UNITED STATES SECURITIES AND EXCHANGE COMMISSION
			                Washington,  DC 20549            
				                  FORM 10-K405
				                  ANNUAL REPORT
 
 (Mark one)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
  THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31,1996
			      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 0-8804

			THE SEIBELS BRUCE GROUP, INC.
		(Exact name of registrant as specified in its charter)

South Carolina                                    57-0672136
(State or other jurisdiction of         (IRS employer identification no.)
incorporation or organization)          

	  1501 Lady Street (P.O. Box 1)
	  Columbia, S.C.                                29201(2)
(Address of principal executive offices)        (Zip code)

Registrant's telephone number, including area code      (803) 748-2000

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

		Common stock, par value $1.00 per share
				(Title of class)

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 by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of the registrant knowledge, in definitive proxy 
or information statements incorporated by reference in Part III of this 
Form 10-K or any amendment to this Form 10-K.  (  )
 


The aggregate market value of the voting stock held by non-affiliates of 
the registrant as of March 10, 1997:  $47,851,214.  

The number of shares outstanding of the registrant's common stock as 
of March 10, 1997:  24,691,029.
     
		DOCUMENTS INCORPORATED BY REFERENCE

Portions of the annual proxy statement in connection with the annual meeting to 
be held April 9, 1997 are incorporated by reference into Part III.






			Table of Contents


	Table of Contents...........................................i

	Acronyms....................................................ii

			    PART I

	Item 1. Business............................................1

	Item 2. Properties..........................................7

	Item 3. Legal Proceedings...................................8

	Item 4. Submission of Matters to a Vote 
       		of Security Holders.................................8

			    PART II

	Item 5. Market for the Registrant's Common 
       		Stock and Related Security Holder Matters..........11

	Item 6. Selected Financial Data............................12

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

	Item 8. Financial Statements and Supplementary Data........25

	Item 9. Changes in and Disagreements with Accountants 
 	on Accounting and Financial Disclosure.....................51

			    PART III

	Item 10. Directors, Executive Officers, Promoters and
        		 Control Persons of the Registrant.................51

	Item 11. Executive Compensation............................51

	Item 12. Security Ownership of Certain Beneficial Owners 
        		 and Management....................................51

	Item 13. Certain Relationships and Related Transactions....51

			     PART IV

	Item 14. Exhibits, Financial Statements, Schedules and
		 Reports on Form 8-K...............................52

	Signatures.................................................56





								   

				ACRONYMS



The following acronyms used in the text have the meaning set 
forth below unless the context requires otherwise:

	FASB..................Financial Accounting  Standards Board

	GAAP..................Generally Accepted Accounting Principles

	IBNR..................Incurred-But-Not-Reported
	
	KIC...................Kentucky Insurance Company

	LAE...................Loss Adjustment Expenses

	MGA...................Managing General Agent

	NAIC..................National Association of Insurance Commissioners

	NCCI..................National Council on Compensation Insurance

	N.C. FACILITY.........North Carolina Reinsurance Facility

	RBC...................Risk Based Capital

	SAP...................Statutory Accounting Principles

	SBIG..................The Seibels Bruce Group, Inc. (and the "Company")

	SBC...................Seibels Bruce and Company
	
	SCIC..................South Carolina Insurance Company

	S.C. FACILITY.........South Carolina Reinsurance Facility

	WYO...................Write-Your-Own






				PART I 
				------

Item 1.         Business

Company Profile
---------------

The Seibels Bruce Group, Inc. (the "Company") is the parent 
company of South Carolina Insurance Company and Seibels 
Bruce and Company and their wholly-owned subsidiaries. SCIC 
consists of a group of property and casualty insurance 
companies and associated companies with headquarters in 
South Carolina and Kentucky. Founded in 1869, the Company 
performs servicing carrier activities for state and federal 
insurance facilities. Managing general agency services are also 
performed for a non-affiliated insurance company. Insurance 
products are offered through independent agents, primarily in 
the southeastern states.  During 1993 and 1994, the Company 
began to withdraw from selected states and selected risk 
retained products, and changed its emphasis to fee income 
generating activities. Effective mid-1995, the Company 
voluntarily suspended underwriting new and renewal business 
for which the risks were not reinsured to an unaffiliated party. 
After both the Company and its regulators became satisfied that 
the capital level was adequate to undertake such risk, 
underwriting on a risk retention basis was resumed at very 
modest levels in mid 1996.

The following table sets forth certain information for each of the 
Company's sources of revenue for the periods indicated (amounts in thousands): 
								  
<TABLE>
<S>                           <C>       <C>        <C>        <C>         <C>        <C>       <C>       <C>      <C> 
			                                                     					Years ended December 31,                                    
			                         --------------------------------------------------------------------------------------------
				                                 	   1996                             1995                          1994    
			                         -------------------------------   -----------------------------  ----------------------------
                   			        Gross       Net                   Gross       Net                Gross      Net     
			                         Premiums   Premiums               Premiums   Premiums            Premiums  Premiums
			                          Written     Earned    Revenues     Written    Earned   Revenues  Written    Earned  Revenues
			                          --------   --------   ---------   --------   --------  --------  --------  -------- ---------
Current operations:                                                                                                    
 Fee and service operations:                                                                                             
   SCRF premiums-based fees   $69,981                $14,556     $64,206              $13,451   $80,073            $21,415 
   SCRF claims-based fees           0                 10,638           0               14,343         0             17,706
   Flood premiums-based fees   27,157                  8,340      28,576                9,408    29,517             10,250 
   Flood claims-based fees          0                  3,581           0                2,863         0                648 
   Other state facilities       6,130                  1,390       9,757                2,613    12,365              3,188 
   MGA                         18,676                  6,170      24,245                6,734    25,388              7,094 
   Brokerage and other          1,212                    910       1,158                  160     1,120                368 
 Risk operations:                                                                                                
   Nonstandard automobile       2,948         71          71       2,381         -       -            -         -        - 
   Assumed from pools 
    and associations            6,235      5,819       5,819         422      1,232     1,232     5,332     2,275    2,275 
			      ------------------------------    -----------------------------  ---------------------------
Total current operations      132,339      5,890      51,475     130,745      1,232    50,804   153,795     2,275   62,944 
Run-off risk operations           710      1,774       1,774       9,264     10,042    10,042    18,728    14,244   14,244 
			      ------------------------------    -----------------------------  ---------------------------
  Total                       $133,049    $7,664     $53,249     $140,009   $11,274   $60,846  $172,523   $16,519  $77,188 
												

</TABLE>


Fee-generating Activities
-------------------------

As a servicing carrier for the South Carolina Reinsurance Facility 
("S.C. Facility"),  a state-sponsored  plan for insuring South 
Carolina drivers outside of the voluntary market and the WYO 
federal flood facility of the National Flood Insurance Program 
("NFIP"), the Company receives commissions and fees for 
handling policy production and administration, as well as claims 
adjustment for the policies it writes.   From January 1994 until 
December, 1996,  the Company provided services to the 
Kentucky Fair Plan, a homeowners residual market.   Effective 
in the fourth quarter of 1995, the Company ceased to operate 
as a servicing carrier for the North Carolina Reinsurance Facility. 
The auto business previously written in that state and ceded to 
the Facility continues to be handled in a similar manner but with 
a change in the Company's compensation. The impact to the 
Company's earnings due to these changes has not been 
significant.  The servicing carrier contracts currently in place 
with the S.C. Facility and NFIP   have both operated profitably 
in the past three years.

All of the Company's commercial business is underwritten under 
an MGA agreement with an unaffiliated insurance company. The 
Company services these policies and claims on  a commission 
basis without any underwriting risk. Commission and service 
income generated under this contract was $5.9 million and $6.7 
million during 1996 and 1995, respectively, which represents 
12.9% and 13.5%, respectively, of the Company's total 
commission and service income as stated in the consolidated 
financial statements. With the current premium volume and the 
corresponding expenses, the Company did not make a profit 
under the current contract. The Company has undertaken 
significant cost reductions during 1995 and 1996 in an effort to 
stem the losses.  The Company is currently reviewing plans for 
1997 with the intent of making this a profitable business unit.  
The Company expects to develop a plan that includes both 
modifications to the contract and participating in a percentage 
of the risk.

The Company also assists subagents in providing excess and 
surplus lines for difficult or unusual risks. This business is 
placed with nonaffiliated insurers on a commission basis. Under 
these arrangements, the Company has varying degrees of 
underwriting and claims authority.


Property and Casualty Insurance Underwriting
--------------------------------------------

The Company's underwriting activities currently are limited to 
the Nonstandard Automobile Physical Damage business 
conducted in South Carolina.  The Company underwrites this 
business with the goal of achieving adequate pricing and seeks 
to classify risks into narrowly defined segments by using all 
available underwriting criteria and credible historical data.  The 
Company uses several factors in determining its rates.  Some of 
the characteristics used are vehicle type, age and location of 
the vehicle, driving experience, number of vehicles per 
policyholder, number and type of convictions or accidents, 
limits of liability, deductibles, and, where allowed by law, sex 
and marital status of the insured.  The rate approval process 
varies from state to state.

The Company believes that its renewal business will follow 
industry experience and produce lower loss ratios than new 
business.  The Company estimates that its rate of retention of 
renewal business for the year ended December 31, 1996, was 
approximately 65 to 70%.   In an effort to maintain and improve 
underwriting profits, the Company regularly monitors loss ratios 
of its agencies and periodically meets with the agencies in order 
to address any adverse trends and loss ratios.

In 1994 and through the first quarter of 1995, the underwriting 
risks retained by the Company were limited to Personal Lines 
business written in the states of Georgia, Kentucky, North 
Carolina, South Carolina, and Tennessee.  This business 
included four major lines of insurance:  Private Passenger 
Automobile, Homeowners, Dwelling Fire and Watercraft Inland 
Marine.  Beginning in the second quarter of 1995, the Company 
initiated the year long process of nonrenewing this business 
because of the lack of sufficient capital to support the risk.  
Beginning in the third quarter of 1996, both the Company and 
its regulators became satisfied that its capital level was 
sufficient to undertake such risk, and underwriting on a risk 
retention basis was resumed on a modest basis.

The Company has elected not to be rated by A. M. Best, and as 
a result, currently has a group rating of NR-4 ("Not Assigned - 
Company Request").  A. M. Best is an independent company 
which rates insurance companies based on its judgment factors 
related to the ability to meet policyholder and other contractual 
obligations.  Such ratings are not directed toward the protection 
of investors or shareholders.  A low rating would not directly 
impact the Company's servicing carrier or MGA operations.  
However, at the appropriate time, the Company intends to seek 
a new rating from A. M. Best in order to enhance its risk taking 
potential.


Claims Operations
-----------------

The Company services and adjusts claims for its retained 
business, servicing carrier functions and MGA services. Starting 
in 1994, the Company started reducing its usage of outside 
adjusters and increased its usage of employee adjusters for 
handling of claims. This shift has resulted in a significant 
reduction in allocated LAE, beginning with the 1994 accident 
year. Through the earlier involvement of the Company's claims 
personnel in the claims process, the Company has recognized 
lower overall adjustment expenses. The Company has continued 
this trend into 1995 and 1996.

The Company, by virtue of its experience with weather- related 
catastrophes of years prior to 1993, has developed a 
comprehensive catastrophe plan designed to maximize customer 
service in the event of a catastrophe. This plan has been 
particularly useful with the widespread incidence of flood claims 
over the last several years.

Insurance Network Services, a catastrophe claims handling 
operation, was formed and began operating in 1996.  This 
division handled over 3,000 catastrophe related claims during 
the year, generating revenue of $1.5 million, of which $0.8 
million was from affiliated companies and eliminated in 
consolidation.  The division plans to expand in 1997.

Management, in conjunction with the Company's independent 
actuaries, reviews the loss reserves to evaluate their adequacy. 
Such review is based upon past experience and current 
circumstances and includes an analysis of reported claims, an 
estimate of losses for IBNR claims, estimates for LAE, 
reductions for salvage/subrogation reserves and assumed 
reinsurance losses. Management believes the reserves are 
sufficient to prevent prior years' losses from adversely affecting 
future periods; however, establishing reserves is an estimation 
process and adverse developments in future years may occur 
and would be recorded in the year so determined.
	
For information regarding insurance reserves, see Item 7, 
Management's Discussion and Analysis of Financial Condition 
and Results of Operations.


Reinsurance
-----------

Prior to suspending underwriting operations in the first quarter 
of 1995, the Company followed the customary industry practice 
of reinsuring a portion of its risks.  Business was ceded 
principally to reduce the Company's exposure on large individual 
risks.  In addition, reinsurance was purchased to provide 
protection against large catastrophic occurrences that may 
impact numerous individual risks, such as hurricanes or similar 
events.  Currently, the Company is not purchasing either of 
these types of reinsurance, but has outstanding claims 
recoverable, primarily on unpaid claims for liability exposures 
that take a lengthy period to settle.

Currently, the Company reinsures 50% of its Auto physical 
damage business with a group of reinsurers led by Constitution 
Reinsurance Company.  The Company pays a proportional 
amount of its premiums and collects a proportional amount of 
its claims from the reinsurers.  Proportional reinsurance is 
designed to take maximum advantage of its capacity to write 
direct policies without excessively exposing the Company to 
loss of statutory net worth.

As part of its routine procedures, the Company evaluates the 
financial condition of each prospective reinsurer before it cedes 
business to that carrier.  Based on the Company's review of its 
reinsurers' financial health and reputation in the insurance 
marketplace, the Company believes its reinsurers are financially 
sound and that they can meet their obligations to the Company 
under the terms of the reinsurance agreements.  Reserves for 
uncollectable reinsurance are provided if deemed necessary.

In its capacity as a servicing carrier, the Company issues its 
direct policies for auto risks and flood risks, then cedes these 
risks 100% to government agencies.  While the amounts of 
reinsurance recoverables under these arrangements are 
significant, the Company believes these balances from the 
various government agencies are fully collectible due to their 
ability to assess others for deficiencies.




Investment and Investment Results
---------------------------------

The Company's cash and investments were distributed as follows at 
December 31, 1996 and 1995 (in thousands):
							      
                                		    1996                1995
				                                 Asset                Asset  
				                                Values      %        Values      %
                           				    --------   -----     --------   -----

U.S. government and government      
  agencies and authorities          $40,102    93.4%      $31,416    62.0%
States, municipalities and
  political subdivisions                115     0.3           993     2.0
Corporate bonds                           -       -         1,168     2.3
Redeemable preferred stocks               -       -             4       -
                            				    -------   ------      -------   -----
    Total debt securities            40,217    93.7%       33,581    66.3%
Cash & short term investments         2,664     6.2        16,649    32.9
Equity securities                        35     0.1           377     0.7
Other long term investments              28       -            34     0.1
                            				    -------   ------      -------    -----
    Total cash and investments      $42,944   100.0%      $50,641    100.0%
				                                =======   ======      =======    ======



Asset values represent market values at December 31. The 
Company reorganized the investment portfolio during 1994 to 
reduce the percentage concentration in longer term maturities 
and increase the concentration in more liquid securities such as 
cash and short-term investments. The Company believes that 
this mix more accurately matches with the Company's liabilities 
at this time.

The following table sets forth the consolidated investment 
results for the three years ended December 31,1996 (in thousands):

                                  		 			     1996       1995       1994
                                    					     ----       ----       ----

 Total investments (1)                    $ 47,614    $ 53,841    $ 90,175
 Net investment income                       3,006       3,176       5,321
 Average yield                                6.3%        5.9%        5.9%
 Net realized investment gains (losses)   $   (14)    $    164    $ (6,327)

(1)  Average of the aggregate invested amounts (market values) 
at the beginning of the year, as of June 30 and as of the end of 
the year.


Divestitures
------------

In early 1994, the Company sold substantially all of the 
receivables of Premium Service Corporation, its premium 
financing subsidiary, and has withdrawn from that business.

During the first quarter of 1995, the accounts receivable and 
other immaterial assets of Forest Lake Travel Service, Inc. were 
sold. The Company has withdrawn from this business as well.

Each of the sales of subsidiaries or their assets were made at 
small gains, while the dissolutions resulted in increased liquidity 
for their respective parent companies. The sales and 
dissolutions took place because of management's emphasis on 
restructuring the Company's core operations. In the Company's 
continuing focus on its primary business, none of these 
companies were considered to be an integral part of operations.  
The impact of these divestitures on 1996, 1995 and 1994 
results was not material and future years' operations are not 
anticipated to be significantly affected.



Regulation
----------

State Regulation.  Insurance companies are subject to 
supervision and regulation in the jurisdictions in which they 
transact business, and such supervision and regulation relate to 
numerous aspects of an insurance company's business and 
financial condition. The primary purpose of such supervision and 
regulation is the protection of policyholders. The extent of such 
regulation varies but generally derives from state statutes which 
delegate regulatory, supervisory and administrative authority to 
state insurance departments. Accordingly, the state insurance 
departments have the authority to establish standards of 
solvency which must be met and maintained by insurers; license 
insurers and agents; and to approve policy forms. State 
insurance departments also conduct periodic examinations of 
the affairs of insurance companies and require the filing of 
annual and other reports relating to the financial condition of 
insurance companies. 

Most states have enacted legislation which regulates insurance 
holding company systems, including acquisitions, dividends, the 
terms of surplus notes, the terms of affiliate transactions and 
other related matters. Three of the Company's insurance 
subsidiaries are domiciled in the state of South Carolina and are 
principally regulated by the South Carolina Department of 
Insurance. KIC is domiciled in Kentucky and is principally 
regulated by the Kentucky Department of Insurance.

Insurance companies are required to file detailed annual 
statements with the state insurance regulators in each of the 
states in which they do business, and their business and 
accounts are subject to examination by such regulators at any 
time.  In addition, these insurance regulators periodically 
examine the insurer's financial condition, adherence to statutory 
accounting principles, and compliance with insurance 
department rules and regulations.  South Carolina and Kentucky 
insurance laws, rather than federal bankruptcy laws, would 
apply to the liquidation or reorganization of any of its South 
Carolina insurance companies.  Examinations of SCIC, 
Consolidated American and Catawba as of December 31, 1992, 
and of Kentucky Insurance Company as of June 30, 1995 have 
been completed.

The insurance industry has received a considerable amount of 
publicity because of rising insurance costs, a number of high 
profile insurance company insolvencies and a limited exemption 
from the provisions of federal anti-trust prohibitions.  Changes 
in the law are being proposed which would bring the insurance 
industry under the regulation of the Federal government and 
eliminate current exemptions from anti-trust prohibitions. It is 
not possible to predict whether, in what form or in what 
jurisdictions, if any, these proposals might be adopted, or the 
effect, if any, on the Company. The NAIC has developed and 
recommended for adoption by the state insurance regulatory 
authorities various model laws and regulations pertaining to, 
among other things, capital requirements for the insurance 
industry members.

NAIC Guidelines.  The NAIC has adopted Risk-Based Capital 
(RBC) requirements for property and casualty insurance 
companies to evaluate the adequacy of statutory capital and 
surplus in relation to investment and insurance risks such as 
asset quality, asset and liability matching, loss reserve 
adequacy, and other business factors.  The RBC formula is used 
by state insurance regulators as an early warning tool to 
identify, for the purpose of initiating regulatory action, insurance 
companies that are potentially inadequately capitalized. 
Compliance is determined by the ratio of the Company's 
regulatory total adjusted capital to its authorized control level 
RBC (as defined by the NAIC). Companies which fall below the 
authorized RBC level may be required to disclose plans to 
remedy the situation. As of December 31, 1996, all of the  
insurance subsidiaries have ratios of total adjusted capital to 
RBC that are in excess of the level which would prompt 
regulatory action. 


Regulation of Dividends and Other Payments from Insurance Subsidiaries
----------------------------------------------------------------------

The Company is a legal entity separate and distinct from its 
subsidiaries. As a holding company, the primary sources of cash 
needed to meet its obligations, including principal and interest 
payments with respect to indebtedness, are dividends and other 
permitted payments from its subsidiaries and affiliates.



South Carolina insurance laws and regulations require a 
domestic insurer to report any action authorizing distributions to 
shareholders and material payments from subsidiaries and 
affiliates at least thirty days prior to distribution or payment 
except in limited circumstances. Additionally, those laws and 
regulations provide the Department of Insurance with the right 
to disapprove and prohibit distributions meeting the definition of 
an "Extraordinary Dividend" under the statutes and regulations.  
The South Carolina Insurance Holding Company Regulatory Act 
provides that, without the prior approval of the Director of 
Insurance of the State of South Carolina, dividends within any 
twelve-month period may not exceed the greater of (i) 10% of 
surplus as regarding policyholders as of December 31 of the 
prior year and (ii) statutory net income, not including realized 
capital gains or losses, for the prior calendar year.  Payment of 
cash dividends by SCIC is at the discretion of its Board of 
Directors, upon approval of the Director of Insurance, and is 
based on its earnings, financial condition, capital requirements, 
and other relevant factors.  If the ability of SCIC and the 
Company's other insurance subsidiaries to pay dividends or 
make other payments to the Company is materially restricted by 
regulatory requirements, it could affect the Company's ability to 
pay dividends to its shareholders.  In addition, no assurance can 
be given that South Carolina will not adopt statutory provisions 
more restrictive than those currently in effect.


Required Participation
----------------------

State Residual Market Plans.  Most states in which the 
Company's property and casualty insurance group writes 
business have collective pools, underwriting associations, 
reinsurance facilities (the largest being the South and North 
Carolina Reinsurance Facilities), assigned risks plans or other 
types of residual market plans ("plans"), pursuant to which 
coverages not normally available in the voluntary market are 
shared by all companies writing that type of business in that 
state.  Participation is usually based on the ratio of the 
Company's direct voluntary business to the total industry 
business of that type in that state.  As the Company's share of 
the voluntary market in a given state changes, tentative 
participations are assigned for each policy year and are updated 
as actual data becomes available.

Insurance Guaranty Funds.  Most states have also enacted 
insurance guaranty fund laws. Typically, these laws provide that 
when an insurance company is declared insolvent, the other 
insurance companies writing in that jurisdiction are assessed to 
pay covered claims of the insolvent company. The amount a 
company is assessed is generally determined by the amount of 
premiums written in that state,  subject to a maximum annual 
assessment ranging from 1% to 2% of direct written premiums. 
During 1996 and 1995, the Company paid $29,000 and 
$116,000, respectively, in such assessments.  During 1996, 
the Company received $69,000 in credits.

South Carolina Automobile.  The South Carolina Reinsurance 
Facility is an unincorporated, non-profit administrative service 
association of insurers.  The S. C. Facility is supported by the 
majority of the automobile insurers doing business in the state 
of South Carolina and provides a mechanism for the insurance 
companies to cede mandated high-risk coverages under 
automobile policies, and to share the cost of those coverages 
ceded.  Every insurer authorized to write automobile liability 
insurance in South Carolina is required to participate in the S. C. 
Facility. When  policyholders whose premiums have been ceded 
through the S. C. Facility incur a loss, the member company 
which issued the policy adjusts the loss and subsequently is 
reimbursed for the loss and expenses by the Facility.  The S. C. 
Facility also created a pool of "Designated Agents," which are 
agencies usually comprised of a single independent agent who 
lost his or her access to the voluntary automobile market.  
Designated Agents are assigned to one of the Facility's 
servicing carriers.  Prior to October 1, 1996, the cession or 
retention of physical damage was dictated by whether or not 
the risk was "pointed" or "clean."  Only clean risk physical 
damage could be ceded to the S. C. Facility prior to October 1, 
1996.  Effective October 1, 1996, however, physical damage 
was removed from the mandate, and the S.C. Facility agreed to 
accept any physical damage, pointed or clean, provided the 
Facility-filed rates were used.

