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, 1998 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, 1998         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 12, 1998
                                    (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
                                                                           Page
        Item -                                                             ----
        Condensed Consolidated Balance Sheets at
           June 30, 1998 and December  31, 1997.........................      1
        Condensed Consolidated Statements of Operations for the 
           three and six months ended June 30, 1998 and 1997............      2
        Condensed Consolidated Statements of Cash Flows for the
           three and six months ended June 30, 1998 and 1997............      3
        Notes to Condensed Consolidated Financial Statements............      4

        Item 2 -
        Management's Discussion and Analysis of Financial Condition
           and Results of Operations....................................      6

PART II..OTHER INFORMATION
        Item 1 - Legal Proceedings......................................     13
        Item 5 - Other Information......................................     13
        Item 6 - Exhibits and Reports on Form 8-K ......................     13
        Signatures .....................................................     14












                                       i

<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,
                                                       1998             1997
                                                    -----------     ------------
ASSETS:                                             (Unaudited)
Investments:
  Fixed maturities:
    Held to maturity (market value 1998,
      $35,540; 1997, $37,421).......................$   34,495      $    36,630
    Available for sale (amortized cost 1998,
      $654,074; 1997, $645,108).....................   671,968          657,973
  Other investments.................................    42,628           38,043
Cash and cash equivalents...........................    26,325           29,534
                                                      ---------        ---------
          Total investments and cash................   775,416          762,180
Accrued investment income...........................    10,820           10,667
Premiums in process of collection...................   163,514          126,537
Reinsurance recoverable: on paid losses.............    23,206           34,502
                         on unpaid losses...........   256,005          202,593
Prepaid reinsurance.................................    44,350           29,929
Goodwill............................................    53,766           54,259
Deferred policy acquisition costs...................    24,251           26,100
Deferred income taxes...............................    25,137           29,847
Deposits............................................    19,729           19,040
Other assets........................................    71,437           69,406
                                                      ---------        ---------
                                                   $ 1,467,631      $ 1,365,060
                                                   ============      ===========
 
LIABILITIES:
Loss and loss adjustment expenses...................$  834,011      $   788,240
Unearned premiums...................................   117,035          111,149
Other reinsurance balances..........................    59,600           33,723
Accrued expenses and other liabilities..............    50,737           49,345
Long term debt......................................   108,178          104,126
                                                     ----------       ----------
           Total liabilities........................ 1,169,561        1,086,583
                                                     ----------       ----------
                                                     
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST...................................     8,641            9,425
                                                     -----------      ----------
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 of investments........    12,271            8,741
  Foreign currency translation adjustment...........       505              296
  Retained earnings.................................    58,787           42,149
                                                      ---------        ---------
          Total stockholder's equity................   289,429          269,052
                                                      ---------        ---------
                                                   $ 1,467,631      $ 1,365,060
                                                   ============     ============

            See notes to condensed consolidated financial statements.

                                       1

<PAGE>
<TABLE>

                            CHARTWELL RE HOLDINGS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (dollars in thousands, except share amounts)
                                   (Unaudited)
<CAPTION>

                                       Three Month Periods         Six Month Periods
                                          Ended June 30,              Ended June 30,
                                    ---------------------------    ---------------------
                                       1998            1997          1998        1997
                                    -------------    ----------    ----------  ----------
<S>                                    <C>           <C>           <C>         <C>  

UNDERWRITING OPERATIONS:
Premiums earned....................... $ 56,430      $ 73,890      $ 109,173   $ 135,675
Net investment income.................   11,996        10,793         23,640      20,624
Net realized capital gains (losses)...      (39)          (29)            60         (49)
                                       ----------    ----------    ----------  ----------
     Total revenues...................   68,387        84,654        132,873     156,250
                                       ----------    ----------    ----------  ----------
Loss and loss adjustment expenses.....   33,914        49,810         65,838      91,845
Policy acquisition costs..............   14,639        20,452         29,584      37,572
Other expenses........................    6,011         4,533         10,280       8,227
                                       ----------    ----------    ----------  ----------
     Total expenses...................   54,564        74,795        105,702     137,644
                                       ----------    ----------    ----------  ----------
Income before taxes - 
     underwriting operations..........   13,823         9,859         27,171      18,606
                                       ----------    ----------    ----------  ----------

