SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-Q

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

         For the Quarterly period ended
                September 30, 1997              Commission File Number 0-15330
    _______________________________

                        AMVESTORS FINANCIAL CORPORATION
                    _______________________________________
             (Exact name of registrant as specified in its charter)

                  Kansas                                48-1021516
         ____________________________         _________________________________

         (State or other jurisdiction of    (I.R.S. Employer Identification No.)
         incorporation or organization)

                  555 South Kansas Avenue, Topeka, Kansas 66603
          ____________________________________________________________
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code:  (785) 232-6945




    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

____________________________________________________________________________

    Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

    Class                         Outstanding November 10, 1997
    ______                       _______________________________
    Common Stock, no par value         17,215,888 shares
<PAGE>
                        AMVESTORS FINANCIAL CORPORATION
                                     INDEX


PARTI.      Financial Information:                                  Page Number
            Item1. Financial Statements
            Consolidated Balance Sheets-
              September 30, 1997 and December 31, 1996                   2-3
            Consolidated Statements of Earnings-
              Nine months ended September 30, 1997 and 1996               4
            Consolidated Statements of Earnings-
              Three months ended September 30, 1997 and 1996              5
            Consolidated Statements of Stockholders' Equity-
              Twelve months ended December 31, 1996 and
              Nine months ended September 30, 1997                        6
            Consolidated Statements of Cash Flows-
              Nine months ended September 30, 1997 and 1996             7-8
            Notes to Consolidated Financial Statements                  9-28
            Item 2. Management's Discussion and Analysis of
              Financial Condition and Results of Operations            28-37

PART II.    Other Information                                          38-42
1<PAGE>
AMVESTORS FINANCIAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                    September 30, 1997 and December 31, 1996
                                (000's Omitted)
                                  (Unaudited)



 ASSETS                                                       1997      1996
 _________________________________________________________   _______   _______


 Investments:
     Debt securities:
       Bonds:
         Available-for-sale (cost: $2,773,931 and
          $2,547,658)                                     $2,850,133  2,594,293
         Trading (cost: $33,563 and $12,198)
                                                              34,830     12,291
                                                           2,884,963  2,606,584
     Equity securities:
       Common stock:
         Available-for-sale (cost: $1,159 and $1,396)          2,800      2,440
         Trading (Cost: $1,334 and $-0-)                       1,463          -
       Preferred stock:
         Available-for-sale (cost: $27,894 and $27,742)       31,620     30,694
         Trading (cost: $2,124 and $2,516)                     2,198      2,539
                                                              38,081     35,673
    Other long-term investments                               40,065     41,152
     Short-term investments                                      488        371
 Total investments                                         2,963,597  2,683,780
 Cash and cash equivalents                                    32,882    132,574
 Amounts receivable under reinsurance agreements             225,104    241,458
 Amounts receivable on securities settlements in process      22,344      2,395
 Accrued investment income                                    40,800     36,676
 Deferred cost of policies produced                          195,609    175,837
 Deferred cost of policies purchased                          30,806     39,865
 Goodwill                                                     11,345     11,644
 Other assets                                                 24,942     21,246
         Total assets                                    $ 3,547,429  3,345,475

See notes to consolidated financial statements.
2<PAGE>
                AMVESTORS FINANCIAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                    September 30, 1997 and December 31, 1996
                                (000's Omitted)
                                  (Unaudited)



 LIABILITIES AND STOCKHOLDERS' EQUITY                           1997      1996
 ___________________________________________________________ _______   _______


 Liabilities:

     Policy liabilities:
       Future policy benefits                              $3,190,796  3,037,005
       Other policy liabilities                                12,718      6,709





                                                             3,203,514 3,043,714

     Subordinated debentures payable                            65,000    65,000
     Amounts due on securities settlements in process            8,320    11,301
     Deferred income taxes                                      24,190    13,302
     Accrued expenses and other liabilities                     11,818     7,811
                   Total liabilities                         3,312,842 3,141,128
 Commitments and contingencies
 Stockholders' equity:
     Preferred stock, $1.00 par value, authorized -
       2,000,000 shares                                            -         -
     Common stock, no par value, authorized -
       25,000,000 shares; issued - 13,347,295
        shares in 1997 and 13,167,372 shares in 1996            16,984    16,755
     Paid in capital                                           100,374    98,678
     Unrealized investment gains (net of amortization of
     deferred cost of policies produced of $29,029 and
     $18,175 and net amortization of deferred cost of
     policies purchased of $8,463 and $5,112 and deferred
     income tax expense of $15,360 and $9,643)                  28,717    17,701
     Retained earnings                                          91,248    73,949
                                                               237,323   207,083
     Less treasury stock                                        (234)      (234)
     Less leveraged employee stock ownership trust
       (LESOP)                                                (2,502)    (2,502)
      Total stockholders' equity                              234,587    204,347
       Total liabilities and stockholders' equity          $3,547,429  3,345,475
See notes to consolidated financial statements.
3<PAGE>
                AMVESTORS FINANCIAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF EARNINGS
                 Nine months ended September 30, 1997 and 1996
                     (000's Omitted, except per share data)
                                  (Unaudited)
                                                                 1997      1996

 Revenue:
     Insurance premiums and policy charges..................$   14,314    10,451
     Net investment income                                     157,544   139,704
     Net investment gains                                       11,993     4,792
     Other revenue                                               2,279     1,473
       Total revenue                                           186,130   156,420
  Benefits and expenses:
     Benefits, claims and interest credited to policyholder.   117,938   104,500
     Amortization of deferred cost of policies produced         15,536    11,467
     Amortization of deferred cost of policies purchased         5,707     3,516
     General insurance expenses                                 11,976     9,084
     Premium and other taxes, licenses and fees                  2,218     1,879
     Other expenses                                                164       165
      Total benefits and expenses                              153,539   130,611
  Operating earnings                                            32,591    25,809
 Interest expense                                                4,289     2,107
 Earnings before income tax expense and extraordinary item      28,302    23,702
 Income tax expense                                              9,906     8,414
 Earnings before extraordinary item                             18,396    15,288
 Extraordinary item: Loss on early extinguishment of
     debt (net of income tax benefit of $148)                     -       (269)
  Net Earnings                                                 $18,396    15,019
 Earnings per share of common stock:

     Primary:
     Net earnings                                              $  1.31      1.19
     Fully diluted:
     Net earnings                                              $  1.17      1.15
 Average shares outstanding:

     Primary                                                    14,038    12,584
     Fully diluted                                              18,113    13,755

See notes to consolidated financial statements.
4<PAGE>
                AMVESTORS FINANCIAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF EARNINGS
                 Three months ended September 30, 1997 and 1996
                     (000's Omitted, except per share data)
                                  (Unaudited)
                                                               1997      1996

Revenue:
    Insurance premiums and policy charges                    $ 5,228     4,098
    Net investment income                                     54,406    50,547
    Net investment gains                                       8,078     2,258
    Other revenue                                                718       760
     Total revenue                                            68,430    57,663
Benefits and expenses:
    Benefits, claims and interest credited to policyholders   41,467    37,735
    Amortization of deferred cost of policies produced         7,250     4,054
    Amortization of deferred cost of policies purchased        2,136     1,400
    General insurance expenses                                 4,426     3,548
    Premium and other taxes, licenses and fees                   594       779
    Other expenses                                                60        52
    Total benefits and expenses                               55,933    47,568
Operating earnings                                            12,497    10,095
Interest expense                                               1,426     1,373
Earnings before income tax expense and extraordinary item     11,071     8,722
Income tax expense                                             3,875     3,171
Earnings before extraordinary item                             7,196     5,551
Extraordinary item: Loss on early extinguishment of
    debt (net of income tax benefit of $123)                    -        (222)
Net earnings                                                 $ 7,196     5,329
Earnings per share of common stock:
    Primary:
    Net earnings                                             $   .50       .39
    Fully diluted:
    Net earnings                                             $   .45       .36
Average shares outstanding:
    Primary                                                   14,404    13,636
    Fully diluted                                             18,200    16,939

See notes to consolidated financial statements.
5<PAGE>
                AMVESTORS FINANCIAL CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                (000's Omitted, except share and per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
<S>                            <C>          <C>      <C>           <C>         <C>          <C>        <C>
                                                      Unrealized
                                   Common     Paid-in  Investment   Retained     Treasury
                                    Stock     Capital   Gains       Earnings      Stock      LESOP      Total
Balance as of January 1,
 1996                            2,904       64,284       45,372       54,714         -         (2,829)   174,445

Net earnings                        -          -           -           20,862         -            -       20,862
Change in unrealized invest-
  ment gains                        -          -        (27,671)        -           -           -        (27,671)
Cash dividends to stockholders
  ($.1425 per share on common
  stock)                            -          -           -         (1,627)        -           -         (1,627)
Issuance of common stock:
 upon acquisition of company       3,464      28,865         -           -           -           -         32,329
 upon exercise of options            387         585<F1>     -           -           -           -             972
Issuance of warrants:
  upon acquisition of company       -         5,201         -           -           -           -          5,201
Purchase of warrants                -          (257)        -           -           -           -           (257)
Acquisition of treasury shares      -          -           -           -           (234)        -           (234)
Allocation of LESOP shares          -          -           -           -           -            327          327
Balance as of December 31,
 1996                           16,755       98,678       17,701       73,949      (234)      (2,502)    204,347
Net earnings                        -          -           -         18,396         -              -         18,396
Change in unrealized invest-
  ment gains                        -          -         11,016         -           -             -          11,016
Cash dividends to stockholders
  ($.0825 per share on common
  stock)                            -          -           -         (1,097)        -              -          (1,097)
Issuance of common stock:
 upon exercise of options            229     1,696<F1>         -           -           -            -         1,925
Balance as of September 30,
1997                           $  16,984     100,374     28,717       91,248         (234)      (2,502)       234,587
<FN><F1> Net of income tax benefit of $548 and $242 for the period ended
         September 30, 1997 and December 31, 1996, respectively.

</TABLE>

See notes to consolidated financial statements.
6<PAGE>
                AMVESTORS FINANCIAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents
                 Nine Months ended September 30, 1997 and 1996
                                (000's Omitted)
                                  (Unaudited)

                                                           1997         1996






Operating Activities:
 Net earnings........................................... $  18,396      15,019
 Adjustments to reconcile net earnings to net
     cash provided by (used in) operating activities:
   Interest credited to policyholders...................   121,415     109,925
   Amortization of (discounts) premiums
    on debt securities, net.............................   (3,342)       (798)
   Amortization of deferred cost of policies
    produced............................................    15,536      11,467
   Amortization of deferred cost of policies
     purchased..........................................     5,707       3,516

   Net investment (gains) losses........................  (11,993)     (4,797)
   Investment trading activity..........................  (21,202)    (44,572)
   Accrued investment income............................   (4,124)     (2,396)
   Deferred income taxes................................     5,223       3,413
   Other, net...........................................     2,717         802
   Net cash provided by operating activities............   128,333      91,579
 Investing Activities:
  Purchases of securities:
   Available-for-sale.................................... (627,786)   (631,813)
  Proceeds from sale of securities:
   Available-for-sale....................................   336,290     407,285
  Proceeds from maturity or redemption:
   Available-for-sale....................................    78,198     120,727
  Other long-term investments, net.......................     1,091       4,324
  Short-term investments, net............................     (117)         219
  Capitalization of deferred cost of policies
    produced.............................................  (46,161)    (30,408)
  Capitalization of goodwill.............................        -       (341)
  Acquisition, net of cash received......................        -     (2,314)
  Construction of home office............................   (4,507)     (7,691)
  Other, net.............................................       198       (271)
  Net cash used in investing activities.................. (262,794)   (140,283)
Financing Activities:
  Premiums received......................................  442,137     317,991
  Surrender and death benefits paid...................... (414,303)   (344,339)
  Surrender and risk charges collected...................    12,276      8,801
  Securities settlements in process......................  (22,929)      8,118
  Acquisition of treasury stock..........................        -       (234)
  Cash dividends to stockholders.........................   (1,097)     (1,333)
  Issuance of common stock...............................     1,925        483
  Purchase of warrants...................................        -        (257)
  Notes payable..........................................        -    (22,500)
  Debentures payable.....................................        -       65,000
  Reinsurance reimbursements.............................    18,486      11,510
  Other, net.............................................   (1,726)         619
  Net cash provided by (used in)
   financing activities..................................    34,769     43,859
Increase (Decrease) in Cash and Cash Equivalents........... (99,692)     (4,845)
Cash and Cash Equivalents:
   Beginning of year......................................   132,574      48,281
   End of year............................................ $  32,882      43,436

