SECURITIES AND EXCHANGE COMMISSION

                               Washington, D.C.  20549




                                      FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

                                SECURITIES ACT OF 1934


          For the Quarterly Period Ended September 30, 1995
          Commission File Number 0-4690 



                           FINANCIAL INDUSTRIES CORPORATION
                (Exact Name of Registrant as specified in its charter)

               Texas                                        74-2126975 
           
       (State  of  Incorporation)             (I.R.S. Employer Identification
                                                                     Number)
                                                           


          The Austin Centre, 701 Brazos, 12th Floor
          Austin, Texas                                  78701  
          (Address of principal executive offices)       (Zip Code)

          Registrant's telephone number, including area code (512) 404-5000




          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     

          Number of common shares  outstanding ($1.00 par value) at  end of
          period:  1,085,593 





                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES


                                       INDEX                            

                                                               Page No.   



          Part I - Financial Information

          Consolidated Balance Sheets 
               September 30, 1995 and December 31, 1994...............

          Consolidated Statements of Income 
               For the three and nine month periods ended 
               September 30, 1995 and 1994............................

          Consolidated Statements of Cash Flows
               For the three and nine month periods ended 
               September 30, 1995 and 1994............................

          Notes to Consolidated Financial Statements..................

          Management's Discussion and Analysis of 
               Financial Conditions and Results of Operations.........

          Part II 

          Other Information...........................................

          Signature Page.............................................. 



        Item 1.    Financial Statements



                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES    
                             CONSOLIDATED BALANCE SHEETS           
                              (in thousands of dollars)

                                                       Sept.30,   Dec. 31,
                                                         1995       1994
                                                   
                                                      Unaudited  
       ASSETS
       Investments:

               Fixed maturities available for sale,
                at market value (amortized cost of 
                $79,210 and $83,397, respectively)     $ 80,699  $ 77,468

               Equity securities, at market (cost
                approximately $11)                            4         4

               Policy loans                               1,606     1,231

               Short-term investments                    28,368    28,365 

                    Total investments                   110,677   107,068

          Cash                                            1,828       933

          Investment in affiliate                        39,921    24,912

          Accrued investment income                         780     1,166

          Agent advances and other receivables            7,490     6,979

          Reinsurance receivables                         1,758     2,186

          Due and deferred premiums                       9,469     9,714

          Property and equipment, net                     7,453     4,057

          Deferred policy acquisition costs              36,002    29,975

          Present value of future profits of            
               acquired business                         46,600    50,712

          Deferred financing costs                          194       389

          Other assets                                    7,372     6,286

          Separate account assets                         8,372     8,723

               Total assets                            $277,916  $253,100 

                   (See Notes to Consolidated Financial Statements) 





                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES   
                             CONSOLIDATED BALANCE SHEETS
                              (in thousands of dollars)

                                                       Sept.30,  Dec. 31, 
                                                         1995      1994
                                                                   
                                                       Unaudited
          LIABILITIES & SHAREHOLDERS' EQUITY

          Liabilities: 
           Policy liabilities and contractholder
            deposit funds:
               Future policy benefits payable          $ 56,313  $ 60,411
               Contractholder deposit funds              38,442    30,759
               Unearned premiums                            136       196
               Other policy claims & benefits payable     5,008     6,579 
                                                         99,899    97,945

            Senior loans                                  8,856    17,060
            Subordinated notes payable to affiliate      60,985    60,759
            Deferred federal income taxes                 8,329     7,010
            Other liabilities                            16,308     9,807
            Separate account liabilities                  8,372     8,723 
               Total liabilities                        202,749   201,304


          Commitments and contingencies 

          Shareholders' equity:
           Common stock, $1.00 par value, 
            3,304,200 shares authorized;
            1,169,060 shares issued, 1,085,593
            shares outstanding in 1995 and 1994           1,169     1,169
          Additional paid-in capital                      7,225     7,225
          Net unrealized gain (loss) on investments in
           fixed maturities available for sale            2,729   (12,858)
          Net unrealized loss on equity securities           (1)       (1)
          Retained earnings                              64,467    56,683  
                                                         75,589    52,218
          Common treasury stock, at cost, 83,467
           shares in 1995 and 1994                         (422)     (422)
               Total shareholders' equity                75,167    51,796

