SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.  20549
                                      FORM 10-K

     [S]
     [x]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                          EXCHANGE ACT OF 1934 [FEE REQUIRED]
                     For the fiscal year ended December 31, 1999
                                         OR
     [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
     [S]
                         For the transition period from ___to___
     [S]
                            Commission file number 1-7411
     [S]
                              ALLCITY INSURANCE COMPANY
                 (Exact name of registrant as specified in its charter)
     [S]
         New York                                         13-2530665
     (State of incorporation)           (I.R.S. Employer Identification Number)

      335 Adams Street, Brooklyn, N.Y.                    11201-3731
     (Address of principal executive offices)             (Zip Code)

     Registrant's telephone number, including area code 718-422-4000

     Securities registered pursuant to Section 12(b) of the Act:
                                                    Name of each exchange on
     Title of each class                                which registered

                                        None
     Securities registered pursuant to Section 12(g) of the Act:

                                        None
                                  (Title of Class)
     Indicate by check mark if disclosure of delinquent filers pursuant to
     Item 405 of Regulation S-K is not contained herein, and will not be
     contained, to the best of registrant's knowledge, in definitive proxy
     or information statements incorporated by reference in Part III of this
     Form 10-K or any amendment to this Form 10-K. [x]

     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



       The aggregate market value of the voting stock held by nonaffiliates
     of the registrant
     as of March 17, 2000 was $3,996,981.

       The number of shares outstanding of each of the registrant's
     classes of common shares, as of March 17, 2000, was 7,078,625.

     DOCUMENTS INCORPORATED BY REFERENCE - NONE

        Exhibit Index on Page 26.                  Total number of pages 56

     <PAGE>
<TABLE>
                                   TABLE OF CONTENTS

<S>
                                        Part I
                                                                                    Page
<C>         <C>                                                                     <C>
Item 1-     Business.........................................................	        1

Item 2-     Properties.......................................................	       10

Item 3-     Legal Proceedings................................................	       10

Item 4-     Submission of Matters to a Vote of Security Holders..............        10

                              Part II

Item 5-     Market for the Registrant's Common Equity and Related
              Stockholder Matters.............................................       11

Item 6-     Selected Financial Data...........................................       11

Item 7-     Management's Discussion and Analysis of Financial
              Condition and Results of Operations.............................       13

Item 7A-    Quantitative and Qualitative Disclosures about Market Risk........       16

Item 8-     Financial Statements and Supplementary Data.......................       16

Item 9-     Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure.............................       16

                             Part III

Item 10-    Directors and Executive Officers of the Registrant................       17

Item 11-    Executive Compensation............................................       20

Item 12-    Security Ownership of Certain Beneficial Owners and
               Management.....................................................       22


Item 13-    Certain Relationships and Related Transactions....................       23

                              Part IV

Item 14-    Exhibits, Financial Statement Schedules, and Reports on...........       24
                Form 8-K

Signatures....................................................................       25

</TABLE>





                                                     -i-
<PAGE>

                                                        PART I
     Item 1.     Business

     General

     Allcity Insurance Company (the "Registrant", "Allcity" or the "Company") is
     a property and casualty insurer.  Empire Insurance Company ("Empire"), a
     property and casualty insurer owns approximately 84.6% of the outstanding
     common shares of the Company and 100% of the outstanding common shares of
     Centurion Insurance Company ("Centurion"). Empire's common shares are 100%
     owned and controlled, through subsidiaries, by Leucadia National
     Corporation
     ("Leucadia").  Additionally, Leucadia indirectly owns an additional 6.4% of
     the outstanding common shares of the Company.  The Company, Empire and
     Centurion are sometimes hereinafter collectively referred to as the Group.

     The Group specializes in commercial and personal property and casualty
     insurance business primarily in the New York metropolitan area.  The
     Group offers insurance products for vehicles (including medallion and
     radio-controlled livery vehicles), general liability coverage, property
     coverage (including mercantile and multi-family residential real estate)
     and workers' compensation to commercial accounts and private passenger
     automobile and homeowners products to individuals.  The Group is rated
     "B+"
     (very good) by A.M. Best Company ("Best"), rated (A) (exceptional) by
     Demotech, Inc. ("Demotech") and rated "BBB+" (good) by Standard & Poors
     Insurance Rating Services ("S&P").  As with all ratings, Best, Demotech
     and S&P ratings are subject to change at any time.

     The business of the Group is organized into three divisions: the Small
     Business Division, the Personal Lines Division and the Mid-Market
     Division.  Each of these divisions has separate management teams
     responsible for all marketing, sales and underwriting decisions within
     their divisions.  The Small Business Division focuses on
     commercial package products for small businesses; the Personal Lines



     Division
     concentrates on personal automobile and homeowners insurance; and the Mid-
     Market
     Division focuses on commercial auto, commercial package and workers'
     compensation
     insurance for larger accounts.  Over the past two years, the Group has
     invested
     resources to enhance and market its products, to upgrade the quality of
     customer service
     and to provide its agents with the ability to sell products, process
     applications,
     receive price quotes and obtain other policy and claim information via the
     Internet.
     The Group plans to expand its Internet services in the future.

     For the years ended December 31, 1999, 1998 and 1997 net earned premiums
     for the
     Company were $42.4 million, $67.5 million and $80.9 million, respectively.
     While
     net earned premiums declined in all lines of business, the most significant
     reductions
     were in assigned risk automobile and voluntary private passenger automobile
     lines. As
     a result of poor operating results in the assigned risk business, the Group
     no longer
     participates in this line of business.  Effective January 1, 2000, all
     policy renewal
     obligations have been assigned to another insurance company.  However, the
     Group remains
     liable for the claim settlement costs for assigned risk claims that
     occurred during the
     policy term.  The Group believes it has provided adequate reserves for such
     liabilities,
     including loss adjustment expenses.  With respect to voluntary private
     passenger automobile
     insurance, poor underwriting results have resulted in a re-underwriting of
     the existing
     book of business, the termination of certain agency relationships and, for
     certain other
     agents, a determination not to accept any applications for new private
     passenger automobile
     business.  Additionally, re-underwriting efforts in other commercial lines,
     along with
     terminated and/or reduced agency relationships referred to above, have
     resulted in reduced
     commercial lines premiums.

                                                    1
     <PAGE>
     The Group's reduced premium volume does not support its current overhead
     structure.
     The Group is currently examining its overhead costs and plans to implement
     an expense
     reduction program this year to more closely align these costs with its
     current volume
     of business.  In order to return to profitability, the Group also will have
     to generate
     new business, primarily in the Small Business Division and in the radio-
     controlled livery
     line of the Mid-Market Division, and improve retention of its existing
     profitable business.
     An important customer service feature, which is designed to enable the
     Group to attract



     profitable business, is the ability to provide producers faster quoting of
     policy prices
     and underwriting approval over the Internet.  The Group is currently
     providing this
     service for commercial policies issued by the Small Business Division, and
     plans to
     continue to invest in technology in order to expand this service to other
     lines of
     business in the future.

     During the year ended December 31, 1999, 13% of net earned premiums of the
     Company were
     derived from assigned risk business, 12% from commercial automobile lines,
     35% from other
     commercial lines and 40% from personal lines.  Substantially all of the
     Group's policies
     are written in New York for a one-year period.  The Group is licensed in
     New York to write
     most lines of insurance that may be written by a property and casualty
     insurer.  Empire is
     also licensed to write insurance in Connecticut, Massachusetts, Missouri,
     New Hampshire and
     New Jersey.

     The business of the Group is produced through general agents, local agents
     and insurance
     brokers, who are compensated for their services by payment of commissions
     on the premiums
     they generate.  There are seven general agents, one of which is owned by
     Empire, and 398
     local agents and insurance brokers presently acting under agreements with
     the Group.  These
     agents and brokers also represent other competing insurance companies.  The
     Group's owned
     general agent is its largest producer and generated 12% of its total
     premium volume for the
     year ended December 31, 1999.

     On a quarterly basis, the Group reviews and adjusts its estimated loss
     reserves for
     any changes in trends and actual loss experience.  Included in the
     Company's results
     for 1999 was approximately $5.1 million for reserve increases related to
     losses from
     prior accident years. The Group will continue to evaluate the adequacy of
     its loss
     reserves and record future adjustments to its loss reserves as appropriate.
     Over the
     past few years, the Group has taken steps to improve its operations,
     enhance its
     information systems, redefine its markets and improve its underwriting and
     claims
     handling procedures.  The Group believes that the results of these efforts
     may not be
     known for some time, given the nature of the property and casualty
     insurance business
     and the inherently long period of time involved in settling claims.

     Pooling Agreement

     All insurance business written by the Company is subject to a pooling
     agreement with
     Empire under which the Company and Empire effectively operate as one



     company. The
     pooling agreement and subsequent amendments were approved by the New York
     State
     Insurance Department.  The Company operates under the same general
     management as Empire
     and has full use of Empire's personnel, information technology systems and
     facilities.
     As of December 31, 1999, Empire and its subsidiaries had 521 full and part-
     time employees.
     Currently, and for all periods presented, all premiums, losses, loss
     adjustment expenses
     and other underwriting expenses are shared on the basis of 70% to Empire
     and 30% to
     the Company.

     Financial Information Relating to Business Segments

     For all periods presented, the Company's operations are presented in the
     following
     business segments:

     (1)  Small Business - includes commercial package products for small
     businesses.
     (2)  Mid-Market - includes commercial automobile (including medallion and
     radio-
          controlled livery vehicles), commercial package and workers'
     compensation insurance
          for larger accounts.
     (3)  Personal Lines - includes private passenger automobile, homeowners and
     fire and
          allied insurance coverages.

     Prior year business segment data has been reclassified to conform to the
     1999
     presentation.

                                                    2
     <PAGE>
<TABLE>
The following table presents business segment data, net of reinsurance, for each of
the three years ended December 31, 1999 (in thousands, except loss ratio information):
<CAPTION>

                      Premiums       Premiums          Losses and LAE          Loss
                       Written         Earned             Incurred             Ratio
<S>                    <C>            <C>                  <C>                <C>
1999

Personal Lines (1)     $ 15,156       $ 22,404             $ 19,236             85.9%
Mid-Market               11,679         13,771               19,751            143.4%
Small Business            5,977          6,273                3,551             56.6%
Total                  $ 32,812       $ 42,448             $ 42,538            100.2%

1998

Personal Lines (1)     $ 29,357       $ 39,251             $ 35,741             91.1%
Mid-Market               22,162         21,643               27,459            126.9%
Small Business            6,540          6,618                6,389             96.5%
Total                  $ 58,059       $ 67,512             $ 69,589            103.1%

1997

Personal Lines (1)     $ 44,421       $ 47,292             $ 58,656            124.0%
Mid-Market               24,058         27,223               16,934             62.2%
Small Business            6,550          6,376                6,455            101.2%
Total                  $ 75,029       $ 80,891             $ 82,045            101.4%







<FN>
(1) Includes assigned risk automobile business, which the Company no longer
participates in effective January 1, 2000.
</TABLE>

     [S]
     For further information concerning Business Segments, see Notes 8 and 12 of
     the Notes
     to Consolidated Financial Statements, included elsewhere herein.

     Combined Ratios

     Set forth below is certain statistical information for the Company prepared
     in accordance
     with generally accepted accounting principles ("GAAP") and statutory
     accounting principles
     ("SAP"), for the three years ended December 31, 1999.  The Loss Ratio is
     the ratio of net
     incurred losses and loss adjustment expenses to net premiums earned.  The
     Expense Ratio is
     the ratio of underwriting expenses (policy acquisition costs, commissions,
     and a portion
     of administrative, general and other expenses attributable to underwriting
     operations, net
     of service fee income) to net premiums written, if determined in accordance
     with SAP, or
     to net premiums earned, if determined in accordance with GAAP.  A Combined
     Ratio below 100%
     indicates an underwriting profit and a Combined Ratio above 100% indicates
     an underwriting
     loss.  The Combined Ratio does not include the effect of investment income.


                                                    3
     <PAGE>
     <TABLE>
<CAPTION>
                                               Years Ended December 31,

                                          1999           1998           1997
                                        <C>            <C>            <C>
<S>
Loss Ratio: (a)
      GAAP                               100.2%         103.1%          101.4%
      SAP                                100.2%         103.1%          101.4%
      Industry (SAP) (b)                   N/A           76.5%           72.8%

Expense Ratio:
      GAAP                                39.7%          26.3%           17.9%
      SAP                                 45.0%          31.3%           17.2%
      Industry (SAP) (b)                   N/A           29.5%           28.8%

Combined Ratio:  (c)
      GAAP                               139.9%         129.4%          119.3%
      SAP                                145.2%         134.4%          118.6%
      Industry (SAP) (b)                   N/A          106.0%          101.6%


<FN>
(a) Includes Loss and Loss Adjustment Expenses.

(b) Source: Best's Aggregates & Averages, Property/Casualty, 1999 Edition. Industry
    Combined Ratios may not be fully comparable as a result of, among other things,
    differences in geographical concentration and in the mix of property and casualty
    insurance products.

(c) For 1998, the difference in the accounting treatment for curtailment gains relating
    to defined benefit pension plans was the principal reason for the difference between
    the GAAP Combined Ratio and the SAP Combined Ratio.  Additionally, for all three years,
    the difference relates to the accounting for certain costs which are treated differently
    under SAP and GAAP.  For further information about the Company's Combined Ratios see
    Item 7, "Management's Discussion and Analysis of Financial Condition and Results of
    Operations" of this Report.
</TABLE>

     [S]

     Reinsurance

     The Company's maximum retained limit for all lines of business was $300,000
     for 1999.
     The Company's maximum retained limit for 1998 and 1997 was $500,000 for



     workers'
     compensation and $300,000 for other property and casualty lines.
     Additionally, the
     Company has entered into certain excess of loss and catastrophe treaties to
     protect
     against certain losses.  Its retention of lower level losses under such
     treaties is
     $7.5 million for 2000, and was $7.5 million for 1999 and 1998, and $5.0
     million for
     1997.

     Effective January 1, 1997, Empire entered into a quota share reinsurance
     agreement
     with its subsidiary, Centurion.  Under this agreement, Empire assumes 50%
     up to
     July 1, 1997 and 75% thereafter of the effective period premiums and losses
     of
     Centurion and grants Centurion a ceding commission.  Under the pooling
     agreement,
     70% of such business assumed will be retained by Empire and 30% will be
     ceded to
     the Company.

                                                    4
     <PAGE>
     Although reinsurance does not legally discharge an insurer from its primary
     liability
     for the full amount of the policy liability, it does make the assuming
     reinsurer liable
     to the insurer to the extent of the reinsurance ceded. The Company's
     reinsurance
     generally has been placed with certain of the largest reinsurance
     companies, including
     (with their respective Best ratings) General Reinsurance Corporation (A++)
     (superior),
     Zurich Reinsurance (North America), Inc. (A+) (superior), IPCRe Limited
     (A+) (superior)
     and Partner Reinsurance Company Ltd. (A+) (superior). The Company believes
     its reinsurers
     to be financially capable of meeting their respective obligations.
     However, to the extent
     that any reinsuring company is unable to meet its obligations, the Company
     would be liable
     for the reinsured risks.  The Company has established reserves, which the
     Company believes
     are adequate, for any nonrecoverable reinsurance.

     Investments

     Investment activities represent a significant part of the Company's total
     income.
     Investments are managed by the Investment Committee of the Board of
     Directors, which
     consults with outside investment advisors with respect to a substantial
     portion of the
     Company's investment portfolio.

     The Company has a diversified investment portfolio of securities, a
     substantial portion
     of which is rated "investment grade" by established bond rating agencies or
     issued or
     guaranteed by the U.S. Treasury or by governmental agencies.  At December
     31, 1999, 1998



     and 1997, the Company's portfolio of trading securities was not material.
     At December 31,
     1999, 1998 and 1997, the average yield of the Company's bond portfolio was
     approximately
     6.5%, 5.8% and 5.9%, respectively, and the average maturity of the
     Company's bond
     portfolio for 1999, 1998 and 1997 was approximately 2.6 years, 3.2 years
     and 3.3 years,
     respectively.

     Tax Sharing Agreement

     The Company has been included in the consolidated federal income tax
     returns of
     Leucadia since 1993.  Under the terms of the tax sharing agreement between
     Leucadia
     and the Company, the Company computes its tax provision on a separate
     return basis and
     is either charged its share of federal income tax resulting from its
     taxable income or
     is credited for tax benefits resulting from its losses.

     Government Regulation

     Insurance companies are subject to detailed regulation and supervision in
     the states in
     which they transact business.  Such regulation pertains to matters such as
     approving of
     policy forms and various premium rates, minimum reserves and loss ratio
     requirements,
     the type and amount of investments, minimum capital and surplus
     requirements, granting
     and revoking licenses to transact business, levels of operations and
     regulating trade
     practices.  Insurance companies are required to file detailed annual
     reports with the
     supervising agencies in each of the states in which they do business, and
     are subject
     to examination by such agencies at any time.  Increased regulation of
     insurance companies
     at the state level and new regulation at the federal level is possible,
     although the
     Company cannot predict the nature or extent of any such regulation or what
     impact it
     would have on the Company's operations.

