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:  August 31, 1997

                  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 August 31, 1997, was 1,566,000
shares.

<PAGE>
                              PART I

ITEM 1.   FINANCIAL STATEMENTS.

      The unaudited financial statements for the three month period
ended August 31, 1997, are attached hereto.

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

     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 wherein the Company
acquired life insurance policies from individuals who are
terminally ill or pools of policies from other companies.  However,
during the last fiscal year, the viatical settlement industry has
changed due to advances in medication which prolong life for these
individuals and, as a result thereof, the Company ceased further
participation in the viatical settlement business due to such
extended life expectancies resulting in lower returns.

     As a result thereof, during its last fiscal year, the Company,
desiring to remain in some segment of the insurance industry,
changed its business activities to the reinsurance business.  The
Company applied for licensing in Aruba using a wholly owned
subsidiary, Insurenational, A.V.V., and was approved to commence
operations on September 25, 1997.  The Company will use the life
insurance policies that it now holds as it capital contribution in
Insurenational, A.V.V.

Results of Operations

Comparison of Results of Operations for the three month period
ended August 31, 1997 and three month period ended August 31, 1996

     The Company had no revenues for the three month periods ended
August 31, 1996 and August 31, 1997.  In the three month period
ended August 31, 1997, general and administrative expenses
increased $5,939 (33%) from $17,984 for the three month period
ended August 31, 1996 to $23,923.  This increase was due to fees
incurred to a consultant associated with a potential acquisition by
the Company of a digital pager company and payment by the Company
of its share of general office expenses incurred as a subleasee at
its present offices.

                                                                2

<PAGE>
     The Company incurred a net loss of $(26,991) for the three
month period ended August 31, 1997, compared to a net loss of
$(15,648) for the three months ended August 31, 1996, an increase
of $(11,343), or 58%, primarily due to a noncash bookkeeping entry
related to the discontinued viatical settlement operations.

     Since June 1995 the Company purchased, for its own account, 10
different insurance policies with a face value of $538,294 from
individuals, for an aggregate purchase price of $489,795.  Five of
these policies have matured and net aggregate proceeds from these
policies in the total amount of $75,903 have been paid to the
Company, one of which matured during the three months ended August
31, 1997 with the Company receiving approximately $27,000 as a
result of such maturity, the proceeds of such matured policy having
previously been recognized as income on an accrual basis.  Because
the Company's Financial Statements are prepared on an accrual
rather than a cash basis, this income was account for in the
quarter ended May 31, 1997.  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 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

                                                                3

<PAGE>
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.

     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 policies owned by the Company
(by either accelerating or decelerating the recognition of
remaining unearned discount).  The Company cannot predict how any
accrual period will change, if at all, in the future.

     As discussed hereinabove, during the fiscal year ended May 31,
1997, the Company adopted a plan to cease further participation in
the viatical settlement industry.  This was the Company's only
operating segment since its inception.  The results of its
activities in the viatical settlement business for the current and
prior comparative period have been restated in the Company's
unaudited Financial Statements included herein to present the
viatical settlement business as a discontinued operation.

Plan of Operation

     In September 1997, management created a new wholly owned
subsidiary company, Insurenational, Inc., an Aruba chartered
insurance company ("Insurenational"), which is being undertaken as
a result of the changes in the viatical settlement industry
described above.  It is anticipated that Insurenational will
provide reinsurance to insurance companies who provide coverage to
small associations or associated groups where loss experience is
available and predictable.  For example only, if a group of small
businesses in a common business have individual policies with total
annual premiums of $4 million, a typical insurance company would
base this premium on a loss ratio of 50-55%, or $2 to 2.2 million
of losses annually.  Insurenational intends to work with that
association to arrange for a domestic insurance company to insure
the predictable portion of the annual claims and to reinsure the
excess with Insurenational.  The association will continue to have
their insurance coverage underwritten on the same policy with their
then current carrier.  The association would put the remaining $2
million into a trust account.  Insurenational would then reinsure
the domestic insurance company for all losses exceeding $2 million,
but not to exceed $2.7 million.  In consideration for
Insurenational's assumption of this risk a premium of $1 million
would be charged.  Under this arrangement, Insurenational would
save the association $1 million annually.