               Total liabilities and shareholders'
                equity                                 $277,916  $253,100



                   (See Notes to Consolidated Financial Statements) 




                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES  
                          CONSOLIDATED STATEMENTS OF INCOME
                              FOR THE THREE MONTH PERIOD
                         ENDED SEPTEMBER 30, 1995 AND 1994
                                     (Unaudited)
                   (in thousands of dollars, except per share data)

                                                        3 Months Ended
                                                         September 30,
                                                        1995      1994
          Revenues: 
           Premiums                                    $11,853   $12,104
           Premiums ceded                                 (228)     (282)
               Net premiums                             11,625    11,822
           Net investment income                         1,929     1,758
           Earned insurance charges                      1,731     1,786
           Other                                           803       802 
               Total revenues                           16,088    16,168

          Benefits and expenses:
           Benefits and other expenses                   5,420     4,437
           Interest on insurance policies                  510       442
           Amortization of present value
           of future profits of acquired 
           business                                      1,510     3,167
           Amortization of deferred policy 
           acquisition costs                               958       769
           Operating expenses                            4,075     3,466
           Interest expense                              1,197     1,223
                Total benefits and expenses             13,670    13,504 

          Income before federal income
           taxes and equity in net earnings of          
           affiliate                                     2,418     2,664

          Provision for federal income taxes               495       712 

          Income before  equity in net earnings 
           of affiliate                                  1,923     1,952

          Equity in net earnings of affiliate, net 
           of tax                                          435       318 
                                                       
          Net income                                   $ 2,358   $ 2,270 

          Per Share Data: 
           Common stock and common stock equivalents     1,109     1,107

           Net income per share available to common
            shareholders                               $  2.13   $  2.05 


                   (See Notes to Consolidated Financial Statements) 






                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF INCOME 
                              FOR THE NINE MONTH PERIOD 
                          ENDED SEPTEMBER 30, 1995 AND 1994 
                                     (Unaudited)
                   (in thousands of dollars, except per share data)

                                                        9 Months Ended
                                                         September 30,
                                                        1995      1994 
          Revenues:
           Premiums                                    $33,704   $38,831
           Premiums ceded                                 (688)     (845) 
               Net premiums                             33,016    37,986
           Net investment income                         5,682     5,247
           Earned insurance charges                      5,396     5,555
           Other                                         2,429     2,462 
               Total revenues                           46,523    51,250

          Benefits and expenses:
           Benefits and other expenses                  15,264    14,708
           Interest on insurance policies                1,433     1,256
           Amortization of present value 
           of future profits of acquired
           business                                      4,112     8,871
           Amortization of deferred policy
           acquisition costs                             2,710     2,119 
           Operating expenses                           10,987    11,712
           Interest expense                              3,566     3,661 
               Total benefits and expenses              38,072    42,327

          Income before federal income
           taxes and equity in net earnings of  
           affiliate                                     8,451     8,923

          Provision for federal income taxes             2,061     2,257 

          Income before equity in net earnings
           of affiliate                                  6,390     6,666

          Equity in net earnings of affiliate, net 
           of tax                                        1,394     1,114
                                                       
          Net income                                   $ 7,784   $ 7,780 

          Per Share Data:
           Common stock and common stock equivalents     1,108     1,107
           Net income per share available to common
            shareholders                               $  7.03   $  7.03




                   (See Notes to Consolidated Financial Statements) 