SERVICE OPERATIONS:
Service and other revenue.............    3,291         6,900          6,639      14,434
Equity in net earnings of investees...    1,323         1,030          2,071       2,176
Net investment income.................      129           396            337         644
                                       ----------    ----------    ----------  ----------
     Total revenues...................    4,743         8,326          9,047      17,254
                                       ----------    ----------    ----------  ----------
Other expenses........................    3,329         4,648          6,015       9,526
Amortization of goodwill..............      569           528          1,135       1,045
                                       ----------    ----------    ----------  ----------
     Total expenses...................    3,898         5,176          7,150      10,571
                                       ----------    ----------    ----------  ----------
Income before taxes - 
     service operations...............      845         3,150          1,897        6,683
                                       ----------    ----------    ----------  -----------
CORPORATE:
Net investment income.................       32             -             52           94
General and administrative expenses...      636           394          1,178          784
Interest expense......................    2,403         2,365          4,882        4,519
Amortization expense..................      209            71            415          235
                                       ----------    ----------    ----------  -----------
Loss before taxes - corporate.........   (3,216)       (2,830)        (6,423)      (5,444)
                                       ----------    ----------    ----------  -----------
Consolidated income before taxes
   and minority interest..............   11,452        10,179         22,645       19,845
Income tax expense....................    3,573         3,078          6,891        5,877
                                       ----------    ----------    ----------  -----------
Net income before minority interest... $  7,879       $ 7,101      $  15,754     $ 13,968
Minority Interest.....................      526          (156)           884         (345)
                                       --------       -------      ---------    --------- 
Net Income............................ $  8,405       $ 6,945      $  16,638     $ 13,623
                                       ==========    ==========    ==========  ===========

                                       

            See notes to condensed consolidated financial statements.


                                       2


</TABLE>               
<PAGE>

                        CHARTWELL RE HOLDINGS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                                         Six Month Periods
                                                           Ended June 30,
                                                      --------------------------
                                                           1998          1997
                                                      ------------    ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
        Net premiums collected....................... $   75,548     $   74,732
        Net losses and loss adjustment expenses paid.    (73,479)       (74,922)
        Overhead expenses............................    (11,480)       (12,372)
        Service and other revenue, net of
           related expenses..........................     (2,790)         5,010
        Net income taxes paid........................     (2,554)        (2,092)
        Interest received on investments.............     22,495         21,028
        Interest paid................................     (4,006)        (4,765)
        Other, net...................................      4,025         (3,677)
                                                      ------------    ----------
          Net cash provided by operating activities..      7,759          2,942
                                                      ------------    ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of available for sale securities....    (74,521)       (76,930)
       Maturities of available for sale securities...      7,725          9,904
       Maturities of held to maturity securities           1,300              -
       Sales of available for sale securities........     51,289         43,165
                                                      ------------    ----------
           Net cash used in investing activities.....    (14,207)       (23,861)
                                                      ------------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Issuance of long-term debt......................      5,045          1,619
     Repayment of long-term debt.....................     (1,383)             -
                                                      ------------    ----------
          Net cash provided by financing activities..      3,662          1,619
                                                      ------------    ----------
          Effect of exchange rate on cash............       (423)        (1,059)
                                                      ------------    ----------
Net decrease in cash and cash equivalents............     (3,209)       (20,359)
Cash and cash equivalents at beginning of period.....     29,534         50,343
                                                      -----------     ----------
Cash and cash equivalents at end of period........... $   26,325       $ 29,984
                                                      ===========     ==========
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
    Net income....................................... $   16,638        $13,623
    Adjustments to reconcile net income to net cash
      provided by operating activities:
          Equity in net earnings of investees........       (865)        (2,176)
          Net realized capital (gains) losses........        (60)            49
          Minority interest..........................       (884)           345
          Deferred policy acquisition costs..........      1,849         (4,119)
          Unpaid loss and loss adjustment expenses...     45,771         17,940
          Unearned premiums..........................      5,886         22,116
          Other reinsurance balances.................     11,455          2,769
          Reinsurance recoverable....................    (42,116)       (15,154)
          Net change in receivables and payables.....    (36,939)       (25,065)
          Other, net.................................      7,024         (7,386)
                                                      -----------     ---------
             Net cash provided by operating
                activities........................... $    7,759       $  2,942
                                                      ===========     =========
             
            See notes to condensed consolidated financial statements.