     The aforesaid illustration is indicative of the premium volume
that Insurenational could underwrite based on its existing
capitalization.  With additional capital, additional volume can be
undertaken.  However, there are no assurances that the Company will
generate profits from its proposed operations, or that if it does
become profitable, that the Company will be able to obtain

                                                                4

<PAGE>
additional funding, either debt or equity, to increase its proposed
business.

     Shareholders and other investors should also be advised that
the risks of the above approach to the reinsurance business is very
high.  The market is subject to wide swings in premiums charged and
is highly competitive.  The Company may be unable to find such a
small insurance company, or if such a company is located, there are
no assurances that such a company will agree to engage in business
with the Company as outlined hereinabove.  Additionally, domestic
insurance companies large enough to do nation-wide program business
may not want to do business with a small foreign insurance company.

     In addition, management also intends to cause the Company to
become involved in the business of financial services, to a limited
extent.  The Company may make small commercial loans to, and equity
investments in, emerging growth companies which are unable to
obtain financing from traditional sources.  The Company may also
furnish financial consulting services and advice as an incidental
part of its business plan.  The Company does not intend to
emphasize this business and has no intention of causing the Company
to become classified as an "investment company" as that term is
defined under the Investment Company Act of 1940, as amended.

     The Company intends to focus its financing and capital
arrangement activities on emerging growth companies which plan to
raise capital in the public markets within a reasonably short
period of time, i.e., one or two years.  Management has not
identified any particular industry within which the Company will
focus its efforts.  Rather, management intends to identify any
number of candidates which may be brought to its attention through
present associations or by word of mouth.

     While the Company may require, as a condition to making a loan
to any particular candidate, adequate collateral as security, the
Company will rely upon the expertise and experience of its
management on a case-by-case basis in making the determination
regarding the issue of collateral.  Management will not employ any
specific formula for collateral coverage and may make unsecured
signature loans under circumstances deemed acceptable by
management.  Banks, on the other hand, traditionally require
collateral coverage of approximately 133% for accounts receivable,
300% for inventory and 200% of liquidation value for real estate,
equipment and other tangible assets.  The Company intends to charge
interest rates on loans in a range from 5% to 18% and to obtain
equity participation in the form of warrants or options to purchase
shares of the common stock of the entity financed or other forms of
securities in order to provide additional yield enhancements. 
Where the Company receives such warrants, options or other
securities, the Company may distribute such securities to its
shareholders as a stock dividend, subject to compliance with
applicable state and federal securities laws.  In addition to or in

                                                                5

<PAGE>

lieu of the aforementioned types of securities, the Company may
seek to obtain an interest in revenues, a carried working interest
or other carried interest.

     In instances deemed appropriate by management, the Company may
require security in the form of inventory, accounts receivable,
manufacturing and other operating equipment, and other tangible
assets and/or real estate used in the financing candidate's
business.  With respect to asset-based loans which the Company may
fund, management will have no fixed policy as to the percentage of
collateral coverage required.  However, in almost every such case,
management envisions that the percentage of collateral coverage
required by it will be in excess of 100% of the amount of loan. 
Additionally, management may require that any one or more of the
officers, directors and principal shareholders of the borrower to
personally guarantee the indebtedness and, depending upon the
prospective borrower's financial strength and the nature and value
of any collateral, require, in addition, that the personal
guarantees be collateralized separately.

     Management has not adopted any policy regarding the maximum
size of any loan or stock purchases which it may make with respect
to a single company and may, in fact, own 100% of an operating
company.  Further, management has not determined any maximum
percentage of its loans or stock portfolio which may be committed
to loans or investments in excess of a specified amount. 
Management, in its sole discretion, will determine guidelines for
levels of concentration as to the diversity of companies which it
funds and types of assets required as collateral for loans in order
to attempt to minimize credit losses.  However, management intends
to employ a policy of maintaining a diversity of companies financed
and types of collateral accepted as security for loans in order to
minimize undue exposure.

