UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, DC   20549
                                    
                                Form 10-Q
                                    
(Mark One)
(X)            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934
                                    
                                    
           For the quarterly period ended:  September 30, 1998
                                    
                                   OR
                                    
( )           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934 


            For the transition period from        to        
                                    
                     Commission file number 0-16267
                                    
                           WALSHIRE ASSURANCE COMPANY                      
(Exact name of registrant as specified in its charter)
            
      Pennsylvania                                  23-2023240    
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization                     Identification Number)

3350 Whiteford Road, P. O. Box 3849, York, PA                      17402-0138 
(Address of principal executive offices)                           (Zip code)

                               (717)757-0000                          
(Registrant s telephone number, including area code)
          
    
    
                                                                     
(Former name, former address and former fiscal year,
        if changed since last report)

           Indicate by check mark whether the registrant (1) has filed all 
     reports required to be filed by Section 13 or 15(d) of the
     Securities Exchange Act of 1934 during the preceding 12 months (or
     for such shorter period that the registrant was required to file
     such reports), and (2) has been subject to such filing requirements
     for the past 90 days.

               Yes        X             No        

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

          Class:                      Outstanding at October 31, 1998:
Common stock - $.01 Par Value                    4,493,778 shares


                        
                
                
                WALSHIRE ASSURANCE COMPANY
   AND SUBSIDIARIES
        
                
                
                INDEX
              


                                                             PAGE 
                                                             NUMBER



Part I    FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets as of September 30, 1998
          (unaudited) and December 31, 1997. . . . . . . . . . .         2

          Consolidated Statements of Income for the three
          months ended September 30, 1998 and 1997 (unaudited) .         4

          Consolidated Statements of Income for the nine months
          months ended September 30, 1998 and 1997 (unaudited) .         5

          Consolidated Statements of Cash Flows for the nine
          months ended September 30, 1998 and 1997 (unaudited) .    6

          Notes to Consolidated Financial Statements 
          (unaudited)  . . . . . . . . . . . . . . . . . . . . .    7

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

Part II   OTHER INFORMATION  . . . . . . . . . . . . . . . . . .   11

Item 1.   Legal Proceedings  . . . . . . . . . . . . . . . . . .   11

Item 2.   Changes in Securities  . . . . . . . . . . . . . . . .   11

Item 3.   Defaults Upon Senior Securities  . . . . . . . . . . .        11

Item 4.   Submission of Matters to Vote of Security Holders. . .   11

Item 5.   Other Information  . . . . . . . . . . . . . . . . . .   11

Item 6.   Exhibits and Reports on Form 8-K . . . . . . . . . . .   11

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . .        12





1
                                    



WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES



Consolidated Balance Sheets

    
    
                                                   (In thousands,
                                                    except per share data)
                                         September 30,  December 31,
               Assets                         1998          1997
                                          (Unaudited)

Investments:
  Held to maturity, at amortized cost:
     Fixed maturities (fair value $15,234 and
       $17,754) . . . . . . . . . . . . . . . .  $ 14,455        $ 17,228
  Available for sale, at fair value:
     Fixed maturities (cost $45,776 and
       $37,722) . . . . . . . . . . . . . . . .    46,609         38,182
     Equity securities (cost $8,523 and $8,268).     7,401         8,205
  Short-term investments . . . . . . . . . . . .     2,902          7,531
  Other investments. . . . . . . . . . . . . . .     1,171         2,656

