UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-Q/A

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For The Quarterly Period Ended March 31, 1999

                        Commission File Number: 000-24366

                               GORAN CAPITAL INC.
             (Exact name of registrant as specified in its charter)

CANADA                                                         Not Applicable
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification No.)


                              181 University Avenue
                               Box 11, Suite 1101
                            Toronto, Ontario M5H 3M7

                               4720 Kingsway Drive
                           Indianapolis, Indiana 46205
                    (Address of Principal Executive Offices)

Registrant's telephone number, including area code:  (416) 594-1155 (Canada)
                                                     (317) 259-6400 (U.S.)

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


As of March 31, 1999, there were 5,876,398  shares of Registrant's  common stock
issued and outstanding exclusive of shares held by Registrant.



<PAGE>

                                Form 10-Q/A Index
                      For The Quarter Ended March 31, 1999
                                                                       Page
                                                                      Number

PART I   FINANCIAL INFORMATION

Item 1   Financial Statements

         Unaudited Consolidated Financial Statements:
         Unaudited Consolidated Balance Sheets at
         March 31, 1999 and December 31, 1998.........................      3

         Unaudited Consolidated Statements of Earnings
         for the Three Months Ended March 31, 1999 and 1998...........      4

         Unaudited Consolidated Statements of Shareholders'
         Equity.......................................................      5

         Unaudited Consolidated Statements of Cash Flows
         for the Three Months Ended March 31, 1999 and 1998...........      6

         Condensed Notes to Unaudited Consolidated Financial
         Statements...................................................      7

Item 2   Management's Discussion and Analysis of Financial
         Condition and Results of Operations..........................      8

PART II  OTHER INFORMATION............................................     17

SIGNATURES............................................................     19

INDEX TO EXHIBITS
         Exhibit 11 - Computation of Per Share Earnings...............     20



<PAGE>

                         PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
GORAN CAPITAL INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Canadian GAAP, stated in thousands of U.S. dollars)
<TABLE>
<CAPTION>
                                                                                 March 31,       December 31,
                                                                                   1999              1998
ASSETS                                                                           Restated

<S>                                                                              <C>               <C>
Cash and investments                                                             $252,662          $253,718
                                                                                  -------           -------
Accounts receivable
  Premiums receivable                                                             189,108           121,328
  Income taxes recoverable                                                         18,868            12,711
  Due from related parties                                                          3,136             3,495
  Accrued and other receivables                                                     2,706             2,362
                                                                                  -------           -------
        TOTAL ACCOUNTS RECEIVABLE                                                 213,818           139,896
Reinsurance recoverable on paid and unpaid claims                                  60,459            67,885
Prepaid reinsurance premiums                                                       78,378            17,486
Capital assets, net of accumulated depreciation                                    19,688            19,350
Deferred policy acquisition costs                                                  15,352            16,332
Deferred income taxes                                                               2,544             5,825
Intangibles                                                                        45,695            46,300
Other assets                                                                        7,781             4,197
                                                                                  -------           -------
        TOTAL ASSETS                                                             $696,377          $570,989
                                                                                  =======           =======
LIABILITIES
Accounts Payable:
  Due to insurance companies                                                     $100,873           $12,353
  Accrued and other payables                                                       26,292            22,283
                                                                                  -------           -------
                                                                                  127,165            34,636
Outstanding claims                                                                184,466           207,432
Unearned premiums                                                                 176,022           110,665
Notes payable                                                                       4,520            13,744
                                                                                  -------           -------
                                                                                  492,173           366,477
                                                                                  -------           -------
Minority interest:
  Equity in net assets of subsidiaries                                             19,463            19,787
  Preferred securities                                                            135,000           135,000
                                                                                  -------           -------
                                                                                  154,463           154,787
                                                                                  -------           -------
SHAREHOLDERS' EQUITY                                                               49,741            49,725
                                                                                  -------           -------
        TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                               $696,377          $570,989
                                                                                  =======           =======

See notes to consolidated financial statements
</TABLE>

                                      -3-

<PAGE>

GORAN CAPITAL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
(Canadian GAAP, stated in thousands of U.S. dollars, except per share data)
<TABLE>
<CAPTION>


                                                                                   Three Months Ended
                                                                                        March 31,
                                                                                   1999           1998
                                                                                 Restated

<S>                                                                              <C>            <C>
Gross premiums written                                                           $152,022       $177,196
Less ceded premiums                                                                84,751         78,835
                                                                                  -------        -------
Net premiums written                                                               67,271         98,361
Change in net unearned premiums                                                       147         26,476
                                                                                  -------        -------
Net premiums earned                                                                67,124         71,885
Fee income                                                                          4,464          5,120
Net investment income                                                               3,508          3,176
Net realized capital gain (loss)                                                  (1,322)          1,968
                                                                                  -------        -------
      Total revenues                                                               73,774         82,149
                                                                                  -------        -------
Net claims incurred                                                                58,995         55,302
General and administrative expenses                                                11,630         14,653
Interest expense                                                                       74            183
Amortization of intangibles                                                           605            511
                                                                                  -------        -------
      Total expenses                                                               71,304         70,649
                                                                                  -------        -------
      Earnings before undernoted items                                              2,470         11,500

