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 Quarter Ended September 30, 1995

                       Commission File Number 0-3578


                     Piedmont Management Company Inc.
          (Exact name of registrant as specified in its charter)


            Delaware                                      13-2612123
(State or other jurisdiction of corporation      (IRS Employer Identification
        or organization)                                     Number)

                      80 Maiden Lane, New York, N.Y.
                                   10038

                 (Address of principal executive offices)
                                (Zip Code)

    Registrant's telephone number, including area code: (212) 363-4650


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was 
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                                                           YES  X    NO    
                                                               ----
Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the close of the period covered by this report.

                       Common Stock - $.50 Par Value
                       Authorized 12,000,000 Shares
                  5,252,503 Shares Issued and Outstanding
                (Includes 265,000 Shares of Treasury Stock)

<PAGE>
PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
PART I.  FINANCIAL INFORMATION
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
                                      Three Months Ended                       Nine Months Ended 
                                         September 30,                           September 30,
                                     1995            1994                   1995             1994
<S>                               <C>            <C>                   <C>                 <C>   
REINSURANCE OPERATIONS:                  
 Gross premiums earned . . . .     $53,497,586     $58,558,954        $161,593,922     $159,103,593
 Ceded premiums earned . . . .     (23,090,378)    (22,253,017)        (68,602,921)     (69,358,463)
                                   -----------     -----------          -----------    ------------      
 Net premiums earned . . . . .      30,407,208      33,305,937          92,991,001       89,745,130
 Net investment income . . . .       4,261,554       4,582,927          14,556,810       13,614,268
 Realized capital gains. . . .       2,149,273         226,277           3,434,420          940,752
                                    ----------       ---------           ---------       ----------   
 Total revenues. . . . . . . .      36,818,035      38,115,141         110,982,231      104,300,150

 Losses and loss expenses. . .      75,964,268      43,088,526         153,720,834      146,301,596
 Reinsurance recoveries. . . .     (21,463,546)    (14,369,497)        (53,710,835)     (64,437,506)
                                   -----------      ----------          ----------       -----------     
 Net losses and loss expenses.      54,500,722      28,719,029         100,009,999       81,864,090
 Acquisition and other  
    underwriting expenses. . .      12,178,015      10,586,991          36,225,626       31,159,076
                                   -----------      ----------          ----------       ----------
 Total expenses. . . . . . . .      66,678,737      39,306,020         136,235,625      113,023,166
 Reinsurance operating loss. .     (29,860,702)     (1,190,879)        (25,253,394)      (8,723,016)

INVESTMENT ADVISORY OPERATIONS:
 Advisory, counseling fees  
    earned and other income. .       5,383,549       5,723,038          15,825,768       16,732,355
 Service and marketing costs .       4,872,134       4,417,784          13,681,935       13,498,731
                                   -----------       ---------          ----------       ----------
 Investment advisory 
    operating income. . . . .          511,415       1,305,254           2,143,833        3,233,624

PARENT COMPANY:
 Investment and other income           279,143         188,840             723,366          607,347
 Realized capital gains (losses)          -               -                   (125)         368,215
 Interest expense. . . . . . .         453,660         107,613           1,426,247          317,569
 Other corporate expenses. . .       1,603,322         462,402           2,346,539        1,330,612
                                     ---------         -------           ---------        ---------  
 Parent company operating loss      (1,777,839)       (381,175)         (3,049,545)        (672,619)
 Loss before equity in earnings 
  (losses) of investees and 
  income taxes. . . . . . . .      (31,127,126)       (266,800)        (26,159,106)      (6,162,011)
Equity in net earnings (losses)                                                      
of investees . . . . . . .            40,291         (87,843)            283,821           (138,843) 

Provision for income taxes:
 Current . . . . . . . . . . .      (1,606,964)       (765,466)           (529,587)      (2,915,487) 
 Deferred. . . . . . . . . . .      (9,199,263)        455,923          (8,804,180)          50,390
                                   -----------       ---------          -----------       ----------
                                   (10,806,227)       (309,543)         (9,333,767)      (2,865,097)

