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 September 30, 1995  Commission file number: 0-2047 

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

       A WISCONSIN CORPORATION                 39-1052658


       4610 University Avenue
         Madison,  Wisconsin                   53705-0900

 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


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 (19 3/8) and low price (19),
the aggregate market value of voting stock held by non-affiliates
of the registrant as of September 30, 1995 was approximately
$128,627,455.

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

                      At September 30, 1995

                 Common Stock, $1.00 Par Value;


                       Issued:         6,894,467

                       Outstanding:    6,703,711


                        Total Pages:  22

<PAGE>
               Securities and Exchange Commission

                     Washington, D.C.  20549

                            Form 10-Q


                             Part I


     Financial Information                             Page

          Consolidated Financial Statements           3 - 7

          Notes to Consolidated Financial Statements  8 - 9

          Management's Discussion and Analysis of
            Financial Condition and Results of
            Operations                               10 - 12

          Condensed Statutory Financial
            Statements of Subsidiaries                  13


                             Part II

     Other Information and Exhibits

          Other Disclosures                             15

          Officers and Directors                        16

          Signatures                                    17

          Exhibit 1 (Press Release)                  18 - 21

          Exhibit 2 (Special Press Release)             22














                                2

<PAGE>



<TABLE>
                                                         CAPITOL TRANSAMERICA CORPORATION
                                                            CONSOLIDATED BALANCE SHEETS


<CAPTION>
                                                                             September 30,   December 31,   September 30,
                                                                                 1995           1994            1994
    <S>                                                                    <C>             <C>             <C>
    ASSETS
    Investments:
      Available-for-sale investment securities, at fair value
       U.S. Government bonds (amortized cost $597,235, $607,165
         and $612,053, respectively)                                       $    601,452    $    583,711    $    598,637
       State, municipal and political subdivision bonds (amortized
         cost $65,046,918, $55,980,952 and $54,694,184, respectively)        70,275,297      56,747,846      56,223,465
       Corporate bonds and notes (amortized cost $879,373,
         $2,256,865 and $2,602,653, respectively)                               926,996       2,197,810       2,625,922
       Equity securities:
        Common stock (cost $47,736,672, $32,295,835 and
          $30,188,865, respectively)                                         58,163,813      30,804,059      29,441,710
        Nonredeemable preferred stock (cost $3,717,586, $3,052,524
          and $3,854,979, respectively)                                       3,812,762       2,864,850       3,750,250
       Investment real estate, at cost, net of depreciation                   1,469,887       1,442,910       1,311,488
       Short-term investments, at cost which
          approximates fair value                                             2,517,326      10,143,960       7,099,296
              Total Investments                                             137,767,533     104,785,146     101,050,768

    Cash                                                                        295,501       1,253,320         573,423
    Accrued investment income                                                 1,576,550       1,366,123       1,280,033
    Receivables from agents, insureds and others, less allowance for
         doubtful accounts of $310,000, $262,260 and $248,500, respectively  12,736,500       9,344,224      10,814,140
    Balances due from reinsurers                                                619,071         201,045         524,681
    Funds held by ceding reinsurers                                              77,117         137,422         137,422
    Reinsurance recoverable on unpaid losses                                    262,211          12,363         489,165
    Reinsurance recoverable on paid losses                                      195,014          54,259          89,623
    Deferred insurance acquisition costs                                      9,018,701       7,715,389       7,913,696
    Prepaid reinsurance premiums                                                877,113         627,038         698,848
    Due from securities brokers                                                                    -              3,987
    Income taxes receivable                                                        -            481,711         447,378
    Deferred income taxes                                                          -          1,211,241         293,621
    Other assets                                                                477,435         443,914         488,830
              Total Assets                                                 $163,902,746    $127,633,195    $124,805,615


</TABLE>





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


<CAPTION>
                                                                                September 30,  December 31,      September 30,
                                                                                     1995          1994              1994
    <S>                                                                         <C>             <C>             <C>   
    LIABILITIES
    Policy liabilities and accruals:
      Reserve for losses                                                        $ 24,817,806    $ 19,144,647    $ 19,119,091
      Reserve for loss adjustment expenses                                        10,603,291       8,330,676       5,133,469
      Unearned premiums                                                           30,747,328      26,794,249      27,420,251
         Total Policy Liabilities and Accruals                                    66,168,425      54,269,572      51,672,811

    Accounts payable                                                               3,617,179       3,913,672       3,420,173
    Due to securities brokers                                                        350,450         300,000         501,039
    Balances due to reinsurers                                                     1,631,780         901,055         748,751
    Accrued premium taxes                                                            255,518         269,722         315,123
    Income taxes payable                                                             349,149            -               -
    Deferred income taxes                                                          4,487,389            -               -
         Total Other Liabilities                                                  10,691,465       5,384,449       4,985,086