Provision for income taxes                                                            616          4,023
Distribution of preferred securities, net of tax                                    2,055          2,130
Minority interest                                                                    (324)         1,645
                                                                                  -------        -------
Earnings from continuing operations                                                   123          3,702
Loss from discontinued operations                                                      --           (185)
                                                                                  -------        -------
      Net earnings                                                                $   123        $ 3,517
                                                                                  =======        =======
Net earnings per share - basic                                                      $0.02          $0.61
                                                                                     ====           ====
Net earnings per share - fully diluted                                              $0.02          $0.59
                                                                                     ====           ====

See notes to consolidated financial statements
</TABLE>

                                      -4-

<PAGE>

GORAN CAPITAL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Canadian GAAP, stated in thousands of U.S. dollars)
<TABLE>
<CAPTION>

                                                                           Cumulative       Retained          Total
                                             Common      Contributed       Translation      Earnings      Shareholders'
                                             Stock         Surplus         Adjustment      (Deficit)         Equity

<S>                                         <C>              <C>              <C>           <C>              <C>
Balance at December 31, 1997                $18,010          $2,775           $(292)        $39,839          $60,332

Issuance of common shares                       311             ---             ---             ---              311
Change in cumulative
  translation adjustment                        ---             ---            (103)            ---             (103)
Net earnings                                    ---             ---             ---           3,517            3,517
                                             ------           -----             ---          ------           ------
Balance at March 31, 1998                   $18,321          $2,775           $(395)        $43,356          $64,057
                                             ======           =====             ===          ======           ======

Balance at December 31, 1998                $19,317          $2,775            $252         $27,381          $49,725

Issuance of common shares                       ---             ---             ---             ---              ---
Change in cumulative
  translation adjustment                        ---             ---            (107)            ---             (107)
Net earnings (restated)                         ---             ---             ---             123              123
                                             ------           -----             ---          ------           ------
Balance at March 31, 1999                   $19,317          $2,775            $145         $27,504          $49,741
                                             ======           =====             ===          ======           ======

See notes to consolidated financial statements
</TABLE>


                                      -5-

<PAGE>

GORAN CAPITAL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN CASH RESOURCES
(Canadian GAAP, stated in thousands of U.S. dollars)
<TABLE>
<CAPTION>

                                                                                          Three Months Ended
                                                                                                March 31,
                                                                                            1999        1998
                                                                                          Restated
<S>                                                                                       <C>          <C>
CASH PROVIDED BY OPERATING ACTIVITIES
  Net earnings for the period                                                              $ 123       $3,517
  Items not affecting cash resources:
   Amortization                                                                            1,426        1,167
   Loss (gain) on disposal of investments                                                  1,322       (1,968)
   Minority interest in net income of consolidated subsidiary                               (324)       1,645
   Decrease (increase) in reinsurance recoverable on paid and
     unpaid claims                                                                         7,426       26,444
   Decrease (increase) in prepaid reinsurance premiums                                   (60,892)     (60,275)
   Decrease (increase) in other assets                                                    (9,833)        (516)
   Decrease (increase) in deferred policy acquisition costs                                  980       (6,527)
   Decrease (increase) in goodwill                                                            --          (74)
   Increase (decrease) in deferred income taxes                                            3,281         (430)
   Increase (decrease) in unearned premiums                                               65,357       91,351
   Increase (decrease) in outstanding losses                                             (22,966)     (11,453)
   Decrease (increase) in accounts receivable                                            (67,780)     (75,394)
   Increase (decrease) in accounts payable                                                92,529       64,156
                                                                                          ------       ------
                                                                                          10,649       31,643
                                                                                          ------       ------
FINANCING ACTIVITIES:
  Increase (reduction) of borrowed funds                                                  (9,224)      (1,613)
  Increase (decrease) in minority interest                                                    --        1,360
  Issue of share capital                                                                      --          311
                                                                                          ------       ------
                                                                                          (9,224)          58
                                                                                          ------       ------
INVESTING ACTIVITIES:
  Net purchase of marketable securities                                                  (10,340)     (10,329)
  Net purchase of capital assets                                                            (970)      (2,869)
  Other                                                                                       --         (350)
                                                                                          ------       ------
                                                                                         (11,310)     (13,548)
                                                                                          ------       ------
Change in cash resources during the period                                                (9,885)      18,153
Cash resources, beginning of period                                                       42,759       36,557
                                                                                          ------       ------
Cash resources, end of period                                                            $32,874      $54,710
                                                                                          ======       ======
Cash resources are comprised of:
  Cash                                                                                   $ 4,615      $28,273
  Short-term investments                                                                  28,259       26,437
                                                                                          ------       ------
                                                                                         $32,874      $54,710
                                                                                          ======       ======
See notes to consolidated financial statements
</TABLE>

                                      -6-


<PAGE>

                               GORAN CAPITAL INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                    For The Three Months Ended March 31, 1999

NOTES TO THE CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1)      The  accompanying  unaudited  condensed  financial  statements  have
         been prepared in accordance with the  instructions to Form 10-Q and do
         not include all of the information and footnotes 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 the  interim  periods are not
         necessarily  indicative  of the results  that may be expected  for the
         year ended December 31, 1999.  Interim financial  statements should be
         read in  conjunction  with  the  Company's  annual  audited  financial
         statements.

         These unaudited  consolidated  financial statements have been prepared
         by the Company in  accordance  with  accounting  principles  generally
         accepted in Canada ("CDN GAAP").  These principles also conform in all
         material respects with accounting principles generally accepted in the
         United  States ("US GAAP") except as disclosed in Note 2. All material
         intercompany amounts have been eliminated.