See notes to consolidated financial statements.
7<PAGE>
                AMVESTORS FINANCIAL CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                Increase (Decrease) in Cash and Cash Equivalents
                 Nine months ended September 30, 1997 and 1996
                                (000's Omitted)
                                  (Unaudited)


SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:          1997              1996




    Income tax payments (refunds).................... $   3,093            2,590
    Interest payments...............................  $    975               805







                                                        (000's Omitted)
                                              For the Period Ended September 30,

__________________________________

NON-CASH ACTIVITIES:                                    1997            1996





Change in net unrealized investment gains
   (losses).......................................... $  30,938         (80,016)

  Less: Associated (increase) reduction in
        amortization of deferred cost of policies
         Produced....................................  (10,854)           22,764
        Purchased....................................   (3,351)            (508)
        Deferred income tax (expense) benefit........   (5,717)           20,207





  Net change in net unrealized gains (losses)........ $  11,016         (37,553)







___________________________________________________

  Investing activities:
   Purchase of securities:
     Available-for-sale.............................. $  55,953              -
   Sales of securities:
     Available-for-sale.............................. $   55,953             -

           __________________________________________

  Details of acquisition:
   Fair value of assets acquired..................... $       -          722,388
   Liabilities assumed...............................         -        (673,611)
   Common stock and warrants issued..................         -         (37,531)



   Cash paid.........................................         -           11,246
   Less: Cash acquired...............................         -          (8,932)



   Net cash paid for acquisition..................... $       -            2,314


    The above represents transactions involving the exchange of one security
for another. For additional information see Note 2 of Notes to Consolidated
Financial Statements.

See notes to consolidated financial statements.
8<PAGE>
                AMVESTORS FINANCIAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Summary of Significant Accounting Policies:
_______________________________________________

A.  PRINCIPLES OF CONSOLIDATION:

        The consolidated financial statements include the accounts of
AmVestors and its wholly-
        owned subsidiaries American Investors Life Insurance Company, Inc.
(American), American Investors Sales Group, Inc. (American Sales), AmVestors
Acquisition Subsidiary, Inc. (AAS), successor through merger with Financial
Benefit Group, Inc. (FBG), AmVestors CBO II Inc. (CBO II), AmVestors
Investment Group, Inc. (AIG), Annuity International Marketing Corporation
(AIMCOR), Financial Benefit Life Insurance Company (FBL), Annuity Warehouse,
Inc. (AW), formerly The Insurance Mart, Inc., and Rainbow Card Pack
Publication, Inc. (RBCP), (collectively the company). All significant
intercompany accounts and transactions have been eliminated.
B.  ACCOUNTING PRINCIPLES AND PRACTICES:
        The accompanying unaudited consolidated financial statements have
been prepared on the basis of generally accepted accounting principles as
promulgated by the American Institute of Certified Public Accountants. In the
opinion of the company, the consolidated financial statements contain all
adjustments (consisting of only normal recurring accruals) necessary to
present fairly the financial position as of September 30, 1997 and the
results of earnings and the statements of cash flows for the nine month period
s ended September 30, 1997 and 1996.
C. INVESTMENTS:

        Debt securities held-to-maturity are carried at amortized cost,
except that those securities with an other than temporary impairment in value
are carried at estimated net realizable value. Debt securities
available-for-sale are carried at estimated market value, with any unrealized
gains (losses) recorded in stockholders' equity.
        Investments are reviewed on each balance sheet date to determine if
they are impaired. In determining whether an investment is impaired, the
company considers whether the decline in market value at the balance sheet
date is an other than temporary decline; if so, then the investment's
carrying value is reduced to a new cost basis which represents estimated fair
value. The decline in value is reported as a realized loss, and a recovery
from the new cost basis is recognized as a realized gain only at sale.
        The estimates of fair value are based on information obtained from
published financial information provided by issuers, independent sources such
as broker dealers or the company's independent investment advisor. Such
amounts represent an estimate of the consideration to be received in the
future when the defaulted company's debt is settled through the sale of their
assets or the restructuring of their debt. These estimates do not represent
the discounted present value of these future considerations.
        Investments in common and preferred stock are carried at market, with
unrealized gains (losses) recorded in stockholders' equity for securities
available-for-sale.
        Investments in debt and equity securities which were purchased
principally for the purpose of selling such securities in the near term are
classified as trading securities and are carried at market, with unrealized
gains (losses) included currently in the results of earnings.
        The cost of securities sold is determined on a specific
identification basis.
        Other long-term investments include policy loans and mortgage loans
on real estate which
        are carried at cost less principal payments since date of
acquisition, and certain partnership investments which are accounted for
using the equity method of accounting. These partnership investments are
evaluated on an annual basis to determine the existence of an impairment.
9<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
1. Summary of Significant Accounting Policies (continued):
___________________________________________________________
D.  FAIR VALUE OF FINANCIAL INSTRUMENTS:

        Estimated fair value amounts have been determined by the company
using available market information and appropriate valuation methodologies.
Due to the fact that considerable
        judgment is required to interpret market data to develop the
estimates of fair value, the estimates presented are not necessarily
indicative of the amounts that could be realized in a current market
exchange.
        The carrying values and estimated fair values of the company's
financial instruments as of September 30, 1997, and December 31, 1996, were
as follows:
                                                  (000's Omitted)
                                           1997                      1996

                                 Carrying       Fair       Carrying      Fair
                                  Value         Value        Value       Value
                               __________   __________   __________   __________
Assets:
Debt securities               $2,884,963    2,884,963    2,606,584    2,606,584
Equity securities                 38,081       38,081       35,673       35,673
Other long-term investments       40,065       40,216       41,152       41,176
Short-term investments               488          488          371          371
Cash and cash equivalents         32,882       32,882      132,574      132,574
Accounts receivable on
 securities settlements in
  process                         22,344       22,344        2,395        2,395
Accrued investment income         40,800       40,800       36,676       36,676
Liabilities:
Future policy benefits -
 investment contracts          2,954,041    2,731,858    2,767,326    2,583,902
Other policy liabilities          12,718       12,718        6,709        6,709
Subordinated debentures
 payable                          65,000       79,950       65,000       65,325
Amounts due on securities
 settlements in process            8,320        8,320       11,301       11,301
Accrued expenses and other
 liabilities                      11,818       11,818        7,811        7,811

        DEBT SECURITIES - Fair values are based on quoted market prices or
dealer quotes, if available. If a quoted market price is not available, fair
value is estimated using quoted market prices for similar securities.
        EQUITY SECURITIES - Fair value equals the carrying value as these
securities are carried at quoted market value.
        OTHER LONG-TERM INVESTMENTS - For certain homogeneous categories of
mortgage loans, fair value is estimated using quoted market prices for
securities backed by similar loans, adjusted for differences in loan
characteristics. Fair value of policy loans and other long-term investments
is estimated to approximate the assets' carrying value.
        SHORT-TERM INVESTMENTS AND CASH AND CASH EQUIVALENTS - The carrying
amounts reported in the balance sheet approximate the assets' fair value.
        AMOUNTS RECEIVABLE ON SECURITIES SETTLEMENTS IN PROCESS - The
carrying amount reported in the balance sheet approximates the fair value of
this asset.
        ACCRUED INVESTMENT INCOME - The carrying amounts reported in the
balance sheet for these assets approximate fair value.
10<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

1. Summary of Significant Accounting Policies (continued):
___________________________________________________________
        FUTURE POLICY BENEFITS FOR INVESTMENT CONTRACTS - The fair values for
deferred annuities were estimated to be the amount payable on demand at the
reporting date as those investment contracts have no defined maturity and are
similar to a deposit liability. The amount payable at the reporting date was c
alculated as the account balance less any applicable surrender charges.
        OTHER POLICY LIABILITIES - The carrying amount reported in the
balance sheet approximates the fair value of these liabilities.
        SUBORDINATED DEBENTURES PAYABLE - The fair value of the company's
debentures is based on a dealer quote.
        AMOUNTS DUE ON SECURITIES SETTLEMENTS IN PROCESS - The carrying
amount reported in the
        balance sheet approximates the fair value of this liability.
        ACCRUED EXPENSES AND OTHER LIABILITIES - The carrying amount reported
in the balance sheet approximates the fair value of these liabilities.
        The use of different market assumptions and/or estimation
methodologies could have a material effect on the estimated fair value
amounts.
E. SIGNIFICANT RISKS AND UNCERTAINTIES:
        NATURE OF OPERATIONS - The company specializes in the sale of
deferred annuity products, the earnings on which are not currently taxable to
the annuity owner. Any changes in tax regulations which eliminate or
significantly reduce this advantage of tax deferred income would adversely
impact the operations of the company. The company's products are marketed
nationwide through a network of independent agents licensed in 47 states, the
District of Columbia and the U.S. Virgin Islands. The company is not
dependent on any one agent or agency for a substantial amount of its
business. No single agent accounted for more than 2% of annuity sales in
1996, and the top twenty individual agents accounted for approximately 18% of
1996 annuity sales.
        USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results may differ from those estimates.
        CERTAIN SIGNIFICANT ESTIMATES - Certain costs incurred to acquire new
business are deferred and amortized in relation to the incidence of expected
gross profits over the expected life of the policies. Determination of
expected gross profits includes management's estimate of certain elements
over the life of the policies, including investment income, interest to be
credited to the contract, surrenders and resultant surrender charges, deaths
and in the case of life insurance, mortality charges to be collected. These
estimates of expected gross profits are used as a basis for amortizing
deferred costs. These estimates are periodically reviewed by management and,
if actual experience indicates that the estimates should be revised, the
total amortization recorded to date is adjusted by a charge or credit to
earnings.
F.  DEFERRED COST OF POLICIES PRODUCED:
        The costs of acquiring new business (primarily commissions and policy
expenses), which vary with and are directly related to the production of new
business, have been deferred. The deferred costs related to investment-type
deferred annuity contracts are amortized in relation to the incidence of
expected gross profits over the expected life of the policies. For single
premium life insurance, deferred policy acquisition costs are amortized over
the life of the policies, but not more than 20 years for policies issued
before January l, 1987, and not more than 30 years for policies issued after
December 31, 1986,
11<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
1. Summary of Significant Accounting Policies (continued):
___________________________________________________________
based on the expected gross profits for the amortization periods. The
deferred costs related to traditional life contracts are amortized over the
premium paying period for the related policies using the same actuarial
assumptions as to interest, mortality and withdrawals as are used to
calculate the reserves for future benefits.
        Estimates of the expected gross profits to be realized in future
years include the
        anticipated yield on investments, including realized gains (losses).
Deferred policy acquisition costs will be adjusted in the future based on
actual investment income earned.
G.  DEFERRED COST OF POLICIES PURCHASED:
        At the date of acquisition of a company, a portion of the purchase
price is allocated to the right to receive future cash flows from the
existing insurance contracts. The amount allocated represents the present
value of the projected future cash flows from the acquired policies. These
projections take into account mortality, surrenders, operating expenses,
yields on the investments held to back the policy liabilities and other
factors known or expected at the valuation date based on the judgment of manag
ement.
        The deferred cost of policies purchased is amortized in relation to
the incidence of expected cash flows over the expected life of the policies.
If it is determined that the present value of future cash flows is
insufficient to recover the deferred cost of policies purchased, its carrying
value will be reduced with a corresponding charge to earnings.
H.  GOODWILL:
        Goodwill represents the excess of the amount paid to acquire a
company over the fair value of the net assets acquired. This balance is
amortized on a straight-line basis over a 30-year period. If it is determined
through an estimate of future cash flows that the goodwill has been impaired,
its carrying value will be reduced with a corresponding charge to earnings.
I.  FUTURE POLICY BENEFITS:
        Liabilities for future policy benefits under life insurance policies,
other than single
        premium life insurance, have been computed by the net level premium
method based upon estimated future policy benefits (excluding participating
dividends), investment yield, mortality and withdrawals giving recognition to
risk of adverse deviation. Interest rates range from 41\2% to 101\4%
depending on the year of issue, with mortality and withdrawal assumptions
based on company and industry experience prevailing at the time of issue.
        For single premium life insurance and single premium annuities, the
future policy
        benefits are equal to the accumulation of the single premiums at the
credited rate of interest and for single premium whole life, less any
mortality charges.
J.  PARTICIPATING POLICIES:
        The company issued participating policies on which dividends are paid
to policyholders as determined annually by the Board of Directors. The amount
of dividends declared but undistributed is included in other liabilities.
Policy benefit reserves do not include a provision for estimated future
participating dividends.
K.  DEPRECIATION:
        The home office buildings are depreciated on the straight-line basis
over estimated lives from 25 to 40 years. Other depreciation is provided on
the straight-line basis over useful lives ranging from 1 to 10 years.
12<PAGE>
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
1. Summary of Significant Accounting Policies (continued):
___________________________________________________________
L.  INCOME TAXES:
        The company and its subsidiaries, except for FBL, prepare and file
their income tax returns on a consolidated basis. Under current tax law,
FBLis not eligible for inclusion in a consolidated tax return for a period of
five years following the date of acquisition.
        The company provides for the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
reported in the financial statements on the liability method.
M.  EARNINGS PER SHARE:
        Primary earnings per share of common stock are computed by dividing
net earnings by the sum of the weighted average number of shares outstanding
during the period plus dilutive common stock equivalents applicable to stock
options and warrants calculated using the treasury stock method. Fully
diluted earnings per share assumes the conversion of the convertible
debentures outstanding with applicable reduction in interest expense related
to the debentures.
N.  CONSOLIDATED STATEMENTS OF CASH FLOWS:
        For purposes of reporting cash flows, cash and cash equivalents
includes cash and money market accounts and other securities with original
maturities of three months or less.
O.  NEW ACCOUNTING STANDARDS:
        SFAS125 - ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS
AND EXTINGUISHMENT OF LIABILITIES
        Effective for transactions occurring after December 31, 1996, SFAS
125 establishes accounting and reporting standards based on the consistent
application of the financial-components approach. This approach requires the
recognition of financial assets and servicing assets that are controlled by
the reporting entity, the derecognition of financial assets when control is
surrendered, and the derecognition of liabilities when they are extinguished.
Specific criteria are established for determining when control has been
surrendered in the transfer of financial assets. The company does not expect
the implementation of SFAS125 to have a material effect on its consolidated
financial statements.
        SFAS 127 - Deferral of the Effective Date of Certain Provisions of
FASB Statement No. 125
        Issued in December, 1996, as an amendment to SFAS 125, SFAS 127
defers the provisions of SFAS 125 as regards repurchase agreements,
dollar-rolls, securities lending and similar transactions for one year. The
company does not expect the implementation of SFAS 127 to have a material
effect on its consolidated financial statements.
        SFAS 128 - Earnings Per Share
        Effective for interim and annual periods ending after December 15,
1997, SFAS128 specifies the computation, presentation and disclosure
requirements for earnings per share for entities with publicly held common
stock. Basic earnings per share is computed by dividing income available for
common stockholders by the weighted average number of common shares
outstanding. Diluted earnings per share reflects the dilution that would
occur if securities or other contracts to issue common stock were exercised
or converted into common stock or resulted in the issuance of common stock
and shared in the income available for common stockholders. The company does
not expect the implementation of SFAS 128 to have a material effect on the
reported earnings per share of the company.
        SFAS 129 - Disclosure of Information about Capital Structure
        Effective for periods ending after December 15, 1997, SFAS129 is
applicable to all entities and requires disclosure of the pertinent rights
and privileges of the various securities the entity has outstanding. These
disclosures shall include dividend and liquidation preferences, participation
rights, call prices and dates, conversion or exercise prices or rates and
pertinent dates, sinking-fund requirements, unusual voting rights and
13<PAGE>
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
1. Summary of Significant Accounting Policies (continued):
___________________________________________________________

