UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D. C.   20549
                               FORM 10-QSB

(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
or
(  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

                      Commission file number         333-24739                

                       STONEVILLE INSURANCE COMPANY
        -----------------------------------------------------------------
                (exact name of Registrant as specified in its charter)

                  MISSISSIPPI                                  72-1341156
-----------------------------------------------         --------------------
(State or other jurisdiction                     (I.R.S. Identification Number)
 of incorporation of organization)

633 North State Street, Suite 200, Jackson, Mississippi         39202-7817
--------------------------------------------------------     -----------------
(Address of principal executive offices)                      (Zip Code)

Registrants telephone number, including area code: (601-352-7817)
                                             ----------------------
Securities registered pursuant to section 12(g) of the Act:            None
                                                                  ------------


         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 if 1934 during the preceding 12 months (or for such shorted 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 Registrant's
classes of common stock, as of the latest practicable date.

                  Class                          Outstanding at August 12, 1998
         Common stock, $1.00 par value                   503,384  Shares


 







<PAGE>

                             PART I: FINANCIAL INFORMATION

              Item 1 - Stoneville Insurance Company Financial Statements



Balance Sheets
 September 30, 1998 and December 31, 1997


Statements of Income and Comprehensive Income
  Three Months and Nine Months Ended September 30, 1998 and 1997


Statements of Changes in Stockholders' Equity
   Period Ended December 31, 1997
   Nine Months Ended September 30, 1998


Statements of Cash Flows
   Nine Months Ended September 30, 1998 and 1997


Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>

STONEVILLE INSURANCE COMPANY
Balance Sheets
September 30, 1998 and December 31, 1997


                                                                                            September 30,       December 31,
                                                                                                 1998                1997
                                                                                           --------------      -------------

<S>                                                                                        <C>                 <C>       
Assets
Investments:
Trading securities (at fair value)
   Equity securities                                                                               $0                $247
Securities available-for-sale (at fair value)
   Fixed maturities (amortized cost - $1,495,002 and $1,295,572)                            1,539,679           1,320,855
                                                                                           --------------      -------------
Total Investments                                                                           1,539,679           1,321,102

Cash and cash equivalents                                                                     996,360             425,493
Funds held by ceding companies                                                                652,801                   0
Fees receivable                                                                               238,030                   0
Accrued interest receivable                                                                    27,694              29,819
Capital equipment leases at cost less
   accumulated depreciation of $21,756 and $12,087                                             87,121               7,292
Prepaid expenses                                                                               29,517              25,300
Deferred tax assets                                                                           213,396             322,438
Other assets                                                                                    1,525                 575
                                                                                           --------------      -------------
Total Assets                                                                               $3,786,123          $2,132,019
                                                                                           ==============      =============

Liabilities
Reserve for losses and loss adjustment expenses                                              $939,688                  $0
Unearned premium                                                                              629,872                   0
Unearned fees                                                                                 169,021
Accounts payable and accrued liabilities                                                       96,486             117,226
Capital lease obligations                                                                       8,689               1,256
                                                                                           --------------      -------------
Total Liabilities                                                                           1,843,756             118,482
                                                                                           --------------      -------------

Shareholders' Equity
Common stock ($1 par value; 650,000 shares authorized;
  503,384 shares issued)                                                                      503,384             503,384
Retained earnings                                                                           1,394,306           1,484,870
Accumulated other comprehensive income
  Unrealized gains from investments in securities                                              44,677              25,283
                                                                                           --------------      -------------
Total Shareholders' Equity                                                                  1,942,367           2,013,537
                                                                                           --------------      -------------
Total Liabilities and Shareholders' Equity                                                 $3,786,123          $2,132,019
                                                                                           ==============      =============






<FN>

See accompanying notes to financial statements.
</FN>
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
STONEVILLE INSURANCE COMPANY
Statements of Income and Comprehensive Income
Three Months and Nine Months Ended September 30, 1998 and 1997



                                                                      Three Months Ended                 Nine Months Ended
                                                                         September 30,                    September 30,
                                                                 -------------------------       ---------------------------
                                                                         1998     1997*                  1998     1997*  
                                                                 -------------------------       ---------------------------
<S>                                                               <C>                  <C>         <C>                   <C>
Revenue
Premium assumed                                                   $210,672             $0          $350,544              $0
Premiums ceded                                                           0              0                 0               0
                                                                 -------------------------       ---------------------------
Net premiums earned                                                210,672              0           350,544               0
Investment income                                                   26,621         47,694            65,466         138,550
Other                                                              131,017         (9,958)          203,229         (19,073)
                                                                 -------------------------       ---------------------------
Total Revenue                                                      368,310         37,736           619,239         119,477
                                                                 -------------------------       ---------------------------