     The National Association of Insurance Commissioners ("NAIC") has adopted
     model laws
     incorporating the concept of a "risk based capital" ("RBC") requirement for
     insurance
     companies.  Generally, the RBC formula is designed to measure the adequacy
     of an
     insurer's statutory capital in relation to the risks inherent in its
     business.  The
     RBC formula is used by the states as an early warning tool to identify
     weakly capitalized
     companies for the purpose of initiating regulatory action.  As of December
     31, 1999,
     the Company's RBC ratio exceeded minimum requirements.

     The NAIC also has adopted various ratios for insurance companies which, in
     addition
     to the RBC ratio, are designed to serve as a tool to assist state



     regulators in
     discovering potential weakly capitalized companies or companies with
     unusual trends.
     While the Company's operations had certain "other than normal" NAIC ratios
     for the year
     ended December 31, 1999, the Company believes that it is unlikely that
     material adverse
     regulatory action will be taken.


                                                    5
     <PAGE>
     In 1998, the NAIC adopted the Codification of Statutory Accounting
     Principles guidance,
     which will replace the current Accounting Practices and Procedures manual
     as the NAIC's
     primary guidance on statutory accounting.  The NAIC is now considering
     amendments to the
     Codification guidance that would also be effective upon implementation.
     The NAIC has
     recommended an effective date of  January 1, 2001.  The Codification
     provides guidance
     for areas where statutory accounting has been silent and  changes current
     statutory
     accounting in some areas.  It is not known whether the New York State
     Insurance Department
     (the "Department") will adopt the Codification, and whether the Department
     will make any
     changes to that guidance.  The Company has not estimated the potential
     effect of the
     Codification guidance if adopted by the Department.

     The Group is a member of state insurance funds, which provide certain
     protection to
     policyholders of insolvent insurers doing business in those states.  Due to
     insolvencies
     of certain insurers, the Group has been assessed certain amounts which have
     not been
     material and are likely to be assessed additional amounts by state
     insurance funds.
     The Company believes that it has provided for all anticipated assessments
     and that
     any additional assessments will not have a material adverse effect on the
     Company's
     financial condition or results of operations.

     Competition

     The insurance industry is a highly competitive industry, in which many of
     the Company's
     competitors have substantially greater financial resources, larger sales
     forces, more
     widespread agency and broker relationships, and more diversified lines of
     insurance
     coverage.  Additionally, certain competitors market their products with
     endorsements
     from affinity groups, while the Company's products are unendorsed, which
     may give such
     other companies a competitive advantage.  Federal administrative,
     legislative and judicial
     activity has resulted in changes to federal banking laws that increase the
     ability of
     national banks to offer  insurance products in direct competition with the



     Company.  The
     Company is unable to determine what effect, if any, such changes may have
     on the
     Company's operations.

     The Company believes that property and casualty insurers generally compete
     on the
     basis of price, customer service, consumer recognition, product design,
     product mix
     and financial stability.  The industry has historically been cyclical in
     nature,
     with periods of less intense price competition generating significant
     profits, followed
     by periods of increased price competition resulting in reduced
     profitability or loss.
     The current cycle of intense price competition has continued for a longer
     period than
     in the past, suggesting that the significant infusion of capital into the
     industry in
     recent years, coupled with larger investment returns has been, and may
     continue to be,
     a depressing influence on policy rates.  In addition, the Company is
     experiencing
     increased competition from low cost insurance providers that write many
     lines of
     business on a direct response basis through direct mail, telemarketing and
     the
     Internet.  The profitability of the property and casualty insurance
     industry is affected
     by many factors, including rate competition, severity and frequency of
     claims (including
     catastrophe losses), interest rates, state regulation, court decisions and
     judicial
     climate, all of which are outside of the Company's control.

     Loss and Loss Adjustment Expenses

     Liabilities for unpaid losses, which are not discounted (except for certain
     workers'
     compensation liabilities), and loss adjustment expenses ("LAE") are
     determined using
     case-basis evaluations, statistical analyses and estimates for salvage and
     subrogation
     recoverable and represent estimates of the ultimate claim costs of all
     unpaid losses and
     LAE.  Liabilities include a provision for losses that have occurred but
     have not yet been
     reported.  These estimates are subject to the effect of trends in future
     claim severity
     and frequency experience.  Adjustments to such estimates are made from time
     to time due
     to changes in such trends as well as changes in actual loss experience.
     These
     adjustments are reflected in current earnings.

                                                    6
     <PAGE>
     The Company relies upon standard actuarial ultimate loss projection
     techniques to
     obtain estimates of liabilities for losses and LAE. These projections
     include the
     extrapolation of both losses paid and incurred by business line and
     accident year



     and implicitly consider the impact of inflation and claims settlement
     patterns upon
     ultimate claim costs based upon historical patterns.  In addition, methods
     based upon
     average loss costs, reported claim counts and pure premiums are reviewed in
     order to
     obtain a range of estimates for setting the reserve levels.  For further
     input,
     changes in operations in pertinent areas including underwriting standards,
     product
     mix, claims management and legal climate are periodically reviewed.

     <TABLE>
In the following table, the liability for losses and LAE of the Company, are reconciled
for each of the three years ended December 31, 1999.  Included therein are current year
data and prior year development.
<CAPTION>
                                     RECONCILIATION OF LIABILITY FOR LOSSES AND LAE

                                               1999          1998          1997
                                          <C>           <C>           <C>
(In thousands)
<S>
SAP liability for losses and LAE,
net of reinsurance, at beginning
of the year                                $ 139,771     $ 145,260     $ 143,494

Provision for losses and LAE for
claims occurring in the current year          36,524        56,698        73,741
Increase in estimated losses and LAE
for claims occurring in prior years            6,014        12,891         8,304
                                              42,538        69,589        82,045


Loss and LAE payments for claims
occurring during:
    Current year                              12,382        19,203        23,804
    Prior years                               56,325        55,875        56,475
                                              68,707        75,078        80,279

SAP liability for losses and LAE,
net of reinsurance                           113,602       139,771       145,260

Reinsurance recoverable                      228,334       294,461       272,266

Liability for losses and LAE at
the end of year as reported in
the financial statements (GAAP)            $ 341,936     $ 434,232     $ 417,526
</TABLE>




     [S]

     The table on page 9 presents the development of balance sheet liabilities
     for 1989
     through 1999.  The liability line at the top of the table indicates the
     estimated
     liability, net of reinsurance, for unpaid losses and LAE recorded at the
     balance sheet
     date for each of the indicated years. This liability represents the
     estimated amount of
     losses and LAE for claims that were unpaid at each annual balance sheet
     date, including
     provision for losses estimated to have been incurred but not reported to
     the Company.
     The middle portion of the table shows the re-estimated amount of the
     previously reported
     liability based on experience as of the end of each succeeding year.  As
     more information
     becomes available and claims are settled, the estimated liabilities are
     adjusted upward or
     downward with the effect of decreasing or increasing net income at the time
     of adjustment.

     The "cumulative redundancy (deficiency)" represents the aggregate change in
     the estimates
     over all prior years.  For example, the initial 1989 liability estimate has
     developed a
     $0.5 million redundancy over ten years. The effect on pre-tax income during
     the past three
     years of changes in estimates of the liabilities for losses and LAE is
     shown in the
     reconciliation table above.

     The lower section of the table on page 9 shows the cumulative amount paid
     with respect
     to the previously recorded liability as of the end of each succeeding year.
     For example,
     as of December 31, 1999, the Company had paid $65.8 million of the
     currently estimated
     $70.1 million of losses and LAE that had been incurred for the 1989
     calendar year, thus
     an estimated $4.3 million of losses incurred for 1989 remain unpaid as of
     the current
     balance sheet date.

                                                    7
     <PAGE>
     In evaluating this information it should be noted that each amount shown
     for "cumulative
     redundancy (deficiency)" results includes the effects of all changes in
     amounts for prior
     periods.  For example, the amount of the deficiency related to losses
     settled in 1992,
     but incurred in 1989, will be included in the cumulative redundancy or
     deficiency amount
     for years 1989, 1990 and 1991.  This table is not intended to and does not
     present
     accident or policy year loss and LAE development data.  Conditions and
     trends that have
     affected development of the liability in the past may not necessarily occur
     in the future.
     Accordingly, it would not be appropriate to extrapolate future redundancies
     or



     deficiencies based on this table.

     For further discussion of the Company's loss development experience, see
     Item 7,
     "Management's Discussion and Analysis of Financial Condition and Results of
     Operations"
     of this Report.






                                                    8
     <PAGE>
<TABLE>
<CAPTION>
Analysis of Loss and Loss Adjustment Expenses Development
(In thousands)

Years ended
December 31,          1989      1990      1991      1992      1993      1994      1995      1996      1997      1998      1999
<S>                   <C>       <C>      <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>

Liability for Unpaid
Losses and Loss
Adjustment Expenses   $70,567   $75,420  $ 84,178  $ 96,712  $106,115  $121,923  $142,718  $143,494  $145,260  $139,771  $113,602

Liability Re-
estimated as of:
 One year later       $68,347   $74,844  $ 83,987   $96,516  $103,181  $132,189  $150,852  $151,798  $158,152  $145,785  $     -
 Two years later       65,227    73,538    83,341    97,208   112,176   140,620   160,686   163,378   163,609
 Three years later     63,792    73,151    85,197   103,592   118,127   150,434   172,650   179,200
 Four years later      63,556    74,190    88,928   108,430   124,375   160,542   182,318
 Five years later      63,584    76,509    92,035   112,988   132,606   167,164
 Six years later       64,962    78,392    95,273   118,446   137,669
 Seven years later     65,467    80,040    99,467   121,715
 Eight years later     66,298    83,670   101,505
 Nine years later      68,877    84,981
 Ten years later       70,100
Cumulative
Redundancy/
(Deficiency)          $   467   $(9,561) $(17,327) $(25,003) $(31,554) $(45,241) $(39,600) $(35,706) $(18,349) $ (6,014) $      -

Cumulative Amount of
Liability Paid
Through:
 One year later       $19,744   $23,681  $ 26,852  $ 33,903  $ 35,048  $ 45,789  $ 60,382  $ 56,475  $ 55,875  $ 56,325  $      -
 Two years later       32,840    38,067    44,989    54,615    59,701    80,911    95,190    94,062    93,714
 Three years later     42,271    50,194    59,336    71,653    81,680   105,977   121,900   122,811
 Four years later      49,803    58,830    69,955    85,689    97,917   124,645   141,259
 Five years later      54,602    65,025    77,965    95,938   109,083   136,791
 Six years later       58,185    69,568    83,886   102,416   116,929
 Seven years later     60,953    72,683    88,139   107,246
 Eight years later     62,737    75,932    91,364
 Nine years later      64,409    78,103
 Ten years later       65,815

Gross Liability -
End of year                                                 $ 290,833  $ 341,599  $ 399,879  $ 406,087  $417,526  $434,232  $341,936
Reinsurance                                                   184,718    219,676    257,161    262,593   272,266   294,461   228,334
Net Liability -
End of year as
shown above                                                 $ 106,115  $ 121,923  $ 142,718  $ 143,494  $145,260  $139,771  $113,602

Gross Re-Estimated
Liability - Latest                                          $ 404,267  $ 483,932  $ 519,667  $ 512,662  $474,405  $431,509
Re-estimated Reinsurance
-  Latest                                                     266,598    316,768    337,349    333,462   310,796   285,724
Net Re-estimated Liability
- Latest                                                    $ 137,669  $ 167,164  $ 182,318  $ 179,200  $163,609  $145,785
Gross Cumulative(Deficiency)
/Redundancy                                                 $(113,434) $(142,333) $(119,788) $(106,575) $(56,879) $  2,723

</TABLE>


                                                    9

     <PAGE>
     Item 2.   Properties
     [S]
     The Group has entered into a twenty year lease agreement which expires in
     2018,
     consisting of 286,510 square feet, in an office building located at 335
     Adams Street
     in Brooklyn, New York, in which Leucadia has an equity interest.  The Group
     received
     certain incentives from both the City and State of New York in connection
     with this
     lease, which will be recognized over the term of the lease.

     Empire has subleased 133,140 square feet of the office space to its parent,
     Leucadia
     at similar terms as in the original lease.

     The Group also conducts limited operations from branch offices located in
     Rochester,
     New York and Boston, Massachusetts.  The rental charged to the Company for
     these
     facilities is prorated in accordance with the pooling agreement described
     in "Pooling
     Agreement" under Item 1, herein.

     Item 3.   Legal Proceedings



     [S]
     The Company is party to legal proceedings that are considered to be either
     ordinary,
     routine litigation or incidental to its business. Based on discussion with
     counsel,
     the Company does not believe that such litigation will have a material
     effect on its
     financial position, results of operations or cash flows.

     Item 4.   Submission of Matters to a Vote of Security Holders
     [S]
     The following matters were submitted to a vote of shareholders at the
     Company's 1999
     Annual Meeting of Shareholders held on October 25, 1999:

                                          Number of           Number of
     a) Election of directors:           Shares in favor      Votes
     Withheld

     [S]
     Class III Directors, term expires 2002:
     [S]
     Francis M. Colalucci                  6,405,691          55,276
     James E. Jordan                       6,405,691          55,276
     Joseph A. Orlando                     6,405,691          55,276
     Harry H. Wise                         6,405,691          55,276
     [S]
     Class I Director, term expires in 2000:
     [S]
     Carmen M. Rivera                      6,405,691          55,276
     [S]
     Class I Directors continuing in office:
     [S]
                 Ian M. Cumming
                 Thomas E. Mara
                 Joseph S. Steinberg
                 Daniel G. Stewart
     [S]
     Class II Directors continuing in office:
     [S]
                 Martin B. Bernstein
                 Louis V. Siracusano
                 Lucius Theus
                 Robert V. Toppi
     [S]
     b)    No other matter was voted upon at the meeting.

                                                    10
     <PAGE>
     <TABLE>
                                                 PART II
     <S>
     Item 5.    Market for the Registrant's Common Equity and Related
     Stockholder Matters

     (a) Market Information
     The Company's common stock trades on The NASDAQ National Stock Market under



     the
     symbol "ALCI".  The following table sets forth, for the calendar quarters
     indicated,
     the high and low closing trade price per common share as reported by the
     National
     Association of Securities Dealers, Inc.
     <CAPTION>

                                                   High                 Low
                                                 <C>                 <C>

           1st Quarter 2000                      $ 6 7/8              $ 5  7/8
          (Through March 17, 2000)

           1st Quarter 1999                        8 7/32               7
           2nd   "       "                         8 3/4                7
           3rd   "       "                         8                    6  3/8
           4th   "       "                         7 1/16               6  3/8


           1st Quarter 1998                        7 1/2                6  3/4
           2nd   "       "                         9 1/4                7 10/32
           3rd   "       "                         8                    7
           4th   "       "                         8                    7

     </TABLE>
     [S]
     (b) Holders
     The number of shareholders of record of common shares at December 31, 1999
     was 497.
     [S]
     (c) Dividends
     The Company has paid no dividends on its common shares since 1975.  The New
     York
     Insurance Law prohibits New York domiciled property and casualty companies
     from
     paying dividends except out of earned surplus.  Without the approval of the
     New York
     State Insurance Department, no New York domestic property/ casualty insurer
     may declare
     or distribute any dividend to shareholders which, together with any
     dividends declared
     or distributed by it during  the preceding twelve months, exceeds the
     lesser of  (1)
     10% of surplus  to policyholders as shown by its last statutory annual
     statement or
     (2) one hundred percent of  adjusted net investment income during such
     period.  At
     December 31, 1999, $6,942,000 was available for distribution of dividends.
     The
     Company does not presently anticipate paying dividends in the near future.
     [S]
     <TABLE>
Item 6. 	Selected Financial Data
<S>
The following selected financial data have been summarized from the Company's
consolidated financial statements and are qualified in their entirety by reference to,
and should be read in conjunction with, such consolidated financial statements and
Item 7, "Management's Discussion and Analysis of Financial Condition and Results of
Operations" of this Report:
<S>

                                                  Year ended December 31,
                                 1999         1998         1997         1996         1995
                                         (In thousands, except per share amounts)
<CAPTION>
                               <C>          <C>         <C>          <C>          <C>
Total Revenues                 $55,662      $92,070     $102,624     $120,790     $117,892

Net (Loss)/Income (a)          $(3,731)     $   504     $    (83)    $  2,634     $    563

Basic and Diluted
(Loss)/Earnings Per share:
(Loss)/Income(a)               $ (0.53)     $  0.07     $  (0.01)    $   0.37     $   0.08
</TABLE>


                                                    11
<PAGE>
<TABLE>
Item 6. Selected Financial Data, continued
<S>
a) Net income (loss) includes net securities (losses)/gains net of applicable tax,
as follows (in thousands, except per share amounts):
<S>
<CAPTION>
                                (Losses)/Gains            Per Share
                                <C>                       <C>
         <S>
         1999                   $ (1,084)                 $ (0.15)
         1998                      3,951                     0.56
         1997                       (125)                   (0.02)
         1996                        735                     0.10
         1995                       (133)                   (0.02)
</TABLE>
[S]
<TABLE>
                                                     At  December 31,
                             1999         1998         1997         1996         1995
                                                      (In thousands)
<CAPTION>
                           <C>          <C>          <C>          <C>          <C>
Total assets               $486,020     $605,704     $640,249     $653,730     $660,820
Invested assets             205,246      234,039      271,736      272,992      273,548