National Flood Insurance Program.  FEMA's Federal Insurance 
Administration manages the NFIP.  The NFIP regulations 
established the "Financial Assistance/Subsidy Arrangement" 
pursuant to which the NFIP Administrator and the private sector 
insurers participate in the WYO Program.  Under the WYO 
Program, insurers which are parties to a Financial 
Assistance/Subsidy Arrangement may issue, in their own 
names, a Standard Flood Insurance Policy, the form and 
substance of which is approved by the NFIP Administrator.  
Insurers are responsible for all aspects of service, including 
policy issuance, endorsements and renewals of policies and 
adjustments of claims brought under the policies, and the NFIP 
Administrator monitors the performance levels of all insurers 
participating in the WYO program.

The Company is required to furnish to FEMA such summaries 
and analyses of information, including claims information, as 
may be necessary to carry out the purposes of the National 
Flood Insurance Act of 1968, as amended.  Upon request, the 
Company's Fire and Casualty Annual Statement and Insurance 
Expense Exhibits  are filed with the state insurance authority of 
the Company's domiciliary state.

Recent Legislative Proposals.  A Reform Bill is currently pending 
before the South Carolina State Legislature.  If signed into law, 
the Reform Bill would transform the South Carolina Reinsurance 
Facility into a joint underwriting or assigned risk plan over the 
course of a three-year transition period.  Beginning March 1, 
1998, designated carriers and voluntary carriers would no 
longer be able to cede new business to the Facility.  All renewal 
business ceded to the Facility would be required to use the 
Facility rate.  In an attempt to make the Facility rate a "self-
sustaining" rate, the Facility would increase the rate, up to a 
maximum of 10% a year, until such time as the rate is deemed 
to be adequate.  Voluntary carriers would have to suspend the 
cession of renewals effective October 1, 1998, and designated 
carriers could no longer cede renewals after October 1, 2001.  
On March 1, 1998, the designated agents would be allowed to 
contract with voluntary companies to produce private passenger 
automobile business.  It is not possible to predict whether or in 
what form this proposal might be adopted or the effect, if any, 
on the Company. 


Competition and Other Factors
-----------------------------

The Company operates in highly competitive industry segments.  
Many of its competitors have greater financial resources and 
higher ratings from A. M. Best than the Company.  In general, 
the Company competes with both large national writers and 
smaller regional companies in each state in which it operates.  
These competitors include other companies that, like the 
Company, serve  the agency market, as well as companies that 
sell insurance directly to policyholders.  Direct writers may have 
certain competitive advantages over agency writers, including 
increased name recognition, increased loyalty of their customer 
base, and, potentially, reduced acquisition costs.

Nonstandard Automobile Insurance Business.  The Company is 
one of three servicing carriers for the South Carolina Facility.  
The Company competes with the major carriers for nonstandard 
voluntary automobile business.  The nonstandard automobile 
insurance business is price sensitive and certain competitors of 
the Company have, from time to time, decreased their prices in 
an apparent attempt to gain market share.  Although the 
Company's pricing is inevitably influenced to some degree by 
that of its competitors, management of the Company believes 
that it is generally not in the Company's best interest to match 
such price decreases, choosing instead to compete on the basis 
of underwriting criteria and superior service to its agents and 
insureds.

Flood Program.  Factors  influencing the choice of a competitor 
over the Company include a competitor's ability to offer 
homeowners or other property products to agents, a superior 
rating from A. M. Best, a competitor's ability to increase 
commission rates and on-line policy issuance capability.

Commercial Lines/MGA Operations.  While the Company does 
not have competitors for its Commercial Lines/MGA 
arrangement with Generali, Generali competes with various 
companies in the states serviced by the Company.


Employees
---------

At December 31, 1996, the Company and its subsidiaries employed a total of 
317 employees.



Item 2.         Properties

The Columbia, South Carolina home office, containing 
approximately 148,000 square feet of occupied space, is 
owned by the Company and used primarily by its property and 
casualty insurance operations. Some additional premises are 
leased by the Company in locations in which they operate. 
Management believes that these facilities are adequate for the 
current level of operations.


Item 3.         Legal Proceedings

The Company and its subsidiaries are parties to various lawsuits 
generally arising in the normal course of their insurance and 
ancillary businesses.  The Company does not believe that the 
eventual outcome of such suits will have a material effect on 
the financial condition or results of operations of the Company.


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

(a)   The Annual Meeting of Shareholders (the "Meeting") of the 
Company, was held on December 12, 1996.  As of October 10, 
1996, and for purposes of the Meeting, there were 24,647,686 
shares of common stock of the Company, par value $1.00 per 
share (the "Common Stock"), issued and outstanding.  At the 
Meeting, there were 23,171,195 shares (94%) of the 
outstanding shares entitled to vote represented in person or by 
proxy.

(b)    The Meeting was called for the following purposes and 
   with the following results:

1)     To elect one (1) Director to hold office until the 1997 
Annual Meeting of Shareholders and until his successor shall be elected 
and shall qualify, two (2) Directors each to hold office until the 1998 
Annual Meeting of Shareholders and until his successor shall be elected 
and shall qualify and three (3) Directors each to hold office until the 
1999 Annual Meeting of Shareholders and until his successor shall be 
elected and shall qualify.  Each Director was elected with at 
least 23,100,288 votes (93.7% of the vote).

                                  					 Votes Cast     Votes       
   Nominee       Votes Cast For     %     Against     Abstained   Unvoted
   -------       --------------    ---   ----------   ---------   -------

Fred S. Clark       23,100,788      93.7    70,407      None       None
Ernst N. Csiszar    23,100,788      93.7    70,407      None       None
Claude E. McCain    23,100,288      93.7    70,907      None       None
Kenneth W. Pavia    23,100,409      93.7    70,785      None       None
John P. Seibels     23,100,544      93.7    70,651      None       None
John A. Weitzel     23,100,545      93.7    70,650      None       None


2)      To consider a proposal to ratify the selection of Arthur 
Andersen LLP to audit the Company's books and records for the 
fiscal year ending December 31, 1996.  Passed with 
23,109,966 votes (98.8%) in favor, 17,885 against, 43,343 
abstained and 1 unvoted.

3)      To consider a proposal to ratify and approve the 
issuance of 35,000 shares to Non-Employee Directors as part of 
compensation for services rendered pursuant to Rule 4460 
(formerly Schedule D to the Bylaws) of the National Association 
of Securities Dealers, Inc.  Passed with 22,248,051 votes 
(90.3%) in favor, 578,752 against, 139,886 abstained and 
204,506 unvoted.
	    



				Executive Officers

    Name               Age                  Position
    ----               ---                  ---------
		
Steven M. Armato        45     Vice President - Administration of certain 
                     			       subsidiaries since December, 1995.  Previously 
                    	 		       held the position of Vice President from 
                     			       April, 1986.  Employed by Company since 
                     			       April, 1981.
		
Priscilla C. Brooks     45     Corporate Secretary of the Company since June, 
                    			       1995. Corporate Secretary of certain subsidiaries
                    			       since February, 1995.  Assistant Corporate       
                    			       Secretary of the Company and certain subsidiaries
                    			       since 1982. Employed with the Company since 1973.
		
Thomas S. Camp          45     Vice President - Sales of certain subsidiaries 
		                   	       since November, 1996. Previously with First Union
                    		       Bank as Commercial Banking Executive for South 
                    		       Carolina since November, 1995.  Employed by First 
                    		       Union in various positions since February, 1989.
		
Michael A. Culbertson   48   Group Vice President - Fee Operations of certain 
		                    	     	subsidiaries since December, 1995. Previously 
                         				held positions of Senior Vice President of 
                         				Claims and  Vice President of Claims since June, 
                         				1995; Officer and Director of certain Company 
                         				subsidiaries.  Employee of the Company in various 
                         				claims capacities since December, 1974.  
		
Ernst N. Csiszar        46   President, Chief Executive Officer, and Director 
		                       	  	of the Company and certain subsidiaries since 
                         				June, 1995.  Visiting professor at the School 
                         				of Business, University of South Carolina since 
                         				1988.
				
James P. Donnelly       44   Vice President and Chief Information Officer 
				                         of the Company and certain subsidiaries since  
                         				February, 1997.  Previously a Vice President in 
                         				the Information Technology Department of CNA 
                         				Insurance Companies.  Employed by CNA for more 
                         				than the last five years.
		
Michael D. Faoro        52   Group Vice President - Risk Operations of 
                         				certain subsidiaries since July, 1996.  
                         				Previously Director of Branch Services for CNA 
                         				Insurance Companies from 1976 to December, 1995.
		
Mary M. Gardner         32   Controller of the Company and certain 
		                         		subsidiaries since July, 1994.  From 1989 to 
                         				1994, Assistant Controller of Mercury Insurance 
                         				Group, a group of property and casualty 
                         				insurance companies.
		
Robert F. Key           38   Treasurer of the Company and certain 
                         				subsidiaries since November, 1996.  Previously 
                         				employed by First Union Bank from May, 1989 to 
                         				July, 1996.
		
Robert L. Lippert       34      Vice President - Strategic Planning of certain 
		                        		subsidiaries since May, 1996.   Previously a 
                        				professor at Rutgers University from July, 
                        				1992 to May, 1996 and an independent consultant 
                        				in addition.
			
Matt P. McClure         27      Legal Counsel and Assistant Secretary of the 
			                         	Company and certain subsidiaries since November, 
                         				1996.  Previously Manager of Financial Planning 
                         				with Air South Airlines, Inc. from July, 1995 to 
                          			May, 1996. Employed by the South Carolina Fifth 
                         				Judicial Circuit Solicitor from May, 1993 to 
                         				July, 1995.


John A. Weitzel         51       Vice President and Chief Financial Officer of 
                        				 the Company and certain subsidiaries since 
                        				 September, 1995.  Director of the Company since 
                        				 October, 1995.  Previously Chief Financial 
                        				 Officer of Milwaukee Insurance Group, Inc. from 
                        				 April, 1985 to November, 1994.
		
John C. West            75      Chairman of the Board since September, 1994.  
		                        		Director of the  Company since June, 1994. 
                        				Currently, of counsel with the law firm of 
                        				Bethea, Jordan and Griffin in Hilton Head 
                        				Island, SC and professor at the University of 
                        				South Carolina.  Former Governor of South 
                        				Carolina (1971-75) and former Ambassador to the 
                        				Kingdom of Saudi Arabia (1977-81).





				PART II

Item 5.         Market for the Registrant's Common Stock 
		   and Related Security Holder Matters     
		

(a) Market Information

The Company's common stock is quoted and traded on 
The NASDAQ National Market, symbol "SBIG."   The following 
table sets forth the range of  high and low closing sales prices 
as reported on The Nasdaq  Stock Market.  On March 10, 
1997, the last reported sales price of the Common Stock on 
The Nasdaq Stock Market was $1-15/16 per share.


1995                                      High          Low
----                                      ----          ----
First quarter                            $3-1/16        $7/8
Second quarter                            1-7/16         3/4
Third quarter                             1-1/32         3/4
Fourth quarter                            2-3/16         7/16
							
1996
----                
First quarter                            $4-1/4         $1-9/16
Second quarter                            3-1/8          2-3/8
Third quarter                             2-5/8          1-31/32
Fourth quarter                            2-13/16        1-7/8

1997
----
First quarter (through March 10, 1997)   $2-1/16        $1-13/16
	

(b) Holders
	
There were approximately 2,540 shareholders of record as of 
March 10,1997. This number does not include beneficial 
owners holding shares through nominee or "street" names.

(c) Dividends

There have been no dividends declared by the Company 
during the past 5 years, and the Board of Directors does not 
presently intend to pay any cash dividends in the foreseeable 
future.  The ability of the Company to declare and pay cash 
dividends, as well as to pay any debt service, is dependent 
upon the ability of SCIC to declare and pay dividends to the 
Company.  SCIC is regulated as to its payment of dividends by 
the South Carolina Insurance Holding Company Regulatory Act. 
The Company's payment of cash dividends is at the discretion 
of the Board of Directors and is based on its earnings, financial 
condition, capital requirements, and other relevant factors.  See 
Note #8 of Notes to Financial Statements.






Item 6.  Selected Financial Data

The following selected financial data for each of the five years 
ended December 31, 1996 is derived from the audited 
consolidated financial statements of the Company. The selected 
data should be read in conjunction with Management's 
Discussion and Analysis of Financial Condition and Results of 
Operations and the Consolidated Financial Statements and 
accompanying notes included elsewhere herein.


<TABLE>

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

 (in thousands)                   1996        1995         1994          1993          1992
	                            			--------    --------     --------     ---------     ---------
 FINANCIAL CONDITION                                     
 Total cash & investments       $ 42,944    $ 50,641     $ 61,868     $ 120,480     $ 161,768
 Total assets                    220,472     224,005      255,935       324,695       461,136
 Total debt                            -       2,476          439        11,934        25,153  
 Shareholders' equity             23,791      10,187          650        13,902        14,219
    Per share                       0.96        0.61         0.04          1.85          1.90
					
RESULTS OF OPERATIONS                                   
 Revenues                                        
   Insurance:                                      
   Commission & service income  $ 45,585    $ 49,572     $ 60,669     $  41,625     $  35,943
   Property & casualty premiums    7,186      10,384       14,718        55,331       117,172
   Credit life premiums              478         890        1,801         3,207         4,247
   Net investment & other 
    interest income                3,807       4,330        6,226         7,090        12,960
   Realized gains (losses) 
    on investments                  (14)         164       (6,327)        1,969         7,040
   Other                             151         843        2,673         4,697         4,019

   Total revenues               $ 57,193    $ 66,183     $ 79,760     $ 113,919     $ 181,381

Income (loss) before                                    
 extraordinary item             $  5,176    $   1,152    $ (19,074)   $ (10,249)    $(32,666)
Per share & common equivalent 
 share                              0.22         0.07        (1.72)       (1.37)       (4.36)

Extraordinary item-gain from 
 extinguishment of debt,                                 
 net of income taxes            $      -    $       -    $       -    $   9,235     $      -
Per share & common equivalent 
 share                                 -            -            -         1.23            -
					
Net income (loss)               $   5,176   $   1,152    $ (19,074)   $  (1,014)    $ (32,666)
Per share & common equivalent 
 share                               0.22        0.07        (1.72)       (0.14)        (4.36)
					
Pro forma SFAS No. 128 basic 
 earnings per share (Note 1)         0.26        0.07        (1.72)       (1.37)        (4.36)
						

  (See Item 7 and Notes to Financial Statements included under Item 8).


				
</TABLE>
				

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

The selected financial data and consolidated financial statements 
and related notes thereto should be read in conjunction with the 
following discussion as they contain important information for 
evaluation of the Company's financial condition and operating 
results.

				OVERVIEW
				--------

The Company provides automobile, flood and other property and 
casualty insurance services and products.  The largest source of 
revenues during 1996, 1995 and 1994 was derived from the 
Company's participation in the South Carolina Reinsurance Facility 
("S. C. Facility") and the National Flood Insurance Program 
("NFIP").  Other revenues are derived from acting as a managing 
general agent for an unaffiliated insurance company, excess and 
surplus lines brokerage services and catastrophe claims services.  
The following table shows revenues by the various lines of 
operations during the years ended December 31, 1996, 1995 and 
1994, respectively (in thousands):
		
					                                     1996         1995         1994
Current operations:                     
  Fee and service operations:                     
    S. C. Facility premiums-based fees  $ 14,556     $  13,451   $  21,415
    S. C. Facility claims-based fees      10,638        14,343      17,706
    Flood premiums-based fees              8,340         9,408      10,250
    Flood claims-based fees                3,581         2,863         648
    Other state facilities                 1,390         2,613       3,188
    MGA                                    6,170         6,734       7,094
    Brokerage and other                      910           160         368
Risk operations:                        
    Nonstandard automobile                    71             -          -
    Assumed from pools and 
      associations                         5,819         1,232       2,275
Total current operations                  51,475        50,804      62,944
Premiums from run-off risk operations      1,774        10,042      14,244
                                   
                     			Total          $  53,249    $   60,846    $ 77,188


As one of three servicing carriers, the Company earns 
commission and service income as a percentage of gross 
premiums written and also earns a fee on claims paid.  Until 
October 1, 1994, the Company serviced the largest of three 
blocks of business for the S. C. Facility ("Block 1").  As the 
result of a competitive bid process in 1994, the Company, as the 
second lowest bidder, was awarded a five year contract to 
service the second largest block of business ("Block 2") at lower 
rates than its old contract.  However, the Company continued to 
process the remaining run-off claims from Block 1 for losses 
incurred prior to October 1, 1994, pursuant to the rates under its 
prior contract.  Premium-based fees under the new contract are 
20.99% of gross premiums written (compared with a rate of 
28.0% under its prior contract).  The Company is responsible for 
paying all costs of processing the policies, including a mandated 
12% commission on gross premiums earned to the agent.  The 
Company also receives income on the claims it pays for the S. C. 
Facility in the amount of 10.98% of the gross paid claims 
(compared with a 15.0% rate under its prior contract).  The 
Company is responsible for paying all costs to process these  
claims, including adjusting expenses.  However, the S. C. Facility 
does reimburse the Company in full for legal expenses associated 
with processing these claims.

In 1996, the Company expanded its participation in the South 
Carolina automobile business to include writing and retaining a 
portion of the risk on nonstandard automobile policies.  These 
revenues were not significant during 1996.

The Company is a servicing carrier for the NFIP.  During 1996, 
1995 and 1994, the Company recognized income for the policies 
it processes in the amount of 30.6% of gross premiums written. 
The Company's estimated rate for 1997 is 30.6% and would 
increase to 32.6% if the Company is able to increase its 
contracts in force, as defined by the NFIP, by 10%.  The rate 
can increase up to 34.6% for a growth rate in excess of 10%.  
The Company is responsible for paying all costs associated with 
processing the policies, including a commission to the 
independent agent.  The Company also receives a fee on the 
claims that it pays on these policies in the amount of 3.3% of 
incurred claims.  The Company is reimbursed for the allocated 
loss adjustment expenses associated with these claims according 
to a standard fee schedule.

The Company also derives revenues from its role as managing 
general agent for an unaffiliated insurance company.  While the 
Company performs all services and pays all costs (including the 
independent agents' commissions) related to administering and 
processing policies and processing claims, the policies are 
written on behalf of an unaffiliated insurance company.  The 
Company's financial statements reflect commission income as a 
percentage of premiums written but do not reflect these 
premiums written or associated claims incurred.

Revenues derived from pools and associations consist of 
mandated participation in various state associations due to the 
Company's participation in that state.  Currently, the only 
association that significantly impacts the Company's operating 
results is the business assumed from the North Carolina 
Reinsurance Facility ("N. C. Facility").  The amount of risk 
business assumed by the Company in any given year is based  
upon its percentage of premiums ceded to the N. C. Facility for 
prior years, which is ultimately adjusted to reflect actual current 
year participation.  The assumption of this risk business is 
reflected in the Company's reported premiums, losses and loss 
adjustment expenses incurred and policy acquisition costs.

The Company continues to maintain reserves and pay significant 
claims with respect to its run-off operations.  These run-off 
operations consist primarily of workers' compensation and 
general liability policies that include contractors liability and 
environmental coverages primarily in California and personal lines 
policies in the Southeast.  The run-off of claims on these policies 
created substantial losses to the Company during the past 10 
years. The Company commissioned additional reviews of its run-
off operations by independent actuaries resulting in a large 
increase in reserves as of December 31, 1994.

Management Changes and New Strategic Direction

Beginning in early 1995, the Company replaced its Chief 
Executive Officer and Chief Financial Officer and began an 
intensive and ongoing effort to recruit additional management.  
New management has taken a number of actions to stabilize and 
improve the Company's financial condition through significant 
cost reductions, the raising of new equity capital and a renewed 
emphasis on non-risk fee-based businesses.  As a result of these 
actions and the relative stabilization of reserves, the Company 
was profitable in 1995 and 1996 and resumed limited 
underwriting activities in 1996.



			RESULTS OF OPERATIONS

Years Ended December 31, 1996 and 1995
--------------------------------------

Commission & Service Income

Commission and service income for the year ended December 
31, 1996 decreased $4.0 million, or 8%, to $45.6 million from 
$49.6 million for the year ended December 31, 1995.  This 
decrease is due primarily to a decline of $3.7 million in S. C. 
Facility claims-based fees resulting largely from the new contract 
effective in October, 1994.  The effect of this new contract 
caused an immediate reduction in premium-based fees and a 
more gradual reduction over an approximately eighteen month 
period in claims-based fees for the reasons explained in the 
above overview.  Flood premium-based revenues for the year 
ended December 31, 1996, decreased $1.1 million, compared to 
the year ended December 31, 1995, due to a decrease in the 
amount of flood premiums serviced by the Company.  However, 
this decrease was partially offset by a $0.7 million increase to 
claims-based revenues due to a larger amount of flood claims 
during 1996.  The cancellation of the contract with the N.C. 
Facility also accounts for decreased revenues in the amount of 
$1.1 million.

Property and Casualty Premiums Earned

Net property and casualty premiums earned for the year ended 
December 31, 1996 decreased $3.2 million, or 31%, to $7.2 
million from $10.4 million for the year ended December 31, 
1995.  This decline is largely due to the suspension of risk-
bearing business in the first half of 1995 and would have been 
significantly greater but for the $5.8 million of premiums the 
Company was required to assume from the N. C. Facility  
(compared to $1.2 million of such premiums assumed in 1995).  
In 1996, the Company continued to earn premiums on personal 
lines business written by the Company  in the first half of 1995.  
Although the Company resumed limited insurance underwriting 
activities in July 1996, these activities generated less than 
$100,000 of earned premiums in 1996.  Beginning in July, 
1996, the Company began to write a very limited amount of 
non-standard automobile and retained an insignificant amount of 
private passenger automobile physical damage business.

Credit Life Premiums Earned 

Net credit life premiums earned for the year ended December 31, 
1996 decreased $0.4 million, or 44%, to $0.5 million from $0.9 
million for the year ended December 31, 1995.  The Company 
sold this subsidiary in September, 1993.  Under the sale 
agreement, the Company retained the responsibility and 
continues to run-off the policies in existence at the sales date.

Net Investment and Interest Income

Net investment and other interest income for the year ended 
December 31, 1996 decreased $0.5 million, or 12%, to $3.8 
million from $4.3 million for the year ended December 31,  
1995.  This decrease is primarily a result of a decrease of $7.7 
million, or 15%, in the Company's overall cash and investment 
position from $50.6 million at December 31, 1995 to $42.9 
million at December 31, 1996. This decrease is due to the 
Company's negative cash flow from operations in 1996 and is 
described in "Liquidity and Capital Resources.  However, average 
yield on total cash and investments improved from 5.9% for the 
year ended December 31, 1995 to 6.3% for the year ended 
December 31, 1996.

Realized Gains (Losses) on Investments

Realized gains (losses) on investments decreased $178,000 from 
a gain of $164,000 for the year ended December 31, 1995 to a 
loss of $14,000 for the year ended December 31, 1996.