     Total investments . . . . . . . . . . . . .    72,538        73,802

Cash. . . . . . . . . . . . . . . . . . . . . . .        302           254
Accrued investment income receivable. . . . . . .        855         800
Amounts receivable from reinsurers. . . . . . . .     1,210        3,698
Amounts receivable from reinsured company . . . .       521          542
Agents  balances (net of allowance for doubtful
  accounts of $120). . . . . . . . . . . . . . .     6,397          7,411
Installment premiums receivable . . . . . . . . .     5,586         7,681
Agents  balances and installment premiums 
  receivable from related parties. . . . . . . .     1,351          1,897
Premium finance receivables (net of unearned
  finance charges and allowance for credit
  losses of $102 and $84). . . . . . . . . . . .     3,443          4,283
Reinsurance receivable. . . . . . . . . . . . . .    25,779        24,370
Deferred acquisition costs. . . . . . . . . . . .     3,879        4,778
Property and equipment, (net of accumulated      
  depreciation of $2,378 and $2,194) . . . . . .     2,475          3,462
Other assets. . . . . . . . . . . . . . . . . . .     3,820         1,464

     Total assets. . . . . . . . . . . . . . . .  $128,156      $134,442



See accompanying notes to consolidated financial statements.

                                   
                                   
                                   2                                   

                                   
                                   
                                   
                                   WALSHIRE ASSURANCE COMPANY
                                        AND SUBSIDIARIES

                                   
                                   Consolidated Balance Sheets, Continued

                                   
                                   
                                   
                                                    (In thousands,
                                                  except per share data)
                                                   September 30, December 31,
Liabilities and Shareholders  Equity                   1998         1997
                                                    (Unaudited) 



Liabilities:
  Unpaid claims and claim settlement expenses.    $  55,483      $ 48,964
  Unearned premiums. . . . . . . . . . . . . .       22,183        27,384
  Short-term notes payable . . . . . . . . . .        5,583         5,015
  Long-term notes payable. . . . . . . . . . .            9           558
  Deposits by insureds . . . . . . . . . . . .        1,933         2,445
  Commissions payable to agents. . . . . . . .        1,188         1,442
  Commissions payable to related parties . . .          118           163
  Other liabilities. . . . . . . . . . . . . .      _ 1,410           980

     Total liabilities . . . . . . . . . . . .       87,907        86,951

Shareholders  equity:
  Preferred stock, par value $.01 per share; 
     2,000 shares authorized; 128 and 123
     shares issued and outstanding . . . . . .            1             1
  Common stock, par value $.01 per share; 
     10,000 shares authorized; 4,692 and
     4,710 shares issued; 4,443 and 4,710     
      shares outstanding. . . . . . . . . . . .           47            47
  Additional paid-in capital . . . . . . . . .       38,827        38,812
  Unrealized gain (loss) on investments          
     available for sale (net of deferred taxes     
     of $(98) and $135). . . . . . . . . . . .     (    191)          262 
  Retained earnings. . . . . . . . . . . . . .        3,549         8,369

                                                      42,233        47,491

   Treasury stock (249 shares in 1998). . . . .     (  1,984)         -___

      Shareholders' equity. . . . . . . . . . .        40,249        47,491

  Total liabilities and shareholders  equity .    $ 128,156      $134,442

 
      See accompanying notes to consolidated financial statements.
                                    
                                    
                                    
                                    3
                                     
                                    
                                    
                       WALSHIRE ASSURANCE COMPANY
                            AND SUBSIDIARIES
                    Consolidated Statements of Income



                                                  (In thousands,
                                                        except per share data)
                                                         Three Months Ended
                                                            September 30,_____ 
                                                          1998      1997   
                                                       (Unaudited)(Unaudited)


Revenues:
  Premiums earned . . . . . . . . . . . . . . . . .    $ 12,230   $ 16,464
  Premiums ceded. . . . . . . . . . . . . . . . . .     ( 2,131)   ( 7,091)
  Net premiums earned . . . . . . . . . . . . . . .      10,099      9,373
  Net investment income . . . . . . . . . . . . . .       1,090      1,110
  Net realized gains on investments . . . . . . . .         208        842
  Other . . . . . . . . . . . . . . . . . . . . . .         156        261
     Total revenues . . . . . . . . . . . . . . . .      11,553     11,586