significant terms of contracts to issue additional shares. In addition, an
entity is required to disclose the number of shares issued upon conversion,
exercise or satisfaction of required conditions. Due to the reporting nature
of SFAS129, the company does not expect the implementation to have a material
effect on its consolidated financial statements.
        SFAS 130 - Reporting Comprehensive Income
        Effective for financial periods beginning after December 15, 1997,
SFAS130 establishes standards for reporting of comprehensive income and its
components. All items that are required to be recognized as components of
comprehensive income, consisting of changes in the equity of a business
enterprise during a period from transactions and other events and
circumstances from nonowner sources, are to be reported in a financial
statement that is displayed with the same prominence as other financial
statements. Due to the reporting nature of SFAS130, the company does not
expect the implementation to have a material effect on its consolidated
financial statements.
        SFAS 131 - Disclosures about Segments of an Enterprise and Related
Information
        Effective for financial periods beginning after December 15, 1997,
SFAS131 establishes standards for the reporting of information about
operating segments in the financial statements of public companies. Operating
segments are components of an enterprise about which separate financial
information is available and evaluated on a regular basis by the chief
operating decision maker in deciding how to allocate resources and assess
performance. Financial information is required to be reported on the basis tha
t it is used for the internal evaluation of segment performance and the
allocation of resources to segments. Due to the reporting nature of SFAS 131,
the company does not expect the implementation to have a material effect on
its consolidated financial statements.
P.  RECLASSIFICATIONS:
        Certain reclassifications have been made to conform the September 30,
1996 and December 31, 1996 financial statements to the September 30, 1997
presentation.
14<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
2. Investments:
_________________
A summary of net investment income and net investment gains (losses) follows:

                                                       (000's Omitted)
                                             For the Period Ended September 30,
                                           ____________________________________

                                                    1997             1996



Net investment income:
Debt securities............................  $       148,763        135,403
Equity securities..........................            1,371          1,057
Other long-term investments................            5,892          3,590
Short-term investments.....................            3,258          1,641



    .......................................          159,284        141,691
Less investment expenses...................            1,740          1,987



Net investment income......................  $      157,544         139,704
Net investment gains (losses):
 Realized investment gains (losses):
    Debt securities, available-for-sale....  $         4,646          3,404
    Debt securities, trading...............            1,540            360
    Equity securities, available-for-sale..            4,039            707
    Equity securities, trading.............              427            282
    Other..................................              (1)           (122)
Net realized investment gains (losses).....           10,651          4,631
 Unrealized investment gains (losses):
    Debt securities, trading...............            1,173            154
    Equity securities, trading.............              181              7
    Other long-term investments............             (12)              -
Net unrealized investment gains (losses)...            1,342            161
Net investment gains (losses)..............  $        11,993          4,792
         Certain limited partnership investments are included in income from
other long-term investments. These funds (commonly referred to as hedge
funds) are managed by outside investment advisors. The investment guidelines
of these partnerships provide for a broad range of investment alternatives,
including stocks, bonds, futures, options, commodities, and various other
financial instruments. These investments were purchased with the strategy to
achieve a yield in excess of the S&P 500 Index. The partnerships are carried
at an amount equal to the company's share of the partnerships' net asset
value with the current period change recorded in net investment income. In
accordance with the permitted guidelines, the investments purchased by these
partnerships may experience greater than normal volatility which could
materially affect the company's earnings for any given period.
15<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
2. Investments (continued):
______________________________
        The maturity of the company's debt and equity securities portfolio as
of September 30, 1997 was as follows:
                                              (000's Omitted)
                                           As of September 30, 1997
                                  Available-for-Sale            Trading
                                             Estimated             Estimated
                                 Amortized    Market    Amortized    Market
                                   Cost       Value       Cost        Value
 Debt securities:
 One year or less              $   40,939      41,222        -          -
 Two years through five years     645,303     668,332       3,016       3,172
 Six years through ten years    1,635,997   1,679,494      25,197      26,084
 Eleven years and after           451,692     461,085       5,350       5,574
                                2,773,931   2,850,133      33,563      34,830
Equity securities                  29,053      34,420       3,458       3,661
                               $2,802,984   2,884,553      37,021      38,491
          These tables include the maturities of mortgage-backed securities
based on the estimated cash flows of the underlying mortgages.
        The amortized cost, estimated market value and unrealized market
gains and losses of debt and equity securities as of September 30, 1997 and
December 31, 1996, were as follows:
                                                 (000's Omitted)
                                                                      Estimated
                                 Amortized   Unrealized   Unrealized    Market
                                   Cost         Gains      Losses        Value
     September 30, 1997
 Bonds available-for-sale:
  Corporate debt obligations
  Investment grade              $1,855,929       52,937    2,984    1,905,882
  High-yield                       158,266        4,870      959      162,177
                                 2,014,195       57,807    3,943    2,068,059
  U.S. Treasury obligations          6,310           27       21        6,316
  Mortgage-backed securities
  Investment grade                 753,426       23,052      720      775,758
  High-yield                          --           --       --           --
Bonds available-for-sale         2,773,931       80,886    4,684    2,850,133
Bonds trading:
  Corporate debt obligations
  Investment grade                  12,263          570      130       12,703
  High-yield                        21,300          877       50       22,127
  Bonds trading                     33,563        1,447      180       34,830
   Total bonds                   2,807,494       82,333    4,864    2,884,963
Equity securities                   32,511        5,901      331       38,081
                                $2,840,005       88,234    5,195    2,923,044
16<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

2. Investments (continued):
_____________________________
                                          (000's Omitted)

                                                                      Estimated
                              Amortized      Unrealized   Unrealized    Market
                                Cost          Gains        Losses       Value
    December 31, 1996
Bonds available-for-sale:
Corporate debt obligations
Investment grade............$ 1,589,336       38,980        8,831    1,619,485
High-yield                      129,510        3,546          821      132,235
                              1,718,846       42,526        9,652    1,751,720
U.S. Treasury obligations        44,520          246          437       44,329
Mortgage-backed securities
Investment grade                778,615       18,216        2,561      794,270
High-yield                        5,677         --          1,703        3,974
 Bonds available-for-sale     2,547,658       60,988       14,353    2,594,293
 Bonds trading:
Corporate debt obligations
Investment grade                  8,824           90           57        8,857
High-yield                        3,374           84           24        3,434
  Bonds trading                  12,198          174           81       12,291
Total bonds                   2,559,856       61,162       14,434    2,606,584
Equity securities                 31,654        4,430          411       35,673
                              $2,591,510       65,592       14,845    2,642,257


        The preceding table includes the carrying value and estimated market
value of debt securities which the company has determined to be impaired (othe
r than temporary decline in value) as follows:
                                          (000's Omitted)
                                      Accumulated                  Estimated
                          Original      Write       Carrying          Market
                            Cost         Downs        Value            Value
September 30, 1997      $   7,545        7,545          -                -
December 31, 1996       $   7,545        7,545          -                 -

        The company defines high-yield securities as those corporate debt
obligations rated below investment grade by Standard & Poor's and Moody's or,
if unrated, those that meet the objective criteria developed by the company's
independent investment advisory firm. Management believes that the return on
high-yield securities adequately compensates the company for additional
credit and liquidity risks that characterize such investments. In some cases,
the ultimate collection of principal and timely receipt of interest is
dependent upon the issuer attaining improved operating results, selling
assets or obtaining financing.
17<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

2. Investments (continued):
____________________________

        The amortized cost, estimated market value and unrealized market
gains (losses) by type of mortgage-backed security as of September 30, 1997
and December 31, 1996 were as follows:
                                                        (000's Omitted)
                                                                       Estimated
                                          Amortized Unrealized Unrealized Market
             September 30, 1997              Cost     Gains     Losses    Value
             ___________________
Government agency mortgage-backed securities:
Pass-throughs                                $   22        2        -         24
  Total government agency
     mortgage-backed securities                  22        2       -          24
Government sponsored enterprise
 mortgage-backed securities:
 Planned amortization classes                433,483   15,141     580    448,044
 Targeted amortization classes and
  accretion directed classes                  27,259    1,092       -     28,351

 Sequential classes                            8,832      221       -      9,053
 Pass-throughs                                 1,770       22      18      1,774
    Total government-sponsored enterprise
      mortgage-backed securities             471,344   16,476     598    487,222
Other mortgage-backed securities:
 Planned amortization classes                  8,678      111       -      8,789
 Sequential classes                          227,718    4,923     122    232,519
 Pass-throughs                                     7        -        -         7
 Subordinated classes                         45,657    1,540       -     47,197
    Total other mortgage-backed securities   282,060    6,574     122    288,512
Total mortgage-backed securities            $753,426   23,052     720    775,758