Surplus note:
   Face value                 7,000        7,000        7,000        7,000        7,000
   Accrued Interest           8,851        8,300        7,710        7,115        6,524
Common Shareholders'
   Equity(a)                 71,716       78,200       78,164       75,658       75,936
</TABLE>
[S]
<TABLE>
                                              For the years ended December 31,
                             1999         1998         1997         1996         1995
<CAPTION>
                           <C>          <C>          <C>          <C>          <C>
GAAP Combined Ratio(b)       139.9%       129.4%       119.3%       114.1%       115.4%
SAP Combined Ratio (b)       145.2%       134.4%       118.6%       107.5%       107.5%
Industry SAP Combined
  Ratio (c)                    N/A        106.0%       101.6%       105.8%       106.4%
Premium to Surplus
  Ratio (d)                    0.5X         0.8X         1.1X         1.4X         1.6X
<S>
<FN>
(a) Includes unrealized depreciation of approximately $2.3 million in 1999 and $1.7
million in 1996 and unrealized appreciation of approximately $0.5 million in 1998, $0.9
million in 1997 and $1.2 million in 1995, all net of tax, on investments classified as
available for sale.
<S>
(b) For 1998, the difference in the accounting treatment for curtailment gains
relating to defined benefit pension plans was the principal reason for the difference
between the GAAP Combined Ratio and the SAP Combined Ratio.  For 1996 and 1995, a change
in the statutory accounting treatment for   retrospectively rated reinsurance agreements
was the principal reason for the difference between the GAAP Combined Ratios and the SAP
Combined Ratios. Additionally, for 1999, 1998, 1997 and 1996,  the difference relates to
the accounting for certain costs, which are treated differently under SAP and GAAP.
<S>
(c) Source:  Best's Aggregates & Averages, Property/Casualty, 1999 Edition. Industry
Combined Ratios may not be fully comparable as a result of, among other things,
differences in geographical concentration and in the mix of property and casualty
insurance products.
<S>
(d) Premium to Surplus Ratio was calculated by dividing annual statutory net premiums
written by year-end statutory surplus.
</TABLE>
                                                    12
     <PAGE>

     Item 7.       Management's Discussion and Analysis of
                   Financial Condition and Results of Operations



     [S]
     The purpose of this section is to discuss and analyze the Company's
     financial condition,
     liquidity and capital resources and results of operations.  This analysis
     should be read
     in conjunction with the financial statements and related notes which appear
     elsewhere
     in this Report.
     [S]
     Liquidity and Capital Resources
     [S]
     In 1999 and 1998, net cash was used for operations as a result of a
     decrease in premiums
     written and a program to reduce pending claims.

     At December 31, 1999 and 1998 the yield of the Company's fixed maturities
     portfolio was
     6.5% and 5.8%, respectively, with an average maturity of 2.6 and 3.2 years
     for 1999 and
     1998, respectively.  Additionally, the Company maintains a diversified
     investment
     portfolio of securities, of which at December 31, 1999, approximately 82%
     of the fixed
     maturities portfolio was invested in issues of the U.S. Treasury and its
     governmental
     agencies with the remainder primarily invested in investment grade
     corporate and
     industrial issues.

     The Company maintains cash, short-term and readily marketable securities
     and anticipates
     that the cash flow from investment income, maturities and sales of short-
     term investments
     and fixed maturities will be sufficient to satisfy its anticipated cash
     needs.  During
     1999, the Company sold certain securities at a net realized capital loss to
     meet short-
     term cash flow needs.  The Company does not presently anticipate paying
     dividends in the
     near future and believes it has sufficient capital to meet its currently
     anticipated
     level of operations.
     [S]
     Results of Operations
     [S]
     Net earned premium revenues of the Company were $42.4 million, $67.5
     million and $80.9
     million for the years ended December 31, 1999, 1998 and 1997, respectively.
     While
     earned premiums declined in all lines of business, the most significant
     reductions
     during 1999 were in assigned risk automobile ($7.3 million), voluntary
     private passenger
     automobile ($8.1 million) and commercial package policies ($3.7 million).
     As a result
     of poor operating results, the Company is no longer entering into new
     assigned risk
     contracts.  Effective January 1, 2000, all policy renewal obligations have
     been assigned
     to another insurance company. However, the Company remains liable for the
     claim settlement
     costs for assigned risk claims that occurred during the policy term.  The
     Company believes



     it has provided adequate reserves for such liabilities, including loss
     adjustment expenses.
     The decline in voluntary private passenger automobile resulted from tighter
     underwriting
     standards, increased competition and the Company's decision to no longer
     accept new
     policies from those agents who historically have had poor underwriting
     results.  The
     Company's termination of certain unprofitable agents has also adversely
     affected premium
     volume in other lines of business.

     In 1998, the decrease in earned premium revenues was primarily due to a
     decline in the
     number of assigned risk automobile pool contracts acquired due to
     competition and the
     depopulation of the assigned risk automobile pool ($7.4 million) and a
     reduction in
     certain lines, principally voluntary commercial automobile ($2.6 million),
     private passenger
     automobile ($1.8 million), commercial package policies ($1.3 million) and
     workers'
     compensation ($1.1 million), due to tighter underwriting standards, re-
     underwriting and
     increased competition.

                                                    13
     <PAGE>
     <TABLE>
     The Company's combined ratios as determined under GAAP and SAP were as
     follows:
     <CAPTION>
                                       Years Ended December 31,
                                     1999         1998         1997
           <S>                      <C>          <C>          <C>
           GAAP                     139.9%       129.4%       119.3%
           SAP                      145.2%       134.4%       118.6%
     </TABLE>

     [S]
     The Company's combined ratios increased in 1999 and 1998 primarily due to
     the reduction
     in premium volume at a rate greater than the reduction in net underwriting
     and other
     costs.  In addition, the reduction in servicing fees negatively affected
     the expense
     ratios.  Expense ratios were also adversely affected by increased
     expenditures related to
     the installation of new information systems, providing Internet access to
     agents and
     severance costs.  Included in the Company's results for 1999, 1998 and 1997
     were $5.1
     million, $12.9 million and $8.3 million, respectively, for reserve
     strengthening related
     to losses from prior accident years.

     During 1999, the Company experienced unfavorable development due to an
     increase in
     severity of 1998 accident year losses in the assigned risk automobile and
     voluntary
     private passenger automobile lines, and 1996 accident year losses in
     certain classes
     of the commercial automobile line.  As a result, the Company increased its
     reserves by
     $2.2 million for assigned risk automobile, $1.5 million for voluntary
     private passenger
     automobile and $1.4 million for commercial automobile lines. As previously
     discussed,
     the Company no longer accepts new policies from certain agents identified
     as having
     had poor underwriting results in the voluntary private passenger automobile
     line of
     business and, effective January 1, 2000, the Company no longer participates
     in the
     assigned risk business.  Additionally, the Company no longer offers
     insurance in
     those classes of the commercial automobile line that contributed to the
     unfavorable
     development.

     During 1998, the Company reviewed the adequacy of the reserves carried for
     its open
     claims' files, focusing on workers' compensation, commercial auto and other
     commercial
     liability lines of business.  As part of the review, substantially all open
     workers'
     compensation claim files were reviewed for every accident year up to and
     including 1998.
     Additionally, during 1998, the Company reorganized the commercial auto
     claims department.
     As part of this realignment, more complex claims files were reviewed by the
     most
     experienced claims examiners and assumptions regarding average claims
     severity and
     probable ultimate losses were revised.  Accordingly, reserves were
     strengthened by
     $3.9 million for workers' compensation, $4.2 million for commercial
     automobile and
     $4.2 million for other commercial liability lines of business.

     The 1997 reserve strengthening included $3.3 million for commercial package
     lines of
     business and $2.1 million for voluntary commercial automobile lines of
     business.
     These increases resulted from a review of open claim files and the
     continued unfavorable
     development of prior accident years losses, particularly the 1992 through
     1994 accident years.

     As a consequence of its reserve increases, the Company has reduced premiums
     and pre-tax
     profits to recognize reinsurance premiums due for 1995 and prior years
     under
     retrospectively rated reinsurance agreements.  Such amounts totaled $1.4
     million,
     $0.6 million and $1.6 million  for the years ended December 31, 1999, 1998
     and 1997,
     respectively.  The Company has not entered into retrospectively rated
     reinsurance
     agreements after 1995.

     For the lines of business discussed above, as well as all other property
     and casualty
     lines of business, the Company employs a variety of standard actuarial
     ultimate loss
     projection techniques, statistical analyses and case-basis evaluations to
     estimate its
     liability for unpaid losses.  The actuarial projections include an
     extrapolation of both
     losses paid and incurred by business line and accident year and implicitly
     consider the
     impact of inflation and claims settlement patterns upon ultimate claim
     costs based upon
     historical patterns.  These estimates are performed quarterly and consider
     any changes
     in trends and actual loss experience.  Any resulting change in the estimate
     of the
     liability for unpaid losses, including those discussed above, is reflected
     in current
     year earnings during the quarter the change in estimate is identified.

     The reserving process relies on the basic assumption that past experience
     is an
     appropriate basis for predicting future events.  The probable effects of
     current
     developments, trends and other relevant matters are also considered.  Since
     the
     establishment of loss reserves is affected by many factors, some of which
     are outside
     the Company's control or are affected by future conditions, reserving for
     property and
     casualty claims is a complex and uncertain process, requiring the use of
     informed
     estimates and judgments.  As additional experience and other data become
     available and
     are reviewed, the Company's estimates and judgments may be revised.  While
     the effect
     of any such changes in estimates could be material to future results of
     operations,
     the Company does not expect such changes to have a material effect on its
     liquidity
     or financial condition.


                                                    14
     <PAGE>
     In management's judgment, information currently available has been
     appropriately
     considered in estimating the Company's loss reserves.  The Company will
     continue to
     evaluate the adequacy of its loss reserves on a quarterly basis,
     incorporating any
     future changes in trends and actual loss experience, and record adjustments
     to its
     loss reserves as appropriate.

     Investment income has decreased by approximately $2.1 million or 14.2% in
     1999 as
     compared to a decrease of  $1.2 million, or 7.5% in 1998, primarily as a
     result of
     lower invested assets due to a decrease in premiums written and a program
     to reduce
     pending claims.  During 1999, the Company had realized capital losses of
     $1.7 million
     principally due to the sale of fixed maturities to satisfy operating cash
     needs.
     During 1998, the Company had realized capital gains of $6.1 million
     principally from



     gains recognized on the sale of fixed maturities, primarily U.S. Treasury
     Notes.
     During 1997, the Company recorded $0.2 million in realized capital losses
     in the
     normal course of managing its investment strategy.

     The combination of other underwriting expenses incurred and the
     amortization of
     deferred policy acquisition costs reflected a decrease of $2.2 million in
     1999 or
     10.5% and an increase of approximately $1.0 million or 4.9% in 1998. The
     decrease
     in 1999 primarily related to the decline in premium revenue coupled with a
     reduction
     in operating expenses. The increase in 1998 was largely the result of
     expenses relating
     to the move of the Company's executive and administrative offices  to
     Brooklyn, New York
     and higher underwriting costs relating to surveys and audits of insureds
     records in
     connection with the Company's re-underwriting efforts offset in part by a
     $2.0 million
     pension curtailment gain.  The decrease in 1997 was primarily the result of
     lower
     operating costs, primarily relating to pension and severance benefits for
     certain
     employees, and a decrease in the provision for servicing carriers expenses
     in connection
     with the NYPAP, offset by higher systems costs.
     [S]
     Impact of Inflation
     [S]
     The Company, as well as the property and casualty insurance industry in
     general, is
     affected by inflation.  With respect to losses, the Company's claim
     severity is
     affected by the impact of inflation on the cost of automobile repair parts,
     medical
     costs and lost wages.  The costs of adjusting claims and other underwriting
     expenses
     have also been  affected by inflationary pressures on salaries and employee
     benefits.
     The Company receives rate increases based in part upon its experience as
     well as the
     industry's experience.  Accordingly, premium increases generally follow the
     rate of
     inflation.
     [S]
     Cautionary Statement for Forward-Looking Information
     [S]
     Statements included in this Report may contain forward-looking statement
     pursuant to
     the safe-harbor provisions of the Private Securities Litigation Reform Act
     of 1995.
     Such statements s.  Such forward-looking statements are made may relate,
     but are not
     limited, to projections of revenues, income or loss, capital expenditures,
     fluctuations
     in insurance reserves, plans for growth and future operations, competition
     and regulation
     as well  as assumptions relating to the foregoing.  Forward-looking
     statements are
     inherently subject to risks and uncertainties, many of which cannot be
     predicted or
     quantified.  When used in this Report, the words "estimates", "expects",
     "anticipates",
     "believes", "plans", "intends" and variations of such words and similar
     expressions are
     intended to identify forward-looking statements that involve risks and
     uncertainties.
     Future events and actual results could differ materially from those set
     forth in,
     contemplated by or underlying the forward-looking statements.  The factors
     that could
     cause actual results to differ materially from those suggested by any such
     statements
     include, but are not limited to, those discussed or identified from time to
     time in
     the Company's public filings, including general economic and market
     conditions, changes
     in  domestic laws, regulations and taxes, changes in competition and
     pricing environments,
     regional or general changes in asset valuation, the occurrence of
     significant natural
     disasters, the inability to reinsure certain risks economically, the
     adequacy of loss
     reserves, prevailing interest rate levels, weather related conditions that
     may affect
     the Company's operations and changes in composition of the Company's assets
     and
     liabilities through acquisitions or divestitures.  Undue reliance should
     not be placed
     on these forward-looking statements, which are applicable only as of the
     date hereof.
     The Company undertakes no obligation to revise or update these forward-
     looking statements
     to reflect events or circumstances that arise after the date of this Report
     or to
     reflect the occurrence of unanticipated events.

                                                    15
     <PAGE>
     [S]
     Item 7A.   Quantitative and Qualitative Disclosures about Market Risk
     [S]
     The following includes "forward-looking statements" that involve risks and
     uncertainties.
     Actual results   could differ materially from those projected in the
     forward-looking
     statements.

     The Company's market risk arises principally from interest rate risk
     related to its
     investment portfolio.  The Company does not enter into material derivative
     financial
     instrument transactions.

     The Company's investment portfolio is primarily classified as available for
     sale,
     and consequently, is recorded on the balance sheet at fair value with
     unrealized
     gains and losses reflected in shareholders' equity.  Included in the
     Company's
     investment portfolio are fixed income securities, which comprised
     approximately 80%
     of the Company's total investment portfolio at December 31, 1999.  These
     fixed income
     securities are primarily rated "investment grade" or are U.S. governmental
     agency
     issued or guaranteed obligations, although limited investments in "non-
     rated" or rated
     less than investment grade securities have been made from time to time.
     The estimated
     weighted average remaining life of these fixed income securities was
     approximately 2.6
     years at December 31, 1999.  The Company's fixed income securities, like
     all fixed
     income instruments, are subject to investment rate risk and will fall in
     value if market
     interest rates increase.  At December 31, 1998, fixed income securities
     comprised
     approximately 78% of the Company's investment portfolio and had an
     estimated weighted
     average remaining life of 3.2 years.  At December 31, 1999 and 1998, the
     Company's
     portfolio of trading securities was not material.  Expected maturities will
     differ from
     contractual maturities because the borrowers may have the right to call or
     prepay
     obligations with or without call or prepayment penalties.  The Company
     manages the
     investment portfolio to preserve principal, maintain a high level of
     quality, comply
     with applicable insurance industry laws and regulations and achieve an
     acceptable rate
     of return.  In addition, the Company considers the duration of its
     insurance reserves in
     comparison with that of its investments.

