SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    --------

                                    FORM 10-Q
                                    --------

(X)   QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT of 1934 for the quarterly period ended June 30, 1997 or

( )   TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934 for the transition
         period from                to                  .
                     -------------      ----------------

For the Quarter Ended June 30, 1997         Commission file number 0-28188
                      -------------                                -------


                        Chartwell Re Holdings Corporation

             (Exact name of registrant as specified in its charter)
                                  -------------
         Delaware                                               06-1438493
-------------------------------                              ------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

                              Four Stamford Plaza,
                                P. O. Box 120043
                        Stamford, Connecticut 06912-0043
               (Address of principal executive offices) (zip code)
                                  -------------

Registrant's telephone number, including area code (203) 705-2500

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No __

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

Common Stock - $1.00 par value                                  100
------------------------------                                 ------
       Description of Class                             Shares Outstanding
                                                       as of August 14, 1997
                                               (All shares are privately held, 
                                                and there is no public market 
                                                for the Company's common shares)



<PAGE>



                        Chartwell Re Holdings Corporation

                               Index To Form 10-Q

PART I  FINANCIAL INFORMATION
        Item 1 -                                                           Page
                                                                           ----
        Condensed Consolidated Balance Sheets at June 30, 1997 and
           December  31, 1996.................................................1
        Condensed Consolidated Statements of Operations for the 
            three and six month periods ended June 30, 1997 and 1996..........2
        Condensed Consolidated Statements of Cash Flows for the    
           six month periods ended June 30, 1997 and 1996.....................3
        Notes to Condensed Consolidated Financial Statements..................4

        Item 2 -
        Management's Discussion and Analysis of Financial Condition 
           and Results of Operations..........................................5

PART II.OTHER INFORMATION
        Item 6 -
        Exhibits and Reports on Form 8-K ....................................15
        Signatures ..........................................................16


















<PAGE>



PART I. FINANCIAL INFORMATION
ITEM 1- Financial Statements

                            CHARTWELL RE HOLDINGS CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (dollars in thousands, except share amounts)

                                                    June 30,      December 31,
                                                      1997            1996
                                                   -----------   ------------
ASSETS:                                            (Unaudited)
Investments:
 Fixed maturities:
  Held to maturity (market value 1997,
   $34,903; 1996, $36,620)......................  $    34,483    $    36,043
  Available for sale (amortized cost
   1997, $632,610; 1996, $609,368)..............      628,838        606,621
Other investments...............................       33,114         30,896
Cash and cash equivalents.......................       29,984         50,343
                                                       ------         ------
          Total investments and cash............      726,419        723,903
Accrued investment income.......................       10,374         10,529
Premiums in process of collection...............      115,811         86,351
Reinsurance recoverable: on paid losses.........       33,153         29,767
                         on unpaid losses.......      184,145        172,377
Prepaid reinsurance.............................       33,641         21,733
Goodwill........................................       50,249         52,609
Deferred policy acquisition costs...............       22,022         17,903
Deferred income taxes...........................       41,742         42,160
Deposits........................................       18,609         18,135
Other assets....................................       79,004         69,757
                                                       ------         ------
                                                  $ 1,315,169    $ 1,245,224
                                                  ===========    ===========

LIABILITIES:
Loss and loss adjustment expenses................ $   765,798    $   747,858
Unearned premiums................................     103,715         81,599
Other reinsurance balances.......................      29,766         15,085
Accrued expenses and other liabilities...........      54,095         51,763
Long term debt...................................     108,224        107,297
                                                      -------        -------
           Total liabilities.....................   1,061,598      1,003,602
                                                    ---------      ---------
COMMMITMENTS AND CONTINGENCIES

MINORITY INTEREST................................       9,436          9,469
                                                           --             --
COMMON STOCKHOLDER'S EQUITY 
Common stock, par value $1.00 per share;
  authorized 1,000 shares; shares issued
  and outstanding 100............................        --              --
  Additional paid-in capital.....................     217,866        217,866
  Net unrealized depreciation of investments.....      (2,711)        (1,379)
  Foreign currency translation adjustment........         982          1,291
  Retained earnings..............................      27,998         14,375
                                                       ------         ------
          Total common stockholder's equity......     244,135        232,153
                                                      -------        -------
                                                  $ 1,315,169    $ 1,245,224
                                                  ===========    ===========

       See notes to condensed consolidated financial statements


                                       1
<PAGE>


                            CHARTWELL RE HOLDINGS CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (dollars in thousands)
                                   (Unaudited)

                                      Three Month Periods   Six Month Periods  
                                         Ended June 30,       Ended June 30,   
                                      -------------------  ------------------  
                                        1997        1996     1997      1996    
                                        ----        ----     ----      ----    
                                                                               