                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS 
                              FOR THE THREE MONTH PERIOD 
                          ENDED SEPTEMBER 30, 1995 AND 1994
                                     (Unaudited)
                              (in thousands of dollars)
                                                        3 Months Ended
                                                         September 30,
                                                        1995      1994
          CASH FLOWS FROM OPERATING ACTIVITIES
          Net income                                   $  2,358  $  2,270
          Adjustments to reconcile net income to net
           cash used in operating activities
          Amortization of present value of future 
           profits                                        1,510     3,167
          Amortization of deferred policy acquisition
           costs                                            958       769
          Financing costs amortized                        (141)      199
          Equity in undistributed earnings of 
           affiliate                                     (1,183)     (966)
          Changes in assets and liabilities net of 
           effects from purchase of insurance 
           subsidiaries:
          Decrease in accrued  investment income            314       507 
          Decrease (increase) in agent advances and 
           other receivables                                212    (1,909)
          (Increase) decrease in due and deferred
           premiums                                        (686)      178 
          Increase in deferred policy acquisition
           costs                                         (2,418)   (2,339)
          (Increase) decrease in other assets              (723)      649 
          Increase (decrease) in policy liabilities     
           and accruals                                   1,298      (464)
          Increase (Decrease) in other liabilities        2,743       (78)
          Increase in policy loans                         (181)     (125)
          Decrease in deferred federal income taxes      (2,672)   (1,138)
          Other, net                                         (4)      783 
          Net cash provided by operating activities       1,385     1,503 
          Cash Flows From Investing Activities
          Investments purchased                             -0-    (3,444)
          Proceeds from sale and maturities of 
           investments                                      399       921
          Net change in short-term investments             (207)    2,579
          Retirement of equipment                             1       -0- 
          Net cash provided by investing activities         193        56 
          Cash Flows From Financing Activities         
          Repayment of debt                              (2,091)   (1,963)
          Net cash used in financing activities          (2,091)   (1,963)
          Net decrease in cash                             (513)     (404)
                                                       
          Cash, beginning of period                       2,341     1,708
          Cash, end of period                          $  1,828  $  1,304



                   (See Notes to Consolidated Financial Statements) 






                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                        CONSOLDIATED STATEMENTS OF CASH FLOWS
                              FOR THE NINE MONTH PERIOD 
                          ENDED SEPTEMBER 30, 1995 AND 1994 
                                     (Unaudited)
                              (in thousands of dollars)
                                                        9 Months Ended
                                                         September 30,
                                                        1995      1994 
          CASH FLOWS FROM OPERATING ACTIVITIES
          Net income                                   $  7,784  $  7,780
          Adjustments to reconcile net income to net
           cash provided by (used in) operating 
           activities:
          Amortization of present value of future 
           profits                                        4,112     8,871
          Amortization of deferred policy acquisition
           costs                                          2,710     2,119 
          Financing costs amortized                         195       520
          Loss on sale of equipment                         -0-       119
          Equity in undistributed earnings of                      
           affiliate                                     (3,642)   (3,251)
          Changes in assets and liabilities net of 
           effects from purchase of insurance 
           subsidiaries:
          Decrease in accrued  investment income            386       286 
          Increase in agent advances and                    (83)   (1,504)
           other receivables
          Decrease (Increase) in due and deferred           245    (1,451)
           premiums
          Increase in deferred policy acquisition        (8,737)   (7,153)
           costs                                         (1,086)   (1,564)
          Increase in other assets                        1,954       514 
          Increase in policy liabilities and accruals     6,501    (2,714)
          Increase (decrease) in other liabilities                 
          Increase in policy loans                         (375)     (256)
          Increase (decrease) in deferred federal 
           income taxes                                   1,319    (2,444)
          Other, net                                        (12)    3,535 
          Net cash provided by operating activities      11,271     3,407 
          Cash Flows From Investing Activities
          Investments purchased                             -0-   (10,313)
          Proceeds from sale and maturities of 
           investments                                    1,001     3,546
          Net change in short-term investments               (3)   11,754
          Purchase of equipment, net                     (3,396)      -0-  
          Net cash provided by investing activities      (2,398)    4,987 
          Cash Flows From Financing Activities
          Issuance of subordianted notes payable to 
           affiliate                                        226       201 
          Repayment of debt                              (8,204)   (9,809)
          Net cash used in financing activities          (7,978)   (9,608)
          Net increase (decrease) in cash                   895    (1,214)
          Cash, beginning of period                         933     2,518 
          Cash, end of period                          $  1,828  $  1,304

                   (See Notes to Consolidated Financial Statements) 






                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES

              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


          The financial statements included  herein reflect all adjustments
          which are, in the  opinion of management, necessary to  present a
          fair  statement of the interim results.  The statements have been
          prepared to  conform to the requirements of  Form 10-Q and do not
          necessarily  include  all   disclosures  required  by   generally
          accepted accounting  principles (GAAP).  The  reader should refer
          to  Form 10-K  for the  year ended  December 31,  1994 previously
          filed with  the Commission  for financial statements  prepared in
          accordance  with GAAP.    Certain prior  year  amounts have  been
          reclassified to conform with current year presentation. 

