FORM 10-Q/A
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                AMENDMENT NO. 1


           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

                                       OR

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

                   For the transition period from ____ to ____


                          Commission File Number 1-7411


                            ALLCITY INSURANCE COMPANY
                            -------------------------
             (Exact name of registrant as specified in its charter)


            New York                                             13-2530665
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 (State or other jurisdiction of                              (I.R.S. Employer
  incorporation or organization)                             Identification No.)



335 Adams Street, Brooklyn, N.Y.                      11201-3731
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(Address of principal executive offices)              (Zip Code)


Registrant's telephone number, including area code: (718)422-4000


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 12 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[ ]

On August 10, 2001 there were 7,078,625 shares of Common Stock outstanding.



76830.0146
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                                EXPLANATORY NOTE

Allcity Insurance Company (the "Company") hereby amends and restates in its
entirety "Item 2. Management's Discussion and Analysis of Financial Condition
and Interim Results of Operations" of its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001 on this Form 10-Q/A as follows:




















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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF INTERIM OPERATIONS

           The following should be read in conjunction with the Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the 2000 10-K.

LIQUIDITY AND CAPITAL RESOURCES

           For the six month periods ended June 30, 2001 and 2000, net cash was
used for operations principally as a result of a decrease in premiums written
and the payment of claims.

           At June 30, 2001 and 2000, the yield on the Company's bond portfolio
was 4.5% and 6.8%, respectively, with an average maturity of 1.0 year and 2.0
years, respectively. At June 30, 2001, a substantial portion of the Company's
investment portfolio is rated "investment grade" by established bond rating
agencies or issued or guaranteed by the U.S. Treasury or by governmental
agencies. A portion of the Company's invested assets represent an investment in
a limited partnership which invests principally in convertible preferred stocks,
convertible long-term debt securities, limited partnerships, and common stocks
sold, but not yet purchased.

           The Company maintains cash, short-term and readily marketable
securities and anticipates that the cash flow from investment income and the
maturities and sales of short-term investments and fixed maturities will be
sufficient to satisfy its anticipated cash needs. During each of the six month
periods ended June 30, 2001 and 2000, the Company sold certain securities to
meet short-term cash flow needs. The Company does not presently anticipate
paying dividends in the near future.


           As a result of its decision to exit all lines of business, the
Company expects to report a net use of cash from operations resulting primarily
from the payment of claims and other expenses in excess of revenues generated
for the foreseeable future. During 2001, the Company replaced a significant
portion of its fixed maturities investment portfolio with shorter term
investments in order to shorten its duration to match its cash needs.

           In April 2001, the Group's A.M. Best Company rating was downgraded
from B+ (Very Good) to C++ (Marginal). As a result of the Group having filed a
plan of orderly withdrawal with the Department, its decision to cease writing
any business and the substantial loss reported for the year 2000, the Company
does not expect that the downgrade will have a material impact on its
operations.


INTERIM RESULTS OF OPERATIONS-SIX AND THREE MONTHS ENDED JUNE 30, 2001 COMPARED
TO THE SIX AND THREE MONTHS ENDED JUNE 30, 2000.

           Net earned premium revenues of the Company were $11.9 million and
$16.0 million for the six month periods ended June 30, 2001 and 2000,
respectively, and $5.3 million and $8.0 million for the three month periods
ended June 30, 2001 and 2000, respectively. Earned and written premiums declined
in almost all lines of business. The declines are due, in part, to previously
announced decisions not to issue any new (as compared to renewal) insurance
policies in any lines of business effective March 1, 2001, to non-renew all
statutory automobile policies (public livery vehicles) effective March 1, 2001,
and to not accept any new private passenger automobile policies effective
December 2000. Commercial lines policies were non-renewed or canceled in
accordance with New York insurance law or replaced by Tower. Starting in the
second quarter, Tower purchased the renewal rights for substantially all of the
Empire Group's remaining lines of business, excluding private passenger
automobile and commercial automobile/garage, for a fee based on the direct
written premium actually renewed by Tower. The amount of the fee is not expected
to be material. The Empire Group will continue to be responsible for the
remaining term of its existing policies and all claims incurred prior to the
expiration of these policies. For commercial lines, the Empire Group will
thereafter have no renewal obligations for those policies. Under New York
insurance law, the Empire Group is obligated to offer renewals of homeowners,
dwelling fire, personal insurance coverage and personal umbrella for a


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three-year policy period; however, the Tower agreement provides that Tower must
offer replacements for these policies.

           Pre-tax losses for the Company were $15.1 million and $1.0 million
for the six month periods ended June 30, 2001 and 2000, respectively, and $0.8
million and $0.9 million for the three month periods ended June 30, 2001 and
2000, respectively. The pre-tax losses include increases for loss and loss
adjustment expenses for prior accident years of $11.7 million and $1.8 million
for the six month periods ended June 30, 2001 and 2000, respectively, and $0.9
million for the three month period ended June 30, 2000. In addition, during the
six and three month periods ended June 30, 2001, the Company wrote-off
approximately $2.6 million and $0.4 million, respectively, of deferred policy
acquisition costs as their recoverability from premiums and related investment
income was no longer anticipated.

