Washington, D.C.  20549



---

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934



|For the Quarter Ended | Commission File Number
|--------------------- | ----------------------
|June 30, 1999         | 0-6478                



|Michigan                                 | 38-1863522         
|---------------------------------------- | -------------------
|(State or Other Jurisdiction of          | (I.R.S. Employer   
|Incorporation or Organization)           | Identification No.)
|                                         |                    
|5600 Beech Tree Lane                     |                    
|Caledonia, Michigan                      | 49316              
|(Address of Principal Executive Offices) | (Zip Code)         

Registrant's Telephone Number, Including Area Code(616) 942-3000



Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report.



|                               | Outstanding at   
|------------------------------ | -----------------
|Class                          | June 30, 1999    
|                               |                  
|Common Stock, $1.00 par value, | 26,614,826 shares

---

INDEX



|                                                                     |  | Page No.
|-------------------------------------------------------------------- |  | --------
|Part I.  Financial Information:                                      |  |         
|                                                                    
|Item 1. Financial Statements:                                        |  |         
|                                                                    
|Consolidated Balance Sheets -                                        |  |         
|June 30, 1999 and December 31, 1998                                  |  | 1-2     
|                                                                    
|Consolidated Statements of Income -                                  |  |         
|Six Months Ended June 30, 1999 and 1998                              |  | 3-4     
|                                                                    
|Consolidated Condensed Statements of Cash Flows -                    |  |         
|Six Months Ended June 30, 1999 and 1998                              |  | 5       
|                                                                    
|Condensed Notes to Consolidated Financial Statements                 |  | 6-8     
|                                                                    
|Item 2.  Management's Discussion and Analysis of Financial Condition |  |         
|and Results of Operations                                            |  | 8-13    
|                                                                    
|Item 3.  Quantitative and Qualitative Disclosures About Market Risk  |  | 13-15   
|                                                                    
|                                                                    
|                                                                    
|Part II.  Other Information:                                         |  |         
|                                                                    
|Item 1.  Legal Proceedings                                           |  | 15-16   
|                                                                    
|Item 4.  Submission of Matters to a Vote of Security Holders         |  | 16      
|                                                                    
|Item 6.  Exhibits and Reports on Form 8-K                            |  | 17-18   
|                                                                    
|Signatures                                                           |  | 19      

---







|                                                 | June 30,                              |  | December 31,
|------------------------------------------------ | ------------------------------------- |  | ------------
|                                                 | 1999                                  |  | 1998        
|                                                 | (In thousands, except per share data)
|                                                 | (Unaudited)                           |  |             
|Assets:                                          |                                       |  |             
|Investments-                                     |                                       |  |             
|Fixed maturities held to maturity                | $        501                          |  | $        947
|Securities available for sale:                   |                                       |  |             
|Fixed maturities                                 | 384,316                               |  | 356,776     
|Equity securities                                | 62,168                                |  | 79,936      
|Mortgage loans and land contracts on real estate | 4,083                                 |  | 5,867       
|Investment real estate                           | 13,687                                |  | 13,228      
|Short-term investments                           | 33,666                                |  | 36,907      
|Total investments                                | 498,421                               |  | 493,661     
|                                                 |                                       |  |             
|Cash                                             | 1,469                                 |  | 2,227       
|Accrued investment income                        | 6,512                                 |  | 5,966       
|Premiums receivable                              | 83,027                                |  | 76,808      
|Due from reinsurance companies                   | 24,133                                |  | 23,914      
|Other receivables                                | 1,257                                 |  | 1,573       
|Prepaid policy acquisition costs                 | 77,215                                |  | 75,689      
|Prepaid reinsurance premiums                     | 495                                   |  | 977         
|Real estate and equipment                        | 56,585                                |  | 54,565      
|Other assets                                     | 16,820                                |  | 17,816      
|Total assets                                     | $765,934                              |  | $753,196    
|                                                 |                                       |  |             
|Liabilities:                                     |                                       |  |             
|Unearned premium                                 | $267,132                              |  | $250,959    
|Insurance losses and loss adjustment expenses    | 82,253                                |  | 84,128      
|Accounts payable and accrued expenses            | 41,288                                |  | 34,045      
|Notes and other obligations payable              | 85,251                                |  | 89,853      
|Income taxes                                     | 9,400                                 |  | 16,274      
|Other liabilities                                | 12,126                                |  | 13,782      
|Total liabilities                                | 497,450                               |  | 489,041     