          The consolidated  financial  statements include  the accounts  of
          Financial Industries  Corporation  ("FIC") and  its  wholly-owned
          subsidiaries.   The  investment of  FIC in  InterContinental Life
          Corporation ("ILCO") is  presented using the equity  method.  All
          significant   intercompany  items  and   transactions  have  been
          eliminated.

                                              



          Item  2.    Management's  Discussion and  Analysis  of  Financial
          Conditions and Results of Operation

          For  the nine-month  period ended September  30, 1995,  FIC's net
          income was  $7,784,000 ($7.03 per  common share), as  compared to
          $7,780,000  ($7.03 per  common share)  for the  nine-month period
          ended September 30, 1994.  

          The decline  in long-term  interest rates during  the first  nine
          months of 1995, which was related to general economic conditions,
          had  a  positive   effect  upon  the market  value  of the  fixed
          maturities  available for sale segment  of the portfolio.   As of
          September 30,  1995, the  market  value of  the fixed  maturities
          available for sale  segment was  $80.7 million as  compared to  a
          carrying  value of  $79.2  million, or  an  unrealized gain  $1.5
          million.   There is no assurance that this unrealized gain may be
          realized in the future.
            
          The  operating strategy  of  the Company's  management emphasizes
          several   key  objectives:   expense  management;   marketing  of
          competitively priced  insurance products  which  are designed  to
          generate an  acceptable level of profitability;  maintenance of a
          high quality  portfolio of  investment grade securities;  and the
          provision of quality customer service.

          The  consolidated balance  sheets at  September 30,  1995 include
          Separate Account assets of Family Life Insurance Company ("Family
          Life") in the amount  of $8.4 million.   The Separate Account  is
          maintained by Family Life, which was  acquired by FIC on June 12,
          1991.  Under the provisions of the purchase agreement between FIC
          and Merrill  Lynch Insurance Group, Inc.,  certain life insurance
          companies affiliated with Merrill  Lynch agreed to assume (on  an
          assumption  reinsurance  basis)  the  variable  annuity contracts
          related to such Separate  Account assets.  The transfer  of these
          assets,  in accordance  with  the provisions  of the  reinsurance
          agreement,  is  subject  to  certain regulatory  approvals.  Such
          regulatory  approvals   have  been   obtained  in  a   number  of
          jurisdictions,  and  the  assumption  of the  business  has  been
          completed in those states.  However, the Company has not obtained
          a definitive date  from Merrill  Lynch as to  when the  remaining
          regulatory  approvals will  be obtained,  so as to  enable Family
          Life  to complete  the transfer  of the  balance of  the Separate
          Account assets.


              Equity in Net Income of InterContinental Life Corporation

          General:

          Prior to the acquisition  of Family Life in  June of 1991,  FIC's
          primary involvement  in the  life insurance business  was through
          its   equity  interest   in  InterContinental   Life  Corporation
          ("ILCO").    The Company's  equity in  the  net earnings,  net of
          federal  income tax, of  ILCO, was $1,394,000  for the nine-month
          period ended September  30, 1995, as  compared to $1,114,000  for
          the similar period in 1994.  

          FIC currently  owns 1,795,146 shares of ILCO's  common stock, and
          holds  options to  acquire an  additional 1,702,155 shares.   The
          options were  granted under an  Option Agreement between  FIC and 
          ILCO which was entered into in  March, 1986.  In addition, Family
          Life,  a subsidiary of FIC, currently owns 171,200 shares of ILCO
          common  stock.   As a  result, FIC  currently owns,  directly and
          indirectly through Family  Life, 1,966,346 shares  (approximately
          48%) of  ILCO's common stock.   If all of FIC's  rights under the
          Option Agreement were to  be presently exercised, FIC's ownership
          would amount to approximately  63% of the issued  and outstanding
          shares of ILCO's common stock.