Net loss. . . . . . . . . . .    $ (20,280,608)      $ (45,100)      $ (16,541,518)    $ (3,435,757)
                                    ==========          ======          ===========      ============
RESULTS PER COMMON SHARE (EXHIBIT 1):
Net loss . . . . . . . . . . .          $(4.07)          $(.01)             $(3.32)           $(.69) 
Deduction for preferred dividends         (.01)           (.01)               (.03)            (.03)
                                          ----           -----                ----             -----   
Net loss . . . . . . . . . . .          $(4.08)          $(.02)             $(3.35)           $(.72)
                                         =====            =====              ======            ======         
</TABLE>
See accompanying notes to financial statements.

<PAGE>
PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS           
<CAPTION>
                                                    9/30/95             12/31/94 
                                                  (Unaudited)          (Audited)
<S>                                               <C>                   <C>
ASSETS:
Fixed Maturities:
 Held-to-Maturity, at amortized cost
(market:  $9,213,162 and $8,818,353)              $  8,777,995         $  8,813,314
 Available-for-Sale, at market
(amortized cost:  $239,469,877 and $262,325,625)   237,172,352          244,335,744
Equity Securities, at market
(cost:  $48,972,472 and $67,214,430). . .           52,478,441           66,666,764
Short-Term investments, at cost . . . . .           94,336,433           51,703,561
                                                   -----------          -----------  
   Total investments . . . . . . . . . . .         392,765,221          371,519,383
Cash. . . . . . . . . . . . . . . . . . .           10,342,988            9,066,870
Investments in and advances to investee companies    5,155,745            4,634,527
Accrued interest and dividends receivable .          3,418,930            3,687,258
Reinsurance recoverable . . . . . . . . . .        172,765,393          170,278,300
Premiums receivable . . . . . . . . . . . .         32,542,665           35,602,712
 Prepaid reinsurance premiums. . . . . . ..         24,219,051           22,980,856
 Deferred policy acquisition costs . . . . .        12,649,199           10,896,632
 Deferred income taxes . . . . . . . . . . .        23,161,556           21,799,010
  Other assets . . . . . . . . . . . . . . .        26,731,160           25,003,520
                                                   -----------          -----------   
   Total assets. . . . . . . . . . . . . . .      $703,751,908         $675,469,068
                                                   ===========          ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Outstanding losses and loss expenses. . . .       $487,627,991         $461,533,490
Unearned premiums . . . . . . . . . . . . .         77,553,005           73,839,992
Loan payable. . . . . . . . . . . . . . . .         19,500,000           20,000,000
Expenses, taxes and other liabilities . . .         19,435,228           17,615,047
                                                   -----------          -----------
   Total liabilities . . . . . . . . . . . .       604,116,224          572,988,529

 Stockholders' equity:
 Capital stock:
Preferred stock, $1 par value, authorized 
2,000,000 shares; cumulative convertible 
Series A shares issued: 244,936 and 245,068 .          244,936              245,068
Common stock, $.50 par value, authorized                            
12,000,000 shares; shares issued:  
5,252,503 and 5,250,539. . . . . . . . . . .         2,626,252            2,625,269
Paid-in capital . . . . . . . . . . . . . .         28,023,481           28,007,604
Unrealized depreciation on investments and 
foreign translation adjustment, net of deferred 
income taxes. . . . . . . . . . . . . . . .           (109,404)         (13,929,580)
Retained earnings . . . . . . . . . . . . .         70,572,919           87,254,678
Less cost of treasury stock (265,000 shares 
common, 53,000 shares preferred) . . . . .          (1,722,500)          (1,722,500)
Total stockholders' equity. . . . . . . .           99,635,684          102,480,539
Commitments and contingencies                       ----------          ----------- 
   Total liabilities and stockholders' equity     $703,751,908         $675,469,068
                                                   ===========          ===========   
</TABLE>
See accompanying notes to financial statements.