UNDERWRITING OPERATIONS:                                                       
Premiums earned......................  $73,890   $ 48,961  $135,675   $105,204 
Net investment income................   10,793     10,628    20,624     21,021 
Net realized capital gains (losses)..      (29)        21       (49)       853 
                                       --------  --------  ---------  -------- 
    Total revenues...................    84,654    59,610   156,250    127,078 
                                       --------  --------  --------   -------- 
Loss and loss adjustment expenses....    49,810    35,072    91,845     76,014 
Policy acquisition costs.............    20,452    11,769    37,572     25,945 
Other expenses.......................     4,533     3,948     8,227      8,004 
                                       --------  --------  --------   -------- 
     Total expenses..................    74,795    50,789   137,644    109,963 
                                       --------  --------  --------   -------- 
Income before taxes -                                                          
        underwriting operations           9,859     8,821    18,606     17,115 
                                       --------  --------  --------   -------- 
SERVICE OPERATIONS:                                                            
Service and other revenue.............    6,900       883    14,434      1,469 
Equity in net earnings of investees...    1,030       871     2,176      1,757 
Net investment income.................      396         2       644          4 
                                       --------  --------  --------   -------- 
     Total revenues..................     8,326     1,756    17,254      3,230 
                                       --------  --------  --------   -------- 
Amortization of goodwill.............       528      --       1,045       --   
Other expenses.......................     4,648       298     9,526        611 
                                       --------  --------  --------   -------- 
     Total expenses..................     5,176       298    10,571        611 
                                       --------  --------  --------   -------- 
Income before taxes -                                                          
        service operations                3,150     1,458     6,683      2,619 
                                       --------  --------  --------   -------- 
CORPORATE:                                                                     
Net investment income................      --          27        94        267 
Net realized capital gains (losses)..      --         (21)     --           68 
General and administrative expenses..       394        71       784         71 
Interest expense.....................     2,365     1,640     4,519      3,910 
Amortization expense.................        71        64       235        141 
                                       --------  --------  ---------  -------- 
Loss before taxes - corporate........    (2,830)  (1,769)    (5,444)    (3,787)
                                       --------  --------  ---------  -------- 
                                                                               
Consolidated income before taxes                                               
and extraordinary item...............    10,179     8,510    19,845     15,947 
Income tax expense...................     3,078     2,459     5,877      4,603 
                                       --------  --------  --------   -------- 
Net income before minority interest
 and extraordinary item..............     7,101     6,051    13,968     11,344 
Minority interest....................       156      --         345         --
Extraordinary item, net of tax.......      --       1,874      --        1,874 

                                       --------  --------  --------   -------- 
Net income...........................  $  6,945  $  4,177  $ 13,623   $  9,470 
                                       ========  ========  ========   ======== 
                                                                               
                                                                               
            See notes to condensed consolidated financial statements.



                                       2
<PAGE>


                            CHARTWELL RE HOLDINGS CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (Unaudited)

                                                            Six Month Periods
                                                               Ended June 30,
                                                            ------------------
                                                               1997      1996
                                                            --------  ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net premiums collected..............................  $  74,732   $  60,837
    Net losses & loss adjustment expenses paid..........    (74,922)    (65,098)
    Overhead expenses paid..............................    (12,372)     (6,654)
    Service and other revenue, net of related
      expenses paid.....................................      5,010       3,226
    Net income taxes paid...............................     (2,092)       (888)
    Interest received on investments....................     21,028      19,663
    Interest paid.......................................     (4,765)     (4,818)
    Other, net..........................................     (3,677)      3,782
                                                          ---------   ---------
             Net cash provided by operating activities..      2,942      10,050
                                                          ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Cost of investments acquired........................   (128,460)   (272,548)
    Proceeds from investment matured or repaid..........      9,904      14,055
    Proceeds from investments sold......................     94,695     145,394
                                                          ---------   ---------
           Net cash used in investing activities........    (23,861)   (113,099)
                                                          ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Capital contribution from parent....................         --      48,545
    Redemption of Senior Notes..........................         --     (28,280)
    Proceeds from long-term debt........................       1,619         --
       Other, net.......................................         --        (250)
                                                          ----------  ---------
           Net cash provided by financing activities....      1,619      20,015
                Effect of exchange rate on cash.........     (1,059)         10
                                                          ---------   ---------
Net decrease in cash and cash equivalents...............    (20,359)    (83,024)
Cash and cash equivalents at beginning of period........     50,343     152,507
                                                          ---------   ---------
Cash and cash equivalents at end of period..............  $  29,984   $  69,483
                                                          =========   =========
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
    Net income..........................................     13,623   $   9,470
    Adjustments to reconcile net income to net cash
       provided by operating activities:
      Extraordinary item................................      --          1,874
      Net realized capital (gains) losses...............         49        (921)
      Deferred policy acquisition costs.................     (4,119)        536
      Unpaid loss and loss adjustment expenses..........     17,940      (4,886)
      Unearned premiums.................................     22,116      (6,839)
      Reinsurance balances..............................      2,769         152
      Reinsurance recoverable...........................    (15,154)       (730)
      Net change in receivables and payables............    (27,241)      7,577
      Other, net........................................     (7,041)      3,817
                                                          ---------   ---------
           Net cash provided by operating activities....  $   2,942   $  10,050
                                                          =========   =========

            See notes to condensed consolidated financial statements.

                                       3


<PAGE>




                        CHARTWELL RE HOLDINGS CORPORATION
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 1997
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

         The accompanying  unaudited  interim Condensed  Consolidated  Financial
Statements of Chartwell Re Holdings  Corporation  ("Chartwell" or the "Company")
have been prepared in accordance with generally accepted  accounting  principles
for interim financial information,  the instructions to Form 10-Q and Article 10
of Regulation S-X.  Accordingly,  they do not include all of the information and
notes  required  by  generally  accepted  accounting   principles  for  complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring  accruals)  considered  necessary for fair presentation have
been  included.  Operating  results for any interim  period are not  necessarily
indicative  of results  that may be expected  for the full year.  These  interim
statements  should be read in conjunction with the 1996  consolidated  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K as filed with the Securities and Exchange Commission.