---



|                                            | June 30,                              |  | December 31,
|------------------------------------------- | ------------------------------------- |  | ------------
|                                            | 1999                                  |  | 1998        
|                                            | (In thousands, except per share data)
|                                            | (Unaudited)                           |  |             
|Shareholders' Equity:                       |                                       |  |             
|Preferred stock, no par value - 10,000,000  |                                       |  |             
|shares authorized, no shares issued         | --                                    |  | --          
|Common stock, $1 par - 70,000,000 shares    |                                       |  |             
|authorized in 1999 and 1998, respectively;  |                                       |  |             
|26,614,826 and 27,166,240 shares issued and |                                       |  |             
|outstanding in 1999 and 1998, respectively  | 26,615                                |  | 27,166      
|Additional paid-in capital                  | 82,846                                |  | 83,205      
|Unrealized appreciation of securities       |                                       |  |             
|available for sale, net of applicable taxes | 2,894                                 |  | 10,262      
|Retained earnings                           | 156,134                               |  | 143,527     
|Restricted stock - deferred compensation    | (5)                                   |  | (5)         
|                                            |                                       |  |             
|Total shareholders' equity                  | 268,484                               |  | 264,155     
|                                            |                                       |  |             
|Total liabilities and shareholders' equity  | $765,934                              |  | $753,196    

---



|                                          | Three Months                          |  | Six Months    
|----------------------------------------- | ------------------------------------- |  | --------------
|                                          | Ended June 30,                        |  | Ended June 30,
|                                          | 1999                                  |  | 1998          
|                                          | (In thousands, except per share data)
|Income:                                   |                                       |  |               
|Property and casualty premium earned      | $111,698                              |  | $108,503      
|Net investment income                     | 6,497                                 |  | 5,814         
|Realized gains                            | (115)                                 |  | 2,426         
|Other                                     | (5,398)                               |  | 563           
|                                          |                                       |  |               
|Total income                              | 112,682                               |  | 117,306       
|                                          |                                       |  |               
|Expense:                                  |                                       |  |               
|Insurance losses and loss expenses        | 63,556                                |  | 66,841        
|Amortization of prepaid policy            |                                       |  |               
|acquisition costs                         | 33,528                                |  | 32,003        
|Operating                                 | 4,750                                 |  | 4,718         
|Interest                                  | 1,580                                 |  | 1,729         
|Total expense                             | 103,414                               |  | 105,291       
|                                          |                                       |  |               
|Income before taxes                       | 9,268                                 |  | 12,015        
|Income tax provision                      | (1,992)                               |  | (2,901)       
|                                          |                                       |  |               
|Net income before extraordinary item      | 7,276                                 |  | 9,114         
|                                          |                                       |  |               
|Extraordinary loss on early extingishment |                                       |  |               
|of debt (net of $1,782 of federal income  |                                       |  |               
|tax)                                      | --                                    |  | (3,310)       
|                                          |                                       |  |               
|Consolidated net income                   | $    7,276                            |  | $    5,804    
|                                          |                                       |  |               
|Per share of common stock:                |                                       |  |               
|Net income before extraordinary item      | $      0.27                           |  | $      0.33   
|Extraordinary loss - net of tax benefit   | $          --                         |  | $    (0.12)   
|                                          |                                       |  |               
|Net income                                | $      0.27                           |  | $       0.21  
|                                          |                                       |  |               
|Average shares outstanding                | 26,636                                |  | 27,345        
|                                          |                                       |  |               
|Cash dividends per share                  | $      0.09                           |  | $      0.09   

---



|                                        | Three Months                          |  | Six Months    
|--------------------------------------- | ------------------------------------- |  | --------------
|                                        | Ended June 30,                        |  | Ended June 30,
|                                        | 1999                                  |  | 1998          
|                                        | (In thousands, except per share data)
|Per share of common stock - diluted     |                                       |  |               
|Net income before extraordinary item    | $        0.27                         |  | $        0.33 
|Extraordinary loss - net of tax benefit | $           --                        |  | $     (0.12)  
|                                        |                                       |  |               
|Net income                              | $        0.27                         |  | $        0.21 
|                                        |                                       |  |               
|Average shares outstanding              | 27,135                                |  | 27,961        



---



|                                                  | Six Months Ended
|------------------------------------------------- | ----------------
|                                                  | June 30,        
|                                                  | 1999            
|                                                  | (In thousands)  
|                                                 
|Operating Activities:                             |                 
|Net cash from operating activities                | $36,617         
|                                                 
|Investing Activities:                             |                 
|Purchases of securities and loans made            | (121,269)       
|Purchases of real estate and equipment            | (7,535)         
|Sales of securities                               | 80,001          
|Maturities of securities and receipts             |                 
|from repayments of loans                          | 26,306          
|Sales of real estate and equipment                | 3,268           
|Decrease in short-term investments                | 3,241           
|                                                 
|Net cash for investing activities                 | (15,988)        
|                                                 
|Financing Activities:                             |                 
|Prepayment of mortgage                            | --              
|Extraordinary loss on early extingishment of debt | --              
|Repayment of debt                                 | (11,102)        
|Proceeds from borrowings                          | 6,500           
|Repurchase of common stock                        | (11,305)        
|Dividends paid                                    | (4,825)         
|Exercise of stock options:  Receipts              | 869             
|Exercise of stock options:  Repurchases           | (1,524)         
|                                                 
|Net cash for financing activities                 | (21,387)        
|                                                 
|Cash increase (decrease)                          | (758)           
|Cash at beginning of year                         | 2,227           
|                                                 
|Cash at end of period                             | $  1,469        