     <TABLE>
The following table provides information about the Company's fixed income securities.
The table presents principal cash flows by expected maturity dates.
<S>
Expected Maturity Date
<S>
                                     2000     2001     2002     2003     2004     Thereafter    Total    Fair Value
                                                   (Dollars in thousands)
<CAPTION>
                                  <C>        <C>      <C>      <C>      <C>       <C>         <C>       <C>
<S>
Rate Sensitive Assets:
Available for Sale Fixed
  Income Securities:
U.S. Government                   $14,812   $23,416   $77,653        -        -   $24,788     $140,669  $140,669
 Weighted Average Interest Rate     5.08%     5.35%     6.43%        -        -      5.16%         -         -
Other Fixed Maturities:
Rated Investment Grade            $ 1,925   $ 1,569   $ 4,386  $ 3,298  $10,691   $ 7,256     $ 29,125  $ 29,125
 Weighted Average Interest Rate     6.53%     6.91%     6.68%    6.00%    6.95%     6.51%           -         -
Rated Less Than Investment
 Grade/Not Rated                       -         -         -   $   830       -         -      $    830  $    830
 Weighted Average Interest Rate        -         -         -     7.13%       -         -            -          -

Held to Maturity Fixed Income
  Securities:
U.S. Government                        -         -    $  492        -        -         -      $    492  $    476
 Weighted Average Interest Rate        -         -     6.38%        -        -         -            -          -
</TABLE>

     [S]
     Item 8.   Financial Statements and Supplementary Data
     [S]
               See page F1.
     [S]
     Item 9.   Changes in and Disagreements with Accountants on Accounting
               and Financial Disclosure
     [S]
               NONE

                                                    16
     <PAGE>
                                                 PART III
     [S]
     Item 10. Directors and Executive Officers of the Registrant
     [S]
     Pursuant to the Company's Charter and By-Laws, the Board of Directors of
     the Company
     consists of 13 members divided into three classes: Class I, Class II and
     Class III.
     Class I consists of five directors and Class II  and III each consists of
     four directors.
     Joel Berlin resigned from the Boards of the Group in January 1999 and was
     replaced by
     Ms. Carmen M. Rivera in March 1999.  One class of directors is elected in
     each year for
     a three-year term.  All of the directors of the Company are also directors
     of Empire and
     Centurion.
    <TABLE>
                                     <C>
<S>
Name, Age and Position               Principal Occupation, Office
     with Company                       and Term of Office

Robert V. Toppi, 62,                 Principal Occupation - President, and Chief Executive
Director, President and Chief        Officer of the Company and  Empire
Executive Officer                    since August 1998.
                                     Previously, Resident Vice President of the Greater New York
                                     district with Aetna Casualty and Surety Company.
                                     Class II Director since August 1998; current term expires 2001.

Martin B. Bernstein, 66,             Principal Occupation - President and
Director                             Director of Ponderosa Fibres of America, Inc.
                                     (A pulp manufacturer for paper producers).
                                     Class II Director since February 1988; current term
                                     expires 2001.

Ian M. Cumming, 59,                  Principal Occupation - Presently and since June 1978,
Director                             Chairman of the Board and a Director of Leucadia.
                                     Director of Skywest, Inc. (a Utah-based
                                     regional air carrier) since June 1986.
                                     Director of MK Gold Company ("MK Gold")
                                     (an international gold mining company) since June 1995.
                                     Director of HomeFed Corporation ("HomeFed"),
                                     (a   California real estate developer) since May 1999.
                                     Class I Director since February 1988; current
                                     term expires 2000.

James E. Jordan, 56,                 Principal Occupation - Private Investor.
Director                             Previously, President of  The William Penn Corporation
                                     from 1986 until 1997. Director of First Eagle SoGen Mutual
                                     Funds and JZ Equity Partners PLC (a British investment trust
                                     company).
                                     Class III Director since 1997; current term expires 2002.

Thomas E. Mara, 54,                  Principal Occupation - Presently and
Director                             since May 1980, Executive Vice President of Leucadia
                                     and Treasurer of Leucadia since January 1993.
                                     Class I Director since October 1994; current term expires 2000.

Louis V. Siracusano, 53,             Principal Occupation - Attorney with
Director                             McKenna, Fehringer, Siracusano &
                                     Chianese (a law firm) for over seven years.
                                     Class II Director since 1985; current term expires 2001.

                                               17
<PAGE>
Name, Age and Position               Principal Occupation, Office
   with Company                       and Term of Office

<S>
Joseph A. Orlando, 44,               Principal Occupation - Chief Financial Officer of  Leucadia
Director                             since April 1996 and Vice President of  Leucadia since January 1994.
                                     Class III Director  since 1998; current term expires 2002.

Joseph S. Steinberg, 56,             Principal Occupation - President of Leucadia since
Director, Chairman of the Board      January 1979 and Director of Leucadia since
                                     December 1978.  Director of MK Gold  since June 1995. Director since
                                     June 1988 of Jordan Industries, Inc., a holding company principally
                                     engaged in manufacturing.  Director of  HomeFed  since August 1998.
                                     Class I Director since February 1988; current term expires 2000.

Daniel G. Stewart, 81,               Principal Occupation - Independent
Director                             consulting actuary. Previously, Senior Vice
                                     President of Mutual Benefit Life Insurance
                                     Company from 1985 to November 1991.
                                     Class I Director since 1980; current term expires 2000.

Lucius Theus, 77,                    Principal Occupation - President, The U.S. Associates
Director                             (consultants in civic affairs, human resources
                                     and business management) since 1989.  Principal and
                                     Director of the Wellness Group, Inc.
                                     (a provider of health promotion programs) since 1989
                                     Corporate Director, Civic Affairs of Allied
                                     Corporation (a diversified industrial company) since 1979.
                                     Class II Director since 1980; current term expires 2001.

Carmen M. Rivera, 53,                Principal Occupation - Senior Vice President of Small Business
Director, Senior Vice President      and Personal Lines Division of the Company and Empire since
                                     November 1998.  Previously, Select  Manager in the  N.Y.C. office
                                     at the  Travelers Property Casualty  Corporation.
                                     Class I Director since March 1999; current term expires 2000.

Harry H. Wise, 61,                   Principal Occupation - President and
Director                             Director, H.W. Associates, Inc. (an investment
                                     advisory firm). President and Director, Madison
                                     Equity Capital Corp. (a sponsor of private investment partnerships).
                                     Class III Director since 1988; current term expires 2002.

Francis M. Colalucci, 55,            Principal Occupation - Executive Vice President,
Director, Executive Vice President,  Chief Financial Officer and Treasurer of the
Chief Financial Officer &            Company and Empire since March 1999.
Treasurer                            Senior Vice President, Chief Financial Officer and Treasurer
                                     since January 1996.  Previously, Vice President & Corporate Treasurer
                                     of Continental Corporation (an insurance holding Company) from
                                     1991 to January 1996.
                                     Class III Director since October 1996; Current term expires in
                                     2002.

                                               18
<PAGE>
Name, Age and Position                Principal Occupation, Office
  with Company                         and Term of Office
<S>
Robert F. Boyle, 46,                  Principal Occupation - Senior Vice President, Mid-Market
Senior Vice President 			  Division of the Company and Empire since March 1998.
                                      Vice President, Underwriting from January 1997 to March
                                      1998.  Previously,  Northeast Regional Commercial Underwriting
                                      Manager at Allstate Insurance Company from March 1988 to January 1997.

Rocco J. Nittoli, 41,                 Principal Occupation - Senior Vice President & Chief
Senior Vice President &               Information Officer of the Company and Empire since January
Chief Information Officer             2000.  Vice President and Controller from September 1997 to January
                                      2000.  Previously, Controller of Aegis Insurance Services, Inc. from
                                      October 1995 to September 1997.

Edward A. Hayes, 48,                  Principal Occupation - Senior Vice President,
Senior Vice President                 Claims for the Company and Empire since November
                                      1999.  Previously, attorney with Hawkins, Feretic,
                                      Daly, Maroney & Hayes ( a law firm) from May 1997 to November 1999.
                                      Vice President at Travelers Property Casualty Corporation from February
                                      1996 to May 1997. Attorney of  Record and Managing Attorney of Aetna
                                      Casualty & Surety Company's Staff Counsel Office in New York City from
                                      July 1988 to February 1996.
</TABLE>


                                                  19

     <PAGE>
     <TABLE>
Item 11.	Executive Compensation

Summary Compensation Table
The following table sets forth certain compensation information for Robert V. Toppi,
currently the Chief Executive Officer ("CEO") of  the Company and Richard G. Petitt
who was previously CEO of the Company, the only executive officers whose compensation
paid, or accrued for, under the pooling arrangement exceeded $100,000 for the years
ended December 31, 1999, 1998 and 1997.
<CAPTION>
                                                   Summary Compensation Table
                                                                       All Other
                                             Annual Compensation     Compensation
Name and Principal
  Position                                   Salary      Bonus
                       Year                    $           $               $
                       <C>                   <C>         <C>              <C>
<S>
Robert V. Toppi        1999                  (a)         (a)              (a)
President  & CEO       1998                  (a)         (a)              (a)

Richard G. Petitt      1997                  105,969      90,000           6,767 (b)
Chairman, President
& CEO.
<S>
<FN>
(a) Mr. Toppi receives no compensation from the Company.  He is compensated directly by
Leucadia.
(b) Includes Salary Cap Restoration Plan ($2,303), Pension Plan ($3,264), and Company match
of 401(k) Plan ($1,200).
</TABLE>


     The Company does not directly remunerate directors.  The directors of the
     Company and Empire
     who are not officers or employees of Empire and the Company were paid an
     annual retainer of
     $5,000.  In addition, eligible directors receive $1,500 for each joint
     board meeting attended.
     For attendance at a meeting of a committee of the joint board, such
     directors receive $1,500
     per meeting.  In addition, each Chairperson of a committee is entitled to
     $500 per annum.
     All fees paid to such directors are shared in accordance with the pooling
     agreement.

     In 1998, Mr. Richard G. Petitt retired as Director, Chairman of the Board,
     President and CEO
     of the Company and the Group.  He was succeeded by Mr. Toppi who is
     President and CEO and a
     Director.  Mr. Steinberg succeeded Mr. Petitt as Chairman of the Board.
     [S]
     Pension Plan
     [S]
     Effective January 1, 1999, Empire adopted a non-contributory defined
     contribution plan
     (the "Plan").  The contributions, ranging from 2% - 16% of employees'
     current pension
     eligible compensation, are based on the age and service of the employee
     with Empire.
     These contributions accumulate for participants on a tax-deferred basis.
     Participants
     direct the investment of their contributions to their accounts.  Empire
     contributed
     $1,145,000 to the Plan in 1999.  In accordance with the pooling agreement,
     the Company
     is obligated to provide 30% of Empire's contributions to the Plan.


                                                     20
     <PAGE>
     Prior to January 1, 1999, pensions for officers and employees of the
     Company were
     provided under a non-contributory defined benefit pension plan ("prior
     plan").  Any
     employee was eligible for membership in the plan on January 1st or July 1st
     of any
     plan year after which they had completed one full year of service,
     consisting of a
     minimum of 1,000 credited hours with Empire, provided they had attained the
     age of
     21 years by or before such date.  Members of the prior plan received a
     basic pension
     if they worked until their normal retirement date, which was the last day
     of the
     month in which they attained 65 years of age with 5 years of, credited
     service.  Any
     member in the active employ of Empire may have elected early retirement
     between 55
     and 65.  A member electing early retirement must have had at least 10 years
     of service.
     A monthly average of total compensation received over the highest 5
     consecutive plan or
     calendar years before retirement was taken to compute benefits as follows:

     1.30% of the first $833 per month of average pay, plus
     1.75% of average pay over $833 per month.

     The sum of these two credits was multiplied by the years of credited
     service. The basic
     benefit amounts listed in the table below were not subject to any deduction
     for Social
     Security benefits or other offset amounts. The maximum benefit payable
     under the pension
     plan was $96,400 per year.  Benefits accrued under the Plan were frozen as
     of December 31,
     1998.  The prior plan was merged with the Leucadia plan effective  January
     1, 1999.



     As a result of the curtailment of the pension benefits in 1998, the Group
     recognized a
     gain of $6,548,000.  In accordance with the pooling agreement, the
     Company's share of
     the curtailment gain was 30%.
    <TABLE>

The amounts set forth in the following table show estimated annual benefits upon retirement
to which the Company contributes 30% of such cost through the pooling agreement.
<S>
<CAPTION>
         Highest
     Five Year Average
      Compensation at                                   Years of Service
         Retirement          10        15         20         25       30        35
       <S>              <C>          <C>         <C>        <C>      <C>       <C>
       $ 10,000         $ 1,300      $ 1,950     $ 2,600    $ 3,250  $ 3,900   $ 4,550
         25,000           3,925        5,888       7,850      9,813   11,775    13,738
         50,000           8,300       12,450      16,600     20,750   24,900    29,050
         75,000          12,675       19,013      25,350     31,688   38,025    44,363
        100,000          17,050       25,575      34,100     42,625   51,150    59,675
        160,000          27,500       41,300      55,100     69,000   82,600    96,400
</TABLE>

     [S]

     Salary Cap Restoration Plan
     [S]
     In 1994, Empire established a Salary Cap Restoration Plan ("SCRP") for
     certain corporate
     officers.  Under the SCRP, Empire provided these officers with an
     additional benefit, to
     be paid in a lump-sum upon retirement, equal to the difference between the
     actuarially
     determined lump-sum benefits, as computed under the prior pension plan, of
     the officer's
     highest five year average compensation (not to exceed $320,000, adjusted
     for the cost-
     of-living) at retirement and the current maximum compensation limit of
     $160,000. The SCRP
     was an unfunded plan.  Along with the prior pension plan, the benefits
     under SCRP were
     curtailed as of December 31, 1998.
     [S]
     Employees' Savings Plan
     [S]
     Empire sponsors an Employees' Savings Plan (the "Savings Plan"), under
     which each
     eligible employee may defer a portion of his or her annual compensation,
     subject to
     limitations. Empire contributes a matching amount, subject to certain
     limits. Empire
     matches contributions equal to 50% of an employee's contributions up to a
     maximum of 2.5%



     of the employee's salary.  Empire's contributions to the Savings Plan were
     $452,000,
     $420,000, and $438,000 in 1999, 1998 and 1997, respectively. Under the
     pooling agreement,
     the Company is obligated to provide 30% of Empire's contributions to the
     Savings Plan.

                                                    21
     <PAGE>

     Item 12. Security Ownership of Certain Beneficial Owners and Management

     Security Ownership of Certain Beneficial Owners

     The following table sets forth information as of March 17, 2000 as to the
     Common
     Shares of the Company owned of record and beneficially by each person who
     owns of
     record, or is known by the Company to own beneficially, more than 5% of
     such Common
     Shares.
    <TABLE>
<CAPTION>
           Name and                       Amount and
           Address of                     Nature of
           Beneficial                     Beneficial                    Percent of
           Owner                          Ownership                       Class
                                          <C>                           <C>
<S>
          Empire Insurance Company        5,987,401 Common              84.6%
          335 Adams Street                Shares owned of
          Brooklyn, N.Y.  11201           record

          Baldwin Enterprises, Inc.       451,707 Common                 6.4%
          529 East South Temple           Shares owned of
          Salt Lake City, Utah 84102      record
</TABLE>

     [S]

     As discussed in Item 1, "Business", Leucadia (and certain of its wholly-
     owned subsidiaries)
     may be deemed a parent of Empire and therefore of the Company as a result
     of its indirect
     ownership of 100% of the outstanding common stock of Empire.

     Security Ownership of Management

     The following table sets forth information concerning beneficial ownership
     of the
     Company's common stock and the equity securities of Leucadia by all
     directors and by
     directors and officers of the Company as a group as of December 31, 1999
     with respect
     to the Company's Common Shares and as of March 13, 2000 with respect to
     Leucadia's and
     Empire's securities.

                                                   22
     <PAGE>



     Each holder shown exercises sole voting and sole investment power of the
     shares
     shown opposite his or her name.

     Name of Beneficial               Amount and Nature of               Percent
     of
         Owner                        Beneficial Ownership                 Class

     Martin B. Bernstein                         -                            -
     Robert F. Boyle                             -                            -
     Francis M. Colalucci                        -                            -
     Ian M. Cumming (1)                          -                            -
     Edward A. Hayes                             -                            -
     James E. Jordan                             -                            -
     Thomas E. Mara                              -                            -
     Rocco J. Nittoli                              -
     -
     Joseph A. Orlando                             -
     -
     Carmen M. Rivera                            -                            -
     Louis V. Siracusano                         -                            -
     Joseph S. Steinberg (1)                     -                            -
     Daniel G. Stewart                           -                            -
     Lucius Theus                                -                            -
     Robert V. Toppi                             -                            -
     Harry H. Wise                               -                            -
     Directors and Executive
     Officers as a group                         -                            -
     (22 persons) (2)
     [S]
     (1) Although neither Ian M. Cumming nor Joseph S. Steinberg directly owns
     any shares
     of common stock of the Company, by virtue of their respective interest of
     approximately
     17.9% and 16.4% in Leucadia, each may be deemed to be the beneficial owner
     of a
     proportionate number of the shares of common stock of the Company
     beneficially owned
     by Leucadia through its 100% ownership of Empire.
     [S]
     (2) Aside from the beneficial ownership described in Note 1 to this table,
     five
     directors and one officer beneficially own common shares of Leucadia, which
     in the
     aggregate, represent less than 1% of Leucadia's common stock.

     [S]
     Item 13. Certain Relationships and Related Transactions
     [S]
     See Item 1 of this report and Notes 1, 2, 3, 8, 9, 10 and 11 of Notes to
     Consolidated
     Financial Statements for information relating to transactions and
     relationships
     between the Company and its affiliates.

                                                    23
     <PAGE>
                                                 PART IV

     Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K

     (a) Financial Statements and Schedule.



