U.S. SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549


                          Form 10-QSB

                     Quarterly Report Under
               the Securities Exchange Act of 1934

                For Quarter Ended:  November 30, 1996

                  Commission File Number:  0-26920



                       USAsurance Group, Inc.
 (Exact name of small business issuer as specified in its charter)


                              Colorado
    (State or other jurisdiction of incorporation or organization)

                             84-1298212
                  (IRS Employer Identification No.)

                         7345 E. Peakview Ave.
                          Englewood, Colorado
                (Address of principal executive offices)

                                80111
                             (Zip Code)

                           (303) 689-0123
                     (Issuer's Telephone Number)


(Former name, former address and former fiscal year, if changed
since last report)

Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 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 number of shares of the registrant's only class of common stock
issued and outstanding, as of November 30, 1996, was 1,566,000
shares.


<PAGE>

                              PART I

ITEM 1.   FINANCIAL STATEMENTS.

      The unaudited financial statements for the six month period
ended November 30, 1996, are attached hereto.

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

     The following discussion should be read in conjunction with
the Financial Statements and notes thereto included herein.

      USAsurance Group, Inc. (the "Company"), is a company
incorporated pursuant to the laws of the State of Colorado on
January 15, 1991, for the purpose of engaging as an insurance
brokerage company.  The Company did not undertake any business
activities relevant thereto and in June 1995, the Company's Board
of Directors elected to change the Company's principal business
activities to the viatical settlement industry.  Viatical
settlements are made to persons who are terminally ill and who want
to sell their life insurance to obtain the benefit of the money
provided by the settlement during the remainder of their life.

Results of Operations

Comparison of Results of Operations for the three month period
ended November 30, 1996 and three month period ended November 30,
1995

     The Company's revenues for the three month period ended 
November 30, 1996 were $2,492 compared to $21,284 for the three
month period ended November 30, 1995, a decrease of $18,792 (88%). 
This decrease was as a result of the maturity of an insurance
policy owned by the Company during the three months ended November
30, 1995.  During the similar period in 1996, no insurance policies
owned by the Company matured.  In the three month period ended
November 30, 1996, expenses increased $1,119 (8%) to $14,957 from
$13,838 in November 30, 1995.  This increase was due to costs
associated with increased general and administrative expenses,
including legal and accounting expenses.

     The Company's net operating income decreased from $4,378 to
($15,533), primarily due to a required noncash bookkeeping entry
related to the payment of management salaries.  However, as of the
date of this report, the Company does not pay its management any
salaries, by accrual or otherwise.

Comparison of Results of Operations for the six month period ended
November 30, 1996 and six month period ended November 30, 1995

     The Company's revenues for the six month period ended November

                                                                2

<PAGE>

30, 1996 were $7,551 compared to $23,722 for the six month period
ended November 30, 1995, a decrease of $16,171 (68%).  This
decrease was due to the fact that no insurance policies owed by the
Company matured during the period ended Nov. 30, 1996, while one
insurance policy matured during the period ended Nov. 30, 1995.  In
the six month period ended November 30, 1996, the Company incurred
expenses of $32,940, as compared to expenses of $16,508 for the
similar period ended Nov. 30, 1995, an increase of $16,432 (99%). 
This increase was due to costs associated with increased general
and administrative expenses, including legal and accounting
expenses.

     The Company's net operating income decreased from $4,171 to
($31,180), primarily due to the increase of operating activities.

     Interest expense increased by approximately $2,748.  The
increase resulted primarily from interest accruing on notes payable
to the Company's lenders which the Company had borrowed to fund
previous purchases of policies.

     Since June 1995 the Company has purchased, for its own
account, 12 different insurance policies with a face value of
$628,294 from individuals, for an aggregate purchase price of
$565,795.  Four of these policies in the amount of $203,200 have
matured and the proceeds from these policies have been paid to the
Company.  The Company recognizes income (earned discount) on each
purchased policy by accruing, over the period between the
acquisition date of the policy and the Company's estimated date of
collection of the face value of the policy (the accrual period),
the difference (the unearned discount) between (a) the death
benefit payable (face value under the policy less the amount of
fees, if any, payable to a referral source upon collection of the
face value; and (b) the carrying value of the policy.  The carrying
value of each policy is reflected on the Company's balance sheet
under "purchased life insurance policies" and consists of the
purchase price, other capitalized cost and the earned discount on
the policy accrued to the balance sheet date.  The Company
capitalizes as incurred the following costs of a purchased policy: 
(i) the purchased price paid for the policy; (ii) policy premiums,
if any, paid by the Company; (iii) amounts, if any, paid to
referral sources upon acquisition of the policy; and (iv) amounts
paid to retained physicians or other medical consultants who
estimated the insured's life expectancy.  The carrying value of a
policy change over time and is adjusted quarterly to reflect the
earned discounts accrued on the policy, amounts paid for any
additional future increases in coverage, any additional premium
payments and any premium refunds if the policy becomes covered by
premium waiver provisions.  The length of the accrual period is
determined by the Company based upon its estimate of the date on
which it will collect the face value of the policy.  Such date is
based upon the Company's estimate of the life expectancy of the
insured, after review of the medical records of the insured by the