---



|1. | The notes to the consolidated financial statements are condensed and do not contain all information required by generally accepted accounting principles to be included in a full set of financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | All information is unaudited; however, in the opinion of management, all adjustments (consisting only of normal recurring accruals) have been made which are necessary to present fairly the results shown.  All
significant intercompany balances and transactions have been eliminated in consolidation.  Interim results are not necessarily indicative of the results to be expected in any other period.                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | During the first quarter of 1998, the Company adopted Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income," which requires that all components of comprehensive income
and total comprehensive income be reported on one of the following: a statement of income and comprehensive income, a statement of comprehensive income or a statement of shareholder's equity.  Comprehensive income is comprised of net income and all
changes to shareholders' equity, except those due to investments by owners (changes in paid in capital) and distributions to owners (dividends).  For interim reporting purposes, SFAS 130 requires disclosure of total comprehensive income.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Comprehensive income and its components consist of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|                                                 | For the Three Months Ended
|------------------------------------------------ | --------------------------
|                                                 | June 30,                  
|                                                 | 1999                      
|                                                 | (In thousands)            
|                                                
|Net income                                       | $  7,276                  
|Other comprehensive income, net of taxes:        |                           
|Change in unrealized appreciation of investments | (3,872)                   
|Comprehensive income                             | $  3,404                  

---



|                                                 | For the Six Months Ended
|------------------------------------------------ | ------------------------
|                                                 | June 30,                
|                                                 | 1999                    
|                                                 | (In thousands)          
|                                                
|Net income                                       | $27,541                 
|Other comprehensive income, net of taxes:        |                         
|Change in unrealized appreciation of investments | (4,886)                 
|Comprehensive income                             | $22,655                 

|4. | Earnings per share amounts are computed based on the weighted average number of common shares outstanding during each quarter.  The reconciliation of basic to diluted earnings per share amounts is as follows:
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  | For the Three Months Ended              
|----------------- | ----------------------------------------
|                  | June 30, 1999                           
|                  |                                         
|                  | Net Income                              
|                  | (In thousands, except per share amounts)
|                 
|Basic EPS         | $7,276                                  
|O/S Stock Options | --                                      
|Diluted EPS       | $7,276                                  

|                  | For the Three Months Ended              
|----------------- | ----------------------------------------
|                  | June 30, 1998                           
|                  |                                         
|                  | Net Income                              
|                  | (In thousands, except per share amounts)
|                 
|Basic EPS         | $5,804                                  
|O/S Stock Options | --                                      
|Diluted EPS       | $5,804                                  

---



|                  | For the Six Months Ended                
|----------------- | ----------------------------------------
|                  | June 30, 1999                           
|                  |                                         
|                  | Net Income                              
|                  | (In thousands, except per share amounts)
|                 
|Basic EPS         | $27,541                                 
|O/S Stock Options | --                                      
|Diluted EPS       | $27,541                                 

|                  | For the Six Months Ended                
|----------------- | ----------------------------------------
|                  | June 30, 1998                           
|                  |                                         
|                  | Net Income                              
|                  | (In thousands, except per share amounts)
|                 
|Basic EPS         | $17,365                                 
|O/S Stock Options | --                                      
|Diluted EPS       | $17,365                                 

Results of Operations

The Company achieved record operating earnings per share for the first half of 1999.  Net income for the first six months was $1.01 per share, which includes $.02 per share income from legal settlements.  That compares to net
income, before an extraordinary item, of $.74 per share for the first half of 1998.  Realized gains of $.09 per share in both 1999 and 1998 are included in the six months results.

Results from lawsuit settlements recorded in the first six months of 1999, include a $6.75 million pre-tax settlement received in the first quarter from settlements with First USA Bank and a second quarter accrual of $5.8
million pre-tax for the settlement and payment by the Company of a verdict in Iowa.

Net income for the three months ended June 30, 1999 was reduced by $.14 from $.41 per share to $.27 per share due to the Iowa verdict accrual.  No realized gains were included in the second quarter 1999 net income.  This
compares to net income, before an extraordinary item, of $.33 per share, including $.05 per share in realized gains, during the same quarter of 1998.