         Total Liabilities                                                        76,859,890      59,654,021      56,657,897


    SHAREHOLDERS' INVESTMENT
    Common stock, $1.00 par value, authorized 15,000,000 shares,
          issued 6,894,467, 6,877,596 and 6,873,488, respectively                  6,894,467       6,877,596       6,873,488
    Paid-in surplus                                                                7,996,027       7,931,671       7,912,112
    Net unrealized appreciation (depreciation) on investment securities
          carried at fair value, net of deferred taxes of $5,372,862, $338,322
          and $233,665, respectively                                              10,429,673        (656,743)        453,585
    Retained earnings                                                             62,044,396      54,157,275      53,239,158

    Shareholders' investment before treasury stock                                87,364,563      68,309,799      68,478,343

    Treasury stock, 190,756, 191,273 and 191,273 shares,
          respectively, at cost                                                     (321,707)       (330,625)       (330,625)

          Total Shareholders' Investment                                          87,042,856      67,979,174      68,147,718

          Total Liabilities and Shareholders' Investment                        $163,902,746    $127,633,195    $124,805,615

    Book Value Per Share                                                        $      12.98    $      10.17    $      10.20

    Shares Outstanding                                                             6,703,711       6,686,323       6,682,215
</TABLE>

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

                                                                           For the Nine Months            For the Three Months
                                                                           Ended September 30             Ended September 30
<CAPTION>
                                                                             1995           1994            1995          1994

   <S>                                                                  <C>            <C>            <C>            <C>
   REVENUES
     Premiums earned                                                    $ 46,578,365   $ 38,768,832   $ 16,446,484   $ 13,551,139
     Net investment income                                                 4,781,290      3,889,170      1,669,199      1,352,814
     Realized investment gains                                               868,309       (114,088)          (743)      (134,876)
     Other revenues                                                          143,315        104,539         16,107         21,782
       Total Revenues                                                     52,371,279     42,648,453     18,131,047     14,790,859

   LOSSES INCURRED AND EXPENSES
     Losses incurred                                                      17,714,251     14,745,286      6,888,189      5,013,790
     Loss adjustment expenses incurred                                     5,868,831      3,949,434      1,366,565      1,477,186
     Underwriting, acquisition and insurance expenses                     15,950,007     13,347,743      5,646,838      4,570,338
     (Increase) decrease in deferred insurance acquisition costs          (1,303,312)      (982,680)        61,874       (296,460)
     Other expenses                                                          850,102        908,124        360,668        366,797
       Total Losses Incurred and Expenses                                 39,079,879     31,967,907     14,324,134     11,131,651


   Income from operations before income taxes                             13,291,400     10,680,546      3,806,913      3,659,208

   Income tax expense (benefit)
       Current                                                             3,541,165      2,823,605      1,273,116        940,579
       Deferred                                                              (12,555)        62,725       (323,050)       116,121
                                                                           3,528,610      2,886,330        950,066      1,056,700


   Net Income                                                           $  9,762,790   $  7,794,216   $  2,856,847   $  2,602,508


   INCOME PER SHARE                                                     $       1.46   $       1,17   $       0.43   $       0.39


   Weighted Average Number of Shares Outstanding                           6,691,722      6,666,547      6,691,722      6,666,547




</TABLE>






                                                                         5
<PAGE>                                                                        
<TABLE>
                                                                  CAPITOL TRANSAMERICA CORPORATION
                                                         CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT



<CAPTION>


                                                                                       Unrealized
                                                                                      (Depreciation)
                                                         Common                       Appreciation
                                                          Stock                       on Securities
                                                        (Par Value       Paid-In       Carried at       Retained       Treasury
                                                          $1.00)         Surplus       Fair Value       Earnings         Stock
     <S>                                              <C>              <C>            <C>             <C>            <C>
     Balance, December 31, 1994                       $ 6,877,596      $ 7,931,671    $  (656,743)    $54,157,275    $  (330,625)
        Net income                                          -                -              -           9,762,790          -
        Unrealized appreciation on
          securities, net of deferred taxes                 -                -         11,086,416           -              -
        Stock options exercised                            16,871           64,356          -               -               (935)
        Dividends paid                                      -                -              -          (1,875,669)         -
        Other, net                                          -                -              -               -              9,853


     Balance, September 30, 1995                      $ 6,894,467      $ 7,996,027    $10,429,673     $62,044,396    $  (321,707)