     The Company is, and will remain for the foreseeable future, an
insignificant participant among those firms which are also engaged
in the businesses of the Company.  There are many established
entities and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the
Company.  Management will rely upon their own ability to generate
potential lending candidates, either through their own personal
relationships or through limited advertising in trade journals for
industries which management has had prior experience.  In view of
the Company's extremely limited financial resources, it should be
expected that the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.

Liquidity and Capital Resources

     The Company's prior primary need for capital has been the
funding of policy purchases.  In the future, it will be for the
establishment of business operations in the reinsurance industry. 

                                                                 6

<PAGE>

Since its inception, the Company has relied upon the proceeds from
the sale of common stock of $329,448 derived from a private
offering and loans from related parties of $175,340.  During the
three month period ended August 31, 1997, the Company financed its
operations from cash flow generated from a outstanding receivable
derived from the maturity of one life insurance policy in the
amount of $27,000.

     In June 1995, Terry Whiteside, the Company's former President
loaned the Company the principal sum of $42,340, which the Company
utilized to purchase its initial insurance policy with a face value
of $58,000.  In August 1995, Ms. Whiteside loaned the Company the
principal sum of $58,000.  Additionally in August 1995, a minority
shareholder of the Company loaned the Company the principal sum of
$75,000.  Each of these aforesaid loans are unsecured and all have
been extended until August 1998 by the mutual consent of the
parties, with interest accruing at the rate of 7% per annum.  The
Company utilized the proceeds of these loans to purchase insurance
policies.  

     At August 31, 1997, the Company had an increase in cash flow
of $47,840 compared to a decrease in cash flow of $(76,863) at
August 31, 1996, primarily as a result of a decrease in receivables
for matured policies and discontinuation of cost associated with
purchased life insurance policies.  During the three month period
ended August 31, 1997, the Company produced enough cash flow from
its now discontinued operations to cover cash outflow.  Current
assets consists mostly of Purchased Life Insurance Policies. 
Current liabilities consists mostly of accrued interest to related
parties.

     The Company's cash requirements have been and will continue to
be significant in order to finance its new business plan.  The
Company will consider borrowing additional funds or selling
additional stock if the cash requirements exceed cash reserves. 
However, there can be no assurances that the Company will be able
to successfully borrow such additional funds on terms beneficial to
the Company, or at all.  Additionally, there are no assurances that
the Company will be able to generate any funds from sale of its
securities.

     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.

                                                                7

<PAGE>
     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.


                                                                8

<PAGE>
<TABLE>
USAsurance Group, Inc.
Balance Sheet
-----------------------------------------------------------------
<CAPTION>
                                            Unaudited  Audited
                                              August     May
                                            31, 1997  31, 1997
                                            --------  --------
<S>                                         <C>       <C>
ASSETS

Current Assets:
Cash                                        $ 48,569  $    729
Matured Policies Receivable - Related Party        0    27,000
Purchased Life Insurance Policies            407,776   407,000
Deposits With Insurance Company                    0    38,476
Other Assets                                  17,863    18,040
                                            --------  --------
Total Current Assets                         474,208   491,245
                                            --------  --------
TOTAL ASSETS                                $474,208  $491,245

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES

Current Liabilities:
Accounts Payable                            $  2,103  $  3,969
Interest Payable                              12,298     9,229
                                            --------  --------
Total Current Liabilities                     14,401    13,198

Long-Term Debt - Related Party                75,000   100,340
Long-Term Debt - Other                       100,340    75,000
                                            --------  --------
Total Long-Term Debt                         175,340   175,340
                                            --------  --------
TOTAL LIABILITIES                            189,741   188,538

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                    407,841   399,091

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

Retained Earnings (Deficit)                 (123,531)  (96,541)
                                            --------  --------
TOTAL SHAREHOLDERS' EQUITY                   284,467   302,707
                                            --------  --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $474,208  $491,245
                                            ========  ========
<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
                                            August       August
                                           31, 1997     31, 1996
                                          ---------    ---------
<S>                                       <C>          <C>        
                                    