Other Income

Other income for the years ended December 31, 1996 and 1995 
was $0.2 million and $0.8 million, respectively.  Other income in 
1995 includes a gain from the settlement of a litigation.

Loss and Loss Adjustment Expenses

Property and casualty loss and loss adjustment expenses 
incurred decreased $6.6 million, or 37.7%, to $11.0 million from 
$17.6 million for the year ended December 31, 1995. This 
decrease largely corresponds to the decrease in property and 
casualty premiums earned and also reflects a smaller provision 
for prior year losses of $1.1 million in 1996 as compared to $3.4 
million in 1995.  See "Loss and Loss Adjustment Expense 
Reserves" .

Policy Acquisition Costs

Property and casualty policy acquisition costs incurred decreased 
$2.0 million, or 53%, to $1.8 million from $3.8 million for the 
year ended December 31, 1996 compared to the year ended 
December 31, 1995. This decrease is due to the reduction in net 
premiums written.  The decline would have been greater but for 
the policy acquisition costs associated with the premiums the 
Company was required to assume from the N. C. Facility.

Credit Life Benefits

Credit life benefits incurred were $0.2 million and $0.5 million 
for the years ended December 31, 1996 and 1995, respectively.  
The Company sold this subsidiary in September, 1993.  Under 
the sale agreement, the Company retained the responsibility and 
continues to run-off the policies in existence at the sales date.

Interest Expense

Interest expense was $0.2 million and $0.3 million for the years 
ended December 31, 1996, and 1995, respectively.  The 
majority of the interest expense during both years related to 
interest paid on notes payable to one of the Company's principal 
shareholders.  The Company repaid these notes in full on May 1, 
1996.

Other Operating Costs and Expenses

Other operating costs and expenses for the years ended 
December 31, 1996 and 1995 were $39.0 million and $42.8 
million, respectively.  This decrease of $3.8 million, or 9%, is 
primarily a result of the Company's continuing efforts to maintain 
costs at a level appropriate to the associated revenue levels.  A 
portion of this decrease is related to the cancellation of the 
Company's contract with Policy Management Systems 
Corporation ("PMSC") in September, 1996.  While most of the 
services that PMSC had provided for the Company were 
discontinued in 1995 and 1994, the amount paid to PMSC 
during 1996 was reduced from $1.8 million for the year ended 
December 31, 1995 to $0.9 million for the year ended December 
31, 1996.

Income Taxes

Benefit from income taxes  was $131,000 and $2,000 for the 
years ended December 31, 1996, and 1995, respectively.  
During 1996 and 1995, the Company utilized net operating loss 
carryforwards to offset current income taxes in the amount of 
$1.6 million and $0.3 million, respectively.  The 1996 income 
tax benefit resulted primarily from reversals of tax overaccruals 
in prior year.



Years Ended December 31, 1995 and 1994
--------------------------------------

Commission & Service Income
	
Commission and service income for the year ended December 
31, 1995 decreased $11.1 million, or 18.3%, to $49.6 million 
from $60.7 million for the year ended December 31, 1994.  This 
decrease is due primarily to a decline of $8.0 million and $3.4 
million in S. C. Facility premiums-based fees and claims-based 
fees, respectively, resulting largely from the new contract 
effective in October, 1994.  The effect of this new contract 
caused an immediate reduction in premium-based fees and a 
more gradual reduction over an approximately eighteen month 
period in claims-based fees for the reasons explained in the 
above overview.  Flood premium-based revenues for the year 
ended December 31, 1995, decreased $0.8 million, compared to 
the year ended December 31, 1995, due to a decrease in the 
amount of flood premiums serviced by the Company.  However, 
this decrease was offset by a $2.2 million increase to claims-
based revenues due to a larger amount of flood claims during 
1995.

Property and Casualty Premiums Earned

Net property and casualty premiums earned for the year ended 
December 31, 1995 decreased $4.3 million, or 29%, to $10.4 
million from $14.7 million for the year ended December 31, 
1994.  This decline is largely due to the suspension of risk-
bearing business in the first half of 1995.

Credit Life Premiums Earned 

Net credit life premiums earned for the year ended December 31, 
1995 decreased $0.9 million, or 51%, to $0.9 million from $1.8 
million for the year ended December 31, 1994.  The Company 
sold this subsidiary in September, 1993.  Under the sale 
agreement, the Company retained the responsibility and 
continues to run-off the policies in existence at the sales date.

Net Investment and Interest Income

Net investment and other interest income for the year ended 
December 31, 1995 decreased $1.9 million, or 30%, to $4.3 
million from $6.2 million for the year ended December 31, 1994. 
This decrease is primarily a result of a decrease of $11.3 million, 
or 18%, in the Company's overall cash and investment position 
from $61.9 million at December 31, 1994 to $50.6 million at 
December 31, 1995.  This decrease is due to the Company's 
negative cash flow from operations in 1995 described in 
"Liquidity and Capital Resources".  Average yield on net 
investment income remained the same at 5.9% for both years 
ended December 31, 1995 and 1994.

Realized Gains (Losses) on Investments

Realized gains (losses) on investments increased $6.4 million 
from a loss of $ 6.3 million for the year ended December 31, 
1994 to a gain of $164,000 for the year ended December 31, 
1995.  As a result of negative cash flow from operations during 
1994, the Company had to sell bonds in a period of declining 
values, resulting in the realized losses for 1994.

Other Income

Other income for the years ended December 31, 1995 and 1994 
was $0.8 million and $2.7 million, respectively.  Other income in 
1995 includes a gain from the settlement of a litigation.  Other 
income for 1994 includes a $0.6 million gain on the sale 
Premium Service Corporation and $1.7 million from operations of 
the former premium financing and travel subsidiaries.

Loss and Loss Adjustment Expenses

Property and casualty loss and loss adjustment expenses 
incurred for the year ended December 31, 1995 decreased $19.3 
million, or 52.3%, to $17.6 million from $37.0 million for the 
year ended December 31, 1994.  This decrease largely 
corresponds to the decrease in property and casualty premiums 
earned and also reflects a smaller provision for prior year losses 
of $3.4 million in 1995 as compared to $17.0 million in 1994.  
See "Loss and Loss Adjustment Expense Reserves" .

Policy Acquisition Costs

Property and casualty policy acquisition costs incurred decreased 
$1.7 million, or 32%, from $3.8 million for the year ended 
December 31, 1995 compared to the year ended December 31, 
1994 ($5.5 million).  This decrease is due to the reduction in net 
premiums written.

Credit Life Benefits

Credit life benefits incurred was $0.5 million and $0.8 million for 
the years ended December 31, 1995 and 1994, respectively.  
The Company sold this subsidiary in September, 1993.  Under 
the sale agreement, the Company retained the responsibility and 
continues to run-off the policies in existence at the sales date.

Interest Expense

Interest expense was $0.3 million for both years ended 
December 31, 1995 and 1994.  The majority of the interest 
expense during both years related to interest paid on notes 
payable to one of the Company's principal shareholders.  The 
Company repaid these notes in full on May 1, 1996.

Other Operating Costs and Expenses

Other operating costs and expenses for the years ended 
December 31, 1995 and 1994 were $42.8 million and $55.2 
million, respectively.  This decrease of $12.5 million, or 23%, is 
a result of the Company's ongoing efforts to maintain costs at a 
level appropriate to the associated revenue levels.  The largest 
component  of the decrease is due to workforce reductions 
management of the Company initiated in early 1995.  At 
December 31, 1995, the Company employed 268 full-time 
employees, compared to 407 at December 31, 1994.  The 
related salaries and fringes for the Company was $10.7 million 
for the year ended December 31, 1995, compared to $14.5 
million for the year ended December 31, 1994, a decrease of 
$3.8 million, or 26%.  Additional savings were realized in the 
Company's data processing costs.  The Company converted its 
two largest volumes of business from PMSC to another data 
processing system in December, 1994 and June, 1995 reducing 
data processing expense from $3.4 million for the year ended 
December 31, 1994 to $1.8 million for the year ended December 
31, 1995.

Income Taxes

Provision (benefit) from income taxes  was $(2,000) and 
$29,000 for the years ended December 31, 1995, and 1994, 
respectively. During 1995, the Company utilized net operating 
loss carryforwards to offset current income taxes in the amount 
of $0.3 million.  Net operating loss carryforwards were not used 
to offset current income taxes during 1994.  The 1995 and 
1994 provision for income taxes on operations of insignificant 
amounts resulted from certain life insurance taxable income and 
state income taxes that cannot be offset by tax operating losses.



		 LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

Loss reserves are estimates at a given point in time of the 
amount of claims that the insurer expects to pay claimants plus 
investigation and litigation costs, based on facts and 
circumstances then known. It can be expected that the ultimate 
liability in each case will differ from such estimates. During the 
loss settlement period, additional facts regarding individual 
claims may become known and, consequently, it becomes 
necessary to refine and adjust the estimates of liability.

The liability for losses on direct business is determined using 
case-basis evaluations and statistical projections. The liabilities 
determined under these procedures are reduced, for GAAP 
purposes, by estimated amounts to be received through salvage 
and subrogation. The resulting liabilities represent the Company's 
estimate of the ultimate net cost of all unpaid losses and LAE 
incurred through December 31 of each year. These estimates 
may be affected by the frequency and/or severity of future 
claims. These estimates are continually reviewed and as 
experience develops and new information becomes known, the 
liability is adjusted as necessary.

The anticipated effect of inflation is implicitly considered when 
estimating liabilities for losses and LAE. While anticipated price 
increases due to inflation are considered, an increase in average 
severity of claims may be caused by a number of factors that 
vary with the individual type of policy written. Future average 

severity is projected based on historical trends adjusting for 
changes in underwriting standards, policy provisions, and general 
economic trends.
 
These anticipated trends are monitored based on actual 
developments and are modified as necessary. The Company does 
not discount its loss and LAE reserves.

The following table presents, on a GAAP basis, a three-year 
analysis of losses and LAE, net of ceded reinsurance recoverable, 
with the net liability reconciled to the gross liability as reported in 
the Company's financial statements (in thousands):
									
<TABLE>

<S>                                                            <C>             <C>              <C>
                                                        								   1996              1995            1994
                                                        								  ------            ------          ------
Liability for losses and LAE at the beginning of the year:      
   Gross liability per balance sheet                            $ 145,523       $  166,698       $ 194,682
   Ceded reinsurance recoverable,          
    classified as an asset                                       (84,492)          (88,731)        (76,221)
   Net liability                                                  61,031            77,967         118,461
			
Provision for losses and LAE for claims                 
   occurring in the current year                                   9,863            14,243          19,997
Increase in estimated losses and LAE for                        
   claims occurring in prior years                                 1,117             3,375          16,957
                                                         								  -------           -------         ------
                                                        								  10,980            17,618          36,954
                                                        								  -------           -------         ------
Losses and LAE payments for claims occurring during                     
   Current year                                                    8,317            11,711          13,837
   Prior years                                                    16,267            22,843          63,611
                                                        								  -------           -------         ------
                                                        								  24,584            34,554          77,448
                                                        								  -------           -------         ------
Liability for losses and LAE at the end of the year:                    
   Net liability                                                  47,427            61,031          77,967
   Ceded reinsurance recoverable,                  
	   classified as an asset                                        84,725            84,492          88,731
                                                         								--------            ------          ------
Gross liability per balance sheet                               $132,152          $145,523        $166,698
                                                        								========          ========        ========


</TABLE>


The ceded reinsurance recoverable, classified as an asset, 
includes $74.8 million at the end of 1996 ($76.1 million at the 
end of 1995 and $75.7 million at the end of 1994) of balances 
recoverable from various facilities (such as the S.C. Facility, N.C. 
Facility and NFIP).  See Note #12 of Notes to Financial 
Statements.     

As reflected in the preceding table, each year was affected by 
reserves from prior years having been deficient in those earlier 
periods. However, this impact of adverse development has 
decreased significantly since 1994.  The amount of adverse 
development related to claims occurring in prior years was $1.1 
million in 1996, $3.4 million in 1995, and $17.0 million in 1994. 
Adverse development will be fully discussed following the tabular 
ten-year period analysis presented later in this section. Reserve 
deficiencies are caused primarily by the difficulties inherent in 
estimating the liability for claims on the casualty lines of 
business, where the full extent of the damages can often be 
sizable, but not accurately determinable at the date of 
estimation. This situation is further complicated by the fact that 
the existence of a claim may not be reported to the Company for 
a number of years.

The difference between the year-end net liability for losses and 
LAE reported in the accompanying consolidated financial 
statements in accordance with GAAP and that in accordance 
with SAP was as follows for the years ended December 31, (in 
thousands): 

<TABLE>                                                                  

<S>                                                             <C>            <C>
                                                        	 							  1996          1995
                                                         								  -----         -----
Net liability on a SAP basis as filed in annual statement       $ 47,952     $ 61,812
Established salvage and subrogation recoveries recorded on              
   a cash basis for SAP and on an accrual basis for GAAP           (525)        (781)
Net liability on a GAAP basis, at year end                        47,427       61,031
		
Ceded reinsurance recoverable, classified as an asset             84,725       84,492
		
Gross liability on a GAAP basis, at year end                    $132,152     $ 145,523
						    


</TABLE>

The following table reflects the loss and LAE development for 1996 and 1995 on a
GAAP basis (in thousands):

                           				   Unpaid losses  Re-estimated as    Cumulative
                          				      and LAE     of one year later  Deficiency
                           				   -------------  -----------------  ----------

1996:  Gross liability              $ 132,152         
       Less reinsurance recoverable    84,725          
                            				      -------
       Net liability                $  47,427          
				                                  =======

1995:  Gross liability              $ 145,523       $ 148,186         $ (2,663)
       Less reinsurance recoverable    84,492          86,038           (1,546)
                            				      -------        --------           -------
       Net liability                $  61,031       $  62,148         $ (1,117)
	                            			      =======          ======           =======
					





The following analysis reflects loss and LAE development on a SAP basis, net of
ceded reinsurance  recoverable, for a ten-year period for retained business only
for year ended December 31 (in millions):

 
<TABLE>


<S>                         <C>     <C>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
							                                                        Year Ended December 31,
				    
                    				    1986    1987    1988    1989    1990    1991    1992    1993    1994    1995    1996

Liability for  unpaid losses                                                                                    
	and LAE (SAP)               162     145     129     122     114     112     118     120     80       62      48
											
Cumulative liability paid through:                                                                                      
	One year later               94      82     104      78      77      63      30      65      26      16      
	Two years later             142     150     141     121     116      50      84      86      42              
	Three years later           194     173     166     145      93      91     102      99                      
	Four years later            211     191     183     115     125     104     112                             
	Five years later            224     203     151     139     135     111                                     
	Six years later             233     174     170     147     140                                             
	Seven years later           208     191     176     151                                                     
	Eight years later           223     195     179                                                             
	Nine years later            226     199                                                                     
	Ten years later             229                                                                             
											
Liability re-estimated as of:                                                                                   
	One year later              181     158     174     135     136     119     129     138     85      63      
	Two years later             192     197     177     150     147     124     146     144     87              
	Three years later           229     200     188     156     151     134     151     143                     
	Four years later            233     210     185     159     161     145     149                             
	Five years later            240     204     185     168     172     143                                     
	Six years later             235     204     195     180     171                                             
	Seven years later           235     213     206     178                                                     
	Eight years later           243     224     204                                                             
	Nine years later            253     222                                                                     
	Ten years later             251                                                                             
											
Cumulative (deficiency)      (89)    (77)    (75)    (56)    (57)    (31)    (31)    (23)    (7)     (1)     


</TABLE>




The preceding table presents the development of balance sheet 
liabilities on a SAP basis for 1986 thorough 1996. The top line of 
the preceding table shows the initial estimated liability on a SAP 
basis. This liability represents the estimated amount of losses 
and LAE for claims arising in years that are unpaid at the balance 
sheet date, including losses that have been incurred but not yet 
reported.  The next portion of the  table reflects the cumulative 
payments made for each of the indicated years as they have 
developed through time. This table has been adjusted for a 
modification made to 1994 paid losses on a GAAP basis, not 
recorded for statutory net losses incurred. On a statutory basis, 
the modification is a reclassification only and has no effect on 
income.

In evaluating this information, it should be noted each amount 
includes the effects of all changes in amounts for prior periods. 
This table does not present accident or policy year development 
data, which readers may be more accustomed to analyzing. 
Conditions and trends that behave affected development of the 
liability in the past may not necessarily occur in the future. 
Accordingly, it may not be appropriate to extrapolate future 
redundancies or deficiencies based on this table. 

The positive trend of decreasing adverse development is due to 
the Company's proactive approach of engaging additional 
actuarial reviews to perform an independent analysis of reserves 
as of December 31, 1994.  These studies resulted in the 
Company recording additional reserve strengthening in the fourth 
quarter of 1994.  Establishing reserves is an estimation process 
and adverse developments in future years may occur and would 
be recorded in the year so determined.  Since that time, the 
Company's operating results have not been significantly 
impacted by incurred losses and loss adjustment expenses that 
relate to claims occurring in prior years compared to the impact 
upon operating results for the year ended December 31, 1994.

The adverse loss reserve development in 1986 through 1993 is 
primarily attributable to business other than the Company's core 
southeastern business.  Run-off on the claims of the previously 
mentioned workers' compensation and general liability exposures 
in Florida and California created substantial losses for the 
Company for the past 10 years.  However, as a result of the 
previously mentioned reserve strengthening in the fourth quarter 
of 1994, the years ended December 31, 1996 and 1995 were 
not  significantly impacted.

A part of the Company's reserve for losses and LAE is set aside 
for environmental, pollution, and toxic tort claims. These claims 
relate to business written by the West Coast operation prior to 
1986. On June 7,1994, the Company settled a dispute relative 
to approximately 400 of these claims. Any future liability on 
these claims is limited to 50% of the direct loss and LAE paid.  
The Company's obligation does not begin until the other 
company pays out subsequent to June 7,1994 a total of $ 20 
million in losses and LAE paid, net of reinsurance.  As of 
December 31, 1996, $4.2 million of claims payments have been 
made (gross of reinsurance) since June 7, 1994.  A portion of 
the reinsurance on this business was placed with a reinsurer 
currently operating under the supervision of its state regulator.  
Estimates of any obligations of the Company take into account 
potential recoverable amounts. 

Of the remaining environmental, pollution and toxic tort claims, 
the following activity took place during 1996:
				
	Pending, December 31, 1995              85
	New claims advised                      16
	Claims settled                          30

	Pending, December 31, 1996              71


The policies corresponding to these claims were written on a 
direct basis. The Company has excess of loss reinsurance with 
company retentions through 1980 of $ 100,000 and $ 500,000 
after that date.  The claims are reserved as follows as  of 
December 31, 1996  and 1995 (thousands of dollars):             
	
	               	      1996            1995
 		
	Case reserves     $   3,170       $   2,229
	IBNR reserves         6,381           8,675
	LAE reserves          3,764           3,453
               			  ------------      -------
	Total             $  13,315       $  14,357


The above claims involve 8 Superfund sites, 5 asbestos or toxic 
claims, 6 underground storage tanks and 52 miscellaneous clean-
up sites.   For this direct business there are usually several 
different insurers participating in the defense and settlement of 
claims made against the insured. Costs and settlements are pro-
rated by either time on the risk or policy limits.

In estimating the liability for reported and estimated losses and 
adjustment expenses related to environmental and construction 
defect claims, management considers facts currently known 
along with current state of the law and coverage litigation. 
Liabilities are recognized for known claims  (including the cost of 
related litigation) when sufficient information has been developed 
to indicate the involvement of a specific insurance policy, 
management can reasonably estimate its liability. In exposures 
on both known and unasserted claims, estimates of the liabilities 
are reviewed and updated continually. The potential development 
of losses is restricted by policy limits. 

Because only 71 claims remain open as of December 31,1996, 
the exposure to significant additional development is less than 
when the claims were less mature. In addition, the likelihood of 
new claims being asserted for construction liability is lessened by 
the expiration of statutes of limitations since the last policy 
expired over ten years ago.


			LIQUIDITY AND CAPITAL RESOURCES

Liquidity relates to the Company's ability to produce sufficient 
cash to fulfill contractual obligations, primarily to policyholders. 
Sources of liquidity include service fee income, premium 
collections, investment income and sales or maturities of 
investments.

The Company experienced negative cash flow from operations of 
$12.9 million in 1996, an improvement from $21.7 million in 
1995 and $44.6 million in 1994.  As a result of its decision to 
suspend risk-taking activities in 1995, the Company's stream of 
direct premium collections was eliminated for the first six months 
of 1996. However, the Company continued to pay losses and 
loss adjustment expenses totaling $24.6 million in 1996, of 
which $16.3 million were loss payments on prior year claims. 
Net income for the year ended December 31, 1996, totaled $5.2 
million but cash flow from operations was not sufficient to fund 
claim payments from run-off operations.  A  minimal amount of 
risk activity was undertaken in the last six months of 1996, but 
the premium collections were not significant.  During 1994, cash 
flows from operations was affected by $26.5 million of 
disbursements for the non-recurring commutation of NCCI 
liabilities and a dispute settlement regarding a previously sold 
subsidiary.

Net cash outflow from investing activities in 1996 was $7.9 
million as $14.3 million in new investments were acquired.  The 
source of cash for these investments was comprised of $7.0 
million of investments that had matured or been sold and $9.3 
million in new capital stock issued less $2.5 million to retire 
notes payable.  During 1996, the Company continued to dispose 
of investments that were inconsistent with its current investment 
policy, which resulted in realized losses of $14,000.  During 
1995, the Company realized a $164,000 gain on its portfolio 
sales.  As a result of negative cash flow from operations during 
1994, the Company had to sell bonds, resulting in realized losses 
of $6.3 million.

Total cash and investments at December 31, 1996, 1995 and 
1994 was $42.9 million, $50.6 million and $61.9 million, 
respectively.  At December 31, 1996, 6.2% of total investments 
were committed to cash and short-term investments, primarily 
money market funds and overnight repurchase agreements 
compared to 32.9% at the end of 1995.  Investments in U.S. 
Treasury and U.S. Government notes represented 93.4% of the 
portfolio as compared to 62.0% as of December 31, 1995.  The 
Portfolio does not contain non-investment grade or derivative 
securities.

All debt securities are considered available-for-sale and are 
carried at market value as of December 31, 1996 and 1995.  
The market values of the debt securities were $0.5 million below 
book value at the end of 1996, which is included as a reduction 
in shareholders' equity, compared to $0.4 million above book 
value as of December 31, 1995.  The weighted average maturity 
of the fixed maturity investments were 3.78 years as of 
December 31, 1996. Average net investment yields on the 
Company's cash and investments were 6.3% in 1996 and 5.9% 
for both 1995 and 1994.

Financing activities since January 1, 1995 included the following:

      As of December 31, 1994, the Company had shareholders' 
equity of $0.7 million and its principal insurance subsidiary 
("SCIC") had negative statutory surplus.  In January, 1995, the 
Company received proceeds from a rights offering in the amount 
of $5.3 million and made a capital contribution of $5 million to 
SCIC.  During the second quarter of 1995, a principal 
shareholder loaned the Company $2 million, which was 
contributed to SCIC in order to increase its statutory surplus.   
 