18<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
2. Investments (continued):
___________________________
<TABLE>
<CAPTION>

                                                                (000's Omitted)
                                                                             Estimated
                                             Amortized Unrealized Unrealized  Market
             December 31, 1996                 Cost      Gains     Losses      Value
<S>                                          <C>       <C>         <C>       <C>
Government agency mortgage-backed securities:
Pass-throughs                                $   23          2       --           25
Total government agency
    mortgage-backed securities                   23          2       --           25
Government sponsored enterprise
 mortgage-backed securities:
Planned amortization classes                 488,496     13,569      1,400    500,665
Targeted amortization classes and
 accretion directed classes                   27,596        673       --       28,269
Sequential classes                             8,883        194       --        9,077
Pass-throughs                                  2,712         31          1      2,742
Total government-sponsored enterprise
     mortgage-backed securities              527,687     14,467      1,401    540,753
Other mortgage-backed securities:
Planned amortization classes                  13,025        163       --       13,188
Sequential classes                           204,193      3,054      1,160    206,087
Pass-throughs                                      9       --         --            9
Subordinated classes                          39,355        530      1,703     38,182
   Total other mortgage-backed securities    256,582      3,747      2,863    257,466
Total mortgage-backed securities            $784,292     18,216      4,264    798,244
</TABLE>

        Certain mortgage-backed securities are subject to significant
prepayment risk. In periods of declining interest rates, mortgages may be
repaid more rapidly than scheduled as individuals refinance higher rate
mortgages to take advantage of the lower current rates. As a result, holders
of mortgage-backed securities may receive large prepayments on their
investments which they are unable to reinvest at an interest rate comparable
to the rate on the prepaying mortgages. Mortgage-backed pass-through securitie
s and sequential classes, which comprised 31.6% and 27.5% of the carrying
value of the company's mortgage-backed securities as of September 30, 1997
and December 31, 1996, respectively, are sensitive to this prepayment risk.
        A portion of the company's mortgage-backed securities portfolio
consist of planned
        amortization class ("PAC"), targeted amortization class ("TAC") and
accretion directed class ("AD") instruments. These securities are designed to
amortize in a more predictable manner by shifting the primary risk of
prepayment to investors in other tranches of the mortgage-backed security.
PAC, TAC and ADsecurities comprised 62.3% and 67.5% of the carrying value of
the company's mortgage-backed securities as of September 30, 1997 and
December 31, 1996, respectively.
        As of September 30, 1997, 62.6% of the company's mortgage-backed
securities were issued by either government agencies or government-sponsored
enterprises, compared to 67.3% as of December 31, 1996. The credit risk
associated with these securities is generally less than other mortgage-backed
securities. With the exception of six issues, with a carrying value of
$21,957,957 as of September 30, 1997, all of the company's investments in
other mortgage-backed securities are rated A or better by Standard& Poor's or
Moody's.
19<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
2. Investments (continued):
___________________________
        The consideration received on sales of investments, carrying value
and realized gains and losses on those sales were as follows:

                                                     (000's Omitted)
                                             For the Period Ended September 30,
                                          ___________________________________
                                                  1997                1996
Consideration received.........................  $524,806           557,219
Carrying value.................................   514,155           552,588
   Net realized investment gains (losses)......  $ 10,651             4,631
Investment gains...............................  $ 15,046            13,262
Investment losses..............................    (4,395)           (8,631)
  Net realized investment gains (losses).......  $ 10,651             4,631

        Net unrealized gains (losses) on debt securities available-for-sale,
debt securities trading, equity securities available-for-sale, equity
securities trading and other long-term investments changed as follows:
                                         (000's Omitted)
                                   Net Unrealized Gains (Losses)
                      __________________________________________________________

                        Debt                    Equity
                      Securities      Debt     Securities    Equity     Other
                      Available-   Securities  Available-  Securities Long-term
                       for-Sale     Trading     for-Sale    Trading  Investments
Balance as of
  January 1, 1996......$   96,829       (4)          301         10           -
1996 Net Change........  (50,194)        97        3,695         13           -
Balance as of
    December 31, 1996..    46,635        93        3,996         23           -
1997 Net Change........    29,567     1,174        1,371        180         (12)
Balance as of
    September 30, 1997.$   76,202     1,267        5,367        203         (12)

20<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
3. Other Assets:
________________

   Other assets consist of the following:
                                                       (000's Omitted)
                                                 September 30,     December 31,
                                                     1997                1996
   Property and equipment at cost:
    Home office properties
     (including land of $1,374 and 1,919).........   $  19,625           17,605
    Furniture and equipment.......................       5,785            5,015
    Automobiles...................................         212              196
       .............                                    25,622           22,816
    Less accumulated depreciation.................       5,178            5,987
                                                        20,444           16,829
   Accounts receivable............................       1,355              593
   Other..........................................       3,143            3,824
                                                     $  24,942           21,246
4. Reinsurance:
_______________
        The company reinsures portions of insurance it writes. The maximum
amount of risk retained by American on any one life is $150,000, while the
maximum amount of risk retained by FBL on any one life is $25,000.
        A summary of reinsurance data follows (000's Omitted):
                                                           Ceded to
    For the                                      Gross      Other         Net
  Period Ended        Descriptions               Amount     Companies    Amount
September 30,
   1997            Life insurance in force    $   277,193     203,771     73,422
                   Insurance premiums and
                   policy charges                  14,998         684     14,314

September 30,
   1996            Life insurance in force        303,309     228,696     74,613
                   Insurance premiums and
                   policy charges                  11,012         561     10,451

September 30,
    1997           Future policy benefits       3,190,796    220,306   2,970,490

 December 31,
    1996            Future policy benefits       3,037,005    238,774  2,798,231

        The company is contingently liable for the portion of the policies
reinsured under each of its existing reinsurance agreements in the event the
reinsurance companies are unable to pay their portion of any reinsured claim.
Management believes that any liability from this contingency is unlikely.
        The company had amounts receivable under reinsurance agreements of
$225,104,354 and $241,458,335 as of September 30, 1997 and December 31, 1996,
respectively. Of the total amounts receivable, $134,799,345 and $140,457,353
were associated with a coinsurance agreement entered into in 1989, which
ceded 90% of the risk on American's block of single premium whole life
policies written prior to 1989 to Employers Reassurance Corporation (ERC).
The agreement provides that ERC assumes 90% of all risks associated with each
policy in the block. Reimbursement received from ERC for amounts paid by
American on the reinsured risks totaled $10,283,674 and $8,222,668 for
periods ended September 30, 1997 and 1996, respectively.
21<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
4. Reinsurance (continued):
___________________________
        The following table identifies the components of the amounts
receivable from ERC:

                                                        (000's Omitted)
                                                September 30,       December 31,
                                                     1997                 1996
Reserve for future policy benefits            $        132,541          139,571
Reimbursement for benefit payments and
 administrative allowance                                2,258              886
                                              $        134,799          140,457

        FBL and Philadelphia Life Insurance Company (PLI) are parties to a
reinsurance agreement under which FBL ceded 100% of the risk on certain
deferred annuity policies on a coinsurance basis. As of September 30, 1997
and December 31, 1996, the company had amounts receivable of $88,649,720 and
$99,335,043 resulting from this agreement.
        The following table identifies the components of the amounts
receivable from PLI:
                                                     (000's Omitted)
                                           September 30,       December 31,
                                                 1997              1996
Reserve for future policy benefits           $  86,146            97,602
Reimbursement for benefit payments and
 administrative allowance                        2,504             1,733
                                              $  88,650            99,335
5. Convertible Subordinated Debentures:
_______________________________________