     1.    The following Financial Statements of Allcity Insurance Company are
     included
           in Item 8:

           Report of Independent Accountants
           Consolidated Balance Sheets as of December 31, 1999 and 1998
           Consolidated Statements of Operations for the years ended December
     31, 1999,
           1998 and 1997
           Consolidated Statements of Changes in Shareholders' Equity for the
     years ended
           December 31, 1999, 1998 and 1997
           Consolidated Statements of Cash Flows for the years ended December
     31, 1999, 1998 and 1997
           Notes to Consolidated Financial Statements

     2.    The information for Schedules I, IV and V required to be filed
     pursuant to
           Regulation S-X, Article 7 is contained in the Notes to Consolidated
     Financial
           Statements and, therefore, these schedules have been omitted.  The
     information
           required by Schedules III and IV of Article 7 is combined in Schedule
     VI -
           Supplemental Insurance Information Concerning Property/Casualty
     Insurance
           Operations.  All other required schedules are not applicable.

           Schedule VI - Supplemental Insurance Information Concerning
     Property/Casualty
           Insurance Operations
            for the years ended December 31, 1999, 1998 and 1997.

     3.   The exhibits required by Item 601 of Regulation S-K have been filed
     herewith,
          see attached Exhibit Index.

     (b) Reports on Form 8-K.

         During the quarter ended December 31, 1999, there were no reports on
         Form 8-K filed for the Company.

     (c) Exhibits Required by Item 601 of Regulation S-K.

         See attached Exhibit Index.

     (d) Financial Statements Required by Regulation S-X.

         See Item 14(a).

                                                     24
     <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.

                                         ALLCITY INSURANCE COMPANY

     March 29, 2000                      By:  /s/ Francis M. Colalucci



                                                  Francis M. Colalucci
                                                  Director, Executive Vice
     President,
                                                   CFO. & Treasurer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
     report
     has been signed below by the following persons on behalf of the registrant
     and in
     the capacities indicated and on the date set forth above.

     /s/ Robert V. Toppi                     /s/ Francis  M. Colalucci

     Robert V. Toppi                             Francis M. Colalucci
     Director, President & C.E.O.                Director, Executive Vice
     President,
                                                 C.F.O. & Treasurer


     /s/ Joseph S. Steinberg                 /s/ Martin B. Bernstein

     Joseph S. Steinberg                         Martin B. Bernstein
     Director, Chairman of the Board             Director


     /s/ Louis V. Siracusano                /s/ Harry H. Wise

     Louis V. Siracusano                        Harry H. Wise
     Director                                    Director



     /s/ Daniel G. Stewart                  /s/ Thomas E. Mara
     Daniel G. Stewart                          Thomas E. Mara
     Director                                   Director



     /s/ Ian M. Cumming                    /s/ James E. Jordan
     Ian M. Cumming                            James E. Jordan
     Director                                  Director



     /s/ Lucius Theus                      /s/ Carmen M. Rivera
     Lucius Theus                              Carmen M. Rivera
     Director                                  Director, Senior Vice President



     /s/ Joseph A. Orlando
     Joseph A. Orlando
     Director



                                                    25
     <PAGE>
     EXHIBIT INDEX


      The following designated exhibits, as indicated below, are either filed
     herewith



     (if indicated by an asterisk) or have heretofore been filed with the
     Securities
     and Exchange Commission under the Securities Act of 1933 or the Securities
     Exchange
     Act of 1934 and are incorporated herein by reference to such filings.
     Reference is
     made to Item 8 of this Form 10-K for a listing of certain financial
     information and
     statements incorporated by reference herein.
     [S]
     Exhibit Number           Description of Document
     [S]
            3                Corporate charter, as amended, and by-laws, as
                             amended, of the Company (Incorporated by reference
                             to Exhibit 3 of the Company's Annual Report on Form
                             10-K for the year ended December 31, 1994).

            10(a)            Pooling Agreement, as amended through March 31,
                             1992 between Empire and the Company (Incorporated
     by
                             reference to Exhibit 10(a)-20 of the Company's Form
                             8 Amendment No. 1 of its annual Report for the year
                             ended December 31, 1981).

            10(c)            Centurion Agreement, made effective as of
                             August 21, 1987 by and between Empire and the
                             Company, and Centurion.  (Incorporated by reference
                             to Exhibit 10(e) of the Company's Annual Report on
                             Form 10-K for the year ended December 31, 1987).

            10(d)            Empire Mutual Executive Deferred Compensation Plan
                             dated November 17, 1987.  (Incorporated by
     reference
                             to Exhibit 10(f) of the Company's Annual Report on
                             Form 10-K for the year ended December 31, 1987).

            10(e)            Empire Mutual Insurance Company Supplemental
                             Retirement Plan dated November 17, 1987.
                             (Incorporated by reference to Exhibit 10(g) of the
                             Company's Annual Report on Form 10-K for  the year
                             ended December 31, 1987).



















                                                    26
     <PAGE>
     Exhibit Number                Description of Document





     10(f)                        Tax Allocation Agreement dated February 28,
                                  1989 among
                                  the Company, PHLCORP, Inc., Empire, Centurion,
                                  Empire
                                  Livery Services, Inc., Executroll Services
                                  Corporation,
                                  and Empall Agency Incorporated.  (Incorporated
                                  by reference
                                  to Exhibit 10(m) of the Company's Annual
                                  Report on Form
                                  10-K for the year ended December 31, 1988).

     10(g)                        Employment Agreement made as of January 1,
                                   1993 between
                                  Empire and Andrew W. Attivissimo.
                                  (Incorporated by reference
                                  to Exhibit 10(g) of the 10-K for the year
                                  ended December
                                  31, 1992).

     10(h)                        Empire Insurance Company Salary Cap
                                  Restoration Plan dated
                                  May 26, 1994. (Incorporated by reference to
                                  Exhibit 10(i)
                                  of the Company's Annual Report on Form 10-K
                                  for the December
                                  31, 1994).

     10(i)                        Quota Share Reinsurance Agreement between
                                  Empire Insurance
                                  Company and Centurion Insurance Company
                                  (Incorporated by
                                  reference to Exhibit 10(i) of the Company's
                                  Annual Report
                                  on Form 10-K for the year ended December 31,
                                  1997).

     10(j)                        Lease agreement dated June 27, 1996 between
                                  Empire Insurance
                                  Company and Brooklyn Renaissance Plaza L.L.C.,
                                  as Landlord,
                                  BRPII L.L.C as sub-landlord (Incorporated by
                                  reference to
                                  Exhibit 10(a) of the Company's quarterly
                                  report on Form 10-Q
                                  for the quarter ended March 31, 1997).


     27*                          Financial Data Schedule















                                                  27
     <PAGE>








     ITEM 8.  Financial Statements and Financial Statement Schedule
                                               Page
     The following financial information is submitted herein:

     Report of Independent Accountants                                   F-2
     Consolidated Balance Sheets as of December 31, 1999 and 1998        F-3
     Consolidated Statements of Operations for the years
           ended December 31, 1999, 1998 and 1997                        F-4
     Consolidated Statements of Changes in Shareholders' Equity
           for the years ended December 31, 1999, 1998 and 1997          F-5
     Consolidated Statements of Cash Flows for the years ended
           December 31, 1999, 1998 and 1997                              F-6
     Notes to Consolidated Financial Statements                       F7-F26

     Financial Statement Schedule:

     Schedule VI- Supplemental Insurance Information
     Concerning Property/Casualty Insurance Operations for the
           years ended December 31, 1999, 1998 and 1997                 F-27














                                                      F1
     <PAGE>
     REPORT OF INDEPENDENT ACCOUNTANTS


     To the Board of Directors and Shareholders
     Of Allcity Insurance Company:

     In our opinion, the consolidated financial statements listed in the index
     appearing under
     item 14(a)(1) on page 24 present fairly, in all material respects, the
     financial position
     of Allcity Insurance Company and its subsidiary at December 31, 1999 and
     1998, and the
     results of their operations and their cash flows for each of the three
     years in the period
     ended December 31, 1999 in conformity with accounting principles generally
     accepted in the
     United States of America.  In addition, in our opinion, the financial
     statement schedules
     listed in the index appearing under Item 14(a)(2) on page 24 present
     fairly, in all material
     respects, the information set forth therein when read in conjunction with
     the related
     consolidated financial statements.  These financial statements and
     financial statement
     schedules are the responsibility of the Company's management; our
     responsibility is to
     express an opinion on these financial statements and financial statement
     schedules based
     on our audits.  We conducted our audits of these statements in accordance
     with auditing
     standards generally accepted in the United States of America, which require
     that we plan
     and perform the audit to obtain reasonable assurance about whether the
     financial statements
     are free of material misstatement.  An audit includes examining, on a test
     basis, evidence
     supporting the amounts and disclosures in the financial statements,
     assessing the accounting
     principles used and significant estimates made by management, and
     evaluating the overall
     financial statement presentation.  We believe that our audits provide a
     reasonable basis
     for the opinion expressed above.



     PricewaterhouseCoopers LLP
     New York, New York
     March 15,2000












                                                  F2

       <PAGE>

       <TABLE>
       CONSOLIDATED BALANCE SHEETS
       <S>
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY
       (In thousands, except share and per share amounts)
       <CAPTION>
       <S>
                                                           December 31,_
                                                           <C>        <C>
        ASSETS                                             1999        1998
          Investments:
            Fixed maturities
             Available for sale (amortized cost of
             $167,294 in 1999 and $181,214 in 1998)       $163,495    $181,729
             Held to maturity (fair value
             of $476 in 1999 and $502 in 1998)                 492         502
           Equity securities available for sale                255         176
           Short-term                                        7,129      20,186
           Other invested assets                            33,875      31,446
                                 TOTAL INVESTMENTS         205,246     234,039

          Cash                                                 644         390
          Agents' balances, less allowance for
             doubtful accounts ($1,812 in 1999 and
             $1,817 in 1998)                                 6,115      10,015
          Accrued investment income                          3,041       3,662
          Reinsurance balances receivable                  230,193     295,994
          Prepaid reinsurance premiums                      22,282      37,691
          Deferred policy acquisition costs                  3,415       5,365
          Deferred tax benefit                               9,938      10,413



          Due from affiliates                                    -       3,698
          Other assets                                       5,146       4,437
                                TOTAL ASSETS              $486,020    $605,704
        LIABILITIES
          Unpaid losses                                   $307,075    $382,109
          Unpaid loss adjustment expenses                   34,861      52,123
          Unearned premiums                                 38,927      63,972
          Drafts payable                                     1,118       3,912
          Due to affiliates                                  7,476           -
          Unearned service fee income                        1,099       2,240
          Reserve for servicing carrier claim expenses         922       1,730
          Reinsurance balances payable                         717         885
          Other liabilities                                  6,258       5,233
          Surplus note                                      15,851      15,300
                                TOTAL LIABILITIES          414,304     527,504
       SHAREHOLDERS' EQUITY
          Common stock, $1 par value: 7,368,420



            shares authorized; 7,078,625 shares issued
            and outstanding in 1999 and 1998                 7,079       7,079
          Additional paid-in capital                         9,331       9,331
          Accumulated other comprehensive (loss)/income
            net of deferred (benefit)/tax of ($1,240) and
            $242 in 1999 and 1998, respectively             (2,304)        449
          Retained earnings                                 57,610      61,341
                             TOTAL SHAREHOLDERS' EQUITY     71,716      78,200
            TOTAL LIABILITIES   AND SHAREHOLDERS' EQUITY   $486,020    $605,704
       <S>
       See Notes to Consolidated Financial Statements.
       <S>
       </TABLE>
                                                      F3
       <PAGE>
       <TABLE>
       CONSOLIDATED STATEMENTS OF OPERATIONS
       <S>
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY
       (In thousands, except share
       and per share amounts)
       <CAPTION>
       <S>


                                                  Years  Ended December  31,
       REVENUES                                     1999       1998      1997
       <S>                                        <C>       <C>       <C>
          Premiums earned                         $42,448   $67,512   $80,891
          Net investment income                    12,466    14,523    15,694
          Service fee income                        2,032     3,389     5,696
          Net securities (losses)/ gains           (1,668)    6,079      (192)
          Other income                                384       567       535
                                                   55,662    92,070   102,624

       LOSSES AND EXPENSES
          Losses                                   33,597    62,282    68,901
          Loss adjustment expenses                  8,941     7,307    13,144
          Other underwriting expenses, less
            deferrals of $7,398 in 1999, $11,697
            in 1998 and $14,616 in 1997             9,547     7,705     4,886
          Amortization of deferred policy
            acquisition costs                       9,348    13,411    15,245
          Interest on surplus note                    551       591       595
                                                   61,984    91,296   102,771



       (LOSS)/INCOME BEFORE FEDERAL INCOME TAXES   (6,322)      774      (147)

       FEDERAL INCOME TAXES
           Current benefit                         (4,549)    (1,031)     (227)
           Deferred expense                         1,958      1,301       163
                                                   (2,591)       270       (64)

                    NET (LOSS)/INCOME             $(3,731)  $   504   $   (83)

       Per share data, based on 7,078,625
          average shares outstanding in 1999,
          1998 and 1997

       BASIC AND DILUTED(LOSS)/EARNINGS PER SHARE  $(0.53)   $ 0.07    $(0.01)




       <FN>
       See Notes to Consolidated Financial Statements.
       </TABLE>








                                               F4
       <PAGE>
    <TABLE>
  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
  <S>
  ALLCITY INSURANCE COMPANY AND SUBSIDIARY
  For the years ended December 31, 1999, 1998 and 1997
  (In thousands)
<CAPTION>
                                       SHAREHOLDERS' EQUITY

                                                           Accumulated           Total
                                             Additional         Other            Share-
                            Common Stock    Paid-In   Comprehensive  Retained          holders'
                             Shares    Amount  Capital     (Loss)/Income  Earnings       Equity_
                                              <C>           <C>         <C>       <C>        <C>        <C>
<S>
  Balance at January 1, 1997                   7,079        $ 7,079     $9,331    $(1,672)   $60,920    $ 75,658
  Comprehensive Income:
    Net loss for the year                                                                        (83)        (83)
    Net change in unrealized gain on
    investments (net of deferred tax
    of $1,394)                                                                       2,589                  2,589
      Comprehensive Income                                                                                  2,506

  Balance as of December 31, 1997              7,079          7,079      9,331         917    60,837       78,164
  Comprehensive Income:
    Net income for the year                                                                      504          504
    Unrealized holding gain arising during
    the period (net of deferred tax of $767)                                         1,425                  1,425
    Less reclassification of net securities
    gains included in net income (net of
    deferred benefit  of $1,019)                                                    (1,893)                (1,893)
      Comprehensive Income                                                                                     36


  Balance as of December 31, 1998              7,079          7,079      9,331         449    61,341       78,200

  Comprehensive Loss:
    Net loss for the year                                                                      (3,731)     (3,731)
    Unrealized holding loss arising during
    the period (net of deferred benefit of
      $1,803)                                                                        (3,349)               (3,349)
    Less reclassification of net securities
    losses included in net loss (net of
    deferred tax  of $321)                                                              596                   596
      Comprehensive Loss                                                                                   (6,484)

  Balance as of December 31, 1999              7,079         $7,079      $9,331     $(2,304)  $57,610     $71,716

<S>
  See Notes to Consolidated Financial Statements
</TABLE>

     F5
     <PAGE>
   <TABLE>
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  ALLCITY INSURANCE COMPANY AND SUBSIDIARY
  (In thousands)
                                                          Years  Ended December 31,
                                                     <C>       <C>         <C>
<S>                                                    1999        1998       1997
  NET CASH FLOWS FROM OPERATING ACTIVITIE
   Net(loss)/income                                    $(3,731)    $   504     $  (83)
    Adjustments to reconcile net (loss)/income
      to net cash used for operating
      activities:
        Provision for deferred tax expense               1,958       1,301        163
        Amortization of deferred policy
         acquisition costs                               9,348      13,411      15,245
        Provision for doubtful accounts                     (5)        256         198
        Net securities losses/ (gains)                   1,668      (6,079)        192
        Policy acquisition costs incurred
          and deferred                                  (7,398)    (11,697)    (14,616)
        Net change in:
          Agents' balances                               3,905       2,838       4,507
          Reinsurance balances receivable               65,801     (22,714)     (9,121)
          Prepaid reinsurance premiums                  15,409      17,383      14,987
          Unpaid losses and loss adjustment
            expenses                                   (92,296)     16,706      11,439
          Unearned premiums                            (25,045)    (26,835)    (20,850)
          Drafts payable                                (2,794)     (1,071)       (729)
          Due to and (from) affiliates                  11,174     (18,125)        195
          Unearned service fees                         (1,141)     (2,299)       (922)
          Reserve for servicing carrier claims
            expenses                                      (808)     (1,971)     (4,342)
          Reinsurance balances payable                    (168)     (3,940)        (62)
          Other                                          2,743      (2,526)       (413)
   NET CASH USED FOR OPERATING ACTIVITIES              (21,380)    (44,858)     (4,212)


  NET CASH FLOWS FROM INVESTING ACTIVITIES
        Acquisition of fixed maturities              (186,831)    (246,375)   (147,423)
        Net change in other invested assets            (2,429)    ( 31,446)          -
        Proceeds from sale of fixed maturities        181,863      323,177     120,272
        Proceeds from maturities of fixed
          maturities                                   15,974       15,466      13,301



        Net change in short-term investments           13,057      (18,437)     18,693
    NET CASH PROVIDED BY INVESTING ACTIVITIES          21,634       42,385       4,843

       NET INCREASE/(DECREASE) IN CASH                    254       (2,473)        631
                Cash at beginning of year                 390        2,863       2,232
                Cash at the end of year              $    644       $  390     $ 2,863

       Cash paid for federal income taxes            $  2,872       $2,242     $ 1,428
<S>
  See Notes to Consolidated Financial Statements.
</TABLE>

     F6
     <PAGE>
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     [S]
      ALLCITY INSURANCE COMPANY AND SUBSIDIARY NOTE 1-ORGANIZATION Allcity
     Insurance
     [S]
       Company ("Allcity" or the "Company") is a property and casualty insurer
     and
       includes the results of its subsidiary, Empall Agency, Inc. ("Empall").
     Empire
       Insurance Company ("Empire"), a property and casualty insurer owns
     approximately
       84.6% of the outstanding common shares of the Company and 100% of the
       outstanding common shares of Centurion Insurance Company ("Centurion").
       Empire's common shares are 100% owned and controlled, through



     subsidiaries, by
       Leucadia National Corporation ("Leucadia").  Additionally, Leucadia
     indirectly
       owns an additional 6.4% of the outstanding  common shares of the Company.
     The
       Company, Empire and Centurion are sometimes hereinafter collectively
     referred to
       as the Group.

