--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                    FORM 10-Q

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the period ended:  June 30, 2001             Commission file number: 0-2047
                       -------------                                    -------

                     CAPITOL TRANSAMERICA CORPORATION (CTC)
     -----------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

    A Wisconsin Corporation                                  39-1052658
    -----------------------                                  ----------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                         Identification Number)


        4610 University Avenue
          Madison, Wisconsin                            53705-0900
          ------------------                            ----------
(Address of principal executive offices)                (Zip Code)


   Registrant's telephone number, including area code:  (608) 231-4450
                                                        --------------


          Securities registered pursuant to Section 12 (g) of the Act:

                          COMMON STOCK, $1.00 PAR VALUE
--------------------------------------------------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to  be  filed  by  Section  13  or 15 (d) of the Securities Exchange Act of 1934
during  the  preceding  twelve  months  (or  for  such  shorter  period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.


                       Yes     X          No
                            -------            -------


Based  on  the  closing  average  of the high (15.86) and low price (14.91), the
aggregate  market value of voting stock held by non-affiliates of the registrant
as  of  June  30,  2001  was  approximately  $168,471,950.


 Indicate the number of shares of each issuer's class of common stock, as of the
                            latest practicable date:

                                At June 30, 2001

                          Common Stock, $1.00 Par Value

                               Issued:  11,560,970

                            Outstanding:  10,950,403

                                Total Pages:  38


<PAGE>
                       Securities and Exchange Commission
                       ----------------------------------

                                Washington, D.C.
                                ----------------

                                    Form 10-Q
                                    ---------


                                     Part I
                                     ------


Financial Information                                                  Page
---------------------                                                  ----

    Consolidated Financial Statements                                  3-7

    Notes to Consolidated Financial Statements                         8-10

    Management's  Discussion  and  Analysis  of  Financial
       Condition and Results of Operations                            11-13

    Condensed  Statutory  Financial  Statements  of
        Insurance Subsidiaries                                          14


                                     Part II
                                     -------

Other  Information
------------------


    Other Disclosures                                                   15

    Officers and Directors                                              16

    Signatures                                                          17

    Exhibit Index                                                       18


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                          CAPITOL TRANSAMERICA CORPORATION
                                            CONSOLIDATED BALANCE SHEETS


                                                                            June 30,    December 31,     June 30,
                                                                              2001           2000          2000
                                                                          ------------  -------------  ------------
<S>                                                                       <C>           <C>            <C>
ASSETS
Investments:
   Available-for sale investment securities, at fair value:
       U.S. Government bonds (amortized cost $27,728, $33,930 and
            $36,729, respectively)                                        $     30,007  $      35,620  $     38,158
       State, municipal and political subdivision bonds (amortized cost
            $94,845,487, $84,236,165 and $77,472,800, respectively)         99,652,064     89,732,054    80,912,733
       Corporate bonds and notes (amortized cost $1,095,190,
            $1,099,888 and $1,119,485, respectively)                         1,071,657      1,074,137     1,091,332
       Equity securities:
            Common stock (cost $112,753,050, $123,504,211 and
                 $125,727,134, respectively)                               116,990,647    119,413,538   114,456,520
            Non-redeemable preferred stock (cost $5,344,152, $6,470,793
                 and $5,809,582, respectively)                               5,194,659      5,516,567     5,006,663
   Investment real estate, at cost, net of depreciation                     11,385,595     11,008,554    10,800,128
   Short-term investments, at cost which approximates fair value             6,249,395      5,587,306     2,398,329
                                                                          ------------  -------------  ------------
        Total Investments                                                  240,574,024    232,367,776   214,703,863

Cash                                                                         4,569,659      3,641,628     1,121,753
Accrued investment income                                                    2,066,163      1,953,466     1,834,048
Receivables from agents, insureds and others, less allowance for
     doubtful accounts of $530,000 for each period                          24,307,358     18,438,610    20,393,815
Balances due from reinsurers                                                 1,638,394      1,794,851     1,303,352
Funds held by ceding reinsurers                                                 47,000         47,000        40,000
Deferred insurance acquisition costs                                        15,024,286     13,726,372    14,060,118
Prepaid reinsurance premiums                                                 2,304,716      1,714,017     1,558,020
Due from securities brokers                                                  1,198,000      4,218,650     6,989,479
State income taxes recoverable                                                 105,919         32,263             -
Federal income taxes recoverable                                             2,203,577         35,200             -
Deferred income taxes                                                                -      2,468,713     4,973,709
Other assets                                                                 2,503,142      2,819,506     3,044,207
                                                                          ------------  -------------  ------------
       Total Assets                                                       $296,542,238  $ 283,258,052  $270,022,364
                                                                          ============  =============  ============
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                         CAPITOL TRANSAMERICA CORPORATION
                                            CONSOLIDATED BALANCE SHEETS

                                                                        June 30,      December 31,     June 30,
                                                                          2001            2000           2000
                                                                      -------------  --------------  -------------
<S>                                                                   <C>            <C>             <C>
LIABILITIES
Policy liabilities and accruals:
     Reserve for losses                                               $ 51,659,083   $  52,231,685   $ 54,279,583
     Reserve for loss adjustment expenses                               25,741,871      25,749,288     23,578,052
     Unearned premiums                                                  53,589,577      45,587,586     45,540,141
                                                                      -------------  --------------  -------------
        Total Policy Liabilities and Accruals                          130,990,531     123,568,559    123,397,776
                                                                      -------------  --------------  -------------

Accounts payable                                                         3,638,222       4,203,407      3,380,360
Claim drafts outstanding                                                 5,987,411       4,927,097      3,766,846
Balances due to securities brokers                                         401,500          34,125        201,633
Balances due to reinsurers                                               5,792,798       4,097,368      1,642,391
Accrued premium taxes                                                      717,447         727,627        441,924
State income taxes payable                                                       -               -         48,681
Federal income taxes payable                                                     -               -        343,036
Deferred income taxes                                                      418,771               -              -
                                                                      -------------  --------------  -------------
      Total Other Liabilities                                           16,956,149      13,989,624      9,824,871
                                                                      -------------  --------------  -------------