      During the fourth quarter of 1995, a group of investors 
signed a letter of intent to acquire 6,250,000 shares of 
unregistered Company Common Stock at a price of $1.00 per 
share.  On September 26, 1996, the sale was consummated 
when the last regulatory approval was obtained and the funds 
released.  The proceeds were used to make a $6.3 million 
contribution to SCIC.  In conjunction with the sale of common 
stock, the Company also issued to these investors stock options 
to acquire an additional 3,125,000 shares at the greater of 
$1.50 per share or the book value per share at the date of 
exercise, expiring December 31, 1998 and 3,125,000 shares at 
the greater of $2.00 or the book value per share at date of 
exercise, expiring December 31, 2000.
 
       During the first quarter of 1996, the Company issued 
1,635,000 shares of unregistered Company Common Stock at a 
price of $2.00 per share to a different group of investors.  The 
proceeds of this stock sale were used to repay the $2 million 
loan described above which was due May 1, 1996.  In addition, 
the Company has issued to this group stock options expiring 
December 31, 2000 to acquire an additional 1,635,000 shares at 
the greater of $2.50 per share or the book value per share at the 
date of exercise.

The Company is a legal entity separate and distinct from its 
subsidiaries. As a holding company, the primary sources of cash 
needed to meet its obligations, including principal and interest 
payments with respect to any indebtedness, is dividends and 
other permitted payments from its subsidiaries and affiliates.

South Carolina insurance laws and regulations require a domestic 
insurer to report any action authorizing distributions to 
shareholders and material payments from subsidiaries and 
affiliates at least thirty days prior to distribution or payment 
except in limited circumstances. Additionally, those laws and 
regulations provide the Department of Insurance with the right to 
disapprove and prohibit distributions meeting the definition of an 
"Extraordinary Dividend" under the statutes and regulations.  The 
South Carolina Insurance Holding Company Regulatory Act 
provides that, without the prior approval of the Director of 
Insurance of the State of South Carolina, dividends within any 
twelve-month period may not exceed the greater of (i) 10% of 
SCIC's surplus as regarding policyholders as of December 31 of 
the prior year and (ii) SCIC's statutory net income, not including 
realized capital gains or losses, for the prior calendar year.  
Payment of cash dividends by SCIC, is at the discretion of its 
Board of Directors, upon approval of the Director of Insurance, 
and is based on its earnings, financial condition, capital 
requirements, and other relevant factors.  If the ability of SCIC 
and the Company's other insurance subsidiaries to pay dividends 
or make other payments to the Company is materially restricted 
by regulatory requirements, it could affect the Company's ability 
to service its debt and/or pay dividends.  In addition, no 
assurance can be given that South Carolina will not adopt 
statutory provisions more restrictive than those currently in 
effect.

The volume of premiums that the property and casualty 
insurance subsidiaries may prudently write is based in part on the 
amount of statutory net worth as determined in accordance with 
applicable insurance regulations.  The National Association of 
Insurance Commissioners has adopted risk based capital 
requirements for property and casualty insurance companies to 
evaluate the adequacy of statutory capital and surplus in relation 
to investments and insurance risks such as asset quality, asset 
and liability matching, loss reserve adequacy, and other business 
factors.  The RBC formula is used by state insurance regulators 
as an early warning tool to identify, for the purpose of initiating 
regulatory action, insurance companies that are potentially 
inadequately capitalized.  Compliance is determined by the ratio 
of the companies' regulatory total adjusted capital to its 
authorized control level RBC (as defined by the NAIC).  All four 
of the property and casualty insurance subsidiaries of the 
Company have December 31, 1996 ratios of total adjusted 
capital to RBC that are in excess of the level which would 
prompt regulatory action.
	
		UTILIZATION OF NET OPERATING LOSS CARRYFORWARDS

The Company has unused tax operating loss carryforwards and 
capital loss carryforwards of approximately $95.4 million for 
income tax purposes. However, due to a "change in ownership" 
event that occurred in January, 1995, the Company's use of the 
net operating loss carryforwards are subject to limitations in 
future years of approximately $2 million per year.  Net operating 
loss carryforwards available for use in 1997 is approximately 
$7.6 million due to the tax losses incurred in 1995 subsequent 
to the change in ownership event occurred.

Based on its recent earning history, the Company established a 
valuation allowance of $15.0 million against the net deferred tax 
asset at December 31, 1996.
	

Item 8. Financial Statements and Supplementary Data (continued 
on following page)



			REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Shareholders of 
The Seibels Bruce Group, Inc.:

We have audited the accompanying consolidated balance sheets 
of The Seibels Bruce Group, Inc. ( a South Carolina corporation) 
(the Parent Company) and subsidiaries (collectively the 
"Company"), as of December 31, 1996 and 1995, and the 
related consolidated statements of operations, changes in 
shareholders' equity and cash flows for each of the three years 
in the period ended December 31, 1996. These financial 
statements and the schedules referred to below are the 
responsibility of the Company's management. Our responsibility 
is to express an opinion on these financial statements and 
schedules based on our audits.

We conducted our audits in accordance with generally accepted 
auditing standards. Those standards require that we plan and 
perform the audit to obtain reasonable assurance about whether 
the financial statements are free of material misstatement. An 
audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An 
audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as 
evaluating the overall financial statement presentation. We 
believe that our audits provide a reasonable basis for our 
opinion.

In our opinion, the financial statements referred to above 
present fairly, in all material respects, the consolidated financial 
position of The Seibels Bruce Group, Inc. and subsidiaries, as of 
December 31, 1996 and 1995 and the results of their 
operations and their cash flows for each of the three years in 
the period ended December 31, 1996 in conformity with 
generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on 
the basic financial statements taken as a whole. The Schedules 
I, II, III, IV, V and VI listed in Part IV, Item 14, are presented for 
purposes of complying with the Securities and Exchange 
Commissions rules and are not part of the basic financial 
statements.  These schedules have been subjected to the 
auditing procedures applied in the audit of the basic financial 
statements, and in our opinion, fairly state in all material 
respects the financial data required to be set forth therein in 
relation to the basic financial statements taken as a whole.




ARTHUR ANDERSEN LLP

Columbia, South Carolina
March 14,1997











			THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
				CONSOLIDATED BALANCE SHEETS  
			      For the year ended December 31,
				(Dollars shown in thousands)

ASSETS                                                     1996           1995
Investments:
  Debt securities, available-for-sale, at market
   (cost of $40,709 at 1996 and $33,171 at 1995)      $  40,217        $  33,581
  Equity securities, at market (cost of $34 at 
   1996 and $222 at 1995)                                    35              377
  Cash and short-term investments                         2,664           16,649
  Other long-term investments                                28               34
   
   Total cash and investments                            42,944           50,641
Accrued investment income                                   772              697
Premiums and agents'balances receivable, net              6,477            7,005
Reinsurance recoverable on paid losses and
 loss adjustment expenses                                28,218           27,423
Reinsurance recoverable on unpaid losses and 
 loss adjustment expenses                                84,725           84,492
Property and equipment, net                               5,194            5,396
Prepaid reinsurance premiums - ceded business            46,118           43,469
Deferred policy acquisition costs                            96              293
Other assets                                               5,928           4,589

  Total assets                                        $  220,472       $ 224,005

LIABILITIES
Losses and claims:
  Reported and estimated losses and claims 
		                -      retained business            $   37,019       $  47,445
		                -      ceded business                   74,735          74,918
Adjustment expenses - retained business                   10,408          13,586
		                  - ceded business                       9,990           9,574
Unearned premiums:
Property and casualty - retained business                  1,380           1,900
		                    - ceded business                    46,118          43,469
Credit life                                                  194             758
Balances due other insurance companies                     8,736          12,438
Notes payable                                                  -           2,476
Current income taxes payable                                  17             191
Other liabilities and deferred items                       8,084           7,063
  
  Total liabilities                                      196,681         213,818

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Special stock, no par value, authorized 5,000,000
 shares, none issued and outstanding                           -               -
Common stock, $1 par value, authorized 50,000,000 shares,
 issued & outstanding 24,672,388 shares (16,772,686 
 shares at 1995)                                          24,672          16,773
Additional paid-in-capital                                35,546          34,080
Unrealized gain/(loss) on investments                      (536)           401
Accumulated deficit                                      (35,891)       (41,067)
	
	Total shareholders' equity                               23,791          10,187

Total liabilities and shareholders' equity           $   220,472      $  224,005


The accompanying notes are an integral part of these consolidated financial 
 statements.                 



			THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
				CONSOLIDATED STATEMENTS OF OPERATIONS
				For the Year Ended December 31,
			(Dollars shown in thousands, except per share amounts)

                                  					  1996        1995         1994
			
Commission & service income            $ 45,585     $ 49,572     $ 60,669
Premiums earned:                        
 Property & casualty                      7,186       10,384       14,718
 Credit life                                478          890        1,801
Net investment income                     3,006        3,176        5,321
Other interest income                       801        1,154          905
Realized gains (losses) on investments      (14)         164       (6,327)
Other income                                151          843        2,673
                                     				 -------      -------      -------
	Total revenue                           57,193       66,183       79,760
                                    				 -------      --------     -------
Expenses                        
  Property & casualty:                    
    Losses & loss adjustment expenses    10,980       17,618       36,954
    Policy acquisition costs              1,777        3,794        5,538
  Credit life benefits                      203          545          770
  Interest expense                          174          308          321
  Other operating costs & expenses       39,014       42,768       55,222
                                   					 ------       ------       ------
	Total expenses                          52,148       65,033       98,805
                                   					 ------       ------       -------
Income (loss) from operations,                  
	before income taxes                      5,045        1,150      (19,045)
			
Provision (benefit) for income taxes      (131)          (2)           29
			                                   		-------        ------     ---------
Net income (loss)                       $ 5,176      $ 1,152     $ (19,074)
                                   					=======       =======    =========
Per share & common equivalent share:                    
	Net income (loss)                      $  0.22      $  0.07     $ (1.72)
                                    					=======      ========    =========
Pro forma SFAS No. 128 basic earnings                   
	per share (Note 1):                     
	 Net income (loss)                     $  0.26    $   0.07    $   (1.72)
                                   					=======     ========     ========
			


The accompanying notes are an integral part of these consolidated financial
 statements





		THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
	   CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
			For the Year Ended December 31,                                         
			(Dollars shown in thousands)
															
			                                       	    1996       1995         1994
			
Common stock outstanding:                      
  Beginning of year                          $ 16,773   $ 14,501   $   7,501
  Stock issued in connection with 
    rights offering                                 -      2,217           -
  Stock issued to benefit plans, 
    agents and others                              15         55           -
  Stock issued in exchange for cancellation                                   
    of note payable                                 -          -       7,000
  Stock issued in connection with capital                                 
    contributions                               7,884          -           -
                                    					    ---------   ---------   --------
  End of year                               $  24,672   $  16,773   $ 14,501
                                    					    =========   =========   ========
Additional paid-in-capital:                     
  Beginning of year                         $  34,080   $  30,983   $ 27,983
  Stock issued in connection with 
    rights offering                                 -       3,104          -
  Stock issued to benefit plans, 
    agents and others                              10          (7)         -
  Stock issued in exchange for cancellation                       
    of note payable                                 -           -      3,000
  Stock issued in connection with capital                 
   contributions, net of associated expenses    1,456           -          -
                                     					    ---------  ----------   ---------
  End of year                               $  35,546  $   34,080   $  30,983
			
Unrealized gain (loss) on securities:                   
  Beginning of year                         $     401  $ (2,615)    $   2,404
  Change during the year                        (937)     3,016        (5,019)
			                                     		    ---------  ----------   ----------
  End of year                               $   (536)  $    401     $  (2,615)
                                     					    =========  ===========  ==========
Accumulated deficit:                    
  Beginning of year                        $ (41,067)  $ (42,219)   $ (23,145)
  Net income (loss) for the year               5,176       1,152      (19,074)
  End of year                              $ (35,891)  $ (41,067)   $ (42,219)
                                    					   ---------   ----------   ----------
   Total shareholders' equity              $  23,791   $  10,187    $     650
                                     					   =========   ==========   ==========





		THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
		      CONSOLIDATED STATEMENTS OF CASH FLOWS
			  For the Year Ended December 31,
			    (Dollars shown in thousands)


Cash flows from operating activities:        1996     1995         1994
   Net income (loss)                $       5,176   $ 1,152   $  (19,074)
   Adjustments to reconcile net loss to net 
    cash used in operating activities:   
		
    Depreciation                              979       925          739
    Realized losses (gains) on investments     14      (164)       6,327
    Stock issued as compensation               16        31           -
    Change in assets and liabilities:                               
    Accrued investment income                 (75)      112          278
    Premium and agents' balances receivable,
       net                                    528     6,023          690
    Premium notes receivable                    -        -        11,120
    Reinsurance recoverable on losses and loss                      
      adjustment expenses                  (1,028)    7,093       (8,943)
    Prepaid reinsurance premiums-ceded
       business                            (2,649)    5,014        6,443
    Deferred policy acquisition costs         197       606        2,943
    Unpaid losses and loss adjustment
       expenses                           (13,371)  (21,175)     (26,837)
    Unearned premiums                       1,565   (10,164)      (8,719)
    Balances due other insurance companies (3,702)   (6,681)      (8,657)
    Current income taxes payable             (174)       42         (571)
    Outstanding drafts and bank overdraft      -     (3,891)      (3,336)
    Other-net                                (414)     (634)       2,989

 Net cash used in operating activities    (12,938)  (21,711)     (44,608)
			
Cash flows from investing activities:                   
  Proceeds from investments sold            3,954    10,804      143,609
  Proceeds from investments matured         3,095     2,030           45
  Cost of investments acquired            (14,288)   (4,201)     (88,041)
  Proceeds from mortgage loan receivable       -      1,965            -
  Proceeds from property and equipment sold   116        57           655
  Purchases from property and equipment      (797)      (92)       (2,418)

 Net cash (used in) provided by
     investing activities                  (7,920)    10,563       53,850
			
Cash flows from financing activities:                   
  Issuance of capital stock                 9,340          -           -
  Proceeds from (repayment of)notes payable(2,476)     2,000       (1,934)
  Stock issued under stock option plans         9         18           -
  Proceeds from stock rights offering           -      5,321           -
Net cash used in financing activities       6,873      7,339       (1,934)
			
Net increase (decrease) in cash and
   short term investments                 (13,985)    (3,809)       7,308
Cash and short term investments,
   beginning of year                       16,649     20,458       13,150
Cash and short term investments,
   end of year                      $       2,664   $ 16,649    $  20,458
			
Supplemental cash flow information:                     
   Interest paid                    $         350   $     96    $     210
   Income taxes paid (recovered)               43        (44)         600
			
Noncash investing activities:                   
   Notes payable exchanged for common
     stock                          $           -   $     -     $  10,000
	Notes payable in lieu of interest payment      -         37          439
			


The accompanying notes are an integral part of these consolidated financial
 statements  
		




                THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Business Operations, Principles of Consolidation and Presentation
    -----------------------------------------------------------------

The Seibels Bruce Group, Inc. ("SBIG") provides 
automobile, flood, and other property and casualty 
insurance services and products to customers located 
primarily in the southeastern United States.  The 
Company's largest source of revenues derives from the 
Company's role as one of three servicing carriers for the 
South Carolina Reinsurance Facility (the "Facility"), a 
state-sponsored plan for insuring South Carolina drivers 
outside of the voluntary market.  The Company also is a 
leading provider, and an original participant, in the 
National Flood Insurance Program (the "NFIP"), a flood 
insurance program administered by the federal 
government.  As a servicing carrier for the Facility and 
the NFIP, the Company receives commissions and fees, 
but reinsures all of the underwriting risk.  The Company 
provides other fee-based services, including services in 
its capacity as a managing general agent ("MGA") for 
commercial insurance policies underwritten by 
unaffiliated insurance companies, catastrophe claims 
services, excess and surplus lines brokerage services 
and liability run-off management services.  Recently, the 
Company began marketing and underwriting 
nonstandard automobile insurance on a risk-bearing 
basis.   

From the mid-1980's through the middle of 1995, the 
Company experienced significant operating losses due 
primarily to environmental and construction defect 
claims on general liability policies written by the 
Company prior to 1985, losses from Hurricane Hugo in 
1989 and from Hurricane Andrew in 1992, and losses 
on workers' compensation insurance policies written by 
the Company.  Despite a significant recapitalization in 
1994, these operating losses reduced the Company's 
shareholders' equity to $650,000 by the end of 1994, 
and the Company suspended its underwriting operations 
in early 1995.  Beginning in 1995, new management 
took a number of actions to stabilize and improve the 
Company's financial condition through significant cost 
reductions and the investment of new equity capital as 
well as a renewed emphasis on the Company's fee-
based businesses.  As a result of these actions, the 
Company realized net income in both 1995 and 1996 
and was able to resume limited insurance underwriting 
activities in 1996.

The accompanying consolidated financial statements 
have been prepared in conformity with generally 
accepted accounting principles (GAAP) and include the 
accounts of the Company and its wholly-owned 
subsidiaries. All significant intercompany balances and 
transactions have been eliminated in consolidation.

Certain classifications previously presented in the 
consolidated financial statements for prior years have 
been changed to conform to current classifications.

        Use of Estimates in Preparation of Financial Statements
        -------------------------------------------------------

The preparation of financial statements in conformity 
with generally accepted accounting principles requires 
management to make estimates and assumptions that 
affect the reported amounts of assets and liabilities and 
disclosures of contingent assets and liabilities at the 
date of the financial statements and the reported 
amounts of revenues and expenses during the reporting 
period. Actual results could differ from those estimates, 
although, in the opinion of the management, such 
differences would not be significant.

        

        Cash and Short-term Investments
        --------------------------------

For purposes of the Statements of Cash Flows, the 
Company considers both cash and short-term 
investments within the caption "cash and short-term 
investments" to be those highly liquid investments 
purchased with an initial maturity of three months or 
less.

        Fair Value of Financial Instruments
        -----------------------------------

The fair value of debt and equity securities, short-term 
investments, other long-term investments, cash and 
accrued investment income was $43.7 million and  
$51.3 million at December 31,1996 and 1995, 
respectively. The fair values of cash and short-term 
investments approximate carrying value because of the 
short maturity of those instruments.

The fair values of debt securities and equity securities  
were determined in accordance with methods prescribed 
by the National Association of Insurance Commissioners 
which do not differ materially from nationally quoted 
market prices. The fair market value of certain municipal 
bonds is assumed to be equal to amortized cost where 
no market quotations exist. Premium and agents' 
balances receivable are carried at their historical costs 
which approximate fair value as a result of timely 
collections and evaluations of recoverability with a 
provision for uncollectable amounts.

The fair value of debt was $2.5 million  at December 
31, 1995.  The fair value of debt was estimated to be 
its carrying value based on the remaining short-term 
maturity.  The Company satisfied all notes payable in 
May, 1996.

        Property and Casualty Premiums
        -------------------------------

Property and Casualty premiums are reflected in income 
when earned as computed on a monthly pro-rata 
method. Written premiums and earned premiums have 
been reduced by reinsurance placed with other 
companies, including substantial amounts related to 
business produced as a servicing carrier. A reconciliation 
of direct to net premiums, on both a written and an 
earned basis is as follows (in thousands):

                    1996                   1995                   1994
            Written     Earned      Written     Earned     Written     Earned
           -------------------    ---------------------    ------------------
Direct     $ 106,925  $ 105,212   $ 114,184   $ 122,912  $ 140,683  $ 146,481
Assumed        6,235      5,819         422       1,232      5,332      2,275
Ceded      (106,494)   (103,845)   (108,560)   (113,760)  (131,478)  (134,038)
           ---------   ---------   ---------   ---------  ---------  ---------
Net        $  6,666    $  7,186   $   6,046   $  10,384  $   14,537 $  14,718


The amounts of premiums pertaining to catastrophe reinsurance that were ceded 
from earned premiums during 1996, 1995 and 1994 were $0.2 million, $0.8 
million and $1.7 million, respectively.

Credit Life Premiums
--------------------

Credit life premiums are reflected in income when 
earned as computed on a monthly pro-rata method for 
level term premiums and on a sum-of-the-digits method 
for decreasing term premiums.



Commission and Service Income
-----------------------------

Commission and service income is predominately derived 
from servicing carrier activities. The commission income 
related to producing and underwriting the business is 
recognized in the period in which the business is 
written. A portion of commission income is also derived 
from business produced by the Company as a Managing 
General Agent. The Company receives commissions for 
producing and underwriting the business as well as 
servicing such business. These revenues are recognized 
on an accrual basis as earned.

Policy Acquisition Costs
------------------------

Policy acquisition costs attributable to property and 
casualty operations represent that portion of the cost of 
writing business that varies with and is primarily related 
to the production of business. Such costs are deferred 
and charged against income as the premiums are 
earned. The deferral of policy acquisition costs is 
subject to the application of recoverability tests to each 
primary line or source of business based on past and 
anticipated underwriting results. The deferred policy 
acquisition costs that are not recoverable from future 
policy revenues are expensed. The Company considers 
anticipated investment income in determining whether 
premium deficiencies exist.

Property and Casualty Unpaid Loss and Loss Adjustment Expense
-------------------------------------------------------------

The liability for property and casualty unpaid losses and 
loss adjustment expenses includes:

(1)     An accumulation of formula and case estimates for losses 
        reported prior to the close of the accounting period.
(2)     Estimates of incurred-but-not-reported losses based upon 
        past experience and current circumstances.
(3)     Estimates of allocated, as well as unallocated, loss adjustment 
        expense liabilities by applying percentage factors to the unpaid 
        loss reserves, with such factors determined on a by-line basis 
        from past results of paid loss expenses to paid losses.
(4)     The deduction of estimated amounts recoverable from salvage and 
        subrogation.
(5)     Estimated losses for reinsurance ceded and assumed.

Management, in conjunction with the Company's 
consulting actuaries, performs a complete review of the 
above components of the Company's loss reserves to 
evaluate the adequacy of such reserves. Management 
believes the reserves, which approximate the amount 
determined by independent actuarial reviews, are 
sufficient to prevent prior years' losses from adversely 
affecting future periods; however, establishing reserves 
is an estimation process and adverse developments in 
future years may occur and would be recorded in the 
year so determined.


Earnings per Share
------------------

Per share and common equivalent share is based on the 
weighted average number of shares outstanding 
(25,529,527 in 1996, 16,722,107 in 1995 and 
11,067,565 in 1994).  Outstanding stock options and 
warrants are common stock equivalents and had a 
dilutive effect in 1996, but had no dilutive effects on 
income per share in 1995 and 1994.

In February 1997, the Financial Accounting Standards 
Board ("FASB") issued Statement No. 128, "Earnings 
Per Share," ("SFAS No. 128") which requires the 
Company to disclose both basic and diluted earnings per 
share.  SFAS No. 128 is effective for fiscal years ending 
after December 15, 1997.  The Company has disclosed 
pro forma basic earnings per share as will be required 
under SFAS No. 128.  Weighted average number of 
shares outstanding used in the calculation of basic 
earnings per share is 19,673,386 in 1996 (16,722,107 
in 1995 and 11,067,565 in 1994).

Allowance for Uncollectable Accounts
------------------------------------

Allowance for uncollectable accounts for agents' 
balances receivable, other receivables, and premium notes 
receivable were $823,000 and $224,000 at December 31, 
1996 and December 31, 1995, respectively. 

Property and Equipment
----------------------

Property and equipment are stated at cost and, for 
financial reporting purposes, depreciated on a straight-
line basis over the estimated useful lives of the assets. 
For income tax purposes, accelerated depreciation 
methods are used for certain equipment.