       The property and casualty insurance business written by Empire and
     Allcity is
       subject to a pooling agreement under which premiums, losses, loss
     adjustment
       expenses and other underwriting expenses, net of reinsurance, are shared
     on the
       basis of 70% to Empire and 30% to Allcity.  The pooling percentages have
     been
       changed from time to time and may be changed in the future subject to New
     York
       State Insurance Department approval.  Allcity has no employees of its
     own.
       Empire provides administrative services and 30% of the related expenses
     are
       allocated to Allcity.
       The Company's three business segments and principal lines of business are
     (1)
       Personal Lines (personal auto and homeowners insurance), 2) Mid-Market
       (commercial auto, commercial package and workers' compensation insurance
     for
       larger accounts) and 3) Small Business (commercial package products for
     small
       businesses). Based on the Company's 1999 net earned premiums,
     approximately 53%,
       32% and 15% of such premiums were for the personal lines, mid-market and
     small
       business lines of business, respectively. The Company markets its
     products
       primarily to individuals, retail establishments, restaurants, livery and
     taxicab
       owners, and several types of service contractors. A portion of the
     Company's and
       Empire's automobile business, both private passenger and commercial, is
     assigned
       risk business acquired through contractual arrangements with other
     insurance
       companies, some of which are competitors. These contractual arrangements,
     which
       are negotiated for one or two year periods, provide for fees paid to the
     Group
       within parameters established by the New York State Insurance Department.
     As a
       result of poor operating results in the assigned risk business, the Group
     no
       longer participates in this line of business. Effective January 1, 2000,
     the
       Group transferred its policy renewal obligations to another carrier and
     ceased
       writing new contracts. However, the Group remains liable for the claim
       settlement costs for assigned risk claims that occurred during the policy
     term.
       The Group believes it has provided adequate reserves for such
     liabilities,
       including loss adjustment expenses.




       The Company and Empire are licensed to transact insurance in the State of
     New
       York with Empire being additionally licensed in Connecticut,
     Massachusetts,
       Missouri, New Hampshire and New Jersey. Based on direct premiums written,
       approximately 6%, 4% and 4%  of the property and casualty business
     written by
       the Group were from sources outside New York State for the years ended
     December
       31, 1999, 1998 and 1997, respectively.
     [S]
     F7
     <PAGE>
     [S]
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY NOTE 1--ORGANIZATION--CONTINUED
     [S]

       The Company and Empire distribute their products through seven general
     agents,
       one of which is an Empire subsidiary, and independent agents and brokers.
       Empire's wholly-owned general agent is its largest producer and generated
       approximately 12%, 12% and 11% of its total earned premium volume for the
     years
       ended December 31, 1999, 1998 and 1997, respectively.

       The consolidated financial statements include the accounts of the Company
     and
       its wholly-owned subsidiary, Empall.  The preparation of financial
     statements in
       conformity with generally accepted accounting principles requires
     management to
       make estimates and assumptions that affect the reported amounts of assets
     and
       liabilities and disclosure of contingent assets and liabilities at the
     date of
       the financial statements and the reported amounts of revenues and
     expenses
       during the reporting period.  Actual results could differ from those
     estimates.

       NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       Investments: At acquisition, marketable debt and equity securities  are
       designated as either (i) "held to maturity" and carried at amortized
     cost, (ii)
       "trading" and carried at estimated market value, which is based on quoted
     market
       prices, with differences between cost and estimated fair value reflected
     in
       results of operations or (iii) "available for sale" and carried at
     estimated
       fair value with differences between cost and estimated fair value being
       reflected as accumulated other comprehensive income (loss), net of
     deferred
       income tax effects. Other invested assets are designated as trading
     securities.
       Short-term investments are carried at cost which approximates fair value.

       At December 31, 1999 and 1998, investments in fixed maturities on deposit
     with
       the New York State Insurance Department, which the Company has the intent



     and
       ability to hold to maturity, are classified as "Investments held to
     maturity".
       Investment income is reported when earned.

       Net securities gains or losses on the sales of investments are determined
     on a
       specific identification basis and are included in revenues. Investments
     with an
       impairment in value considered to be other than temporary are written
     down to
       estimated net realizable value.

       Unearned Premiums: Unearned premiums have been calculated predominantly
     using
       the daily pro rata method for new and renewed business recorded in 1998
     and
       1999.

     F8
     <PAGE>
     [S]
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY NOTE 2--ACCOUNTING POLICIES-
     CONTINUED
       Unpaid Losses and Loss Adjustment Expenses: Liabilities for unpaid
     losses, which
       are not discounted (except for certain workers' compensation
     liabilities), and
       loss adjustment expenses ("LAE") are determined using case-basis
     evaluations,
       statistical analyses for losses incurred but not reported and estimates
     for
       salvage and subrogation recoverable and represent estimates of the
     ultimate
       claim costs of all unpaid losses and LAE.  Liabilities include a
     provision for
       losses that have occurred but have not yet been reported.  These
     estimates are
       subject to the effect of trends in future claim severity and frequency
       experience.  Adjustments to such estimates are made from time to time due
     to
       changes in such trends as well as changes in actual loss experience.
     These
       adjustments are reflected in current earnings.

       Reinsurance: Unpaid losses, unpaid loss adjustment expenses and unearned
       premiums are stated gross of reinsurance ceded.  Premiums written and
     earned,
       losses and LAE paid and incurred, and other underwriting expenses are
     stated net
       of reinsurance ceded.

       Pension Cost: Empire funds actuarially determined pension costs as
     currently
       accrued; 30% of such pension costs are allocated to Allcity.

       Policy Acquisition Costs: Policy acquisition costs, which consist of
       commissions, premium taxes and certain other underwriting expenses, are
     deferred
       and amortized ratably over the terms of the related policies.  Deferred
     policy
       acquisition costs are limited to their net realizable value after



     consideration
       of investment income on the related premium. If recoverability of such
     costs
       from future premiums and related investment income is not anticipated,
     the
       amounts not considered recoverable are charged to operations.

       Participating Policies: Participating business on workers' compensation
     lines
       constitutes approximately 7.2% of the Company's policies in force and net
       premiums written.  Amounts transferred to the participating
     policyholders' funds
       are determined by means of specific identification based upon premium
     volume and
       loss experience.  The amount of dividends to be paid to participating
       policyholders is approved quarterly by the Board of Directors. The amount
     of
       policyholders' dividends paid on participating policies was $133,000,
     $212,000
       and $526,000 in 1999, 1998 and 1997, respectively.  Unpaid dividends to
       participating policyholders are included as a liability in the
     consolidated
       balance sheets.

       Servicing Arrangements: Service fee income from assigned risk business
     acquired
       through contractual arrangements with other insurance companies is
     recognized as
       revenue and earned over the life of the covered policies on a monthly
     pro-rata
       method.

     F9
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED



       ALLCITY INSURANCE COMPANY AND SUBSIDIARY NOTE 2--ACCOUNTING POLICIES-
     CONTINUED
       Service fee income for the administrative services, including
     underwriting,
       policy issuance, premium collection and claims services, provided to the
     New
       York Public Auto Pool (the "NYPAP") is recorded as a reduction to other
       underwriting and loss adjustment expenses and is earned over the life of
     the
       policies issued.  The premiums and losses processed by the Company on
     behalf of
       the NYPAP, which are not reflected in the consolidated financial
     statements for
       the years ended December 31, are as follows (in thousands):


     <TABLE>
     <CAPTION>
                                          1999          1998        1997

     <S>                                   <C>          <C>        <C>
       Premiums Earned                     $    -       $  4,091   $  29,076
       Losses Incurred                       (12,972)       23,543     50,745
       Unpaid Losses                          32,250        70,469     98,150
     </TABLE>



     [S]


       The premiums, losses and expenses of the business for which the Company
     provides
       administrative services are reflected on the financial statements of
     those
       insurance companies, including the Company, in New York State which are
     required
       to participate in the NYPAP.  In its role as a servicing carrier, the
     Company is
       liable only for the loss adjustment expenses which are reflected as a
     reserve
       for servicing carrier claim expense and are determined using case basis
       evaluations and statistical analyses.

       Federal Income Taxes: The Company uses the liability method in providing
     for
       income taxes.  Under the liability method, deferred income taxes are
     provided at
       the enacted tax rates for differences between the financial statement
     carrying
       amounts and tax bases of assets and liabilities and for net operating
     loss
       carryforwards.  A valuation allowance is provided if deferred tax
     benefits are
       not considered more likely than not to be realized.

       Earnings Per Share: Earnings per share ("EPS") are based on the weighted
     average
       number of common shares outstanding.  There were no outstanding common
     stock
       equivalents during 1999, 1998 and 1997 and therefore, basic and diluted
     EPS are
       the same.

       New Pronouncements: In June 1999, the Financial Accounting Standards
     Board
       issued Financial Accounting Standards No. 137, "Accounting for Derivative
       Instruments and Hedging Activities - Deferral of the Effective date of
     FASB
       Statement No. 133 ("SFAS 133")", which will be effective for fiscal years
       beginning after June 15, 2000.  The Company is reviewing the impact of
     the
       implementation of SFAS 133 on the Company's financial position and
     results of
       operations.

       Presentation: Certain prior year amounts have been reclassified to
     conform with
       the 1999 presentation.

     F10
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 3--SURPLUS NOTE




       The Company issued a surplus note to Empire in 1980.  The surplus note



     provides,
       among other things, for interest to be accrued on the principal of the
     note
       based on a bank's prime rate at the end of the calendar quarter.  Neither
     the
       principal amount of the surplus note nor the accrued interest may be
     paid, in
       whole or in part, without the consent of the Superintendent of Insurance
     of the
       State of New York ("Superintendent") and must be repaid, in whole or in
     part,
       when so ordered by the Superintendent

       NOTE 4-INVESTMENTS

       Investment income by source is summarized as follows:

     <TABLE>
     <CAPTION>



                                            Years Ended December 31,
                                            1999        1998      1997
                                                    (In thousands)
     <S>                                    <C>         <C>       <C>
     Investment income:
           Fixed maturities                 $ 9,214      $12,702  $15,627
           Other invested assets              2,430        1,445       -
           Short-term investments             1,025          715      385
                                             12,669       14,862   16,012
           Less: Investment expenses            203          339      318
                     NET INVESTMENT INCOME  $12,466      $14,523  $15,694

     </TABLE>
        Investments at December 31, 1999 are summarized as follows:
     <TABLE>
     <CAPTION>

                                             Gross Unrealized Estimated
                                Amortized    Appre-  Depre-    Fair
                                Cost         ciation ciation   Value
                                             (In thousands)

     <S>                        <C>          <C>     <C>       <C>

       Available for sale:
       U.S. Treasury securities
         and obligations of U.S.
         government agencies    $129,132     $  -    $3,145    $125,987
       Mortgage-backed
         securities                7,622       18      87         7,553
       Foreign governments           897      -         3           894
       All other corporate bonds  29,643       51     633        29,061
       Total fixed maturities    167,294       69   3,868       163,495
       Equity securities              -       255     -             255
             TOTAL INVESTMENTS
             AVAILABLE FOR SALE  167,294      324   3,868       163,750
       Held to maturity:
       U.S. Treasury securities      492      -        16           476
             TOTAL INVESTMENTS
             HELD TO MATURITY:       492      -        16           476



       Short-term                  7,129      -       -           7,129
       Other invested assets      33,875      -       -          33,875

             TOTAL INVESTMENTS  $208,790   $  324  $3,884      $205,230
     </TABLE>

     F11
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 4-INVESTMENTS-CONTINUED

       Investments at December 31, 1998 are summarized as follows:
     <TABLE>
     <CAPTION>


                                           Gross Unrealized  Estimated
                                Amortized  Appre-    Depre-  Fair
                                Cost       ciation   ciation Value___


                                              (In thousands)
     <S>                        <C>        <C>       <C>     <C>

       Available for sale:
       U.S. Treasury securities
         and obligations of U.S.
         government agencies    $145,061   $  365    $284     $145,142
       Mortgage-backed
         securities               21,302      413      -       21,715
       Foreign governments           909       26      -          935
       All other corporate bonds  13,942      206     211       13,937
       Total fixed maturities    181,214    1,010     495     181,729
       Equity securities              -       176      -          176
             TOTAL INVESTMENTS
             AVAILABLE FOR SALE  181,214    1,186     495     181,905
       Held to maturity:
       U.S. Treasury securities      502      -        -          502
             TOTAL INVESTMENTS
             HELD TO MATURITY        502      -        -          502
       Short-term                 20,186      -        -       20,186
       Other invested assets      31,446      -        -       31,446
             TOTAL INVESTMENTS  $233,348   $1,186    $495    $234,039

     </TABLE>
       The amortized cost and estimated fair values of fixed maturities
     (including
       short-term securities) at December 31, 1999 are shown as follows (in
     thousands):
     <TABLE>
     <CAPTION>
                                                  Amortized   Fair
                                                  Cost        Value
     <S>                                          <C>         <C>

       Investments available for sale:
       Due in one year or less                    $ 16,521    $  16,460
       Due after one year through five years       125,840      123,124
       Due after five years through ten years       24,440       23,487
                     Sub total                     166,801      163,071
       Mortgage-backed securities                    7,622        7,553



                     Sub total                     174,423      170,624
       Investments held to maturity:
       Due after one year through five years           492          476
                                      TOTAL       $174,915     $171,100

     </TABLE>

       Expected maturities will differ from contractual maturities because
     borrowers
       may have the right to call or prepay obligations with or without call or
       prepayment penalties.

       The Company sold certain fixed maturities during 1999, 1998 and 1997 and
       realized gross gains of $148,000, $6,227,000 and $216,000, respectively,
     and
       gross losses of $1,820,000, $91,000 and $298,000, respectively, before
     income
       taxes.  In 1997, the Company realized a gross gain $129,000 before taxes,
     from
       the conversion of a portion of stock received from a trade organization
       membership, Insurance Services Offices, into a stock company.

     F12
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 4-INVESTMENTS-CONTINUED

       The changes in unrealized (depreciation)/appreciation on investments
     available
       for sale were $(4,235,000) and $(720,000) for the years ended December
     31, 1999
       and 1998, respectively, before income taxes.




       As of December 31, 1999 and 1998, a security with an amortized cost of
       approximately $492,000 and $502,000, respectively, was on deposit with
     the New
       York State Insurance Department.
       During 1999 and 1998, the Company sold call options on certain U.S.
     Treasury
       Notes and recognized investment gains and (losses) of $4,000 and
     $(57,000),
       respectively.