                                       3



<PAGE>

              Notes to Condensed Consolidated Financial Statements
                            June 30, 1998 (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

         The accompanying  unaudited  interim Condensed  Consolidated  Financial
Statements  of  Chartwell  Re Holdings  Corporation  (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 1997  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.

         Certain account balances from the prior year's  presentation  have been
reclassified to conform to the current year's presentation.

NOTE 2 - NEW ACCOUNTING STANDARD

         In June 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 130,  "Reporting  Comprehensive  Income"
("SFAS No.  130"),  which became  effective  for the Company on January 1, 1998.
SFAS No. 130  establishes  standards for reporting and display of  comprehensive
income and its components (revenues,  expenses,  gains and losses) in a full set
of general-purpose financial statements.  This statement requires that all items
that are required to be recognized under  accounting  standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same  prominence  as other  financial  statements.  It does  not  require  a
specific  format for that  financial  statement  but requires that an enterprise
display an amount representing total comprehensive income for the period in that
financial statement.

         The  components of the Company's  comprehensive  income are net income,
changes in foreign  currency  translation  adjustments and changes in unrealized
appreciation  of  investments.  Total  comprehensive  income for the three month
periods  ended  June  30,  1998  and  1997  was  $10,955,000  and   $14,684,000,
respectively.  Total  comprehensive  income for the six month periods ended June
30, 1998 and 1997 was $20,377,000 and $11,982,000, respectively.

NOTE 3 - CONTINGENCIES

         American  Eagle--In  1996 and early  1997,  the  Company  entered  into
certain assumption of liability  endorsements  ("ALEs") pursuant to an agreement
with American Eagle Insurance Company ("American Eagle"), which provided for the
assumption  of  certain  policy  liabilities  by the  Company in the event of an
insolvency of American Eagle. As part of such arrangements, the Company obtained
from American  Eagle a trust fund to  collateralize  any  potential  obligations
arising  out of the  issuance of the ALEs by the  Company.  On December 3, 1997,
American Eagle was placed in receivership by the Texas Department of Insurance.

                                       4

<PAGE>

          On June 16, 1998, the California Insurance Guarantee Association filed
suit in the Superior  Court of  California,  County of Los Angeles,  against the
Company,  seeking,  among other  things,  a  declaratory  judgment that the ALEs
covered  claims  arising prior to the date upon which the ALEs were issued.  The
Company believes,  and has been so advised by counsel handling the case, that it
has a number of valid defenses to the litigation  pending  against it. Such case
is, and will continue to be, vigorously defended. However, it is not possible to
predict the outcome of such case.  Litigation is subject to many  uncertainties,
and it is possible  that such case could be decided or settled  unfavorably.  In
such  event,  it  is  possible  that the  Company's  results  of  operations  or
financial position could be materially adversely affected.






                                       5

<PAGE>


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

         Chartwell Re Holdings Corporation is an insurance holding company with
global  underwriting and service operations,  conducting  its  business  in  the
United  States  and  in the  Lloyd's  market  through  its  principal  operating
subsidiaries,  Chartwell  Reinsurance  Company  ("Chartwell  Reinsurance"),  The
Insurance  Corporation  of New York  ("INSCORP")  and Archer Group  Holdings plc
("Archer").   Chartwell  Re  Holdings   Corporation  and  its  subsidiaries  are
collectively  referred to as the Company.  The Company was formed in 1995 to act
as  an  intermediate  level  holding  company  for  its  parent,   Chartwell  Re
Corporation,  a company  whose  common  stock is  traded  on the New York  Stock
Exchange.