---

The Company's property and casualty group's combined ratio for the six months ended June 30, 1998 was 90.1% compared to 94.4 % for the same period in 1998.  The combined ratio for the quarter ended June 30, 1999 was 91.9%
compared to 96.1% for the same period in 1998.  The majority of the improvement in the combined ratios can be attributed to lower catastrophe losses, which accounted for 3.8 points of the decline in the first six months of 1999 and 4.0 points of the
decline in the quarter ended June 30, 1999.

Written premium by major product line is as follows:



|                     | For the Three Months Ended June 30,
|-------------------- | -----------------------------------
|                     |                                    
|                     | 1999                               
|                     | (In thousands)                     
|Mobile Home          | $99,593                            
|Recreational Vehicle | 15,631                             
|Automobile - Direct  | 3,756                              
|Automobile - Runoff  | 1,257                              
|Basics               | 2,280                              
|Homeowners           | 804                                
|Other                | 786                                
|Total                | $124,107                           

|                     | For the Six Months Ended June 30,
|-------------------- | ---------------------------------
|                     |                                  
|                     | 1999                             
|                     | (In thousands)                   
|Mobile Home          | $191,258                         
|Recreational Vehicle | 28,691                           
|Automobile - Direct  | 7,441                            
|Automobile - Runoff  | 3,573                            
|Basics               | 4,347                            
|Homeowners           | 1,429                            
|Other                | 1,522                            
|Total                | $238,261                         

---

The Company has produced three consecutive quarters of solid growth in written premium, led by gains in its mobile home business, which increased by 4.9% in the first six months of 1999 compared to the premiums written in the
same period in 1998.  Direct response automobile written premium for the first six months of 1999 more than doubled from the same period in 1998 when the Company wrote approximately $3.5 million compared to $7.4 million in 1999.

For the first six months of the year, after-tax investment income contributed $.39 per share in 1999 compared to $.36 per share for the same period in 1998.  After-tax investment income contributed $.20 per share in the
second quarter of 1999 compared to $.18 per share for the same period in 1998.  The majority of the increase can be attributed to the positive cash flow from operations during the first six months of 1999.

Financial Position

The principle sources of cash for the first six months of 1999 were approximately $106.3 million from sales and maturities of investments and $36.6 million from operations.  The Company also borrowed an additional $6.5
million from its line of credit, but repaid approximately $11.1 million of its debt.  The primary uses of cash were approximately $128.8 million for the purchases of securities, real estate and equipment, $12.8 million to purchase previously-issued
Company stock and $4.8 million to pay dividends to shareholders.  The Company had $35.1 million in cash and other liquid assets at June 30, 1999.

Total invested assets on a cost basis increased 3.37%, or $16.1 million, during the first six months of 1999 compared to the same period in 1998.  The unrealized gain in securities available for sale declined $7.4 million net
of tax in the first six months of 1999 compared to the same period in 1998, of which $2.5 million net of tax, represents realized gains taken from the sale of securities.  The shift in investments from equity securities to fixed maturities is due to the
Company's concern that there is more risk in owning certain large cap common stocks, with high multiples, at this time than the potential for reward.  Also by investing in current return securities, the Company expects that it will be able to maintain or
grow its investment income.  The Company will continue its strategy of allocating a portion of invested assets to total return investing as opportunities present themselves.

The Company continued to manage its capital base and leverage ratios by repurchasing $12.8 million of its common stock during the first six months of 1999, under a previously announced repurchase plan.  In the first six
months of 1999 the Company repurchased 664,945 of its shares.  Since the inception of this repurchase plan in February 1994, the Company has purchased 6,729,317 of its shares.



---

On June 24, 1999, the Company restructured the interest rate swap on the $30 million of the term loan that is amortizing.  The interest rate was lowered from 5.705% to 5.09% plus credit spread and the term was shortened by
three years to terminate in May 2001.  The starting notional amount was $25 million.

Year 2000 Readiness Disclosure

The Year 2000 issue is the result of computer programs being written using two digits to define the applicable year instead of four.  The problem exists when time sensitive software may recognize a date using "00"
as the year 1900 rather than the year 2000.  By nature, the insurance industry is highly dependent upon computer systems because of significant transaction volumes and date dependencies for many of its applications.  The Company has completed a
comprehensive review of its computer programs to identify the systems that would be affected by the Year 2000 problem.  The Company has a comprehensive written plan, which regularly is updated and monitored by technical personnel.  Management regularly
reviews plan status.  The Company also has hired an outside consulting firm to assist in this conversion process and has completed 95% of the Year 2000 modification of its mainframe computer applications. The Company performed a Year 2000 test of its
mainframe systems and applications during June 1999.  The test results were positive and all errors discovered were remediated and tested.  The procedures used by these consultants for the Year 2000 conversion effort have been certified by Information
Technology Association of America "ITAA."  The ITAA 2000 Certification Program evaluates the consultant's processes and methods used to develop new software or convert existing software to meet the date-related needs of the next century.