<PAGE>
PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>
                                                
                                                Nine Months Ended September 30, 
                                                     1995                 1994  

<S>                                             <C>                  <C>
Cash flows from operating activities:
 Net loss. . . . . . . . . . . . . . . . . .    $(16,541,518)       $(3,435,757)
 Adjustments to reconcile net loss to net cash
  from operating activities:
    Realized capital gains . . . . . . . . .      (3,434,295)        (1,308,967)
    Outstanding losses and loss expenses . .      26,094,501         23,087,664
    Unearned premiums. . . . . . . . . . . .       3,713,013         10,928,927
    Reinsurance recoverable. . . . . . . . .      (2,487,093)       (17,479,279)
    Premiums receivable. . . . . . . . . . .       3,060,047          2,078,358
    Prepaid reinsurance premiums . . . . . .      (1,238,195)          (511,134)
    Deferred acquisition costs . . . . . . .      (1,752,567)        (2,184,650)
    Amortization of bond premium, net. . . .         452,395            500,248
    Equity in net (earnings) losses of investees    (283,821)           138,843
    Income taxes recoverable . . . . . . . .        (529,587)        (2,914,457)
    Deferred income tax expense (benefit). .      (8,804,180)            50,390
    Accrued interest and dividends . . . . .         268,328            (17,914)
    Other items, net . . . . . . . . . . . .         815,568           (501,576)
                                                    ---------         ----------
 Total cash flows from operating activities.        (667,404)         8,430,696

Cash flows from investing activities:
 Purchases of Held-to-Maturity securities. .          -              (3,519,421)
 Purchases of Available-for-Sale securities      (49,169,365)       (59,982,203)
 Proceeds from maturity of Held-to-Maturity           -               4,000,000
 Proceeds from maturity of Available-for-Sale         -              28,695,342
 Proceeds from sale of Available-for-Sale         72,732,243         16,262,030
 Net (purchases) sales of Equity Securities.      21,533,421         (4,351,892)
 Net (purchases) sales/maturities of Short-Term  (42,669,502)        13,221,998
                                                  ----------         -----------
 Total cash flows from investing activities.       2,426,797         (5,674,146)

Cash flows from financing activities:
 Repayment of loans. . . . . . . . . . . .          (500,000)        (1,575,000)
Proceeds from exercise of stock options . .           16,725            303,558
                                                    ---------         --------- 
Total cash flows from financing activities          (483,275)        (1,271,442)
Net increase in cash . . . . . . . . . . .         1,276,118          1,485,108
Cash balance, beginning of year. . . . . .         9,066,870          6,727,821
                                                   ---------         ----------  
Cash balance, end of period. . . . . . . .       $10,342,988         $8,212,929
                                                  ==========          ==========

Supplemental cash flow disclosure:
 Interest paid . . . . . . . . . . . . . . .      $1,056,230          $311,597

</TABLE>
See accompanying notes to financial statements.

<PAGE>
PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Unaudited)

1.  BASIS OF PRESENTATION:

The interim financial information presented is unaudited.  In the
opinion of Company management, all adjustments necessary to present fairly the
consolidated financial position and the results of operations for the interim
periods have been made.  The financial statements should be read in conjunction 
with the financial statements and related notes in the Company's 1994 Annual 
Report on Form 10K.

2.  RESULTS PER COMMON SHARE:

For all periods presented, loss per share was based on the weighted average 
number of common shares outstanding, excluding the effect of common stock 
equivalents which would be anti-dilutive.  In 1995 and 1994 accrued dividends of
$.01 and $.03 per share in the quarter and nine month periods, respectively, 
on cumulative Series A preferred stock were deducted in arriving at the net 
loss per share.