Expenses:
  Claims and claim settlement expenses. . . . . . .      13,207     12,120
  Reinsurance recoveries. . . . . . . . . . . . . .     ( 4,043)   ( 5,484)
  Net claims and claim settlement expenses. . . . .       9,164      6,636
  Amortization of deferred acquisition costs. . . .       1,687      1,257
  Underwriting, general and administrative 
     expenses. . . . . . . . . . . . . . . . . . . .       2,026      1,889
  Dividends to policyholders. . . . . . . . . . . .         -          213
  Interest. . . . . . . . . . . . . . . . . . . . .         124        178 
     Total expenses . . . . . . . . . . . . . . . .      13,001     10,173 

Income (loss) before income taxes. . . . . . . . . .     ( 1,448)     1,413
Provision for income taxes (benefit) . . . . . . . .     (   434)       366
Net income (loss). . . . . . . . . . . . . . . . . .     ( 1,014)     1,047 
Dividends on convertible preferred stock . . . . . .         104        104
Net income (loss) applicable to common stock . . . .    $( 1,118)  $    943

Net income (loss) per common share:              
  Basic and diluted:
     Net income (loss). . . . . . . . . . . . . . .    $(   .25)  $    .20

     Weighted average shares outstanding. . . . . .       4,443      4,680





See accompanying notes to consolidated financial statements.





4                                    

                                   
                                   
                                   
                                   
                      WALSHIRE ASSURANCE COMPANY
                           AND SUBSIDIARIES
                    Consolidated Statements of Income




                                                  (In thousands,
                                                        except per share data)
                                                          Nine Months Ended
                                                            September 30,   _ 
                                                          1998      1997   
                                                       (Unaudited)(Unaudited)


Revenues:
  Premiums earned . . . . . . . . . . . . . . . . .    $ 38,887   $ 48,014
  Premiums ceded. . . . . . . . . . . . . . . . . .     ( 6,679)   (15,316)
  Net premiums earned . . . . . . . . . . . . . . .      32,208     32,698
  Net investment income . . . . . . . . . . . . . .       3,251      3,161
  Net realized gains on investments . . . . . . . .         748      2,235
  Other . . . . . . . . . . . . . . . . . . . . . .         371        593
     Total revenues . . . . . . . . . . . . . . . .      36,578     38,687

Expenses:
  Claims and claim settlement expenses. . . . . . .      39,998     34,812
  Reinsurance recoveries. . . . . . . . . . . . . .     ( 8,693)   (10,483)
  Net claims and claim settlement expenses. . . . .      31,305     24,329
  Amortization of deferred acquisition costs. . . .       5,678      4,585
  Underwriting, general and administrative 
     expenses. . . . . . . . . . . . . . . . . . . .       5,195      6,246
  Dividends to policyholders. . . . . . . . . . . .         -          213
  Interest. . . . . . . . . . . . . . . . . . . . .         324        543
     Total expenses . . . . . . . . . . . . . . . .      42,502     35,916 

Income (loss) before income taxes. . . . . . . . . .     ( 5,924)     2,771
Provision for income taxes (benefit) . . . . . . . .     ( 2,015)       600
Net income (loss). . . . . . . . . . . . . . . . . .     ( 3,909)     2,171
Dividends on convertible preferred stock . . . . . .         316        312
Net income (loss) applicable to common stock . . . .    $( 4,225)  $  1,859

Net income (loss) per common share:
  Basic and diluted:
     Net income (loss). . . . . . . . . . . . . . .    $(   .93)  $    .40

     Weighted average shares outstanding. . . . . .       4,561      4,670





See accompanying notes to consolidated financial statements.