(2)      UNITED STATES ACCOUNTING PRINCIPLES

         These unaudited consolidated financial statements have been prepared in
         accordance with CDN GAAP. The differences  between CDN GAAP and US GAAP
         are as follows:
         <TABLE>
         <CAPTION>

                                                                                      March 31,      December 31,
                                                                                        1999            1998
                                                                                      Restated

         <S>                                                                           <C>             <C>
         Shareholders' equity in accordance with Canadian GAAP                         $49,741         $49,725

         Add (deduct) effect of difference in accounting for:
            Receivables from sale of capital stock                                      (1,377)         (1,377)
            Unrealized gain (loss) on investments*                                         251           1,176
                                                                                        ------          ------
         Shareholders' equity in accordance with US GAAP                               $48,615         $49,524
                                                                                        ======          ======
         </TABLE>

           *Note: The  increase in  shareholders'  equity  attributable  to the
                  unrealized  gain of $251 and  $1,176  at March  31,  1999 and
                  December  31,  1998,  respectively,  are net of deferred  tax
                  expense (recovery) of $(64) and $679, and related minority
                  interest (recovery) of $(39) and $416.

  (3)    The Company writes nonstandard insurance  business  through  agents in
         California where some of the agents charge  administration fees on top
         of the  premium  to these  customers.  The  California  Department  of
         Insurance  (CDOI) in early 1998  indicated  that such  broker fees are
         part of premium and has requested  reimbursement to the  policyholders
         by Superior  Insurance  Company.  The CDOI has indicated it may assess
         the Company to repay fees the agents  received  from the insured.  The
         Company did not  receive  any of these  broker fees and has carried on
         the  insurance  practice  that is  normal  for  many of the  insurance
         companies  writing  automobile  insurance  in  California.  The  total
         amount,  if CDOI  proceeds  and  requires  all fees  returned  with no
         recovery from agents,  is $3 million.  As the ultimate outcome of this

                                      -7-

<PAGE>

         potential  assessment  is not deemed  probable,  the  Company  has not
         accrued any amount in its consolidated financial statements.  Although
         the  assessment  has not been  formally made by the CDOI at this time,
         the Company  believes it will prevail and will  vigorously  defend any
         potential assessment.

         As part of an agreement by the Company to assume the  multi-peril  and
         crop  operations of CNA during 1998,  the Company  agreed to reimburse
         CNA for certain direct overhead costs incurred by CNA during the first
         quarter of 1998 before the Company assumed this book of business.  CNA
         has  requested  reimbursement  of $2.0  million in expenses  which the
         Company  believes  should only be $1.1  million.  Negotiations  are in
         process to settle this dispute. The Company fully expects the ultimate
         settlement will  approximate  $1.1 million and has therefore,  accrued
         this  amount in its  consolidated  financial  statements  at March 31,
         1999.

(4)      On April 19, 1999, the Company  guaranteed  loans in the amount of
         $2,505,000,  granted by a third party lender to certain  shareholders,
         the  proceeds  of which  were  used to repay  the  Company  for  loans
         previously  made to the  shareholders.  The guarantees were secured by
         the pledge of 715,800 shares of Symons  International  Group,  Inc., a
         67% owned subsidiary of the Company.

(5)      These  restated  financials  contain a correction of an  accounting
         error.   The  error  related  to  the  recording  of  the  retroactive
         reinsurance   recoverable  pertaining  to  AgPI(R)  in  the  incorrect
         accounting  period. The correction of the error defers the recognition
         of a gain on a reinsurance  recovery from first quarter 1999 to second
         quarter  1999.  The amount of the  deferred  gain is  $4,668,000.  The
         Company  recorded an increase in loss and loss  adjustment  expense of
         $4,668,000 due to the deferral of the gain which reduced net income by
         $2,045,000  or $0.35  per  share  (basic),  net of  income  taxes  and
         minority interest.

ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS OF THE COMPANY

The Company  underwrites and markets  nonstandard  private passenger  automobile
insurance and crop insurance.

Nonstandard Automobile Insurance Operations

     The Company, through its wholly-owned subsidiaries,  Pafco and Superior, is
engaged in the writing of insurance  coverage on automobile  physical damage and
liability  policies  for  "nonstandard  risks".  Nonstandard  insureds are those
individuals who are unable to obtain insurance  coverage through standard market
carriers  due  to  factors  such  as  poor  premium  payment  history,   driving
experience,  record  of  prior  accidents  or  driving  violations,   particular
occupation or type of vehicle.  The Company  offers several  different  policies
which are  directed  towards  different  classes of risk within the  nonstandard
market.  Premium rates for nonstandard risks are higher than for standard risks.
Since it can be viewed as a residual market, the size of the nonstandard private
passenger automobile insurance market changes with the insurance environment and
grows when the standard coverage becomes more restrictive.  Nonstandard policies
have relatively short policy periods and low limits of liability. Due to the low
limits of coverage,  the period of time that elapses  between the occurrence and
settlement of losses under nonstandard policies is shorter than many other types
of  insurance.   Also,  since  the  nonstandard  automobile  insurance  business
typically   experiences  lower  rates  of  retention  than  standard  automobile

                                      -8-

<PAGE>

insurance,   the  number  of  new  policyholders   underwritten  by  nonstandard
automobile insurance carriers each year is substantially greater than the number
of new policyholders underwritten by standard carriers.