</TABLE>

                                                                      6
<PAGE>

<TABLE>
                                                                  CAPITOL TRANSAMERICA CORPORATION
                                                             CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                                        September 30,     December 31,    September 30,
                                                                             1995             1994            1994
    Cash flows provided by operating activities:
     <S>                                                                <C>              <C>             <C>
     Net Income                                                         $ 9,762,790      $  9,247,240    $  7,794,216
         Adjustments to reconcile net income to net cash
            provided by operating activities:
              Depreciation                                                  273,982           344,328         274,791
              Realized investment (gains) losses                           (868,309)          106,188         114,088
              Change in:
                  Deferred insurance acquisition costs                   (1,303,312)         (784,373)       (982,680)
                  Unearned premiums                                       3,953,079         3,466,567       4,092,569
                  Allowance for doubtful accounts receivable from agents     45,000            60,000          45,000
                  Accrued investment income                                (210,427)          (26,674)         59,416
                  Receivables from agents, insureds and others           (3,437,276)         (415,046)     (1,869,962)
                  Balances due to/from reinsurers                           312,699            55,481        (420,459)
                  Reinsurance recoverable on paid and unpaid losses        (390,603)          117,133        (395,033)
                  Funds held by ceding reinsurers                            60,305            (2,829)         (2,829)
                  Income taxes payable                                      830,860        (2,000,010)     (1,965,677)
                  Deferred income taxes                                     (12,554)         (262,036)         83,597
                  Due to/from securities brokers                             50,450         2,651,078       2,848,130
                  Prepaid reinsurance premiums                             (250,075)          601,845         530,035
                  Other assets                                              147,948           504,974         321,437
                  Reserve for losses and loss adjustment expenses         7,945,774         8,155,874       4,933,111
                  Accounts payable                                         (296,493)         (239,443)       (732,942)
                  Accrued premium taxes                                     (14,204)            6,432          51,833
                          Net cash provided by operating activities      16,599,634        21,586,729      14,778,641

    Cash flows provided by (used for) investing activities:
         Proceeds from sales of available-for-sale investments           12,454,050         1,895,147       1,260,254
         Purchases of available-for-sale investments                    (33,398,210)      (26,596,166)    (19,329,883)
         Maturities of available-for-sale investments                     5,599,361         6,074,710       4,899,977
         Purchase of depreciable assets                                    (427,130)         (320,920)       (160,626)
                          Net cash used for investing activities        (15,771,929)      (18,947,229)    (13,330,278)

    Cash flows provided by (used for) financing activities:
         Cash dividends paid                                             (1,875,669)       (2,938,618)     (2,403,711)
         Stock options exercised                                             81,227           139,710         116,043
         Net proceeds from sale (purchase) of treasury stock                  8,918             8,444           8,444
                          Net cash used for financing activities         (1,785,524)       (2,790,464)     (2,279,224)

         Net decrease in cash                                              (957,819)         (150,964)       (830,861)
         Cash, beginning of period                                        1,253,320         1,404,284       1,404,284
         Cash, end of period                                            $   295,501      $  1,253,320    $    573,423

    Cash paid during the year for:
         Income taxes                                                   $ 2,717,638      $  5,427,361    $  4,775,000
         Interest                                                               -                 -               -
</TABLE>


                                                                                

                                                                             7
<PAGE>

                           CAPITOL TRANSAMERICA CORPORATION
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 September 30, 1995

   (1)   Basis of Presentation
         The condensed financial statements included herein of Capitol 
         Transamerica Corporation (the "Company"), other than the Consolidated
         Balance Sheet as of December 31, 1994, and the Consolidated Statement
         of Cash Flows as of December 31, 1994, have been prepared by the Compa-
         ny without audit, pursuant to the rules and regulations of the 
         Securities Exchange Commission. Certain information and footnote dis-
         closures normally included in financial statements prepared in accor-
         dance with generally accepted accounting principles 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 con-
         densed financial statements be read in conjunction with the financial
         statements and the notes thereto included in the Company's 1994 annual
         report on Form 10-K. Wherever applicable, prior period's information 
         has been restated to reflect the June 15, 1992 three-for-two stock 
         split effected as a stock dividend. Certain amounts in the prior 
         periods' consolidated financial statements have been reclassified to 
         conform with the 1995 presentation.

   (2)   Income Per Share
         Net income per share is computed by dividing net income by the weighted
         average number of shares of stock outstanding during the period.

   (3)   Income Taxes
         Deferred income taxes reflect the net tax effects of temporary differ-
         ences between the carrying amounts of assets and liabilities for finan-
         cial statement purposes and the amounts used for income taxes.

   (4)   Common Stock Options
         There were 16,871 options exercised during the nine months ended Sep-
         tember 30, 1995 and there were 27,078 options exercised during the 
         nine months ended September 30, 1994. For further information regard-
         ing stock options refer to Note 6 of Notes to Consolidated Financial 
         Statements included in the Company's 1994 annual report.

   (5)   Dividends
         1995
         On July 28, 1995 a cash dividend of $.10 per share was declared to 
         shareholders of record September 15 and paid September 29 in the 
         amount of $670,359.

         On May 09, 1995 a cash dividend of $.10 per share was declared to 
         shareholders of record June 15 and paid June 30 in the amount of 
         $670,006.