        On July 12, 1996, the company closed an offering of $65,000,000 par
value of Convertible Subordinated Debentures. These securities were placed in
Europe pursuant to Regulation S under the Securities Act of 1933. The
debentures pay an annual cash yield of 3% payable semi-annually, are
convertible into the company's common stock at $17.125, and mature on July
12, 2003 unless previously converted or redeemed. The debentures are
redeemable, in whole or in part, at the option of the holders, on September
30, 2001, at 124.25% of their principal amount (which in essence reflects
deferred interest at a compounded rate of 4.25%), plus accrued but unpaid
cash interest at the coupon rate of 3%. The debentures are redeemable, at the
company's option, on or after June 30, 1999, at certain specified declining
redemption prices (starting at 103% of principal value) plus accrued but
unpaid cash interest (at the rate of 3%) and accrued deferred interest (at a
compounded rate of 4.25%). The debentures may be redeemed any time after
August 15, 1996, at the company's option at their principal amount plus
accrued cash interest (at the rate of 3%), but with no payment for accrued
deferred interest, if the average closing price of the company's common stock
equals or exceeds $23.12 for 20 consecutive trading days.
        The debentures are unsecured obligations of the company, subordinated
to all existing and future senior indebtedness. Approximately $35,000,000 of
the net proceeds of the offering were used to repay existing bank debt,
$20,000,000 was contributed to American and the balance was used for other
general corporate purposes.
        On September 24, 1997, a notice of redemption was mailed to the
holders of the company's debentures. Under the terms of this redemption all
$65,000,000 have been called for mandatory redemption on November 14, 1997,
at the principal amount plus accrued current interest as of the redemption
date.
        Prior to the close of business on November 7, 1997, the debentures
may be converted into common shares at a conversion price of $17.125 per
share.
22<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
6. Credit Agreement:
____________________
        On April 8, 1996, the company entered into a $35,000,000 credit
agreement with The First National Bank of Chicago (First Chicago), Fleet
National Bank (Fleet) and Boatmen's First National Bank of Kansas City
(Boatmen's), as Lenders. On that same date, the company borrowed the entire
$35,000,000, using the proceeds to repay existing bank debt, fund the cash
portion of the acquisition of FBG and for general corporate purposes.
        On July 12, 1996, the company paid off the existing bank debt from
the proceeds of the Convertible Subordinated Debentures.
7. Related Party Transactions:
______________________________
        On April 15, 1997 the company made a loan in the amount of $66,531 to
its President and General Counsel. This loan bears interest at prime and is
due and payable on or before December 31, 1997.
        On April 22, 1997 the company engaged Bush-O'Donnell &Co., Inc. as a
financial advisor to assist the company in its analysis and consideration of
various financial alternatives, including the possible sale or merger of the
company. The fees to be earned will depend on the outcome of the assignment,
subject to a minimum of $25,000. In the event the company is either sold or
merged, a transaction fee of $350,000 plus .4% of the amount by which the
aggregate consideration exceeds $362.5 million will be paid. Mr. James V.
O'Donnell, President and shareholder of Bush-O'Donnell & Co., Inc. serves as
a director of the company.
        Mr. B.B. Andersen, spouse of Janis L. Andersen who serves as a
director of the company, served as project manager in the construction of the
company's home office complex. For his services, Mr. Andersen received
$335,000 and $45,000 during the nine months ended September 30, 1997 and 1996
respectively.
8. Retirement Plans:
____________________
        The company sponsors an Employee Stock Ownership Plan (ESOP) for all
full-time employees with one year of service. Qualifying participants may
contribute an amount not to exceed 10% of covered compensation. As of
September 30, 1997 and December 31, 1996, the ESOP held 59,153 and 61,735
shares of AmVestors common stock. The company made no contributions to this
plan during either the nine months ended September 30, 1997 or 1996.
        The company sponsors a Leveraged Employee Stock Ownership Plan
(LESOP) for all full-time employees with one year of service.
        The LESOP has acquired 370,244 shares of the company's stock through
the proceeds of a note payable to American. The note bears interest at 7.0%
and is payable in annual installments through December 30, 2002. The note had
an unpaid principal balance of $2,662,965 as of September 30, 1997, and
December 31, 1996.
        Each year the company makes contributions to the LESOP which are to
be used to make loan interest and principal payments. On December 31 of each
year, a portion of the common stock is allocated to participating employees.
Of the 410,558 shares of the company's common stock now owned by the LESOP,
196,330 shares have been allocated to the participating employees with the
remaining 214,228 shares being held by American as collateral for the loan.
        On October 24, 1996, the ESOP was merged into the LESOP.
        The unallocated portion of the company's common stock owned by the
LESOP has been recorded as a separate reduction of stockholders' equity.
Accrued contributions to the LESOP were $262,377 and $245,214 for nine months
ended September 30, 1997 and 1996, respectively.
        During 1992, the company's Board of Directors approved retirement
plans for its members and members of the Board of Directors of certain of its
subsidiaries. The plans provide that retired Directors shall serve as
Advisory Members to the Board at a fee of $750 per meeting attended and a
monthly lifetime benefit in the amount of $750 be paid to each qualified
Director upon retirement. In addition, the company has agreed to continue any
life insurance policies being provided as of the date of retirement.
23<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
8. Retirement Plans (continued):
________________________________
        To qualify for this benefit, a Director must reach the age of 60 and
meet years of service requirements thereafter. The plan also calls for a
mandatory retirement on the date the Director's term expires following age
70. A liability in the amount of $430,953, representing the present value of
future benefits, has been established. Charges (credits) to earnings related
to the plans were ($406) and ($2,889) for the nine months ended September 30,
1997 and 1996, respectively.
        Effective January 1, 1993, the company adopted an Age-Weighted Money
Purchase Plan for all full-time employees with one year of service. The full
cost of this plan will be paid by the company with qualifying participants
receiving contributions based upon their age at plan implementation and
current salary. Contributions to the Age-Weighted Money Purchase Plan for the
nine months ended September 30, 1997 and 1996, were $292,908 and $273,099,
respectively.
        Prior to the merger with AmVestors, FBG had approved a
non-contributory Employee Stock Ownership Plan (FBGESOP) and a contributory
401-k Plan for all of its employees. As of December 31, 1996, the FBG ESOP
owned 313,031 shares of AmVestors common stock and 76,579 warrants to
purchase AmVestors common stock. At that same date, the 401-k Plan held
15,846 shares of AmVestors common stock and 3,861 warrants to purchase
AmVestors common stock. The company anticipates maintaining these as separate
plans for the benefit of the former FBG employees and is working with the
Internal Revenue Service to correct any qualification problems which may
exist. There were no contributions to the FBG ESOP in 1997 or 1996.
9. STOCKHOLDERS' EQUITY:
        Dividends by American and FBLto AmVestors are limited by laws
applicable to insurance companies. Under Kansas law, American may pay a
dividend from its surplus profits, without prior consent of the Kansas
Commissioner of Insurance, if the dividend does not exceed the greater of 10%
of statutory capital and surplus at the end of the preceding year or all of
the statutory net gain from operations of the preceding year. As of December
31, 1996, surplus profits of American were $19,936,727 and 10% of statutory
capital and surplus was $10,146,126. American is also required to maintain,
on a statutory basis, paid-in capital stock and surplus (capital in excess of
par value and unassigned surplus) of $400,000 each. As of September 30, 1997
and December 31, 1996, American's statutory capital and surplus was
$105,115,766 and $101,461,258,respectively. The statutory net gain from
operations for 1996 was $7,203,263.
        Under Florida insurance law and regulations, the aggregate dividends
that FBL may pay without prior regulatory approval is limited to the greater
of the sum of statutory net operating profits and net realized capital gains
for the preceding calendar year (provided there is available surplus from net
operating profits and net realized capital gains) or 10% of its available and
accumulated statutory surplus derived from net operating profits and net
realized capital gains. After payment of a dividend, FBLmust have 115% of
required statutory surplus.
        On December 31, 1996, FBLhad accumulated statutory surplus derived
from net operating profits and net realized capital gains of $25,384,976. The
sum of statutory net profits and net realized capital gains for 1996 were
$3,811,912. As of September 30, 1997, available surplus from net operating
profits and net realized capital gains was $2,660,089. Required statutory
surplus as of September 30, 1997 was $19,237,426 and actual surplus was
$35,958,053.
        In connection with the original establishment of the Interest
Maintenance Reserve (IMR), the Commissioner of Insurance of Kansas, the
company's domiciliary state, ordered that American prepare its December 31,
1992, NAIC Annual Statement Form to equitably allocate 1992 capital gains and
losses, not included in the calculation of the Asset Valuation Reserve (AVR),
on other than government securities, fifty (50%) percent to surplus and fifty
(50%) percent to IMR, after calculation of the AVR pursuant to the
instructions provided by the NAIC. This differs from prescribed statutory
accounting practices. This represented a permitted accounting practice for
regulatory purposes, the effect of which was to increase statutory surplus by
$8,168,000 as of December 31, 1992 ($4,844,920 as of September 30, 1997).
24<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
9. STOCKHOLDERS' EQUITY (CONTINUED):
        In addition, American received permission from the Commissioner of
Insurance of Kansas to amortize the effects of changing to Actuarial
Guideline No. 33 concerning the Commissioners Annuity Reserve Valuation
Method for individual annuity contracts over a three-year period beginning in
1995 rather than to record the full amount of the change of $2,176,497. The
effect of this permitted accounting practice was to increase statutory
surplus by $103,299 and $441,450 as of September 30, 1997 and December 31, 199
6, respectively.
        On August 2, 1996, American was granted a variance from prescribed
statutory accounting practices which allowed the company to contribute
$20,000,000 to be used for the sole purpose of strengthening American's
reserves without experiencing a decrease in Unassigned Funds (Surplus). The
contribution was recorded as a contribution to a Special Surplus Fund and the
resulting reserve strengthening was charged against this Special Surplus
Fund. Total surplus was unaffected by this transaction.
        The company currently has two fixed stock option plans; the 1989
Nonqualified Stock Option Plan (1989 Plan), and the 1996 Incentive Stock
Option Plan (1996 Plan). Options granted under the 1989 Plan have an exercise
price equal to the closing price of the company's stock on the date of the
original grant and none may be exercised beyond ten years from the grant
date. A total of 923,820 options to acquire common stock were outstanding
under the 1989 Plan as of September 30, 1997. The 1996 Plan was approved by
the stockholders of the company at its Annual Meeting held on May 16, 1996
and is intended to qualify as an "incentive stock option plan" under Section
422 of the Internal Revenue Code of 1986. Options granted under the 1996 Plan
have an exercise price equal to the closing price of the company's stock on
the date of the original grant and none may be exercised beyond ten years
from the grant date. A total of 931,064 options to acquire common stock were
outstanding under the 1996 Plan as of September 30, 1997.
        Both the 1989 Plan and the 1996 Plan are administered by the Board of
Directors and officers of the company and its subsidiaries. The terms of the
options, including the number of shares granted, and the exercise price are
subject to the sole discretion of the Board of Directors.
        A summary of the company's stock option plans as of and for the
period ended September 30, 1997 and December 31, 1996 follows:
                                  1997                        1996
                        ______________________        _______________________
                                   Weighted                          Weighted
                                   Average                           Average
                                   Exercise                          Exercise
                        Shares      Price           Shares            Price
                        ________   ________        ________          ________
Options outstanding,
  beginning of period   1,551,556   $ 11.15          839,841           $8.97
Options granted           483,247      15.63         804,500           12.96
Options exercised       (179,919)       7.78         (76,285)           6.52
Options terminated             -          -          (16,500)          10.15
Options outstanding,
  end of period       1,854,884       $12.64        1,551,556          $11.15
Options exercisable,
  end of period         1,077,711                   1,127,630
Options reserved for
  future grants,
  end of period                -                      483,247
25<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
9. Stockholders' Equity (continued):
____________________________________
        The following table summarizes information about stock options
outstanding under the company's option plans as of September 30, 1997:
                                                Weighted
                                                Average           Weighted
          Range of                             Remaining          Average
          Exercise           Options          Contractual         Exercise
          Prices           Outstanding       Life in Years         Price
          ________         ____________      ______________      __________

   $7.03-$7.50                 143,073               .09             $7.32
   $8.75                        20,000              7.15              8.75
  $10.00-$11.25                343,500              6.41             10.13
  $12.66-$13.50                865,064              8.21             12.94
  $15.63                       483,247              4.57             15.63
                             __________        __________        __________
                             1,854,884              6.29            $12.64
                             __________        __________        __________
                             __________        __________        __________


        The following table summarizes information about stock options
exercisable under the company's option plans as of September 30, 1997:
                                           Weighted
                                            Average
                    Options                 Exercise
                  Exercisable                Price
                  ____________             __________

                      143,073                 $ 7.32
                       20,000                   8.75
                      343,500                  10.13
                      571,138                  12.98
                    __________             __________
                    1,077,711                 $11.24
                    __________             __________
                    __________             __________

        The estimated fair value of options granted or modified in 1996 was
$6.03 per share. The estimated fair value of options granted in 1997 was
$4.73 per share. The company applies Accounting Principles Board Opinion No.
25 and related Interpretations in accounting for its stock option plans.
Accordingly, no compensation expense has been recognized for its option
plans. Had compensation expense for the company's option plans been
determined based on the fair value at the grant dates for awards under those p
lans consistent with the method prescribed by SFAS123, the company's net
earnings and fully diluted earnings per share for the nine month period ended
September 30, 1997 and 1996 would have been reduced to the pro forma amounts
indicated below:
                                                1997              1996
                                              ______________  _____________


  Net earnings (in thousands):
    As reported............................... $18,396            15,019
    Pro forma.................................  17,251            14,483
  Fully diluted earnings per share:
    As reported...............................   $1.17              1.15
    Pro forma.................................    1.11              1.06
        As SFASNo. 123 has not been applied to options granted prior to
January 1, 1995, the resulting pro forma compensation cost may not be
representative of that to be expected in future years.
        The fair value of options granted in 1997 was estimated on the date
of grant using a binomial options-pricing model and the following weighted
average assumptions: (i) expected volatility of 23.9%, (ii) risk-free
interest rate of 5.37%, (iii) dividend yield of .58%, and (iv) an expected
life equal to the contractual expiration.
26<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
9. Stockholders' Equity (continued):
____________________________________
        The fair value of options granted in 1996 was estimated on the date
of grant using a binomial options-pricing model and the following weighted
average assumptions: (i) expected volatility of 29.4% (ii) risk-free interest
rate of 5.14%, (iii) dividend yield of .69%, and (iv) an expected life equal
to the contractual expiration.
        On March 17, 1989, the Board of Directors also adopted the 1989 Stock
Appreciation Rights Plan (the SAR Plan) and the 1989 Restricted Stock Plan
(the Restricted Stock Plan). The SAR Plan authorized the Board of Directors
to grant stock appreciation rights to employees, officers and directors in
such amounts and with such exercise prices as it shall determine. No stock
appreciation rights granted under the SAR Plan may be exercised more than
five years from its date of grant. The SAR Plan authorized a maximum of
125,000 shares to be issued pursuant to stock appreciation rights granted
thereunder.
                                                 For the Period Ended
                                                    (000's Omitted)
                                         _____________________________________

                                             September 30,   December 31,
                                                  1997           1996
Rights outstanding, beginning of year.......          -             -
Rights granted..............................          -             -
Rights exercised............................          -             -
Rights expired..............................          -             -
Rights cancelled............................          -             -
Rights outstanding, end of year.............          -             -
 Reserved for future grants.................     35,000         35,000

        The company recorded no compensation expense relating to stock
appreciation rights for the nine months ended September 30, 1997 and 1996,
respectively.
        The Restricted Stock Plan authorizes the Board of Directors to make
restricted stock awards to employees, officers and directors in such amounts
as it shall determine. The stock issued pursuant to such awards is subject to
restrictions on transferability for a period of five years. Such stock is
subject to a five-year vesting schedule, and the company is required to
repurchase all vested stock from a grantee if such grantee's employment with
the company is terminated prior to the lapse of the transfer restrictions.
The Restricted Stock Plan authorizes a maximum of 125,000 shares to be issued
thereunder. No restricted stock awards have been granted pursuant to the
Restricted Stock Plan.
        In conjunction with a previous bank borrowing, the company issued
ten-year warrants to purchase a total of 170,002 shares of its common stocks
as summarized in the following table:
             Warrant         Issue        Number       Exercise      Expiration
              Holder         Date      of Shares       Price            Date
 Morgan Guaranty            12/8/88       75,000       $ 3.9688        12/9/98
                            4/30/92       95,002         6.3855         5/1/02
                                         170,002