Crop Insurance Operations

General

The three  principal  components of the Company's  crop  insurance  business are
Multi-Peril Crop Insurance ("MPCI") and private named peril, crop hail insurance
and fee based  services to farmers.  Crop  insurance  is purchased by farmers to
reduce  the risk of crop  loss from  adverse  weather  and other  uncontrollable
events.  Farms are subject to drought,  floods and other natural  disasters that
can cause  widespread  crop losses and, in severe  cases,  force  farmers out of
business. Historically, one out of every twelve acres planted by farmers has not
been harvested  because of adverse weather or other natural  disasters.  Because
many farmers  rely on credit to finance  their  purchases  of such  agricultural
inputs as seed, fertilizer,  machinery and fuel, the loss of a crop to a natural
disaster  can reduce  their  ability to repay these loans and to find sources of
funding for the following year's operating expenses.

The Company,  like other  private  insurers  participating  in the MPCI program,
generates revenues from the MPCI program in two ways. First, it markets,  issues
and administers policies, for which it receives administrative fees; and second,
it  participates in a  profit-sharing  arrangement in which it receives from the
government a portion of the aggregate profit, or pays a portion of the aggregate
loss,  in respect of the  business it writes.  The Company  writes MPCI and crop
hail insurance through 2,007 independent agencies in 43 states.

In addition to MPCI, the Company offers stand alone crop hail  insurance,  which
insures  growing  crops  against  damage  resulting  from hail  storms and which
involves no federal  participation,  as well as its  proprietary  product  which
combines the application and  underwriting  process for MPCI and hail coverages.
This  product  tends to produce less  volatile  loss ratios than the stand alone
product since the combined product  generally insures a greater number of acres,
thereby  spreading the risk of damage over a larger insured area.  Approximately
60% of the  Company's  hail  policies  are  written  in  combination  with MPCI.
Although  both crop hail and MPCI provide  coverage  against hail damage,  under
crop hail coverages farmers can receive payments for hail damage which would not
be severe enough to require a payment under an MPCI policy. The Company believes
that  offering  crop hail  insurance  enables it to sell more  policies  than it
otherwise would.

In addition to crop hail  insurance,  the Company also sells  insurance  against
crop damage from other  specific  named perils.  These  products  cover specific
crops and are  generally  written on terms that are specific to the kind of crop
and farming  practice  involved and the amount of actuarial data available.  The
Company plans to seek  potential  growth  opportunities  in this niche market by
developing  basic policies on a diverse number of named crops grown in a variety
of geographic  areas and to offer these  policies  primarily to large  producers
through certain select agents.

The fee income business is primarily  services to farmers for global positioning
grid mapping of their farm and soil  sampling to enhance the growing  conditions
of the crops.

AgPI(R) is business interruption  insurance that protects businesses that depend

                                      -9-

<PAGE>

upon a steady flow of a crop (or crops) to stay in business.  This protection is
available to those involved in agribusiness who are a step beyond the farm gate,
such as elevator operators, custom harvesters,  cotton gins and other processing
businesses that are dependent upon a single supplier of products, (i.e., popping
corn).

These businesses have been able to buy normal business interruption insurance to
protect  against on-site  calamities such as a fire, wind storm or tornado.  But
until now, they have been totally  unprotected by the insurance industry if they
encounter a production shortfall in their trade area which limited their ability
to bring raw  materials  to their  operation.  AgPI(R)  allows the  agricultural
business to protect  against a disruption in the flow of the raw materials these
businesses  depends on. AgPI(R) was formally  introduced at the beginning of the
1998 crop year.

GeoAgPLUS(TM)  provides  to the farmer  measuring,  gridding  and soil  sampling
services  combined with fertility maps and the software that is necessary to run
precision  farming  programs.  Grid soil sampling,  when combined with precision
farming  technology,  allows  the  farmer  to apply  just the  right  amount  of
fertilization, thus balancing soil nutrients for a maximum crop yield. Precision
farming  technology  increases  the  yield to the  farmer,  reduces  the cost of
unnecessary  fertilization and enhances the environment by reducing overflows of
fertilization  into the ecosystem.  Geo  AgPLUS(TM) is an IGF Insurance  Company
trademarked  precision  farming  division  that is now  marketing  its fee based
services to the farmer.

Certain Accounting Policies for Crop Insurance Operations

MPCI is a  government-sponsored  program with accounting treatment which differs
in certain  respects from the more traditional  property and casualty  insurance
lines.  For  income  statement  purposes  under  generally  accepted  accounting
principles,  gross  premiums  written  consist of the  aggregate  amount of MPCI
premiums  paid by farmers for buy-up  coverage  (MPCI  coverage in excess of CAT
Coverage  - the  minimum  available  level of MPCI  Coverage),  and any  related
federal premium subsidies,  but do not include MPCI premium on CAT Coverage.  By
contrast,  net premiums  written do not include any MPCI  premiums or subsidies,
all of which are deemed to be ceded to the Federal  Crop  Insurance  Corporation
(FCIC) as a reinsurer.  The  Company's  profit or loss from its MPCI business is
determined  after the crop season ends on the basis of a complex  profit sharing
formula  established  by law and the FCIC.  For  generally  accepted  accounting
principles income statement purposes,  any such profit or loss sharing earned or
payable by the Company is treated as an adjustment to commission  expense and is
included in policy acquisition and general and administrative expenses.