      Total Liabilities                                                147,946,680     137,558,183    133,222,647
                                                                      -------------  --------------  -------------

SHAREHOLDERS' INVESTMENT
Common stock ($1.00 par value, authorized 15,000,000 shares, issued
     11,560,970, 11,558,767 and 11,558,166 shares, respectively)        11,560,970      11,558,767     11,558,166
Paid-in surplus                                                         22,744,662      22,733,088     22,727,877
Accumulated other comprehensive income (loss) (net of deferred tax
     expense (benefit) of $3,105,699, $149,425 and ($3,031,113),
     respectively)                                                       5,767,728         277,504     (5,629,211)
Retained earnings                                                      113,083,886     114,944,048    111,085,182
                                                                      -------------  --------------  -------------

Shareholders' Investment Before Treasury Stock                         153,157,246     149,513,407    139,742,014

Treasury stock (610,567, 549,867 and 476,152 shares, respectively,
     at cost)                                                           (4,561,688)     (3,813,538)    (2,942,297)
                                                                      -------------  --------------  -------------

      Total Shareholders' Investment                                   148,595,558     145,699,869    136,799,717
                                                                      -------------  --------------  -------------

      Total Liabilities and Shareholders' Investment                  $296,542,238   $ 283,258,052   $270,022,364
                                                                      =============  ==============  =============

Book Value Per Share                                                  $      13.57   $       13.23   $      12.34
                                                                      =============  ==============  =============

Shares Outstanding                                                      10,950,403      11,008,900     11,082,014
                                                                      =============  ==============  =============
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                     CAPITOL TRANSAMERICA CORPORATION
                                    CONSOLIDATED STATEMENTS OF INCOME

                                                      For the Six Months        For the Three Months
                                                        Ended June 30,              Ended June 30,
                                                  --------------------------  ---------------------------
                                                      2001          2000          2001           2000
                                                  ------------  ------------  -------------  ------------
<S>                                               <C>           <C>           <C>            <C>
REVENUES
Premiums earned                                   $47,320,300   $42,080,648   $ 24,477,487   $21,414,099
Net investment income                               4,843,119     4,502,403      2,389,338     2,243,802
Realized investment (losses) gains                 (1,748,074)    3,978,978         74,414     2,932,470
Other revenues                                        267,584       157,413        141,366        86,009
                                                  ------------  ------------  -------------  ------------
    Total Revenues                                 50,682,929    50,719,442     27,082,605    26,676,380
                                                  ------------  ------------  -------------  ------------

LOSSES AND EXPENSES INCURRED
Losses incurred                                    28,094,100    17,127,494     18,460,750    11,199,458
Loss adjustment expenses incurred                   5,495,667     4,918,748      2,873,243     3,007,547
Underwriting, acquisition and insurance expenses   18,796,536    16,441,863      9,955,057     8,435,991
Increase in deferred insurance acquisition costs   (1,297,914)   (1,415,929)      (988,845)     (995,722)
Other expenses                                        719,057       705,708        359,234       361,831
                                                  ------------  ------------  -------------  ------------
    Total Losses and Expenses Incurred             51,807,446    37,777,884     30,659,439    22,009,105
                                                  ------------  ------------  -------------  ------------


(Loss) Income Before Income Taxes                  (1,124,517)   12,941,558     (3,576,834)    4,667,275
                                                  ------------  ------------  -------------  ------------

Income tax (benefit) expense:
    Current                                          (742,145)    3,791,729     (2,184,731)    1,063,266
    Deferred                                          (68,790)       77,199        821,950       212,258
                                                  ------------  ------------  -------------  ------------
                                                     (810,935)    3,868,928     (1,362,781)    1,275,524
                                                  ------------  ------------  -------------  ------------


Net (Loss) Income                                   ($313,582)  $ 9,072,630    ($2,214,053)  $ 3,391,751
                                                  ============  ============  =============  ============


Per Share Data:

     Cash Dividends Declared                      $      0.16   $      0.14   $       0.08   $      0.07
                                                  ============  ============  =============  ============

     Earnings Per Share - Basic                        ($0.03)  $      0.81         ($0.20)  $      0.30
                                                  ============  ============  =============  ============

     Earnings Per Share - Diluted                      ($0.03)  $      0.81         ($0.20)  $      0.30
                                                  ============  ============  =============  ============
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT AND COMPREHENSIVE INCOME (LOSS)



                                                                 Common     Accumulated
                                                                 Stock         Other
                                                               (Par Value     Paid-In     Comprehensive    Comprehensive
                                                                 $1.00)       Surplus     Income (Loss)    Income (Loss)
                                                              ------------  ------------  --------------  ---------------
<S>                                                           <C>           <C>           <C>             <C>
Balance, January 1, 1999                                      $11,529,376   $ 22,246,366              -   $   18,019,545
    Comprehensive income (loss):
        Net income                                                      -              -     16,712,463                -
                                                                                          --------------
        Other comprehensive loss:
            Unrealized depreciation on available-for-sale
                securities, net of deferred taxes                       -              -    (16,662,277)               -
            Less: reclassification adjustment, net of tax of
                $2,864,435, for gain included in net income             -              -     (5,319,666)               -
                                                                                          --------------
              Other comprehensive loss                                  -              -    (21,981,943)     (21,981,943)
                                                                                          --------------
        Comprehensive loss                                              -              -     (5,269,480)               -
    Stock options exercised                                         9,594         57,748              -                -
    Purchases and sales of treasury stock, net                          -        290,424              -                -
    Cash dividends paid                                                 -              -              -                -
                                                              ------------  ------------  --------------  ---------------
Balance, December 31, 1999                                    $11,538,970   $ 22,594,538              -      ($3,962,398)
    Comprehensive income:
        Net income                                                      -              -     14,453,317                -
                                                                                          --------------
        Other comprehensive income:
            Unrealized appreciation on available-for-sale
                securities, net of deferred taxes                       -              -     11,913,380                -
            Less: reclassification adjustment, net of tax of
                $2,546,352, for gain included in net income             -              -     (7,673,478)               -
                                                                                          --------------
              Other comprehensive income                                -              -      4,239,902        4,239,902
                                                                                          --------------
        Comprehensive income                                            -              -     18,693,219                -
    Stock options exercised                                        19,797        138,550              -                -
    Stock-based compensation                                            -              -              -                -
    Purchases and sales of treasury stock, net                          -              -              -                -
    Cash dividends paid                                                 -              -              -                -
                                                              ------------  ------------  --------------  ---------------
Balance, December 31, 2000                                    $11,558,767   $ 22,733,088              -   $      277,504
    Comprehensive (loss) income:
        Net loss                                                        -              -       (313,582)               -
                                                                                          --------------
        Other comprehensive income:
            Unrealized appreciation on available-for-sale
                securities, net of deferred taxes                       -              -      4,353,976                -
            Less: reclassification adjustment, net of tax of
                $611,826, for gain included in net income               -              -      1,136,248                -
                                                                                          --------------
              Other comprehensive income                                -              -      5,490,224        5,490,224
                                                                                          --------------
        Comprehensive income                                            -              -      5,176,642                -
    Stock options exercised                                         2,203         11,574              -                -
    Stock-based compensation                                            -              -              -                -
    Purchases and sales of treasury stock, net                          -              -              -                -
    Cash dividends paid                                                 -              -              -                -
                                                              ------------  ------------  --------------  ---------------
Balance, June 30, 2001                                        $11,560,970   $ 22,744,662              -   $    5,767,728
                                                              ============  ============  ==============  ===============