Expenses
Loss and loss adjustment expenses                                   39,032              0           118,072               0
Policy acquisition fees                                             14,747              0            24,538               0
Program administration fees                                         31,723                           52,704               0
Regulatory fees                                                     18,312          5,751            37,997          17,253
General expenses                                                   256,991        109,603           534,393         293,363
                                                                 -------------------------       ---------------------------
Total Expenses                                                     360,805        115,354           767,704         310,616
                                                                 -------------------------       ---------------------------
Net Income
  Before Income Tax Provision                                        7,505        (77,618)         (148,465)       (191,139)

Provision (benefit) for income taxes                                 2,927        (26,045)          (57,901)        (66,534)
                                                                 -------------------------       ---------------------------
Net Income (Loss)                                                   $4,578       ($51,573)          (90,564)      ($124,605)

Other Comprehensive Income
  Unrealized gain (loss) on investments in securities
    net of income tax affect                                        21,522         12,914            19,394          15,453
                                                                 -------------------------       ---------------------------
Comprehensive Income (Loss)                                        $26,100       ($38,659)         ($71,170)      ($109,152)
                                                                 =========================       ===========================



Per Share Data
Net Income (Loss)                                                    $0.01         ($.10)             ($0.17)        ($0.25)
                                                                 ==========     =========        ============      =========
<FN>


*1997 represents the combined information of two previously separate entities.

See accompanying notes to financial statements.
</FN>
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

STONEVILLE INSURANCE COMPANY
Statements of Changes in Shareholders' Equity
For Periods Indicated



                                                                               
                                                                               Accumulated                         
                                                              Common Stock       Other                             Total
                                                          ------------------- Comprehensive     Retained        Shareholders'
                                                              Shares  Amount     Income         Earnings           Equity
                                                          -----------------------------------------------------------------
<S>                                                       <C>     <C>           <C>             <C>             <C>       
Balance at December 31, 1996                                    0       $0      ($9,236)        $2,462,693      $2,453,457
1997* 
  Net income (loss)                                                                               (474,439)       (474,439)


  Issuance of stock upon conversion from a Trust          503,384 503,384                         (503,384)              0
   to a stock company

  Net increase in unrealized appreciation of
    securities available for sale net of tax                                     34,519                             34,519
                                                          -----------------------------------------------------------------


Balance at December 31, 1997                              503,384 $503,384      $25,283         $1,484,870      $2,013,537

1998
  Net income (loss)                                                                                (90,564)        (90,564)

  Net increase (decrease) in unrealized appreciation of
    securities available for sale net of tax                                     19,394                             19,394
                                                          -----------------------------------------------------------------
Balance at September 30, 1998                             503,384 $503,384      $44,677         $1,394,306      $1,942,367
                                                          =================================================================



<FN>

*1997 represents the combined information of two previously separate entities.

See accompanying notes to financial statements.
</FN>
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

STONEVILLE INSURANCE COMPANY
Statements of Cash Flows
Nine Months Ended September 30, 1998 and 1997


                                                                                               1998                         1997*  
                                                                                         -------------                -------------
<S>                                                                                        <C>                                 <C>
Cash Flows From Operating Activities
Premiums collected                                                                         $1,223,237                          $0
Losses and loss adjustment expenses paid                                                     (172,159)                 (1,124,467)
Refunds and premium adjustments paid                                                                0                     (63,172)
Administrative expenses paid                                                                 (571,316)                   (304,595)
Income taxes net refund received                                                              166,943                      97,071
Investment income received                                                                     74,617                     154,024
Other income received                                                                         123,720                           0
Net decrease in trading securities                                                                  0                   1,676,780
Interest paid                                                                                    (401)                          0
                                                                                         -------------                -------------
Net Cash Provided by Operating Activities                                                     844,641                     435,641
                                                                                         -------------                -------------
Cash Flows From Investing Activities
Proceeds from sales of available-for-sale securities                                           45,097                       2,067
Purchase of available-for-sale securities                                                    (251,692)                   (587,775)
Proceeds from maturities of held-to-maturity securities                                             0                     422,220
Transfer of held-to-maturity security to cash equivalent                                            0                     286,242
Capital expenditures                                                                          (65,037)                          0
                                                                                         -------------                -------------
Net Cash Provided by (used in) Investing Activities                                          (271,632)                    122,754
                                                                                         -------------                -------------
Cash Flows From Financing Activities
Principal payments under capital lease obligations                                             (2,142)                     (1,845)
                                                                                         -------------                -------------
Net Cash (used in) Financing Activities                                                         2,142                      (1,845)
                                                                                         -------------                -------------
Net Increase in Cash and
  Cash Equivalents                                                                            570,867                     556,550

