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 September 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 September 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  November 13, 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
           September 30, 1997 and December 31, 1996.......................   1
        Condensed Consolidated Statements of Operations for the 
          three and nine months ended September 30, 1997 and 1996.........   2
        Condensed Consolidated Statements of Cash Flows for the
          nine months ended September 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)

                                              September 30,         December 31,
ASSETS:                                           1997                  1996
                                             ---------------      --------------
Investments:                                   (Unaudited)
  Fixed maturities:
  Held to maturity (market value 1997,
     $37,336; 1996, $36,620).................    $ 36,521              $ 36,043
  Available for sale (amortized cost 1997,
     $629,653; 1996, $609,368)...............     634,553               606,621
Other investments............................      37,921                30,896
Cash and cash equivalents....................      34,320                50,343
                                                 --------               --------
          Total investments and cash.........     743,315               723,903
Accrued investment income....................       9,397                10,529
Premiums in process of collection............     129,251                86,351
Reinsurance recoverable: on paid losses......      27,721                29,767
                         on unpaid losses....     179,453               172,377
Prepaid reinsurance..........................      35,557                21,733
Goodwill.....................................      48,359                52,609
Deferred policy acquisition costs............      27,689                17,903
Deferred income taxes........................      40,532                42,160
Deposits.....................................      18,883                18,135
Other assets.................................      81,931                69,757
                                                 --------               --------
                                              $ 1,342,088           $ 1,245,224
                                              ============          ===========

LIABILITIES:
Loss and loss adjustment expenses...........    $ 765,903             $ 747,858
Unearned premiums...........................      120,876                81,599
Other reinsurance balances..................       32,111                15,085
Accrued expenses and other liabilities......       49,588                51,763
Long term debt..............................      107,525               107,297
                                                 --------              ---------
           Total liabilities................    1,076,003             1,003,602
                                                ----------            ----------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST...........................        9,260                 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 appreciation (depreciation
   of investments...........................        3,827                (1,379)
  Foreign currency translation adjustment...         (91)                 1,291
  Retained earnings.........................       35,223                14,375
                                                  --------              --------
       Total common stockholder's equity....      256,825               232,153
                                                  --------              --------
                                              $ 1,342,088           $ 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 Months            Nine Months
                                     Ended September 30,     Ended September 30,
                                     --------------------    -------------------
                                       1997       1996          1997       1996
                                     ---------  ---------      -------   -------
UNDERWRITING OPERATIONS:
Premiums earned......................$  59,002  $ 47,982    $ 194,677  $ 153,186
Net investment income................   10,665    11,570       31,289     32,591
Net realized capital gains...........      112        97           63        950
                                        --------  -------    --------   --------
    Total revenues...................   69,779    59,649      226,029    186,727
                                        --------  -------    --------   --------
Loss and loss adjustment expenses....   36,454    34,579      128,299    110,593
Policy acquisition costs.............   19,088    11,566       56,660     37,511
Other expenses.......................    4,525     3,753       12,752     11,757
                                        --------  -------    --------   --------
     Total expenses..................   60,067    49,898      197,711    159,861
                                        --------  -------    --------   --------
Income before taxes -
  underwriting operations............    9,712     9,751       28,318     26,866
                                        --------  -------    --------   --------
SERVICE OPERATIONS:
Service and other revenue............    7,076       965       21,510      2,337
Equity in net earnings of investees..    1,097       877        3,273      2,731
Net investment income................      236         1          880          5
                                        -------   -------    --------   --------
     Total revenues..................    8,409     1,843       25,663      5,073
                                        -------   -------    --------   --------
Other expenses.......................    4,184       167       13,710        778
Amortization of goodwill.............      476        -         1,521         -
                                       --------   -------    --------   --------
     Total expenses..................    4,660       167       15,231        778
                                       --------   -------    --------   --------
Income before taxes -service
  operations.........................    3,749     1,676       10,432      4,295
                                       --------   -------    --------   --------
CORPORATE:
Net investment income................        9       104          103        371
Net realized capital gain (losses)...       -        (16)          -          52
General and administrative expenses..      449       673        1,233        744
Interest expense.....................    2,391     1,599        6,910      5,509
Amortization expense.................      135        56          370        197
                                       --------   -------    ---------  --------
Loss before taxes - corporate........   (2,966)   (2,240)      (8,410)   (6,027)
                                       --------   -------    ---------  --------

Consolidated income before taxes
   and extraordinary item............   10,495     9,187       30,340     25,134
Income tax expense...................    3,047     2,744        8,974      7,347
                                       --------   -------    ---------  --------
Net income before minority interest
   and extraordinary item............    7,398     6,443       21,366     17,787
Minority interest....................      173       -            518         -
Extraordinary item, net of tax.......      -         -            -        1,874
                                      ---------   -------    ---------  --------
Net income..........................   $ 7,225   $ 6,443     $ 20,848     15,913
                                      =========  ========    =========  ========


            See notes to condensed consolidated financial statements.