The Company also  receives  from the FCIC (i) an expense  reimbursement  payment
equal to a percentage of gross premiums  written for each Buy-Up Coverage policy
it writes ("Buy-Up Expense Reimbursement Payment") and (ii) an LAE reimbursement
payment equal to 13.0% of MPCI Imputed  Premiums for each CAT Coverage policy it
writes  (the "CAT LAE  Reimbursement  Payment").  For 1998 and 1997,  the Buy-Up
Expense Reimbursement Payment has been set at 27% and 29%, respectively,  of the
MPCI Premium.  For generally  accepted  accounting  principles  income statement
purposes,  the Buy-Up Expense Reimbursement Payment is treated as a contribution
to income and reflected as an offset against policy  acquisition and general and
administrative  expenses.  The CAT LAE  Reimbursement  Payment  is,  for  income
statement  purposes,  recorded as an offset against LAE, up to the actual amount
of LAE incurred by the Company in respect of such policies, and the remainder of
the payment, if any, is recorded as Other Income.

                                      -10-

<PAGE>

In June 1998,  the United States  Congress  passed  legislation  which  provided
permanent funding for the crop insurance industry.  However,  beginning with the
1999 MPCI crop year,  the Buy-Up  Expense  Reimbursement  Payment was reduced to
24.5%,  the CAT LAE  Reimbursement  Payment  was  reduced to 11% and the $60 CAT
coverage fee will no longer go to the insurance companies.

The  Company  expects to more than offset  these  reductions  through  growth in
non-federally  subsidized programs such as AgPI(R) and Geo AgPLUS(TM)  initiated
in 1998.  The  Company  has also been  working to reduce  its  costs.  While the
Company  fully  believes it can more than offset these  reductions,  there is no
assurance  the  Company  will be  successful  in its  efforts  or  that  further
reductions in federal reimbursements will not continue to occur.

In 1996, the Company instituted a policy of recognizing (i) 35% of its estimated
MPCI gross premiums written for each of the first and second  quarters,  20% for
the third quarter and 10% for the fourth quarter, (ii) commission expense at the
applicable  rate of MPCI gross  premiums  written  recognized  and (iii)  Buy-Up
Expense  Reimbursement  at the applicable  rate of MPCI gross  premiums  written
recognized  along with normal  operating  expenses  incurred in connection  with
premium writings.  In the third quarter,  if a sufficient volume of policyholder
acreage  reports have been received and processed by the Company,  the Company's
policy is to  recognize  MPCI gross  premiums  written for the first nine months
based on a re-estimate which takes into account actual gross premiums processed.
If an insufficient  volume of policies has been processed,  the Company's policy
is to recognize in the third quarter 20% of its full year estimate of MPCI gross
premiums written,  unless other circumstances require a different approach.  The
remaining  amount of gross premiums written is recognized in the fourth quarter,
when  all  amounts  are  reconciled.   The  Company  also  recognizes  the  MPCI
underwriting  gain or loss during each quarter,  reflecting  the Company's  best
estimate of the amount of such gain or loss to be recognized  for the full year,
based on, among other things,  historical results,  plus a provision for adverse
developments.  In the third and  fourth  quarters,  a  reconciliation  amount is
recognized for the  underwriting  gain or loss based on final premium and latest
available loss information.

                                      -11-


<PAGE>

Results of Operations
<TABLE>
<CAPTION>
                                                                                     For the three months
                                                                                        ended March 31,
                                                                                      1999          1998
                                                                                    Restated

<S>                                                                                 <C>           <C>
NONSTANDARD AUTOMOBILE INSURANCE OPERATIONS:
  Gross premiums written                                                            $61,171       $89,976
                                                                                     ======        ======
  Net premiums written                                                              $62,526       $82,267
                                                                                     ======        ======
  Net premiums earned                                                               $65,396       $68,323
  Fee income                                                                          4,521         4,155
  Net investment income                                                               3,164         2,801
  Net realized gain (loss)                                                           (1,382)        1,968
                                                                                     ------        ------
        TOTAL REVENUES                                                               71,699        77,247
                                                                                     ------        ------
  Losses and loss adjustment expenses                                                51,313        53,146
  Policy acquisition and general and administrative expenses                         19,595        18,123
                                                                                     ------        ------
        TOTAL EXPENSES                                                               70,908        71,269
                                                                                     ------        ------
  Earnings before income taxes                                                      $   791        $5,978
                                                                                     ======         =====
GAAP RATIOS (Nonstandard Automobile Only):
  Loss and LAE Ratio                                                                   78.5%         77.8%
  Expense ratio, net of billing fees                                                   23.0          20.4
                                                                                       ----          ----
  Combined ratio                                                                      101.5%         98.2%
                                                                                      =====          ====

CROP INSURANCE OPERATIONS:
  Gross premiums written                                                            $90,723       $86,175
                                                                                     ======        ======
  Net premiums written                                                              $ 1,613       $17,294
                                                                                     ======        ======
  Net premiums earned                                                               $(1,060)         $161
  Fee income                                                                            (59)          963
  Net investment income                                                                  57            53
                                                                                     ------        ------
        TOTAL REVENUES                                                               (1,062)        1,177
                                                                                     ------        ------
  Losses and loss adjustment expenses                                                 5,174            59
  Policy acquisition and general and administrative expenses(1)                      (8,008)       (5,016)
  Amortization of intangibles                                                            95            --
  Interest expense                                                                       74           183
                                                                                     ------         -----
        TOTAL EXPENSES                                                               (2,665)       (4,774)
                                                                                     ------         -----
  Earnings before income taxes                                                      $ 1,603        $5,951
                                                                                     ======         =====
</TABLE>

(1)  Negative  crop  expenses  are caused by  inclusion  of MPCI expense
     reimbursement and underwriting gain.