        In conjunction with the acquisition of FBG, the company issued
warrants to purchase 663,706 shares (11,747 of which were issued to
subsidiaries of the company) of its common stock. In addition, 52,660
warrants to purchase common stock were issued upon the exercise of warrants
previously issued by FBGby conversion. These warrants are exercisable at
$16.42 per share of common stock and expire on April 2, 2002. As of September
30, 1997, 704,614 of these warrants were outstanding.
27<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
9. Stockholders' Equity (continued):
____________________________________
        In addition to the above, the company assumed warrants previously
issued by FBG to purchase a total of 270,689 shares of its common stock.
Prior to December 31, 1996, 260,305 warrants had been exercised. The
remaining 10,384 warrants have exercise prices ranging from $1.346 to
$3.7198.
10. Other Revenue:
__________________
        American is party to a coinsurance agreement with Employers
Reassurance Corporation (ERC) which reinsured 90% of the risk on the
American's block of SPWL policies written prior to 1989. The agreement
provides that ERC assumes 90% of all risks associated with each policy in the
block. These policies continue to be administered by American. In return,
American receives an administrative allowance of $31.50 per policy per year.
The total allowance received during the nine months ended September 30, 1997
and 1996 were $78,894 and $85,937, respectively.
        FBL and Philadelphia Life Insurance Company (PLI) are parties to a
reinsurance agreement under which FBLceded 100% of the risk on certain
deferred annuity policies on a coinsurance basis. These policies continue to
be administered by FBL. In return, FBLreceives an administrative allowance of
$25 per policy per year. The total allowance received during the nine months
ended September 30, 1997 and 1996 were $67,318 and $51,944, respectively.
        In addition to the above, other revenue for the nine months ended
September 30, 1997 and 1996 includes override commissions of $1,253,357 and
$902,471, respectively attributable to the marketing efforts of AIMCORand AW.
The 1997 period includes $390,905 of administrative fees received by AIG from
AmVestors CBO Trust I.
11. Income Taxes:
_________________
        The provision for income taxes charged to operations was as follows:

                                                   (000's Omitted)
                                         For the nine months Ended September 30,
                                   _____________________________________________

                                                 1997       1996
Current income tax expense................... $  4,683       5,001
Deferred income tax expense (benefit)........    5,223       3,413
    Total income tax expense (benefit)....... $  9,906       8,414


12. Acquisition:
________________
        On September 8, 1995, the company signed a merger agreement pursuant
to which it acquired all of the outstanding capital stock of FBG, a Delaware
corporation, for $5.31 per share, payable in 2,722,223 shares of the
company's common stock, warrants to purchase 663,706 shares of common stock
and cash of approximately $10,000,000.
        FBG was an insurance holding company which owned all of the shares of
FBL, a Florida domiciled insurer, which specializes in the sale and
underwriting of annuity products and is admitted in 41 jurisdictions, which
includes 39 states, the District of Columbia and the U.S. Virgin Islands. FBG
also owned all of the shares of AIMCOR and AW, both of which specialize in
the distribution and marketing of annuities.
        The merger received the approval of the shareholders of both FBG and
the company, and became effective on April 8, 1996. The consolidated
statements of earnings for the nine months ended September 30, 1997 and 1996
include the results of operations of FBG.
28<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
12. Acquisition (continued):
____________________________
        The transaction has been accounted for using the purchase method with
any resulting goodwill being amortized on a straight line basis over a period
not to exceed 30 years. The opening consolidated balance sheet of the
acquired entities follows:
                                                     (000's Omitted)
  ASSETS
 Investments.......................................$    523,145
 Cash and cash equivalents.........................       8,932
 Amounts receivable under reinsurance agreements...     112,875
 Accrued investment income.........................       7,373
 Deferred cost of policies purchased...............      51,500
 Goodwill..........................................      11,942
 Other assets......................................       6,621
  Total assets.....................................$    722,388
  LIABILITIES AND STOCKHOLDERS' EQUITY
 Liabilities:
 Policy liabilities................................$    650,865
 Notes payable.....................................      15,500
 Deferred income taxes.............................       1,316
 Accrued expenses and other liabilities............       5,930
  Total liabilities................................     673,611
 Stockholders' Equity:
 Common stock, no par value........................           -
 Paid in capital...................................       48,777
   Total stockholders' equity......................       48,777
   Total liabilities and stockholders' equity...... $    722,388


13. Proposed Merger with AmerUs:
________________________________

        On September 19, 1997, the company entered into an Agreement and Plan
of Merger with AmerUs Life Holdings, Inc. (AmerUs) providing for a merger
whereby the company would become a wholly-owned subsidiary of AmerUs.
        The transaction provides for an exchange ratio of .6724 shares of
AmerUs Class A common stock for each outstanding share of common stock of the
company, provided the average closing price of the AmerUs stock for the
20-day trading period, which ends 10 trading days prior to completion of the
transaction, is at least $29.75. In the event the average AmerUs stock price
if less than $29.75 but greater than or equal to $27.00, the exchange ratio
will be adjusted to value the company's stock at $20.00 per share.
        If the average AmerUs stock price is less than $27.00, the exchange
ratio will be .7407, or the company can terminate the transaction unless
AmerUs adjusts the exchange ratio to value the company's outstanding common
stock at $20.00 per share.
        The merger transaction was unanimously approved by the boards of
directors of both the company and AmerUs and is subject to approval by
regulatory authorities and the stockholders of the company and AmerUs.

14. Commitments and Contingencies:
__________________________________

        The company's insurance subsidiaries are subject to state guaranty
association assessments in all states in which they are admitted. Generally,
these associations guarantee specified amounts payable to residents of the
state under policies issued by insolvent insurers. Most state laws permit
assessments or some portion thereof to be credited
29<PAGE>
        against future premium taxes. Charges relating to the guaranty fund
assessments impacted the years 1996 and 1995 by approximately $1,913,000 and
$1,001,000. The company expects that further charges to income may be
required in the future and will record such amounts when they become known.
15. Subsequent Event:
_____________________

        On September 24, 1997, the company mailed a Notice of Redemption to
the holders of its 3% Convertible Subordinated Debentures due 2003.
        Under the terms of this redemption, all $65,000,000 principal amount
of the debentures were called for mandatory cash redemption on November 14,
1997, at a redemption price of 100 percent of the principal amount together
with Accrued Current Interest to the redemption date.
        As of the close of business on November 7, 1997, all $65,000,000 of
the debentures had been converted, at the election of the holders thereof,
into shares of the company's common stock at a conversion price of $17.125
per share, in accordance with the terms of the indenture, resulting in no
cash redemption being made.

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

GENERAL
    The company specializes in the sale of deferred annuity products. During
each of the past three years, sales of deferred annuities have accounted for
at least 96% of the company's premiums received, while sales of single
premium immediate annuities (SPIAs) and flexible premium universal life
insurance (FPULs) have accounted for virtually all remaining premiums
received.
    The company's operating earnings are derived primarily from its
investment results, including realized gains (losses), less interest credited
to annuity contracts and expenses. Under GAAP, premiums received on deferred
annuities, SPIAs without life contingencies and FPULs are not recognized as
revenue at the time of sale. Similarly, policy acquisition costs (principally
commissions) related to such sales are not recognized as expenses but are
capitalized as deferred acquisition costs, or "DAC". As a result of this
deferral of costs and the lack of revenue recognition for premiums received,
no profit or loss is realized on these contracts at the time of sale.
Premiums received on deferred annuities, SPIAs without life contingencies and
FPULs are reflected on the company's balance sheet by an increase in assets
equal to the premiums received and by a corresponding increase in future
policy liabilities.
    The company's earnings depend, in significant part, upon the persistency
of its annuities. Over the life of the annuity, net investment income, net
investment gains (losses) and policy charges are realized as revenue, and DAC
is amortized as an expense. The timing of DACamortization is based on the
projected realization of profits including realized gains (losses) for each
type of annuity contract and is periodically adjusted for actual experience.
If a policy is terminated prior to its expected maturity, any remaining
related DAC is expensed in the current period. Most of the company's annuity
policies in force have surrender charges which are designed to discourage and
mitigate the effect of premature terminations.As a result, the impact on
earnings from surrenders will depend upon the extent to which available
surrender charges offset the associated amortization of DAC.
    Recent periods of low interest rates have reduced the company's
investment yields. As a result of the lower investment yields, the company
reduced credited interest rates on its annuity products. Certain annuities
issued by the company include a "bailout" feature which allows policyowners
to withdraw their entire account balance without surrender charges for
30<PAGE>
 a period of 45 to 60 days following the initial determination of a renewal
credited rate below a predetermined level. If a policyowner elects not to
withdraw funds during this period, surrender charges are reinstated. As of
September 30, 1997, approximately $261.6 million, or 11.3% of American's
annuity account values contained a "bailout" provision, the current credited
interest rates on these policies are above the "bailout" rate. The "bailout"
rate on $259.4 million of this amount is 6% or less. As of that same date,
approximately $20.7 million, or 3.6% of FBL's annuity account values
contained a "bailout" provision, the current credited interest rates on these
policies are above the "bailout" rate. The "bailout" rate on the entire $20.7
million is 5.5% or less, with $13.9 million at 5% or less. If the company
reduces credited interest rates below the "bailout" rates on policies
containing "bailout" provisions in the future, it intends to pay any
resulting surrenders from cash provided by operations and premiums received.
In the event such sources are not sufficient to pay surrenders, the company
would have to sell securities at the then current market prices. Management
expects that withdrawals on the company's annuity contracts will increase as
such contracts approach maturity. The company may not be able to realize
investment gains in the future to offset the adverse impact on earnings, shoul
d future "bailout" surrenders occur.
MARGIN ANALYSIS
        The company's earnings are impacted by realized investment gains
(losses) and by the associated amortization of the deferred costs of policies
produced and purchased. The actual timing and pattern of such amortization is
determined by the actual profitability to date (which includes realized
investment gains (losses)) and the expected future profitability on a
particular annuity contract. To the extent investment income is accelerated
through realization of investment gains, the corresponding amortization of
deferred costs is also accelerated as the stream of profitability on the
underlying annuities is effectively accelerated. When investment losses are
realized, the reverse is true. The following margin analysis depicts the
effects of realized gains, amortization of DACand other components of profit
on the company's operating earnings:
31<PAGE>
                                      For the Nine months Ended September 30,
                            ___________________________________________________

                                                  1997                1996
                                                      (dollars in millions)
                                          (percent of average invested assets)
Average invested assets  <F1>           $  2,846.9     100.0%   $2,471.8   00.0%
Insurance premiums and
  policy charges                       $     14.3        .67%   $  10.5     .56%
Net investment income <F2>                   157.5       7.38      139.7    7.54
Net investment gains
    (losses), core (<F3>                     10.1        .47        2.7     .15
Policyholder benefits                      (117.9)     (5.52)    (104.5)  (5.64)
Gross interest margin                        64.0       3.00       48.4    2.61
Associated amortization of
    deferred cost of:
     Policies produced                      (15.2)      (.71)     (10.7)   (.57)
     Policies purchased                      (5.0)      (.23)      (4.0)   (.21)
Net interest margin                          43.8       2.05       33.7    1.82
Net investment gains (losses), other          1.9        .09        2.1     .4
Associated amortization of
    deferred cost of:
     Policies produced                        (.3)      (.01)       (.8)   (.04)
     Policies purchased                       (.7)      (.03)        .4     .02
Net margin from investment
    gains (losses), other                      .9        .04        1.7     .09
Total net margin                             44.7       2.09       35.4    1.91
Expenses, net                               (12.1)      (.57       (9.6)   (.52)
Operating earnings                           32.6       1.53       25.8    1.39
Interest expense                             (4.3)      (.20)      (2.1)   (.11)
Earnings before income taxes and
  extraordinary item                        28.3       1.33       23.7    1.28
Income tax expense                           (9.9)      (.46)      (8.3)   (.45)
Earnings before extraordinary item           18.4        .86       15.4     .83
Extraordinary item                         --        --             (.4)   (.02)
Net earnings                           $     18.4        .86% $    15.0     .81%
Operating earnings                     $     32.6       1.53% $    25.8    1.39%
Less: Net margin from
    investment gains (losses), other           .9        .04        1.7     .09
Operating earnings
    excluding net margin from
    investment gains (losses), other   $     31.7       1.49% $     24.1   1.30%


[FN]<F1> Average of cash, invested assets (before SFAS115 adjustment) and net
amounts due
    to or from brokers on unsettled security trades at the beginning and end
of
    period for 1997 and time weighted for 1996 for acquisition of FBG
effective April 1,
    1996.
<F2> Net investment income is presented net of investment expense.
<F3> Includes realized and unrealized gains (losses) on trading securities and
realized
    gains (losses) on convertible securities where the company has accepted
lower current
    yields in anticipation of the equity performance of the underlying common
stock.