NOTE 2- PRO FORMA DATA

     On November 19,  1996,  the  Company's  parent,  Chartwell  Re  Corporation
("Chartwell Re"),  acquired (the "Acquisition") 100% of the outstanding stock of
Archer  Group  Holdings  plc  ("Archer   Holdings")  through  its  newly  formed
subsidiary,  Chartwell Holdings Limited.  The Acquisition has been accounted for
under the purchase method of accounting.

     The following pro forma consolidated  income statement  information for the
Company  for the six  months  ended  June 30,  1996 is  presented  as though the
Acquisition and the redemption of 35% of the Company's outstanding 10.25% Senior
Notes (the "Senior Notes") due 2004 had occurred on January 1, 1996.

                  Three Months     Three Months      Six Months      Six Months
                     Ended             Ended          Ended             Ended
                   June 30, 1997   June 30, 1996   June 30, 1997   June 30, 1996
                      Actual          Pro forma        Actual         Pro forma
                  --------------   -------------   -------------  --------------
Total revenues           $92,980        $68,410       $173,598         $144,719
Net income                $6,945         $6,437        $13,623          $12,531



        

                                       4

<PAGE>


ITEM 2 - Management's Discussion and Analysis


                        CHARTWELL RE HOLDINGS CORPORATION
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations
                                  June 30, 1997
                                   (Unaudited)

Overview
         Chartwell Re Holdings  Corporation  ("Chartwell" or the "Company") is a
holding  company which conducts  business  through its four principal  operating
subsidiaries,  Chartwell  Reinsurance  Company  ("Chartwell  Reinsurance"),  The
Insurance  Corporation  of New  York  ("INSCORP"),  Chartwell  Advisers  Limited
("Chartwell Advisers") and its recently acquired Lloyd's managing agency, Archer
Managing Agents Limited ("Archer"). Chartwell Reinsurance was founded in 1979 as
a  wholly-owned  subsidiary  of  Northwestern  National Life  Insurance  Company
("NWNL"). The Company was formed in 1995 to act as an intermediate level holding
company for its parent,  Chartwell Re  Corporation  ("Chartwell  Re"), a company
whose common stock is traded on the New York Stock  Exchange.
         Chartwell   Reinsurance    underwrites   treaty   reinsurance   through
reinsurance brokers for casualty and, to a lesser extent, property risks as well
as for marine and aviation risks. INSCORP writes property and casualty insurance
for  specialty  program  administrators.  Archer is one of the largest  managing
agencies in the  Lloyd's  marketplace  with  approximately  380  million  pounds
sterling  of  underwriting  capacity  for the 1997  Year of  Account.  Chartwell
Advisers  acts as the exclusive  advisor for  syndicate  selection to New London
Capital plc, a  non-affiliated  publicly  traded company formed to underwrite at
Lloyd's.
         Chartwell's  other  subsidiaries  include  Dakota  Specialty  Insurance
Company ("Dakota Specialty") and Drayton Company Limited.  Dakota Specialty is a
newly formed  subsidiary of Chartwell whose objective is to underwrite a book of
surplus lines  insurance.  Drayton Company Limited is not currently  writing new
business, and Chartwell is managing the resolution of Drayton's remaining claims
and assets in a controlled winding-up.
         As of June 30,  1997,  Chartwell  had  total  assets  in excess of $1.3
billion and  stockholder's  equity of $244.1 million.  Chartwell  Reinsurance is
rated "A" (Excellent) by A.M. Best Company,  Inc., an independent  rating entity
serving the insurance industry,  and both INSCORP and Dakota Specialty are rated
"A-" (Excellent) by A.M. Best. In addition,  Chartwell Reinsurance,  INSCORP and
Dakota  Specialty  have each been assigned an A- claims paying ability rating by
Standard  and Poor's,  and the  Company's  10.25%  Senior  Notes (the "Senior
Notes") are rated BBB- by Standard & Poor's and Ba1 by Moody's, respectively.


                                       5
<PAGE>


Results of  Operations - Six Months Ended June 30, 1997 Compared With Six Months
Ended June 30, 1996:

         Revenues:  Total  revenues  for the six  months  ended  June  30,  1997
increased 32.9% to $173.6 million, compared to $130.6 million for the comparable
period in 1996. The accompanying table summarizes gross and net premiums written
and total revenues for the periods indicated:

                                         Six month periods ended June 30,
                                     ------------------------------------------
                                            1997                  1996
                                     -------------------      -----------------
                                                     (in thousands)
Gross premiums written                          $193,615              $132,467
                                     ===================       =================
Net premiums written                            $146,262               $95,723
                                     ===================       =================
Premiums earned                                 $135,675              $105,204
Net investment income                             21,362                21,292
Net realized capital gains (losses)                 (49)                   921
Service and other revenue                         14,434                 1,469
Equity in net earnings of investees                2,176                 1,757
                                     -------------------       -----------------
Total Revenues                                  $173,598              $130,643
                                     ===================       =================