                                                                Retained       Treasury
                                                                Earnings        Stock
                                                              -------------  ------------
<S>                                                           <C>            <C>
Balance, January 1, 1999                                      $ 90,016,245     ($495,559)
    Comprehensive income (loss):
        Net income                                              16,712,463             -

        Other comprehensive loss:
            Unrealized depreciation on available-for-sale
                securities, net of deferred taxes                        -             -
            Less: reclassification adjustment, net of tax of
                $2,864,435, for gain included in net income              -             -

              Other comprehensive loss                                   -             -

        Comprehensive loss                                               -             -
    Stock options exercised                                              -       (26,534)
    Purchases and sales of treasury stock, net                           -             -
    Cash dividends paid                                         (3,151,515)            -
                                                              -------------  ------------
Balance, December 31, 1999                                    $103,577,193     ($522,093)
    Comprehensive income:
        Net income                                              14,453,317             -

        Other comprehensive income:
            Unrealized appreciation on available-for-sale
                securities, net of deferred taxes                        -             -
            Less: reclassification adjustment, net of tax of
                $2,546,352, for gain included in net income              -             -

              Other comprehensive income                                 -             -

        Comprehensive income                                             -             -
    Stock options exercised                                              -       (76,250)
    Stock-based compensation                                        25,476             -
    Purchases and sales of treasury stock, net                           -    (3,215,195)
    Cash dividends paid                                         (3,111,938)            -
                                                              -------------  ------------
Balance, December 31, 2000                                    $114,944,048   ($3,813,538)
    Comprehensive (loss) income:
        Net loss                                                  (313,582)            -

        Other comprehensive income:
            Unrealized appreciation on available-for-sale
                securities, net of deferred taxes                        -             -
            Less: reclassification adjustment, net of tax of
                $611,826, for gain included in net income                -             -

              Other comprehensive income                                 -             -

        Comprehensive income                                             -             -
    Stock options exercised                                              -             -
    Stock-based compensation                                       207,224             -
    Purchases and sales of treasury stock, net                           -      (748,150)
    Cash dividends paid                                         (1,753,804)            -
                                                              -------------  ------------
Balance, June 30, 2001                                        $113,083,886   ($4,561,688)
                                                              =============  ============
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>
                                              CAPITOL TRANSAMERICA CORPORATION
                                            CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                              Year-to-date
                                                                               --------------------------------------------
                                                                                 June 30,      December 31,     June 30,
                                                                                   2001            2000           2000
                                                                               -------------  --------------  -------------
<S>                                                                            <C>            <C>             <C>
Cash flows (used for) provided by operating activities:
-------------------------------------------------------
     Net Income                                                                   ($313,582)  $  14,453,317   $  9,072,630
     Adjustments to reconcile net income to net cash provided by (used
          for) operating activities:
               Depreciation                                                         611,836       1,215,024        583,576
               Realized investment gains                                          1,748,074     (11,805,350)    (3,978,978)
               Change in:
                    Deferred insurance acquisition costs                         (1,297,914)     (1,082,183)    (1,415,929)
                    Unearned premiums                                             8,001,991       6,133,329      6,085,884
                    Accrued investment income                                      (112,697)        (25,565)        93,853
                    Receivables from agents, insureds and others                 (5,868,748)     (3,545,963)    (5,501,169)
                    Balances due to/from reinsurers                                 471,630         149,564        310,137
                    Reinsurance recoverable on paid and unpaid losses             1,380,257         683,248     (1,440,802)
                    Funds held by ceding reinsurers                                       -          (7,000)             -
                    Income taxes payable/recoverable                             (2,242,033)        618,777      1,077,957
                    Deferred income taxes                                           (68,790)       (598,340)        77,202
                    Due to/from securities brokers                                3,388,025      (3,545,389)    (6,148,710)
                    Prepaid reinsurance premiums                                   (590,699)       (426,390)      (270,393)
                    Other assets                                                    212,529        (707,858)      (705,913)
                    Reserve for losses and loss adjustment expenses                (580,019)        724,781        601,443
                    Accounts payable                                                495,129       3,324,905      1,341,607
                    Accrued premium taxes                                           (10,180)        388,764        103,061
                                                                               -------------  --------------  -------------
                         Net cash provided by (used for) operating activities     5,224,809       5,947,671       (114,544)
                                                                               -------------  --------------  -------------

Cash flows provided by (used for) investing activities:
------------------------------------------------------
     Proceeds from sales of available-for-sale securities                        15,521,460      26,278,568     12,995,673
     Purchases of available-for-sale securities                                 (18,663,376)    (26,716,842)   (10,588,065)
     Maturities of available-for-sale securities                                  1,380,745       4,053,867      2,179,652
     Purchases of depreciable assets                                               (254,654)       (782,511)      (599,088)
                                                                               -------------  --------------  -------------
                         Net cash (used for) provided by investing activities    (2,015,825)      2,833,082      3,988,172
                                                                               -------------  --------------  -------------