Note: Numbers may not add due to rounding.
32<PAGE>
                                          For the Quarter Ended September 30,
                                                 1997                   1996
                                                     (dollars in millions)
                                           (percent of average invested assets)
Average invested assets <F1>        $   2,893.3      100.0%  $2,692.0     100.0%
Insurance premiums and
  policy charges                       $   5.2         .72%   $  4.1        .61%
Net investment income <F2>                54.4        7.52      50.5        7.51
Net investment gains
    (losses), core <F3>                    6.1         .84       1.1         .16
Policyholder benefits                    (41.5)      (5.73)    (37.7)     (5.61)
Gross interest margin                     24.2        3.35      18.0        2.68
Associated amortization of
    deferred cost of:
     Policies produced                    (6.6)       (.91)     (3.7)      (.55)
     Policies purchased                   (1.8)       (.25)     (1.4)      (.21)
Net interest margin                       15.8        2.18      12.9        1.91
Net investment gains (losses), other       2.0         .28       1.2         .17
Associated amortization of
    deferred cost of:
     Policies produced                     (.7)       (.09)      (.3)      (.04)
     Policies purchased                    (.3)       (.04)        -           -
Net margin from investment
    gains (losses), other                  1.1         .15        .9         .13
Total net margin                          16.9        2.33      13.7        2.04
Expenses, net                             (4.4)       (.60)     (3.6)      (.54)
 Operating earnings                       12.5        1.73      10.1       1.50%
Interest expense                          (1.4)       (.20)     (1.4)      (.20)
Earnings before income taxes and
  extraordinary item                      11.1        1.53       8.7       1.30
Income tax expense                        (3.9)       (.54)     (3.0)      (.45)
Earnings before extraordinary item         7.2         .99       5.7         .84
Extraordinary item                           -           -       (.3)      (.05)
Net earnings                           $   7.2         .99%    $ 5.3        .79%
Operating earnings                     $  12.5        1.73%   $ 10.1       1.50%
Less: Net margin from
    investment gains (losses), other       1.1         .15      .9         .13
Operating earnings
    excluding net margin from
    investment gains (losses), other   $  11.4        1.58% $    9.2       1.37%

[FN]
<F1> Average of cash, invested assets (before SFAS 115 adjustment) and net
amounts due
    to or from brokers on unsettled security trades at the beginning and end
of
    period for 1997 and time weighted for 1996 for acquisition of FBG
effective April 1,
    1996.
<F2> Net investment income is presented net of investment expense.
<F3> Includes realized and unrealized gains (losses) on trading securities and
realized
    gains (losses) on convertible securities where the company has accepted
lower current
    yields in anticipation of the equity performance of the underlying common
stock.

Note: Numbers may not add due to rounding.
33<PAGE>
        Nine Months Ended September 30, 1997, and 1996
        INSURANCE PREMIUMS AND POLICY CHARGES increased $3.9 million or 37%,
to $14.3 million in 1997, due primarily to a $3.0 million increase in
surrender charges received on increased surrenders of annuity policies. This
increase results in large part from the acquisition of FBG.
        NET INVESTMENT INCOME increased $17.8 million or 13%, to $157.5
million in 1997. This increase reflects an increase in average invested
assets from $2,471.8 million in 1996 to $2,846.9 million in 1997, offset in
part by a decrease in the average yield on invested assets from 7.5% for the
nine months ended September 30, 1996, to 7.4% for the same period in 1997.
The increase in average invested assets can be primarily attributed to the
acquisition of FBG. The yield in both periods was impacted by investments in
investment partnerships. These partnerships form a fund of funds totalling
$22.6 million and $18.8 million on September 30, 1997 and 1996, respectively.
This fund of funds is structured in an attempt to consistently provide
returns in excess of the S&P 500 over time without regard to the general
direction of financial markets. This fund generated net income of $3.8
million in the 1997 nine months compared with income of $1.4 million in 1996.
        NET INVESTMENT GAINS (LOSSES) were $12.0 million in 1997, compared
with $4.8 million in 1996. Gains and losses may be realized upon securities
which are disposed of for various reasons. The net gains realized in both
periods are the result of general portfolio management. Unrealized gains
(losses) in the company's bond portfolio were $77.5 million, $46.7 million
and $17.4 million as of September 30, 1997, December 31, 1996 and September
30, 1996, respectively.
        OTHER REVENUE increased $.8 million to $2.3 million in 1997. This
increase results from a $.4 million increase in commissions received by AW
and AIMCOR and a $.4 million increase in administrative fees received by AIG.
        BENEFITS, CLAIMS AND INTEREST CREDITED TO POLICYHOLDERS increased
$13.4 million, or 13%, to $117.9 million in 1997 from $104.5 million in 1996.
This increase results primarily from an increase in annuity liabilities to
$3,020.5 million on September 30, 1997, from $2,823.7 million on September
30, 1996 and an increase in the average interest rate credited on the
company's annuity liabilities, from 5.8% as of September 30, 1996, to 5.9% as
of September 30, 1997. The increase in annuity liabilities is largely due to
the acquisition of FBG.
        Amortization of deferred cost of policies produced increased $4.0
million, or 35%, to $15.5 million in 1997 from $11.5 million in 1996.
Amortization associated with gross interest margin increased $4.5 million to
$15.2 million in 1997 from $10.7 million in 1996. Amortization associated
with investment gains (losses) increased to $.3 million on $.7 million of
gains in 1997 from $.8 million on $2.9 million of gains in 1996. Costs
incurred during 1997 and deferred into future policy periods were $46.2
million, compared with $30.4 million in 1996.
        Amortization of deferred cost of policies purchased increased $2.2
million to $5.7 million and represents the amortization of the purchase price
allocated to the policies acquired in the acquisition of FBG. The 1997
expense represents amortization for nine months while the 1996 expense
represents amortization for six months.
        General insurance expenses increased $2.9 million, or 32%, to $12.0
million for the 1997 nine months from $9.1 million for the same period in
1996. This increase can be attributed to increases in business activity,
assets under management and the acquisition of FBG.
        Interest expense increased $2.2 million reflecting the $65.0 million
of convertible subordinated debentures issued in July, 1996.
        Income tax expense increased $1.5 million to $9.9 million in 1997
from $8.4 million in 1996. Taxes were provided at an effective rate of 35% on
1997 income and 36% on 1996 income.
34<PAGE>
        Three Months Ended September 30, 1997, and 1996
        INSURANCE PREMIUMS AND POLICY CHARGES increased $1.1 million or 27%,
to $5.2 million in 1997, due primarily to a $.8 million increase in surrender
charges received on increased surrenders of annuity policies and a $.3
million increase in premiums received on SPIA's with life contingencies.
        NET INVESTMENT INCOME increased $3.9 million or 8%, to $54.4 million
in 1997. This increase reflects an increase in average invested assets from
$2,692.0 million in 1996 to $2,893.3 million in 1997. The yield in both
periods was impacted by investments in investment partnerships. These
partnerships form a fund of funds totalling $22.6 million and $18.8 million
on September 30, 1997 and 1996, respectively. This fund of funds is
structured in an attempt to consistently provide returns in excess of the S&P
500 over time without regard to the general direction of financial markets.
This fund generated net income of $2.0 million in the 1997 three months
compared with a net loss of $.1 million in 1996.
        NET INVESTMENT GAINS (LOSSES) were $8.1 million gain in 1997,
compared with $2.3 million loss in 1996. Gains and losses may be realized
upon securities which are disposed of for various reasons. The net gains
realized in both periods are the result of general portfolio management. Unrea
lized gains (losses) in the company's bond portfolio were $77.5 million,
$46.7 million and $17.4 million as of September 30, 1997, December 31, 1996
and September 30, 1996, respectively.
        BENEFITS, CLAIMS AND INTEREST CREDITED TO POLICYHOLDERS increased
$3.8 million, or 10%, to $41.5 million in 1997 from $37.7 million in 1996.
This increase results primarily from an increase in annuity liabilities to
$3,020.5 million on September 30, 1997, from $2,823.7 million on September
30, 1996 and an increase in the average interest rate credited on the
company's annuity liabilities, from 5.8% as of September 30, 1996, to 5.9% as
of September 30, 1997.
        Amortization of deferred cost of policies produced increased $3.2
million, or 78%, to $7.3 million in 1997 from $4.1 million in 1996.
Amortization associated with gross interest margin increased $2.9 million to
$6.6 million in 1997 from $3.7 million in 1996. Amortization associated with
investment gains (losses) increased to $.7 million on $1.5 million of gains
in 1997 from $.3 million on $1.2 million of gains in 1996. Costs incurred
during 1997 and deferred into future policy periods were $17.6 million,
compared with $10.1 million in 1996.
        Amortization of deferred cost of policies purchased increased $.7
million to $2.1 million and represents the amortization of the purchase price
allocated to the policies acquired in the acquisition of FBG.
        General insurance expenses increased $.9 million, or 26%, to $4.4
million for the 1997 three months from $3.5 million for the same period in
1996. This increase can be attributed to increases in business activity and
assets under management.
        Income tax expense increased $.7 million to $3.9 million in 1997 from
$3.2 million in 1996. Taxes were provided at an effective rate of 35% on 1997
income and 36% on 1996 income.
        LIQUIDITY AND CAPITAL RESOURCES
        The company is an insurance holding company whose principal asset is
the common stock of its insurance subsidiaries. The company's primary cash
requirements are to pay operating expenses, stockholder dividends and debt
service.
        As a holding company, the company relies on funds received from
American and FBL to meet its cash requirements at the holding company level.
The company receives funds from American in the form of commissions paid to
American Sales, fees paid to AIG, rent, admin
35<PAGE>
istrative, printing and data
processing charges and dividends. The insurance laws of Kansas and Florida
generally limit the ability of American and FBL to pay cash dividends in
excess of certain amounts without prior regulatory approval and also require
that certain agreements relating to the payment of fees and charges to the
company by its insurance subsidiaries be approved by the Insurance
Commissioner of the state of domicile.
        The liquidity requirements of American and FBL are met by premiums
received from annuity sales, net investment income received, and proceeds
from investments upon maturity, sale or redemption. The primary uses of funds
are the payment of surrenders, policy benefits, operating expenses and
commissions, as well as the purchase of assets for investment.
        For purposes of reporting the company's consolidated statements of
cash flows, financing activities include premiums received from sales of
deferred annuities, surrenders and death benefits paid, and surrender and
policy charges collected on these contracts. The net cash provided by (used
in) these particular financing activities for the nine months ended September
30, 1997 and 1996 was $40.1 million and ($17.5) million, respectively.
        The decrease in net cash provided by annuity contracts without life
contingencies in 1997 resulted primarily from a $70.0 million increase in
surrender and death benefits paid from $344.3 million (approximately 15% of
beginning reserves for future policy benefits) to $414.3 million
(approximately 14% of beginning reserves for future policy benefits) offset
by a $124.1 million increase in premiums received from $318.0 million to
$442.1 million.
        Net cash provided by the company's operating activities was $128.3
million and $91.6 million in 1997 and 1996, respectively.
        Cash provided by financing and operating activities and by the sale
and maturity of portfolio investments is used primarily to purchase portfolio
investments and for the payment of acquisition costs (commissions and
expenses associated with the sale and issue of policies). To meet its
anticipated liquidity requirements, the company purchases investments taking
into account the anticipated future cash flow requirements of its underlying
liabilities. In addition, the company invests a portion of its assets in
short-term investments with maturities of less than one year (4% and 8% as of
September 30, 1997 and December 31, 1996, respectively). The weighted average
duration of the company's investment portfolio was 4.4 years as of September
30, 1997.
        The company continually assesses its capital requirements in light of
business developments and various capital and surplus adequacy ratios which
affect insurance companies. The company has met its capital needs and those
of American through several different sources including bank borrowing, the
issuance of convertible debentures and the sale of both preferred and common
stock.
        Recent regulatory actions against certain large life insurers
encountering financial difficulty have prompted the various state guaranty
associations to begin assessing life insurance companies for the resulting
losses. For further information regarding the effects of guaranty fund
assessments, see Note 13 of Notes to Consolidated Financial Statements.
        REINSURANCE. American and Employers Reassurance Corporation (ERC) are
parties to a reinsurance agreement under which American ceded 90%, on a
coinsurance basis, of the risk on its SPWLpolicies written prior to 1989.
Under the terms of the agreement, American continues to administer the
policies and is reimbursed for all payments made under the terms of the
reinsured policies. For its services, American receives a fee from the
reinsurer for administering such policies. If ERCwere to become insolvent,
American would remain responsible for the payment of all policy liabilities.
As of September 30, 1997 and December 31, 1996, American had amounts
receivable resulting from this agreement of $134.8 million and $140.5
million, respectively.
        FBL and Philadelphia Life Insurance Company (PLI) are parties to a
reinsurance agreement
36<PAGE>
under which FBLceded 100% of the risk on certain
deferred annuity policies on a coinsurance basis. Under the terms of the
agreement, FBL continues to administer the policies and is reimbursed for all
payments made under the terms of the reinsured policies. For its services,
FBLreceives a fee from the reinsurer for administering such policies. If PLI
were to become insolvent, FBL would remain responsible for the payment of all
policy liabilities. As of September 30, 1997 and December 31, 1996, FBL had
amounts receivable resulting from this agreement of $88.7 million and $99.3
million.
        In addition, American is a party to two assumption reinsurance
agreements with other reinsurers.
        EFFECT OF INFLATION AND CHANGES IN INTEREST RATES. The company does
not believe that inflation has had a material effect on its consolidated
results of operations during the past three years. The company seeks to
manage its investment portfolio in part to reduce its exposure to interest
rate fluctuations. In general, the market value of the company's fixed income
securities increases or decreases directly with interest rate changes. For
example, if interest rates decline (as was the case in 1995), the company's
fixed income investments generally will increase in market value, while net
investment income will decrease. Conversely, if interest rates rise (as was
the case in 1996), fixed income investments generally will decrease in market
value, while net investment income will increase.
        In a rising interest rate environment, the company's average cost of
funds would increase over time as it prices its new and renewing annuities to
maintain a generally competitive market rate. During such a rise in interest
rates, new funds would be invested in bonds with higher yields than the
liabilities assumed. In a declining interest rate environment, the company's
cost of funds would decrease over time, reflecting lower interest crediting
rates on its fixed annuities.
        In addition to the increase in the company's average cost of funds
caused by a rising interest rate environment, surrenders of annuities are no
longer protected by surrender charges increase.
37<PAGE>
PART II. OTHER INFORMATION
AMVESTORS FINANCIAL CORPORATION