                                                                3

<PAGE>

Company's medical consultants and also takes into account the
historical accuracy of the life expectancies estimated by the
Company's consultants and the typical period (collection period)
between the date of the insured's death and the date on which the
Company collects the face value of the policy.

     The unearned discount is accrued over the accrual period using
the straight line method. Under the straight line method, the
unearned discount is earned evenly throughout the accrual period
and the unearned discount will be fully accrued as earned discount
by the end of the accrual period.

     The weighted average original accrual period of the Company's
portfolio of policies comprising "purchased life insurance
policies" and "matured policies receivable" as of November 30, 1996
was 12.0 months.  At that date, 7.5 months of the accrual period
had elapsed, leaving a weighted average remaining accrual period at
the end of the period of 4.5 months.  The average accrual period
will change as the composition of policies comprising the Company's
portfolio changes.  To the extent the Company purchases policies
insuring lives of individuals with longer life expectancies, the
average accrual period will become longer.  The Company has a
relatively limited operating history and as it accumulates more
experience and data, it may need to revise the accrual periods for
existing and newly acquired policies to reflect more accurately
such experience and data.  In addition, the Company has been using
several consultants to estimate life expectancies of insureds
afflicted with AIDS.  accrual periods may also be revised if (i)
such consultants become more or less accurate in their estimates of
life expectancies of insureds; (ii) the Company uses additional or
different consultants who produce different levels of accuracy ; or
(iii) the Company purchases more non-Aids policies or policies
insuring the lives of individuals with longer life expectancies,
both of which may result in different levels of life expectancy
accuracy.

     Any change in accrual periods will not cause a restatement of
earned discounts in prior periods but will impact earned discounts
in the current and future periods on both policies then owned by
the Company (by either accelerating or decelerating the recognition
of remaining unearned discount) and policies thereafter acquired by
the Company.  The Company cannot predict how any accrual period
will change, if at all, in the future.

Liquidity and Capital Resources

     The Company's primary need for capital has been for the
funding of policy purchases.  Since commencement of its business
operations in June 1995, the Company has primarily utilized the
proceeds which it derived from its private offering to implement
its business plan of purchasing insurance policies.  The Company
intends to attempt to continue to implement its business plan

                                                                4

<PAGE>

during the next 12 months.  While it is perceived by management
that there are numerous potential sellers in the viatical market,
management believes that the Company may be limited in the number
of insurance policies the Company may acquire because of the
Company's present limited financial resources.  In response
thereto, management has undertaken various discussions with
investment bankers and venture capitalists in order to arrange to
provide the Company with additional financial resources.  However,
as of the date of this report, the Company has obtained no
commitments from any sources to provide the Company with either
debt or equity capital in the future and there can be no assurances
that such agreements will be obtained by the Company from any such
sources in the future.

     In the event the Company is unable to obtain additional
capital, management intends to continue to fund the Company's
acquisition of insurance policies through the proceeds derived from
operations, if any.  There can be no assurances that the Company
will generate profits from its current operations, or if profits
are generated, that the Company will be able to significantly
increase the number of policies it purchases.  If possible, the
Company may explore the possibility of obtaining loans from
established financial institutions.  However, while the Company has
had informal discussions with various financial institutions to
obtain loans, as of the date hereof there is no agreement between
the Company and any financial entity wherein the Company will
obtain any additional funding, either equity or debt.

     The Company's cash requirements have been and will continue to
be significant in order to finance its policy purchases.  As a
result of accruing income on each purchased policy prior to
collecting the face value, the amount of earned discount recognized
is not related to the collection of cash by the Company on
policies.  Net cash flows provided by operating activities has
decreased by $328,541.  This was due to an decrease in policies
purchased.