3.  MERGER AND SPIN-OFF:

On August 7, 1995, the Company entered into an Agreement and
Plan of Merger (the "Merger Agreement") with Chartwell Re Corporation
("Chartwell"), pursuant to which the Company agreed to merge (the "Merger")
with and into Chartwell, with Chartwell being the surviving corporation. 
Following the Merger, The Reinsurance Corporation of New York, the
Company's principal reinsurance underwriting subsidiary ("RECO"), will become
a subsidiary of Chartwell Reinsurance Company, the reinsurance underwriting
subsidiary of Chartwell.

In the Merger, holders of common and preferred stock of the Company
will receive newly-issued shares of common stock of Chartwell representing
approximately 45.25% of the outstanding common stock of the combined entity.  
Chartwell intends to seek a stock exchange listing of its common stock 
effective upon the closing of the Merger.

Prior to the Merger, Lexington Management Corporation (combined with the
Company's other asset management operations) will be spun-off on a
one-for-one share basis to the Company's stockholders in a tax-free 
transaction. 

Also prior to the Merger, stockholders of the Company will receive a dividend
of contingent interest notes of the Company.  The notes, which will mature on
June 30, 2006, unless previously redeemed, will not pay any interest to holders
until maturity.  The notes will provide for payment of up to $57.0 million to
holders at maturity, substantially depending on the results, particularly loss
reserve development, over time of RECO's previously written business.  The
notes may be settled at maturity in registered common stock.  The notes will be
assumed by Chartwell in the Merger.
                         
The combined entity will be managed by Chartwell's current management team.
Four members of the Company's existing Board of Directors will become directors 
of Chartwell upon the Merger.  Pursuant to the Merger Agreement, the Company 
increased RECO's reserves for losses incurred but not reported in respect of 
its existing business by $32.5 million gross and $25.0 million net in the 
period ended September 30, 1995.

The Merger is subject to the consent of the Company's and Chartwell's stockhold-
ers, bank, regulatory and certain other approvals and certain other 
conditions. The Merger and Spin-Off are each expected to be consummated in the
fourth quarter of 1995.



<PAGE>
PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION

Management's Discussion and Analysis contained in the Company's Annual
Report on Form 10-K for December 31, 1994 is incorporated herein by reference
and should be read in conjunction with the following.

  CONSOLIDATED RESULTS OF OPERATIONS
   
The consolidated net loss for the nine months ended September 30, 1995
was $16.5 million, $3.35 per share.  This compares to a net loss for the nine
months ended September 30, 1994 of $3.4 million, $0.72 per share.  Included
in the nine months results for 1995 are various charges in connection with the
merger of the Company with and into Chartwell Re Corporation (Chartwell) as
well as other non-recurring expenses relating to the spin-off of the Company's
asset management operations.  Further information regarding these adjustments
is contained in the following discussion.  Additional information on the Merger
and Spin-Off is contained in Note 3 of the Notes to Financial Statements.

               NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

  REINSURANCE OPERATIONS

The pre-tax operating loss for The Reinsurance Corporation of New York
(RECO) was $25.3 million compared to a pre-tax operating loss of $8.7 million
in 1994.  Included in the results for 1995 is a charge of $25.0 million, net of
reinsurance of $7.5 million, strengthening the reserves for losses incurred but
not reported with respect to RECO's business written in prior years.  This
reserve strengthening was agreed to in the Merger Agreement between the
Company and Chartwell and was based on a reevaluation of RECO's business,
particularly environmental and other latent injury claims and other long-tail
casualty exposures.  Such increase reflects the utilization of factors that are
consistent with recent trends in the property and casualty insurance industry
where a number of companies have increased IBNR reserves for these types of
exposures in light of continued adverse development and as additional
information becomes known.  Also included in these results is a $5.4 million
charge for severance and other employee benefit costs expected to be incurred
in connection with the merger.