5                                   

                       WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES
                           Consolidated Statements of Cash Flows

                                                          (In thousands)
                                                       except per share data)  
             
                                                         Nine Months Ended
                                                           September 30, ____  

                                                          1998        1997
                                                       (Unaudited) (Unaudited)
Cash flows from operating activities:
  Net income (loss). . . . . . . . . . . . . . . . .    $( 3,909)   $  2,171
  Adjustments to reconcile net income to net
    cash provided by operating activities
      Net realized gains on investments. . . . . . .     (   748)    ( 2,235)
      Decrease (increase) in assets:
       Accrued investment income receivable. . . . .     (    55)         18 
       Amounts receivable from reinsurers. . . . . .       2,488       1,837 
       Amounts receivable from reinsured company . .          21          17 
       Agents  balances and installment premiums
        receivable . . . . . . . . . . . . . . . . .       3,109       2,795 
       Agents  balances and installment premiums
        receivable from related parties. . . . . . .         546       1,050 
       Premium finance receivables . . . . . . . . .         840         289 
       Reinsurance receivables . . . . . . . . . . .     ( 1,409)    ( 7,865)
       Deferred acquisition costs. . . . . . . . . .         899         561 
       Other, net. . . . . . . . . . . . . . . . . .     ( 1,970)        204 
      (Decrease) increase in liabilities: 
       Unpaid claims, claim settlement expenses. . .       6,519       6,016
       Unearned premiums . . . . . . . . . . . . . .     ( 5,201)    ( 5,343)
      Amounts payable to reinsurers . . . . . . . .         -         3,902
       Deposits by insureds. . . . . . . . . . . . .     (   512)    (   196)
       Other, net. . . . . . . . . . . . . . . . . .         156     (    38)
  Net cash provided by operating activities. . . . .         774       3,183
Cash flows from investing activities:
  Purchase of investments:
    Held to maturity . . . . . . . . . . . . . . . .        ---      ( 2,338)
    Available for sale . . . . . . . . . . . . . . .     (24,075)    (27,784)
  Sale of investments:
    Available for sale . . . . . . . . . . . . . . .      14,957      24,273
  Maturity of investments. . . . . . . . . . . . . .       4,179       4,010
  Net (purchase) sale of short term and other
    investments. . . . . . . . . . . . . . . . . . .       6,207       1,801 
  Purchase of property and equipment . . . . . . . .     (    73)    (   216)
  Sale of property and equipment . . . . . . . . . .         672         616
  Other, net . . . . . . . . . . . . . . . . . . . .         267     (   137)
    Net cash provided by investing activities. . . .       2,134         225
Cash flows from financing activities:
  Cash dividends paid. . . . . . . . . . . . . . . .     (   909)    ( 1,223)
  Issuance of common stock . . . . . . . . . . . . .          14         148
  Purchase of treasury stock . . . . . . . . . . . .     ( 1,984)       -
  Proceeds from notes payable  . . . . . . . . . . .         608        -    
  Payment of notes payable . . . . . . . . . . . . .     (   589)    ( 2,476)
    Net cash (used in) financing activities. . . . .     ( 2,860)    ( 3,551)
Net increase (decrease) in cash  . . . . . . . . . .          48     (   143)
Cash at beginning of the period. . . . . . . . . . .         254         637
Cash at end of the period. . . . . . . . . . . . . .    $    302     $   494

See accompanying notes to consolidated financial statements.
                                    6
               WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                    
                                    
1.  The consolidated balance sheet as of September 30, 1998, the consolidated 
statements of income for the three and nine months ended September 30, 1998 and
1997, and the consolidated statements of cash flows for the nine months then
ended have been prepared by Walshire Assurance Company ( the Company ) without
audit.  In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at September 30, 1998 and for all periods
presented, have been made.

2.  Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted.  It is suggested that these unaudited consolidated financial
statements be read in conjunction with the financial statements and notes 
thereto
included in the Company s 1997 Annual Report.  The results of operations for the
period ended September 30, 1998 are not necessarily indicative of the results of
operations for the full year.

3.  Basic net income per share is computed by dividing net income applicable for
common stock by the weighted average number of common shares outstanding during
the year.  Diluted earnings per share includes the additional shares that would
have been outstanding had the 6 1/2% Convertible Preferred Stock been converted
to common, if dilutive, as well as the diluted effect of the Company's stock
option and stock purchase plans.