The Company has identified the non-IT systems that have Year 2000 issues and has a plan to assess, remediate and test, if necessary, these systems.  The Company will continue to assess the impact of the Year 2000 issue on the
remainder of its computer-based systems and applications throughout the remainder of 1999.

Management also has reviewed its Year 2000 exposure to third party customers, distributors, suppliers and banking institutions. The Company is in the process of evaluating the Year 2000 readiness of third parties.
Significant third parties with which the Company interfaces with regard to the Year 2000 problem include, among others, agents, technology vendors, financial institutions and service providers and companies that provide utility infrastructure (power,
natural gas, delivery services, telecommunications).  Unreadiness by these third parties would expose the Company to the potential for loss and impairment of business processes and activities.  The Company is assessing these risks through bilateral
efforts and is considering the need for contingency plans intended to address perceived risks.  The Company cannot predict what effect the failure of a third party to address, in a timely manner, the Year 2000 problem

---

would have on the Company.   However, the extent to which the computer operations, utility infrastructures and other systems of the Company's important third parties are adversely affected could, in turn, affect the Company's ability to operate or
communicate with these third parties and could materially affect the Company's results of operations in any period or periods.

In connection with the Year 2000 issue, the Company spent approximately $1.8 million before 1997, $3.8 million in 1997 and $4.3 million in 1998.  The Company has spent approximately $2.4 million in the first six months of
1999 and expects to spend approximately $0.7 million in the remainder of 1999.  These costs primarily will consist of professional fees paid to third party providers of remedial services.  It is the Company's policy to expense all costs associated with
these systems changes.  The Company also may invest in new or upgraded technology, which has definable value lasting beyond 2000.  In these instances, where Year 2000 compliance is merely ancillary, the Company may capitalize and depreciate the asset over
its estimated useful life.

Based on currently available information, management does not presently anticipate that the costs to address the Year 2000 issues will have a material adverse impact on the Company's financial conditions, results of
operations or liquidity.

The costs of the project and the date on which the Company believes it will complete the Year 2000 modifications are based on management's best estimates.  There can be no guarantee that these estimates will be achieved and
actual results could differ from those anticipated.  Specific factors that might cause differences include, but are not limited to, the ability of other companies on which the Company's systems rely to modify or convert their systems to be Year 2000
ready, the ability to locate and correct all relevant computer codes, the ability of all third parties who have business relationships with the Company to continue their businesses without interruption and similar uncertainties.  As a result, the Company
is in the process of evaluating the need for contingency plans that will address possible internal and external scenarios that might have an adverse effect on the Company.  We anticipate that all necessary contingency plans will be completed during 1999.

This Year 2000 Readiness Disclosure is based upon and partially repeats information provided by the Company's outside consultants and others regarding the Year 2000 readiness of the Company and its customers, suppliers,
financial institutions and other parties.  Although the Company believes this information to be accurate, it has not independently verified the information.



---

Forward-Looking Statements

All statements, other than statements of historical fact, contained in this Form 10-Q report are forward-looking statements.  Forward-looking statements generally are accompanied by words such as "anticipate," "
believe," "estimate," "project," "expect" or similar statements.  Such forward-looking information involves important known and unknown risks and 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.  Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, no assurance can be given that the expectations will prove correct.  Factors that could cause the Company's results to differ materially from the results discussed in the forward-looking statements include
competition from other insurance companies, general economic conditions, effects of governmental regulation, effects of the Year 2000 on the Company's business and effects of weather-related catastrophes.  All forward-looking statements are expressly
qualified in their entirety by the cautionary statements in this paragraph and current and potential shareholders are cautioned not to place undue reliance on the forward-looking statements made in this report.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The investment portfolios of the Company are managed with the objective of maximizing after-tax investment income and total return, while minimizing credit and market risks to provide support for the insurance operations and
overall results of the Company.  When developing the investment strategies for the Company, management considers many factors including underwriting results, tax impacts, regulatory requirements, fluctuations in interest rates and other market risks.
Investment decisions are managed by investment professionals based on guidelines established by management and approved by the board of directors.

Market risk represents the potential for loss due to changes in the fair value of financial instruments caused primarily by fluctuations in interest rates and equity prices.  The Company mitigates these risks by managing the
maturity of its financial instruments to provide adequate funding for the payout of its property and casualty reserves.