Net premiums written were $95.5 million for nine months, a 5% decline
over the prior year period.  Premiums earned increased to $93.0 million from
$89.8 million a year ago.  The decline in premiums written is in line with
RECO's strategy of withdrawing from certain classes of business.  RECO has
chosen not to renew a number of property reinsurance accounts primarily in an
effort to reduce exposure to property related catastrophe losses.  Excluding the
effects of the $25 million net reserve strengthening mentioned above, loss
activity for RECO declined in comparison to the prior year, primarily as a re-
sult of a reduction in catastrophe and other major loss activity in 1995.  The
combined ratio, computed on a generally accepted accounting principles basis,
after excluding the foregoing reserve strengthening and non-recurring expenses,
was 113.5% in the 1995 period.

For the 1995 period, net investment income was $14.6 million compared
to $13.6 million for the 1994 period, a 7% increase.  This increase is 
attributed to higher average yields and growth in the base of invested assets.  
During the fourth quarter of 1994, additional cash for investment was provided 
by the $17.5 million capital contribution made by Piedmont.  

  INVESTMENT ADVISORY OPERATIONS

Pre-tax operating income was $2.1 million in the 1995 period, down from
$3.2 million earned in the 1994 period.  Results in the 1995 period include

<PAGE>
PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION (continued)

$1.0 million in non-recurring expenses (primarily legal and other professional
fees) connected with the spin-off of Piedmont's asset management companies
which is expected to occur by the end of 1995.  Primarily as a result of a
decline in average net assets, revenues in the mutual fund segment of Lexington
are down in comparison to the prior year period.  Service and marketing
expenses also declined as compared to last year.  On September 30, 1995 total
assets under management were $3.5 billion, an increase of $100 million since
December 31, 1994.

  PARENT COMPANY AND INVESTEES

The parent company operating loss for the nine months was $3.1 million
compared to a loss of $673,000 a year ago.  These results also include merger
related expense accruals, notably, severance and other employee benefit costs
amounting to $1.3 million.  Excluding these items, the main reason for the
decline in pre-tax income from last year relates to increased interest expense
which, for the 1995 period, was $1.4 million compared to $318,000 for the
1994 period.  The Company entered into a senior term loan agreement in
December of 1994 for $20.0 million, which replaced a previously outstanding
loan in the amount of $8.2 million.  

Equity in net earnings (losses) of investees was $284,000 in the 1995
period compared to a loss of $139,000 a year ago.  This component of the
Company's operating results is represented by RECO's investment in
Continental National Corporation (CNC), an affiliated company.  CNC has
experienced an improvement in underwriting results in 1995 primarily as a
result of the abatement in weather related losses in comparison to the prior 
year period and a continuing emphasis on underwriting lines of business that
historically have produced better results for the company.  

The Company recorded a $25.9 million pre-tax loss for the nine months of
1995 which in turn created a net operating loss for tax purposes.  The Company
has accrued a current tax benefit of $530,000 because it was able to carry back
a portion of this net operating loss to 1993.  The $8.8 million deferred tax
benefit is virtually all related to the net operating loss generated from 
results of operations in the period.  The Company expects to realize the
benefit of this loss based upon projections of taxable income to be earned 
in the carryforward period.  On September 30, 1995 the net deferred tax 
asset carried in the balance sheet was $23.2 million.  Management believes that 
amount will be realized based on estimates of future taxable income.  

            THIRD QUARTER 1995 COMPARED WITH THIRD QUARTER 1994

In 1995, the consolidated net loss for the period was $20.3 million, $4.08
per share compared to a net loss of $45,000, $0.02 per share, in 1994.

  REINSURANCE OPERATIONS

As mentioned in the preceding section, the third quarter of 1995 includes
charges in connection with the merger with Chartwell.  Further, RECO's
underwriting results in the third quarter were negatively impacted by losses 
from Hurricanes Luis and Marilyn which, in the aggregate, totalled $1.4 
million. 