Income:                                   $       0    $       0

General & Administrative Expenses:

Contract Labor                                8,250        8,250
Depreciation                                    177          135
Legal And Accounting                          6,070        9,200
Office                                        5,539          174
Professional Services                         2,500            0
Rent                                            518          100
Stock Transfer                                  200            0
Telephone                                       669          125
                                          ---------    ---------
Total                                        23,923       17,984
                                          ---------    ---------
Net (Loss) Before Taxes & Discontinued
  Operations                                (23,923)     (17,984)
                                          ---------    ---------
Other Income (Expense)

Interest Income                                   0           96
Interest Expense                             (3,068)      (2,819)
                                          ---------    ---------
Total Other Income (Expense)                 (3,068)      (2,723)
                                          ---------    ---------
(Loss) Before Discontinued Operations       (26,991)     (20,707)

Discontinued Operations - 
Income from discontinued operations for
 August 31, 1997, net of income tax expense
 of $ -0-.                                        0        5,059
                                          ---------    ---------
Net (Loss)                               ($  26,991)  ($  15,648)
                                          =========    =========
Net (Loss) Per Common Share:

 Before Discontinued Operations              ($0.02)      ($0.01)
 Discontinued Operations                      $0.00        $0.00
                                          ---------    ---------
Net (Loss) Per Common Share                  ($0.02)      ($0.01)
                                          =========    =========
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
                                           3 Month     3 Month
                                        Period Ended Period Ended
                                           August       August
                                          31, 1997     31, 1996
                                          ---------    ---------
<S>                                       <C>          <C>
Net (Loss)                               ($  26,991)  ($  15,648)

Adjustments To Reconcile Net Loss To
 Net Cash Used In Operating Activities:
Depreciation                                    177          135
Contributed Services And Rent                 8,750        8,350

Changes In Operating Assets
 And Liabilities:
(Increase) Decrease In Receivable            27,000       12,000
(Increase) In Purchased Life 
 Insurance Policies                            (776)     (49,539)
(Increase) (Decrease) In Deposits 
 With Life Insurance Companies               38,476      (38,476)
(Increase) In Prepaid Expenses                    0       (2,000)
Increase (Decrease) In Accounts Payable      (1,865)       5,246
Increase In Interest Payable                  3,069        3,069
                                          ---------    ---------
 Net Flows From Operations                   47,840      (76,863)
                                          ---------    ---------
Cash Flows From Investing Activities:
                                                  0            0
                                          ---------    ---------
Net Cash Flows From Investing                     0            0
                                          ---------    ---------
Cash Flows From Financing  Activities:

Loans Made To Other Parties                 (15,000)           0
Funds Received From Loans                    15,000            0
                                          ---------    ---------
Cash Flows From Financing                         0            0

Net Increase In Cash                         47,840      (76,863)
Cash At Beginning Of Period                     729      124,540
                                          ---------    ---------
Cash At End Of Period                     $  48,569    $  47,677
                                          =========    =========

Summary Of Non-Cash Investing
 And Financing Activities:

Inventory Purchased By Related Party as
 Loan To Related Party                    $       0    $       0
                                          =========    =========

<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 Three Month Period Ended August 31, 1997
------------------------------------------------

Note 1 - Unaudited Financial Information
----------------------------------------

The unaudited financial information included for the three month
interim period ended August 31, 1997 and August 31, 1996 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 three month period
ended August 31, 1997 are not necessarily indicative of the results
expected for the fiscal year ended May 31, 1998.


                                                               12

<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:  October 23, 1997


                                   By:  s/Matthew J. Kavanagh III
                                      Matthew J. Kavanagh, III
                                      Secretary



<PAGE>


                                                             13
                       USAsurance Group, Inc.
          Exhibit Index to Quarterly Report on Form 10-QSB
                For the Quarter Ended August 31, 1997

EXHIBITS                                                 Page No.

  EX-27     Financial Data Schedule . . . . . . . . . . .     15



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