     Of the policies purchased by the Company since June 1995, all
of these policies have been purchased from individuals diagnosed
with Human Immunodeficiency Virus (HIV).  In deference to new
treatments involving combinations of various drugs for treating HIV
positive patients, the Company has temporarily slowed down its
activities relating to the purchasing of policies which insure
people afflicted with AIDS and HIV will not take an aggressive
approach to such acquisitions until additional information can be
obtained and analyzed relating to the effect these new treatments. 
At the present, management is of the opinion that insufficient
information is available to allow the Company to make decisions on
accrual periods or in the methodology for income recognition.  The
Company is continuing to analyze available data regarding new
treatments and cannot, as of the date of this report, predict what
impact this situation will have on its business, prospects, results

                                                                5

<PAGE>

of operations or financial position. Additionally, the Company has
not determined the implication of these recent developments on the
Company's strategic direction.  Until management is satisfied as to
the future treatment of AIDS, the Company will not utilize any
additional debt capital to purchase insurance policies from
individuals diagnosed as HIV positive or with AIDS.  However, the
Company will consider purchasing insurance policies of persons
afflicted with other terminal diseases.

     It is not anticipated that the Company will expend any of its
present financial resources on the purchase of any significant
equipment in the future, nor is it anticipated that the number of
employees of the Company will increase to any significant degree in
the future.

     Inflation has not had and is not expected to have a
significant impact on the Company's financial position or operating
results.

     The Company's common stock shares are currently traded on the
NASDAQ over the counter Bulletin Board using the trading symbol
"UASG".


                         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 MATTERS TO A VOTE OF SECURITY HOLDERS - 
            NONE.

ITEM 5.     OTHER INFORMATION - NONE.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            (a)  Exhibits
                 EX-27     Financial Data Schedule

            (b)  Reports on Form 8-K - None.



                                                                6

<PAGE>

<TABLE>
USAsurance Group, Inc.
Balance Sheet
<CAPTION>
                                             Unaudited   Audited
                                             November      May
                                             30, 1996   31, 1996
                                             _________  _________
<S>                                          <C>        <C>
ASSETS

Current Assets:

Cash                                           $14,142   $124,540
Other Receivables                               15,000     12,000
Purchased Life Insurance Policies              442,442    389,405
Escrow deposit                                  38,476          0
                                             _________  _________
Total Current Assets                           510,060    525,945
                                             _________  _________
Equipment (net of depreciation)                   2160       2430
                                             _________  _________
Other Assets - Deferred Tax Asset                 6100       6100
                                             _________  _________
TOTAL ASSETS                                  $518,320   $534,475

LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES

Current Liabilities:

Accounts Payable                                $7,572     $1,534
Deferred Tax Liability                           8,900     10,900
Interest Payable                                 3,092      9,205
                                             _________  _________
Total Current Liabilities                       19,564     21,639
                                             _________  _________
Long-Term Debt - Related Party                  75,000     75,000
Long-Term Debt - Other                         100,340    100,340
                                             _________  _________
Long-Term Liabilities                          175,340    175,340
                                             _________  _________
TOTAL LIABILITIES                              194,904    196,979
                                             _________  _________
SHAREHOLDERS' EQUITY                                    
Common Stock, $.0001 Par Value                          
Authorized 900,000,000 Shares;
Issued And Outstanding 1,566,000 Shares            157        157

Capital Paid In Excess Of                               
Par Value Of Common Stock                      382,091    364,991

                                                                7

<PAGE>

Preferred Stock, $.01 Par Value, Non Voting
Authorized 1,000,000 Shares;
Issued And Outstanding -0- Shares                    0          0

Retained Earnings (Deficit)                    (58,832)   (27,652)
                                             _________  _________
TOTAL SHAREHOLDERS' EQUITY                     323,416    337,496
                                             _________  _________
TOTAL LIABILITIES AND 
SHAREHOLDERS' EQUITY                          $518,320   $534,475
 
<FN>

          The Accompanying Notes Are An Integral Part Of These
Unaudited Financial Statements.

</TABLE>


                                                                8

<PAGE>

<TABLE>
USAsurance Group, Inc.
Statement Of Operations
<CAPTION>
                                           Unaudited   Unaudited
                                            6 Month     6 Month
                                         Period Ended Period Ended
                                           November     November
                                           30, 1996     30, 1995
                                           _________    _________
<S>                                        <C>          <C>       
                                                
Income:

Earned Discount On Life Insurance Policies    $7,551      $23,722
                                           _________    _________
Expenses:

Depreciation                                     270            0
Legal And Accounting                          14,972        8,622
Licenses And Fees                                  0        2,705
Office                                           223          899
Officers Compensation                         16,500            0
Professional Dues                                  0        2,750
Rent                                             600            0
Telephone                                        375            0
Travel                                             0        1,532
                                           _________    _________
Total                                         32,940       16,508
                                           _________    _________
Net  (Loss) Profit  From Operations          (25,389)       7,214

Other Income (Expense):

Interest Income                                   96           25
Interest (Expense)                            (5,887)      (3,068)
                                           _________    _________
Total                                         (5,791)      (3,043)
                                           _________    _________
Net (Loss) Profit                           ($31,180)      $4,171

Net (Loss) Profit Per Common Share            ($0.02)       $0.00

Weighted Average Common Shares 
 Outstanding                               1,566,000    1,566,000


<FN>

          The Accompanying Notes Are An Integral Part Of These
Unaudited Financial Statements.