Net Earnings

For the three months ended March 31, 1999 as restated,  the Company recorded net
earnings  of  $123,000  or $0.02  per share  (basic).  This is  approximately  a
decrease from 1998 comparable amounts of $3,517,000 or $0.61 per share (basic).

These restated financials contain a correction of an accounting error. The error
related to the recording of the retroactive  reinsurance  recoverable pertaining

                                      -12-

<PAGE>

to AgPI(R) in the  incorrect  accounting  period.  The  correction  of the error
defers the  recognition  of a gain on a reinsurance  recovery from first quarter
1999 to second quarter 1999. The amount of the deferred gain is $4,668,000.  The
Company  recorded an increase in loss and loss adjustment  expense of $4,668,000
due to the deferral of the gain which  reduced net income by $2,045,000 or $0.35
per share (basic), net of income taxes and minority interest.

Consolidated Gross Premiums Written

Gross premiums written for the nonstandard  automobile  segment  decreased 32.0%
for the three  months  ended March 31, 1999  compared to the three  months ended
March 31, 1998.  This  represents  an 8.8% decrease in premiums from the average
premium volume in the last half of 1998. The primary reasons for this decline in
volume has been the  downsizing  by the  Company of its  nonstandard  automobile
business in certain competitive  markets, the loss of some business prior to the
hiring of a new product  development team and the slowing of new business during
the conversion by the Company to a new operating computer system.

Gross premiums  written for the crop segment were  comparable to those of a year
ago. Crop premiums for the three months ended March 31 are as follows:

                                                    1999           1998
                                                    ----           ----

CAT imputed                                       $16,312        $16,319
MPCI                                               62,280         60,743
Crop hail and named perils                         28,443         25,431
                                                  -------        -------
                                                  107,035        102,493
Less: CAT imputed                                 (16,312)       (16,319)
                                                  -------        -------
                                                  $90,723        $86,174
                                                  =======        =======

Remaining gross written premiums  represent  commercial  business which is ceded
100% to another subsidiary, Granite Reinsurance Company Ltd.

MPCI  premiums are  considered  to be 100% ceded to the federal  government  for
accounting purposes.  Quota share cession rates for other lines of insurance for
the three months ended March 31 are as follows:

                                                 1999             1998
                                                 ----             ----

Nonstandard automobile                             0%              10%
Crop hail                                         62%              25%
Named peril                                       50%              50%
AgPI                                              62%               0%

Fee income decreased 12.8% for the three months ended March 31, 1999 as compared
to the  corresponding  period of the prior year. Such decrease was primarily due
to the  discontinuance  by the government of the CAT policy fee partially offset
by increased penetration of policy issuance fees on the automobile book.

Net investment  income increased 10.5% for the three months ended March 31, 1999
as compared to the corresponding period of the prior year due to the transfer of
invested  assets  to  interest   bearing  fixed  maturities  from  equity  based
investments since the first quarter of 1998. The realized loss was primarily due
to tax loss  related  selling of certain  securities  as well as some selling to

                                      -13-

<PAGE>

reduce the average duration of the fixed income portfolio.

The loss ratio for the nonstandard automobile segment for the three months ended
March 31, 1999 was 78.5%  comparable  to 77.8% for the three  months ended March
31,  1998 . Crop hail loss ratios in the first  quarter do not have  significant
impact on consolidated earnings.

These  restated  financials  contain a  reclassification  of  reinsurance  ceded
premium   related  to  AgPI(R)   from   policy   acquisition   and  general  and
administrative  expense  to  ceded  premiums.  The  amount  of  the  reclass  is
$4,668,000  with no impact on net  income.  Policy  acquisition  and general and
administrative  expenses have  decreased to  $11,630,000 or 17.3% of net premium
earned for the three  months  ended March 31, 1999  compared to  $14,653,000  or
20.4% of net premium earned in the  corresponding  period of 1998. The reduction
in expense related to the  reclassification  was partially offset by nonstandard
auto general and  administrative  expenses  which rose due to  increased  use of
temporary help to resolve processing  backlogs and lower expense recoveries from
reinsurers due to the elimination of quota share reinsurance in 1999.

Crop segment expenses include agent commissions, stop loss reinsurance costs and
operating  expenses  which are offset by MPCI  Expense  Reimbursements  and MPCI
Underwriting  Gain. The negative expense results primarily from the inclusion of
the MPCI Underwriting Gain.

Amortization of intangibles  includes goodwill from the acquisition of Superior,
additional  goodwill from the  acquisition of the minority  interest  portion of
GGSH and the acquisition of NACU, debt or preferred  security issuance costs and
organizational costs.

Income tax  expense was 24.9% and 35.0% of pre-tax  income for the three  months
ended  March 31,  1999 and 1998.  The  decrease  in the  average  rate  resulted
primarily from the earning of income in nontaxable jurisdictions.

Distributions  on Preferred  Securities  are calculated at a rate of 9.5% net of
federal income taxes.

Liquidity and Capital Resources

The  Company's  total  assets of  $696,377,000  at March 31,  1999 as  restated,
increased  $125,388,000  from  $570,989,000 as of December 31, 1998. The primary
reasons for this increase were  increased  premium  receivable  and  reinsurance
payable  balances in the crop business due to the normal  accumulation  of these
balances  during the year and settlement in the fall of each year,  coincidental
with fall harvest.

Net cash provided by operating  activities  reduced to  $10,649,000 in 1999 from
$31,643,000 in 1998 due to lower premium  volume.  This additional cash flow was
used  to  increase  invested  assets.   Financing   activities  included  normal
activities on the Company's line of credit for crop operations.