          The  fixed  maturities  available  for  sale  portion  of  ILCO's
          investment  assets at September 30, 1995 was $469.4 million.  The
          amortized cost of the fixed maturities available for sale segment
          as of September 30,  1995 was $463.3 million, representing  a net
          unrealized  gain   of  $6.1  million.     This  unrealized  gains
          principally reflects changes in interest  rates from the date the
          respective   investments  were   purchased.     Since   FIC  owns
          approximately 48%  of the common  stock of ILCO,  such unrealized
          gains,  net of  tax, are  reflected in  FIC's equity  interest in
          ILCO, and had the effect of increasing the reported value of such
          equity interest by approximately $2.9 million.

          ILCO's net  income for the nine-month period  ended September 30,
          1995, as compared to the same  period in 1994, was affected by an
          increase in interest expense.   Interest expense was $4.6 million
          for the  first nine months  of 1995, as compared  to $3.8 million
          for the same period in 1994.   The increase is attributable to an
          increase  in the average rate  of interest paid  on ILCO's senior
          loans  - 8.72% for the 1995 period,  as compared to 6.56% for the
          1994 period.

          ILCO's  results for  the first  nine months  of 1995  include the
          operations  of  Investors  Life   Insurance  Company  of  Indiana
          (formerly Meridian  Life Insurance  Company) for the  period from
          February  14,  1995  to  September  30,  1995.    Investors  Life
          Insurance  Company of  Indiana ("Investors-IN") was  purchased by
          ILCO  and  Investors  Life  Insurance Company  of  North  America
          ("Investors-NA") for an adjusted purchase price of $17.1 million;
          the transaction was completed on February 14, 1995.


          Liquidity and Capital Resources of ILCO:

          ILCO is a holding  company whose principal assets consist  of the
          common   stock   of   Investors-NA   and   its   subsidiaries   -
          InterContinental  Life  Insurance  Company  ("ILIC")  and,  since
          February,  1995, Investors-IN.   ILCO's  primary source  of funds
          consists of payments under the Surplus Debentures from Investors-
          NA. 

          The cash requirements of ILCO consist primarily of its service of
          the indebtedness created in  connection with the 1988 acquisition
          of  the Investors Life  Companies.  As of  December 31, 1994, the
          unpaid principal of  ILCO's Senior  Loan was $66.6  million.   On
          January  2, 1995, ILCO made  a scheduled payment  of $4.5 million
          under its Senior  Loan.   In connection with  the acquisition  of
          Investors-IN in  February, 1995, ILCO borrowed  an additional $15
          million under its Senior  Loan to help finance the purchase.   On
          April  3, 1995,    a principal  payment  in the  amount of  $13.2
          million  was made, which prepaid the Senior Loan until October 1,
          1995.   As a result, the  Senior Loan had a  principal balance at 
          September 30, 1995 of $63.9 million. 

          ILCO's  principal source  of liquidity  consists of  the periodic
          payment of principal and interest to it by Investors-NA, pursuant
          to  the terms  of  the  two  surplus  debentures.    The  surplus
          debentures  were  originally issued  by  Standard Life  Insurance
          Company and its terms were previously approved by the Mississippi
          Insurance  Commissioner.  One  of the surplus  debentures, in the
          original amount of $15 million, was issued in connection with the
          1986  acquisition of  Standard Life  by ILCO;  the other,  in the
          original amount of $140 million was issued in connection with the
          1988 acquisition by  ILCO of the  Investors Life Companies.  Upon
          the merger of Standard Life into Investors-NA, the obligations of
          the  surplus debentures  were  assumed by  Investors-NA.   As  of
          September  30, 1995,  the  outstanding principal  balance of  the
          surplus  debentures   was   $7.2  million   and  $64.3   million,
          respectively.   Since Investors-NA  is domiciled in  the State of
          Washington,  the   Washington  insurance  law   applies  to   the
          administration of the terms of the surplus debentures.  Under the
          provisions  of the surplus  debentures and current  law, no prior
          approval of the Washington Insurance Commissioner is required for
          Investors-NA  to  pay  interest   or  principal  on  the  surplus
          debentures; provided that, after  giving effect to such payments,
          the statutory surplus of Investors-NA is in excess of $10 million
          (the  "surplus floor").    However, Investors-NA  has voluntarily
          agreed with  the Washington  Insurance Commissioner that  it will
          provide  at least five days  advance notice of  payments which it
          will  make under  the surplus  debentures.   As of  September 30,
          1995, the statutory capital and surplus of Investors-NA was $60.0
          million, an amount substantially in excess of the surplus  floor.
          The  funds required  by Investors-NA  to meet its  obligations to
          ILCO under the terms of the surplus debentures are generated from
          operating   income  generated   from  insurance   and  investment
          operations.