                                       2
<PAGE>


                            CHARTWELL RE HOLDINGS CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (Unaudited)
                                                             Nine Months
                                                          Ended September 30,
                                                    ----------------------------
                                                       1997              1996
                                                    ------------    ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net premiums collected........................ $ 129,852            87,490
     Net losses and loss adjustment
        expenses paid..............................  (117,330)          (96,906)
     Overhead expenses paid........................   (17,083)          (10,792)
     Service and other revenue, net of
        related expenses...........................    (4,111)            5,068
     Net income taxes paid.........................    (2,093)           (2,247)
     Interest received on investments..............    32,656            32,407
     Interest paid.................................    (8,267)           (7,662)
     Other, net....................................    (5,898)            4,884
                                                     ----------       ----------
             Net cash provided by operating
                activities.........................     7,726             12,242
                                                     ----------        ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Cost of investments acquired..................  (204,007)         (331,534)
     Proceeds from investments matured
        or repaid..................................    18,860            27,445
     Proceeds from investments sold................   161,862           183,022
                                                     --------           -------
           Net cash used in investing activities...   (23,285)         (121,067)
                                                     --------          ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Cash contribution from parent.................       -              48,545
     Redemption of Senior Notes....................       -             (28,280)
     Proceeds from issuance of long-term debt......       812              -
     Other, net....................................        -               (250)
                                                     ---------         ---------
            Net cash provided by financing 
               activities..........................       812            20,015
                                                     ---------          --------
                 Effect of exchange rate on cash...    (1,276)               38
                                                     ---------          --------
Net decrease in cash and cash equivalents..........   (16,023)          (88,772)
Cash and cash equivalents at beginning
   of period.......................................    50,343           152,507
                                                      -------           -------
Cash and cash equivalents at end of period.........   $ 34,320         $ 63,735
                                                     =========         ========

RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
     Net income....................................   $ 20,848         $ 15,913
     Adjustments to reconcile net income to net
     cash provided by operating activities:
          Extraordinary item.......................        -              1,874
          Equity in net earnings of investees......     (3,273)          (2,731)
          Net realized capital gains...............        (63)          (1,002)
          Deferred policy acquisition costs........     (9,786)             475
          Unpaid loss and loss adjustment expenses.     18,045           (5,199)
          Unearned premiums........................     39,277           (5,456)
          Reinsurance balances.....................      3,198              108
          Reinsurance recoverable..................     (5,030)          (2,467)
          Net change in receivables and payables...    (45,335)           8,574
          Other, net...............................    (10,155)           2,153 
                                                       --------         --------
                  Net cash provided by 
                      operating activities.........    $ 7,726         $ 12,242
                                                       ========          =======
            See notes to condensed consolidated financial statements.


                                       3

<PAGE>



                        CHARTWELL RE HOLDINGS CORPORATION
              Notes to Condensed Consolidated Financial Statements
                               September 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 nine months ended  September 30, 1996 is presented as though
the  Acquisition   and  the  redemption  of  35% of  the  Company's  outstanding
10 1/4%  Senior Notes (the "Senior Notes") due 2004 had occurred on January 1,
1996.

                     Three Months    Three Months   Nine Months    Nine Months
                        Ended             Ended          Ended         Ended
                     September 30,   September 30,  September 30   September 30,
                        1997             1996           1997          1996
                      Actual         Pro forma         Actual       Pro forma
                     -------------   -------------  -------------  ------------

   Total revenues        $78,197         $68,618       $251,795      $213,337
  
   Net income             $7,225          $6,789        $20,848       $19,320

 


                                       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
                               September 30, 1997
                                   (Unaudited)