                                      -14-

<PAGE>

Year 2000 Compliance

General

TheYear 2000 Project  ("Project")  addresses the inability of computer  software
and hardware to  distinguish  between the year 1900 and the year 2000.  In 1996,
the Company began a company-wide replacement of hardware and software systems to
address  this and other  issues.  The Company is  utilizing  systems  from Dell,
Hewlett Packard, Sun Systems, Compaq, Oracle and ZIM as well as certain software
conversions  using Java.  The new  hardware is in place and  operational  at all
subsidiaries.  The  software  systems  are  in  place  in our  nonstandard  auto
operations and are being  implemented  on a  state-by-state  basis.  The Company
first began  implementing  the new  nonstandard  auto operating  system in those
states in which the Company  writes annual  policies  (annual  states).  100% of
those annual states are currently in production. The remaining non-annual states
are  scheduled to be completed by June 30, 1999.  The Y2K issue does not have an
effect on the crop  operations  until October 1, 1999. The Company is converting
non-compliant crop operating  systems,  through  programmatic  means, into a Y2K
compliant  environment.  The crop operation has completed the conversion and the
testing phase of the Project.  A number of the  Company's  other IT projects are
being delayed or completely eliminated due to the implementation of the Project.

Project

The  Company  has divided  the  Project  into three  sections -  Infrastructure,
Applications/Business  Systems  and Third  Party  Suppliers.  There  are  common
portions of each of these divisions  which are: (1)  identifying Y2K items;  (2)
assigning a priority  for those items  identified;  (3)  repairing  or replacing
those items; (4) testing the fixes; and (5) designing a contingency and business
continuation plan for each subsidiary.

In February 1998, all items had been identified and the plans for replacement or
repair were  proposed to  management.  These plans were approved and the process
began.

The infrastructure  section of the Project was quickly implemented and tested by
the Company's IT staff and has been  completed  since May of 1998.  All desktop,
mini  and  midrange  systems  as well as phone  switches,  phones  and  building
security  systems have been tested for Y2K compliance.  Any new systems required
by the Company are being tested and certified  prior to purchase with completion
by June 30, 1999. Two mainframes being used by the Company are not Y2K certified
or compliant.  These machines have been replaced by Sun and HP compliant systems
and are being kept in production  until new applications are put in place on the
new machines.

The applications systems section of the Project includes: (1) the replacement of
nonstandard auto companies  Policy  Administration  and Claims systems;  (2) the
conversion  of  crop  operations  systems  in  total;  and  (3)  replacement  of
non-compliant  business  systems  company-wide  (this  includes  wordprocessors,
network operating systems, spreadsheet programs, presentation systems, etc.).

The  Company  had  already  made  the  decision  to  transition  off  all of its
nonstandard  auto legacy  systems and this  process had been in work since 1996.
These systems are Y2K  compliant and are scheduled for  completion by the end of
June 30,  1999.  The  conversion  of crop  systems  began in August  1998 and is
complete.   Business  systems  are  being  replaced  as  vendors  certify  their
compliance. The Company is at 90% compliance in this area.

                                      -15-

<PAGE>

The Company relies on third party vendors for investments,  reinsurance treaties
and banking.  The Company began  inquiring  about Y2K compliance  with its third
party  vendors  beginning  in July  1998.  To date,  all  vendors  have  replied
regarding their compliance efforts.  Those that are not in compliance have until
the end of second quarter 1999 to do so, or they will be replaced.

Costs

The Company  considers the cost associated with the Project to be material.  The
Company has estimated  the total cost to be $5.7 million,  the majority of which
has been  capitalized  as  hardware  or  software  costs.  The  Company has also
incurred  substantial costs for carrying two systems  including  personnel costs
and outside service fees. The component of these costs  specifically  associated
with Y2K cannot be reasonably estimated. The total amount expended through March
31,  1999 on all  infrastructure  and  software  upgrades  is  approximately  $5
million.  The  Company  expects  to spend  another  $800,000  in its  efforts to
complete the Project.  This does not include additional annual maintenance costs
that will be incurred as we move forward.  Funding for these costs will continue
to be  provided by funds from  operations.  The  Company  believes  that the new
nonstandard auto system will significantly enhance service capability and reduce
future operating costs.

Risks

Failure to correct the Y2K problem through  efficient and timely  implementation
of the Company's new operating  system could cause a failure or  interruption of
normal business operations. These failures could materially affect the Company's
operational  results,  financial  condition and liquidity  through  reduction of
premium  volume and an increase in operating  costs as a  percentage  of premium
volume  or  deterioration  of  loss  experience.  Due to the  nature  of the Y2K
problem,  the Company is uncertain whether it will have a material affect or the
potential  magnitude of any  financial  impact.  The Company  believes  that the
possibility  of  significant   business   interruptions  should  be  reduced  by
successful implementation of the Project.

                                      -16-

<PAGE>

PART II -      OTHER INFORMATION

ITEM 1.        LEGAL  PROCEEDINGS
               The Company's  insurance  subsidiaries are parties to litigation
               litigation  arising  in the  ordinary  course  of  business.  The
               Company  believes that the ultimate  resolution of these lawsuits
               will  not  have  a  material  adverse  effect  on  its  financial
               condition  or results of  operations.  The  Company,  through its
               claims  reserves,  reserves  for both  the  amount  of  estimated
               damages attributable to these lawsuits and the estimated costs of
               litigation.