4.  Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income", was issued by the Financial Accounting Standards Board 
(FASB) in 1997.  As defined in SFAS 130, comprehensive income is composed of net
income, as well as other revenues, expenses, gains and losses that are currently
excluded from net income, but are accounted for separately in the shareholders'
equity section of the balance sheet.  SFAS 130 requires that all items of
comprehensive income be reported in a financial statement.  Total comprehensive
income (loss) is as follows:

                                                           (In thousands)
                                                          Nine Months Ended
                                                           September 30, _____ 
 
                                                          1998        1997
                                                       (Unaudited) (Unaudited)

Net income (loss) . . . . . . . . . . . . . . . . .     $(3,909)      2,171
Other comprehensive income (loss):
  Unrealized gain (loss) on securities, net of tax:
    Unrealized holding gains arising during period.          41       1,904    
   
    Less: reclassification adjustment for gains
      realized in net income. . . . . . . . . . . .         494       1,475    
  
    Net unrealized gain (loss). . . . . . . . . . .      (  453)        429    
              
Other comprehensive income (loss) . . . . . . . . .      (  453)        429    
                

Total comprehensive income (loss) . . . . . . . . .     $(4,362)    $ 2,600
     
5.  Forward Looking Statements.  The information contained in this Quarterly
Report contains forward looking statements (as such term is defined in the
Securities Exchange Act of 1934 and the regulations thereunder), including
without limitation, statements as to the allowances for doubtful accounts and 

7   
credit losses, reserves for unpaid claims and claim settlement expenses, the
classification of the Company's investment portfolio and other statements as to
management's beliefs, expectations or opinions.  Such forward looking statements
are subject to risks and uncertainties and may be affected by various factors
which may cause actual results to differ materially from those in the forward
looking statements.  Certain of these risks, uncertainties and other factors are
discussed in this Quarterly Report or in the Company's Annual Report on 
Form 10-K
for the year ended December 31, 1997, a copy of which may be obtained from the
Company upon request and without charge (except for the exhibits thereto).

6.  Investment Considerations.  In analyzing whether to make, or to continue, 
an investment in the Company, investors should consider, among other factors, 
certain investment considerations more particularly described in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.

7.  Subsequent Event.  On August 12, 1998, the Company announced that it had
entered into a definitive Merger Agreement, pursuant to which Kingsway Financial
Services Inc. will acquire all outstanding shares of Walshire common stock for
$8.25 per share in cash and all outstanding shares of Walshire preferred stock
for $50.00 per share, plus all accrued and unpaid dividends through the 
Effective
Date of the Merger (an amount equal to the redemption price for such shares). 
The closing of the transaction is subject to obtaining all necessary shareholder
and regulatory approvals and the satisfaction of certain other closing
conditions.

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

Revenues for the three month period ended September 30, 1998 decreased $33,000
or .3%, from revenues for the three month period ended September 30, 1997.  This
decrease was primarily the result of a decrease in net realized gains on
investments, offset, in part, by an increase in net premiums earned. Net 
premiums
earned in the third quarter of 1998 increased $.7 million, or   7.7%, over
premiums earned in the same period in 1997.  The increase in net premiums earned
is a result of the Company ceding less premiums to reinsurers in the current 
year
than it did in 1997.  Direct premiums written decreased $1.4 million, or 13.0%,
in the three month period ended September 30, 1998 when compared to the same
period in 1997.  The following table sets forth the direct premiums written by
the Company for the three month periods ended September 30, 1998 and 1997 by 
line
of business.  
                                                (In thousands)
                                        Three months ended September 30,
                                        1998          1997        %Change 
          Auto liability         $3,677       $ 4,282       (14.1%)
          Auto physical damage        2,759         3,192       (13.6%)
          Homeowners                    654           793       (17.5%) 
          Inland marine                 637           606         5.1% 
          Workers  compensation         541           858       (36.9%)
          Other                       1,267         1,223         3.6% 
                 Total              $9,535       $10,954       (13.0%)

Expenses for the three month period ended September 30, 1998 increased $2.8
million, or 27.8%, over expenses for the three month period ended September 30,
1997.  The increase was primarily the result of an increase in net claims and 
claim settlement expenses and amortization of deferred acquisition costs.