Results of  Operations - Six Months Ended June 30, 1998 Compared With Six Months
Ended June 30, 1997:

         Revenues:  Total  revenues  for the six months  ended  June 30,  1998
decreased 18.2% to $142.0 million, compared to $173.6 million forthe comparable
period in 1997.
         The accompanying  table  summarizes gross and  net premiums written and
total revenues for the periods indicated:
                                                 Six Month Periods
                                                  Ended June 30,
                                     ------------------------------------------
                                            1998                  1997
                                     ------------------------------------------
                                                    (in thousands)

Gross premiums written                          $168,665              $193,615
                                             ==============      ===============
Net premiums written                            $101,528              $146,262
                                             ==============      ===============
Premiums earned                                 $109,173              $135,675
Net investment income                             24,029                21,362
Net realized capital gains (losses)                   60                  (49)
Service and other revenue                          6,639                14,434
Equity in net earnings of investees                2,071                 2,176
                                             --------------      ---------------
Total Revenues                                  $141,972              $173,598
                                             ==============      ===============


Underwriting Operations
         Gross Premiums  Written;  Net Premiums  Written;  Net Premiums  Earned.
Gross premiums  written for the first six months of 1998 were $168.7 million,  a
decrease of 12.9% compared to the same period in 1997. The  distribution  of the
Company's gross premiums written among its business segments was as follows:

                                              Six Month Periods
                                                Ended June 30,         % Change
                                          --------------------------------------
                                               1998         1997
                                          -------------   ----------
Gross Premiums Written from
    Reinsurance Operations                   $84,629      $136,106       -37.8%
Gross Premiums Written from 
   Specialty Insurance Operations             84,036        57,509        46.1%
                                          -------------   ----------
                        Total                $168,665     $193,615       -12.9%
                                          =============   ==========

         The decrease in gross premiums written from  reinsurance  operations is
primarily  attributable to the non-renewal of several large treaties  written in
1997.  Certain of the treaties were  non-renewed at the Company's option because
the price fell below levels at which the Company was willing to write  business,
and others were not renewed because the ceding companies were directly  affected
by  consolidation  activity in the industry.  Pro forma for the  elimination  of
these contracts,  gross premiums written from reinsurance operations for the six
months  ended June 30, 1998 were $77.4  million,  a decrease of 17.9% from $94.3
million for the same period in 1997.

                                       6

<PAGE>

         Net premiums  written for the six months ended June 30, 1998  decreased
30.6% to $101.5 million  compared to $146.3 million for the same period in 1997.
The decrease in both gross and net premiums written is principally  attributable
to the opportunistic underwriting of certain reinsurance accounts in 1997, which
did not renew for 1998, as well as the Company's  response to the persistence of
intense price competition in the reinsurance industry. This is offset in part by
the  continued  growth  of  the  Controlled  Source  Insurance  business,  which
increased 24.2% and 49.8% in gross and net premiums written, respectively,  from
the same period in 1997 as well as the addition of premiums  from the  Company's
two dedicated corporate capital vehicles which participate on syndicates managed
by Archer  (the  "Dedicated  Vehicles")  amounting  to $22.8  million  and $20.4
million  on a gross and net  basis,  respectively,  for the  first  half of 1998
compared  to $8.2  million  and $8.1  million  for the first  half of 1997.  Net
premiums  earned for the six months ended June 30, 1998 were $109.2  million,  a
decrease of 19.5% compared to $135.7 million for the same period in 1997.

         Loss and Loss Adjustment  Expenses.  The Company's  principal  expense,
loss and loss adjustment  expenses  ("LAE") related to the settlement of claims,
was $65.8  million  for the six months  ended June 30,  1998,  a 28.3%  decrease
compared to $91.8  million for the  comparable  period in 1997.  The decrease is
principally  attributable to the decrease in net premiums earned noted above and
the  decrease in the loss ratio noted below.  Net losses and LAE  expressed as a
percentage of net premiums earned (the loss and LAE ratio) improved to 60.3% for
the six months  ended June 30, 1998 from 67.7%  recorded  for the same period in
1997. The improvement of 7.4 percentage points in the loss and LAE ratio for the
six months  ended June 30,  1998 was a result of a change in the mix of business
as well as the benefits of new reinsurance programs,  including aggregate excess
of loss  reinsurance  treaties,  and the  enhancement  of  existing  reinsurance
programs.