         On January 27, 1995 a cash dividend of $.08 per share was declared to 
         shareholders of record March 17 and paid March 31 in the amount of 
         $535,304.

         1994
         On October 28, 1994 a cash dividend of $.08 per share was declared to 
         shareholders of record December 15 and paid December 30 in the amount 
         of $534,907.

         On July 29, 1994 a cash dividend of $.08 per share was declared to 
         shareholders of record September 15 and paid September 30 in the amount
         of $534,585.

         On May 3, 1994 a cash dividend of $.08 per share was declared to share-
         holders of record June 15 and paid June 30 in the amount of $534,176.

         On January 28, 1994 a regular cash dividend of $.08 per share and an 
         extra cash dividend of $.12 per share were declared to shareholders of
         record March 4 and paid March 18 in the amount of $1,334,950.

                                           8
<PAGE>

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

         Investment real estate is carried at cost net of accumulated deprecia-
         tion of $116,4862, $82,130 and $72,080 as of September 30, 1995, De-
         cember 31, 1994 and September 30, 1994, respectively.

         Cost of investments sold is determined under the specific identifica-
         tion method.

   (7)   Contingent Liabilities
         The Company is a defendant in certain lawsuits involving complaints
         which demand damages and recoveries for claims and losses alledgedly
         related to risks insured by the Company. In the opinion of management,
         such lawsuits are routine in that they result from 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>

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS

OVERVIEW

Capitol Transamerica Corporation (the "Company") is an insurance holding company
operating in 33 states which writes, through its insurance subsidiaries, both 
property-casualty and fidelity-surety insurance. The property-casualty segement
accounts for approximately 78% of the business written while the fidelity-surety
segment accounts for approximately 22% of the Company's business.

The underwriting cylcles of the property-casualty insurance industry have been 
characterized by peak periods of adequate rates, underwriting profits and lower
combined ratios, while the downward side of the cycle is characterized by inade-
quate rates, underwriting losses and, as a result, 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. This combination has resulted in considerable reduction in 
underwriting profitability for the industry as a whole.

Inflation also has a significant impact on the insurance industry in general, as
well as on the Company. Inflation creates higher claim costs, which are then
matched currently against premiums whose rating statistics were developed from
data of previous years. In recent inflationary periods, this has led to inade-
quate rate structures, since rate regualtors are slow to grant rate adjustments
at times when the overall economy is in an inflationary cycle. Studies have 
shown that premium rates trail the claim experience by a period of two years or 
more. Adequate premium rates continue to be of concern to the Company as well as
the entire property-casulaty insurance industry.

OPERATING RESULTS

As mentioned in the Overview section, the property-casualty insurance industry
is in a downward cycle. However, based on its operating results the Company is 
in a peak period as it continues to generate considerable underwriting profits.
The Company's increase in premiums earned has been strictly due to volume 
increases resulting from new product lines, expansion of coverages and entry in-
to new geographic territories. The ability to maintain a steady combined ratio,
typically 15 to 20 points below the industry average, is due to its basic phi-
losophy of generating underwriting profits. When the industry's cycle reverses,
the Company will be in an excellent position to take advantage of premium rate
increases which will benefit the Company's overall profitability.

For the nine months ended September 30, 1995 gross premiums written were 
$52,173,363 compared with $58,564,342 for the year ended December 31, 1994 and 
$44,912,718 at September 30, 1994.

Premiums earned are recognized as net revenues after reduction for reinsurance
ceded and after establishment of the provision for the pro-rata unearned portion
of premiums written. Net premiums earned totaled $46,578,365, $52,461,456 and 
$38,768,832 for the respective periods; and net unearned premiums were 
$30,747,328, $26,794,249 and $27,420,251 at each respective period.
<TABLE>
<CAPTION>
                                 September 30,    December 31,    September 30,  
                                     1995            1994             1994
     <S>                           <C>            <C>             <C>
     Gross Premiums Written        $52,173,363    $58,564,342    $44,912,718
     Reinsurance Ceded               1,891,994      1,912,401      1,399,209
     Net Premiums Written          $50,281,369    $56,651,941    $43,513,509
     Net Premiums Earned           $46,578,365    $52,461,456    $38,768,832
     Net Unearned Premium Reserve  $30,747,328    $26,794,249    $27,420,251

                                          10
<PAGE>
The Company's underwriting results can be measured by reference to the combined loss and expense ratios. This
tabulation includes the operating results of the two subsidiary insurance companies on a statutory basis. Loss and loss
adjustment expenses are stated as a ratio of net premiums earned, while underwriting expenses are stated as a ratio of net
premiums written. The combined ratios were as follows:
<CAPTION>
                                               September 30,    December 31,    September 30,
Insurance Operating Ratios (Statutory Basis):      1995            1994             1994
          <S>                                       <C>             <C>              <C>
          Loss and Loss Adjustment Expenses         50.5%           52.3%            47.9%
          Underwriting Expenses                     32.9%           32.4%            31.9%
          Combined Ratios                           83.4%           84.7%            79.8%

The Company's combined loss and expense ratios compare very favorably with the industry average of 106.3% for the 
first six months of 1995 and 108.5% for the full year of 1994.
</TABLE>

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 pro-
gram 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 serious oc-
currences in which a number of claims could produce a large aggregate loss. 
Management continually monitors the Company's reinsurance program to obtain pro-
tection that should be adequate to ensure the availability of funds for losses
while maintaining future growth.

