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 from April 1, 1997 to June 30, 1997

                           Commission File No. 0-3978

                           UNICO AMERICAN CORPORATION
             (Exact name of registrant as specified in its charter)

               Nevada                                   95-2583928
   (State or other jurisdiction of                   (I.R.S. Employee
    incorporation or organization)                   Identification No.)

         23251 Mulholland Drive, Woodland Hills, California    91364
            (Address of Principal Executive Offices)         (Zip Code)

                                 (818) 591-9800
                          Registrant's telephone number

           Securities registered pursuant to Section 12(b) of the Act:
                                      None
                              (Title of each class)

           Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, No Par Value
                                (Title of Class)

                                    No Change
(Former name,former address and former fiscal year,if changed since last report)

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


                                    6,153,203
        Number of shares of common stock outstanding as of August 8, 1997

                                      1 of 12
<PAGE>

                                              PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                   UNICO AMERICAN CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                              June 30,           December 31,
                                                                                                1997                 1996
                                                                                             ----------           -----------
<S>                                                                                         <C>                  <C>
ASSETS
Investments
  Available for sale:
      Fixed maturities, at market value (amortized cost:  June 30,
         1997  $81,312,638; December 31, 1996  $75,984,966                                  $82,130,702           $77,109,214
      Equity securities at market (cost: June 30, 1997
         $999,460;  December 31, 1996  $0)                                                      921,950                     -
   Short-term investments, at cost                                                            4,209,055             4,861,745
                                                                                             ----------            ---------- 
      Total Investments                                                                      87,261,707            81,970,959
Cash                                                                                            493,477                82,637
Accrued investment income                                                                     1,535,452             1,443,551
Accounts and notes receivable, net                                                            8,129,373             8,898,839
Reinsurance recoverable:
   Paid losses and loss adjustment expenses                                                     585,148               452,943
   Unpaid losses and loss adjustment expenses                                                 1,861,444             2,629,019
Prepaid reinsurance premiums                                                                  1,333,153             1,647,806
Deferred policy acquisition costs                                                             5,092,867             4,953,085
Property and equipment (net of accumulated depreciation)                                        222,337               229,972
Deferred income taxes                                                                         1,659,189             1,503,655
Other assets                                                                                    614,726               638,856
                                                                                            -----------           -----------    
Total Assets                                                                               $108,788,873          $104,451,322
                                                                                            ===========           ===========
                                            LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses                                                  $40,816,390           $39,740,865
Unearned premiums                                                                            22,495,105            22,120,241
Advance premiums                                                                              1,340,098             1,358,671
Funds held as security for performance                                                          751,652               730,426
Accrued expenses and other liabilities                                                        2,030,236             2,395,699
Income taxes payable                                                                            103,113                     -
Note payable-bank                                                                               500,001               750,001
Dividends payable                                                                               430,724                     -
                                                                                             ----------            ----------  
    Total Liabilities                                                                       $68,467,319           $67,095,903
                                                                                             ----------            ---------- 
STOCKHOLDERS'  EQUITY
Common stock, no par - authorized 10,000,000 shares issued
   and outstanding shares 6,153,203 at June 30, 1997
   and 6,028,781 at December 31, 1996                                                         2,836,781             2,836,422
Net unrealized investment gains                                                                 488,766               742,004
Retained earnings                                                                            36,996,007            33,776,993
                                                                                            -----------           ----------- 
  Total Stockholders' Equity                                                                 40,321,554            37,355,419
                                                                                            -----------           -----------
     Total Liabilities and Stockholders' Equity                                            $108,788,873          $104,451,322
                                                                                            ===========           ===========
</TABLE>

                 See notes to consolidated financial statements.


                                       2 of 12
<PAGE>

                   UNICO AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                Three Months Ended                 Six Months Ended
                                                                     June 30,                           June 30,
                                                              1997              1996             1997             1996
                                                           ----------         ---------       ----------        ----------
<S>                                                       <C>                <C>             <C>               <C>    
REVENUES
Insurance Company Revenues
     Premium earned                                       $10,689,663        $9,382,132      $20,786,826       $18,676,324
     Premium ceded                                          1,598,378         1,015,932        2,554,001         2,096,297
                                                           ----------         ---------       ----------        ----------
          Net premium earned                                9,091,285         8,366,200       18,232,825        16,580,027
     Investment income                                      1,190,632           978,179        2,345,148         1,936,135
     Net realized investment gains                                  -           191,174              919           210,716
     Other income                                                  45                60              160                90
                                                           ----------         ---------       ----------        ----------
          Total Insurance Company Revenues                 10,281,962         9,535,613       20,579,052        18,726,968