Item 1.           Legal Proceedings
________________________________

        The company has no material legal proceedings pending against it.
Item 2.           Changes in Securities
_____________________________________

        None
Item 3.           Defaults upon Senior Securities
_________________________________________________

        None
Item 4.           Submission of Matters to a Vote of Security Holders
______________________________________________________________________

        None

Item 5.           Other Information
________________________________

        None
Item 6.           Exhibits and Reports on Form 8-K
________________________________________________

        (a)Exhibits (numbered in accordance with Item 601 of Regulation S-K).

 Exhibit                                        Page Number or Incorporation
 Number              Description                       by Reference
(2)(a)  Plan and Agreement of Union dated       Exhibit (2) to Registration
        July 10, 1986, between AmVestors        Statement on Form S-2,
        Financial Corporation and American      File No. 2-82811 dated
        Investors Life Insurance Company,       November 26, 1986.
        Inc.


(2)(b)  Resolutions of the Board of             Exhibit (2)(a) to Form 10-Q
        Directors dated January 7, 1988,        dated May 11, 1988.
        providing for succession to the
        position of Chairman of the Board
        of Directors

(2)(c)  Agreement and Plan of Merger dated      Exhibit (2.1)to Registration
        September 8, 1995, between Financial    Statement on Form S-4,
        Benefit Group, Inc., AmVestors          File No. 333-01309 dated
        Financial Corporation and AmVestors     March 1, 1996
        Acquisition Subsidiary, Inc. as Amended

(2)(d)  Amended and Restated Agreement and Plan Annex I to the company's
        of Merger among AmerUs Life Holdings,   definitive Proxy, dated
        Inc., AFC Corporation and AmVestors     November 12, 1997, contained
        Financial Corporation dated as of       in the Registration Statement
        September 19, 1997 and amended as of    on Form S-4, File No. 333-40065
        October 8, 1997                         filed by AmerUsLife Holdings,
                                                Inc. dated November 12, 1997
38<PAGE>

 Exhibit                                        Page Number or Incorporation
 Number              Description                       by Reference
 (3)(a)  Articles of Incorporation as Amended       Exhibit (3)(a) to Form 10-Q
         and Restated                               dated October 26, 1993

 (3)(b)  Bylaws of the company                     Exhibit (4.2) to Registration
                                                    Statement on Form S-4, File
                                                    No. 333-01309 dated February
                                                    28, 1996

 (4)(a)  Specimen Common Stock Certificate          Exhibit (4)(a) to Form 10-K
                                                    dated March 30, 1995.

 (4)(b)  Common Stock Purchase Warrant              Exhibit (10)(o) to Form 10-K
         expiring December 9, 1998                  dated April 12, 1989

 (4)(c)  Common Stock Purchase Warrant              Exhibit (10)(v) to Form 10-Q
                                                    dated May 13, 1992

 (4)(d)  1995 Agents Stock Option Plan             Exhibit (4.1) to Registration
                                                    Statement on Form S-3, File
                                                    No. 333-02211 dated April 2,
                                                    1996


 (4)(e)  AmVestors Financial Corporation 1996     Exhibit (4)(a) to Registration
         Incentive Stock Option Plan                Statement on Form S-8, File
                                                    No. 333-14571 dated October
                                                    21, 1996

 (4)(f)  Form of 3% Convertible Subordinated      Exhibit (4.2) to Registration
         Debentures due 2003                        Statement on Form S-3, File
                                                  No. 333-10101 dated August 29,
                                                    1996

 (4)(g)  Warrant agreement and form of warrant      Appendix V to Registration
                                                    statement on Form S-4, File
                                                    No. 333-01309 dated March 1,
                                                    1996

(10)(a)  Form of Indemnification Agreement between  Exhibit (10)(a) to Form 10-K
         company and its officers and directors     dated March 29, 1988

(10)(b)  1989 Non-Qualified Stock Option Plan       Exhibit (10)(q) to Form 10-K
         adopted March 17, 1989                     dated April 12, 1989

(10)(c)  Stock Appreciation Rights Plan adopted     Exhibit (10)(r) to Form 10-K
         March 17, 1989                             dated April 12, 1989

(10)(d)  Restricted Stock Plan adopted             Exhibit (4.4) to Registration
         March 17, 1989                             Statement on Form S-8, File
                                                    No. 33-31155 dated September
                                                    19, 1989
39<PAGE>
 Exhibit                                        Page Number or Incorporation
 Number              Description                       by Reference
(10)(e)   Employment Agreement dated December 17,   Exhibit (10)(l) to Form 10-K
          1992, among the company, its              dated March 30, 1993
          subsidiaries and Mark V. Heitz

(10)(f)   Employment Agreement dated October 3,     Exhibit (10)(a) to Form 10-Q
          1994, among the company, its              dated November 10, 1994
          subsidiaries and Ralph W. Laster, Jr.

(10)(g)   Bonus Compensation Agreement dated        Exhibit (10)(b) to Form 10-Q
          September 30, 1994, between the company   dated November 10, 1994
          and Ralph W. Laster, Jr.

(10)(h)   Bonus Compensation Agreement dated        Exhibit (10)(c) to Form 10-Q
          September 30, 1994, between the company   dated November 10, 1994
          and Mark V. Heitz

(10)(i)   1994 Stock Purchase Plan for Non-Employee Exhibit (10)(j) to Form 10-K
          Directors effective February 24, 1994     dated March 30, 1995

(10)(j)   Incentive Compensation Plan between the   Exhibit (10)(k) to Form 10-K
          company and certain designated employees  dated March 30, 1995
          effective for the calendar year 1994

(10)(k)   Employment Agreement dated January 1,     Exhibit (10)(k) to Form 10-Q
          1997 between the company and Timothy S.   dated May 14, 1997
          Reimer

(10)(l)   Employment Agreement dated January 1,     Exhibit (10)(l) to Form 10-Q
          1997 between the company and Thomas M.    dated May 14, 1997
          Fogt

(10)(m)   Employment Agreement dated January 1,     Exhibit (10)(m) to Form 10-Q
          1997 between the company and Lynn F.      dated May 14, 1997
          Hammes

(10)(n)   Employment Agreement dated January 1,     Exhibit (10)(n) to Form 10-Q
          1997 between the company and J. Ronald    dated May 14, 1997
          Stanley

(10)(o)   Special Incentive Bonus Agreement dated   Exhibit (10)(o) to Form 10-Q
          March 27, 1997, between the company and   dated May 14, 1997
          Ralph W. Laster, Jr.

(10)(p)   Special Incentive Bonus Agreement dated   Exhibit (10)(p) to Form 10-Q
          March 27, 1997, between the company and   dated May 14, 1997
          Mark V. Heitz

(10)(q)   Employment Agreement dated April 8,       Exhibit (10)(p) to Form 10-Q
          1996, between the company and             dated November 13, 1996
          Frank T. Crohn
40<PAGE>
 Exhibit                                        Page Number or Incorporation
 Number              Description                       by Reference
  (10)(r)    Employment Agreement dated April 8,   Exhibit (10)(p) to Form 10-Q
             1996, between the company and         dated November 13, 1996

             Donna J. Rubertone

  (10)(s)    Employment Agreement dated April 1,   Exhibit (10)(s) to Form
             1997, between the company and         10-Q/A dated October 1, 1997
             Ralph W. Laster, Jr.

  (10)(t)    Employment Agreement dated April 1,   Exhibit (10)(t) to Form
             1997, between the company and         10-Q/A dated October 1, 1997
             Mark V. Heitz

  (10)(u)    Incentive Agreement dated April 22,   Exhibit (10)(u) to Form
             1997, between the company and         10-Q/A dated October 1, 1997
             Ralph W. Laster, Jr.

  (10)(v)    Incentive Agreement dated April 22,   Exhibit (10)(v) to Form
             1997, between the company and         10-Q/A dated October 1, 1997
             Mark V. Heitz

  (10)(w)    Engagement letter dated April 22,     Exhibit (10)(w) to Form
             1997, between the company and         10-Q/A dated October 1, 1997
             Bush-O'Donnell & Co., Inc.

  (10)(x)    Promissory note dated April 15,       Exhibit (10)(x) to Form
             1997, between the company as payee    10-Q/A dated October 1, 1997
             and Mark V. Heitz.

  (10)(y)    Letter Agreement dated April 8,       Exhibit (10)(y) to Form
             1996, between Financial Benefit       10-Q/A dated October 1, 1997
             Group, Inc. and John F.X. Mannion.

  (10)(z)    Amendment to Employment Agreement     Exhibit (10)(z) to Form
             dated January 1, 1997 between the     10-Q/A dated October 1, 1997
             company and Thomas M. Fogt

 (11)        Calculation of Earnings per Share     P 43

 (20)        Reports on Form 8-K
             The company filed a report on Form
             8-K on August 15, 1997.

 (27)        Financial Data Schedule
41<PAGE>
                                   SIGNATURES
                         _____________________________


        Pursuant to the requirements of Section 13 or 15 (d) 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.
AMVESTORS FINANCIAL CORPORATION

                                By: /s/ Ralph W. Laster, Jr.
                                    __________________________
                                Ralph W. Laster, Jr.
                                Chairman of the Board
                                Chief Executive Officer
                                (Principal Executive Officer
                                and Chief Financial Officer)
                                (Principal Accounting Officer)

Date:  November 14, 1997
      ____________________
42