Overview
         Chartwell Re Holdings Corporation  ("Chartwell" or the "Company") is an
insurance holding company with global  underwriting and service operations which
conducts its business in the United States and in the Lloyd's market through its
four principal operating subsidiaries, Chartwell Reinsurance Company ("Chartwell
Reinsurance"),  The  Insurance  Corporation  of  New  York  ("INSCORP"),  Archer
Managing Agents Limited  ("Archer"),  and Chartwell Advisers Limited ("Chartwell
Advisers").  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
through 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  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  ("Drayton").  Dakota
Specialty  is a newly  formed  subsidiary  of  Chartwell  whose  objective is to
underwrite  business on a non-admitted  basis.  Drayton 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 September 30, 1997,  Chartwell had total assets in excess of $1.3
billion and  stockholder's  equity of $256.8 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.  All of Archer's  syndicates enjoy the benefit of the newly
issued  ratings of Lloyd's,  which has been rated "A"  (Excellent) by A. M. Best
and has been assigned an A+ claims paying  ability  rating by S&P. The 10 1.4%
Senior Notes (the "Senior Notes") are rated BBB- by Standard & Poor's and Ba1 by
Moody's, respectively.


                                       5

<PAGE>
Results of Operations - Nine Months Ended  September 30, 1997 Compared With Nine
Months Ended September 30, 1996:

         Revenues:  Total revenues for the nine months ended  September 30, 1997
increased 31.0% to $251.8 million, compared to $192.2 million for the comparable
period in 1996. The accompanying table summarizes gross and net premiums written
and total revenues for the periods indicated:

                                              Nine months ended September 30,
                                            ------------------------------------
                                                  1997                  1996
                                            ---------------        -------------
                                                         (in thousands)
Gross premiums written                          $298,040              $196,080
                                             ==============        =============
Net premiums written                            $220,760              $140,960
                                             ==============        =============
Premiums earned                                 $194,677              $153,186
Net investment income                             32,272                32,976
Net realized capital gains                            63                 1,002
Service and other revenue                         21,510                 2,337
Equity in net earnings of investees                3,273                 2,731
                                             --------------        -------------
Total Revenues                                 $ 251,795              $192,223
                                             ==============        =============
 
Underwriting Operations
         Gross Premiums  Written;  Net Premiums  Written;  Net Premiums  Earned.
Gross premiums  written for the nine months ended September 30, 1997 were $298.0
million,  an  increase  of 52.0%  compared  to the same  period  in 1996.  These
increases reflect (i) new programs and products  developed with ceding companies
in the  Specialty  Accounts  client  segment,  (ii) the  expansion  of  existing
programs  and the addition of new programs in the  Controlled  Source  Insurance
Accounts  segment  and  (iii)  gross  premiums  written  through  two  dedicated
corporate capital vehicles supporting Archer syndicates. The distribution of the
Company's gross premiums written among its  underwriting  client segments was as
follows:

                                        Nine months ended
                                           September 30,
                                      ----------------------
                                        1997          1996
                                      ---------    ---------
          Reinsurance:                    (in thousands)

             Specialty                $132,476       $65,992
                                      ---------     --------
             Global
               Domestic                 13,400        14,972
               International            12,520        16,477
                                      ---------     --------
                                        25,920        31,449
                                      ---------     --------
             Regional                   19,728        20,681
                                      ---------     --------
             Marine & Aviation          24,480        24,177
                                      ---------     --------
          Total Reinsurance            202,604       142,299


             Controlled Source
                Insurance               80,930        46,356

             Archer/Oak Dedicated
               Facilities               14,506             -

             Run-Off (1)                     -         7,425
                                      --------      --------