Underwriting Operations
         Gross Premiums  Written;  Net Premiums  Written;  Net Premiums  Earned.
Gross  premiums  written  for the six  months  ended June 30,  1997 were  $193.6
million,  an  increase  of 46.2%  compared  to the same  period  in 1996.  These
increases  reflect  the  addition of a number of new  programs in the  Specialty
Accounts  client  segment,  as well as the  continued  growth of the  Controlled
Source Insurance Accounts segment.  Controlled Source Insurance Accounts grew as
a  result  of  the   expansion  of  current   programs  in  response  to  market
opportunities  as well as the addition of new programs.  The distribution of the
Company's gross premiums written among its  underwriting  client segments was as
follows:
                               Six month periods ended
                             ---------------------------
                                      June 30,
                               1997          1996
                              -------     ---------
Reinsurance:                      (in thousands) 
              
Specialty                     $87,312       $42,829
                              -------     ---------
Global
  Domestic                      6,562        11,011
  International                10,856         8,941
                              --------    ---------
                               17,418        19,952
                              --------    ---------
Regional                       13,216        13,298
                              --------    ---------
Marine & Aviation              18,160        16,556
                              --------    ---------
Total Reinsurance             136,106        92,635

             
Controlled Source
   Insurance                   49,350        30,974

Archer/Oak
Dedicated Facilities            8,159             -
               
Run-Off (1)                         -         8,858
                              --------    ---------
          TOTAL              $193,615      $132,467
                             =========    =========
         (1) The  run-off  is  reinsurance  business  previously  written by The
Insurance  Corporation  of New York and not renewed into  Chartwell  Reinsurance
Company.

                                       6
<PAGE>

         Specialty  Accounts gross premiums  written for the first six months of
1997  increased  103.9%  over the prior  year  primarily  due to a number of new
workers  compensation  programs.  Global  Accounts  continues  to  focus  on the
international  marketplace and, in particular, on U. K. business. Gross premiums
written  in the  international  market  increased  21.4 % while  gross  premiums
written  in the  domestic  market  decreased  40.4%.  In the  aggregate,  Global
Accounts gross premiums  written  decreased  12.7% for the six months ended June
30, 1997  compared to June 30,  1996.  Gross  premiums  written in the  Regional
Accounts client segment were relatively flat for the first six months of 1997 as
compared with the same period last year  primarily due to the  non-renewal  of a
specific  reinsurance  contract because the ceding company retained the business
after obtaining additional surplus. Marine and Aviation gross premiums increased
9.7% for the six months ended June 30, 1997 as compared with 1996  primarily due
to increases in the aviation book of business.  Gross premiums  written  through
June  30,  1997 in the  Controlled  Source  Insurance  Accounts  client  segment
increased 59.3% reflecting the continued growth of existing  programs as well as
the addition of new programs in the first half of the year.
         In addition to underwriting through its five client segments, Chartwell
provides capital to syndicates managed by Archer through two dedicated corporate
capital vehicles,  Oak Dedicated Limited and Archer Dedicated  Limited.  Through
these facilities,  Chartwell  supports capacity at Archer totaling $45.0 million
for the 1997 Year of Account.  Chartwell's  financial  statements for the second
quarter of 1997  include  $8.2  million  of gross  premiums  written  from these
facilities.
         Net  premiums  written  for the six month  period  ended June 30,  1997
increased 52.8% to $146.3 million  compared to $95.7 million for the same period
in 1996.  The increase in net premiums  written  resulted in large part from the
factors  described above which generated the increase in gross premiums written.
Net  premiums  earned for the six month  period  ended June 30, 1997 were $135.7
million,  an increase of $30.5  million or 29.0%  compared to the same period in
1996.

         Loss and Loss Adjustment  Expenses.  The Company's  principal  expense,
loss and loss adjustment  expenses  ("LAE") related to the settlement of claims,
was $91.8 million for the six month period ended June 30, 1997, a 20.8% increase
compared to $76.0  million for the  comparable  period in 1996.  The increase is
principally  attributable to the increase in earned premiums as noted above. Net
losses and LAE  expressed as a percentage  of net earned  premiums (the loss and
LAE ratio)  improved to 67.7% for the six month  period ended June 30, 1997 from
72.3%  recorded for the same period in 1996.  The  improvement of 4.6 percentage
points in the loss and LAE ratio for the six month  period  ended June 30,  1997
was a result  of the  positive  contributions  of the new  workers  compensation
programs as well as the benefits of new reinsurance programs and the enhancement
of existing  reinsurance  programs at attractive  terms.  In addition,  the 1997
results  were not  materially  affected by the run-off of  reinsurance  programs
written by The  Reinsurance  Corporation  of New York prior to December  1995, a
factor which impacted the 1996 results.

         Policy   Acquisition  Costs.   Policy  acquisition  costs,   consisting
primarily of  commissions  paid to ceding  companies and brokerage  fees paid to
intermediaries, less commissions received on business ceded to other reinsurers,
were $37.6  million for the six month  period  ended June 30,  1997  compared to
$25.9 million for the same period in 1996. Policy acquisition costs expressed as
a percentage of net earned premiums (the acquisition expense ratio) increased to
27.7% from 24.7% in 1996.  The increase is due to a modestly  higher  commission
structure  for  proportional  business in general  and the workers  compensation
programs in particular.