Cash and Cash Equivalents at Beginning of Period                                              425,493                   1,379,935
                                                                                         -------------                -------------
Cash and Cash Equivalents at End of Period                                                   $996,360                  $1,936,485
                                                                                         =============                =============












<FN>

                                                             Continued

*1997 represents the combined information of two previously separate entities.

See accompanying notes to financial statements.
</FN>

</TABLE>




<PAGE>
<TABLE>
<CAPTION>



STONEVILLE INSURANCE COMPANY
Statements of Cash Flows (Continued)
Nine Months Ended September 30, 1998 and 1997



Reconciliation of net income to net cash provided                                                1998                        1997*  
  by Operating Activities                                                                -------------                -------------
<S>                                                                                          <C>                        <C>       
Net Income                                                                                   ($90,564)                  ($124,605)
  Adjustments to reconcile net income to net cash
  provided by operating activities:
   Realized loss or (gain) on sale of assets                                                        0                      19,073
   Depreciation                                                                                 9,669                       3,614
   Decrease in trading securities                                                                   0                   1,676,780
   Decrease (increase) in funds held by ceding company                                       (652,801)                          0
   Decrease (increase) in prepaid expenses                                                     (4,217)                     11,815
   Decrease (increase) in accrued interest receivable                                           2,125                           0
   (Increase) decrease in notes and other receivables                                        (238,030)                     14,575
   (Increase) decrease in other assets                                                           (950)                     (1,700)
   Amortization of bond premium                                                                 7,414
   Increase (decrease) in unpaid loss and loss adjustment expenses                            939,688                  (1,124,467)
   (Decrease) increase in accounts payable and accrued liabilities                            (35,628)                    (69,981)
   Increase (decrease) in unearned fees                                                       169,021
   Increase (decrease) in unearned premiuns                                                   629,872
   (Decrease) increase in deferred taxes                                                      109,042                      30,537
                                                                                         -------------                -------------

Net cash provided by operating activities                                                    $844,641                    $435,641
                                                                                         =============                =============
   Non-cash financing and investing activities
    Issuance of stock for Trust units                                                                                    $503,384
                                                                                                                      =============
   Captial Leases incurred                                                                     $9,574                 
                                                                                         =============













<FN>

*1997 represents the combined information of two previously separate entities.

See accompanying notes to financial statements.
</FN>
</TABLE>


<PAGE>

Stoneville Insurance Compaoy
Notes to Financial Statements
Quarters Ended September 30, 1998 and 1997


1.      Basis of Presentation

        These interim  financial  statements  have been prepared on the basis of
        accounting  principles  used in the annual  financial  statements  ended
        December  31,  1997,  and  must be read in  conjunction  with  the  1997
        statements.  In the  opinion of  management,  the  accompanying  interim
        unaudited financial  statements contain all adjustments  necessary for a
        fair  statement of financial  position and results of  operations of the
        Company for the interim periods.


2.      Plan of Reorganization and Conversion

        A Plan and Agreement of  Reorganization  and Conversion was entered into
        on September 11, 1997 by and between Delta  Agricultural  and Industrial
        Trust and Stoneville Insurance Company whereby the Trust transferred all
        of its existing  assets and  liabilities  to  Stoneville on December 31,
        1997 in exchange for stock in Stoneville.  The Trust was then liquidated
        and  dissolved  with the stock of Stoneville  distributed  to its former
        members in accordance with the terms outlined in the Plan.