                    TOTAL             $298,040      $196,080
                                      ========      ========

         (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 nine months of
1997  increased  100.7%  over the prior  year  primarily  due to a number of new
workers compensation programs.  Global Accounts gross premiums written decreased
17.6% for the nine months ended  September  30, 1997  compared to September  30,
1996 reflecting the  continuation of the soft  reinsurance  market and increased
competition for business. Gross premiums written in the Regional Accounts client
segment  decreased  4.6% for the first nine months of 1997 as compared  with the
same period last year  primarily  resulting  from the  non-renewal of a specific
reinsurance  contract due to the ceding  company  retaining  the business  after
obtaining  additional  surplus.  Marine and Aviation  gross  premiums  increased
modestly  for the nine months  ended  September  30, 1997 as compared  with 1996
primarily  due to  increases in the aviation  book of business.  Gross  premiums
written through September 30, 1997 in the Controlled  Source Insurance  Accounts
client  segment  increased  74.6%  reflecting  the continued  growth of existing
programs as well as the addition of new programs in the first nine months 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 ADIT One Limited.  Through these
facilities,  Chartwell  provides  capacity to Archer  syndicates  totaling $45.0
million for the 1997 year of account.  Chartwell's  financial statements for the
nine months ended  September 30, 1997 include  $14.5  million of gross  premiums
written from these facilities.
         Net  premiums  written for the nine  months  ended  September  30, 1997
increased 56.6% to $220.8 million compared to $141.0 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 nine months ended  September  30, 1997 were $194.7
million,  an increase of $41.5  million or 27.1%  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 $128.3  million  for the nine  months  ended  September  30,  1997,  a 16.0%
increase  compared to $110.6  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 65.9% for the nine months ended  September  30,
1997 from 72.2%  recorded for the same period in 1996.  The  improvement  of 6.3
percentage  points in the loss and LAE ratio for the nine months ended September
30, 1997 was a result of a change in the mix of business as well as the benefits
of  new  reinsurance  programs  and  the  enhancement  of  existing  reinsurance
programs.  In addition,  the 1997 results  were not  materially  affected by the
run-off of reinsurance programs written by The Insurance 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 $56.7  million for the nine months  ended  September  30, 1997  compared to
$37.5 million for the same period in 1996. Policy acquisition costs expressed as
a percentage of net earned premiums (the acquisition expense ratio) increased to
29.1% from 24.5% in 1996.  The increase is due a change in the  Company's mix of
business and the effects of increased  premiums ceded as well as the cost of the
new reinsurance programs.

         Other  Expenses.  Other expenses  related to  underwriting  operations,
which include underwriting and administrative  expenses,  were $12.8 million for
the nine months ended  September 30, 1997 compared to $11.8 million for the same
period in 1996.  For the nine months ended  September 30, 1997,  other  expenses
include $1.0  million  reflecting  the  Company's  share of  syndicate  expenses
related to the Archer  dedicated  corporate  capital  vehicles.  Other  expenses
expressed as a percentage of net earned premiums  decreased to 6.6% for the nine
months ended September 30, 1997 compared to 7.7% 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 $3.0
million  for  the  nine  months  ended  September  30,  1997 as  compared  to an
underwriting  loss of $6.7  million  for the same period in 1996.  The  combined
ratio for the nine months ended  September 30, 1997 computed in accordance  with
GAAP improved to 101.6% compared to 104.4% for the same period in 1996. Although
the loss ratio  component  improved to 65.9% for the nine months ended September
30,  1997 from 72.2%  recorded  for the same period in 1996,  the expense  ratio
increased to 35.7% for the nine months ended  September  30, 1997 from the 32.2%
recorded for the same period in 1996, for the reasons noted above.

Service Operations
         Revenue from service operations increased to $25.7 million for the nine
months ended  September 30, 1997 compared to $5.1 million for the same period in
1996.  The increase 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
         Interest and Amortization. Interest and amortization expenses were $7.3
million for the nine months ended  September  30, 1997  compared to $5.7 million
for the same period in 1996.  The 1997 amount  includes $2.0 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 nine months ended  September 30,
1997 was $22.9  million,  compared to $22.2 million for the same period in 1996.
The carrying value of the Company's  invested assets increased to $743.3 million
at September 30, 1997 from $723.9  million at December 31, 1996 primarily due to
the decline in interest  rates during this period as well as the  positive  cash
flows from  operations.  The  average  annual tax  equivalent  yield on invested
assets after investment expenses increased to 6.49% for the first nine months of
1997 compared to 6.26% for the same period in 1996.
         The Company  realized  net capital  gains of $63,000 for the first nine
months of 1997 compared to net capital  gains of $1,002,000  for the same period
in 1996. The net capital gains were realized  principally to reposition  certain
sectors of the portfolio.

         Income  Before Income  Taxes.  Income before income taxes  increased to
$30.3  million for the nine months ended  September  30, 1997  compared to $25.1
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.


                                       8
<PAGE>

         Income Tax Expense. The provision for Federal income taxes for the nine
months ended  September  30, 1997  increased to $9.0 million  compared with $7.3
million for the same period in 1996.  The effective tax rate was 29.6% and 29.2%
for the nine  months  ended  September  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 $20.8 million for the
nine months ended September 30, 1997 compared with a net profit of $15.9 million
for the comparable 1996 period because of the factors discussed above.