         Other  Expenses.  Other expenses  related to  underwriting  operations,
which include  underwriting and administrative  expenses,  were $8.2 million for
the six month period  ended June 30, 1997  compared to $8.0 million for the same
period in 1996. Other expenses  expressed as a percentage of net earned premiums
decreased to 6.1% for the six month period ended June 30, 1997  compared to 7.6%
for the same period in 1996.

                                       7
<PAGE>

         Net Underwriting  Results.  The Company  incurred an underwriting  loss
(net  premiums  earned  minus  losses,  LAE and  underwriting  expenses) of $2.0
million  for the six  month  period  ended  June  30,  1997  as  compared  to an
underwriting  loss of $4.8  million  for the same period in 1996.  The  combined
ratio for the six month period ended June 30, 1997 computed in  accordance  with
GAAP improved to 101.5% compared to 104.6% for the same period in 1996. Although
the loss ratio  component  improved to 67.7% for the six month period ended June
30,  1997 from 72.3%  recorded  for the same period in 1996,  the expense  ratio
increased  to 33.8% for the six month  period ended June 30, 1997 from the 32.3%
recorded for the same period in 1996, for the reasons noted above.

Service Operations
         Revenue from service operations  increased to $17.3 million for the six
month period ended June 30, 1997 compared to $3.2 million for the same period in
1996. The  improvement is due principally to the revenues from Archer as well as
increases  in advisory  fee  revenues and equity in the net earnings of investee
companies.

Corporate Operations
         Interest and Amortization. Interest and amortization expenses were $4.8
million for the six month  period  ended June 30, 1997  compared to $4.1 million
for the same period in 1996.  The 1997 amount  includes $1.3 million of interest
and  amortization  related to the acquisition of Archer offset by a reduction in
interest expense on the Senior Notes due to the redemption, on April 8, 1996, of
35% of the principal amount of outstanding Senior Notes.

Consolidated
         Net  Investment   Income  and  Net  Realized  Capital  Gains  (Losses).
Consolidated  after-tax  net  investment  income,   exclusive  of  realized  and
unrealized  capital  gains and losses,  for the six month  period ended June 30,
1997 was $15.2  million,  compared to $14.2 million for the same period in 1996.
The carrying value of the Company's  invested assets increased to $726.4 million
at June 30, 1997 from $723.9  million at December 31, 1996  primarily due to the
positive cash flows from operations offset by the decline in the market value of
the investment  portfolio.  The average annual tax equivalent  yield on invested
assets after investment  expenses increased to 6.53% for the first six months of
1997 compared to 6.15% for the same period in 1996.
         The Company  realized  net capital  losses of $49,000 for the first six
months of 1997  compared to net capital gains of $921,000 for the same period in
1996. The 1996 net capital gains were realized principally to reposition certain
sectors of the portfolio and to modify the portfolio to improve  credit  quality
without sacrificing yield.

         Income Before Income Taxes. Net income before income taxes increased to
$19.8  million for the six month  period  ended June 30, 1997  compared to $15.9
million for the same period in 1996.  The increase  resulted  primarily from the
increase  in  earned  premiums,  the  favorable  results  in both  loss and loss
adjustment expense and in other expenses,  and from the increases in service and
other revenue.

         Income Tax Expense.  The provision for Federal income taxes for the six
month period ended June 30, 1997  increased to $5.9 million  compared  with $4.6
million for the same period in 1996.  The effective tax rate was 29.6% and 28.9%
for the six  month  periods  ended  June 30,  1997 and 1996,  respectively.  The
principal factor in the decline below the statutory rate of 35% for both periods
was the benefit of investments in tax-advantaged securities.


                                       8
<PAGE>

         Net Income.  The Company realized a net profit of $13.6 million for the
six month period ended June 30, 1997  compared with a net profit of $9.5 million
for the  comparable  1996 period  because of the factors  discussed  above. The
1996 figures  include an extraordinary  charge of $1.9 million attributable to
the redemption of 35% of the Senior Notes which occurred on April 8, 1996.

Results of  Operations - Three Months  Ended June 30, 1997  Compared  With Three
Months Ended June 30, 1996:

         Revenues:  Total  revenues  for the three  months  ended June 30,  1997
increased  51.5% to $93.0 million,  compared to $61.4 million for the comparable
period in 1996. The accompanying table summarizes gross and net premiums written
and total revenues for the periods indicated:

                                        Three month periods ended June 30,
                                     ------------------------------------------
                                            1997                  1996
                                     -------------------       -----------------
                                                     (in thousands)
Gross premiums written                           $96,939               $63,903
                                     ===================       =================
Net premiums written                             $76,350               $46,005
                                     ===================       =================
Premiums earned                                  $73,890               $48,961
Net investment income                             11,189                10,657
Net realized capital losses                         (29)                     -
Service and other revenue                          6,900                   883
Equity in net earnings of investees                1,030                   871
                                     -------------------       -----------------
Total Revenues                                   $92,980              $61,372
                                     ===================       =================
Underwriting Operations
         Gross Premiums  Written;  Net Premiums  Written;  Net Premiums  Earned.
Gross  premiums  written  for the second  quarter  1997 were $96.9  million,  an
increase of 51.7% compared to the same period in 1996.  These increases  reflect
the  addition  of a number of new  programs  in the  Specialty  Accounts  client
segment,  as well as the continued  growth of the  Controlled  Source  Insurance
Accounts segment.  Controlled Source Insurance  Accounts grew as a result of the
expansion of current programs in response to market opportunities.