Other Revenues from Insurance Operations
     Gross commissions and fees                             1,478,723         1,473,105        2,897,459         2,941,445
     Investment income                                         34,759            33,316           69,713            75,846
     Finance charges and late fees earned                     301,857           293,172          591,925           586,797
     Other income                                               3,553             3,491            6,354             3,256
                                                           ----------        ----------       ----------        ----------
          Total Revenues                                   12,100,854        11,338,697       24,144,503        22,334,312
                                                           ----------        ----------       ----------        ----------
               
EXPENSES
Losses and loss adjustment expenses                         4,921,938         4,715,902        9,896,411         9,115,263
Policy acquisition costs                                    2,599,119         2,249,451        5,239,049         4,464,580
Salaries and employee benefits                                935,663           920,857        1,860,076         1,833,538
Commissions to agents/brokers                                 294,485           331,490          569,461           638,074
Other operating expenses                                      619,809           726,901        1,353,436         1,491,671
                                                            ---------         ---------       ----------        ----------
     Total Expenses                                         9,371,014         8,944,601       18,918,433        17,543,126
                                                            ---------         ---------       ----------        ----------
                       
     Income Before Taxes                                    2,729,840         2,394,096        5,226,070         4,791,186

Income Tax Provision                                          845,256           720,002        1,576,332         1,442,275
                                                              -------           -------        ---------         --------- 
     Net Income                                            $1,884,584        $1,674,094        3,649,738         3,348,911
                                                            =========         =========       

Retained earnings January 1,                                                                  33,776,993        27,345,753
Dividend declared to stockholders                                                               (430,724)         (418,087)
                                                                                              ----------        ----------       
     Retained Earnings June 30,                                                              $36,996,007       $30,276,577
                                                                                              ==========        ==========

PER SHARE DATA
Weighted Average Shares Outstanding                         6,328,350         6,224,843        6,329,570         6,217,738
Earnings Per Share                                              $0.30             $0.27            $0.58             $0.54

</TABLE>



                 See notes to consolidated financial statements


                                       3 of 12
<PAGE>

                   UNICO AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                        FOR THE SIX MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>

                                                                                            1997                 1996
                                                                                          ---------            ---------
<S>                                                                                      <C>                  <C>       
Net Income                                                                               $3,649,738           $3,348,911
Adjustments to reconcile net income to net cash from operations
     Depreciation and amortization                                                           41,343               81,614
     Bond amortization, net                                                                 243,559              306,070
     Net realized (gain) on sale of securities                                                 (919)            (210,716)
Changes in assets and liabilities
     Premium, notes and investment income receivable                                        677,565              317,876
     Reinsurance recoverable                                                                635,370              949,451
     Prepaid reinsurance premiums                                                           314,653               47,486
     Deferred policy acquisitions costs                                                    (139,782)            (210,547)
     Other assets                                                                            24,130             (532,375)
     Reserve for unpaid losses and loss adjustment expenses                               1,075,525            1,780,164
     Unearned premium reserve                                                               374,864              774,084
     Funds held as security and advanced premiums                                             2,653              (65,720)
     Accrued expenses and other liabilities                                                (365,461)            (322,529)
     Income taxes current/deferred                                                           78,035              546,821
                                                                                          ---------            ---------       
          Net Cash Provided from Operations                                               6,611,273            6,810,590
                                                                                          ---------            ---------
Investing Activities
     Purchase of fixed maturity investments                                              (8,688,530)          (8,920,105)
     Proceeds from maturity of fixed maturity investments                                 3,098,000            3,713,514
     Purchase of equity securities  -  cost                                              (1,019,500)          (2,882,723)
     Proceeds from sale of equity securities                                                 20,959            2,767,938
     Net decrease in short-term investments                                                 671,987              311,685
     Additions to property and equipment                                                    (33,708)             (40,821)
                                                                                          ---------            ---------
          Net Cash (Used) by Financing Activities                                        (5,950,792)          (5,050,512)
                                                                                          ---------            ---------
Financing Activities
     Proceeds from issuance of common stock                                                     359                  525
     Repayment of note payable - bank                                                      (250,000)          (1,395,000)
                                                                                            -------            --------- 
          Net Cash  (Used) by Financing Activities                                         (249,641)          (1,394,475)
                                                                                            -------            ---------

Net increase in cash                                                                        410,840              365,603
Cash at beginning of period                                                                  82,637                  951
                                                                                            -------              -------
          Cash at End of Period                                                            $493,477             $366,554
                                                                                            =======              =======

Supplemental cash flow information
     Cash paid during the period for:
          Interest                                                                          $21,697              $83,416
          Income taxes                                                                   $1,380,000             $905,000


</TABLE>

                 See notes to consolidated financial statements.