3.      Operations of the Company

        The Company was formed to become the successor to the Delta Agricultural
        and Industrial  Trust, a Mississippi  self-funded  workers  compensation
        trust. The Company entered the workers  compensation market in the first
        quarter  of 1998 as a  reinsurer.  Although  The  Company  did not write
        workers compensation  insurance on a direct basis during the first three
        quarters of 1998, it has begun doing so in the fourth quarter.


4.      Assets Pledged

        Of the $1,539,679 in securities available-for-sale,  $200,000 is pledged
        as  collateral  for a letter of credit  issued  to an  insurer  that the
        Company  reinsures on a quota share  basis.  A claim can be made against
        the letter of credit if the ceding  insurer is unable to pay claims from
        premiums collected by it. 

        Additionally,  $885,949 in cash is pledged as collateral for a letter of
        credit  issued to an insurer that the Company  reinsures.  The letter of
        credit secures the payment of claims being administered by the Company.

5.      Reserve for Losses and Loss Adjustment Expenses

        The reserve  for losses and loss  adjustment  expenses  ("LAE") is based
        upon case reserve reports received from ceding  insurance  companies and
        the  company's  own  estimates.  Loss  and  LAE  reserves  also  include
        estimates of incurred but not reported  losses based on past  experience
        modified for current trends and estimates of expenses for  investigating
        and settling  claims.  It is the Company's  policy to discount  workers'
        compensation  claims on reported and unreported  losses to present value
        using an interest rate of 4.5%. Such discount resulted in a reduction in
        gross loss reserves of $20,808 as of September 30, 1998. The reserve for
        losses and LAE is attributable to reinsurance  arrangements in which the
        Company  participates only as a reinsurer.  Management believes that the
        reserve for loss and LAE as of  September  30, 1998 is adequate to cover
        the ultimate


<PAGE>


        gross cost of losses and LAE incurred  through  September 30, 1998.  The
        reserve is based on estimates of losses and LAE incurred and, therefore,
        the amount ultimately paid may be more or less than such estimates.

        Included  in the  reserve  for  loss  and loss  adjustment  expenses  is
        $789,686 of reserves  associated  with a reinsurance  agreement  that is
        being  accounted  for using the deposit  method.  Under this method,  no
        premium  income is recorded.  Income or expenses  are  recorded  only as
        claims are settled.  During the quarter ended  September  30, 1998,  the
        Company  recognized  $90,000  of  income  from  settlement  activity  by
        reducing  claims  expense and the  reserve for loss and loss  adjustment
        expenses.  Since claims under this reinsurance  arrangement are expected
        to be settled in a short period of time,  their  reserves  have not been
        discounted.


6.      Operations of Previously Separate Companies

        As indicated in the financial statements,  the information presented for
        the nine months and three months ended September 30, 1997 represents the
        combined  information from two previously separate entities.  Presented
        below are the  operating  results of each  entity  and the  intercompany
        adjustments  made as a result  of the  combination  for the nine  months
        ended September 30, 1997.

                                                     Delta
                                      Stoneville  Agricultural
                                      Insurance   & Industrial
                                      Company        Trust            Combined

        Total Revenues                $     0      $ 120,376         $ 120,376

        Net Income                    ( 1,481)      (123,124)         (124,605)

        Intercompany Interest Expense
          Eliminated                      899

        Intercompany Interest Income
          Eliminated                                     899



7.      Other Income

        Other  Income for the nine months  ended  September  30,  1998  includes
        $188,233  in fees  earned  by the  Company  for  management  of  certain
        insurance  programs  for a ceding  carrier.  For the nine  months  ended
        September  30,  1997,  other  income  represented  a loss on the sale of
        trading securities.


8.      Earnings (Loss) Per Share

        Earnings  (loss) per common share is based on net income (loss) and
        the weighted average number of shares  outstanding during each interim
        period.  The number of shares used in computing  earnings per share is
        503,384 for the  quarter  ended  September  30,  1998.  No shares were
        issued  until  December  31,  1997.  Consequently,  earnings per share
        for  1997  was calculated using 503,384 shares, the aggregate shares 
        issued as a part of the plan of conversion and reorganization.




<PAGE>
Item 2: Management's  Discvssion and Analysis of Financial Condition and Results
of Operations

Financial Condition - September 30, 1998 Compared to December 31, 1997

        Total shareholders'  equity decreased by $71,170 or 3.5% from $2,013,537
at December 31, 1997 to  $1,942,367  at September  30, 1998.  This  decrease was
caused by a net loss from  operations  of $90,564  for the first nine  months of
1998 and a increase  in  unrealized  gain on  securities  available-for-sale  of
$19,394.