8
        
The increase in net claims and claim settlement expenses was the result of an 
increase in net premiums earned as well as an increase in the statutory loss
ratio from 72.1% in 1997 to 92.1% in 1998. The increase in the loss ratio was 
due primarily to adverse development in prior years loss reserves of $.8 million
(predominantly workers' compensation) and an increase in the loss ratio of the
Company's auto liability business. The increase in the amortization of deferred
acquisition costs was primarily the result of the increase in net premiums 
earned
and a decrease in ceding commission income. The statutory combined ratio for the
three month period ended September 30, 1998 was 130.5%, an increase from 108.1%
for the three month period ended September 30, 1997.

Revenues for the nine month period ended September 30, 1998 decreased $2.1
million, or 5.5%, from revenues for the nine month period ended September 30, 
1997.  This decrease was primarily the result of a decrease in net realized 
gains
on investments.  Even though premiums earned decreased by $9.1 million, net
premiums earned in the first nine months of 1998 decreased only $.5 million, or
1.5%, from premiums earned in the same period in 1997.  The minor decrease in 
net
premiums earned is a result of the Company ceding less premiums to reinsurers in
the current year than it did in 1997.  Direct premiums written decreased $8.4
million, or 20.0%, in the nine month period ended September 30, 1998 when
compared to the same period in 1997.  The following table sets forth the direct
premiums written by the Company for the nine month periods ended September 30,
1998 and 1997 by line of business.

                                           (In thousands)
                                         Nine months ended September 30,

                                        1998          1997        %Change 
          Auto liability        $14,950       $18,540       (19.4%)
          Auto physical damage        9,369        12,727       (26.4%)
          Inland marine               2,148         2,365       ( 9.2%)
          Homeowners                  1,844         2,132       (13.5%)
          Workers  compensation       1,708         2,813       (39.3%)
          Other                       3,643         3,488         4.4%
                 Total             $33,662       $42,065       (20.0%)

Expenses for the nine month period ended September 30, 1998 increased $6.6
million, or 18.3%, over expenses for the nine month period ended September 30,
1997.  The increase was primarily the result of increases in net claims and 
claim
settlement expenses and amortization of deferred acquisition costs, offset, in
part, by a decrease in underwriting, general and administrative expenses. 
Increases in net claims and claim settlement expenses were the result of an
increase in the statutory loss ratio from 75.8% in 1997 to 98.4.% in 1998. The
increase in the loss ratio was due primarily to adverse development in prior 
year
auto liability and workers' compensation loss reserves totaling $6.2 million as
well as a higher loss ratio in the Company's auto liability business. The
increase in the amortization of deferred acquisition costs was primarily the
result of decreases in ceding commission income. The decrease in underwriting,
general and administrative expenses were primarily the result of the reduction
in operating expenses due to decreases in direct premium written.  The statutory
combined ratio for the nine month period ended September 30, 1998 was 131.8%, an
increase from 110.1% for the nine month period ended September 30, 1997.




9
        

Liquidity and Capital Resources

Historically, the Company has generated funds sufficient to support its
operations and has maintained a high degree of liquidity in its investment
portfolio.  The primary sources of funds to meet the demands of claim 
settlements
and operating expenses are premiums, ceding commissions, investment income and
existing lines of credit.  The Company s funds generally are invested in
securities with maturities intended to provide adequate funds to pay claims and
expenses without the forced sale of investments.  The Company believes that its
current cash and short term investments, together with funds generated from
operations, will be sufficient to meet its operating and capital requirements 
for
the foreseeable future.