                                       4 of 12
<PAGE>

                   UNICO AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1997


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

Nature of Business
------------------
Unico American  Corporation is an insurance holding company.  Unico American and
its  subsidiaries,  all of which are  wholly  owned  (the  "Company"),  provide,
primarily in California,  property,  casualty,  health and life  insurance,  and
related premium financing.

Principles of Consolidation
---------------------------
The  consolidated  financial  statements  include the accounts of Unico American
Corporation and its  subsidiaries.  All significant  inter-company  accounts and
transactions have been eliminated in consolidation.

Basis of Presentation
---------------------
The  consolidated  financial  statements  have been prepared in conformity  with
generally  accepted  accounting  principles (GAAP) which differ in some respects
from those followed in reports to insurance regulatory authorities.

Use of Estimates
----------------
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts and disclosure of certain assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses during the reporting  period.  While every effort is made to ensure the
integrity of such estimates, actual results could differ from those estimates.

Investments
-----------
Although all of the  Company's  fixed  maturity  investments  are  classified as
available-for-sale  and are stated at market  value,  the  Company's  investment
guidelines   place   primary   emphasis  on  buying  and  holding   high-quality
investments.  Investments in equity  securities are carried at market value. The
unrealized  gains or losses  from fixed  maturities  and equity  securities  are
reported as a separate  component of stockholders'  equity,  net of any deferred
tax effect. Short-term investments are carried at cost which approximates market
value.  When a decline in the value of a fixed  maturity  or equity  security is
considered  other  than  temporary,  a loss is  recognized  in the  consolidated
statement  of  operations.  Realized  gains  and  losses  are  included  in  the
consolidated  statements  of operations  based upon the specific  identification
method.

Property and Equipment
----------------------
Property  and  equipment  are  stated  at cost  less  accumulated  depreciation.
Depreciation  is  computed  using  accelerated  depreciation  methods  over  the
estimated useful lives of the related assets.

Income Taxes
------------
The  provision  for income  taxes is computed on the basis of income as reported
for financial reporting purposes under generally accepted accounting principles.
Deferred  income taxes arise  principally  from certain  assets and  liabilities
which are  recognized  for income tax  purposes in  different  periods  than for
financial statements.


                                       5 of 12
<PAGE>

                   UNICO AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1997


NOTE 2 - RESTRICTED FUNDS
-------------------------
As required by law, the Company  segregates from its operating accounts premiums
collected  from insureds into separate  trust  accounts.  As of a June 30, 1997,
these trust funds  represent  $2,356,409  of the Company's  cash and  short-term
investments.  In addition,  $2,725,000  of the Company's  investments  represent
statutory  deposits of Crusader which are assigned to and held by the California
State  Treasurer and the Insurance  Commissioner  of the State of Nevada.  These
deposits  are  required  for  Crusader  to write  certain  lines of  business in
California and for its admission in states other than California.

NOTE 3 - FUNDS HELD AS SECURITY
-------------------------------
Funds held as security  for  performance  represent  funds  received in order to
guarantee the contractual obligations entered into with customers.

NOTE 4 - STATUTORY CAPITAL AND SURPLUS
--------------------------------------
As of June 30,  1997,  Crusader's  statutory  capital  and  surplus  were deemed
sufficient to support its present insurance premium writings.

NOTE 5 - INCENTIVE STOCK OPTION PLAN
------------------------------------
The Company's 1985 stock option plan provided for the grant of "incentive  stock
options"  to  officers  and key  employees.  The plan  covers  an  aggregate  of
1,500,000  shares of the  Company's  common stock  (subject to adjustment in the
case of stock splits,  reverse stock splits, stock dividends,  etc.). As of June
30, 1997,  374,313  options were  outstanding  of which  275,411 were  currently
exercisable. During the quarter ended June 30, 1997, options on 50,286 of common
stock were exercised. There are no additional options available for future grant
under the 1985 plan.