Cash flows (used for) provided by financing activities:
------------------------------------------------------
     Cash dividends paid                                                         (1,753,804)     (3,111,938)    (1,564,641)
     Stock options exercised                                                         13,777          45,273         76,285
     Net cost of purchase of treasury stock                                        (540,926)     (3,152,895)    (2,343,954)
                                                                               -------------  --------------  -------------
                         Net cash used for financing activities                  (2,280,953)     (6,219,560)    (3,832,310)
                                                                               -------------  --------------  -------------

Net increase in cash                                                                928,031       2,561,193         41,318
Cash, beginning of period                                                         3,641,628       1,080,435      1,080,435
                                                                               -------------  --------------  -------------
Cash, end of period                                                            $  4,569,659   $   3,641,628   $  1,121,753
                                                                               =============  ==============  =============

Cash paid during the period for:
     Income taxes                                                              $  1,499,021   $   4,856,364   $  3,429,748
                                                                               =============  ==============  =============
</TABLE>


                                        7
<PAGE>
                        CAPITOL TRANSAMERICA CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001


(1)     Basis  of  Presentation
        -----------------------
        The  condensed  financial  statements  included  herein  of  Capitol
        Transamerica  Corporation  (the  "Company"), other than the Consolidated
        Balance  Sheet  at  December 31, 2000, and the Consolidated Statement of
        Shareholders'  Investment  and  Comprehensive  Income  (Loss)  and  the
        Consolidated  Statement of Cash Flows as of December 31, 2000, have been
        prepared  by  the  Company  without  audit,  pursuant  to  the rules and
        regulations  of  the  Securities  and  Exchange  Commission.  Certain
        information  and  footnote  disclosures  normally  included in financial
        statements  prepared  in accordance with accounting principles generally
        accepted in the United States have been condensed or omitted pursuant to
        such  rules  and  regulations.

        Although  the  Company believes the disclosures are adequate to make the
        information  presented  not  misleading,  it  is  suggested  that  these
        condensed financial statements be read in conjunction with the financial
        statements  and  the notes thereto included in the Company's 2000 annual
        report  on  Form  10-K.


(2)     Earnings  Per  Share
        --------------------
        Basic  earnings  per  share  is  computed  by dividing net income by the
        weighted  average  number  of  shares  of  stock  outstanding during the
        period. Diluted earnings per share is computed by dividing net income by
        the  weighted  average number of shares of common stock and common stock
        equivalents from options outstanding. The following table sets forth the
        computation  of  basic  and  diluted  earnings  per  share  (EPS):

<TABLE>
<CAPTION>
                                                                  June 30,    December 31,    June 30,
                                                                    2001          2000          2000
                                                                 -----------  -------------  -----------
<S>                                                              <C>          <C>            <C>
  Numerator:
  ----------
      Consolidated net (loss) income                              ($313,582)  $  14,453,317  $ 9,072,630
                                                                 ===========  =============  ===========
  Denominator:
  ------------
      Basic EPS - weighted average shares of common stock        10,957,829      11,124,074   11,224,260
      Effect of dilutive securities - unexercised stock options           -          34,388       31,147
                                                                 -----------  -------------  -----------
      Diluted EPS - weighted average shares of common
             stock and unexercised stock options                 10,957,829      11,158,462   11,255,407
                                                                 ===========  =============  ===========
</TABLE>

        The effect of dilutive securities was excluded from the diluted loss per
        common share computation for the six months ended June 30, 2001, because
        the Company had a net loss in this period and their inclusion would have
        been  anti-dilutive.

(3)     Comprehensive  Income  (Loss)
        -----------------------------
        Comprehensive income (loss) is defined as net income plus or minus other
        comprehensive  income  (loss),  which  for  the  Company, under existing
        accounting  standards,  includes  unrealized  gains  and  losses, net of
        income  tax  effects,  on  certain  investments  in  debt  and  equity
        securities.  Comprehensive  income  (loss) is reported by the Company in
        the  Consolidated  Statements  of  Shareholders'  Investment  and
        Comprehensive  Income  (Loss).


(4)     Income  Taxes
        -------------
        Deferred  income  taxes  reflect  the  net  tax  effect  of  temporary
        differences  between  the carrying amounts of assets and liabilities for
        financial  statement  purposes  and  the  corresponding amounts used for
        income  tax  reporting.


(5)     Common  Stock  Options
        ----------------------
        There  were 2,203 options exercised during the six months ended June 30,
        2001  compared  to  19,196 options exercised during the six months ended
        June 30, 2000. For further information regarding stock options, refer to
        Note 6 of the Notes to the Consolidated Financial Statements included in
        the  Company's  2000  annual  report.


                                        8
<PAGE>
(6)     Dividends
        ---------

        2001
        ----
        On  May  30,  2001,  a  cash  dividend of $.08 per share was declared to
        shareholders of record June 8, 2001 and paid June 28, 2001 in the amount
        of  $875,593.

        On  February 27, 2001, a cash dividend of $.08 per share was declared to
        shareholders  of  record  March  9,  2001 and paid March 23, 2001 in the
        amount  of  $878,211.

        2000
        ----
        On  November 21, 2000, a cash dividend of $.07 per share was declared to
        shareholders  of  record  December 8, 2000 and paid December 20, 2000 in
        the  amount  of  $773,304.

        On  September 5, 2000, a cash dividend of $.07 per share was declared to
        shareholders of record September 15, 2000 and paid September 26, 2000 in
        the  amount  of  $773,993.

        On  May  30,  2000,  a  cash  dividend of $.07 per share was declared to
        shareholders  of  record  June  16,  2000  and paid June 28, 2000 in the
        amount  of  $775,865.

        On  February 18, 2000, a cash dividend of $.07 per share was declared to
        shareholders  of  record  March  10, 2000 and paid March 23, 2000 in the
        amount  of  $788,776.