         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 $29.6  million  for the six months  ended June 30,  1998  compared to $37.6
million for the same period in 1997.  Policy  acquisition  costs  expressed as a
percentage of net premiums  earned (the  acquisition  expense  ratio)  decreased
modestly to 27.1% from 27.7% in the first half of 1997.

         Other  Expenses.  Other expenses  related to  underwriting  operations,
which include underwriting and administrative  expenses,  were $10.3 million for
the six months ended June 30, 1998  compared to $8.2 million for the same period
in 1997.  Other  expenses  expressed  as a  percentage  of net  premiums  earned
increased  to 9.4% for the six months  ended June 30, 1998  compared to 6.1% for
the same period in 1997  resulting  primarily  from the reduced level of premium
volume.

         Net  Underwriting  Results.  For the six months ended June 30, 1998 the
Company's net  underwriting  result (net premiums  earned minus losses,  LAE and
underwriting expenses) increased to a net gain of $3.5 million compared to a net
underwriting  loss of $2.0  million  for the same period in 1997.  The  combined
ratio for the six  months  ended  June 30,  1998  computed  in  accordance  with
generally accepted  accounting  principles  improved to 96.8% compared to 101.5%
for the same period in 1997. Although the loss ratio component improved to 60.3%
for the six months  ended June 30, 1998 from 67.7%  recorded for the same period
in 1997, the expense ratio  increased to 36.5% for the six months ended June 30,
1998 from the 33.8%  recorded for the same period in 1997, for the reasons noted
above.

                                       7

<PAGE>

Service Operations
         Revenue from service  operations  decreased to $9.0 million for the six
months  ended June 30,  1998  compared  to $17.3  million for the same period in
1997,  principally  reflecting a reduction in profit  commissions at Archer as a
result of competitive market conditions at Lloyd's.

Corporate
         Interest and Amortization. Interest and amortization expenses were $5.3
million for the six months ended June 30, 1998  compared to $4.8 million for the
same period in 1997.  The  increase  was due  principally  to bank fees paid for
letters of credit used to support the Company's  underwriting  participation  on
syndicates  managed by Archer and an increase in variable interest rates on debt
denominated in pounds sterling.

Consolidated
         Net  Investment  Income and Net Realized  Capital  Gains.  Consolidated
after-tax net investment  income,  exclusive of realized and unrealized  capital
gains,  for the six months  ended June 30,  1998 was $17.0 million,  compared to
$15.2 million for the same period in 1997.  The carrying  value of the Company's
invested  assets and cash  increased  to $775.4  million  at June 30,  1998 from
$762.2 million at December 31, 1997 primarily due to the Company's  draw-down on
its revolving  credit  facility and changes in the market value of  investments.
The average  annual tax  equivalent  yield on invested  assets after  investment
expenses decreased to 6.31% for the first half of 1998 compared to 6.53% for the
same  period  in 1997  reflecting  the  lower  interest  rate  environment.  The
Company's  pro rata share of investment  income from the  Dedicated  Vehicles is
excluded  from this  calculation  because  the related  invested  assets are not
included in the Company's consolidated balance sheet.

         The Company  realized  net capital  gains of $60,000 for the six months
ended June 30, 1998 compared to net capital losses of $49,000 for the six months
ended June 30, 1997.

         Income Before Income Taxes and Minority Interest.  Income before income
taxes and minority interest  increased to $22.6 million for the six months ended
June 30,  1998  compared  to $19.8  million  for the same  period  in 1997.  The
increase  resulted  primarily from the improvement in net  underwriting  results
discussed  above,  offset,  in part,  by the  reduction  in income from  service
operations.