NOTE 6 - CLAIMS AND LITIGATION
------------------------------
The Company,  by virtue of the nature of the business  conducted by it,  becomes
involved  in  numerous  legal  proceedings  in which  it may be named as  either
plaintiff or defendant.  The Company is required to resort to legal  proceedings
from  time-to-time  in  order  to  enforce  collection  of  premiums  and  other
commissions  or fees for the services  rendered to customers or to their agents.
These routine items of litigation do not  materially  affect the Company and are
handled on a routine basis by the Company through its general counsel.

Likewise,  the Company is sometimes  named as a  cross-defendant  in  litigation
which is  principally  directed  against that insurer who has issued a policy of
insurance  directly or indirectly  through the Company.  Incidental  actions are
sometimes  brought  by  customers  or other  agents  which  relate  to  disputes
concerning the issuance or non-issuance of individual policies.  These items are
also handled on a routine basis by the Company's  general  counsel,  and they do
not  materially  affect the  operations of the Company.  Management is confident
that the  ultimate  outcome  of  pending  litigation  should not have an adverse
effect on the Company's consolidated operation or financial position.


                                       6 of 12
<PAGE>

                   UNICO AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1997


NOTE 7 - LEASE COMMITMENTS AND CONTINGENCIES
--------------------------------------------
The Company  presently  occupies a 46,000 square foot building  located at 23251
Mulholland  Drive,  Woodland  Hills,  California,  under a master lease expiring
March 31, 2007.  The lease  provides  for an annual gross rental of  $1,025,952.
Erwin Cheldin, the Company's president,  chairman and principal stockholder,  is
the owner of the building.  The terms of the lease were at least as favorable to
the Company as could have been obtained from  unaffiliated  third  parties.  The
Company utilizes for its own operation 100% of the space it leases.

NOTE 8
------
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all necessary adjustments,  which consist of normal recurring
adjustments,  to present  fairly the results of operations for the three and six
months ended June 30, 1997, and June 30, 1996.

NOTE 9
------
The  results of  operations  for the three and six months  ended June 30,  1997,
should not be considered as necessarily indicative of the results to be expected
for the full year.

                                       7 of 12
<PAGE>

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

(a)  Liquidity and Capital Resources:
-------------------------------------
Due to the nature of the Company's business  (insurance and insurance  services)
and whereas Company growth does not normally  require  material  reinvestment of
profits into  property or equipment,  the cash flow  generated  from  operations
usually results in improved liquidity for the Company.

Crusader's losses and loss adjustment  expense payments are the most significant
cash flow requirement of the Company.  These payments are continually  monitored
and  projected  to ensure  that the  Company  has the  liquidity  to cover these
payments without the need to liquidate its investments. As of June 30, 1997, the
Company had cash and cash  investments  of  $87,014,630  (at amortized  cost) of
which $83,878,368 (96%) were investments of Crusader.

As of the quarter ended June 30, 1997, the Company had invested  $81,312,638 (at
amortized  cost) or 94% of its invested  assets in fixed  maturity  obligations.
Although all of the  Company's  fixed  maturity  investments  are  classified as
available-for-sale,  the Company's investment  guidelines place primary emphasis
on buying and holding  high-quality  investments.  The balance of the  Company's
investments  were  in  equity  securities  of  regional  utility  companies  and
high-quality,  short-term  investments  that include a U.S.  treasury bill, bank
money  market  accounts,   certificates  of  deposit,  commercial  paper  and  a
short-term treasury money market fund.

The Company's  investments  in fixed maturity  obligations  of  $81,312,638  (at
amortized cost) include $39,317,305 (48%) of tax exempt,  pre-refunded state and
municipal bonds,  $19,462,644  (24%) of U.S.  treasury  securities,  $22,532,689
(28%) in high-quality  industrial  bonds and  certificates  of deposit.  The tax
exempt  interest income earned for the three and six months ended June 30, 1997,
was $449,546 and $904,162,  respectively.  The tax exempt interest income earned
for the three and six months  ended June 30, 1996,  was  $443,257 and  $853,745,
respectively.

The Company's investment policy limits investments in any one company to no more
than  $1,000,000.  This limitation  excludes bond premiums paid in excess of par
value and U.S.  Government or U.S.  Government  guaranteed issues. The Company's
fixed maturity  obligations  have maturities no greater than eight years. All of
the Company's  investments are high-grade  investment quality.