There was an additional loss reserve increase of $1.8 million in the 
period for RECO's share of a textile plant fire loss that occurred earlier this
year. Excluding the effects of the $25.0 million net reserve strengthening, 
non-recurring charges of $5.4 million, hurricanes and the fire loss of $3.2 
million in the period, RECO's combined ratio, computed on a generally accepted
accounting principles basis, was 108.9% in the third quarter of 1995.  The
1994 third quarter reflected additional development of $1.1 million from the
Northridge, California earthquake as well as $1 million relating to airline
accidents and launching failures on telecommunication satellites.
<PAGE>
PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION (continued)

RECO will incur losses from Hurricane Opal, which struck the Gulf Coast
region on October 4, 1995.  At this time, based on early reports of losses and
projections of additional losses, up to approximately $1.0 million, pre-tax, 
could be incurred from this hurricane.  Since all reporting is not complete, 
ultimate losses could be higher.

Net investment income was $4.3 million in the third quarter, down
$300,000 from the 1994 period.

  INVESTMENT ADVISORY OPERATIONS

Investment advisory pre-tax income was $511,000 in the third quarter,
down from $1.3 million for the third quarter of 1994.  However, results in this
period include $1.0 million in non-recurring expenses as mentioned above. 
Also, as mentioned above, mutual fund revenues in this period were down
slightly in comparison to 1994, but operating expenses, notably personnel
related costs and marketing expenses, likewise declined.    

  PARENT COMPANY AND INVESTEES

The parent company operating loss in the third quarter was $1.8 million
compared to $381,000 for the same period in 1994.  Results in the 1995 period
include $1.3 million in severance and other employee benefit costs expected to
be incurred as a result of the Chartwell merger.

Investment and other income increased to $279,000 in the 1995 period
compared to $189,000 for the same period of 1994.  The 1995 period included
interest of $66,000 received from the Internal Revenue Service relating to a
refund of prior year taxes.  As explained above, interest expense increased over
the prior year period.     

Primarily for the reasons mentioned in the preceding section, the Company
accrued current and deferred income tax benefits totalling $10.8 million.  

           THIRD QUARTER 1995 COMPARED WITH SECOND QUARTER 1995

The consolidated net loss in the third quarter was $20.3 million, $4.08 per
share, compared to net income of $3.8 million, $0.69 per share, earned in the
second quarter of this year.  RECO's operating results in the third quarter
reflect the $25.0 million net reserve strengthening and $5.4 million in other
non-recurring charges, as well as other losses from hurricanes and development
on a prior period fire loss.  Pre-tax realized capital gains in the third 
quarter were $2.1 million compared to $432,000 for the second quarter.  
This is in line with a policy decision to sell a portion of RECO's common 
stock portfolio to minimize its exposure to equity market volatility.  Net 
investment income was $4.3 million compared to $5.1 million in the second 
quarter.  

Excluding the effects of the reserve strengthening of $25.0 million, other
non-recurring expenses and the hurricane and fire losses, the combined ratio in
the third quarter was 108.9% compared to 101.0% in the second quarter.  The
second quarter was virtually catastrophe free, accounting for the lower combined
ratio in that period.  

Investment advisory pre-tax income in the third quarter declined to
$511,000.  However, this included $1.0 million  in non-recurring costs related
to the spin-off of the asset management companies.  Investment advisory pre-tax
operating income was $779,000 in the second quarter.  The parent company
operating loss in the third quarter was $1.8 million (including non-recurring
expenses op 1.3 million) compared to a loss of $674,000 in the second quarter.

<PAGE>
PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION (continued)

  LIQUIDITY AND FINANCIAL CONDITION

Total assets on September 30, 1995 were $704.0 million, up from $675.5
million at the end of 1994.  Invested assets grew to $392.8 million from $371.5
million at the end of 1994.  Virtually all of the Company's fixed income
investments, primarily bonds, are categorized as available for sale and carried
at market values, with unrealized gains and losses reflected in stockholders'
equity, net of related deferred income taxes.  On September 30, 1995, the
weighted average maturity of the bond portfolio was 3.6 years and the average
quality rating was AAA.  On September 30, 1995, fixed maturities carried at
market value were $237.2 million with an amortized cost of $239.5 million. 