NET INVESTMENT INCOME AND REALIZED GAINS

In accordance with SFAS No. 115, the Company's fixed maturities and equity se-
curites are classified as available-for-sale and are carried at fair value. The
unrealized gains and losses, net of tax, are reported as a separate component of
shareholders investment.

Interest and Dividend Income: Interest on fixed maturities is recorded as income
when earned and is adjusted for any amortization of purchase premium or dis-
count. Dividends on equity securities are recorded as income on ex-dividend 
dates.
<TABLE>
<CAPTION>
                                      September 30,        December 31,        September 30,
Investments:                              1995                1994                 1994
     <S>                                <C>                 <C>                 <C>
     Invested Assets                    $ 137,767,533       $ 104,785,146       $ 101,050,768
     Net Investment Income                  4,781,290           5,359,606           3,889,170
     Percent of Return to
       Average Carrying Value                   5.6%                5.6%                5.5%
     Realized Gains (Losses)                   868,309           (106,188)           (114,088)
     Change in Unrealized Gains(Losses) $   16,797,600      $  (6,251,923)      $  (4,569,609)
</TABLE>
The $16,798,0000 increase in unrealized gains for 1995 was composed of a
$4,596,000 increase in fixed maturities and a $12,202,000 increase in equity se-
curities. The Company not only has gained back all the unrealized losses ex-
perienced in 1994, but has another $10,546,000 in additional appreciation. Net
investment income for the nine months of 1995 was up 23% over the first nine 
months of 1994. Net unrealized gains (losses) were $15,802,536, ($995,065) and 
$687,250 as of September 30, 1995, December 31, 1994 and September 30, 1994.

                                       11
<PAGE>    
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 in-
come taxes arise from timing differences between the recognition of income de-
termined 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 discounting the claims reserves for
tax purposes. Deferred taxes are also provided on unrealized gains and losses.

LOSS RESERVES

Reserves for loss and loss adjustment expenses reflect the Company's best esti-
mate of the liability for the ultimate cost of reported claims and incurred but
not reported (IBNR) claims as of 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 reserve for loss and loss adjustment expenses
was $35,421,097 as of September 30, 1995 compared with $27,475,323 as of De-
cember 31, 1994 and $24,252,560 as of September 30,1994. This increase is a com-
bination of giving consideration for the increase in premium volume, increased 
retention on all lines of coverages written and an increase in the IBNR re-
serves. Management continues to closely monitor the reserve development trends 
and projections as it attempts to stabilize the loss reserve development which 
has occurred in recent years.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity refers to the Company's ability to meet obligations as they become
due. The obligations and cash outflow of the Company include claims settlements,
acquisition and administrative expenses, investment purchases and dividends to 
shareholders. In addition to satisfying obligations and cash outflow through
premium collections, there is cash inflow obtained from interest and dividend 
income, maturities and sales of investments. Because cash inflow from premiums
is received in advance of cash outflow required to settle claims, the Company
accumulates funds which it invests pending liquidity requirements. Therefore,
investments represent the majority (84.1%, 82.1% and 81.0% at each respective 
period) of the Company's assets. Cash outflow can be unpredictable for two rea-
sons: first, a large portion of liabilities representing loss reserves have un-
certainty regarding settlement dates; and second, there is potential for losses
occurring either individually or in aggregate. As a result, the Company main-
tains adequate short-term investment programs necessary to ensure the availa-
bility of funds. The investment program is structured so that a forced sale li-
quidation of fixed maturities should not be necessary during the course of ordi-
nary business involvement and activities. The Company has no material capital
expenditure commitments.

                                      12
<PAGE>

<TABLE>
                                                          INSURANCE SUBSIDIARY FINANCIAL STATEMENTS
                                                  Statutory Basis as Reported to State Regulatory Authorities
                                                  September 30, 1995, December 31, 1994 and September 30, 1994