          ILCO's ability to  pay dividends to its shareholders is affected,
          in part, by receipt of dividends from its insurance subsidiaries.
          Under current Washington law, any proposed payment  of a dividend
          or distribution  by the Company's  insurance subsidiaries  which,
          together  with   dividends  or  distributions  paid   during  the
          preceding  twelve  months, exceeds  the  greater  of (i)  10%  of
          statutory  surplus  as  of  the  preceding December  31  or  (ii)
          statutory  net gain  from operations  for the  preceding calendar
          year  is called an "extraordinary  dividend" and may  not be paid
          until either it has been approved, or a waiting period shall have
          passed during which it has not been disapproved, by the insurance
          commissioner.

          In July,  1993, Washington amended  its insurance code  to retain
          the "greater of" standard  for dividends but enacted requirements
          that  prior notification of a  proposed dividend be  given to the
          Washington Insurance Commissioner and  that cash dividends may be
          paid only from  earned surplus.  Investors-NA does  not presently
          have  earned surplus as defined by the regulations adopted by the
          Washington   Insurance  Commissioner   and,  therefore,   is  not
          permitted  to pay  cash dividends.   However,  since the  new law
          applies only to dividend payments, the ability of Investors-NA to
          make principal and interest payments under the surplus debentures
          is not affected.  ILCO does not anticipate that Investors-NA will 
          have any difficulty  in making principal and interest payments on
          the surplus debentures in the amounts necessary to enable ILCO to
          service its Senior Loan for the foreseeable future. 

          Investors-IN is domiciled  in the  State of Indiana.   Under  the
          Indiana  insurance code,  a  domestic insurer  may make  dividend
          distributions upon proper notice  to the Department of Insurance,
          as    long  as the  distribution  is  reasonable  in relation  to
          adequate levels of policyholder surplus and quality of earnings. 
          Under  Indiana law the dividend must be paid from earned surplus.
          Extraordinary  dividend  approval  would   be  required  where  a
          dividend exceeds  the greater of 10%  of surplus or the  net gain
          from  operations  for  the   prior  fiscal  year.    Investors-IN
          currently has earned surplus.

          The Form  10-Q of ILCO for  each of the  quarters ended September
          30,  1995  and  September  30,  1994,  sets  forth  the  business
          operations and financial  results of ILCO and its  life insurance
          subsidiaries.     Such  10-Q  reports  of   ILCO,  including  the
          discussion by  ILCO's management under the  caption "Management's
          Discussion and  Analysis of  Financial Conditions and  Results of
          Operations" are incorporated herein by reference.


                                Results of Operations


          For  the  three-month  period   ended  September  30,  1995,  the
          Company's income from operations  before Federal income taxes and
          before  equity in net  earnings of  affiliate, was  $2,418,000 on
          revenues of  $16,088,000, as compared to $2,664,000, on  revenues
          of $16,168,000  for the same period in 1994.

          Premium income, net of reinsurance, for the third quarter of 1995
          was  $11.6  million, as  compared to  $11.8  million in  the same
          period in 1994.

          Operating expenses  were $4.1  million in the  three-month period
          ended September 30, 1995, as compared to $3.5 million in the same
          period in 1994.


                           Liquidity and Capital Resources

          FIC  is a holding company  whose principal assets  consist of the
          common  stock of  Family Life  Insurance Company  and  its equity
          ownership in  InterContinental Life Corporation  ("ILCO").  FIC's
          primary sources of capital consists of cash  flow from operations
          of its subsidiaries and the proceeds from bank and  institutional
          borrowings. 