---

The only change in the quantitative information since year end 1998 was the restructuring of the interest rate swap.  On June 24, 1999, the Company restructured the interest rate swap on $30 million of the term loan that is
amortizing.  The interest rate was lowered from 5.705% to 5.09% plus credit spread and the term was shortened by three years to terminate in May 2001.  The starting notional amount was $25 million.  The following table presents the maturities of long-term
debt with the corresponding interest rate swaps on this debt.  Since the interest rate swaps effectively fix the interest rate on the notional amount of debt, changes in interest rates have no current effect on the interest expense recorded by the
Company. Further quantitative information can be found in Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in the Company's Form 10-K for the year ended December 31, 1998.

As of June 30, 1999:



|               | Remainder |  |        |  |        |  |        |  |         |  |           
|-------------- | --------- |  | ------ |  | ------ |  | ------ |  | ------- |  | ----------
|               | of 1999   |  | 2000   |  | 2001   |  | 2002   |  | 2003    |  | Thereafter
|LIABILITIES    |           |  |        |  |        |  |        |  |         |  |           
|(In thousands) |           |  |        |  |        |  |        |  |         |  |           
|Long-term debt | $2,500    |  | $5,000 |  | $5,000 |  | $5,000 |  | $13,000 |  | $52,500   

INTEREST RATE SWAPS
(In thousands)

|Notional Amount | $2,500 |  | $13,000 |  | $17,500 |  | $50,000 |  | $       -- |  | $       --
|--------------- | ------ |  | ------- |  | ------- |  | ------- |  | ---------- |  | ----------

Duration is used by management to estimate the value change in the Company's fixed income securities.  Price volatility and duration are directly related.  Duration is the present value of all future cash flows to be
received.  The duration of the Company's fixed income portfolio as of June 30, 1999 was four years and the market value was $384.8 million.  Therefore, a 1% increase in interest rates would equate to a decrease in market value of approximately $15 million
or 4%.  Conversely, a 1% decline in interest rates would equate to an increase in market value of approximately $15 million.  Other factors such as spread changes, call features, special redemption features and prepayment changes will affect the duration
of the portfolio.  While duration is expressed in years, it is regarded as a percent change.

Equity price risk is the potential loss due to changes in the value of equity securities. Equities have more price variability than fixed securities.  Historically, equities have provided higher returns over a long
period of time.  As of  June 30, 1999, the Company's investment in equity securities had a market value of $62.2 million.  A 10% change in the portfolios equity prices would impact their value by approximately $6.2 million.  All equity securities are
marketable.



---

All of the above risks are monitored on an ongoing basis.  Management's need to react to significant changes in interest rates and equity prices is minimized by the fact that the annual maturities of investments and cash
flow from insurance operations are sufficient to meet the cash flow requirements of the business.  Therefore, management has the ability to wait out these changes.





The Company and its subsidiaries routinely are engaged in litigation as plaintiff and defendant in the normal course of business.  In the opinion of management all of these proceedings, as well as proceedings described
in the Company's Annual Report on Form 10-K for the year ended December 31, 1998, are not expected to have a material adverse effect on the Company's consolidated financial position, cash flow or operating results.  The aggregate ultimate liability, if
any, of the Company and its subsidiaries for these proceedings is not determinable at June 30, 1999.  However, of the proceedings that were pending at December 31, 1998, the following have been terminated:

On January 19, 1999, the Company and First USA Bank agreed to resolve the action filed in 1998 by the Company against First USA Bank and Banc One in the United States District Court for the Western District of Michigan
arising out of a dispute concerning an insurance services agreement made in 1996.  The settlement provided that First USA Bank pay the Company $6.75 million in connection with the termination of the insurance services agreement which had provided the
Company the exclusive right to offer certain insurance products to First USA Bank's credit card customers.  The settlement proceeds were recorded in the Company's financial results for the first quarter of 1999.

In April 1996, national class actions were filed by the same group of plaintiffs' attorneys in Wisconsin, Illinois and Florida state courts against the Company and certain other defendants alleging misrepresentations in
connection with the sale of force-placed collateral protection insurance.  The complaints sought unspecified compensatory and punitive damages.  The Wisconsin case was conditionally class certified by the Wisconsin state court, before service of the
complaint.  On June 22, 1998, the Circuit Court of Waupaca County, Wisconsin, issued an Order vacating the class certification dismissing all claims against the Company in the Wisconsin action, without prejudice.  The case filed in the Circuit Court of
the Sixth Judicial Circuit, Champaign County, Illinois, was dismissed by stipulation without prejudice on April 6, 1999.  The action filed in the Circuit Court of the Eleventh Judicial Circuit in and for Dade County, Florida, has been stayed.  The Company
will defend this remaining case, if the stay is terminated, and believes that the case has no merit.  The Company has not established a specific reserve for these related actions, because the amount of the Company's liability exposure, if any, cannot be
reasonably estimated.