(7)     Investments
        -----------
        The  Company's  fixed maturities and equity securities are classified as
        available-for-sale  and,  accordingly,  are  carried at fair value, with
        unrealized  gains  (losses)  reported  as  a  separate  component of the
        shareholders'  investment, net of taxes. The cost of fixed maturities is
        adjusted  for the amortization of premiums and accretion of discounts to
        maturity. Fixed maturities and equity securities deemed to have declines
        in  value  that  are  other  than temporary are written down through the
        Consolidated  Statement  of  Income  to  carrying  values equal to their
        estimated  fair  values.

        Investment  real  estate  is  carried  at  cost,  net  of  accumulated
        depreciation  of $1,845,294, $1,595,693 and $1,378,314 at June 30, 2001,
        December  31,  2000  and  June  30,  2000,  respectively. Real estate is
        depreciated  over  the  useful  life  of  the  asset.

        The  cost  of  investments  sold  is  determined  under  the  specific
        identification  method.


(8)     Contingent  Liabilities
        -----------------------
        The  Company  is  a  defendant  in certain lawsuits involving complaints
        which  demand  damages  and  recoveries  for claims and losses allegedly
        related  to  risks  insured by the Company. Management's opinion is that
        such  lawsuits  are  a  result of the ordinary course of business in the
        insurance  industry.  The  reserve  for  losses  includes  management's
        estimates of the probable ultimate cost of settling all losses involving
        lawsuits.


                                        9
<PAGE>
(9)     Industry  Segment  Disclosures
        ------------------------------
        The  Company  has three business segments, which are segregated based on
        the  types  of  products  and  services  provided.  The segments are (1)
        property  and  casualty,  (2)  fidelity and surety, and (3) discontinued
        reinsurance  assumed  operations.  These segments constitute 100% of the
        operations of the Company. Data for each segment as required for interim
        reporting  follows:

<TABLE>
<CAPTION>
                                                               Year-to-date
                                               -------------------------------------------
                                                 June 30,      December 31,     June 30,
                                                   2001            2000           2000
                                               -------------  --------------  ------------
<S>                                            <C>            <C>             <C>
    Total Revenues:
        Property & Casualty                    $ 39,027,798   $  75,198,171   $35,528,425
        Fidelity & Surety                         9,643,259      21,472,270     9,977,597
        Discontinued Reinsurance Assumed            181,225       1,008,654       402,468
                                               -------------  --------------  ------------
              Subtotal                         $ 48,852,282   $  97,679,095   $45,908,490
        Reconciliation to Consolidated GAAP:
            Capital & Surplus                     1,905,380      12,036,436     4,852,785
            Inter-company adjustments               (74,733)       (207,069)      (41,833)
                                               -------------  --------------  ------------
    Total Consolidated Revenues                $ 50,682,929   $ 109,508,462   $50,719,442
                                               =============  ==============  ============

    Before-tax (Loss) Profit:
        Property & Casualty                       ($816,455)  $   4,627,311   $ 3,900,792
        Fidelity & Surety                        (2,478,114)       (548,495)    2,513,113
        Discontinued Reinsurance Assumed             75,743       2,374,163     1,239,430
                                               -------------  --------------  ------------
              Subtotal                          ($3,218,826)  $   6,452,979   $ 7,653,335
        Reconciliation to Consolidated GAAP:
            Capital & Surplus                     1,905,380      12,036,436     4,852,785
            Inter-company adjustments               188,928         828,846       435,438
                                               -------------  --------------  ------------
    Consolidated Net (Loss) Income Before Tax   ($1,124,518)  $  19,318,261   $12,941,558
                                               =============  ==============  ============
</TABLE>


                                       10
<PAGE>
      MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF
                                   OPERATIONS


OVERVIEW
--------
Capitol  Transamerica  Corporation  (the  "Company")  is  an  insurance  holding
company,  which operates in 37 states and writes, through its subsidiaries, both
property-casualty  and  fidelity-surety insurance. The property-casualty segment
accounts for approximately 81% of the business written while the fidelity-surety
segment  accounts  for  approximately  19%  of  the  business.

The  underwriting  cycles  of the property-casualty insurance industry have been
characterized  by peak periods of adequate rates, underwriting profits and lower
combined  ratios,  with  the  down  side  of  the  cycles being characterized by
inadequate  rates,  underwriting losses and higher combined ratios. The adequacy
of  premium rates is affected primarily by the severity and frequency of claims,
which, in turn, are affected by natural disasters, regulatory measures and court
decisions, which continue to uphold the "deep pocket" theory in awarding against
insurance  companies.  Unfortunately  for  the  insurance industry, the trend of
increasing  price  competition  has  continued  as has the number of significant
natural  disasters.  However,  on  the positive side, the industry appears to be
hardening,  with  rate  increases  slowly  being  implemented.

Adequate  premium  rates  continue  to  be  a  concern  for  the Company and the
property-casualty  insurance industry as a whole. Management feels strongly that
rate  regulators  have  been slow to adjust rates in response to increased claim
costs  from  the  factors  noted  above.  This,  when  combined  with  increased
competition  in  the  Company's  niche  market,  has  presented an unprecedented
challenge  to  management.  The  Company  has  responded  to this challenge with
increased  marketing  efforts as well as the addition of innovative programs and
alliances  that  should  position  the  Company  for  continued  expansion  and
profitability.


OPERATING  RESULTS
------------------
Due  to  a combination of increased marketing efforts and the re-underwriting of
the  Company's  book  of  business  undertaken  in  1998 and 1999, the Company's
operating  results remain favorable. Operating income decreased compared to 2000
due  primarily  to higher than expected losses on a few specific surety contract
bonds  coupled  with  higher  than  normal  storm losses. Had the aforementioned
losses  not  occurred, the combined ratio would have been approximately 88.7%, a
level  typical  of the Company's history. Management believes that the return to
solid  underwriting  standards and continued profitability of the Company's core
operations  will  provide  a  foundation  for  increasing  shareholder  value.