     Total  assets  increased  by  $1,654,104  or 77.6% at  September  30,  1998
compared  to  December  31,  1997.  Cash and  investments  increased  a total of
$789,444  during the nine months ended  September  30, 1998 due primarily to the
funding of a reinsurance  agreement  whereby the Company agreed to assume all of
the insurance  liabilities  of the business  written by Delta  Agricultural  and
Industrial  Trust.  These  insurance  liabilities had previously been assumed by
another commercial carrier as part of an assumption  reinsurance  agreement with
the Trust. The commercial  carrier remains the ultimate guarantor of the payment
of these insurance liabilities with the Company's involvement limited to that of
a  reinsurer.  The cash and  liabilities  received by the Company as a result of
this reinsurance  agreement  totaled  $1,051,845.  Claims totaling $165,896 were
paid in conjunction  with this agreement  during the period ending September 30,
1998. The Company also made significant  disbursements in the development of its
risk  control and claims  management  services  division  during the nine months
ended September 30, 1998. Funds held by ceding  companies  increased by $652,801
during the period due to a significant  amount of insurance  written  during the
three  months  ended  September  30,  1998.  Additionally,  because  the Company
provides risk control and claims  management  services to the ceding  company on
this  business,  fees due from the ceding  company  also  increased  by $238,030
during the period.

     Total  liabilities  increased by $1,725,274 or 1,456% at September 30, 1998
compared to December 31, 1997.  This increase was due primarily to the insurance
liabilities assumed as a part of the reinsurance  agreement discussed above. The
cash received as a part of this arrangement collateralizes a letter of credit to
the ceding carrier  guaranteeing the payment of these  liabilities.  The Company
also increased its reserve for losses and loss adjustment expenses for its share
of insurance liabilities associated with a quota share reinsurance  arrangement.
As a result of these two  reinsurance  arrangements,  total reserve for loss and
loss adjustment expenses increased to $939,688 at September 30, 1998 compared to
$0 at December  31,  1997.  Unearned  premium  from the quota share  reinsurance
arrangement  increased $629,872 as a result of a significant amount of insurance
business written during the period.  Unearned risk control and claims management
fees also increased by $169,021 as a result of the business written.

Results of Operations - Quarter and Nine Months Ended September 30, 1998
Compared to Quarter and Nine Months Ended September 30, 1997

     The Company  experienced  net income of $4,578  during the third quarter of
1998 compared to a net loss of $51,573 during the third quarter of 1997.  During
the first  quarter of 1998 the Company  entered  into a quota share  reinsurance
arrangement with another insurance carrier in which the Company shares in 25% of
the income  and is  obligated  to pay 25% of the  expenses  associated  with the
business  written  within this  program.  As a result of this  arrangement,  the
Company's  portion  of  earned  premium  during  the third  quarter  of 1998 was
$210,672 compared to $0 in 1997. Losses and loss adjustment  expenses related to
this program were  $129,032  during the third  quarter of 1998 compared to $0 in
the same period in 1997.  Other expenses  associated  with this program  totaled
$64,782 during the third quarter of 1998 compared to $0 in the
<PAGE>

third  quarter  of 1997.  The  Company's  share of net  income  before  tax
associated  with this  program  during  the third  quarter  of 1998 was  $16,858
compared to $0 in the third  quarter of 1997.  During the third quarter of 1998,
the Company  entered into a reinsurance  agreement with another  carrier whereby
the Company  reinsured the ceding carrier for 100% of the liabilities  that were
assumed by the ceding carrier from Delta Agricultural and




Industrial  Trust at December 31, 1997.  The Company  recognizes  income or loss
from this arrangement as claims are settled by increasing or decreasing loss and
loss  adjustment  expenses on the statement of income.  During the quarter ended
September 30, 1998, the Company decreased its loss and loss adjustment  expenses
by $90,000 for the income that was attributable to settlements during the period
compared to $0 for the same period in 1997.