         Income Tax Expense.  The provision for Federal income taxes for the six
months ended June 30, 1998 increased to $6.9 million  compared with $5.9 million
for the same period in 1997.  The effective tax rate was 30.4% and 29.6% for the
six months ended June 30, 1998 and 1997,  respectively.  For both  periods,  the
effective  rate  is  below  the  statutory  rate of 35%  due to the  benefit  of
investments in tax-advantaged securities.

                                       8

<PAGE>

         Net Income.  The Company realized a net profit of $16.6 million for the
six months ended June 30, 1998  compared  with a net profit of $13.6 million for
the comparable 1997 period because of the factors discussed above.

Results of  Operations - Three Months  Ended June 30, 1998  Compared  With Three
Months Ended June 30, 1997:

         Revenues:  Total  revenues  for the three  months ended June 30, 1998
decreased  21.3% to $73.2 million, compared to  $93.0 million for the comparable
period in 1997.

         The  accompanying  table  summarizes gross and net premiums written and
total revenues for the periods indicated:
                                                Three Month Periods
                                                  Ended June 30,
                                          --------------------------------------
                                               1998                  1997
                                          ---------------         --------------
                                                      (in thousands)
Gross premiums written                           $86,806               $96,939
                                          ===============         ==============
Net premiums written                             $59,966               $76,350
                                          ===============         ==============
Premiums earned                                  $56,430               $73,890
Net investment income                             12,157                11,189
Net realized capital gains (losses)                 (39)                  (29)
Service and other revenue                          3,291                 6,900
Equity in net earnings of investees                1,323                 1,030
                                          ---------------         --------------
Total Revenues                                   $73,162               $92,980
                                          ===============         ==============

Underwriting Operations
         Gross Premiums  Written;  Net Premiums  Written;  Net Premiums  Earned.
Gross  premiums  written for the second  quarter of 1998 were $86.8  million,  a
decrease of 10.5% compared to the same period in 1997. The  distribution  of the
Company's gross premiums written among its business segments was as follows:
                                               Three Month Periods
                                                 Ended June 30,        % Change
                                             ----------------------  -----------
                                               1998          1997
                                             ---------    ----------
Gross Premiums Written from
   Reinsurance Operations                     $40,191      $62,072        -35.3%
Gross Premiums Written from
   Specialty Insurance Operations              46,615       34,867         33.7%
                                              --------    -----------
                                 Total        $86,806      $96,939        -10.5%
                                             =========    ===========

         The decrease in gross premiums written from  reinsurance  operations is
primarily  attributable to the non-renewal of several large treaties  written in
1997.  Certain of the treaties were  non-renewed at the Company's option because
the price fell below levels at which the Company was willing to write  business,
and others were not renewed because the ceding companies were directly  affected
by  consolidation  activity in the industry.  Pro forma for the  elimination  of
these  contracts,  gross premiums  written from  reinsurance  operations for the
three  months ended June 30, 1998 were $38.9  million,  a decrease of 26.2% from
$52.7 million for the same period in 1997.

                                       9

<PAGE>

         Net premiums written for the three months ended June 30, 1998 decreased
21.5% to $60.0  million  compared to $76.4  million for the same period in 1997.
The decrease in both gross and net premiums written is principally  attributable
to the opportunistic underwriting of certain reinsurance accounts in 1997, which
did not renew for 1998, as well as the Company's  response to the persistence of
intense price competition in the reinsurance industry. This is offset in part by
the  continued  growth  of  the  Controlled  Source  Insurance  business,  which
increased 10.3% and 18.9% in gross and net premiums written,  respectively,  for
the  second  quarter  of 1998  as well as the  addition  of  premiums  from  the
Dedicated  Vehicles which amounted to $17.2 million and $15.4 million on a gross
and net basis,  respectively,  for the second  quarter of 1998  compared to $8.2
million and $8.1  million,  respectively,  for the second  quarter of 1997.  Net
premiums  earned for the three months ended June 30, 1998 were $56.4 million,  a
decrease of 23.6% compared to $73.9 million for the same period in 1997.