Other Interest Income and Other Income
--------------------------------------

Other interest income includes interest received on 
reinsurance balances withheld, agents' balances 
receivable, and balances due from the South Carolina 
Reinsurance Facility. Other income for 1995 includes a 
gain from the settlement of a case previously in 
litigation. Other income for 1994 includes a $0.6 million 
gain on the sale of a subsidiary.

Recent Accounting Pronouncements
--------------------------------

On January 1, 1996, the Company adopted Statement 
No. 123 of the Financial Accounting Standards Board, 
"Accounting for Stock-Based Compensation".  The 
Statement requires that companies with stock-based 
compensation plans either recognize compensation 
expense based on new fair value accounting methods or 
continue to apply the provisions of Accounting 
Principles Board Opinion No. 25 ("APB 25") and disclose 
pro forma net income and earnings per share assuming 
the fair value method had been applied.  The Company 
has elected to adopt the disclosure alternative in its 
annual financial statements and to continue accounting 
for its stock-based compensation plans in accordance 
with APB 25 (see Note 10).

NOTE 2  INVESTMENTS

Investments in notes and other debt securities, preferred 
stocks and common stocks are all considered available-
for-sale securities and are carried at market at December 
31, 1996 and 1995.  Short-term investments are carried 
at cost, which approximates market value.

Unrealized gains and losses on marketable debt and 
equity securities are credited or charged directly to 
shareholders' equity. Realized gains and losses on 
investments included in the results of operations are 
determined using the "identified certificate" cost 
method. 




Realized gains (losses) on investments are summarized as follows (in thousands):

                         Debt           Equity
                      Securities      Securities      Other        Total
                                                
Realized:                               
        1996        $   (62)          $   48         $   -       $  (14)
        1995             240             (76)            -           164
        1994          (7,019)            930           (238)      (6,327)
Change in unrealized:                           
        1996        $   (902)         $ (154)        $  119      $  (937)
        1995           2,790             237            (11)        3,016 
        1994          (3,222)          (1,657)         (140)       (5,019)

Net bond discount accretion and premium amortization charged to income for the 
years ended December 31, 1996, 1995 and 1994 was not material.          


Unrealized gains and losses reflected in equity are as follows (in thousands):
   
                                  1996     1995        1994
                        
Gross unrealized gains          $    8    $ 577     $     136
Gross unrealized losses           (544)    (176)       (2,751)
                                --------  ------    ----------
  Net unrealized gain (loss)    $ (536)   $ 401     $  (2,615)
                                            
Proceeds from sales of debt securities and related realized gains and losses  
were as follows (in thousands):

                                1996            1995           1994
                        
Proceeds from sales     $       3,554   $       10,556  $       34,318
Gross realized gains            30              267             98
Gross realized losses   $       (92)    $       (27)    $       7,517)
                                                                             
                      
Proceeds from sales of equity securities and related realized gains and losses 
were as follows (in thousands):                   
        
                            1996        1995       1994
                        
Proceeds from sales     $   400     $    248     $  9,291
Gross realized gains         75           -         1,555
Gross realized losses   $  (127)    $    (76)    $   (625)

Investments which exceed 10% of shareholders' equity, excluding investments in 
U.S. Government and government agencies and authorities, at December 31, 
1996, are as follows (in thousands):
                                                        Carrying value
Short-term investments: 
        Evergreen Money Market Fund                       $  3,301
        First Union Bank - Repurchase Agreements             4,690
                                                                
There were no debt securities which were non-income producing for 
the twelve months ended December 31, 1996. Debt 
securities with an amortized cost of $22.0 million and 
$21.9 million at December 31, 1996 and 1995, 
respectively, were on deposit with regulatory 
authorities.

The amortized cost and estimated market values of 
investments in debt and equity securities were as 
follows (in thousands):
                                  December 31, 1996                    
                                                
                                             Gross         Gross      Estimated
                               Amortized   Unrealized    Unrealized    Market
                                  Cost        Gains        Losses      Value
                                
U.S. Government & government                            
 agencies and authorities     $  40,601     $     -       $  (499)    $  40,102
States, municipalities & 
 political subdivisions             108           7             -           115
                
      Total debt securities      40,709           7          (499)       40,217

Non-redeemable preferred stock       17           1             -            18
Common stocks                        17           -             -            17
                
      Total equity securities        34           1             -            35

Other long-term investments          73           -           (45)           28
      Total                   $  40,816     $     8       $  (544)    $  40,280

                                
                                  December 31, 1995

                                              Gross         Gross     Estimated
                               Amortized     Unrealized   Unrealized   Market
                                  Cost        Gains        Losses       Value
                                
U. S. Government & government                           
   agencies and authorities   $  31,068     $   348       $     -     $  31,416
States, municipalities & 
   political subdivisions           931          62             -           993
All other corporate               1,168           -             -         1,168
Redeemable preferred stocks           4           -             -             4
      
      Total debt securities      33,171         410             -        33,581

Non-redeemable preferred stocks     166           -            (7)          159
Common stocks                        56         167            (5)          218
                
      Total equity securities       222         167           (12)          377
Other long-term investments         198           -          (164)           34
                
      Total                  $   33,591     $   577       $  (176)     $ 33,992
                


Actual maturities may differ from contractual maturities 
because borrowers may have the right to call or prepay 
obligations with or without penalties. The amortized 
cost and estimated market value of debt securities at 
December 31, by contractual maturity, are as follows (in 
thousands):
         
                                                                 
                                                    December 31,1996
                                                                    Estimated
                                            Amortized                Market
                                               Cost                  Value
                                                                
Due in one year or less                    $   1,665               $   1,667
Due after one year through five years         25,388                  25,224
Due after five years through ten years        13,481                  13,142
Due after ten years                              175                     184
        
        Total                              $  40,709               $  40,217

Investment income as of December 31 consists of the following (in thousands):

                             1996        1995          1994
                                        
Debt securities           $ 2,122      $  2,023      $  4,348
Equity securities               9            15           266
Short-term investments        849         1,138           626
Mortgage loan                   -            23           255
Other                          56            42             -
   
  Total investment income   3,036         3,241         5,495
Investment expenses          (30)          (65)          (174)
  
  Net investment income   $ 3,006      $  3,176      $  5,321


NOTE 3  PROPERTY AND EQUIPMENT

A summary of property and equipment is as follows (in thousands):

Description                       Life-years      1996         1995
                        
Land                                  -       $  1,153       $  1,153
Buildings                           10-40        4,320          4,323
Data processing equipment            3-7         4,963          4,218
Furniture and equipment              3-10        7,422          7,387
                                                17,858         17,081

Accumulated depreciation                        (12,664)      (11,685)
                                              
                                              $  5,194       $  5,396

Depreciation expense charged to operations was $1.0 million in 1996, 
$0.9 million in 1995 and $0.7 million in 1994.




NOTE 4  DEFERRED POLICY ACQUISITION COSTS

Policy acquisition costs incurred and amortized to income on property and 
casualty business were as follows (in thousands):
        


                                                1996           1995
                
Deferred at beginning of year                 $    -         $     -
                
Costs incurred and deferred during year:                
        Commissions and brokerage               1,552           1,287
        Taxes, licenses and fees                   13             486
        Other                                      15           1,415
                                                ------       ---------
             Total                              1,580           3,188
Amortization charges to income during year     (1,580)         (3,188)
                                              ---------       ---------
Deferred at end of year                       $     -         $      -
                                              =========       =========

 

Deferred policy acquisition costs attributable to the credit life operation 
were $96,000 and $293,000 at December 31, 1996 and 1995, respectively.  These 
costs represent that portion of the cost of writing business which is deferred 
and charged against income, through other operating costs and expenses, as 
premiums are earned. 

NOTE 5  NOTES PAYABLE   

Notes payable at December 31, 1996 and 1995, are summarized as follows 
(in thousands):
                                                
                                                                
                                                           1996        1995  

Note payable (due 5/1/96, interest accrued 
  at a rate equal to NationsBank's Prime Rate 
  (8.5%) plus 2%, compounded daily)                     $    -        $ 2,000 
Interest note payable, due 5/1/96, interest at 8.5%          -            476
                               
        Notes payable                                           
                                                        $   -         $ 2,476

On May 1, 1996 the Company repaid both notes which were payable to a single 
investor of the Company.  Proceeds for repayment were obtained through the sale 
of Company stock.


NOTE 6  INCOME TAXES

The Company uses the liability method in accounting for 
income taxes. Deferred taxes are determined based on 
the estimated future tax effects of differences between 
the financial statement and tax bases of assets and 
liabilities given the provisions of the enacted tax laws.

The Company files a consolidated federal income tax 
return which includes all companies. A formal tax-
sharing agreement has been established by the 
Company with its subsidiaries.

        
A reconciliation of the differences between income 
taxes (benefit) on income (loss) before extraordinary 
items computed at the federal statutory income tax rate 
is as follows (in thousands):
 


                                            1996         1995          1994
                        
Federal income tax (benefit), 
  at statutory rates                    $   1,715     $    391      $ (6,475)
                        
Increase (decrease) in taxes due to:                    
   Tax exempt interest                        (5)          (22)           (92)
   Dividends received deduction               (2)           (4)           (82)
   Overaccrual from prior years             (187)            -              -
   Limitation of net operating loss 
    carryforward due to change in control   3,617        18,007             -
   Changes in valuation allowances:                        
   Utilization of net operating loss       (1,590)         (329)         6,695
   Reduction due to limitation of                  
    net operating loss                     (3,617)       (18,007)            -
   Other                                      (62)           (38)         (17)
                                           --------      ---------     --------
      Tax expense (benefit) from 
                operations               $    (131)    $     (2)       $     29




The (benefit) provision for income taxes on income from 
operations consists entirely of current income taxes 
resulting from alternative minimum tax and overaccruals 
of prior years' taxes. The change in deferred amounts 
has been offset by the valuation allowance.


Deferred tax liabilities and assets at December 31, 1996 
and 1995, are comprised of the following (in 
thousands):

                                    1996 Tax Effect     1995 Tax Effect

Deferred tax liabilities                
    Deferred acquisition costs        $    29             $    146
    Property and equipment                 92                   95
    Net unrealized investment gains         -                  136
    Other                                  97                    -
                
        Total deferred liabilities        218                  377

Deferred tax assets:            
    Net operating loss carryforwards   (11,056)            (15,300)
    Insurance reserves                  (3,127)             (4,115)
    Net unrealized investment losses      (182)                  -
    Bad debts                             (521)               (449)
    Other                                 (306)               (376)
                
         Total deferred tax assets     (15,192)            (20,240)
                
Valuation allowance                     14,974              19,863
                
Net deferred tax liabilities          $     -            $     -
                

The Company has determined, based on its recent earnings history, that 
a valuation allowance of $15.0 million should be maintained against the 
deferred tax asset at December 31, 1996. The Company's valuation 
allowance decreased by $4.9 million during 1996 due to 
utilization of net operating loss and due to unrealized investment losses.

The Company has unused tax operating loss carryforwards and capital loss 
carryforwards of $95.4 million for income tax purposes. However, due to a 
"change in ownership" event that occurred in January, 1995, the Company's 
use of the net operating loss carryforwards are subject to limitations in 
future years of approximately $2 million per year.  Net operating loss 
carryforwards available for use in 1997 is approximately $7.6 million due 
to the losses incurred in 1995 after the change in ownership event occurred.

The years of expiration of the tax carryforwards are as follows (in thousands):
                
                                Net Operating   
        Year of Expiration         Loss         Capital Loss
                
                1999            $        -       $   5,002
                2000                     -             825
                2004                13,986               -
                2006                20,411               -
                2007                31,931               -
                2009                19,342               -
                2010                 3,918               -
                                 $  89,588       $   5,827


NOTE 7  PROPERTY AND CASUALTY UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSE

A part of the Company's reserve for losses and LAE is 
set aside for environmental, pollution and toxic tort 
claims. These claims relate to business written by a 
previously owned West Coast operation prior to 1986. 
On June 7,1994, the Company settled a dispute relative 
to approximately 400 of these claims. Any future 
liability on those claims is limited to 50% of the direct 
loss and LAE paid.  The Company's obligation does not 
begin until the other company pays out subsequent to 
June 7,1994 a total of $ 20 million in losses and LAE 
paid, net of reinsurance.  As of December 31, 1996, 
$4.2 million of claims payments have been made (gross 
of reinsurance) since June 7, 1994.  A portion of the 
reinsurance on this business was placed with a reinsurer 
currently operating under the supervision of its state 
regulator.  Estimates of any obligations of the Company 
take into account potential recoverable amounts.

Of the remaining environmental and toxic tort claims, 
the following activity took place during 1996:

        Pending, December 31, 1995              85
        New claims advised                      16
        Claims settled                          30
        
        Pending, December 31, 1996              71

The policies corresponding to the pending claims were 
written on a direct basis and the Company has excess 
of loss reinsurance above Company retentions through 
1980 of $100,000 and $ 500,000 after that date. At 
December 31, 1996 and 1995, the claims are reserved 
as follows (in thousands):

                           1996           1995
                
        Case reserves   $  3,170      $   2,229
        IBNR               6,381          8,675
        LAE reserves       3,764          3,453

        Total           $ 13,315       $ 14,357
                                          
The above claims involve 8 Superfund sites, 5 asbestos 
or toxic tort claims, 6 underground storage tanks and 52 
miscellaneous clean-up sites. 

In estimating the ultimate liability for environmental and 
construction defect claims, management considers facts 
currently known along with the current state of the law 
and coverage litigation. Liabilities are recognized for 
known claims (including the cost of related litigation) 
when sufficient information has been developed to 
indicate the involvement of a specific insurance policy, 
and management can reasonably estimate its liability.  
Usually there are several different insurers participating 
in the defense and settlement with ultimate costs pro-
rated by either time on the risk or policy limits. In 
exposures on both known and unasserted claims, 
estimates of the liabilities are reviewed and updated 
continually. The potential development of losses is 
restricted by policy limitations.

Because only 71 claims remain open as of December 
31, 1996, the exposure to significant additional 
development is less than when the claims were less 
mature. In addition, the likelihood of new claims being 
asserted for construction liability is lessened by the 
expiration of statutes of limitations since the last policy 
expired over ten years ago.

Losses incurred are reduced by recoveries made and to 
be made from reinsurers, which also includes substantial 
amounts related to business produced as a servicing 
carrier.  Reinsurance recoveries are as follows  (in 
thousands):
        
                                    1996            1995            1994

                        
Losses incurred                 $  158,307      $  150,339      $  145,930
Loss adjustment expenses             5,583           5,379          19,429
                                ----------      ----------      ----------
                                $  163,890      $  155,718       $ 165,359
     
The following table summarizes net property and casualty losses and LAE 
incurred (in thousands):

                                            1996           1995          1994

                        
Estimated losses and LAE incurred       $  174,870     $  173,336    $  205,599
Estimated reinsurance loss                              
   recoveries on incurred losses          (163,890)      (155,718)     (165,359)
NCCI commutation (1)                             -               -       (6,138)
American Star commutation (2)                    -               -       2,852
        
                                        $   10,980     $   17,618    $  36,954
                       
(1) Until March 31,1994, the Company participated in the National Workers' 
Compensation Reinsurance Pool ("NCCI"), which is a national reinsurance fund 
for policies allocated to insurers under various states' workers' compensation 
assigned risk laws for companies that cannot otherwise obtain coverage. On 
September 30, 1994, the Company satisfied its obligation with respect to all 
outstanding and future claims associated with the Company's participation for a 
cash payment of $ 16.2 million. The redundancy in the losses and claim reserves 
as a result of its settlement of $ 6.1 million, reduced 1994 loss and LAE 
incurred.

(2) In June, 1994, the Company made a cash payment in the amount of $ 10.3 
million for a settlement of pending arbitration relating to indemnification of 
American Star for certain loss and LAE reserves. Recorded reserves amounted to 
$ 7.4 million before the settlement. This transaction increased loss and LAE 
incurred by $ 2.9 million. 

Activity in the liability for unpaid losses and LAE is summarized as follows 
(in thousands):


<TABLE>

<S>                                                  <C>           <C>          <C>
                                                        1996           1995        1994

Liability for losses and LAE at beginning of year                       
Gross liability per balance sheet                     $ 145,523     $ 166,698    $ 94,682
        Ceded reinsurance recoverable                  (84,492)      (88,731)     (76,221)
                                                      ---------      --------     --------
                Net liability                            61,031        77,967     118,461
                                                      ---------      --------     --------
Provision for losses and LAE for claims                 
        occurring in the current year                    9,863         14,243      19,997
Increase in estimated losses and LAE for                        
        claims occurring in prior years                  1,117          3,375      16,957
                                                       --------       --------    -------
                                                        10,980         17,618      36,954
                                                       --------        -------     -------
Loss and LAE payments for claims occurring during:                      
        Current year                                     8,317         11,711      13,837
        Prior years                                     16,267         22,843      63,611
                                                        -------        -------    -------
                                                        24,584         34,554      77,448
                                                        -------        -------    --------
Liability for losses and LAE at end of year:                    
        Net liability                                   47,427          61,031     77,967
        Ceded reinsurance recoverable                   84,725          84,492     88,731
                                                       --------        -------     -------
                Gross liability per balance sheet   $  132,152      $  145,523  $ 166,698
                                                      ==========       =======    ========


</TABLE>


NOTE 8  DIVIDEND RESTRICTIONS

The ability of the Company to declare and pay cash 
dividends, as well as to service any debt , is dependent 
to some degree upon the ability of South Carolina 
Insurance Company ("SCIC") to declare and pay 
dividends to SBIG. SCIC is regulated as to its payment 
of dividends by the South Carolina Insurance Holding 
Company Regulatory (the "ACT").

The Act provides that, without prior approval of the 
South Carolina Insurance Commissioner, dividends 
within any twelve-month period may not exceed the 
greater of (1) 10% of SCIC's statutory surplus as 
regards policyholders as of December 31 of the prior 
year or (2) SCIC's statutory net income, not including 
the realized gains, for the prior calendar year. 
Notwithstanding the foregoing, SCIC may not pay any 
dividend in 1997 without the prior approval of the 
Insurance Commissioner of South Carolina.


NOTE 9  STATUTORY REPORTING

The Company's insurance subsidiaries' assets, liabilities 
and results of operations have been reported on the 
basis of GAAP, which varies from statutory accounting 
practices ("SAP") prescribed or permitted by insurance 
regulatory authorities. The principal differences between 
SAP and GAAP, are that under SAP: (1) certain assets 
that are not admitted assets are eliminated from the 
balance sheet, (2) acquisition costs for policies are 
expensed as incurred, while they may be deferred and 
amortized over the estimated life of the policies under 
GAAP, (3) no provision is made for deferred income 
taxes, (4) the timing of establishing certain reserves is 
different than under GAAP, and (5) valuation allowances 
are established against investments. Each of the 
Company's insurance subsidiaries must file with 
applicable state insurance regulatory authorities an " 
Annual Statement" which reports, among other items, 
net income (loss) and shareholders' equity( called 
"surplus as regards policyholders" in property and 
casualty reporting). 

A reconciliation between GAAP net income (loss) and 
statutory net income (loss) of the property and casualty 
insurance subsidiaries is as follows for the year ended 
December 31 (in thousands): 
                                                                     
<TABLE>

<S>                                              <C>          <C>          <C>
                                                      1996          1995        1994
                        
GAAP income (loss)                                $   5,176   $   1,152    $ (19,074)
Increase (decrease) due to:                     
  Deferred policy acquisition costs                     198         606        2,943
  Salvage/subrogation recoverable and reserves          256         (41)       1,225
  Deferred reinsurance benefits                         (6)           -        (155)
Parent company GAAP-only items and other                        
  non-statutory subsidiaries                          1,252        1,820        181
Mortgage loan loss recognition                            -         (987)         -
Intercompany dividends (1995 offset by increase                         
  in statutory surplus)                               2,400      (13,202)      2,500
Adjustment to premium and loss reserves                (278)        (255)     (1,833)
Other                                                    56           99         606
Allocation of Seibels Bruce and Company expenses          -       (1,574)         -
                                                    ---------     --------    ---------
Statutory net income (loss)-(1996 as adjusted;                  
                1995 and 1994 as amended)         $   9,054    $  (12,382)   $ (13,607)
                                                  ===========  ===========   ==========

</TABLE>


A reconciliation between GAAP shareholders' equity and statutory capital and 
surplus, at December 31, is as follows (in thousands):


                                                      1996      1995      1994

                        
GAAP shareholders' equity                         $   23,791  $10,187  $   650
Increase (decrease) due to:                     
  Deferred policy acquisition costs                     (96)     (293)    (899)
  Parent company debt contributed                 
   to statutory surplus                                   -     2,400        -
  Non-statutory companies' shareholders' equity        (840)    1,436        -
  Adjustments to premium and loss reserves           (1,128)     (554)  (1,874)
  Other                                                 (95)   (2,301)     508
  Allocation of Seibels Bruce and Company expenses        -    (1,574)       -
  
  Statutory surplus (1996 as adjusted;                   
    1995 and 1994 as amended)                     $   21,632  $ 9,301   $(1,615)
                                              


Net income and shareholders' equity of the credit life insurance subsidiary as 
determined in accordance with statutory accounting practices are as follows for 
the year ended December 31, is as follows (in thousands):
                                                               
                                            1996         1995       1994

Net income                                $   460     $    276    $    750
Shareholders' equity                    
   ("surplus as regards policyholders")   $ 4,769     $  4,334    $  4,036





NOTE 10 BENEFIT PLANS AND OPTIONS

The SCIC Employees' Profit Sharing and Saving Plan 
contains both profit-sharing and 401(k) plan elements.

The profit-sharing element of the plan covers all full-time 
employees. There were no contributions to this element 
of the plan during the last four years.  The profit-sharing 
account held 157,979 and 214,587 shares of Company 
stock at December 31, 1996 and 1995, respectively.               
 
Under the 401(k) element of the plan, employees may 
elect to have a portion of their salary withheld on a pre-
tax basis for investment in the plan, subject to 
limitations imposed by IRS regulations. From January 1, 
1993 through June 30, 1994, the employer matched 
25% of the employee contributions, limited to a 
maximum of 1.5% of the employee's eligible 
compensation. From July 1, 1994 through June 
30,1995, the employer resumed matching 50% of the 
employee contributions, limited to a maximum of 3% of 
the employee's eligible compensation. The employer 
discontinued matching effective July 1, 1995. The 
employer matched portion is invested in accordance 
with the investment options selected by the participant. 
The employer contribution to the plan on behalf of 
participating employees was  $87,000 in 1995 and  
$270,000 in 1994.  There was no contribution in 1996.

The Company currently has three plans under which  
stock options, incentive stock and restricted stock may 
be granted to employees of the Company, non-employee 
directors of the Company, consultants and active 
independent agents representing the Company. All three 
plans were approved by the shareholders at a special 
meeting held on June 14, 1996.  Options granted under 
all  plans except the Directors' plan expire 5 years from 
the date of grant.  Options granted under the Directors' 
plan expire 10 years from the date of grant.

The 1996 Stock Option Plan (the "1996 Plan") for 
Employees supersedes the 1987 Stock Option Plan (the 
"1987 Plan") and became effective November 1, 1995. 
The 1996 Plan reserves 5 million shares of Company 
stock which may be issued as stock options, incentive 
stock and restricted stock to employees and consultants 
of the Company. The following table shows option 
activity under the 1987 and 1996 plans for the three 
years.