</TABLE>

                                                                9

<PAGE>

<TABLE>
USAsurance Group, Inc.
Statement Of Operations
<CAPTION>
                                           Unaudited   Unaudited
                                            3 Month     3 Month
                                         Period Ended Period Ended
                                           November     November
                                           30, 1996     30, 1995
                                           _________    _________
<S>                                        <C>          <C>       
                                                
Income:

Earned Discount On Life Insurance Policies    $2,492      $21,284
                                           ---------    ---------
Expenses:

Depreciation                                     135            0
Legal And Accounting                           5,772        8,622
Licenses And Fees                                  0        2,705
Office                                            50          729
Officers Compensation                          8,250            0
Professional Dues                                  0          250
Rent                                             500            0
Telephone                                        250            0
Travel                                             0        1,532
                                           _________    _________
Total                                         14,957       13,838

Net  (Loss) Profit  From Operations          (12,465)       7,446
                                           _________    _________
Other Income (Expense):

Interest Income                                    0            0
Interest (Expense)                            (3,068)      (3,068)
                                           _________    _________
Total                                         (3,068)      (3,068)
                                           _________    _________
Net (Loss) Profit                           ($15,533)      $4,378

Net (Loss) Profit Per Common Share            ($0.01)       $0.00

Weighted Average Common Shares 
 Outstanding                               1,566,000    1,566,000

<FN>

          The Accompanying Notes Are An Integral Part Of These
Unaudited Financial Statements.

</TABLE>



                                                               10

<PAGE>

<TABLE>
USAsurance Group, Inc.
Statement Of Cash Flows
<CAPTION>
                                           Unaudited    Unaudited
                                            6 Month      6 Month
                                          Period Ended Period Ended
                                            November     November
                                            30, 1996     30, 1995
                                           _________    _________ 
<S>                                        <C>          <C>
Net (Loss) Profit                           ($31,180)      $4,171
Adjustments To Reconcile Net
 (Loss) Profit To Net Cash
 Used In Operating Activities:
Depreciation                                     270            0
Contributed Services And Rent                 17,100            0

Changes In Operating Assets And Liabilities:
(Increase) In Other Accounts Receivable       (3,000)           0
(Increase) In Purchased
  Life Insurance Policies                    (53,037)    (446,178)
(Increase) In Escrow Deposits                (38,476)           0
Increase In Accounts Payable                   6,038            0
(Decrease) In Deferred Tax Liability          (2,000)
(Decrease) In Interest Payable                (6,113)       3,068
                                           _________    _________
 Net Flows From Operations                  (110,398)    (438,939)

Cash Flows From Investing Activities:
Net Cash Flows From Investing                      0            0
                                           _________    _________
Cash Flows From Financing  Activities:
Issuance Of Common Stock                           0      330,000
Funds Received From Loans                          0       75,000
Advances From Related Parties                      0       58,500
Payments Made On Loans                             0         (500)
                                           _________    _________
Cash Flows From Financing                          0      463,000

Net Increase In Cash                        (110,398)      24,061
Cash At Beginning Of Period                  124,540            0
                                           _________    _________
Cash At End Of Period                        $14,142      $24,061

Summary Of Non-Cash Investing
  And Financing Activities:

Inventory Purchased By Related Party as
  Loan To Related Party                           $0      $42,340

Policies Matured Not Collected                     0      $40,100

Matured Policy Unearned Revenue                   $0       $7,331

<FN>

          The Accompanying Notes Are An Integral Part Of These
Unaudited Financial Statements.

</TABLE>

                                                               11

<PAGE>

USAsurance Group, Inc.
Notes To Unaudited Financial Statements
For The Six Month Period Ended November 30, 1996

Note 1 - Unaudited Financial Information

The unaudited financial information included for the three month
and six month interim periods ended November 30, 1996 and 1995 were
taken from the books and records without audit. However, such
information reflects all adjustments (consisting only of normal
recurring adjustments, which are of the opinion of management,
necessary to reflect properly the results of interim periods
presented). The results of operations for the six month period
ended November 30, 1996 are not necessarily indicative of the
results expected for the fiscal year ended May 31, 1997

Note 2 - Type of Life Insurance Policies and Collection of Proceeds

The Company has purchased both group and individual policies that
include term, whole life, and universal life insurance from various
individuals that have life expectancies of 12 months or less. Upon
the maturity of the policies the Company will receive a cashiers
check for the face amount of the policy made out to the Company
within 30 days.