On March 4, 1997,  the Board of  Directors  declared a $0.07  (seven  cents) per
common share cash dividend payable on August 15, 1997, to shareholders of record
at the close of business on August 1, 1997.

The  Company's  premium  finance  subsidiary,  American  Acceptance  Corporation
("AAC"),  has a bank credit line of $4,000,000  with a variable rate of interest
based on the London Inter Bank Offered Rate ("LIBOR").  This credit line is only
used to provide AAC with the additional  funds it requires to finance  insurance
premiums.  AAC has been paying down its bank note payable from its internal cash
flow as well as from  intercompany  loans from its parent,  Unico. The bank note
payable has been reduced from $750,001 as of December 31, 1996 to $500,001 as of
June 30, 1997.

                                       8 of 12
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
--------------------------------------------------------------------
         AND RESULTS OF OPERATIONS (continued)
         -------------------------------------

(a)  Liquidity and Capital Resources (continued)
------------------------------------------------
Although  material capital  expenditures may also be funded through  borrowings,
the  Company  believes  that  cash  generated  from  operations,  plus  cash and
short-term  investments  at  the  quarter  end,  net  of  trust  restriction  of
$2,356,409 and statutory  deposits of  $2,725,000,  should be sufficient to meet
its operating  requirements  during the next twelve months without the necessity
of borrowing additional funds. Crusader is restricted in the amount of dividends
it may pay to its  parent,  Unico,  without  prior  regulatory  approval  by the
California  Department of Insurance.  Crusader  anticipates  that it will not be
required to obtain prior  regulatory  approval for any dividend which it may pay
to Unico in the next twelve months.

There are no material  commitments  for capital  expenditures  as of the date of
this report.

(b)  Results of Operations:
---------------------------
All  comparisons  made in this discussion are comparing the three and six months
ended June 30, 1997,  to the three and six months  ended June 30,  1996,  unless
otherwise indicated.

The Company's net income  increased  $210,490  (13%) to $1,884,584 for the three
months and $300,827 (9%) to  $3,649,738  for the six months ended June 30, 1997,
compared to net income of $1,674,094 for the three months and $3,348,911 for the
six months ended June 30, 1996. Total revenues  increased  $762,157 (7%) for the
three months and  $1,810,191  (8%) for the six months ended June 30, 1997,  when
compared to the three and six months ended June 30, 1996.

Premium  earned  before  reinsurance  increased  $1,307,531  (14%) for the three
months and $2,110,502 (11%) for the six months ending June 30, 1997.  Crusader's
primary line of business is its Commercial Package business  representing 96% of
all  premiums  earned in both the three months and the six months ended June 30,
1997.  The  Commercial  Package  business  continued to grow with earned premium
increasing  $1,044,960  (11%) to $10,243,319 for the three months and $1,601,706
(9%) to  $19,899,996  for the six months ended June 30, 1997, as compared to the
corresponding  period of the prior year.  Crusader's  other  lines of  business,
which include Commercial  Property and Other Liability increased $262,571 (143%)
for the three months and $508,796  (135%) for the six months ended June 30, 1997
as compared to the corresponding  period of the prior year. The growth in earned
premium in California  represented  69% of the total  increase in earned premium
for the three months and 58% for the six months ended June 30, 1997.

Due to additional  reinsurance cost, ceded premium increased from 11% of premium
earned to 15% of premium  earned for the three months and increased  from 11% of
premium earned to 12% of premium earned for the six months ending June 30, 1997.
Although  reinsurance  cost has increased as a percentage of earned  premium for
the three and six months ended June 30, 1997, the percentage of premium ceded to
premium  earned is still  lower than the 16%  incurred  in the fiscal year ended
March 31, 1996.

Losses and loss adjustment  expenses were 54% of net premium earned for both the
three and six months ended June 30, 1997,  compared to 56% of net premium earned
for the three months and 55% of net premium earned for the six months ended June
30, 1996.


                                       9 of 12
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
--------------------------------------------------------------------
         AND RESULTS OF OPERATIONS (continued)
         -------------------------------------

(b)  Results of Operations (continued)
--------------------------------------
Policy acquisition costs consist of commissions, premium taxes, inspection fees,
and certain other underwriting costs which are directly or indirectly related to
the production of Crusader insurance policies. These costs include both Crusader
expenses  and  allocated  expenses  of  other  Unico  subsidiaries.   Crusader's
reinsurer pays Crusader a ceding  commission  which is primarily a reimbursement
of the acquisition cost related to the ceded premium.