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

The annual meeting of shareholders of the Company was held on April 29, 1999.  The purpose of the meeting was to elect directors, to ratify the appointment of BDO Seidman, LLP as independent auditors for the year ending
December 31, 1999 and to transact any other business that properly came before the meeting.  The total shares of Common Stock outstanding as of the record date was 26,830,110.

The name of each director elected (along with the number of votes cast for or authority withheld) is as follows:



|                      |  | Votes Cast
|--------------------- |  | ----------
|Election of Directors |  | For       
|                      |  |           
|Richard L. Antonini   |  | 24,712,325
|Larry J. Orange       |  | 24,716,249
|Joseph A. Parini      |  | 24,710,574

The following individuals continue to serve as directors of the Company:  John C. Canepa, Michael de Havenon, Arthur E. Hall, Richard A. Kayne, Robert M. Raives, Michael B. Targoff and F. Robert Woudstra.



|Proposal                          | For        |  | Against |  | Abstain
|--------------------------------- | ---------- |  | ------- |  | -------
|                                  |            |  |         |  |        
|Proposal to ratify appointment of |            |  |         |  |        
|BDO Seidman, LLP:                 | 24,834,104 |  | 5,481   |  | 28,143 

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(a)      List of Exhibits.  The following documents are filed as exhibits to this report on Form 10-Q:



|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                     
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                                                                            
|3.1            |  | Articles of Incorporation of the Company. Incorporated by reference to Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 dated November 12, 1998.                        
|               |  |                                                                                                                                                                                                                            
|3.2            |  | Bylaws of the Company. Incorporated by reference to Exhibit 3.2 of the Company's Quarterly Report on Form 10-Q for the quarter ending September 30, 1998, dated November 12, 1998.                                         
|               |  |                                                                                                                                                                                                                            
|4.1            |  | Specimen Stock Certificate.  Incorporated by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q for the quarter ending September 30, 1998, dated November 12, 1998.                                   
|               |  |                                                                                                                                                                                                                            
|4.2            |  | Rights Agreement. Incorporated by reference to Exhibit 2.1 of the Company's Registration Statement on Form 8-A, effective January 8, 1990.                                                                                 
|               |  |                                                                                                                                                                                                                            
|4.3            |  | Articles of Incorporation.  See Exhibit 3.1 above.                                                                                                                                                                         
|               |  |                                                                                                                                                                                                                            
|4.4            |  | Bylaws.  See Exhibit 3.2 above.                                                                                                                                                                                            
|               |  |                                                                                                                                                                                                                            
|10.1           |  | Company's Annual Incentive Plan, restated January 1, 1998.*  Incorporated by reference to Exhibit 10.1 of the Company's Annual Report on Form 10-K for the year ending December 31, 1998, dated March 16, 1999.            
|               |  |                                                                                                                                                                                                                            
|10.2           |  | Company's Long-Term Incentive Plan dated December 8, 1994, as amended December 5, 1996.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ending December 31,1997, dated March
17, 1997.
|               |  |                                                                                                                                                                                                                            
|10.3           |  | Company's Retirement Supplement Plan, as amended effective January 1, 1994.* Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, dated February 24, 1994.          
|               |  |                                                                                                                                                                                                                            
|10.4           |  | Company's Non-Qualified Stock Option Plan, dated February 23, 1995.* Incorporated by reference to the Company's Annual Report on Form 10-K for the year ending December 31, 1994, dated February 23, 1995.                 

---

|10.5  |  | Amended and Restated Agreement made as of the 1st day of January 1998 between the Company and the American Association of Retired Persons. Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ending December 31, 1997, dated March 6, 1998.
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                             
|10.6  |  | Director's Deferred Compensation Plan, as amended effective January 1, 1994.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, dated February 24, 1994.                                                         
|      |  |                                                                                                                                                                                                                                                                             
|10.7  |  | Executive Deferred Compensation Plan, as amended effective January 1, 1994.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, dated February 24, 1994.                                                          
|      |  |                                                                                                                                                                                                                                                                             
|10.8  |  | Employment Agreements dated as of January 1, 1990 between the Company and certain of its employees.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31,
1989, dated February 22, 1990.                                  
|      |  |                                                                                                                                                                                                                                                                             
|10.9  |  | Directors' Restricted Stock Plan, dated December 8, 1994.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ending December 31, 1994, dated February 23, 1995.                                                                           
|      |  |                                                                                                                                                                                                                                                                             
|10.10 |  | Stock Option Plan of 1998.*  Incorporated by reference to the Company's Definitive Proxy Statement filed on March 25, 1998.                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                             
|10.11 |  | Form of Indemnity Agreement for directors and officers.  Incorporated by reference to the Company's Definitive Proxy Statement filed on March 25, 1998.                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                             
|27    |  | Financial Data Schedule.                                                                                                                                                                                                                                                    

---

(b)      Reports on 8-K.  There were no reports filed on Form 8-K for the quarter ended June 30, 1999.