    CAPITOL INDEMNITY CORPORATION                           September 30,        December 31,    September 30,
    Balance Sheets                                              1995                 1994            1994
    <S>                                            <C>                          <C>             <C>      
    ASSETS
    Cash and Invested Assets                       $        121,547,899         $ 96,224,984    $ 90,697,302
    Other Receivables                                        13,278,253           10,069,285      11,960,473
    Total Assets                                   $        134,826,152         $106,294,269    $102,657,775
    LIABILITIES
    Reserve for Losses and Loss Expenses           $         34,632,248         $ 26,829,156    $ 23,091,027
    Unearned Premiums                                        29,870,215           26,167,211      26,721,403
    Other Payables                                           13,657,686           12,645,939      10,898,038
    Total Liabilities                                        78,160,149           65,642,306      60,710,468
    SURPLUS AS REGARDS POLICYHOLDERS
    Shareholder's Equity                                     56,666,003           40,651,963      41,947,307
    Total Liabilities and Capital                  $        134,826,152         $106,294,269    $102,657,775

    Statements of Income
    Premiums Earned                                $         46,241,603         $ 51,476,687    $ 37,901,254
    Underwriting Deductions                                  39,768,163           45,441,802      32,148,375
    Net Underwriting Gain                                     6,473,440            6,034,885       5,752,879
    Investment Income Including Sales                         4,771,408            4,287,368       3,045,128
    Other Income (Expense)                                      118,208              (40,763)        (52,401)
    Income Tax Expense                                        3,430,265            2,865,727       2,401,929
    Net Income                                     $          7,932,791         $  7,415,763    $  6,343,677


    CAPITOL SPECIALTY INSURANCE CORPORATION
    Balance Sheets
    ASSETS
    Cash and Invested Assets                       $          5,614,880         $  5,283,210    $  5,321,014
    Other Receivables                                            83,861               75,084          71,545
    Total Assets                                   $          5,698,741         $  5,358,294    $  5,392,559
    LIABILITIES
    Other Payables                                                9,155                4,786           4,134
    Total Liabilities                                             9,155                4,786           4,134
    SURPLUS AS REGARDS POLICYHOLDERS
    Shareholder's Equity                                      5,689,586            5,353,508       5,388,425
    Total Liabilities and Capital                  $          5,698,741         $  5,358,294    $  5,392,559
    Statements of Income
    Premiums Earned                                $                849         $    260,879    $    256,083
    Underwriting Deductions                                      14,682              126,974         153,039
    Net Underwriting (Loss) Gain                                (13,833)             133,905         103,044
    Investment Income Including Sales                           210,607              230,004         199,996
    Other Income                                                   -                 138,171         142,865
    Income Tax Expense                                            7,891               69,248          74,707
    Net Income                                     $            188,883         $    432,832    $    371,198
</TABLE>

                                                                   13

<PAGE>












                                         PART II




                                          14
<PAGE> 

                        Other Disclosures




     Item 1.   Legal Proceedings

               Reference is made to footnote number 7 "Contingent
               Liabilities" on Page 9 of this report.


     Item 2.   Changes in Securities
                         NONE

     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 which was held May 8, 1995,
               both of which are dated April 3, 1995 and previously
               filed with the Securities and Exchange Commission
               and are incorporated herein as an exhibit by
               reference.

     Item 5.   Other Information
                         NONE

     Item 6.   Exhibits and Reports on Form 8-K
                         NONE







                                    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            President
      Capitol Transamerica Corporation        Bank One Madison
     Sun Prairie,  Wisconsin                 Madison,  Wisconsin

     George A. Fait                          Reinhart H. Postweiler
      Chairman of the Board                   Retired-formerly with
      and President                           Flad Affiliated Corp.
      Capitol Transamerica Corporation       Madison,  Wisconsin
     Madison,  Wisconsin

     Robert W. Goodwin                       Richard E. Tipple
      Retired-formerly with                   Retired-formerly with
      Dean Witter Reynolds, Inc.              Univ. of Wisconsin
     Clearwater,  Florida                     Planning Department
                                             Stoughton,  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 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






                         George A. Fait
                         Chairman of the Board and President



                         Paul J. Breitnauer
                         Vice President and Treasurer




Date:     October 27, 1995





                                    17
<PAGE>




                CAPITOL TRANSAMERICA CORPORATION


FOR IMMEDIATE RELEASE              Contact:  Paul J. Breitnauer
OCTOBER 20, 1995                             Phone (608) 231-4450
                             NEWS RELEASE
         1995 EARNINGS INCREASE 25.3% THROUGH FIRST NINE MONTHS

Madison, Wisconsin, October 20, 1995- George A. Fait, Chairman, today announced 
that third quarter earnings were up 9.8% over the comparable quarter of 1994.
Consolidated net income for the quarter ended September 30, 1995 was $2.9 
million or $.43 per share compared with $2.6 million or $.39 per share for the 
same period in 1994. 

     Year to date earnings were $9.8 million or $1.46 per share compared with 
$7.8 million or $1.17 per share in 1994, a 25.3% increase.  Nine months income 
in 1995 included $868,000 or $.13 per share of pre-tax capital gains while the  
first nine months of 1994 included pre-tax capital losses of $114,000 or $.02 
per share. Excluding capital gains or losses, net of tax, income for the nine 
months of 1995 was $1.37 per share compared with $1.18 per share for the same 
period last year, a 16.8% increase.