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

         Revenues:  Total revenues for the three months ended September 30, 1997
increased  27.0% to $78.2 million,  compared to $61.6 million for the comparable
period in 1996. The accompanying table summarizes gross and net premiums written
and total revenues for the periods indicated:

                                              Three months ended September 30,
                                           -------------------------------------
                                                  1997                  1996
                                            -------------         --------------
                                                       (in thousands)

Gross premiums written                          $104,425               $63,613
                                            ============          ============
Net premiums written                             $74,498               $45,237
                                            ============          ============
Premiums earned                                  $59,002               $47,982
Net investment income                             10,910                11,675
Net realized capital gains                           112                    81
Service and other revenue                          7,076                   965
Equity in net earnings of investees                1,097                   877
                                            ------------          ------------
Total Revenues                                   $78,197               $61,580
                                            ============          ============

Underwriting Operations
         Gross Premiums  Written;  Net Premiums  Written;  Net Premiums  Earned.
Gross  premiums  written  for the third  quarter  1997 were $104.4  million,  an
increase of 64.2% compared to the same period in 1996.  These increases  reflect
(i) new programs and products  developed with ceding  companies in the Specialty
Accounts  client  segment,  (ii) the  expansion  of  existing  programs  and the
addition of new programs in the Controlled Source Insurance Accounts segment and
(iii) gross premiums  written through two dedicated  corporate  capital vehicles
supporting Archer syndicates.



                                       9


<PAGE>


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

                                               Three months ended
                                                 September 30,
                                              ---------------------
                                                1997         1996            
                                              --------    ---------
          Reinsurance:                            (in thousands)

             Specialty                         $45,164       $23,163
                                               --------     --------
             Global
                Domestic                         6,838         3,961
                International                    1,664         7,536
                                               --------     --------
                                                 8,502        11,497
                                               --------     --------
             Regional                            6,512         7,383
                                               --------     --------
             Marine & Aviation                   6,320         7,621
                                               --------     --------
          Total Reinsurance                     66,498        49,664
     
             Controlled Source Insurance        31,580        15,382
             Archer/Oak Dedicated Facilities     6,347             -
             Run-Off(1)                             -         (1,433)
                                               --------     ---------
                         TOTAL                $104,425       $63,613
                                              =========     =========

     (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  September  30,  1997  increased  95.0% over the prior year
primarily due to a number of new workers compensation programs.  Global Accounts
gross premiums written  decreased 26.1% for the three months ended September 30,
1997  compared to September  30, 1996.  Gross  premiums  written in the Regional
Accounts client segment decreased 11.8% for the three months ended September 30,
1997 as  compared  with the same  period last year.  Marine and  Aviation  gross
premiums  written  decreased 17.1% for the three months ended September 30, 1997
as compared  with 1996.  The decrease in gross  premiums  written in the Global,
Regional and Marine & Aviation client segments is primarily  attributable to the
continuation  of the soft  reinsurance  market  and  increased  competition  for
business.  Gross premiums written in the Controlled  Source  Insurance  Accounts
client segment for the three months ended  September 30, 1997  increased  105.3%
reflecting  the  continued  growth of existing  programs as well as the premiums
from new programs.  In addition,  Chartwell's financial statements for the third
quarter  of 1997  include  $6.3  million  of  gross  premiums  written  from the
dedicated corporate capital vehicles supporting Archer syndicates.
         Net  premiums  written for the three months  ended  September  30, 1997
increased  64.7% to $74.5 million  compared to $45.2 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 months  ended  September  30, 1997 were $59.0
million,  an increase of $11.0  million or 23.0%  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 $36.5 million for the three months ended September 30, 1997, a 5.4% increase
compared to $34.6  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 61.8% for the three months ended September 30, 1997 from
72.1% recorded for the same period in 1996. The  improvement of 10.3  percentage
points in the loss and LAE ratio for the three months ended  September  30, 1997
was a result of a change in the mix of business  as well as the  benefits of new
reinsurance  programs and the enhancement of existing reinsurance  programs.  In
addition,  the 1997  results  were not  materially  affected  by the  run-off of
reinsurance  programs written by The Insurance  Corporation of New York prior to
December 1995, a factor which impacted the 1996 results.



                                       10

<PAGE>

         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 $19.1  million for the three months ended  September  30, 1997  compared to
$11.6 million for the same period in 1996. Policy acquisition costs expressed as
a percentage of net earned premiums (the acquisition expense ratio) increased to
32.4% from 24.1% in 1996.  The increase is due a change in the  Company's mix of
business and the effects of increased  premiums ceded as well as the cost of the
new reinsurance programs.