                                            1996        1995       1994
                        
Shares under options outstanding,  
   beginning of year                      861,175       51,150     64,175
Granted under 1987 Plan                         -       300,000         -
Granted under 1996 Plan                 1,473,800       555,000         -
Exercised during year                           -      (20,000)         -
Canceled or expired during year            (6,300)     (24,975)   (13,025)
        
    Shares under options outstanding, 
          end of year                    2,328,675      861,175    51,150
                        
Shares under options exercisable, 
          end of year                      858,125      561,175    51,150
                        



All grants made under the Plan have exercise prices no 
lower than the market price at the date of grant.  At 
December 31, 1996, 2,558,209 shares of the 
Company's stock have been reserved for future grant.  
The following table summarizes options outstanding and 
exercisable by price range as of December 31, 1996:

                              
                   Options outstanding                Options exercisable 
                               Weighted average                Weighted average
Range of price  Outstanding     exercise price    Exercisable    exercise price
                                
$0.00 - $1.50    340,000        $ 0.9163            336,250       $ 0.9098
$1.51 - $2.50  1,433,050          2.2281            502,000         1.9752
$2.51 - $4.00   284,000           3.8713                  -              -
$4.51 - $5.50   251,750           5.5000                  -              -
$11.25            9,225          11.2500              9,225        11.2500
$10.625         10,650           10.6250             10,650        10.6250
                
                2,328,675                           858,125 

Also included in the 1996 Plan are provisions for the 
granting of incentive stock and restricted stock.  While 
there were no grants of incentive stock during 1996 or 
1995, 113,116 shares of restricted stock were granted 
in 1996.  Of that amount, 8,702 shares were issued in 
1996 and 104,414 shares are to be issued in 1997 
when the restrictions lapse.

The 1995 Stock Option Plan for Non-employee Directors 
became effective June 15, 1995. Under the Plan, all 
non-employee directors are automatically granted 5,000 
options to purchase Company stock on an annual basis 
every June. The exercise price will be the market value 
on the date of grant. On June 15, 1995 and 1996, 
35,000 options were granted at an exercise price of $ 
0.875 and $2.625, respectively.

The 1995 Stock Option Plan for Independent Agents 
became effective December 21, 1995.  The Plan 
authorizes a total grant of 500,000 options.  Activity 
may be summarized as follows:

                                             1996    1995    1994
                        
Shares under options outstanding, 
     beginning of year                      68,000     -       -
Granted during year                        160,500  68,000     -
Exercised during year                      (6,000)     -       -
Canceled or expired during year            (6,000)     -       -
Shares under options outstanding, 
      end of year                          216,500  68,000     -
                        
During 1996 and 1995, a total of 228,500 options were 
granted at an average exercise price of $2.10 and 
$1.50, respectively.  At December 31, 1996, 271,500 
shares of Company's stock have been reserved for 
future grant.  



The Company has adopted the disclosure-only provisions 
of Statement of Financial Accounting Standards No. 
123, "Accounting for Stock-Based Compensation."  
Accordingly, no compensation cost has been recognized 
for the stock option plans.  Had compensation costs for 
the Company's three stock option plans been 
determined based on the fair value at the grant date for 
awards in 1996 and 1995 consistent with the provisions 
of SFAS No. 123, the Company's net income and 
earnings per share would have been reduced to the pro 
forma amounts indicated below (in thousands except per 
share amounts).

                                                1996          1995
                
Net income - as reported                        5,176         1,152
Net income - pro forma                          4,026           597
Earnings per share - as reported                0.22           0.07
Earnings per share - pro forma                  0.18           0.04

The fair value of each option granted is estimated on the date of grant using
the Black-Scholes option-pricing model with the following assumptions:

                                Employee Plan   Directors Plan  Agents Plan
                        
Expected Dividend Yield                 0               0               0
Expected Stock Price Volatility         84.92%          84.92%       84.92%
Risk-free Interest Rate                 5.92%           6.47%           5.61%
Expected Life of Options                5 years         10 years      4.2 years

The Company and its subsidiaries currently provide 
certain health care and life insurance benefits for retired 
employees. The projected future cost of providing 
postretirement benefits, such as health care and life 
insurance, is being recognized as an expense as 
employees render service. The cumulative affect of 
accruing said expenses versus expensing the benefits 
when paid is being recorded as a charge against income 
on a prospective basis as part of the future annual 
benefit cost.  The postretirement benefit expense was 
approximately $75,000 in 1996, $79,000 in 1995, and 
$91,000 in 1994. The following table presents the 
reconciliation of the obligation at December 31, 1996 
and 1995 (in thousands):

                                                           1996       1995

Accumulated postretirement benefit obligation:                  
        Active employees                                $   (37)    $  (71)
        Current retirees                                   (511)      (522)
                Total                                      (548)      (593)
Fair value of assets                                           -          -
Accumulated postretirement benefit obligation           
        in excess of fair value of assets                  (548)       (593)
Unrecognized transition obligation                          502         593   
Unrecognized net gain                                      (53)        (102)
                
                Accrued postretirement benefit cost     $   99      $   102
                                                        



Net periodic postretirement benefit cost includes the 
following components for 1996, 1995, and 1994 (in 
thousands):
        
                                              1996    1995    1994
                        
Service cost                                $   3    $   4    $  4
Interest cost                                  41       43      52
Amortization of transition obligation          31       35      35
Amortization of  net gains                      0       (3)      -
     
     Net periodic postretirement benefits   $  75    $  79    $ 91
                                                
The weighted average annual assumed rate of increase 
in the per capita cost of covered benefits (i.e., health 
care cost trend rate) was 9% for 1996 and 1995, and 
12% for 1994 is assumed to decrease to a 5.5% 
ultimate trend (5.5% in 1995; 7% in 1994) with a 
duration to ultimate trend of 6 years (6 years in 1995 
and 9 years in 1994). The health care cost trend rate 
assumption has an effect on the amounts reported. For 
example, increasing the assumed health care cost trend 
rates by one percentage point in each year would 
increase the postretirement benefit obligation as of 
December 31, 1996 by $9,000.

The weighted-average discount rate used in determining 
the accumulated postretirement benefit obligation was 
7.75% for 1996,  7.25% for 1995 and 7.5% for 
December 31, 1994.

During the first quarter of 1996, the Company issued to 
a group of investors stock options expiring December 
31, 2000 to acquire 1,635,000 shares of unregistered 
Company Common Stock at the greater of the price of 
$2.50 per share or book value at the date of exercise.

In the third quarter of 1996, the Company issued to a 
different group of investors stock options to acquire 
3,125,000 shares of unregistered Company Common 
Stock at the greater of the price of $1.50 per share or 
the book value at the date of exercise, expiring 
December 31, 1998 and 3,125,000 shares at the 
greater of the price of $2.00 or the book value at date 
of exercise, expiring December 31, 2000.

The Company had 185,858 warrants outstanding at an 
exercise price of $0.01 per share at December 31, 1996 
and 1995.


NOTE 11  COMPANY'S OPERATIONS IN DIFFERENT BUSINESS SEGMENTS

Founded in 1869, the Company performs servicing 
carrier activities for state and federal insurance facilities. 
Managing general agency services are also performed 
for a non-affiliated insurance company. Insurance 
products are offered through independent agents, 
primarily in the southeastern states.  During 1993 and 
1994, the Company began to withdraw from selected 
states and selected risk retained products, and changed 
its emphasis to fee income generating activities. 
Effective in mid-1995, the Company voluntarily 
suspended underwriting new and renewal business for 
which the risks were not reinsured to an unaffiliated 
party.  After both the Company and its regulators 
became satisfied that the capital level was adequate to 
undertake such risk, underwriting on a risk retention 
basis was resumed at very modest levels in mid 1996.

In February, 1994, substantially all of the assets of the 
former premium financing subsidiary, Premium Service 
Corporation, were sold, and a new company, Policy 
Finance Company, ("PFC") was formed to handle the 
administration of the assets retained. The pre-tax 
income (loss) of PFC was $(4,000) in 1996; $74,000 in 
1995 and $ 538,000 in 1994. The Company has no 
plans to continue its own premium financing activity.  
Effective January 1, 1995, Forest Lake Travel Service 
(FLT), a subsidiary travel agency, was sold. FLT's pre-
tax income was $95,000 in 1994 and $ 420,000 in 
1993.

The following sets forth certain information with respect 
to the Company's operations in different business 
segments for the year ended December 31, (in thousands):
        
<TABLE>

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

                                                          1996          1995         1994
Revenue:                        
  Property and casualty insurance segments              $   7,186       $   10,384     $14,718
  Commission and service activities segment                45,585          49,572      60,669
  Net investment income and other interest income           3,516           4,038       5,690
  Realized gains (losses) on investments                    (179)           150             (5,793)
      Total for property & casualty insurance segments     56,108           64,144          75,284
                        
Other business revenue                                      1,085           2,039           4,476
                        
                Total revenue                           $  57,193  $       66,183  $       79,760
                        
                        
Operating profit (loss):                        
  Property and casualty insurance segments               $     25      $   (6,719)       $(27,840)
  Commission and service activities segment                 1,595           5,641          10,109
  Net investment income                                     3,516           4,038           5,690
  Realized gains (losses) on investments                     (179)           150             (5,793)
       Subtotal                                             4,957           3,110           (17,834)
                        
Other business segments                                       441             (47)            141
                        
Operating income (loss)                                     5,398           3,063           (17,693)
  General corporate expenses, net of miscellaneous                        
   income and expense                                        (179)           (1,605)         (1,031)
  Interest expense                                           (174)           (308)           (321)
                        
Consolidated income (loss) before income taxes       $       5,045   $       1,150        $(19,045)
                                

</TABLE>




Operating income (loss) represents revenue less related 
operating expenses. Net investment income is that 
related to, but not individually identifiable with, the 
various property and casualty insurance underwriting 
and commission and service activities business 
segments.

Identifiable assets by business segments or combined 
segments represent assets directly identified with those 
operations and an allocable share of jointly used assets.   
For the year ended December 31, (in thousands):

                                                        1996    1995    1994
Identifiable Assets                     
Property and casualty insurance underwriting 
 segment,including related investment activity   $  55,427  $ 82,493  $117,761
Commission and service activities segment          158,237   134,598   127,628
Other business segments                              5,187     5,697     8,449
General corporate assets                             1,621     1,217     2,097
                        
                Total assets                     $ 220,472  $ 224,005 $ 255,935
                                                        
In 1996, depreciation and amortization charges for the 
various property and casualty insurance underwriting 
and commission and service activities segments, 
combined, were $1.0 million ($0.9 million in 1995 and $ 
0.8 million in 1994.) These amounts exclude policy 
acquisition costs of $1.6 million in 1996, ($3.2 million 
in 1995 and $5.5 million in 1994).

Costs of additions to property and equipment for the 
property and casualty insurance underwriting and 
commission and service activities segments, combined, 
amounted to $0.8 million in 1996, $0.1 million in 1995 
and $ 2.4 million in 1994. Additions in 1996 were 
primarily for data processing needs and enhancements.  
The majority of the additions in 1994 were due to 
purchases made to begin the conversion to bring the 
Company's data processing in-house.


NOTE 12  REINSURANCE

The Company's property and casualty insurance run-off 
operations are involved in several types of  reinsurance 
arrangements. Ceding reinsurance programs include 
quota share, pro-rata surplus and excess of loss. In its 
servicing carrier operation, premiums are ceded entirely 
to the applicable state's reinsurance facility.

Reinsurance contracts do not relieve the Company of its 
obligations to policyholders. Failure of reinsurers to 
honor their obligations could result in losses to the 
Company; consequently, allowances are established for 
amounts deemed uncollectable. The Company evaluates 
the financial condition of its reinsurers and monitors 
concentrations of credit risk arising from similar 
geographic regions, activities, or economic 
characteristics of the reinsures to minimize its exposure 
to significant losses from reinsurers insolvency. 
Reinsuring companies are obligated for the following 
amounts for unearned premiums, unpaid losses and LAE, 
and paid losses and LAE (in thousands):
                                1996             1995
                                                       
Unearned premiums       $       46,118  $       43,469
Unpaid losses and LAE           84,725          84,492
Paid losses and LAE             28,218          27,423

Five reinsurers comprise a significant portion of the 
Company's reinsurance recoverable on paid and unpaid 
losses and loss adjustment expense, as well as prepaid 
reinsurance at December 31, 1996.  The reinsurers and 
related balances are as follows (in thousands):    

                                           Reinsurance          Prepaid
                                           Recoverable        Reinsurance
                                                        
South Carolina Reinsurance Facility        $    70,770          $   24,195
National Flood Program                          26,325              19,005
Swiss Reinsurance Corp                          7,027                    -
North Carolina Reinsurance Facility             5,104                1,036
Kentucky Insurance Placement Facility           2,209                1,745
All others                                      1,508                  137
        
        Totals                             $  112,943           $   46,118

The Company believes that the balances from the 
various Facilities are fully collectable due to the 
governmental agency's ability to assess policyholders 
and member companies for deficiencies. The remaining 
recoverables due from nonaffiliated reinsurance 
companies have also been deemed fully collectable by 
the Company.

With respect to credit concentrations, most of the 
Company's business activity is with agents and 
policyholders located within the five operating states. 
The primary reinsurance recoverables are from the state 
and federal servicing carrier activities. There are 
otherwise no material credit concentrations related to 
premiums receivable, agents' balances, and premium 
notes receivable.


NOTE 13  COMMITMENTS AND CONTINGENCIES

(a)     A contingent liability exists with respect to 
        reinsurance placed with other companies.
        (see Note 12)

(b)     Due to the nature of their business, certain 
        subsidiaries are parties to various other legal 
        proceedings, which are considered routine 
        litigation incidental to the insurance business.        
        

NOTE 14  RELATED PARTY TRANSACTIONS

A non-employee Director of the Company is also a 
member of the Board of Directors of Policy Management 
Systems Corporation ("PMSC"), which provided services 
to the Company prior to September  30, 1996. The 
Company paid data processing charges of $0.9 million in 
1996 ($1.8 million in 1995 and $3.4 million in 1994.)

A former non-employee Director of the Company was an 
employee of Prudential Securities, Inc. ("PSI") through 
mid-1995. From 1994 through mid 1995, PSI acted as 
investment manager for the Company and for its 
retirement plan.  The amount of fees earned by PSI on 
trading activity by the Company cannot readily be 
determined, but the amount paid directly to PSI during 
1995 and 1994 was not material. The former Director is 
no longer an employee of PSI, and PSI's services have 
since been terminated.

NOTE 15  SUBSEQUENT EVENTS

On February 27, 1997, the Board of Directors voted to 
recommend for approval by the shareholders a reverse 
stock split.  If approved by the shareholders at the 
Annual Meeting of Shareholders on April 9, 1997, one 
share of common stock will be exchanged for each four 
shares of common stock currently outstanding.


SUPPLEMENTARY DATA
QUARTERLY FINANCIAL INFORMATION (unaudited)
(Thousands of dollars, except in share amounts) 

The following is a summary of unaudited quarterly information 
for the years ended December 31, 1996 and 1995:

<TABLE>


<S>                                     <C>          <C>             <C>             <C>          
1996                                     1st Quarter     2nd Quarter     3rd Quarter     4th Quarter
                                
Commission & service income             $    10,096  $       11,254  $       11,522  $       12,713
Property & casualty premiums earned           2,999           826             2,280   1,081
Credit life premiums                            125             100             80              173
Net investment income & other interest                          
 income                                         778             657             1,239           1,133
Realized gains (losses) on investments          194             -               2             (210)
Net income                              $       632     $       1,217   $       1,497   $       1,830
  Per share and common equivalent share $      0.04    $       0.06    $       0.08    $0.05
                                
Pro forma SFAS No. 128 basic earnings                           
        per share (Note 1):             $      0.04    $       0.07    $       0.08    $       0.07




</TABLE>


Commission and service income continued its trend of 
decreasing every quarter until the second quarter of 1996.   
Since that time, this income has increased due to increased 
claims activity on the Flood program related to two storms that 
hit the East Coast in the second half of 1996.  Premiums earned 
continued to be minimal during 1996 due to the Company 
having very small amounts of business retained on its books.  
Net income for the year ended December 31, 1996 has 
increased, when compared to the year ended December 31, 
1995, due to the Company's constant monitoring of loss 
development on business written in prior years and monitoring 
of expenses across all profit centers in which the Company 
operates.  The figures reported above reflect a $500,000 
downward revision from previously reported unaudited revenues 
and net income for the year.  Each of the four quarters of 1996 
were adjusted down by $125,000, aggregating the $500,000 
annual adjustment.



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

1995                                       1st Quarter     2nd Quarter     3rd Quarter     4th Quarter
                                
Commission & service income                $    13,023     $   12,529      $  12,484  $       11,536
Property & casualty premiums earned              3,307           2,206         2,997   1,874
Credit life premiums                               194             221           197             278
Net investment income & other interest           1,174           1,177         1,137   842
 income                                           
Realized gains (losses) on investments              65              (29)         -       128
Net income (loss)                          $    (2,009)    $    250        $   1,284   $       1,627
  Per share and common equivalent share    $    (0.13)     $   0.01        $    0.08    $0.11




</TABLE>


Property and casualty premiums earned continue to decrease as 
a result of the Company suspending writing of retained "risk" 
business.   However, losses incurred on this business have 
stabilized due to the adequacy of reserves.  The net loss in the 
first quarter is due to management setting aside additional 
reserves for future development.  The negative effect on net 
income due to this run-off business in the remaining quarters 
has been insignificant.  Additionally, while the Company's 
commission and service income has decreased due to lower 
commission rates and volume, ongoing cost reductions have 
mitigated the effect to net income.
                                         
ITEM 9.  Changes In and Disagreements With Accountants On Accounting 
         And Financial Disclosure

           Inapplicable.
 
 
                        PART III

ITEM 10.  Directors, Executive Officers, Promoters, and Control Persons 
          of the Registrant       
        
Information other than the listing of executive officers of the 
Company (which is presented in Part I of this document) is 
contained under the heading "Election of Directors" in the proxy 
statement relating to the annual meeting of shareholders to be 
held April 9, 1997 and is incorporated herein by reference since 
the Company files such definitive proxy materials pursuant to 
Regulation 14A on or prior to April 30, 1997. 

ITEM 11.  Executive Compensation

The information contained under the headings "Compensation 
of Executive officers", Directors' Compensation," and 
"Compensation plans and Arrangements in the proxy statement 
relating to the annual meeting of shareholders to be held April 
9, 1997 is incorporated herein by reference since the Company 
files such definitive proxy materials pursuant to Regulation 14A 
on or prior to April 30, 1997.

ITEM 12.  Security Ownership of Certain Beneficial Owners and 
          Management

The information contained under the headings "Principal 
Shareholders" and "Election of Directors" in the proxy 
statement relating to the annual meeting of shareholders to be 
held April 9, 1997 is incorporated herein by reference since the 
Company files such definitive proxy materials pursuant to 
Regulation 14A on or prior to April 30, 1997.

ITEM 13.  Certain Relationships and Related Transactions

The information contained under the heading "Certain 
Transactions" in the proxy statement relating to the annual 
meeting of shareholders to be held April 9, 1997 is incorporated 
herein by reference since the Company files such definitive 
proxy materials pursuant to Regulation 14A on or prior to April 
30, 1997.




                        PART IV

ITEM 14 EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a) (1) and (2)- List of Financial Statements and Financial 
Statements Schedules

The following consolidated financial statements of The Seibels 
Bruce Group, Inc. and subsidiaries are included in Item 8:

  Report of Independent Public Accountants- Arthur Andersen LLP
  Consolidated balance sheets- December 31, 1996 and December 31, 1995.
  Consolidated statements of operations-Years ended December 
   31, 1996;  December 31, 1995; and December 31, 1994; and 
  Consolidated Statement of Cash flows-Years ended December 
   31, 1996, December 31,  1995; and December 31, 1994. 

The notes to the consolidated financial statements included in 
Item 8 pertain both to the consolidated financial statements 
listed above and the condensed financial information of the 
registrant included in Schedule 3 under Item 14.

The following financial statement schedules are included in Item 
14(d):

  Schedule I- Summary of Investments Other than Investments in Related Parties
  Schedule II- Condensed Financial Information of Registrant
  Schedule III- Supplementary Insurance Information
  Schedule IV- Reinsurance
  Schedule V- Valuation and Qualifying Accounts
  Schedule VI- Supplemental Information Concerning Property/ Casualty Insurance 
               Operations

All other schedules to the consolidated financial statements 
required by Article 7 of Regulation S-X  are not required  under 
the related instructions or are inapplicable and therefore have 
been omitted.

(a) (3) List of Exhibits
        
3.1     Articles of Incorporation of the Registrant, as amended, 
        incorporated herein by reference to the Annual Report, 
        Exhibit (3)(1)-1, for the year ended December 31, 1989.  
        Articles of Amendments dated June 18, 1994, June 13, 
        1995 and June 14, 1996.

3.2     By-Laws of the Registrant, as amended February 25, 
        1992, incorporated herein by reference to the Annual 
        Report on Form 10-K, Exhibit (3)(1)-1, for the year 
        ended December 31, 1991.  Amendments of By-Laws 
        dated June 18, 1994, October 14, 1994 and June 13, 1995.

10.1    Stock Purchase Agreement between registrant, 
        Abdullatif Ali Alissa Est. and Saad A. Alissa, dated  
        December 22,1993, incorporated herein by reference to 
        the Annual Report on Form 10-K, Exhibit (2)(1)-1, for 
        the year ended December 31, 1993.

10.2    Stock Purchase Agreement, dated July 30, 993, by and 
        between National Teachers Life Insurance Company and 
        South Carolina Insurance Company, incorporated herein 
        by reference to the Annual Report on Form 10-K, Exhibit 
        (10)(10)-5, for the year ended December 31, 1993.

10.3    The Seibels Bruce Group, Inc., Common Stock Warrant, 
        dated February 4, 1993, incorporated herein by 
        reference to the Annual Report on Form 10-K, Exhibit 
        (10)(9)-3, for the year ended December 31, 1992.

10.4    The Seibels, Bruce & Company Employees' Profit 
        Sharing and Savings Plan, dated June 30, 1992, as 
        amended January 4, 1993, incorporated herein by 
        reference to the Annual  Report on Form l0-K(10)(9)-9, 
        for the year ended December 31, 1992.

10.5    Stock Purchase Agreement, dated January 29, 1996, by 
        and between the Registrant and Charles H. Powers and 
        Walker S. Powers, and amendment thereto, incorporated 
        herein by reference to submission DEF 14-A, filing date 
        May 10, 1996, file number 000-08804, accession 
        number 0001005150-96-000127, accepted May 9, 1996.

10.6    Stock Option Agreement, dated January 30, 1996, by 
        and between the Registrant and  Charles H. Powers, 
        Walker S. Powers and Rex and Jane Huggins, 
        incorporated herein by reference to submission DEF 14-
        A, filing date May 10, 1996, file number 000-08804, 
        accession number 0001005150-96-000127, accepted 
        May 9, 1996.

10.7    Stock Purchase Agreement, dated March 28, 1996, by 
        and between the Registrant and Fred C. Avent, Frank H. 
        Avent and Pepsico of Florence, incorporated herein by 
        reference to submission Form S-2, filing date October 
        15, 1996, file number 333-14123, accession number 
        0000276380-96-00017, accepted October 15, 1996.