     Third quarter 1995 gross premiums written were $18.2 million compared with
$15.5 million for the same period in 1994, a $2.7 million increase or $18.0%. 
Net premiums earned for the third quarter increased from $13.6 million in 1994
to $16.5 million in 1995, a 21.4% increase.

     Gross premiums written for the first nine months of 1995 were $52.2 million
compared with $44.9 million for the same period in 1994, a 16.2% increase.  Net 
premiums earned increased 20.1% for the first nine months from $38.8 million in 
1994 to $46.6 million in 1995.

     Total cash and invested assets at September 30, 1995 were $138.1 million 
compared with $101.6 million at September 30, 1994, an increase of 35.9%. Net 
investment income for the nine months of 1995 was $4.8 million compared with 
$3.9 million for the same period in 1994, a 22.9% increase.

     Shareholders' equity at September 30, 1995 was $87.0 million or $12.98 per
share compared with $68.1 million or $10.20 per share for the same period in 
1994, a 27.7% increase.

     Dividends paid in the first nine months of 1995 totaled $.28 per share. The
Board of Directors increased the quarterly dividend policy to $.10 per share
beginning with the second quarter of 1995.




                                18
<PAGE>

     Fait stated "the combined net loss, loss expense and general expense ratio
for the nine months of 1995 was 83.4% compared with 79.8% for the like period of
1994. The ability to maintain a favorable combined ratio while increasing prem-
ium volume indicates that we have kept true to our basic philosophy of producing
underwriting profits while continuing to increase investment income resulting in
positive earnings.  Overall the Company continues to show a most favorable com-
bined ratio compared to the industry average of 106.3% for the first six months
of 1995 and 108.0% for the full year of 1994."

     The Company anticipates achieving its goal of increasing premiums written 
by 15% over 1994 and is currently seeking admission in additional states. By 
utilizing resources generated by its strong financial position, the Company is
continuing to meet the challenge of maintaining a steady pattern of growth and
expansion with continuing profitability.

     Market value in excess of cost of the Company's investment portfolio in-
creased by $16.8 million in the first nine months due to increased values in the
equity portfolio and the decrease in interest rates which resulted in an 
increase in appreciation of the Company's bond portfolio.

     Capital Transamerica Corporation is an insurance holding company operating
a regional insurance business writing specialty lines of commercial property and
casualty policies as well as fidelity and surety coverages through its sub-
sidiary insurance companies Capitol Indemnity Corporation and Capitol Specialty
Insurance Corporation. A third subsidiary, Capitol Facilities Corporation, pro-
vides premium financing for the insurance companies.  The Capitol Transamerica
Group operates in 33 states and is rated A+ (Superior) by A.M. Best Company, 
Inc., and independent organization that analyzes the insurance industry.

     Capitol Transamerica Corporation, with 6.7 million shares outstanding, is 
traded on the National Over-the-Counter Stock Market under the symbol CATA.



                   FINANCIAL HIGHLIGHTS FOLLOW






                                   19
<PAGE>



                          CAPITOL TRANSAMERICA CORPORATION
                               SELECTED FINANCIAL DATA

<TABLE>
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                        (in thousands, except per share)
<CAPTION>
                                                   Nine months ended                 Three months ended
                                                     September 30,                       September 30,   
                                                  1995             1994             1995           1994
   <S>                                         <C>              <C>             <C>             <C>    
   REVENUES
     Gross premiums written                    $  52,173        $  44,913        $  18,243      $  15,467
     Net premiums written                         50,281           43,514           17,583         15,069
     Net premiums earned                          46,578           38,769           16,446         13,551

   EXPENSES
     Claims and claim expenses                    23,583           18,695            8,255          6,491
     Other underwriting expenses                  15,497           13,273            6,069          4,641
       Total Losses and Expenses Incurred         39,080           31,968           14,324         11,132

     Underwriting income                           7,498            6,801            2,122          2,419

     Investment income                             4,781            3,889            1,669          1,353
     Realized investment gains                       868             (114)             (1)           (135)
     Other income                                    144              104               17             22

     Income before income tax                     13,291           10,680            3,807          3,659
     Income tax expense                            3,528            2,886              950          1,056

     NET INCOME                                 $  9,763         $  7,794         $  2,857       $  2,603
     EARNINGS PER SHARE                         $   1.46         $   1.17         $   0.43       $   0.39



<CAPTION>
                    COMPARATIVE FINANCIAL HIGHLIGHTS- Nine Months Ended September 30,