         Other  Expenses.  Other expenses  related to  underwriting  operations,
which include  underwriting and administrative  expenses,  were $4.5 million for
the three months ended  September 30, 1997 compared to $3.8 million for the same
period in 1996.  For the three months ended  September 30, 1997,  other expenses
include $322,000 reflecting the Company's share of syndicate expenses related to
the Archer dedicated  corporate capital vehicles.  Other expenses expressed as a
percentage  of net earned  premiums were  relatively  flat at 7.7% for the three
months ended September 30, 1997 compared to 7.8% 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 $1.1
million  for the  three  months  ended  September  30,  1997 as  compared  to an
underwriting  loss of $1.9  million  for the same period in 1996.  The  combined
ratio for the three months ended  September 30, 1997 computed in accordance with
GAAP was 101.9%  compared  to 104.0% for the same period in 1996.  Although  the
loss ratio component  improved to 61.8% for the three months ended September 30,
1997  from  72.1%  recorded  for the same  period  in 1996,  the  expense  ratio
increased to 40.1% for the three months ended  September 30, 1997 from the 31.9%
recorded for the same period in 1996, for the reasons noted above.

Service Operations
         Revenue from service operations increased to $8.4 million for the three
months ended  September 30, 1997 compared to $1.8 million for the same period in
1996.  The increase 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
         Interest and Amortization. Interest and amortization expenses were $2.5
million for the three months ended  September  30, 1997 compared to $1.7 million
for the same  period in 1996.  The  increase  is  primarily  due to  $650,000 of
interest and amortization related to the acquisition of Archer.




                                       11

<PAGE>

Consolidated
         Net  Investment  Income and Net Realized  Capital  Gains.  Consolidated
after-tax net investment  income,  exclusive of realized and unrealized  capital
gains, for the three months ended September 30, 1997 was $7.8 million,  compared
to $8.0 million for the same period in 1996. The carrying value of the Company's
invested  assets  increased to $743.3  million at September 30, 1997 from $723.9
million at December  31,  1996  primarily  due to the decline in interest  rates
during  this  period as well as the  positive  cash flows from  operations.  The
average annual tax equivalent yield on invested assets after investment expenses
decreased to 6.68% for the third  quarter of 1997 compared to 6.88% for the same
period in 1996.

     The  Company  realized  net capital  gains of $112,000  and $81,000 for the
three months ended September 30, 1997 and 1996, respectively.

         Income  Before Income  Taxes.  Income before income taxes  increased to
$10.5  million for the three months ended  September  30, 1997  compared to $9.2
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 months ended  September 30, 1997  increased to $3.1 million  compared with
$2.7 million for the same period in 1996.  The  effective tax rate was 29.5% and
29.9% for the three months ended September 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 $7.2 million for the
three months ended September 30, 1997 compared with a net profit of $6.4 million
for the comparable 1996 period because of the factors discussed above.

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. For the year
ending December 31,1997,  Chartwell Reinsurance has the ability to pay dividends
aggregating  up to $23.8 million  without  regulatory  approval.  On November 5,
1997,  the Board of Directors of Chartwell  Reinsurance  declared a $3.0 million
dividend  payable to the Company on November 21, 1997. No other  dividends  have
been declared or paid by Chartwell Reinsurance in 1997.
         At  September  30,  1997,  94.9%  of  Chartwell's   total   investments
(including cash and cash equivalents)  consisted of fixed income securities,  of
which 95.9% 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
insurance  and  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 September 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 10.6% to $256.8 million at
September 30, 1997 from $232.2 million at December 31, 1996.  Chartwell's  ratio
of long-term  debt to total  capitalization  improved to 29.5% at September  30,
1997 from 31.6% at December 31, 1996.
     Statutory policyholders' surplus of Chartwell Reinsurance Company increased
to $251.3  million at  September  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 which was subsequently  increased
to $35.0 million and,  effective  October 30, 1997, was increased further to $60
million. The Company intends to use the additional funds principally to increase
the  capacity it provides to Archer  syndicates  in 1998  through its  dedicated
corporate capital vehicles.
         At September 30, 1997,  $45.0 million was  outstanding  under the First
Union Credit Facility. In addition, at September 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
and 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.  Up to $23.8
million is available under the foregoing formula for the payment of dividends by
Chartwell  Reinsurance without regulatory approval in 1997. On November 5, 1997,
the Board of Directors of Chartwell Reinsurance declared a $3.0 million dividend
payable to the  Company on  November  21,  1997.  No other  dividends  have been
declared or paid by Chartwell Reinsurance in 1997. Under New York law, which is

                                       13


<PAGE>

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-nine 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.
         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: November 11, 1997

                                       16