          The  cash  requirements  of  FIC  and  its  subsidiaries  consist
          primarily  of   its  service  of  the   indebtedness  created  in
          connection  with its ownership of Family Life Insurance Company. 
          As  of  September  30,  1995  the  outstanding  balance  of  such
          indebtedness was: (i) $8.9  million on the Senior Loan granted by
          a group of banks and (ii) $61.0 million on the Subordinated Notes
          granted by Investors-NA.

          The principal source of liquidity for FIC's subsidiaries consists
          of the periodic payment of principal and interest by Family Life
          pursuant to the  terms of a Surplus Debenture.   The terms of the
          Surplus Debenture  were  previously approved  by  the  Washington
          Insurance  Commissioner.   Under  the provisions  of the  Surplus
          Debenture and  current law, no  prior approval of  the Washington
          Insurance Department is required for  Family Life to pay interest
          or  principal  on the  Surplus  Debenture;  provided that,  after
          giving  effect to such payments, the  statutory surplus of Family
          Life  is in  excess  of  6%  of  assets  (the  "surplus  floor").
          However, Family  Life has voluntarily agreed  with the Washington
          Insurance Commissioner  that it will  provide at least  five days
          advance notice of payments  which it will make under  the surplus
          debenture. As of  September 30, 1995,  the statutory capital  and
          surplus  of  Family  Life   was  $  25.6    million,   an  amount
          substantially  in excess of the  surplus floor.   As of September
          30,  1995,  the principal  balance of  the Surplus  Debenture was
          $52.4 million.   The funds  required by Family  Life to meet  its
          obligations  under  the  terms   of  the  Surplus  Debenture  are
          generated primarily  from premium payments  from policy  holders,
          investment income and  the proceeds from the  sale and redemption
          of portfolio investments.    

          Effective July 25, 1993, Washington amended its insurance code to
          retain  the  "greater  of"  standard for  dividends  but  enacted
          requirements that  prior notification  of a proposed  dividend be
          given  to the  Washington  Insurance Commissioner  and that  cash
          dividends may be paid only from earned surplus.  Family Life does
          not  presently have earned surplus  as defined by the regulations
          adopted by the Washington Insurance  Commissioner and, therefore,
          is not  permitted to pay cash dividends.   However, since the new
          law applies only to dividend payments, the ability of Family Life
          to  make  principal  and  interest  payments  under  the  Surplus
          Debenture  is not affected.  The Company does not anticipate that
          Family  Life  will have  any difficulty  in making  principal and
          interest  payments  on  the  Surplus  Debenture  in  the  amounts
          necessary  to  enable  Family  Life Corporation  to  service  its
          indebtedness for the foreseeable future. 

          The  sources of funds for Family Life consist of premium payments
          from policy holders, investment income and the proceeds from  the
          sale and  redemption of portfolio  investments.  These  funds are
          applied  primarily to  provide for  the payment  of claims  under
          insurance   and  annuity  policies,  operating  expenses,  taxes,
          investments  in portfolio  securities, shareholder  dividends and
          payments under the provisions of the Surplus Debenture. 

          FIC's net  cash flow provided  by (used in)  operating activities
          was  $11.3 million in  the nine-month period  ended September 30,
          1995, as compared to $3.4 million for the corresponding period of
          1994.   Net  cash flow  used in  financing activities  was $(8.0)
          million for  the nine-month period  ended September 30,  1995, as
          compared to $(9.6) million for the  corresponding period of 1994.

          In  connection with the purchase  of the Investors Life Companies
          by ILCO,  the purchase of  Investors-IN by ILCO  and Investors-NA
          and  the purchase of Family  Life Insurance Company  by a wholly-
          owned  subsidiary of  FIC,  FIC  guaranteed  the payment  of  the
          indebtedness created in connection with such acquisitions.  After
          giving effect to  the refinancing  of the ILCO  Senior Loan,  the 
          repayment  of the  ILCO Subordinated  Loans and  the indebtedness
          created in  connection with the acquisition  of Investors-IN, the
          guaranty commitments of FIC with respect to  the debt obligations
          of ILCO relate to ILCO's senior loan, with an outstanding balance
          at September 30, 1995 of $63.9 million.  