         Loss and Loss Adjustment  Expenses.  The Company's  principal  expense,
loss and loss adjustment  expenses  ("LAE") related to the settlement of claims,
was $33.9  million for the three months  ended June 30,  1998, a 31.9%  decrease
compared to $49.8  million for the  comparable  period in 1997.  The decrease is
principally  attributable to the decrease in net premiums earned noted above and
the  decrease in the loss ratio noted below.  Net losses and LAE  expressed as a
percentage of net premiums earned (the loss and LAE ratio) improved to 60.1% for
the three months ended June 30, 1998 from 67.4%  recorded for the same period in
1997. The improvement of 7.3 percentage points in the loss and LAE ratio for the
three months ended June 30, 1998 was a result of a change in the mix of business
as well as the benefits of new reinsurance programs,  including aggregate excess
of loss  reinsurance  treaties,  and the  enhancement  of  existing  reinsurance
programs.

         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 $14.6  million for the three months  ended June 30, 1998  compared to $20.5
million for the same period in 1997.  Policy  acquisition  costs  expressed as a
percentage of net premiums earned (the  acquisition  expense ratio) decreased to
25.9% from 27.7% in the second quarter of 1997.

         Other  Expenses.  Other expenses  related to  underwriting  operations,
which include  underwriting and administrative  expenses,  were $6.0 million for
the three  months  ended June 30,  1998  compared  to $4.5  million for the same
period in 1997. Other expenses  expressed as a percentage of net premiums earned
increased to 10.7% for the three months ended June 30, 1998 compared to 6.1% for
the same period in 1997  resulting  primarily  from the reduced level of premium
volume.

         Net Underwriting  Results. For the three months ended June 30, 1998 the
Company's net  underwriting  result (net premiums  earned minus losses,  LAE and
underwriting expenses) increased to a net gain of $1.9 million compared to a net
underwriting  loss of $0.9  million  for the same period in 1997.  The  combined
ratio for the three  months  ended June 30,  1998  computed in  accordance  with
generally accepted  accounting  principles  improved to 96.7% compared to 101.2%
for the same period in 1997. Although the loss ratio component improved to 60.1%
for the three months ended June 30, 1998 from 67.4% recorded for the same period
in 1997,  the expense  ratio  increased to 36.6% for the three months ended June
30, 1998 from the 33.8%  recorded  for the same period in 1997,  for the reasons
noted above.

                                       10

<PAGE>

Service Operations
         Revenue from service operations decreased to $4.7 million for the three
months ended June 30, 1998 compared to $8.3 million for the same period in 1997,
principally  reflecting a reduction in profit  commissions at Archer as a result
of competitive market conditions at Lloyd's.

Corporate
         Interest and Amortization. Interest and amortization expenses were $2.6
million for the three  months  ended June 30, 1998  compared to $2.4 million for
the same period in 1997. The increase was due  principally to bank fees paid for
letters of credit used to support the Company's  underwriting  participation  on
syndicates  managed by Archer and an increase in variable interest rates on debt
denominated in pounds sterling.

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 June 30, 1998 was $8.6  million,  compared to
$7.9  million for the same period in 1997.  The  average  annual tax  equivalent
yield on invested assets after  investment  expenses  decreased to 6.13% for the
second  quarter  of 1998  compared  to 6.87% for the same  period  in 1997.  The
Company's  pro rata share of investment  income from the  Dedicated  Vehicles is
excluded  from this  calculation  because  the related  invested  assets are not
included in the Company's consolidated balance sheet.

         The  Company  realized  net  capital  losses of $39,000 for the quarter
ended June 30,  1998  compared  to net  capital  losses of $29,000 for the three
months ended June 30, 1997.

         Income Before Income Taxes and Minority Interest.  Income before income
taxes and  minority  interest  increased  to $11.5  million for the three months
ended June 30, 1998 compared to $10.2  million for the same period in 1997.  The
increase  resulted  primarily from the improvement in net  underwriting  results
discussed  above,  offset,  in part,  by the  reduction  in income from  service
operations.

         Income Tax  Expense.  The  provision  for Federal  income taxes for the
three months ended June 30, 1998  increased to $3.6 million  compared  with $3.1
million for the same period in 1997.  The effective tax rate was 31.2% and 30.2%
for the  three  months  ended  June 30,  1998 and 1997,  respectively.  For both
periods,  the  effective  rate is  below  the  statutory  rate of 35% due to the
benefit of investments in tax-advantaged securities.