Total cash flow from operating activities was $(667,000) on September 30,
1995 compared to $8.4 million a year ago.  The negative cash flow for the nine
months of 1995 is reflective of the payments made for several large property
losses incurred in 1995 through RECO's participation in underwriting pools. 
In addition, there have been payments for severance costs and transaction costs
connected with the merger and spin-off.  The overall liquidity of the Company
is strong.  Management intends to satisfy ongoing cash obligations through
internally generated cash without having to liquidate significant amounts of
invested assets.
   
In keeping with an investment policy decision to reduce RECO's level of
equity securities, a program was initiated during 1995 to sell a portion of 
equity investments.  Proceeds from the sales of those investments have 
primarily been reinvested in short term investments and intermediate 
term fixed income securities.  

On November 9, 1995, the Company's commercial bank lender agreed to
waive, for a period not to exceed six months, certain defaults under its loan
agreement with the Company that would otherwise have occurred as a result of
the $25.0 million net reserve strengthening.  The waiver includes an agreement
by the Company to make certain principal payments in the event of termination
of the Merger Agreement between the Company and Chartwell and provides for
certain increases (not to exceed 2% in total) in the interest rate on the 
loan in the event the Merger Agreement is not consummated by certain 
specified dates.

Under the terms of the waiver, the Company has agreed to liquidate certain
short-term invested assets and apply the proceeds thereof at the time of any
such termination of the Merger Agreement to reduce amounts outstanding on the
loan and to use its best efforts to sell its holdings of certain equity 
securities and apply the proceeds thereof to further reduce amounts
outstanding on the loan.  Chartwell has agreed, under certain circumstances, 
to purchase any such equity securities not otherwise sold in the event of a 
termination of the Merger Agreement.  The Company has also agreed, under
certain circumstances, to provide a security interest in certain liquid 
investments to its bank lender.

As a result of the foregoing waiver, the Company is not currently in default
with respect to its bank loan agreement.

Consolidated stockholders' equity on September 30, 1995 was $99.6
million, compared to $102.5 million at the end of 1994.  Consolidated
stockholders' equity includes net unrealized depreciation on invested assets of
$109,000, compared to unrealized depreciation of $13.9 million at the end of
1994.  The significant turnaround in the nine months of 1995 was primarily due
to the positive effects of the bond market rally on RECO's fixed income
portfolio.

EXHIBIT TO PART I

Computation of Results per Common Share and Common Equivalent Share for the
nine months ended September 30, 1995 and 1994.
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PIEDMONT MANAGEMENT COMPANY INC. AND SUBSIDIARIES
PART II.  OTHER INFORMATION

Nine Months Ended September 30, 1995 and 1994


Item 6.  Exhibits and Reports on Form 8K

Exhibit No. 27 Financial Data Schedule (filed with the Securities and
Exchange Commission).

On August 8, 1995, Piedmont Management Company Inc. (Piedmont) filed
a Form 8K announcing that it had signed a definitive agreement to merge with
and into Chartwell Re Corporation (Chartwell) and concurrent with that merger
Piedmont would spin-off to its stockholders, in a tax free transaction, 
its asset management operations.  On August 10, 1995, a Form 8K was filed
containing copies of the Merger Agreement between Piedmont and Chartwell 
and other related documentation.

Other items under Part II have been omitted since they are either not required
or are not applicable.


                                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 thereunto duly authorized.

     
                          PIEDMONT MANAGEMENT COMPANY INC.



   
Date:  November 14, 1995             BY /S/ PETER J. PALENZONA
                                        -----------------------     
                                        Peter J. Palenzona
                                        Senior Vice President
                                        Finance and Administration 
                                        (Chief Financial Officer)


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