       NOTE 5--STATUTORY INFORMATION



       The following is a reconciliation of net (loss)/income and surplus as
     reported
       on a statutory basis to net (loss)/income and shareholders' equity as
     determined
       in conformity with generally accepted accounting principles ("GAAP
     Basis") (in
       thousands):
     <TABLE>
     <CAPTION>
                                                   Years Ended December 31,
                                                  1999         1998      1997




     <S>                                          <C>          <C>       <C>
       Statutory net (loss)/income                 $(4,174)    $ (50)    $ 505
       Add (deduct):
         Change in deferred policy acquisition
           costs                                    (1,950)   (1,714)     (629)
         Change in allowances for doubtful
           accounts                                      5      (256)     (198)
         Policyholders' dividends                      234        90        60
         Pension plan curtailment gain                  -      1,964         -
         Capitalized systems development costs         582      1,440       600
         Other postretirement benefits                 253       210       276
         Current tax benefit                         3,812       688         -
         Deferred tax expense                       (1,958)   (1,301)     (163)
         Interest on surplus note                     (551)     (591)     (595)
         Other                                          16        24        61
                                GAAP Basis         $(3,731)   $  504     $ (83)
     </TABLE>
     <TABLE>
     <CAPTION>


               DECEMBER 31,     _
                                                    1999              1998
     <S>                                            <C>               <C>

       Statutory Shareholders' Equity and Surplus   $69,422           $72,701
        Add (deduct):
         Deferred policy acquisition costs            3,415             5,365
         Nonadmitted assets, less allowance
           for doubtful accounts                        907             1,919
         Capitalized systems development costs        2,622          2,040
         Provision for unauthorized reinsurance         110               205
         Policyholders'dividends                        (66)             (300)
         Current tax benefit                          4,162             350
         Deferred tax benefit                         9,938           10,413
         Other postretirement benefits                   (4)             (257)
         Net unrealized (depreciation)/appreciation
          on investments                             (3,800)           515
         Surplus note                               (15,851)       (15,300)
         Other                                          861               549
                                  GAAP Basis        $71,716         $78,200
     </TABLE>
     F13
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 5--STATUTORY INFORMATION-CONTINUED

       The Company has paid no dividends on its common shares since 1975.  The
     New York
       Insurance Law prohibits New York domiciled property and casualty
     companies from
       paying dividends except out of earned surplus.  Without the approval of
     the New
       York State Insurance Department (the "Department") , no New York domestic
       property/casualty insurer may declare or distribute any dividend to
     shareholders



       which, together with any dividends declared or distributed by it during



     the
       preceeding twelve months exceeds the lesser of (1) 10% of surplus to
       policyholders as shown by its last statutory annual statement, or (2) one
       hundred percent of adjusted net investment income during such period.  At
       December 31, 1999, $6,942,000 was available for distribution of
     dividends. The
       Company does not presently anticipate paying dividends in the near
     future.

       In 1998, the National Association of Insurance Commissioners ("NAIC")
     adopted
       the Codification of Statutory Accounting    Principles guidance, which
     will
       replace the current Accounting Practices and Procedures manual as the
     NAIC's
       primary guidance on statutory accounting.  The NAIC is now considering
       amendments to the Codification guidance that would also be   effective
     upon
       implementation.  The NAIC   has recommended an effective date of January
     1,
       2001.  The Codification provides guidance for areas where statutory
     accounting
       has been silent and changes current statutory accounting in  some areas.
     It is
       not known whether the Department will adopt   the Codification, and
     whether the
       Department will make any changes to that guidance.  The Company has not
       estimated   the potential effect of the   Codification guidance if
     adopted by
       the Department.

       NOTE 6--AGENTS' BALANCES



       Activity affecting the allowance for uncollectible agents' balances for
     the
       years ended December 31, 1999, 1998 and 1997 is summarized as follows (in
       thousands):
     <TABLE>
     <CAPTION>

     <S>                                                   <C>


                  Balance at January 1, 1997                $1,363
                  Provision                                  1,470
                  Charge-offs, net of recoveries            (1,272)

                  Balance at December 31, 1997               1,561
                  Provision                                  1,362
                  Charge-offs, net of recoveries            (1,106)

                  Balance at December 31, 1998               1,817
                 Provision                                   1,130
                 Charge-offs, net of recoveries             (1,135)

                 Balance at December 31, 1999               $1,812

     </TABLE>
     F14
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED



       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 7-UNPAID LOSSES AND LAE

       The Company has relied upon standard actuarial ultimate loss projection
       techniques to obtain estimates of liabilities for losses and LAE.  These
       projections include the extrapolation of both losses paid and incurred by
       business line and accident year and implicitly consider the impact of
     inflation



       and claims settlement patterns upon ultimate claim costs based upon
     historical
       patterns.  In addition, methods based upon average loss costs, reported
     claim
       counts and pure premiums are reviewed in order to obtain a range of
     estimates
       for setting the reserve levels.  For further input, changes in operations
     in
       pertinent areas including underwriting standards, product mix, claims
     management
       and legal climate are periodically reviewed.

       In the following table, the liability for losses and LAE are reconciled
     for the
       three years ended December 31, 1999, 1998 and 1997. Included therein are
     current
       year data and prior year development.

     <TABLE>
     <CAPTION>
                     RECONCILIATION OF LIABILITY FOR LOSSES AND LAE
                                                 1999       1998        1997
                                                 (In thousands)
     <S>                                        <C>        <C>         <C>

       SAP liability for losses and LAE, net
        of reinsurance, at beginning of year    $139,771   $145,260    $143,494

       Provision for losses and LAE for claims
        occurring in the current year             36,524     56,698      73,741
       Increase in estimated losses and LAE
        for claims occurring in prior years        6,014     12,891       8,304
                                                  42,538     69,589      82,045
       Loss and LAE payments for claims
         occurring during:
           Current year                           12,382     19,203      23,804
           Prior years                            56,325     55,875      56,475
                                                  68,707     75,078      80,279

       SAP liability for losses and LAE, net
        of reinsurance                           113,602    139,771     145,260

       Reinsurance recoverable                   228,334    294,461     272,266
       Liability for losses and LAE
         at end of year as reported in
         financial statements (GAAP)            $341,936   $434,232    $417,526

     </TABLE>

       Based upon actuarial studies conducted during 1999, 1998 and 1997 the
     Company



       strengthened reserves for losses from prior accident years by
     approximately $5.1
       million in 1999, primarily related to assigned risk automobile, voluntary
       private passenger automobile and commercial  auto lines, by approximately
     $12.9
       million in 1998, primarily related to commercial liability, commercial
     auto and
       workers' compensation lines, and by approximately $8.3 million in 1997,
       primarily related to commercial package and voluntary commercial
     automobile
       lines of business.

       The Company has purchased annuities with various life insurance companies
     for a
       number of settled claims.  The claimants have been designated as payees;
       however, the Company has a contingent liability of approximately $4.0
     million
       which represents the aggregate amount of settlements with the claimants,
     in the
       event of the failure of the various life insurance companies to perform.

     F15
     <PAGE>

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 8-REINSURANCE

       The Company has obtained reinsurance coverage to reduce its risk of and
     exposure
       to large insurance claims and catastrophes.  The Company retained $0.3
     million
       for property and casualty lines for 1999. For 1998 and 1997, the Company
       retained $0.5 million on workers' compensation and $0.3 million for other
       property and casualty lines of business.  Empire and the  Company also
     use



       reinsurance to protect against certain catastrophic losses. Its retention
     of
       lower level losses under such treaties is $7.5 million for 2000, and was
     $7.5
       million for 1999 and 1998 and $5.0 million for 1997.  Due to the
     geographic
       concentration of its business, the Company believes hurricanes,
     windstorms and
       civil disturbances are its most significant exposure to catastrophic
     losses.
       Computer modeling programs provided by independent consultants are used
     to
       estimate exposure to such losses.

       Although reinsurance does not legally discharge an insurer from its
     primary
       liability for the full amount of the policy liability, it does make the
     assuming
       reinsurer liable to the insurer to the extent of the reinsurance ceded.
     The
       Company's reinsurance generally has been placed with certain of the
     largest
       reinsurance companies, including (with their respective A.M Best & Co.



     ratings)
       General Reinsurance Corporation (A++) (superior),  IPC Re Limited (A+)
       (superior) and Partner Reinsurance Company Ltd. (A+)(superior), and
     Zurich
       Reinsurance (North America), Inc. (A+)(superior). The Company believes
     its
       reinsurers to be financially capable of meeting their respective
     obligations.
       However, to the extent that any reinsuring company is unable to meet its
       obligations, the Company would be liable for the reinsured risks.  The
     Company
       has established reserves, which the Company believes are adequate, for
     any non-
       recoverable reinsurance.

       Effective January 1, 1997, Empire entered into a quota share reinsurance
       agreement with its subsidiary, Centurion.  Under this agreement, Empire
     will
       assume 50% up to July 1, 1998 and 75% thereafter of the effective period
       premiums and losses of Centurion and grant Centurion a ceding commission.
     Under
       the pooling agreement, 70% of such business assumed will be retained by
     Empire
       and 30% will be ceded to the Company.


       Assets and insurance reserves at December 31, 1999 and 1998 (including
     $252.5
       million and $333.7 million, respectively, of reinsured amounts
     principally
       arising from the intercompany pooling agreement with Empire) are as
     follows (in
       thousands):
     <TABLE>
     <CAPTION>


                                                     Ceded to      __
                                               Empire     Others   Total
     <S>                                      <C>         <C>      <C>
       As of December 31, 1999
       Prepaid reinsurance premiums           $ 22,071    $   211  $ 22,282
       Reinsurance balances receivable on:
         Paid losses                                -       1,859     1,859
         Unpaid losses                         170,060     34,936   204,996
         Unpaid loss adjustment expenses        19,009      4,329    23,338

     </TABLE>
     F16
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 8-REINSURANCE--CONTINUED

     <TABLE>
     <CAPTION>

                                                   Ceded to   ________
                                               Empire     Others    Total
       As of December 31, 1998
     <S>                                      <C>         <C>      <C>



       Prepaid reinsurance premiums           $ 37,477    $   214  $ 37,691



       Reinsurance balances receivable on:
         Paid losses                                -       1,534     1,534
         Unpaid losses                         217,958     39,633   257,591
         Unpaid loss adjustment expenses        32,235      4,634    36,869
     </TABLE>
     <TABLE>
     <CAPTION>


       An analysis of reinsurance premiums, losses, LAE and commissions for the
     years
       ended December 31, 1999, 1998 and 1997 are summarized as follows (in
     thousands):
                            Direct    Assumed          Ceded              Net
                                      Empire    Others Empire   Others
     <S>                   <C>       <C>        <C>   <C>       <C>      <C>

       1999
       Premiums earned     $ 87,793  $ 42,448   $485  $ 81,528  $ 6,750  $42,448
       Losses incurred       58,022    33,597    659    56,088    2,593   33,597
       LAE incurred          (6,302)    8,941    223    (6,316)     237    8,941
       Commissions incurred  10,111     5,051     34     9,300      845    5,051

       Premiums written      65,794    32,812     473   59,520    6,747   32,812
       Losses paid          130,845    56,034     958  124,513    7,290   56,034
       LAE Paid              13,289    12,673     107   12,853      543   12,673

       Unearned premiums(a)  31,722    16,645     20    31,531      211   16,645
       Unpaid losses (a)    276,875   102,080  1,003   242,942   34,936  102,080
       Unpaid LAE (a)        31,369    11,522    116    27,156    4,329   11,522

       1998
       Premiums earned     $142,065  $ 67,512   $100  $135,419  $ 6,746  $67,512
       Losses incurred      173,235    62,282    409   155,446   18,198   62,282
       LAE incurred          17,202     7,307     74    15,963    1,313    7,307
       Commissions incurred  15,886     8,438     10    14,795    1,101    8,438

       Premiums written     117,449    58,059     48   111,135    6,362   58,059
       Losses paid          146,208    62,323    655   135,539   11,324   62,323
       LAE Paid              15,576    12,755     74    15,157      493   12,755

       Unearned premiums(a)  53,720    26,281     33    53,539      214   26,281
       Unpaid losses(a)     349,699   124,518  1,303   311,369   39,633  124,518
       Unpaid LAE(a)         50,685    15,253     -     46,051    4,634   15,253

       1997
       Premiums earned     $191,175  $ 80,891  $ 142  $178,488  $12,829  $80,891
       Losses incurred      170,395    68,901    195   155,122   15,468   68,901
       LAE incurred          16,345    13,144     62    15,489      918   13,144
       Commissions incurred  22,121    10,666      4    20,271    1,854   10,666

       Premiums written     169,911    75,029     81   157,359   12,633   75,029
       Losses paid          161,192    68,512    634   150,628   11,198   68,512
       LAE Paid              13,368    11,767     62    13,090      340   11,767

     </TABLE>
     F17
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED



       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 8-REINSURANCE--CONTINUED

       (a) Amounts as reflected in the consolidated balance sheets can be
     derived by
       adding together amounts for direct and assumed and subtracting from this
     sum 30%
       of the amount ceded to Empire.  The Company remains primarily liable for
     amounts
       ceded to reinsurers for unpaid losses, LAE and unearned premiums to the
     extent
       that the assuming reinsuring companies are unable to meet their
     obligations.

       An analysis of the effect of reinsurance on premiums by business segment
     for the



       years ended December 31, 1999, 1998 and 1997 are summarized as follows
     (in
       thousands):
     <TABLE>
     <CAPTION>


     Percentage
                                            Assumed   Ceded                 of
     Amount
                                Direct      from      to        Net
     Assumed
                                Amount      Empire(a) Empire(b) Amount      to
     Net
     <S>                        <C>        <C>       <C>        <C>        <C>
       1999
       Premiums written:
         Personal Lines          $22,738   $15,629   $ 23,211   $15,156
     103.0%
         Mid-Market               22,706    11,679     22,706    11,679
     100.0%
         Small Business           20,350     5,977     20,350     5,977
     100.0%
                       Total     $65,794   $33,285   $ 66,267   $32,812

       1998
       Premiums written:
         Personal Lines         $ 56,222   $29,405   $ 56,270   $29,357
     100.2%
         Mid-Market               38,485    22,162     38,485    22,162
     100.0%
         Small Business           22,742     6,540     22,742     6,540
     100.0%
                     Total      $117,449   $58,107   $117,497   $58,059

       1997
       Premiums written:
         Personal Lines         $ 85,132   $44,502   $ 85,213   $44,421
     100.2%
         Mid-Market               61,973    24,058     61,973    24,058
     100.0%
         Small Business           22,806     6,550     22,806     6,550
     100.0%



                      Total     $169,911   $75,110   $169,992   $75,029

     </TABLE>

        (a)Includes $473, $48 and $81 assumed from non-affiliates in 1999, 1998
           and 1997, respectively, before the effects of the pooling agreement
           described in Note 1.
        (b)Includes $6,750, $6,362 and $12,633 ceded to non-affiliates
           in 1999, 1998 and 1997, respectively, before the effects of the
           pooling agreement described in Note 1.

     F18
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY


       NOTE 9--FEDERAL INCOME TAXES
       The Company has been included in the consolidated federal income tax
     returns of
       Leucadia since 1993.  Under the terms of the tax sharing agreement,
     members
       compute their tax provision on a separate return basis and are either
     charged
       their share of federal income tax resulting from their taxable income or
     are
       credited for the tax benefits resulting from losses. As of December 31,
     1999 and
       1998, the Company's receivable/(liability) from/to affiliates for income
     taxes
       was $1,891,000 and $(4,845,000), respectively.

       The principal components of the deferred tax benefit at December 31, 1999
     and
     <TABLE>
     <CAPTION>


       1998 were as follows (in thousands):
                                                      1999        1998
     <S>                                             <C>         <C>
         Unpaid loss and loss adjustment
           expense reserves                           $5,192      $7,365
         Unearned premiums                             1,162       1,840
         Employee benefits and compensation              566         791
         Interest accrued on surplus note              3,098       2,905
         Allowance for doubtful accounts                 636         636
         Deferred policy acquisition costs            (1,195)     (1,878)
         Pension plan curtailment gain                  (688)       (688)
         Unrealized appreciation/(depreciation)
          on investments                               1,240        (242)
         Investment in Ramius LLP                        297         459
         Unamortized deferred income                     708         -
         Capitalized systems development costs          (918)       (714)
         Other, net                                   _ (160)        (61)
                          Total                      $ 9,938     $10,413

     </TABLE>
       The Company believes that it is more likely than not that the deferred
     tax
       benefit at December 31, 1999 will be fully realized based on the
     availability of
       taxable income.




       For the years 1999, 1998 and 1997, the difference between the "expected"
       statutory federal income tax applicable to continuing operations and the
     actual
       income tax expense are as follows (in thousands):
     <TABLE>
     <CAPTION>


                                                           1999      1998
     1997
     <S>                                                  <C>       <C>
     <C>

       Expected federal income tax (benefit)/expense      $(2,213)     $ 271
     $  (51)
       Other                                                 (378)        (1)
     (13)
       Actual federal income tax (benefit)/expense        $(2,591)     $ 270
     $  (64)

     </TABLE>

     F19
     <PAGE>

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 10--PENSION PLAN AND POSTRETIREMENT BENEFITS

       Effective January 1, 1999, Empire has a defined contribution plan.  The
       contributions, ranging from 2% - 16% of employee's current pension
     eligible
       compensation, are based on age and service life of the employees of
     Empire.
       These contributions accumulate for participants on a tax-deferred basis.
       Participants direct the investment of the contributions to their
     accounts. In
       accordance with the pooling agreement, the Company shared 30% of
     $1,145,000, the
       amount contributed by the Group to the Plan.

       Empire had a trusteed non-contributory defined benefit pension plan
     covering
       substantially all employees for the period ending December 31, 1998.  The
       benefits were based on years of credited service and the employees'
     highest
       compensation during any five consecutive plan or calendar years before



       retirement.  Empire's policy was to fund pension costs on a current basis
     using
       an aggregate method.

       Benefits accrued under the defined benefit plan were  frozen as of
     December 31,
       1998.  The plan was merged with the   Leucadia plan   effective  January
     1,
       1999. As a result of the curtailment of the pension benefits in 1998, the
     Group
       recognized a gain of $6,548,000. In accordance with the pooling



     agreement, the
       Company's share of prepaid pension and net periodic pension cost is 30%
     of the
       amounts reflected above.