        The  Company  experienced  a net loss of $90,564  during the nine months
ended September 30,1998 compared to a net loss of 124,605 during the same period
in 1997. As a result of the quota share reinsurance arrangement, the Company had
earned premium for the nine months ended September 30, 1998 of $350,544 compared
to $0 in 1997.  Losses and loss  adjustment  expenses  related  to this  program
totaled $208,072 for the first nine months of 1998 compared to $0 in 1997. Other
expenses  related to this program totaled  $115,239 for the first nine months of
1998 compared to $0 in 1997. Net income before tax from this program was $27,233
for the first nine  months of 1998  compared  to $0 in 1997.  As a result of the
reinsurance agreement entered into during the third quarter of 1998, the company
recognized a reduction in loss and loss adjustment  expenses from settled claims
during  the nine  months  ended  September  30,  1998 in the  amount of  $90,000
compared to $0 in the same period in 1997.

     Investment  income  of the  Company  decreased  from  $47,694  in the third
quarter of 1997 to $26,621 in the third  quarter of 1998.  This  decrease  was a
result of having less cash to invest for three primary  reasons:  the funding of
an Assumption Reinsurance Agreement in December,  1997 in which the Company paid
a premium of $1,586,463 to be relieved of all of its insurance liabilities;  net
operating  losses during the first half of 1998;  and the payment of significant
claims under a reinsurance  agreement funded in July, 1998. Although the Company
received  $1,051,845 from a ceding carrier in conjunction  with this reinsurance
arrangement, the net cash available for investment, after payment of claims, was
significantly less in the third quarter of 1998 compared to 1997.
 

       As a result of having less cash available to invest as described  above,
investment  income of the Company for the nine months ended  September  30, 1998
decreased to $65,466 from $138,550 for the first nine months of 1997.

        The  Company  realized  capital  losses  in the  third  quarter  of 1997
totaling  $9,958.  No capital  gains or losses  were  realized  during the third
quarter of 1998.  The Company  realized  capital  losses of $19,073 for the nine
months ended  September  30, 1997 compared to $0 in capital gains and losses for
the nine months ended September 30, 1998.

        The Company  recognized  "other  income" of $131,017 in third quarter of
1998 related primarily to services provided to the ceding carrier in reinsurance
arrangements  compared to $0 for the same quarter of 1997.  Other income related
primarily to these services for the nine months ended September 30, 1998 totaled
$203,229 compared to $0 for the same period in 1997.

        During the first nine months of 1998,  the Company  acted as a reinsurer
only and did no direct  writing.  Effective  October 1, 1998,  the Company began
writing  direct  workers's  compensation  insurance  to  employers  with  annual
premiums  generally less than $4,000.  The Company will cede 50% of this program
to a reinsurer under a quota share reinsurance arrangement.

        General expenses increased from $109,603 in the third quarter of 1997 to
$256,991  in the same period in 1998.  This  increase  is due  primarily  to the
development  of a claims and risk  control  department  within the Company  that
began  providing  claims and risk control  services in July,  1998. For the nine
months ended  September 30, 1998,  general  expenses  were $534,393  compared to
$293,363 for the same period in


<PAGE>


1997.  This increase is due primarily to the costs involved in  re-entering  the
commercial  insurance  market in the first  quarter of 1998  including the costs
associated  with  the  execution  of  certain  reinsurance  agreements  and  the
development of a claims and risk control department within the Company.

        The Company  recorded  an income tax  provision  for the  quarter  ended
September  30, 1998 of $2,927  compared to a tax benefit for the same quarter in
1997 of $26,045.  The tax benefit for the nine months ended  September  30, 1998
was $57,901  compared to $66,534 for the nine months ended  September  30, 1997.
The tax  provision  for the third  quarter  of 1998 was a result of having a net
operating profit the quarter compared to a net loss for the same period in 1997.
The  increased  tax benefit for the nine months ended  September  30, 1998 was a
result of larger operating losses  experienced by the Company during this period
compared to 1997.





<PAGE>


                         PART II:  OTHER INFORMATION

Item 1 - Legal Proceedings

There have been no material changes to the legal proceedings described in the 
Company's Registration Statement on Form 10-K (File Number 333-24739).


Item 6 - Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit 27: Financial data schedule

(b) No reports on Form 8-K were filed during the quarter ended 
    September 30, 1998.










<PAGE>

                           STONEVILLE INSURANCE COMPANY


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


STONEVILLE INSURANCE COMPANY
     (Registrant)



DATE: November 13, 1998 /s/ Harry Vickery
                        --------------------------------------
                        President and Chief Accounting Officer