Gross  premiums  written  increased  20% over the first half of 2000, going from
$51.8  million  to  $61.9  million.  The  increase  is due to the rate increases
mentioned  in  the  Overview  along  with  the  Company's  concerted  efforts to
profitably  grow  its  business.  Management  continually monitors the Company's
expansion efforts to ensure that the Company is growing profitably. Net premiums
written  followed gross premiums written, increasing from $47.9 million to $54.7
million,  or  14.3%.

Premiums earned are recognized as net revenues after a reduction for reinsurance
ceded  and  after  the  establishment  of  the provision for a pro-rata unearned
portion  of  the premiums written. Premiums earned totaled $47.3 million for the
first  six  months of 2001, compared to $88.2 million for calendar year 2000 and
$42.1  million for the first six months of 2000. The unearned premium reserve at
the  end  of these same three periods was $53.6 million, $45.6 million and $45.5
million,  respectively.

<TABLE>
<CAPTION>
                                   June 30,     December 31,   June 30,
                                     2001          2000          2000
                                  -----------  -------------  -----------
<S>                               <C>          <C>            <C>
    Gross Premiums Written        $61,883,716  $ 102,110,215  $51,758,281
    Reinsurance Ceded               7,152,124      8,218,433    3,862,142
                                  -----------  -------------  -----------
    Net Premiums Written          $54,731,592  $  93,891,782  $47,896,139
                                  ===========  =============  ===========
    Net Premiums Earned           $47,320,300  $  88,184,842  $42,080,648
                                  ===========  =============  ===========
    Net Unearned Premium Reserve  $53,589,577  $  45,587,586  $45,540,141
                                  ===========  =============  ===========
</TABLE>


                                       11
<PAGE>
The  Company's underwriting results can be measured by reference to the combined
loss  and  expense ratios. The following table includes the operating results of
the  Company's  two  subsidiary insurance companies on a statutory basis. Losses
and  loss adjustment expenses are stated as a percentage of net premiums earned,
while  underwriting expenses are stated as a percentage of net premiums written.
The  combined  ratios  are  as  follows:

<TABLE>
<CAPTION>
                                              June 30,   December 31,   June 30,
Insurance Operating Ratios (Statutory Basis)    2001         2000         2000
--------------------------------------------  ---------  -------------  ---------
<S>                                           <C>        <C>            <C>
     Losses and Loss Adjustment Expenses          71.1%          65.4%      52.6%
     Underwriting Expenses                        34.6%          35.1%      35.0%
--------------------------------------------  ---------  -------------  ---------
     Combined Ratio                              105.7%         100.5%      87.6%
============================================  =========  =============  =========
</TABLE>

The  Company's  combined  ratio  consistently compares favorably to the industry
average,  as  indicated  by  the  following
chart:

<TABLE>
<CAPTION>
                        Year-to-date   Year-end   Year-end
    Combined Ratio          2001         2000       1999
----------------------  -------------  ---------  ---------
<S>                     <C>            <C>        <C>
    Company                    105.7%     100.5%      87.6%
    Industry Average *         106.2%     110.4%     110.2%
----------------------  -------------  ---------  ---------
</TABLE>

*    Year-to-date  2001  industry average is for the 1st quarter, 2001, the most
     recently  available  data.

REINSURANCE
-----------
The  Company  follows the customary practice of reinsuring with other companies,
i.e.,  ceding  a  portion  of  its exposure on the policies it has written. This
program  of  reinsurance permits the Company greater diversification of business
and  the  ability  to  write  larger  policies  while limiting the extent of its
maximum  net  loss.  It  provides  protection  for the Company against unusually
severe  occurrences  in which a number of claims could produce a large aggregate
loss.  Management  continually  monitors  the  Company's  reinsurance program to
obtain  protection  that  management  believes  should be adequate to ensure the
availability  of  funds  for  losses  while  maintaining  future  growth.

NET  INVESTMENT  INCOME  AND  REALIZED  GAINS
---------------------------------------------
The  Company's  fixed  maturities  and  equity  securities  are  classified  as
available-for-sale  and  are  carried  at  fair  value. The unrealized gains and
losses,  net  of  tax,  are  reported as "Accumulated Other Comprehensive Income
(Loss)"  in  the  equity  portion  of  the  balance  sheet.

Interest and Dividend Income: Interest on fixed maturities is recorded as income
when  earned  and  is  adjusted  for  any  amortization  of  purchase premium or
accretion  of discount. Dividends on equity securities are recorded as income on
ex-dividend  dates.

<TABLE>
<CAPTION>
                                                       June 30,      December 31,     June 30,
  Investments                                            2001            2000           2000
---------------------------------------------------  -------------  --------------  -------------
<S>                                                  <C>            <C>             <C>
       Invested Assets                               $240,574,024   $ 232,367,776   $214,703,864
       Net Investment Income                            4,843,119       9,163,062      4,502,403
       Percent of Return to Average Carrying Value            4.2%            4.0%           4.0%
       Realized (Losses) Gains                         (1,748,074)     11,805,350      3,978,978
       Change in Unrealized Gains (Losses)              5,490,224       4,239,902     (1,666,813)
---------------------------------------------------  -------------  --------------  -------------
</TABLE>

The  net  unrealized  gain  of  $5.8  million  for  the first six months of 2001
consists  of  a  $0.4  million  unrealized  loss  on fixed maturities and a $6.2
million  unrealized gain on the Company's equity portfolio. Management has begun
to  increase  its  tax-free bond holdings and de-emphasize the equity portfolio,
but  is  optimistic  that  the  recent  downturn  in  the  value  of  its equity
investments  is temporary and that the current market conditions will provide an
even  greater  opportunity  to  invest and build shareholder value over the long
term,  as  evidenced  by the recent increases in the Company's unrealized gains.

First  half,  2001  net  investment  income  increased from $4.5 million to $4.8
million,  or  7.6%,  over  the  same period last year. The Company holds a large
percentage of equity investments, which results in a comparatively lower rate of
return  on  invested  assets  than  other property-casualty insurance companies.