---





|                         | FOREMOST CORPORATION OF AMERICA             
|------------------------ | --------------------------------------------
|                         | (Registrant)                                
|                         |                                             
|                         |                                             
|Date:    August 10, 1999 | /s/ Paul D. Yared                           
|                         | Paul D. Yared                               
|                         | Its:    Senior Vice President, Secretary and
|                         | General Counsel                             
|                         |                                             
|                         |                                             
|Date:    August 10, 1999 | /s/ Kenneth C. Haines                       
|                         | Kenneth C. Haines                           
|                         | Its:    Controller                          

---



|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                      
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                                                                                                                             
|3.1            |  | Articles of Incorporation of the Company. Incorporated by reference to Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 dated November 12, 1998.                                                                         
|               |  |                                                                                                                                                                                                                                                                             
|3.2            |  | Bylaws of the Company. Incorporated by reference to Exhibit 3.2 of the Company's Quarterly Report on Form 10-Q for the quarter ending September 30, 1998, dated November 12, 1998.                                                                                          
|               |  |                                                                                                                                                                                                                                                                             
|4.1            |  | Specimen Stock Certificate.  Incorporated by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q for the quarter ending September 30, 1998, dated November 12, 1998.                                                                                    
|               |  |                                                                                                                                                                                                                                                                             
|4.2            |  | Rights Agreement. Incorporated by reference to Exhibit 2.1 of the Company's Registration Statement on Form 8-A, effective January 8, 1990.                                                                                                                                  
|               |  |                                                                                                                                                                                                                                                                             
|4.3            |  | Articles of Incorporation.  See Exhibit 3.1 above.                                                                                                                                                                                                                          
|               |  |                                                                                                                                                                                                                                                                             
|4.4            |  | Bylaws.  See Exhibit 3.2 above.                                                                                                                                                                                                                                             
|               |  |                                                                                                                                                                                                                                                                             
|10.1           |  | Company's Annual Incentive Plan, restated January 1, 1998.*  Incorporated by reference to Exhibit 10.1 of the Company's Annual Report on Form 10-K for the year ending December 31, 1998, dated March 16, 1999.                                                             
|               |  |                                                                                                                                                                                                                                                                             
|10.2           |  | Company's Long-Term Incentive Plan dated December 8, 1994, as amended December 5, 1996.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ending December 31,1997, dated March
17, 1997.                                                 
|               |  |                                                                                                                                                                                                                                                                             
|10.3           |  | Company's Retirement Supplement Plan, as amended effective January 1, 1994.* Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, dated February 24, 1994.                                                           
|               |  |                                                                                                                                                                                                                                                                             
|10.4           |  | Company's Non-Qualified Stock Option Plan, dated February 23, 1995.* Incorporated by reference to the Company's Annual Report on Form 10-K for the year ending December 31, 1994, dated February 23, 1995.                                                                  
|               |  |                                                                                                                                                                                                                                                                             
|10.5           |  | Amended and Restated Agreement made as of the 1st day of January 1998 between the Company and the American Association of Retired Persons. Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ending December 31, 1997, dated March 6, 1998.

---

|10.6  |  | Director's Deferred Compensation Plan, as amended effective January 1, 1994.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, dated February 24, 1994.                       
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                           
|10.7  |  | Executive Deferred Compensation Plan, as amended effective January 1, 1994.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, dated February 24, 1994.                        
|      |  |                                                                                                                                                                                                                                           
|10.8  |  | Employment Agreements dated as of January 1, 1990 between the Company and certain of its employees.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31,
1989, dated February 22, 1990.
|      |  |                                                                                                                                                                                                                                           
|10.9  |  | Directors' Restricted Stock Plan, dated December 8, 1994.*  Incorporated by reference to the Company's Annual Report on Form 10-K for the year ending December 31, 1994, dated February 23, 1995.                                         
|      |  |                                                                                                                                                                                                                                           
|10.10 |  | Stock Option Plan of 1998.*  Incorporated by reference to the Company's Definitive Proxy Statement filed on March 25, 1998.                                                                                                               
|      |  |                                                                                                                                                                                                                                           
|10.11 |  | Form of Indemnity Agreement for directors and officers.  Incorporated by reference to the Company's Definitive Proxy Statement filed on March 25, 1998.                                                                                   
|      |  |                                                                                                                                                                                                                                           
|27    |  | Financial Data Schedule.                                                                                                                                                                                                                  

---