                                       9
<PAGE>


         The  distribution  of the Company's  gross  premiums  written among its
underwriting client segments was as follows:

                                   Three month periods ended
                                              June 30,
                                         1997          1996
                                      ---------     ---------
Reinsurance:                               (in thousands)
             
Specialty                             $40,010       $25,744
                                     ----------    -----------
Global
  Domestic                              2,361         5,973
  International                         3,906         5,468
                                     ----------    -----------
                                        6,267        11,441
                                     ----------    -----------
                
Regional                                8,623         6,136
                                     ----------    -----------
Marine &
Aviation                                7,172         5,392
                                     ----------    -----------
Total         
Reinsurance                            62,072        48,713

  Controlled Source
    Insurance                          26,708        13,797

                
Archer/Oak
Dedicated Facilities                    8,159             -
                    
Run-Off(1)                                  -         1,393
                                    ----------     ----------
               TOTAL                $  96,939       $63,903
                                   ===========     ===========
         (1) The  run-off  is  reinsurance  business  previously  written by The
Insurance  Corporation  of New York and not renewed into  Chartwell  Reinsurance
Company.
--------------------------------------------------------------------------------
         Gross premiums written in the Specialty Accounts client segment for the
three months ended June 30, 1997  increased  55.4% over the prior year primarily
due to a number of new workers compensation programs.  Global Accounts continues
to focus on the international marketplace and, in particular, on U. K. business.
Global  Accounts gross  premiums  written  decreased  45.2% for the three months
ended June 30, 1997  compared to June 30, 1996.  Gross  premiums  written in the
Regional Accounts client segment increased 40.5% for the three months ended June
30, 1997 as compared with the same period last year  reflecting the expansion of
existing  programs and new programs  coming on line.  Marine and Aviation  gross
premiums  written  increased  33.0% for the three  months ended June 30, 1997 as
compared with 1996 reflecting increases in the aviation book of business.  Gross
premiums written in the Controlled Source Insurance  Accounts client segment for
the three months ended June 30, 1997  increased  93.6%  reflecting the continued
growth of existing programs as well as the premiums from new programs.
         In  addition, Chartwell's financial  statements for the second  quarter
of 1997  include $8.2 million of gross premiums written  from Archer Dedicated 
Limited and Oak Dedicated Limited.
         Net  premiums  written for the three month  period  ended June 30, 1997
increased  66.0% to $76.4 million  compared to $46.0 million for the same period
in 1996. The increase in net premiums written resulted,  in large part, from the
factors  described above which generated the increase in gross premiums written.
Net  premiums  earned for the three month  period ended June 30, 1997 were $73.9
million,  an increase of $24.9  million or 50.9%  compared to the same period in
1996.
                                       10
<PAGE>

         Loss and Loss Adjustment  Expenses.  The Company's  principal  expense,
loss and loss adjustment  expenses  ("LAE") related to the settlement of claims,
was $49.8  million  for the three  month  period  ended June 30,  1997,  a 42.0%
increase  compared  to $35.1  million  for the  comparable  period in 1996.  The
increase is principally attributable to the increase in earned premiums as noted
above.  Net losses and LAE expressed as a percentage of net earned premiums (the
loss and LAE ratio)  improved to 67.4% for the three month period ended June 30,
1997 from 71.6%  recorded for the same period in 1996.  The  improvement  of 4.2
percentage  points in the loss and LAE ratio for the three  month  period  ended
June 30,  1997 was a result of the  positive  contributions  of the new  workers
compensation  programs as well as the benefits of new  reinsurance  programs and
the  enhancement  of existing  reinsurance  programs  at  attractive  terms.  In
addition,  the 1997  results  were not  materially  affected  by the  run-off of
reinsurance programs written by The Reinsurance Corporation of New York prior to
December 1995, a factor which impacted the 1996 results.

         Policy   Acquisition  Costs.   Policy  acquisition  costs,   consisting
primarily of  commissions  paid to ceding  companies and brokerage  fees paid to
intermediaries, less commissions received on business ceded to other reinsurers,
were $20.5  million for the three month period  ended June 30, 1997  compared to
$11.8 million for the same period in 1996. Policy acquisition costs expressed as
a percentage of net earned premiums (the acquisition expense ratio) increased to
27.7% from 24.0% in 1996.  The increase is due to a modestly  higher  commission
structure  for  proportional  business in general  and the workers  compensation
programs in particular.

         Other  Expenses.  Other expenses  related to  underwriting  operations,
which include  underwriting and administrative  expenses,  were $4.5 million for
the three month period ended June 30, 1997 compared to $3.9 million for the same
period in 1996. Other expenses  expressed as a percentage of net earned premiums
decreased  to 6.1% for the three month  period  ended June 30, 1997  compared to
8.1% for the same period in 1996.