10.8    Stock Purchase Agreement, dated March 28, 1996, by 
        and between the Registrant and Junius DeLeon Finklea, 
        Joseph K. Newsom, Sr., Mark J. Ross, Larry M. Brice, 
        J. Howard Stokes, Winston Y. Godwin, IRA and Peter 
        D. and Vera C. Hyman, incorporated herein by reference 
        to submission Form S-2, filing date October 15, 1996, 
        file number 333-14123, accession number 
        0000276380-96-00017, accepted October 15, 1996.

10.9    The Seibels Bruce Group, Inc. 1996 Stock Option Plan 
        for Employees, dated November 1, 1995, incorporated 
        herein by reference to submission DEF 14-A, filing date 
        May 10, 1996, file number 000-08804, accession 
        number 0001005150-96-000127, accepted May 9, 1996.

10.10   The Seibels Bruce Group, Inc. 1995 Stock Option Plan 
        for Independent Agents, dated June 14, 1996, 
        incorporated herein by reference to submission DEF 14-
        A, filing date May 10, 1996, file number 000-08804, 
        accession number 0001005150-96-000127, accepted 
        May 9, 1996.

10.11   The Seibels Bruce Group, Inc. 1995 Stock Option Plan 
        for Non-Employee Directors, dated June 14, 1996, 
        incorporated herein by reference to submission DEF 14-
        A, filing date May 10, 1996, file number 000-08804, 
        accession number 0001005150-96-000127, accepted 
        May 9, 1996.

10.12   Agreement, dated October 1, 1994, by and between 
        Catawba Insurance Company and the South Carolina 
        Reinsurance Facility.

10.13   Managing General Agent Agreement, dated January 1, 
        1996, by and between Seibels Bruce & Company and 
        Agency Specialty of Kentucky, Inc. and Generali - US 
        Branch.  (Portions of this exhibit have been omitted pursuant
        to a request for confidential treatment.)

10.14   Arrangement, dated October 1, 1996, by and between 
        Catawba Insurance Company, Kentucky Insurance 
        Company and The United States of America Federal 
        Emergency Management Agency.

11.1    Statement re Computation of Per Share Earnings for
        the year ended December 31, 1996.
                                         

21.1    Subsidiaries of the Registrant.

23.1    Consent of Arthur Andersen LLP.

27.1    Financial Data Schedule (electronic filing only).

28.1    Schedule P of Annual Report on Form 10-K/405 for the 
        fiscal year ended December 31, 1996, incorporated 
        herein by reference to Form SE, dated March 17, 1997. 


 (b) Reports on Form 8-K

No reports on Form 8-K have been filed during the last quarter 
of the period covered by this report.

(c) and (d) Exhibits and Financial Statement Schedules

The applicable exhibits and financial statement schedules are 
included immediately after the signature pages.

For the purpose of complying with the amendments to the rules 
governing Form S-8 (effective July 13, 1990) under the 
Securities Act of 1933, the undersigned registrant hereby 
undertakes as follows, which undertaking shall be incorporated 
by reference into registrant's Registration Statements on Form 
S-8 Numbers 333-14135, 333-15457, 2-70057, 2-83595, 33-
34973, 33-43618, 33-43601, and 2-48782, as amended.

Insofar as indemnification for liabilities arising under the 
Securities Act of 1933 may be permitted to directors, officers 
and controlling persons of the registrant pursuant to the 
foregoing provisions, or otherwise, the registrant has been 
advised that in the opinion of the Securities and Exchange 
Commission such indemnification is against public policy as 
expressed in the Securities Act of 1933 and is, therefore, 
unenforceable.

In the event that a claim for indemnification against such 
liabilities (other than the payment by the registrant of expenses 
incurred or paid by a director, officer or controlling person of the 
registrant in the successful defense of any action, suit or 
proceeding) is asserted by such director, officer or controlling 
person in connection with the securities being registered, the 
registrant will, unless in the opinion of its counsel the matter 
has been settled by controlling precedent, submit to a court of 
appropriate jurisdiction the question whether such 
indemnification by it is against public policy as expressed in the 
Act and will be governed by the final adjudication of such issue.


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
 Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the
 undersigned, thereunto duly 
authorized.


The Seibels Bruce Group, Inc.
(Registrant)
                        
Date: March 19, 1997         By  /s/ John C. West
                                  Chairman of the Board

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


Date: March 19, 1997         By /s/                                          
                                 John C. West
                                 Chairman of the Board and Director


Date: March 19, 1997        By /s/                                          
                                 Ernst N. Csiszar
                                 President and Director


Date: March 19, 1997         By /s/                                          
                                 John A. Weitzel
                                 Chief Financial Officer and Director


Date:  March 19, 1997        By /s/                                          
                                  Fred H. Avent
                                  Director


Date: March 19, 1997         By /s/                                           
                                 William M. Barilka
                                 Director


Date: March 19, 1997         By /s/                                          
                                 Fred S. Clark
                                 Director


Date: March 19, 1997         By /s/                                          
                                 Albert H. Cox, Jr.
                                 Director


Date: March 19, 1997          By /s/                                          
                                 Claude E. McCain
                                 Director



Date: March 19, 1997          By /s/                                         
                                 Kenneth W. Pavia                        
                                 Director


Date: March 19, 1997          By /s/                                   
                                  Charles H. Powers
                                  Director


Date: March 19, 1997          By /s/                                      
                                  Walker S. Powers
                                  Director


Date: March 19, 1997          By /s/                                          
                                  John P. Seibels
                                  Director


Date: March 19, 1997          By /s/                                          
                                  George R.P. Walker, Jr.
                                  Director


Date: March 19, 1997          By /s/                                          
                                   Mary M. Gardner
                                   Controller (Principal Accounting Officer)





                        THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES 
                        SCHEDULE I- SUMMARY OF INVESTMENTS OTHER THAN 
                                INVESTMENTS IN RELATED PARTIES
                                        As of December 31,
                                          (in thousands)
                                                      
                                                      
                                                                    Balance
                                                        Market       Sheet
Type of Investment                            Cost       Value        Value
------------------                                                           

Debt securities(1)
------------------                        

   Bonds and Notes:                        

     U.S. Government and government 
         agencies and authorities         $   40,601    $   40,102   $  40,102
                                
     States, municipalities and 
         political subdivisions                  108           115          115
                                             --------       -------     -------
          Total debt securities                40,709       40,217       40,217

Equity securities
                                        
                        
   Common stocks:                  
                        
     Banks, trusts and insurance 
         companies                                 17           17            17
                        
   Non redeemable preferred stocks:                        
                        
     Public utilities                              17           18            18

                                            ---------        -------     -------
          Total equity securities                  34            35          35
                                            ----------       --------    -------
   Other long-term investments                     73            28           28
                        
   Cash and short-term investments              2,664           2,664      2,664
                        
                  
           Total cash and investments      $   43,480       $  42,944   $ 42,944

(1) These debt securities are classified as debt securities available for sale 
and are valued at market.



            SCHEDULE II- CONDENSED FINANCIAL INFORMATION OF REGISTRANT 
                THE SEIBELS BRUCE GROUP, INC. (PARENT COMPANY)
                        BALANCE SHEETS
                        As of December 31
                (Dollars shown in thousands)
                                                                 
                                                      1996            1995
                
ASSETS          
   Cash                                         $       231       $       37 
   Investment in subsidiary companies*                23,409          12,967
   Income tax recoverable from subsidiaries                5              82
   Intercompany recoverables*                            216               -
        Total assets                            $     23,861       $   13,086
LIABILITIES             
   Notes payable                                $         -        $    2,476
   Other liabilities (including $172 payable               
     to affiliate in 1995)*                               70              423
        
        Total liabilities                                 70              2,899
                
SHAREHOLDERS' EQUITY            
   Special stock, no par value authorized 
     5 million shares  none issued and outstanding             -               -
   Common stock, $1 par value, authorized 50 
     million shares, issued and outstanding 
     24,672,388 shares (16,772,686 shares in 1995)      24,672          16,773
                
   Additional paid-in-capital                           35,546          34,080
                
    Unrealized (loss) gain on investments owned 
      by subsidiaries                                   (536)           401
    Accumulated deficit                               (35,891)        ( 41,067)
                
        Total shareholders' equity                      23,791          10,187
        
        Total liabilities and shareholders' equity   $  23,861  $       13,086

* Eliminated in consolidation.

The accompanying notes are an integral part of these financial statements. 



      SCHEDULE II (CONTINUED)- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                  THE SEIBELS BRUCE GROUP, INC. (PARENT COMPANY)
                          STATEMENTS OF INCOME /LOSS
                            As of December 31,
                (Dollars shown in thousands, except per share amounts)

                                                 1996    1995    1994
                        
Total revenue                   $       191     $       650     $       8
                        
Expenses:                       
     Interest                            90              199             111
     Other                               17              851             111
          
          Total expenses                107             1,050           222
                        
Income (loss) before income taxes 
  and  equity in undistributed loss 
  of subsidiary                            84              (400)           (222)
                        
Tax benefit                                 (1)             (18)            (41)
                        
Income (loss) before equity in 
  undistributed loss of subsidiary          85             (382)           (181)
                        
Equity in undistributed income (loss) 
  of subsidiary companies*                  5,091           1,534      (18,893)
                        
Net Income (loss)                   $       5,176   $       1,152   $   (19,074)
                        
Per share & common equivalent share:                    
     Net income (loss)                 $       0.22    $       0.07    $(1.72)
                                
Pro forma SFAS No. 128 basic earnings                   
    per share (Note 1):                     
        Net income (loss)                 $       0.26    $       0.07   $(1.72
                        
                        
*       Eliminated in consolidation                     
                        
The accompanying notes are an integral part of these financial statements.  
                        
<TABLE>

  SCHEDULE II (CONTINUED)- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                THE SEIBELS BRUCE GROUP, INC. (PARENT COMPANY)
                STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                        As of December 31,
                        (Dollars shown in thousands)
<S>                                    <C>             <C>             <C>   
                                        1996           1995            1994

Common stock outstanding:                       
  Beginning of year                     $   16,773   $  14,501       $  7,501
  Stock issued in connection with 
    rights offering                             -        2,217           -
  Stock issued to benefit plans, 
    agents and others                           15          55           -
  Stock issued in exchange for 
    cancellation of note payable                 -          -           7,000
  Stock issued-capital contribution          7,884          -               -
                        
        End of year                     $   24,672    $  16,773      $  14,501
                        
Additional paid-in capital:                     
  Beginning of year                     $   34,080     $ 30,983      $  27,983
  Stock issued in connection with 
    rights offering                          -            3,104           -
  Stock issued to benefit plans, 
    agents and others                        10           (7)             -
  Stock issued in exchange for 
    cancellation of note payable             -             -             3,000
  Stock issued - capital contribution      1,456           -               -
                        
        End of year                     $  35,546     $ 34,080       $  30,983
                        
Unrealized gain (loss) on securities:                   
  Beginning of year                     $     401     $ (2,615)      $  2,404
  Change in unrealized gains 
    on securities                            (937)        3,016        (5,019)
                        
        End of year                     $    (536)    $     401      $ (2,615)
                        
Accumulated deficit:                    
  Beginning of year                     $  (41,067)   $  (42,219)    $ (23,145)
  Net income (loss)                         5,176           1,152     (19,074)
                        
        End of year                     $  (35,891)   $   (41,067)   $ (42,219)
                                
           Total shareholders' equity   $  23,791     $    10,187    $   650
                        
            
The accompany notes are an integral part of these consolidated statement
</TABLE>
<TABLE>
    SCHEDULE II (CONTINUED)- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                THE SEIBELS BRUCE GROUP, INC. (PARENT COMPANY)
                        STATEMENTS OF CASH FLOWS
                        As of December 31,
                        (Dollars shown in thousands)
<S>                                          <C>       <C>         <C>
                                                1996       1995         1994
Cash flows from operating activities:                   
   Net income (loss)                         $   5,176   $   1,152   $ (19,074)
   Adjustments to reconcile net loss 
    to net cash provided by (used in) 
    operating activities:                        
       Equity in undistributed income (loss) 
        of subsidiary company                   (5,091)      (1,534)    18,893
       Changes in assets and liabilities:                      
         Income taxes payable to subsidiaries        -          (41)     (41)
         Other (net)                              (476)          513             223     
                        
                 Total adjustments               (5,567)      (1,062)         19,075

Net cash provided by (used in) operating 
    activities                                    (391)           90              1
                        
Cash flows from investing activities:                   
  Contribution of capital to subsidiary           (6,288)     (7,400)         -
                        
Cash flows from financing activities:                   
   Proceeds from stock right offering              -           5,321           -
   Proceeds from stock issued under employee                               
    benefit plans                                     9           18              -
   Proceeds from repayment of notes payable       (2,476)         2,000           -
   Issuance of stock                               9,340           -               -

Net cash used in financing activities               6,873           7,339           -
                        
Net increase (decrease) in cash                      194             29              1
Cash January 1                                        37              8               7
                        
Cash, December 31                            $       231     $       37      $       8
                        
Supplemental Cash Flow Information:                     
  Income taxes recovered from a subsidiary      $       77      $       27      $       -
  Interest paid                                        271               -                     -
                        
Noncash financing activities:                   
  Notes payable exchanged for common stock      $       -       $       -       $       10,000
  Notes payable exchanged for accrued interest          -               37              439
Issuance of common stock as compensation               15               31                      -
                        


The accompanying notes are an integral part of these financial statements.      

</TABLE>



                        THE SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
                        SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
                                       (in thousands)

<TABLE>

<S>                              <C>            <C>            <C>           <C>             <C>
Column A                          Column B      Column C        ColumnD       Column E        ColumnF
                                                                                
                                                                                                               
                                                Future policy                                           
                                  Deferred      benefits                      Other policy                    
                                  policy        losses,claims                 claims and                      
                                  acquisition   and loss        Unearned      beneits         Premium 
                                  costs         expenses        premiums      payable         revenue 


Segment                                                                         
                                                                                
Year ended December 31, 1996                                                                            
                                                                                
Property and casualty insurance    $   -        $   132,152    $   47,498      $      -        $7,186
Credit life insurance                   96              145           194             -           478
Commission and service activities       -             -               -               -               -       
Other                                 -               -               -               -               -               -
      Total                       $     96      $   132,297 $       47,692  $       -        $  7,664   
      
Year ended December 31, 1995                                                                            
                                                                                
Property and casualty insurance   $     -      $    145,523 $       45,369  $       -       $  10,384
Credit life insurance                  293              199            758           -            890
Commission and service activities        -               -               -           -              -
Other                                    -               -               -               -          -
        Total                  $       293     $    145,722 $       46,127  $       -       $  11,274
                                                                                
Year ended December 31, 1994                                                                            
                                                                                
Property and casualty insurance $       -       $  166,698 $        54,721  $       -       $  14,718 
Credit life insurance                 899              206           1,570           -          1,801 
Commission and service activities       -               -               -             -             -
Other                                   -               -               -             -             -               
        Total                 $       899     $    166,904 $        56,291       $     -    $  16,519  

(1) Allocations of net investment income and other operating expenses are based 
on a number of assumptions and estimates.  Results would change if different 
methods were applied.

                                          Column G        Column H        Column I        Column J        Column K

                                          Net
                                          investment      Benefits,       Amortization            
                                          income (1)      claims,losses   of deferred     
                                          and other       and             policy          Other         
                                          Interest        settlement      acquisition     operating       Premiums        
                                          income          expenses        costs           expenses(1)     written


Segment                                                                         
                                                                                
Year ended December 31, 1996                                                                            
                                                                                
Property and casualty insurance           $      482    $  10,980      $  1,580         $    58      $       6,666
Credit life insurance                            270          203          (207)             74      
Commission and service activities               3,055           -            -           38,881  
Other                                               -           -            -               -          
        Total                                   3,807   $  11,183  $      1,373        $ 39,014  
                                                                                
Year ended December 31, 1995  
                                                                                
Property and casualty insurance          $      699     $  17,618  $       3,188   $       1,680   $       6,046
Credit life insurance                           291           545          (655)              92      
Commission and service activities             3,340             -           -             40,996  
Other                                             -             -           -       
        Total                                $4,330     $  18,163  $       2,533   $      42,768          
                                                                                
Year ended December 31, 1994                                                                            
                                                                                
Property and casualty insurance             $ 2,027     $  36,954  $       5,538   $       9,385   $       14,537
Credit life insurance                           506           770        (1,855)           3,503   
Commission and service activities             3,663           -               -           42,334  
Other                                         1,988           -               -               -       
        
        Total                              $  6,226     $  37,724   $      3,683        $ 55,222




</TABLE>




<TABLE>



                        SEIBELS BRUCE GROUP, INC. AND SUBSIDIARIES
                                SCHEDULE IV - REINSURANCE
                                (in thousands)

<S>                               <C>          <C>            <C>           <C>          <C>
Column A                          Column B      Column C       Column D      Column E    Column F        
                                                Ceded to       Assumed                   Percentage      
                                   Gross        other          from other    Net         of amount       
                                   Amount*      companies      companies     amount      assumed to net  

Year ended December 31, 1996                                            
                                                
Credit life insurance in force     $   5,908     $       -     $       -     $   5,908         -% 
                                                        
Premiums:                                               
   Property/casualty insurance     $ 105,212     $ 103,845     $    5,819    $   7,186       81.0%   
   Credit life insurance                            265                          (1)                -               266          -  
   Accident/health insurance                        211                          (1)                -               212          
-       
          Total                    $ 105,688 $       103,843 $       5,819   $       7,664           
                                                
                                                
Year ended December 31, 1995                                            
                                                
Credit life insurance in force      $    16,717  $       -       $       -       $       16,717          -%
        
                                                
Premiums:                                                       
   Property/casualty insurance       $  122,912 $       113,760 $       1,232   $10,384  11.9%   
   Credit life insurance                    737                          (4)                -               741          -  
   Aaccident/health insurance               147                          (2)                -               149          -       
                
           Total                     $  123,796         $       113,754 $       1,232   $       11,274  
        
                                                
                                                
Year ended December 31, 1994                                            
                                                
Credit life insurance in force       $  39,897  $       -       $       -       $       39,897          -%      
                                                
Premiums:                                                       
   Property/casualty insurance       $  146,481 $       134,038 $       2,275   $14,718          15.5%           
        Credit life insurance               968             -               -               968                   - 
        Accident/health insurance           832                          (1)                -               833           -       
                Total                $  148,281      $       134,037 $       2,275   $       16,519          
        
* Includes amounts written as designated carrier for two state 
sponsored automobile facilities, a homeowners' residual  market 
and the WYO National Flood Insurance Program


</TABLE>


                        THE SEIBELS BRUCE GROUP, INC.
                SCHEDULE V- VALUATION AND QUALIFYING ACCOUNTS
                                (in thousands)

                                Balance at                      
                                beginning                            Balance at
Description                     of year      Additions   Deductions  end of year
                                
Year ended December 31, 1996                            
                                
Allowance for uncollectable:                            
                                
  Agents' balances receivable   $   70        $   738      $   139    $  669
                                
  Other receivable              $    79       $     -      $    -     $   79

  Premium notes receivable      $    75       $     -      $    -     $    75
                                

Year ended December 31, 1995                            
                                
Allowance for uncollectable:                                    
                                
  Agents' balances receivable   $  70        $      -      $       -       $70
                                
  Other receivable              $ 151        $    79       $       151    $ 79
                                
  Premium notes receivable      $ 245    $        -   $   170            $   75
                                
Year ended December 31, 1994                            
                                
Allowance for uncollectable:                            
                                
  Agents' balances receivable  $  187         $    48    $  165           $70
                                
  Other receivables             $  151        $   64         64       $   151
                                
  Premium notes receivable      $  418        $   211     $  383         $246

*  Includes amounts written as designated carrier for two state-
sponsored automobile facilities, a homeowners, residual 
market and the WYO National Flood Insurance Program.



<TABLE>


                        THE SEIBELS BRUCE GROUP, INC.
SCHEDULE VI - SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS
                                (in thousands)


<S>                                      <C>              <C>             <C>            <C>         <C>         <C>          
Column A                               Column B           Column C         Column D       Column E    Column F   Column G           
                                                                                        
                                                          Reserves for                                            Net          
                                       Deferred           Unpaid Claims    Discount,                              Investment  
                                       Policy             and Claim        if any.                                and other         
                                       Acquisition        Adjustment       Deducted in    Unearned    Earned      Interest     
                                       Costs              Expenses         Column C*      Premiums    Premiums    Income       
-------------------------------------------------------------------------------------------------------------------------         

Affiliation with Registrant                                                                                     
                                                                                        
Company and                                                                                     
  consolidated subsidiaries                                                                                     
                                                                                        
                                                                                        
Year ended                                                                                      
  December 31, 1996                  $       -          $  132,152          $       -     $  47,498    $  7,186   $  3,537   
                                                                                        
                                                                                        
Year ended                                                                                      
  December 31, 1995                  $       -          $  145,523          $       -     $   45,369   $ 10,384   $  4,039    
                                                                                        
                                                                                        
Year ended                                                                                      
  December 31, 1994                 $       -           $  166,698          $       -     $   54 ,721  $ 14,718  $  5,690  
                                                                                                                        





                                       Column H                 Column I             Column J        Column K 
                                       Claims and Claim                                                 
                                       Incurred Related to      Amortization         Paid Claims
                                       (1)          (2)         of deferred Policy   and Claim  
                                        Current     Prior       Acquisition          Adjustment      Premiums       
                                        Year        Years       Costs                Expenses        Written             


Affiliation with Registrant                                                                                     
                                                                                        
Company and                                                                                     
  consolidated subsidiaries                                                                                     

Year ended                                                                                      
  December 31, 1996                  $  9,863       $  1,117    $  1,580              $   24,584     $  6,666 
                                                                                        
                                                                                        
Year ended                                                                                      
  December 31, 1995                  $  14,243      $   3,375   $  3,188              $   34,554     $  6,046
                                                                                        
                                                                                        
Year ended                                                                                      
  December 31, 1994                  $  19,997      $  16,957   $  5,538              $   77,448      $14,537
                                                                 



* The Company does not discount loss and LAE reserves

                                                        
</TABLE>
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        Exhibit 3.1        
                                                        
                        
                        
                        STATE OF SOUTH CAROLINA
                          SECRETARY OF STATE

                        ARTICLES OF AMENDMENT


        Pursuant to Section 3-10-106 of the 1976 South Carolina Code, as 
amended, the undersigned corporation adopts the following Articles of Amendment 
to its Articles of Incorporation:


1.      The name of the corporation is THE SEIBELS BRUCE GROUP, INC.


2.      On June 28, 1994, the corporation adopted the following 
        Amendment(s) of its Articles of Incorporation (Type or 
        attach the complete text of each Amendment):

            That the Articles of Incorporation of The Seibels 
            Bruce Group, Inc., be amended by deleting 
            Section (e) of Article 9 in its entirety.