ITEM 2.        CHANGES IN SECURITIES
               None

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES
               None

ITEM 4.        SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
               Of the 682,572  employee  stock options  outstanding at March 31,
               1999,  639,626  have  been  repriced,  subject  to  disinterested
               shareholder  approval,  to an exercise  price of Cdn $14.70,  the
               closing price of the Company's common shares on the Toronto Stock
               Exchange  on  November  9,  1998.  This  repricing  is subject to
               approval by a majority of the  disinterested  shareholders at the
               Company's next annual meeting on June 15, 1999.

ITEM 5.        OTHER INFORMATION
               Within  this  form  10-Q/A  the  Company  has   incorporated  the
               financial  impact of events  which had  occurred  as of March 31,
               1999,  but which came to  management's  attention and / or became
               quantifiable after the release to the public of the first quarter
               results of operations on May 12, 1999.

               Through  the  Company's  67% owned  insurance  subsidiaries,  the
               Company  writes a  portion  of its crop hail  insurance  based on
               continuous  policies  which  remain  in-force  unless  and  until
               cancelled by the  policyholder.  The Company also writes a lesser
               amount of crop hail  insurance on an annual  basis.  In the first
               quarter earnings release dated May 12, 1999, the Company recorded
               approximately  $11.3 million of crop hail gross  written  premium
               related to processed  crop hail  policies.  However,  the Company
               failed  to  record  all  of the  continuous  policies  for  which
               liabilities  had attached as of the March 31, 1999 balance  sheet
               date,  thus  understating  crop hail  gross  written  premium  by
               approximately   $16.6  million,   and  net  written   premium  by
               approximately  $4.0 million.  The crop hail gross written premium
               should have totalled $27.9 million for the first  quarter,  which
               is  comparable  with the $24.5 million in crop hail gross written
               premium recorded in the first quarter of 1998.

               The  increase in the crop hail  premiums  has an effect on income
               through ceding  commissions  the Company  receives on quota share
               reinsurance  treaties.  It also improves earnings through profits
               on the net retained portion of the crop hail business.  The total
               amount  of  pre-tax  earnings  related  to the  additional  $16.6
               million in gross written premiums  recorded for the first quarter
               of 1999 was  approximately  $2.0  million,  or $.9 million  after
               income taxes of $.7 million and minority interest of $.4 million.

                                      -17-

<PAGE>

               Also, through the Company's 67% owned insurance subsidiaries, the
               Company  reinsures  100%  of a book of  crop  insurance  business
               written through a third party insurance company.  As described in
               the notes to the 1998 audited financial statements, this product,
               called "AgPI(R)",  insures against business interruption risk. At
               year end 1998 the  Company  had  recorded  $7.5  million in gross
               assumed loss reserves. Based on further recent analysis,  coupled
               with  recently  released  national  data related to the 1998 crop
               year,  the Company has  increased its assumed gross loss reserves
               from $7.5 million to $15.0 million as of March 31, 1999.

               To  date,  there  has not  been a ceding  of paid  losses  to the
               Company from the third party  reinsurance  company related to the
               potential  AgPI(R)  liability.  The Company believes the ultimate
               development  on these gross reserves could range from $10 million
               to $20 million,  and, as such,  believes that recorded gross loss
               reserves of $15 million is sufficient.  However,  there can be no
               assurance  that the  Company's  ultimate  liability  for  AgPI(R)
               related  losses will not be  materially  greater or less than the
               Company's reserve for this liability.

               The Company   retrocedes  the   majority  of  this   business  to
               reinsurers.  The  retrocession  cover on this book of business is
               62%  quota  share  reinsurance.  As such the  Company  has  ceded
               approximately $4,668,000 of premium, and $9,336,000  of  loss
               reserves,  to its retro reinsurers  of which  $4,668,000  is
               deferred   to  second   quarter.   The  Company   also   incurred
               approximately $996,000 in pretax fee expense related to  this
               treaty in  the first  quarter,  or  $437,000  after  income
               taxes  of  $349,000 and  minority  interest  of $211,000.
               Granite Reinsurance Company Ltd. has a 7.5% participation in this
               reinsurance agreement, being part of the total 62% cession.

               These restated  financials  contain a correction of an accounting
               error.  The error  related to the  recording  of the  retroactive
               reinsurance  recoverable  pertaining  to AgPI(R) in the incorrect
               accounting  period.  The  correction  of  the  error  defers  the
               recognition  of a  gain  on a  reinsurance  recovery  from  first
               quarter 1999 to second  quarter 1999.  The amount of the deferred
               gain is $4,668,000.  The Company recorded an increase in loss and
               loss adjustment  expense of $4,668,000 due to the deferral of the
               gain which  reduced net income by  $2,045,000  or $0.35 per share
               (basic), net of income taxes and minority interest.

ITEM 6(a).     EXHIBITS
               (10) Material Contracts - AgPI, Crop Hail and MPCI Multi-year
                ....Quota Share Reinsurance Agreement
               (11) Statement Regarding Computation of Per Share Earnings

ITEM 6(b).     REPORTS ON FORM 8-K
               None


                                      -18-

<PAGE>

                                   SIGNATURES



Pursuant to the  requirements of Section 13 or 15(d) 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.



Dated: August 27, 1999                          By:/s/ Alan G. Symons
                                                Alan G. Symons
                                                President



Dated: August 27, 1999                          By:/s/ Thomas R. Kaehr
                                                Thomas R. Kaehr
                                                Vice President, Treasurer and
                                                Chief Financial Officer



                                      -19-


<PAGE>