Note 3 - Purchased Life Insurance Policies

The Company recognizes income (earned discount) on each purchased
policy by accruing, over the period between the acquisition date of
the policy and the Company's estimated date of collection of the
face value of the policy (the Accrual Period), the difference (the
unearned discount) between, (a) the death benefit payable (face
value) under the policy less the amount of fees, if any, payable to
a referral source upon collection of the face value, and (b) the
carrying value of the policy. The carrying value of each policy is
reflected on the Company's balance sheet under "purchased life
insurance policies" and consists of the purchase price, other
capitalized costs, and the earned discount on the policy accrued to
the balance sheet date. The Company capitalizes as incurred the
following costs of a purchased policy: (I) the purchase price paid
for the policy, (ii) policy premiums, if any, paid by the Company,
(iii) amounts, if any, paid to referral sources upon acquisition of
the policy, and (iv) amounts paid to Company retained physicians or
other medical consultants who estimated the insured's life
expectancy. The carrying value of a policy will change over time,
and is adjusted quarterly to reflect the earned discounts accrued
on the policy, amounts paid for any additional future increases in
coverage, any additional premium payments and any premium refunds
if the policy becomes covered by premium waiver provisions. The
length of the Accrual Period is determined by the Company based
upon its estimate of the date on which it will collect the face
value of the policy. Such estimate is based upon the Company's

                                                               12

<PAGE>

USAsurance Group, Inc.
Notes To The Unaudited Financial Statements
For The Six Month Period Ended November 30, 1996
 

Note 3 - Continued

estimate of the life expectancy of the insured, after review of the
medical records of the insured by one or more Consultants, and also
take into account the historical accuracy of the life expectancies
estimated by the Company's Consultants and the typical period
(collection period) between the date of the insured's death and the
date on which the Company collects the face value of the policy.

The unearned discount is accrued over the accrual period using the
straight line method, regardless of when the Company collects the
face value. Under the straight line method, the unearned discount
is earned evenly throughout the accrual period and the unearned
discount will be fully accrued as earned discount by the end of the
accrual period.

Differences will arise between the timing of estimated and actual
collections. The Company recalculates the accrual periods on a
quarterly basis, using actual collection experience and, if
necessary, adjusts prospectively the period over which income is
recognized.

Purchased life insurance policies consist of the following as of
November 30, 1996:

<TABLE>
     <S>                                         <C>
     Capitalized costs of purchased
       life insurance policies                   $405,811
     Earned Discount                               56,631
                                                 ________
     Purchased life insurance policies           $442,442

</TABLE>

Purchased life insurance policies included in the above table for
which the discount has been fully earned, but for which the Company
has not yet received notification of the insured's death, consist
of the following at November 30, 1996:

<TABLE>
     <S>                                         <C>
     Capitalized costs of purchased
       life insurance policies                   $328,806
     Earned discount                               27,194
                                                 ________
     Included in purchased
       life insurance policies                   $356,000

</TABLE>



                                                               13

<PAGE>

USAsurance Group, Inc.
Notes To The Unaudited Financial Statements
For The Six Month Period Ended November 30, 1996

Note 4 - Unearned Discount

As of November 30, 1996 there were $7,005 in unearned discounts.
All policies at November 30, 1996 are expected to mature in 12
months or less.

Note 5 - Officer Compensation And Facility Rent

During the six month interim period the Company's management
contributed $16,500 of services and $600 of facility rent both of
which have been recorded as a contribution of equity and as general
and administrative expenses.

































                                                               14

<PAGE>

                          SIGNATURES


           Pursuant to the requirements of Section 12 of the
Securities and Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                   USAsurance Group, Inc.
                                   (Registrant)

                                   Dated:  January 13, 1997


                                   By:  s/Thomas J. Chase        
                                   Thomas J. Chase
                                   President and
                                   Chief Financial Officer





















                                                               15

<PAGE>

                       USAsurance Group, Inc.

          Exhibit Index to Quarterly Report on Form 10-QSB
               For the Quarter Ended November 30, 1996

EXHIBITS                                                 Page No.

  EX-27     Financial Data Schedule . . . . . . . . . . .     17


























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