The Year 2000

Many computer systems in use today were designed and developed using two digits,
rather than four, to specify the year.  As a result, such systems will recognize
the year 2000 as "00".  This could cause many computer applications to fail
completely or to create erroneous results unless corrective measures are taken. 
The Company utilizes software and related computer technologies essential to its
operations that will be affected by the Year 2000 issue.  The Company also 
relies
on certain critical non-information technology systems ("non-IT systems"), such
as electricity, telephones, facsimile machines, heating and air-conditioning and
fire protection systems.  Any disruption in the operation of the IT and non-IT
systems of either the Company or any of its critical customers, vendors or
suppliers could have a material adverse effect on the Company's business, 
results
of operations or financial condition.

The Company has completed plans to ensure year 2000 compliance and started
conversions of applications beginning in 1995.  The Company has also completed
much of the work necessary to make its computer systems Year 2000 compliant.  
These modifications and replacements are expected to be completed by mid year 
1999.  The additional expense associated with these actions cannot presently be
determined, but it is not anticipated to be material.

Despite all the procedures the Company has in place, there can be no guarantee
that its systems or the systems of other companies on which the Company's
business relies will be timely converted, or that failure to convert by another
company or a conversion that is incompatible with the Company's systems, will 
not have a materially adverse effect on the Company and its operations.












                               
                               
                               
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Part II   OTHER INFORMATION

Item 1.   Legal Proceedings

          None

Item 2.   Changes in Securities

          None

Item 3.   Defaults Upon Senior Securities

          None

Item 4.   Submission of Matter to a Vote of Security Holders

          None
          
Item 5.   Other Information

          Pursuant to recent amendments to the proxy rules under the
          Securities Exchange Act of 1934, as amended, (the "Exchange Act"),
          the Company's stockholders are notified that the deadline for
          providing the Company timely notice of any stockholder proposal to
          be submitted outside of the Rule 14a-8 process for consideration at
          the Company's 1999 Annual Meeting of Stockholders (the "Annual
          Meeting") will be March 12, 1999.  As to all such matters which the
          Company does not have notice on or prior to March 12, 1999,
          discretionary authority shall be granted to the persons designated
          in the Company's proxy related to the Meeting to vote on such
          proposal.  This change in procedure does not affect the Rule 14a-8
          requirements applicable to inclusion of stockholder proposal in the
          Company's proxy materials related to the Meeting.  A stockholder
          proposal regarding the Meeting must be submitted to the Company at
          its office located at 3350 Whiteford Road, York, PA  17402 by
          December 28, 1998, to receive consideration for inclusion in the
          Company's 1999 proxy materials.  Any such proposal must also comply
          with the proxy rules under the Exchange Act, including Rule 14a-8.

Item 6.   Exhibits and Reports on Form 8-K

          Exhibits
            
            (a) Exhibit 27.1 Financial data schedule

          Reports on Form 8-K

            None


      
                                  
                                  
                                  
                                  
                                  
                                  
                                  11
                                 
                                  SIGNATURES

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



                                   WALSHIRE ASSURANCE COMPANY
                                   (Registrant)




DATE:  November 13, 1998           /s/ Kenneth R. Taylor                
       
                                   Kenneth R. Taylor
                                   President and Chief
                                   Executive Officer





DATE:  November 13, 1998           /s/ Gary J. Orndorff                 
        
                                   Gary J. Orndorff
                                   Vice President/Treasurer
                                   and Chief Financial Officer

                   
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     12
                    
                     
                     <PAGE>
                      SIGNATURES
                
Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                   WALSHIRE ASSURANCE COMPANY
                                   (Registrant)




DATE:  November 13, 1998                __________________________     
           
                                   Kenneth R. Taylor
                                   President and Chief
                                   Executive Officer





DATE:  November 13, 1998                __________________________     
          
                                   Gary J. Orndorff
                                   Vice President/Treasurer
                                   and Chief Financial Officer

                   
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     12