     F20
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 10--PENSION PLAN AND POSTRETIREMENT BENEFITS

     <TABLE>
     <CAPTION>


       The following tables set forth certain information relating to Empire's
     non-
       contributory defined benefit pension plan (in thousands):
                                                                December 31,
                                                                1998
     <S>                                                       <C>

       Reconciliation of the benefit obligation

       Projected Benefit Obligation at beginning of year       $27,765
       Service cost                                              1,794
       Interest cost                                             1,906
       Actuarial loss                                              323
       Benefits paid                                            (2,521)
       Curtailment gain                                         (7,231)



          Projected Benefit Obligation at end of year          $22,036

       Reconciliation of the fair value of plan assets

       Fair value of plan assets at beginning of year          $25,152
       Actual return on plan assets                              1,637
       Employer contributions                                      925
       Benefits paid                                            (2,521)
       Fair value of plan assets at end of year                $25,193

       Funded Status

       Actuarial present value of benefit obligation:
         Accumulated benefit obligation, including vested
         benefits of $21,188 in 1998                           $22,036

       Projected benefit obligation for services rendered
         to December 31, 1998                                  (22,036)
       Plan assets at fair value (primarily bonds and
         stocks)                                                25,193
                           PROJECTED BENEFIT OBLIGATION
                           LESS THAN PLAN ASSETS                 3,157
       Unrecognized prior service cost                              82
       Unrecognized net gain from past experience
          different from that assumed and effects of
          Changes in assumptions                                  (340)
       Unrecognized net obligation at transition date              258
                    PREPAID PENSION                             $3,157




     </TABLE>
     <TABLE>
     <CAPTION>

       Components of net pension cost:
                                                         Years Ended December
     31,
                                                             1998      1997
     <S>                                                    <C>       <C>

       Service cost-benefits earned during the period       $1,794    $1,628
       Interest cost on projected benefit obligation         1,906     1,985
       Actual return on plan assets                         (1,637)   (2,838)
       Deferred (loss) gain on plan assets                    (124)    1,039
       Net amortization and deferral                           145       145

                           NET PERIODIC PENSION COST        $2,084    $1,959

       Discount rate                                          6.75%      7.0%
       Rate of Increase in future compensation                 N/A       5.0%
       Long-term rate of return on plan assets                7.50%      7.0%
     </TABLE>

     F21
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 10--PENSION PLAN AND POSTRETIREMENT BENEFITS--CONTINUED


       Empire provides certain health care and life insurance benefits for
     retired
       employees.  During 1996, Empire amended the eligibility requirement to
     only
       those employees who had at least ten years of service and were at least
     50 years
       of age as of October 1, 1996.  Prior to this amendment, substantially all
     of
       Empire's employees were eligible for such benefits if they reached normal
     or
       early retirement age while still working for Empire. As a result of this
       amendment, the accumulated postretirement benefit obligation was reduced
     by
       approximately $7,602,000 which has been amortized over three years. Those
       benefits are provided through an insurance company whose premiums are
     based on
       the cost of benefits paid during the year.

       The following table sets forth certain information relating to Empire's
     unfunded
       substantive plan for postretirement benefits (in thousands):

     <TABLE>
     <CAPTION>
                                                    1999          1998

     <S>                                           <C>           <C>
       Reconciliation of the benefit obligation
       Accumulated postretirement obligation
         at beginning of year                      $5,574        $4,729
       Service cost                                    32            29



       Interest cost                                  363           370
       Actuarial (gain)/loss                       (1,065)          770
       Benefits paid                                 (298)         (324)
       Accumulated postretirement obligation at
         end of year                              $ 4,606        $5,574

       Funded Status
       Actuarial present value of accumulated
         postretirement benefit obligation:
       Retirees                                   $(3,220)      $(4,022)
       Fully eligible active plan participants       (938)       (1,074)
       Other active plan participants                (448)         (478)
                                                  $(4,606)       (5,574)
       Unrecognized net gain from past
         experience different from that assumed
         and effects of changes in assumptions       (799)       (1,634)

           ACCRUED POSTRETIREMENT BENEFITS COST   $(5,405)      $(7,208)

     </TABLE>
     <TABLE>
<CAPTION>


  Components of net postretirement benefits


                                                    1999    1998     1997
<S>                                                <C>     <C>       <C>

  Service cost--benefits earned during the period  $   32   $   29      $  23
  Interest cost on projected benefit obligation       363      370        330
  Amortization of curtailment gain                 (1,900)  (2,533)    (3,168)
  Net amortization and deferral                   __   _-        -        (19)
   PERIODIC POSTRETIREMENT BENEFITS INCOME        $(1,505) $(2,134)   $(2,834)

</TABLE>


     F22
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 10--PENSION PLAN AND POSTRETIREMENT BENEFITS--CONTINUED

       In accordance with the pooling agreement, the Company's share of accrued
       postretirement benefit cost and net periodic postretirement benefit
     income  is
       30% of the amounts reflected above and is included in other liabilities.
     In
       determining the accumulated postretirement benefit obligation at December
     31,
       1999 and 1998, Empire utilized discount rates of 8% and 6.75%,
     respectively. The
       assumed health care cost trend rates used in measuring the accumulated
       postretirement benefit obligation were 7% for 1999 declining to an
     ultimate rate
       of 6% by 2000.  If the health care cost trend rates were increased by 1%,



     the
       accumulated postretirement benefit obligation as of December 31, 1999
     would have
       increased by approximately $290,000, before the effects of the pooling
       agreement.  If the health care cost trend rates were decreased by 1%, the
       accumulated postretirement benefit obligation as of December 31, 1999
     would have
       decreased by approximately $246,000 before the effects of the pooling
     agreement.
       The effect of a 1% increase or decrease in the estimated aggregate of
     service



       and interest cost for 1999, 1998 and 1997 would be immaterial.

       In 1994, Empire established a Salary Cap Restoration Plan ("SCRP") for
     certain
       corporate officers.  Under the SCRP, Empire will provide these officers
     with an
       additional benefit, to be paid in a lump-sum upon retirement, equal to
     the
       difference between the actuarially determined lump-sum benefits, as
     computed
       under the Pension Plan, of the officer's highest five year average
     compensation
       (not to exceed $320,000) at retirement and the current Internal Revenue
     Service
       maximum compensation limit of $160,000.  The SCRP is an unfunded plan. In
     1999,
       1998, and 1997 Empire expensed $98,000, $74,000 and $17,000,
     respectively.
       Along with the defined benefit plan, the benefits under SCRP were
     curtailed as
       of December 31, 1998.  Under the pooling arrangement, the Company is
     obligated
       to pay 30% of the cost of the SCRP.

       Empire sponsors an Employees' Savings Plan (the "Savings Plan"), under
     which
       each eligible employee may defer a portion of their annual compensation,
     subject
       to limitations. Empire matches contributions equal to 50% of an
     employee's
       contributions up to a maximum of 2.5% of the employee's salary. A
     participant
       may also contribute, from after-tax dollars, an amount, not to exceed 10%
     of
       annual compensation. Empire's contributions to the Savings Plan were
     $452,000,
       $420,000 and $438,000 in 1999, 1998 and 1997, respectively. Under the
     pooling
       agreement, the Company is obligated to provide 30% of Empire's
     contributions to
       the Savings Plan.

       NOTE 11--LEASES

       The Group has entered into a twenty year lease agreement expiring in
     2018,
       consisting of 286,510 square feet, in an office building located at 335
     Adams
       Street in Brooklyn, New York, in which Leucadia has an equity interest.



     The
       Group received certain incentives from both the City and State of New
     York in
       connection with this lease, which will be recognized over the term of the
     lease.

       Empire has subleased 133,140 square feet of the office space to its
     parent,
       Leucadia at the similar terms as are in the original lease.

     F23
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 11-LEASES-CONTINUED

       Empire has guaranteed the payment of lease rentals by its wholly-owned
       subsidiary Gould Dente Agency ("Gould").  Gould relocated its offices to
     the new
       office building with Empire.  In accordance with the guarantee, in 1998,
     $2.0
       million of a $2.3 million liability for lease abandonment costs
     established by
       Empire in 1997 was reversed upon release by the landlord from its
     obligation.
       The remainder was paid in 1999. Under the pooling agreement, the Company
     is
       obligated for 30% of this transaction.

       Future minimum rentals, which exclude escalation amounts, on non-
     cancelable
       leases in the aggregate for each of the next five years and thereafter
     are as
       follows (in thousands):

     <TABLE>
     <CAPTION>



                                Lease          Sublease  Net
     <S>                        <C>           <C>        <C>

         2000                    $  4,906     $ 2,280    $ 2,626
         2001                       4,906       2,280      2,626
         2002                       4,906       2,280      2,626
         2003                       5,029       2,337      2,692
         2004                       5,642       2,622      3,020
         Thereafter                91,393      42,470     48,923
         Total                   $116,782     $54,269    $62,513


     </TABLE>
       Rental expense for the Group for each of the years 1999, 1998 and 1997
     was $3.3
       million. The Company is obligated to pay 30% of these rental charges in
       accordance with the pooling agreement.


       NOTE 12--BUSINESS SEGMENTS

       Allcity operates in three business segments-Personal Lines, Mid-Market



     and
       Small Business.  Results by business segment for each year ended December
     31,
       1999, 1998 and 1997 are summarized as follows (in thousands):
     <TABLE>
     <CAPTION>



       Premiums  Underwriting
       1999                                          Earned    Gain(Loss)
     <S>                                             <C>       <C>

       Personal Lines                                 $22,404    $ (3,974)
       Mid-Market                                      13,771     (12,647)
       Small Business                                   6,273        (332)
                       TOTAL FROM UNDERWRITING        $42,448    $(16,953)
       Net investment income, net securities losses,
         other income and interest on surplus note                 10,631
                    LOSS BEFORE FEDERAL INCOME TAXES             $ (6,322)

       1998
       Personal Lines                                 $39,251    $ (4,418)
       Mid-Market                                      21,643     (14,598)
       Small Business                                   6,618        (788)
                            TOTAL FROM UNDERWRITING   $67,512     (19,804)
       Net investment income, net securities gains,
         other income and interest on surplus note                 20,578
                    INCOME BEFORE FEDERAL INCOME TAXES           $    774

     </TABLE>
     F24
     <PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY

       NOTE 12--BUSINESS SEGMENTS-CONTINUED

     <TABLE>
     <CAPTION>

        Premiums  Underwriting
                                                     Earned    Gain(Loss
     <S>                                            <C>      <C>
       1997
       Personal Lines                                $47,292  $ (3,802)
       Mid-Market                                     27,223   (10,133)
       Small Business                                  6,376    (1,654)
                       TOTAL FROM UNDERWRITING       $80,891   (15,589)

       Net investment income, net securities losses,
         other income and interest on surplus note              15,442
                    LOSS BEFORE FEDERAL INCOME TAXES          $   (147)

     </TABLE>

       Direct investment  portfolios  are not  maintained  for each   segment
     and
       accordingly,  allocation   of    assets to each segment is not
     performed.
       Seven general agents, one of  which is    an Empire   subsidiary,
     produced
       approximately 33%, 32%, and 28% of Allcity's  premiums for the years



     ended
       December 31, 1999, 1998 and 1997, respectively.  All of Allcity's
     business
       is conducted in the State of New York.




       NOTE 13--FAIR VALUE OF FINANCIAL INSTRUMENTS

       The Company's only material financial instruments are investments for
     which the
       fair values  are disclosed in Note 4, and  the surplus note and short-
     term
       investments, for which the  carrying amounts  approximates fair  value.

       NOTE 14--LITIGATION

       The Company is party to legal proceedings that are considered to be
     either
       ordinary,  routine litigation or   incidental to its  business.  Based
     on
       discussion with counsel, the Company does not believe that such
     litigation will
       have   a material  effect  on  its  financial  position,  results  of
     operations
       or cash flows.


       NOTE 15--RELATED PARTIES

       See Notes 1, 2, 3, 8, 9, 10 and 11  regarding  Allcity's relationships
     with
       the Group and Leucadia.


     F25
     <PAGE>


       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
       ALLCITY INSURANCE COMPANY AND SUBSIDIARY


       NOTE 16--SUMMARY OF UNAUDITED QUARTERLY RESULTS OF OPERATIONS
     <TABLE>
     <CAPTION>

       The following is a summary of unaudited  quarterly   results of
       operations for 1999, 1998  and 1997   (in thousands,  except
       per  share   amounts):

                                                   1999
                                      1st       2nd        3rd        4th
     <S>                              <C>     <C>      <C>        <C>
       Total Revenues                 $17,390 $14,682  $12,353    $11,237
       Net Income/(Loss)                   87    (426)    (314)    (3,078)
       Basic and Diluted Earnings/
        (Loss) Per Share                 0.01   (0.06)   (0.04)     (0.44)

     </TABLE>
     <TABLE>
     <CAPTION>



                                                   1998
                                      1st        2nd       3rd       4th
     <S>                              <C>      <C>      <C>       <C>
       Total Revenues                 $24,168  $22,029  $21,998   $23,875
       Net Income/(Loss)                  110     (851)     (10)    1,255
       Basic and Diluted Earnings/
        (Loss) Per Share                 0.02    (0.12)   (0.01)     0.18

     </TABLE>
     <TABLE>
     <CAPTION>
                                                        1997
                                       1st       2nd      3rd        4th
     <S>                              <C>      <C>       <C>       <C>
       Total Revenues                 $28,108  $26,560   $25,826   $22,130
       Net Income/(Loss)                  856     (162)       49      (826)
       Basic and Diluted Earnings/
        (Loss) Per Share                 0.12    (0.02)     0.01     (0.12)
     </TABLE>



      F26
     <PAGE>

<TABLE>
<CAPTION>
ALLCITY INSURANCE COMPANY
SCHEDULE VI - SUPPLEMENTAL INSURANCE INFORMATION
CONCERNING PROPERTY/ CASUALTY INSURANCE OPERATIONS
(Thousands of dollars)

 Col. A        Col. B      Col. C     Col. D     Col. E   Col. F     Col. G    Col. H        Col. I     Col. J   Col. K  Col. L
                          Reserves                                         Claims and Claim
                         For Unpaid                                      Adjustment Expenses Amortization                   Paid
              Deferred     Claims     Discount                           Incurred related to of Deferred                  Claims
               Policy    and Claim    if any                        Net        (1)     (2)     Policy    Other           and Claim
            Acquisition  Adjustment  Deducted  Unearned  Earned  Investment Current Prior Acquisition Operating Premiums Adjustment
Segment       Costs      Expenses  in Col. C  Premiums Premiums Income (b)   Year   Years    Costs  Expenses (b) Written  Expenses

Year Ended
12/31/99:
<S>             <C>         <C>       <C>       <C>      <C>      <C>       <C>     <C>       <C>        <C>      <C>       <C>

Personal Lines   $1,670     $105,219            $15,794  $22,404  $ 4,114   $21,000 $(1,764)  $ 4,372    $2,769   $15,156   $32,634
Mid-market        1,118      200,278   $ 250     13,047   13,771    6,856    12,008   7,743     3,222     3,445    11,679    32,096
Small Business      627	      36,439             10,086    6,273    1,496     3,516      35     1,754     1,301     5,977     3,977
                 $3,415     $341,936   $ 250    $38,927  $42,448  $12,466   $36,524   6,014   $ 9,348    $7,515   $32,812   $68,707

Year Ended
12/31/98:

Personal Lines   $2,920     $182,447            $33,097  $39,251  $ 5,869   $35,142 $   599   $ 7,340    $1,144   $29,357   $43,866
Mid-market        1,609      215,363   $ 307     19,797   21,643    7,500    17,081  10,378     4,441     3,292    22,162    26,692
Small Business      836       36,422             11,078    6,618    1,154     4,475   1,914     1,630      (120)    6,540     4,520
                 $5,365     $434,232   $ 307    $63,972  $67,512  $14,523   $56,698 $12,891   $13,411    $4,316   $58,059   $75,078

Year Ended
12/31/97:

Personal Lines   $4,050     $159,022            $49,575  $47,292  $ 6,389   $57,834 $   822   $ 8,481  $(4,306)  $44,421    $57,375
Mid-market        2,220      228,772   $ 123     29,958   27,223    8,246    10,831   6,103     5,263    3,063    24,058     17,342
Small Business      809       29,732             11,274    6,376    1,059     5,076   1,379     1,501      433     6,550      5,562
                 $7,079     $417,526   $ 123    $90,807  $80,891  $15,694   $73,741 $ 8,304   $15,245  $  (810)  $75,029    $80,279

</TABLE>


     [FN]
     (a) Liabilities for losses for certain long - term disability payments
     under workers' compensation insurance are discounted  at a maximum
     of 6%. The liabilities discounted are deemed insignificant and do not have
     a material effect on reported income.

     (b) Allocations of Net Investment Income and Other Operating Expenses are
     based on a number of assumptions and estimates and results would
     change if different methods were applied.  Other Operating Expenses are
     reflected net of service fee income excluding other income and interest
     on surplus note.

     * Information required by Schedule III - Supplementary Insurance
     Information has been incorporated within this schedule.

     F27
     <PAGE>