Policy acquisition  costs, net of ceding commission,  are deferred and amortized
as the related  premiums are earned.  These costs were 29% of net premium earned
for the three and six months ended June 30, 1997, compared to 27% of net premium
earned for the three and six months ended June 30, 1996.

Investment income, excluding realized investment gains, increased $213,896 (21%)
to $1,225,391  for the three months and increased  $402,880  (20%) to $2,414,861
for the six months  ended June 30,  1997,  compared  to the three and six months
ended June 30,  1996.  This  increase  was  primarily  due to a 15% increase (at
amortized cost) in invested assets.

Commissions to  agents/brokers  decreased $37,005 (11%) for the three months and
$68,613 (11%) for the six months ended June 30, 1997,  compared to the three and
six months ended June 30, 1996.  The  decrease  was  primarily  due to decreased
sales in the health, life and automobile programs.

Other  operating  expenses  decreased  $107,092  (15%) for the three  months and
$138,235 (9%) for the six months ended June 30, 1997,  compared to the three and
six months  ended June 30,  1996.  The decrease in expenses for the three months
was  primarily due to the cost of the Company's  annual  certified  audits being
incurred in  different  periods due to the change in the  Company's  fiscal year
end. The cost of the  certified  audit for the fiscal year ended March 31, 1996,
was incurred in the quarter ended June 30, 1996, while the cost of the certified
audit for the fiscal year ended  December 31, 1996,  was incurred in the quarter
ended March 31, 1997.  The decrease in expenses for the six months was primarily
due to a $61,719 decrease in interest expense due to decreased borrowings.

There were no significant changes in other revenue or expense items.

The effect of  inflation  on net income of the Company  during the three and six
months ended June 30, 1997, and 1996 was not significant.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------
Not Applicable


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<PAGE>

                           PART II - OTHER INFORMATION


ITEM 2 - CHANGES IN SECURITIES
------------------------------
(c)  During the quarter ended June 30, 1997,  the Company issued an aggregate of
     50,286 shares of its common stock upon  exercise of employee  stock options
     granted  under the Unico  American  Corporation  Employee  Incentive  Stock
     Option Plan.  These shares were issued to an aggregate of two  employees of
     the  Company.  Of these  shares,  6,344  shares were issued in exchange for
     2,248  shares of common  stock and  $5.00 in cash and  43,942  shares  were
     issued in  exchange  for 14,916  shares of common  stock and $3.31 in cash.
     These shares were acquired for  investment and without a view to the public
     distribution  or resale thereof,  and the issuance  thereof was exempt from
     the registration requirements under the Securities Act of 1933, as amended,
     under  Section  4 (2)  thereof  as  transactions  not  involving  a  public
     offering.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
--------------------------------------------------------
(a)  On June 5, 1997, the Company held its Annual Meeting of Stockholders.

(b)  Proxies for the meeting were solicited  pursuant to Regulation 14 under the
     Securities Exchange Act of 1934; there was no solicitation in opposition to
     nominees of the Board of Directors as listed in the Proxy Statement and all
     such nominees were elected.

(c)  At the meeting,  the following  persons were elected by the vote  indicated
     (there were no abstentions or broker non-votes) as directors to serve until
     the next annual meeting of shareholders and until their successors are duly
     elected and qualified:
                                                                      Against or
                 Name                             For                   Withheld
                 ----                           ---------             ----------
                 Erwin Cheldin                  5,427,966                1,678
                 Lester A. Aaron                5,427,966                1,678
                 Cary L. Cheldin                5,427,966                1,678
                 George C. Gilpatrick           5,427,966                1,678
                 Roger H. Platten               5,427,966                1,678
                 David A. Lewis                 5,427,966                1,678
                 Bernard R. Gans                5,427,966                1,678


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
------------------------------------------
(a)   Exhibits:
      Exhibit 27 - Financial Data Schedule

(b)   Reports on Form 8-K:
      None



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<PAGE>


                                   SIGNATURES
                                   ----------

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

                           UNICO AMERICAN CORPORATION

Date: August 11, 1997   By: /s/  Erwin Cheldin
                            ---------------------
                                 Erwin Cheldin
                                 Chairman of the Board, President and Chief
                                 Executive Officer,(Principal Executive Officer)

Date: August 11, 1997   By: /s/  Lester A. Aaron
                            ---------------------
                                 Lester A. Aaron
                                 Treasurer, Chief Financial Officer, (Principal
                                 Accounting and Principal Financial Officer)



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