                                       12
<PAGE>
Under  FASB  Statement 115, the Company absorbed $8.2 million in realized losses
in  the  six  months ended June 30, 2001 for "other-than-temporary" market value
adjustments  for  certain  securities held in its portfolio. No such adjustments
were  made  during  the  first half of 2000. Management continues to monitor its
investment  portfolio for other securities that could potentially fall into this
category  in  the  future.


INCOME  TAXES
-------------
Income  tax expense is based on income reported for financial statement purposes
and  tax  laws  and  rates  in  effect for the years presented. Deferred federal
income  taxes  arise  from  timing differences between the recognition of income
determined for financial reporting purposes and income tax purposes. Such timing
differences are related principally to the deferral of policy acquisition costs,
the  recognition of unearned premiums and the discounting of claims reserves for
tax  purposes.  Deferred taxes are also provided on unrealized gains and losses.
Also  of  note is that the Company's effective income tax rate tends to be lower
than  most  companies  because  of  the  high concentration of investment income
related  to  tax-free  municipal  bonds.

LOSS  RESERVES
--------------
Reserves  for  losses  and  loss  adjustment expenses reflect the Company's best
estimate  of the liability for the ultimate cost of reported claims and incurred
but  not  reported  (IBNR)  claims  at the end of each period. The estimates are
based  on  past  claim  experience  and consider current claim trends as well as
social  and  economic  conditions.  The  Company's  reserves for losses and loss
adjustment  expenses  were  $77.4  million  at  June 30, 2001, compared to $77.9
million  at  June 30, 2000. These reserves remain relatively constant due to the
Company  having a high level of loss and loss adjustment expense payments during
the  first  half  of 2001 compared to the first half of last year, $42.9 million
compared  to $36.7 million. Management continues to closely monitor the loss and
loss  adjustment expense reserves to assure adequate recognition of the ultimate
liability  for  claims  and  claims expenses. Management recognizes that this is
especially  important  in  light  of today's climate whereby the Company has had
increased  premium  volume  and larger than expected contract bond losses in the
Florida  and  Texas  markets.


LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------
Liquidity  refers  to  the  Company's ability to meet obligations as they become
due. The obligations and cash outflows of the Company include claim settlements,
acquisition  and  administrative expenses, investment purchases and dividends to
shareholders.  In  addition  to satisfying obligations and cash outflows through
premium  collections, there are cash inflows obtained from interest and dividend
income,  and  maturities  and  sales  of  investments. Because cash inflows from
premiums are received in advance of the cash outflows required to settle claims,
the  Company accumulates funds, which it invests pending liquidity requirements.
Therefore,  investments  represent  the majority (81.2%, 82.0% and 79.5% at June
30,  2001,  December  31, 2000 and June 30, 2000, respectively) of the Company's
assets.  Cash  outflows  can  be  unpredictable  for two reasons: first, a large
portion  of  liabilities  representing  loss reserves have uncertainty regarding
settlement  dates;  and second, there is a potential for losses occurring either
individually  or  in  the aggregate. As a result, the Company maintains adequate
short-term  investment  programs  necessary to ensure the availability of funds.
The  investment  programs  are  structured  so that a forced sale liquidation of
fixed maturities should not be necessary during the ordinary course of business.
The  Company  has  no  material  capital  expenditure  requirements.


SAFE  HARBOR  STATEMENT
-----------------------
Some  of  the statements in this report, as well as statements by the Company in
periodic  press  releases and oral statements made by the Company's officials to
analysts  and  shareholders  in  the  course of presentations about the Company,
constitute  "forward-looking  statements"  within  the  meaning  of  the Private
Securities  Litigation  Reform  Act  of  1995.  Such  forward-looking statements
involve  known  and  unknown  risks,  estimates subject to change circumstances,
uncertainties  and  other factors that may cause the actual results, performance
or  achievements  of  the  Company  to  be  materially different from any future
results, performance or achievements expressed or implied by the forward-looking
statements.


                                       13
<PAGE>
<TABLE>
<CAPTION>
                              INSURANCE SUBSIDIARY FINANCIAL STATEMENTS
                     STATUTORY BASIS AS REPORTED TO STATE REGULATORY AUTHORITIES


CAPITOL INDEMNITY CORPORATION
-----------------------------                             June 30,      December 31,     June 30,
BALANCE SHEETS                                              2001            2000           2000
------------------------------------------------------  -------------  --------------  -------------
<S>                                                     <C>            <C>             <C>
ASSETS
     Cash and Invested Assets                           $232,742,823   $ 220,326,616   $203,180,898
     Other Assets                                         31,522,366      24,911,537     31,428,022
------------------------------------------------------  -------------  --------------  -------------
     Total Assets                                       $264,265,189   $ 245,238,153   $234,608,920
======================================================  =============  ==============  =============
LIABILITIES
     Reserves for Losses and Loss Adjustment Expenses   $ 80,768,518   $  80,127,074   $ 77,492,685
     Unearned Premiums                                    51,284,861      43,873,569     43,982,121
     Other Liabilities                                    13,082,942      13,320,126     16,665,793
------------------------------------------------------  -------------  --------------  -------------
     Total Liabilities                                   145,136,321     137,320,769    138,140,599
------------------------------------------------------  -------------  --------------  -------------
SURPLUS AS REGARDS POLICYHOLDERS
     Shareholders' Equity                                119,128,868     107,917,384     96,468,321
------------------------------------------------------  -------------  --------------  -------------
     Total Liabilities and Capital                      $264,265,189   $ 245,238,153   $234,608,920
======================================================  =============  ==============  =============
STATEMENTS OF INCOME
     Premiums Earned                                    $ 47,320,300   $  88,184,842   $ 42,080,648
     Underwriting Deductions                              52,288,300      90,802,716     39,231,150
------------------------------------------------------  -------------  --------------  -------------
     Net Underwriting Gain (Loss)                         (4,968,000)     (2,617,874)     2,849,498
------------------------------------------------------  -------------  --------------  -------------
     Investment Income Including Sales                     2,504,194      20,845,091      8,264,815
     Other Income                                            287,492         396,399        156,818
     Dividends to Policyholders                              468,582         489,085              -
     Income Tax Expense                                     (979,435)      5,131,195      3,508,842
------------------------------------------------------  -------------  --------------  -------------
     Net Income                                          ($1,665,461)  $  13,003,336   $  7,762,289
======================================================  =============  ==============  =============