         Net Underwriting  Results.  The Company  incurred an underwriting  loss
(net premiums earned minus losses,  LAE and  underwriting  expenses) of $905,000
for the three month  period  ended June 30, 1997 as compared to an  underwriting
loss of $1.8  million for the same period in 1996.  The  combined  ratio for the
three month  period  ended June 30, 1997  computed in  accordance  with GAAP was
101.2%  compared to 103.7% for the same period in 1996.  Although the loss ratio
component  improved to 67.4% for the three month period ended June 30, 1997 from
71.6% recorded for the same period in 1996, the expense ratio increased to 33.8%
for the three month period  ended June 30, 1997 from the 32.1%  recorded for the
same period in 1996, for the reasons noted above.

Service Operations
         Revenue from service operations increased to $8.3 million for the three
month period ended June 30, 1997 compared to $1.8 million for the same period in
1996. The  improvement is due principally to the revenues from Archer as well as
increases  in advisory  fee  revenues and equity in the net earnings of investee
companies.

Corporate Operations
         Interest and Amortization. Interest and amortization expenses were $2.4
million for the three month period ended June 30, 1997  compared to $1.7 million
for the same  period in 1996.  The  increase  is  primarily  due to  $643,000 of
interest and amortization related to the acquisition of Archer.

                                       11
<PAGE>

Consolidated
         Net Investment  Income and Net Realized  Capital  Losses.  Consolidated
after-tax net investment  income,  exclusive of realized and unrealized  capital
losses,  for the  three  month  period  ended  June 30,  1997 was $7.9  million,
compared to $7.2 million for the same period in 1996.  The carrying value of the
Company's  invested  assets  increased  to $726.4  million at June 30, 1997 from
$723.9  million at December 31, 1996  primarily  due to the positive  cash flows
from  operations.  The average  annual tax equivalent  yield on invested  assets
after  investment  expenses  increased  to 6.87% for the second  quarter of 1997
compared to 6.12% for the same period in 1996. The Company  realized net capital
losses of $29,000 for the three months  ended June 30,  1997.  There were no net
gains or losses for the three months ended June 30, 1996.

         Income Before Income Taxes. Net income before income taxes increased to
$10.2  million for the three month period  ended June 30, 1997  compared to $8.5
million for the same period in 1996.  The increase  resulted  primarily from the
increase  in  earned  premiums,  the  favorable  results  in both  loss and loss
adjustment expense and in other expenses,  and from the increases in service and
other revenue.

         Income Tax  Expense.  The  provision  for Federal  income taxes for the
three month period ended June 30, 1997  increased to $3.1 million  compared with
$2.5 million for the same period in 1996.  The  effective tax rate was 30.2% and
28.9% for the three month  periods  ended June 30, 1997 and 1996,  respectively.
The principal  factor in the decline  below the  statutory  rate of 35% for both
periods was the benefit of investments in tax-advantaged securities.

         Net Income.  The Company  realized a net profit of $6.9 million for the
three  month  period  ended  June 30,  1997  compared  with a net profit of $4.2
million for the comparable 1996 period because of the factors  discussed  above.
The 1996 figures include an extraordinary charge of $1.9 million attributable to
the redemption of 35% of the Senior Notes which occurred on April 8, 1996.

Liquidity and Capital Resources
         As a holding company, Chartwell's assets consist primarily of the stock
of its direct  and  indirect  subsidiaries.  Chartwell's  cash flow,  therefore,
depends  largely on dividends  and other  payments from  Chartwell  Reinsurance.
Chartwell  Reinsurance's  sources of funds  consist  primarily of net  premiums,
reinsurance   recoveries,   investment   income  and  proceeds  from  sales  and
redemptions of investments.  Funds are applied  primarily to payments of claims,
operating expenses and income taxes and to the purchase of investments,  largely
fixed income securities.  Cash and short-term investments are maintained for the
payment  of claims and  expenses.  Chartwell  Reinsurance's  ability to pay cash
dividends  to the  Company is  restricted  by law or subject to  approval of the
insurance  regulatory authority of Minnesota,  Chartwell  Reinsurance's state of
domicile. The Minnesota authority recognizes only statutory accounting practices
for the ability of an insurer to pay  dividends to its  stockholders.  Chartwell
could pay dividends aggregating up to $23.8 million without regulating approval.
         At June 30, 1997,  95.9% of Chartwell's  total  investments  (including
cash and cash equivalents) consisted of fixed income securities,  of which 96.6%
were  rated "A" or better  (or "A-1" for  commercial  paper) by  Moody's.  While
uncertainties  exist regarding interest rates and inflation,  Chartwell attempts
to minimize such risks and  exposures by balancing  the duration of  reinsurance
liabilities with the duration of assets in its investment portfolio. The current
market  value of  Chartwell's  fixed  maturity  investments  is not  necessarily
indicative of their future valuation. Chartwell does not have any investments in
real estate or high-yield bonds and does not have any non-income producing fixed
income investments.  The Company's fixed income securities portfolio at June 30,
1997 was comprised  primarily of U.S. Treasury and government  agency,  mortgage
pass-through securities, and corporate and municipal bonds.