          The  guaranty  commitments of  FIC  under the  loans  incurred in
          connection with the acquisition of Family Life (after taking into
          account  the repayments  and new  loans  which occurred  in July,
          1993) relate to: (i)  the Senior Loan of Family  Life Corporation
          to a bank group, with a  balance of $8.9 million at September 30,
          1995,  (ii)  the  $22.5  million  note  issued   by  Family  Life
          Corporation to Investors Life Insurance Company of North America,
          and  (iii) the  $34.5  million  loaned  by  Investors-NA  to  two
          subsidiaries of FIC.  

          Management  believes that  its cash,  cash equivalents  and short
          term investments are sufficient to meet the needs of its business
          and to satisfy debt service.

          There are  no trends,  commitments or capital  asset requirements
          that are expected to have an  adverse effect on the liquidity  of
          FIC.

                                     Investments

          As of September  30, 1995, the Company's invested  assets totaled
          $110.7  million, as compared to $107.1 million as of December 31,
          1994. 

          The  level  of  short-term  investments  at  September  30,  1995
          remained unchanged at the $28.4 million level which existed as of
          December  31, 1994.    The fixed  maturities  available for  sale
          portion represents $80.7 million  of invested assets at September
          30, 1995, as compared to $77.5 million at December 31, 1994.  The
          amortized cost  of  fixed maturities  available  for sale  as  of
          September  30,   1995  was  $79.2  million   representing  a  net
          unrealized gain  of approximately $1.5 million.   This unrealized
          gain principally reflects changes in interest rates from the date
          the respective investments were purchased.  There is no assurance
          that  this unrealized gain  may be  realized in  the future.   To
          reduce   the  exposure   to  interest  rate   changes,  portfolio
          investments  are  selected   so  that  diversity,  maturity   and
          liquidity   factors  approximate   the  duration   of  associated
          policyholder liabilities.

          The  assets held by Family Life must comply with applicable state
          insurance laws and regulations.  In selecting investments for the
          portfolios  of  its life  insurance  subsidiaries, the  Company's
          emphasis is  to obtain targeted profit  margins, while minimizing
          the  exposure to  changing  interest rates.    This objective  is
          implemented   by   selecting   primarily  short-to   medium-term,
          investment  grade  fixed  income  securities.    In  making  such
          portfolio selections,  the Company generally does  not select new
          investments which  are commonly  referred to  as "high yield"  or
          "non-investment grade."  

          The  Company's fixed  maturities portfolio,  as of  September 30,
          1995, consisted solely of  fixed maturities investments which, in
          the  annual  statements of  the  companies  as filed  with  state 
          insurance  departments,  were   designated  under  the   National
          Association of  Insurance Commissioners ("NAIC") rating system as
          a  "1" (highest quality).  As of December 31, 1994, approximately
          96.3% of the fixed  maturities portfolio consisted of investments
          with  an  NAIC  rating of  "1"  and  the  remaining portion  were
          designated with an NAIC rating of "2" (high quality).

          Management  believes that  the absence  of "high-yield"  or "non-
          investment  grade"   investments  (as   defined  above)  in   the
          portfolios of its life  insurance subsidiary enhances the ability
          of  the  Company to  service its  debt,  provide security  to its
          policyholders and to credit relatively consistent rates of return
          to its policyholders.



                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES


          Part III.      Other Information

          Item 1.  Legal Proceedings   

          The Company and its subsidiaries are defendants in  certain legal
          actions related to the normal business operations of the Company.
          Management  believes that  the resolution  of such  legal actions
          will not have a material impact upon the financial statements.


          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


          Form  10-K  Annual  Report of  Registrant  for  the  year   ended
          December  31,  1994  heretofore  filed  by  Registrant  with  the
          Securities and Exchange Commission, which is  hereby incorporated
          by reference.  


               (b) Reports on Form 8-K:

                   None






                  FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES



                                      SIGNATURE  



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





                                        FINANCIAL INDUSTRIES CORPORATION



                                        /s/ James M. Grace    
                                        James M. Grace
                                        Treasurer



          Date:     November 13, 1995