CAPITOL SPECIALTY INSURANCE CORPORATION
---------------------------------------
BALANCE SHEETS
--------------
ASSETS
     Cash and Invested Assets                           $  4,213,821   $   4,474,294   $  4,325,909
     Other Assets                                            135,313         201,378        213,128
------------------------------------------------------  -------------  --------------  -------------
     Total Assets                                       $  4,349,134   $   4,675,672   $  4,539,037
======================================================  =============  ==============  =============
LIABILITIES
     Liabilities Other Than For Insurance Obligations          7,709           7,709          7,713
------------------------------------------------------  -------------  --------------  -------------
     Total Liabilities                                         7,709           7,709          7,713
------------------------------------------------------  -------------  --------------  -------------
SURPLUS AS REGARDS POLICYHOLDERS
     Shareholders' Equity                                  4,341,425       4,667,963      4,531,324
------------------------------------------------------  -------------  --------------  -------------
     Total Liabilities and Capital                      $  4,349,134   $   4,675,672   $  4,539,037
======================================================  =============  ==============  =============
STATEMENTS OF INCOME
     Underwriting Deductions                                   3,375           6,278          3,645
------------------------------------------------------  -------------  --------------  -------------
     Net Underwriting Gain                                    (3,375)         (6,278)        (3,645)
------------------------------------------------------  -------------  --------------  -------------
     Investment Income Including Sales                       102,213         249,300        130,373
     Income Tax Expense                                        7,761          10,634         12,541
------------------------------------------------------  -------------  --------------  -------------
     Net Income                                         $     91,077   $     232,388   $    114,187
======================================================  =============  ==============  =============
</TABLE>


                                       14
<PAGE>
                                     PART II
                                     -------


                                OTHER DISCLOSURES
                                -----------------



Item  1.  Legal  Proceedings

          Reference  is  made  to  footnote number 8 "Contingent Liabilities" on
          Page  9  of  this  report.

Item  2.  Changes  in  Securities  and  Use  of  Proceeds

          During  the  quarter  ended  June  30,  2001,  the  Company  issued an
          aggregate  of  approximately  181  shares  of  its  common stock at an
          aggregate exercise price of approximately $9.69 in connection with the
          exercise  of  options  issued  pursuant  to the Company's stock option
          plan.  The  shares  of common stock were issued pursuant to exemptions
          from registration under Section 4(2) of the Securities Act of 1933, as
          amended.


Item  3.  Defaults  Upon  Senior  Securities

          NONE

Item  4.  Submission  of  Matters  to  a  Vote  of Security Holders

          Reference  is made to the Notice of Annual Meeting of Shareholders and
          Proxy Statement for the Annual Meeting of Shareholders held on May 14,
          2001,  both of which are dated April 6, 2001 and previously filed with
          the  Securities and Exchange Commission and are incorporated herein as
          an  exhibit  by  reference.

          At  this  meeting, Larry Burcalow and Michael J. Larson were nominated
          and  re-elected  to terms expiring in 2004. George A. Fait, Kenneth P.
          Urso,  Paul  J.  Breitnauer  and  Reinhart  H.  Postweiler continue as
          directors through the expiration of their terms. Additionally, Ernst &
          Young LLP was ratified as the Company's independent auditors for 2001.

Item  5.  Other  Information

          NONE

Item  6.  Exhibits  and  Reports  on  Form  8-K

          (a)  Exhibits
               --------
                  3.2 - By-Laws  of Capitol Transamerica Corporation  as Amended
                 99.1 - Press  Release  -  Capitol  Transamerica  Corporation
                        Reports Second Quarter (June 30, 2001) Results

          (b)  Reports on Form 8-K
               -------------------
               Reference  is  made  to  the  Agreement  and  Plan of Merger with
               Alleghany  Corporation,  which  was  previously  filed  with  the
               Securities  and  Exchange Commission on Form 8-K on July 23, 2001
               and  is  incorporated  herein  by  reference.



                                       15
<PAGE>
                        CAPITOL TRANSAMERICA CORPORATION


                                  Subsidiaries
                                  ------------

                          Capitol Indemnity Corporation
                     Capitol Specialty Insurance Corporation
                         Capitol Facilities Corporation


                               Board of Directors
                               ------------------

    Paul J. Breitnauer                           Michael J. Larson
    Vice President and Treasurer                 Principal
    Capitol Transamerica Corporation             Southwestern Financial Services
    Madison, Wisconsin                           Madison, Wisconsin

    Larry Burcalow                               Reinhart H. Postweiler
    Owner and President                          Retired, formerly with
    Yahara Materials, Inc.                       Flad Affiliated Corporation
    Waunakee, Wisconsin                          Madison, Wisconsin

    George A. Fait                               Kenneth P. Urso
    Chairman of the Board and President          Principal
    Capitol Transamerica Corporation             Urso Ventures
    Madison, Wisconsin                           Madison, Wisconsin


                                    Officers
                                    --------

    George A. Fait                               Virgiline M. Schulte
    Chairman of the Board and President          Secretary

    Paul J. Breitnauer                           Jane F. Endres
    Vice President and Treasurer                 Assistant Secretary


                                       16
<PAGE>
                                   SIGNATURES
                                   ----------

Pursuant  to  the  requirements  of the Securities and Exchange Act of 1934, the
Registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.


CAPITOL  TRANSAMERICA  CORPORATION


/s/  George  A.  Fait
---------------------------------------------
George  A.  Fait
Chairman  of  the  Board  and  President



/s/  Paul  J.  Breitnauer
---------------------------------------------
Paul  J.  Breitnauer
Vice  President  and  Treasurer




Date:  August 10, 2001


                                       17
<PAGE>
                                  Exhibit Index
                                  -------------


Exhibit Number           Exhibit Description
--------------           -------------------

      3.2                By-Laws of Capitol Transamerica Corporation as
                         Amended
     99.1                Press Release - Capitol Transamerica Corporation
                         Reports Second Quarter (June 30, 2001) Results


                                       18
<PAGE>