                                       12
<PAGE>

         Stockholder's equity increased  approximately 5.1% to $244.1 million at
June 30, 1997 from  $232.2  million at December  31,  1996.  Chartwell's  ratio
of long-term debt to total  capitalization improved  to 30.7% at June 30,  1997
from 31.6% at December 31, 1996.
         Statutory  policyholders'  surplus of Chartwell  Reinsurance Company
increased to $247.7 million at June 30, 1997 from $238.3 million at December 31,
1996.
         In connection with the November 1996 acquisition of Archer, the Company
entered into new credit  facilities  with First Union National  Bank,  N.A. (the
"First Union Credit Facility").  The new credit facilities provide term loans of
approximately $50 million (a portion of which is denominated in pounds sterling)
and a $25.0 million revolving credit facility  (subsequently  increased to $35.0
million).
         At June 30, 1997,  $45.4 million was outstanding  under the First Union
Credit  Facility.  In  addition,  at June 30,  1997,  $9.3  million  was used to
guarantee the loan notes and $20.0 million was used to secure letters of credit.
         Chartwell is largely  dependent  upon  receipt of  dividends  and other
statutorily  permissible  payments from its subsidiaries to meet its obligations
including  the  obligation to pay interest and principal on the Senior Notes and
under  the new  credit  facilities.  Further,  dividend  payments  by  Chartwell
Reinsurance  and INSCORP  are subject to limits  under the laws of the States of
Minnesota and New York,  respectively.  Under the  applicable  provisions of the
insurance holding company laws of the State of Minnesota,  Chartwell Reinsurance
may,  upon five days notice to the  Commissioner  following the  declaration  of
dividends to stockholders, and upon at least ten days notice to the Commissioner
prior to dividend payments, pay dividends to the Company without the approval of
the  Commissioner,  unless such  dividends,  together with other  dividends paid
within the preceding  twelve months,  exceed the greater of (i) 10% of Chartwell
Reinsurance's policyholders' surplus as of the end of the prior calendar year or
(ii) Chartwell  Reinsurance's  statutory net income,  excluding realized capital
gains,  for the prior  calendar  year.  Any  dividend  in  excess of the  amount
determined  pursuant  to the  foregoing  formula  would be  characterized  as an
"extraordinary  dividend"  requiring the prior approval of the Commissioner.  In
any case,  the maximum  amount of  dividends  Chartwell  Reinsurance  may pay is
limited to its earned  surplus,  also known as unassigned  funds. As of December
31, 1996, Chartwell Reinsurance reported unassigned funds in the amount of $54.5
million.  Up to $23.8 million is available  under the foregoing  formula for the
payment of dividends by Chartwell  Reinsurance  without  regulatory  approval in
1997. Chartwell Reinsurance paid the Company no dividends in 1997 or 1996. Under
New York law,  which is applicable  to INSCORP,  the maximum  ordinary  dividend
payable in any twelve  month period  without the approval of the  Superintendent
may not exceed the  lesser of (a) 10% of  policyholders  surplus as shown on the
company's last annual  statement or any more recent  quarterly  statement or (b)
the Company's adjusted net investment income.  Adjusted net investment income is
defined as net investment income for the twelve months preceding the declaration
of the dividend plus the excess, if any, of net investment income over dividends
declared or distributed during the period commencing  thirty-six months prior to
the declaration or distribution of the current dividend and ending twelve months
prior  thereto.  In any case,  New York law  permits  the payment of an ordinary
dividend  by an  insurer  or  reinsurer  only out of earned  surplus.  Moreover,
notwithstanding the receipt of any dividend from INSCORP,  Chartwell Reinsurance
may make dividend payments to the Company only to the extent permitted under the
Minnesota provisions described above.
         In  addition  to the  foregoing  limitation,  the  New  York  Insurance
Department,  as is its practice in any change of control situation, has required
Chartwell  to  commit to  preclude  the  acquired  New  York-domiciled  insurer,
INSCORP,  from  paying any  dividends  for two years after the change of control
without prior regulatory approval. This two year period ends in December 1997.

                                       13
<PAGE>

         The maximum dividend permitted by law is not indicative of an insurer's
actual  ability to pay  dividends,  which may be  constrained  by  business  and
regulatory  considerations,  such as the impact of dividends  on surplus,  which
could  affect an  insurer's  ratings  or  competitive  position,  the  amount of
premiums  that  can  be  written  and  the  ability  to  pay  future  dividends.
Furthermore,  beyond  the  limits  described  in the  preceding  paragraph,  the
Commissioner  and  Superintendent  have  discretion  to  limit  the  payment  of
dividends  by  insurance   companies   domiciled  in  Minnesota  and  New  York,
respectively.

                                       14
<PAGE>


CHARTWELL RE HOLDINGS CORPORATION

PART II  OTHER INFORMATION


         Item 6  -         Exhibits and Reports on Form 8-K

                      (a) Exhibits

                           27 - Financial Data Schedule

                      (b) Reports on Form 8-K

                           None

                      (c) Signatures





























                                       15

<PAGE>


CHARTWELL RE HOLDINGS CORPORATION






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.


                                    CHARTWELL RE HOLDINGS CORPORATION
                                               (Registrant)



                                      /s/        Charles E. Meyers
                                    --------------------------------------------
                                      Charles E. Meyers
                                      Duly Authorized Officer and Senior
                                      Vice President and Chief Financial Officer












Dated: August 14, 1997



                                       16