           During 2001, the Company increased its reserve estimates for its
commercial package policies lines of business, primarily due to an increase in
severity of liability claims for accident years 1998 and prior. The Empire
Group, along with other carriers that write similar risks in the New York
marketplace, has exposure for third party liability claims in many of its lines
of business. During 2001, there were several settlements and court decisions on
third party liability cases for amounts that are greater than the industry's
historical experience for similar claims, which had formed the basis for the
Company's estimated loss reserves. While many of these decisions are being
appealed, these results may signal a change in the judicial environment in the
Company's marketplace. Accordingly, the Company has increased its loss reserve
estimate for the six month period ended June 30, 2001 by approximately $5.4
million due to an estimated increase in severity for certain of these exposures.

           Reserve strengthening in the six month period ended June 30, 2001
also resulted from unfavorable development principally in its automobile lines
of business for the 1998 through 2000 accident years, primarily relating to
personal injury protection coverage ("PIP") and in its workers' compensation
lines of business. The Company believes that the increased loss estimates for
PIP are consistent with recent trends in the industry, and has strengthened loss
reserves for all automobile lines by $2.7 million for the six month period ended
June 30, 2001. In addition, during the six month period ended June 30, 2001, the
Empire Group recalculated its estimate of loss adjustment expenses and increased
its reserve by $2.1 million, primarily as a result of increased costs to settle
claims handled in house.

           In management's judgment, information currently available has been
appropriately considered in estimating the Company's loss reserves. However, the
reserving process relies on the basic assumption that past experience is an
appropriate basis for predicting future events. As additional experience and
other data become available and are reviewed, the Company's estimates and
judgments may be revised.

           In July 2001, the Department informed the Company and its parent of
its examination findings concerning the three-year period ended December 31,
1999. The report on examination has not been filed and the Company and its
parent are in the process of reviewing these findings with the Department. Among
other matters, the Department's report indicated a loss reserve deficiency for
the Company and its parent, of which $9.0 million was attributed to the Company.
Although this deficiency is less than the combined surplus of the Company and
its parent, after it is allocated between them in accordance with the pooling
agreement, this deficiency causes its parent's stand alone statutory surplus to
fall below minimum required levels. In addition, the current structure causes
its parent's surplus to be reduced by a statutory limitation on the amount that
it can invest in its insurance subsidiaries. Accordingly, the Company and its
parent are evaluating reorganizing the current structure to reduce and/or


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eliminate these statutory limitations. Additionally, the Company and its parent
are considering certain other transactions to increase the parent's surplus
above the minimum required level on a stand alone basis.

           A meeting has been scheduled with the Department for the end of
August 2001 to review the Company's response to these findings. In addition, the
parent believes that the above transactions will serve as a basis for providing
the Department by the end of August 2001 with a plan for remedying its surplus
deficiency. Such a plan is subject to the review and approval of the Department.
No assurance can be given that such a plan will be approved by the Department or
that material adverse regulatory action will not be taken.

           Income taxes for the six months ended June 30, 2000 reflect a benefit
of $0.4 million for a change in the Company's estimated prior year's federal tax
liability.

CAUTIONARY STATEMENT FOR FORWARD-LOOKING INFORMATION

           Statements included in this Management's Discussion and Analysis of
Financial Condition and Results of Interim Operations may contain
forward-looking statements pursuant to the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements may
relate, but are not limited, to projections of revenues, income or loss, capital
expenditures, fluctuations in insurance reserves, plans for growth and future
operations, competition and regulation as well as assumptions relating to the
foregoing. Forward-looking statements are inherently subject to risks and
uncertainties, many of which cannot be predicted or quantified. When used in
this Management's Discussion and Analysis of Financial Condition and Results of
Interim Operations, the words "estimates", "expects", "anticipates", "believes",
"plans", "intends" and variations of such words and similar expressions are
intended to identify forward-looking statements that involve risks and
uncertainties. Future events and actual results could differ materially from
those set forth in, contemplated by or underlying the forward-looking
statements. The factors that could cause actual results to differ materially
from those suggested by any such statements include, but are not limited to,
those discussed or identified from time to time in the Company's public filings,
including general economic and market conditions, changes in domestic laws,
regulations and taxes, changes in competition and pricing environments, regional
or general changes in asset valuation, the occurrence of significant natural
disasters, the inability to reinsure certain risks economically, the adequacy of
loss and loss adjustment expense reserves, prevailing interest rate levels,
weather related conditions that may affect the Company's operations,
effectiveness of the Tower agreement, the ability to attract and retain key
personnel, adverse selection through renewals of the Empire Group's policies,
the Empire Group's ability to develop an alternative business model, regulatory
approval of the Empire Group's plan in response to the findings of the
Department, adverse regulatory action against the Empire Group and changes in
composition of the Company's assets and liabilities through acquisitions or
divestitures. Undue reliance should not be placed on these forward-looking
statements, which are applicable only as of the date hereof. The Company
undertakes no obligation to revise or update these forward-looking statements to
reflect events or circumstances that arise after the date of this Management's
Discussion and Analysis of Financial Condition and Results of Interim Operations
or to reflect the occurrence of unanticipated events.


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                                    SIGNATURE

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.



                                              ALLCITY INSURANCE COMPANY
                                              Registrant

Date: September 14, 2001                      By: /s/ Rocco J. Nittoli
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                                                  Rocco J. Nittoli
                                                  Chief Operating Officer














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