         Net Income.  The Company  realized a net profit of $8.4 million for the
three months ended June 30, 1998  compared with a net profit of $6.9 million for
the comparable 1997 period because of the factors discussed above.

                                       11
<PAGE>

Liquidity and Capital Resources
         As a holding  company,  the Company's  assets consist  primarily of the
stock  of its  direct  and  indirect  subsidiaries.  The  Company's  cash  flow,
therefore,  depends  largely  on  dividends  and other  statutorily  permissible
payments  from its  operating  subsidiaries  whose  principal  sources  of funds
consist 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.
         Cash flow  from  operations  for  the first  six  months  of  1998  was
$7,759,000 compared to $2,942,000 for the six months ended June 30, 1997.
         Sales of available  for sale  investments  were $51.3 million and $43.2
million for the six months ended June 30, 1998 and 1997, respectively. There was
no unusual trading activity in either period.
         The   Company's    investment    portfolio    consists   primarily   of
investment-grade fixed maturity debt securities. At June 30, 1998, approximately
92.2% of the bond portfolio was rated A or better ("A-1" for  commercial  paper)
by Moody's.  While  uncertainties  exist regarding interest rates and inflation,
the Company  attempts to minimize  such risks and  exposures  by  balancing  the
duration of assets in its  investment  portfolio  with the duration of insurance
and  reinsurance  liabilities.  The current market value of the Company's  fixed
maturity  investments is not necessarily  indicative of their future  valuation.
The Company 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, 1998 was comprised  primarily of
U.S.  Treasury and  government  agency,  mortgage  pass-through  securities  and
corporate and municipal bonds.
         Stockholder's  equity increased  approximately 7.6% to  $289.4  million
at June 30, 1998 from $269.1 million at December 31, 1997.
         The  Company's  outstanding  debt as of June 30,  1998  includes  $48.8
million in principal  amount of 10 1/4% Senior Notes Due 2004 and  approximately
$5.6 million  (denominated  in pounds  sterling) of Loan Notes due June 2002 and
$45.8 million under credit  facilities  with by First Union National Bank N. A.,
as agent (the "First Union Credit Facility").  The Loan Notes bear interest at a
rate per annum equal to one percent below the Sterling London Interbank  Offered
Rate. The First Union Credit Facility  provides term loans of approximately  $50
million (a  portion  of which is  denominated  in pounds  sterling)  and a $60.0
million  revolving  credit  facility.  The Company's  ratio of long-term debt to
total  capitalization  at June 30, 1998 was 27.2%  compared to 27.9% at December
31, 1997.
         The agreements  governing the foregoing debt obligations  significantly
restrict the ability of the Company's  operating  subsidiaries  to make dividend
and other payments to the Company.
         Dividend payments by the Company's  operating  subsidiaries are subject
to limits under the laws of the States of Minnesota and New York,  respectively.
Up to $26.3  million is available  under the laws of the State of Minnesota  for
the payment of dividends by Chartwell Reinsurance without regulatory approval in
1998. No dividends have been declared or paid by Chartwell  Reinsurance in 1998.
Under New York law,  the  maximum  dividend  payable  by  INSCORP  to  Chartwell
Reinsurance  in 1998 without  regulatory  approval is $11.4  million.  Moreover,
notwithstanding the receipt of any dividend from INSCORP,  Chartwell Reinsurance
may make dividend payments only to the extent permitted under Minnesota law.

                                       12
<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
Minnesota and New York  regulators  have discretion to limit further the payment
of dividends by insurance companies domiciled in their states.

PART II  OTHER INFORMATION

         Item 1.  Legal Proceedings.

     Reference is made to Note 3, "Contingencies," of the Notes to the Condensed
Consolidated Financial Statements included in Part I, Item 1 of this report.

         Item 5 - 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











                                       13


<PAGE>





Signatures




     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned 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 12, 1998

                                       14