                                   1995            1994            1993           1992            1991
Per Share Information
    <S>                        <C>             <C>             <C>            <C>             <C>      
    Income per share           $       1.46    $       1.17    $       1.01   $       1.00    $       1.24   
    Consolidated net income    $  9,762,790    $  7,794,216    $  6,654,705   $  6,555,138    $  7,980,394
    Weighted average number
      of shares outstanding       6,691,722       6,666,547       6,621,211      6,557,151       6,419,909
    Book value per share       $      12.98    $      10.20    $       9.07   $       8.00    $       6.80
    Shareholders' investment   $ 87,042,856    $ 68,147,718    $ 60,292,714   $ 52,578,079    $ 44,461,395
    Dividends paid             $  1,871,039    $  2,403,711    $  2,486,582   $  1,373,401    $    970,548
    Shares outstanding            6,703,711       6,682,215       6,648,370      6,572,564       6,539,334
Company Statistics:
    Gross premiums written     $ 52,173,363    $ 44,912,718    $ 36,934,895   $ 28,871,506    $ 25,208,403
    Net investment income      $  4,781,290    $  3,889,170    $  3,672,757   $  3,543,910    $  3,126,480
    Invested assets            $137,767,533    $101,050,768    $ 86,915,138   $ 71,671,374    $ 63,651,020
    Total assets               $163,902,746    $124,805,615    $109,512,123   $ 92,496,471    $ 78,487,318
Insurance Operating Ratios,
Statutory Basis:
    Loss and loss adjustment
                    expenses:         50.5%           47.9%           49.6%          46.8%           34.2%
    Underwriting expenses             32.9%           31.9%           32.6%          35.0%           33.3%
    Combined ratios                   83.4%           79.8%           82.2%          81.8%           67.5%

                                                 20
</TABLE>
<PAGE> 
  
<TABLE>
                          CAPITOL TRANSAMERICA CORPORATION
                               SELECTED FINANCIAL DATA


                                    BALANCE SHEETS
                            (in thousands, except per share)
<CAPTION>
                                                    September 30,    December 31,    September 30,
                                                        1995            1994            1994
   <S>                                              <C>             <C>             <C>
   ASSETS
     Cash and investments                           $  138,063      $  106,038      $  101,624
     Receivables                                        15,467          11,597          13,787
     Other assets                                       10,373           9,998           9,395

    TOTAL ASSETS                                    $  163,903      $  127,633      $  124,806


   LIABILITIES
     Claims and claim expenses                      $   35,421      $   27,475      $   24,253
     Unearned premiums                                  30,747          26,794          27,420
     Other liabilities                                  10,692           5,385           4,985

    TOTAL LIABILITIES                               $   76,860      $   59,654      $   56,658


   SHAREHOLDERS' EQUITY 
     Common Stock, $1.00 par value, authorized
      15,000,000 shares, issued 6,910,928,
      6,877,596 and 6,868,472, respectively         $    6,895      $    6,877      $    6,873
     Paid-in surplus                                     7,996           7,932           7,912
     Unrealized appreciation (depreciation) on 
      securities carried at fair value, net of 
      deferred taxes                                    10,430            (657)            454
     Retained earnings                                  62,044          54,157          53,239
     Less treasury stock, 190,756, 191,273 and
      193,148 shares, respectively, at cost               (322)           (330)           (330)

     TOTAL SHAREHOLDERS' EQUITY                         87,043           67,979           68,148

     TOTAL LIABILITIES AND
      SHAREHOLDERS' EQUITY                           $163,903         $127,633         $124,806


   SHAREHOLDERS' EQUITY PER SHARE                    $  12.98         $  10.17         $  10.20



    Increase in Shareholders' Equity -
       June 30, 1994 to June 30, 1995                  27.7%
       June 30, 1993 to June 30, 1994                                                     13.0%

                                             21
</TABLE>
<PAGE>

                                     SPECIAL NEWS RELEASE

FOR IMMEDIATE RELEASE                           Contact:  Paul J. Breitnauer
OCTOBER 20, 1995                                          Phone:(608)231-4450


              CAPITOL TRANSAMERICA CORPORATION SELLS ITS OWNERSHIP
                         IN MILWAUKEE INSURANCE GROUP

     Madison, Wisconsin, October 20, 1995 - On September 1, 1995, the Milwaukee
Insurance Group, Inc. called a special meeting of shareholders to approve and 
adopt an Agreement and Plan of Merger with Trinity Universal Insurance Company,
a wholly-owned subsidiary of Unitrin, Inc. a Chicago based insurance holding 
company. At the special meeting held on September 27, 1995, shareholders ap-
proved of the sale of the Milwaukee Insurance Group to Trinity Universal Insur-
ance Company at a price of $22.00 per share. Unitrin, Inc. approved the trans-
action on October 2, 1995 with payment to be made during the third week in 
October. Capitol Indemnity Corporation owned 242,500 shares of Milwaukee Insur-
ance group and was a 5.8425% shareholder. The total gain on this sale will be
$2,382,829 and will be recorded on the books of Capitol Transamerica Corporation
in the fourth quarter of 1995.

                                      22