3.      The manner, if not set forth in the Amendment, in which any exchange, 
        reclassification, or cancellation of issued shares provided for in the 
        Amendment shall be effected, is as follows (If not applicable, insert 
        "Not applicable" or "NA"):

                Not applicable

4.      Complete either a or b, whichever is applicable.
        a.      x  Amendment(s) adopted by shareholder action.
        At the date of adoption of the Amendment, the number of outstanding 
        shares of each voting group entitled to vote separately on the 
        Amendment, and the vote of such shares was:


<TABLE>

<S>                 <C>                   <C>                       <C>                           <C>
                                                                                         Number of Undisputed(1)
                        Number of       Number of Votes         Number of Votes                Shares Voted 
Voting Group     Outstanding Shares    Entitled to be Cast   Represented at the Meeting   For            Against
---------------  ------------------    -------------------   --------------------------  -----------------------
Common Stock         7,500,534             7,500,534                 6,889,435           5,751,094       532,366


(1) Pursuant to Section  33-10-106(6)(i), the corporation can alternatively 
state the total number of undisputed shares cast for the amendment by each 
voting group together with a statement that the number of cast votes for the 
amendment by each voting group was sufficient for approval by that voting 
group.


</TABLE>



        b.     ( ) Amendment(s) adopted by the incorporators or 
                board of directors without shareholder approval 
                pursuant to Section 33-6-102(d). 33-10-102 and 33-
                10-105 of the 1976 South Carolina Code, as amended, 
                and shareholder action was not required.

5.     Unless a delayed date is specified, the effective date of these Articles 
       of Amendment shall be the date of acceptance for filing by the Secretary 
       of State (See Section  33-1-230(b)):                                   


Date:  June 28, 1994                         The Seibels Bruce Group, Inc.   
                                             -----------------------------
                                                (Name of Corporation)    
                                          
                                          By:/s/ Sterling E. Beale          
                                             ---------------------------
                                                  (Signature)               
                                            Sterling E. Beale, Chairman of the 
                                            Board of Directors and Chief 
                                            Executive Officer         
                                            -----------------------------
                                                (Name and Office)             


                                


                                
                                
                                
                                STATE OF SOUTH CAROLINA
                                   SECRETARY OF STATE

                                ARTICLES OF AMENDMENT


        Pursuant to Section 3-10-106 of the 1976 South Carolina 
Code, as amended, the undersigned corporation adopts the 
following Articles of Amendment to its Articles of Incorporation:

1.      The name of the corporation is THE SEIBELS BRUCE  GROUP, INC.

2.      On June 13, 1995, the corporation adopted the following 
        Amendment(s) of its Articles of Incorporation (Type or 
        attach the complete text of each Amendment):

           That the Articles of Incorporation be amended by 
           deleting Section C of the Addendum dated July 14, 1978 
           pertaining to indemnification and insurance.

3.      The manner, if not set forth in the Amendment, in which 
        any exchange, reclassification, or cancellation of issued 
        shares provided for in the Amendment shall be effected, 
        is as follows (If not applicable, insert "Not applicable" 
        or "NA"):

Not applicable

4.      Complete either a or b, whichever is applicable.
        a.      x  Amendment(s) adopted by shareholder action.
        At the date of adoption of the Amendment, the number 
        of outstanding shares of each voting group entitled to 
        vote separately on the Amendment, and the vote of 
        such shares was:


<TABLE>
<S>             <C>                     <C>                    <C>                             <C>          <C>   
                                                                                                Number of Undisputed(1)
                Number of               Number of Votes            Number of Votes                 Shares Voted 
Voting Group    Outstanding Shares      Entitled to be Cast     Represented at the Meeting      For          Against
--------------  ------------------      --------------------    --------------------------      -------      --------
Common Stock     16,717,686              16,717,686                 15,203,204                14,910,995      196,795


(1)Pursuant to Section 33-10-106(6)(i), the corporation can alternatively 
statethe total number of undisputed shares cast for the amendment by each 
votinggroup together with a statement that the number of cast votes for the 
amendment by each voting group was sufficient for approval by that voting 
group.


</TABLE>


        b.      ( ) Amendment(s) adopted by the incorporators or 
                board of directors without shareholder approval 
                pursuant to Sections 33-6-102(d). 33-10-102 and 33-
                10-105 of the 1976 South Carolina Code, as amended, 
                and shareholder action was not required.

5.      Unless a delayed date is specified, the effective date of 
        these Articles of Amendment shall be the date of 
        acceptance for filing by the Secretary of State (See 
        Section 33-1-230(b)): 


Date:  June 22, 1995                   The Seibels Bruce Group, Inc.
                                       ------------------------------      
                                             (Name of Corporation)
                            
                                   By:  /s/ Priscilla C. Brooks        
                                       ------------------------------       
                                               (Signature)            

                                     Priscilla C. Brooks, Corporate Secretary
                                     -----------------------------------
                                           (Name and Office)  

                        
                        
                        
                        



                                STATE OF SOUTH CAROLINA
                                   SECRETARY OF STATE

                                ARTICLES OF AMENDMENT


        Pursuant to Section 3-10-106 of the 1976 South Carolina Code, as 
amended, the undersigned corporation adopts the following Articles of Amendment 
to its Articles of Incorporation:

1.      The name of the corporation is THE SEIBELS BRUCE GROUP, INC.

2.      On June 14, 1996, the corporation adopted the following Amendment(s) of 
        its Articles of Incorporation (Type or attach the complete text of each 
        Amendment):

             The Articles of Incorporation of The Seibels Bruce Group, Inc., 
             shall be amended so as to increase the maximum authorized common 
             stock of the Company from 25,000,000 shares to 50,000,000 shares 
             at the par value of $1.00 per share.

3.      The manner, if not set forth in the Amendment, in which any exchange, 
        reclassification, or cancellation of issued shares provided for in the 
        Amendment shall be effected, is as follows (If not applicable, insert 
        "Not applicable" or "NA"):

                Not applicable

4.      Complete either a or b, whichever is applicable.
        a.      x  Amendment(s) adopted by shareholder action.
        At the date of adoption of the Amendment, the number of outstanding 
        shares of each voting group entitled to vote separately on the 
        Amendment, and the vote of such shares was:

        
<TABLE>
<S>             <C>                    <C>                      <C>                          <C>
                                                                                             Number of Undisputed(1)
                     Number of            Number of Votes        Number of Votes                 Shares Voted
Voting Group    Outstanding Shares      Entitled to be Cast     Represented at the Meeting   For            Against
--------------  ---------------------   --------------------    ---------------------------- ----------    ---------- 
Common Stock        18,407,686              18,407,686              18,121,847               17,803,657      199,894



(1) Pursuant to Section 33-10-106(6)(i), the corporation can alternatively 
state the total number of undisputed shares cast for the amendment by each 
voting group together with a statement that the number of cast votes for the 
amendment by each voting group was sufficient for approval by that voting 
group.

</TABLE>



        b.     ( ) Amendment(s) adopted by the incorporators or board of 
       directors without shareholder approval pursuant to Section  33-6-102(d). 
        33-10-102 and 33-10-105 of the 1976 South Carolina Code, as amended, 
        and shareholder action was not required.

5.     Unless a delayed date is specified, the effective date of these Articles 
       of Amendment shall be the date of acceptance for filing by the Secretary 
       of State (See  Section 33-1-230(b)):

Date:  June 14, 1996                             The Seibels Bruce Group, Inc.
                                                 ------------------------------
                                                        (Name of Corporation)
                        
                                             By:  /s/ Priscilla C. Brooks    
                                                 ------------------------------
                                                        (Signature)
        
                                                   Priscilla C. Brooks 
                                                   Corporate Secretary     
                                                 -------------------------------
                                                        (Name and Office)







                                                        Exhibit 3.2         
                                                        
                        
                        
                        
                        THE SEIBELS BRUCE GROUP, INC.
                             AMENDMENT OF BYLAWS

                Adopted by the Board of Directors on April 11, 1994
                        Became effective on June 28, 1994


        RESOLVED, that Section 4 of Article 3 be deleted in its entirety.
                        
                        
                        
                        
                        
                                                        
                         THE SEIBELS BRUCE GROUP, INC.
                            AMENDMENT OF BYLAWS

                Adopted by the Board of Directors on October 14, 1994


        RESOLVED, that Section 1 of Article 4 of the Bylaws be, and hereby is, 
   amended so that, as so amended, it shall read and provide as follows:

                Section 1:  Executive Committee.  The board 
                may create an executive committee and appoint 
                three or more members to serve on it.  The 
                committee as so constituted shall, except as 
                limited by law or by the board, have and may 
                exercise all of the authority of the board.  The 
                directors so appointed shall serve at the 
                pleasure of the board.

        FURTHER RESOLVED, that Subsection (d) of Section 4 of Article 6 of the 
        Bylaws be, and hereby is, amended so that, as so amended, it shall read 
        and provide as follows:

                (d)     Any two or more offices may be held by 
                the same person.  The chairman shall be elected 
                from among the board of directors.
                        
                        
                        
                        
                        
                        
                        THE SEIBELS BRUCE GROUP, INC.
                            AMENDMENT OF BYLAWS

                Adopted by the Board of Directors on March 7, 1995
                   Approved by the Shareholders on June 13, 1995


        RESOLVED, that Section 6 of Article 8 of the Bylaws of 
        the Company be amended to read as follows:

                Section 6:  Indemnification and Insurance.  The 
                Company shall indemnify Officers and Directors 
                of the Company and its subsidiaries to the extent 
                permitted by South Carolina law and may insure 
                such persons against liability arising out of or 
                relating to their employment by the Company in an 
                amount and according to such terms as the Board 
                deems prudent.

















                                                Exhibit 11.1



           STATEMENT RE COMPUTATION OF PER SHARE EARNINGS

What follows is the calculation of earnings per share as presented in the income
statement for the year ended December 31, 1996:

Earnings per share and common equivalent share:

                                          Basic       Primary   Fully - diluted
                                          Earnings    Earnings    Earnings
                                          Per Share   Per Share   Per Share
                        
Net income                                $    5,176   $  5,176   $  5,176
Investment income earned of excess 
  funds after repurchase                           -        566        696
Adjusted net income                       $    5,176   $  5,742   $   5,872
                        
Weighted average number of shares 
  outstanding                                19,673      19,673     19,673
Common stock equivalents assumed 
  exercised                                       -     10,790      10,790
Repurchased shares utilizing APB 15 20%                         
  threshold                                   -          (4,934)         (4,934)
Adjusted weighted average number of shares                      
  outstanding                             19,673          25,529          25,529
                        
Earnings per share and common stock                     
  equivalent                      $       0.26    $       0.22    $       0.23


The calculation of earnings per share for the years ended December 31, 1995 and 
1994 are not presented in this exhibit due to the fact that the computation can 
be clearly determined from the material contained in Item 8.  Financial 
Statements.



                                                             Exhibit 21.1

                        SUBSIDIARIES OF REGISTRANT


The following is a listing of all subsidiaries of The Seibels Bruce Group, Inc. 
as of December 31, 1996:



Subsidiary                               State or Jurisdiction of Incorporation
-----------

Seibels Bruce & Company                          South Carolina

South Carolina Insurance Company                 South Carolina

Consolidated American Insurance Company          South Carolina

Catawba Insurance Company                        South Carolina

Kentucky Insurance Company                       Kentucky

Agency Specialty of Kentucky, Inc.               Kentucky

Seibels Bruce Specialty, Inc.                    South Carolina
                                            
Investors National Life Insurance 
     Company of S.C.                             South Carolina

Policy Finance Company                           South Carolina

FLT Plus, Inc.                                   South Carolina

Seibels Bruce Service Corporation                South Carolina



The financial statements of these subsidiaries are included in the Registrant's 
consolidated financial statements.


                                                                
                                                        Exhibit 23.1




CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the 
incorporation by reference of our report dated March 14, 1997, 
with respect to the consolidated financial statements and 
schedules of The Seibels Bruce Group, Inc., included in this 
Annual Report (Form 10-K) for the year ended December 31, 
1996 into the Company's previously filed Registration 
Statements (File S-8 Nos. 333-14135, 333-15457, 2-70057, 2-
83595, 33-34973, 33-43618, 33-43601, and 2-48782). 





ARTHUR ANDERSEN LLP

 
                                                                
Columbia, South Carolina
March 14, 1997



                                            Exhibit 28.1



(28.1) Information from reports furnished to state insurance 
regulatory authorities. The attached exhibit includes the 
Company's Schedule P as prepared for its 1996 Consolidated 
Annual Statement which will be provided  to state regulatory 
authorities. The schedules have been prepared on a statutory 
basis.

Schedule P as filed with the Securities and Exchange 
Commission has been omitted from this copy. (They are 
available upon request by writing the address shown on page 
1.)





                                                Exhibit 10.14



Federal Emergency Management Agency
Federal Insurance Administration











Financial Assistance/Subsidy Arrangement
(Appendix A - Part 62)



Purpose:
To assist the company in underwriting flood insurance using the
Standard Flood Insurance Policy


Accounting Data:
Pursuant to Section 1310 of the Act, a Letter of Credit shall be 
issued
for payment as provided for herein from the National Flood 
Insurance Fund


Effective Date:
October 1, 1996


Issued By:
Federal Emergency Management Agency, Federal Insurance 
Administration,
Washington, DC 20472


Appendix A of Part 62
Financial Assistance/Subsidy Arrangement

ARTICLE I - FINDINGS, PURPOSE, AND AUTHORITY

Whereas, the Congress in its "Finding and Declaration of 
Purpose" in the National Flood Insurance Act of 1968, as 
amended, ("the Act") recognized the benefit of having the 
National Flood Insurance Program (the Program) "carried out to 
the maximum extent practicable by the private insurance 
industry"; and
Whereas, the Federal Insurance Administration (FIA) 
recognizes this Arrangement as coming under the provisions of 
Section 1345 of the Act; and
Whereas, the goal of the FIA is to develop a program 
with the insurance industry where, over time, some risk-bearing 
role for the industry will evolve as intended by the Congress 
(Section 1304 of the Act); and
Whereas, the insurer (hereinafter the "Company") under 
this Arrangement shall charge rates established by the FIA; and
Whereas, this Arrangement will subsidize all flood policy 
losses by the Company; and
Whereas, this Financial Assistance/Subsidy Arrangement 
has been developed to enable any interested qualified insurer to 
write flood insurance under its own name; and
Whereas, one of the primary objectives of the Program is 
to provide coverage to the maximum number of structures at risk 
and because the insurance industry has marketing access through 
its existing facilities not directly available to the FIA, it has been 
concluded that coverage will be extended to those who would not 
otherwise be insured under the Program; and
Whereas, flood insurance policies issued subject to this 
Arrangement shall be only that insurance written by the Company 
in its own name under prescribed policy conditions and pursuant 
to this Arrangement and the Act; and
Whereas, over time, the Program is designed to increase 
industry participation, and, accordingly, reduce or eliminate 
Government as the principal vehicle for delivering flood 
insurance to the public; and
Whereas, the direct beneficiaries of this Arrangement 
will be those Company policyholders and applicants for flood 
insurance who otherwise would not be covered against the peril 
of flood.
Now, therefore, the parties hereto mutually undertake the 
following:

ARTICLE II - UNDERTAKINGS OF THE COMPANY

A.      In order to be eligible for assistance under this 
Arrangement the Company shall be responsible for:
        1.0     Policy Administration, including
        1.1     Community Eligibility/Rating Criteria
        1.2     Policyholder Eligibility Determination
        1.3     Policy Issuance
        1.4     Policy Endorsements
        1.5     Policy Cancellations
        1.6     Policy Correspondence
        1.7     Payment of Agents' Commissions
The receipt, recording, control, timely deposit and 
disbursement of funds in connection with all the foregoing, and 
correspondence relating to the above in accordance with the 
Financial Control Plan requirements.

2.0     Claims processing in accordance with general 
Company standards and the Financial Control Plan.  Other 
technical and policy material published by FEMA and FIA will 
also provide guidance to the Company.

3.0     Reports
3.1     Monthly Financial Reporting and Statistical 
Transaction Reporting shall be in accordance with the 
requirements of National Flood Insurance Program Transaction 
Record Reporting and Processing Plan for the Write Your Own 
(WYO) Program and the Financial Control Plan for business 
written under the WYO Program.  These data shall be 
validated/edited/audited in detail and shall be compared and 
balanced against Company financial reports.

3.2     Monthly financial reporting shall be prepared in 
accordance with the WYO Accounting Procedures.

B.      The Company shall use the following time 
standards of performance as a guide:
1.0     Application Processing - 15 days (Note:  If the 
policy cannot be mailed due to insufficient or erroneous 
information or insufficient funds, a request for correction or 
added monies shall be mailed within 10 days);
        1.1     Renewal Processing - 7 days;
        1.2     Endorsement Processing - 15 days;
        1.3     Cancellation Processing - 15 days;
        1.4     Claims Draft Processing - 7 days from completion 
of file examination;
1.5     Claims Adjustment - 45 days average from receipt 
of Notice of Loss (or equivalent) through completion of 
examination.
1.6     For the elements of work enumerated above, the 
elapsed time shown is from the date of receipt through the date of 
mail out.  Days means working days, not calendar days.
In addition to the standards for timely performance set 
forth above, all functions performed by the Company shall be in 
accordance with the highest reasonably attainable quality 
standards generally utilized in the insurance and data processing 
industries.
These standards are for guidance.  Although no immediate 
remedy for failure to meet them is provided under this 
Arrangement, nevertheless, performance under these standards 
and the marketing guidelines provided for in Section G. below 
can be a factor considered by the Federal Insurance 
Administrator (the Administrator) in requiring corrective action 
by the Company, in determining the continuing participation of the 
Company in the Program, or in taking other action, e.g., limiting 
the Company's authority to write new business.

C.      To ensure maximum responsiveness to the 
National Flood Insurance Program's (NFIP) policyholders 
following a catastrophic event, e.g., a hurricane, involving 
insured wind and flood damage to policyholders, the Company 
shall agree to the adjustment of the combined flood and wind 
losses utilizing one adjuster under an NFIP-approved Single 
Adjuster Program in the following cases and under procedures 
issued by the Administrator:
1.0     Where the flood and wind coverage is provided 
by the Company;
2.0     Where the flood coverage is provided by the 
Company and the wind coverage is provided by a participating 
State Property Insurance Plan, Windpool Association, Beach 
Plan, Joint Underwriting Association, FAIR Plan, or similar 
property insurance mechanism; and
3.0     Where the flood coverage is provided by the 
Company and the wind coverage is provided by another property 
insurer and the State Insurance Regulator has determined that 
such property insurer shall, in the interest of consumers, facilitate 
the adjustment of its wind loss by the adjuster engaged to adjust 
the flood loss of the Company.

D.      Policy Issuance
1.0     The flood insurance subject to this Arrangement 
shall be only that insurance written by the Company in its own 
name pursuant to the Act.
2.0     The Company shall issue policies under the 
regulations prescribed by the Administrator in accordance with 
the Act;
3.0     All such policies of insurance shall conform to the 
regulations prescribed by the Administrator pursuant to the Act, 
and be issued on a form approved by the Administrator;
4.0     All policies shall be issued in consideration of 
such premiums and upon such terms and conditions and in such 
States or areas or subdivisions thereof as may be designated by 
the Administrator and only where the Company is licensed by 
State law to engage in the property insurance business;
5.0     The Administrator may require the Company to 
discontinue issuing policies subject to this Arrangement 
immediately in the event Congressional authorization or 
appropriation for the National Flood Insurance Program is 
withdrawn.

E.      The Company shall separate Federal flood insurance 
funds from all other Company accounts, at a bank or banks of its 
choosing for the collection, retention and disbursement of Federal 
funds relating to its obligation under this Arrangement, less the 
Company's expenses as set forth in Article III, and the operation 
of the Letter of Credit established pursuant to Article IV All 
funds not required to meet current expenditures shall be remitted 
to the United States Treasury, in accordance with the provisions 
of the WYO Accounting Procedures Manual.

F.      The Company shall investigate, adjust, settle and 
defend all claims or losses arising from policies issued under 
this Arrangement.  Payment of flood insurance claims by the 
Company shall be binding upon the FIA.

G.      The Company shall market flood insurance 
policies in a manner consistent with the marketing guidelines 
established by the Federal Insurance Administration.

ARTICLE III - LOSS COSTS, EXPENSES, EXPENSE 
REIMBURSEMENT, AND PREMIUM REFUNDS

A.      The Company shall be liable for operating, 
administrative and production expenses, including any State 
premium taxes, dividends, agent's commissions or any other 
expense of whatever nature incurred by the Company in the 
performance of its obligations under this Arrangement but 
excluding surcharges on flood insurance premium and guaranty 
fund assessments.

B.      The Company shall be entitled to withhold, on a 
provisional basis, as operating and administrative expenses, 
including agents' or brokers' commissions, an amount from the 
Company's written premium on the policies covered by this 
Arrangement in reimbursement of all of the Company's 
marketing, operating and administrative expenses, except for 
allocated and unallocated loss adjustment expenses described in 
Section C. of this Article, which amount shall be 32.6% of the 
Company's written premium on the policies covered by this 
Arrangement.  The final amount retained by the Company shall be 
determined by an increase or decrease depending on the extent to 
which the Company meets the marketing goals for the 1996-1997 
Arrangement year contained in marketing guidelines established 
pursuant to Article II. G.
The adjustment in the amount retained by the Company 
shall be made after the end of the 1996-1997 Arrangement year.  
Any decrease from 32.6% made as a result of a Company not 
meeting its marketing goals shall be directly related to the extent 
to which the Company's goal was not achieved, but shall not 
exceed two (2) percentage points (providing for a minimum of 
30.6%).
The increase, which shall be distributed among the 
Companies exceeding their marketing goals, shall be drawn from 
a pool composed of the difference between 32.6% of all WYO 
Companies' written premium in Arrangement year 1996-1997 
and the total amount, prior to the increase, provided to the 
Companies on the basis of the extent to which they have met their 
marketing goals.  A distribution formula will be developed and 
distributed to WYO Companies that will consider the extent to 
which the Company has exceeded its goal and the size of the 
Company's book of business in relation to the total number of 
WYO policies.  The amount of any increase shall be paid 
promptly to the Company after the end of the 1996-1997 
Arrangement year.
The Company, with the consent of the Administrator as to 
terms and costs, shall be entitled to utilize the services of a 
national rating organization, licensed under state law, to assist the 
FIA in undertaking and carrying out such studies and 
investigations on a community or individual risk basis, and in 
determining more equitable and accurate estimates of flood 
insurance risk premium rates as authorized under the National 
Flood Insurance Act of 1968, as amended.  The Company shall 
be reimbursed in accordance with the provisions of the WYO 
Accounting Procedures Manual for the charges or fees for such 
services.

C.      Loss Adjustment Expenses shall be reimbursed 
as follows:
1.      Unallocated loss adjustment shall be an expense 
reimbursement of 3.3% of the incurred loss (except that it does 
not include "incurred but not reported").
2.      Allocated loss adjustment expense shall be 
reimbursed to the Company pursuant to a "Fee Schedule" 
coordinated with the Company and provided by the 
Administrator.
3.      Special allocated loss expenses shall be 
reimbursed to the Company in accordance with guidelines 
issued by the Administrator.

D.l.    Loss payments under policies of flood insurance 
shall be made by the Company from funds retained in the bank 
account(s) established under Article II, Section E and, if such 
funds are depleted, from funds derived by drawing against the 
Letter of Credit established pursuant to Article IV.
2.      Loss payments will include payments as a result 
of awards or judgments for damages arising under the scope of 
this Arrangement, policies of flood insurance issued pursuant to 
this Arrangement, and the claims processing standards and 
guides set forth at Article II, Section A, 2.0 of this Arrangement. 
 Prompt notice of any claim for damages as to claims processing 
or other matters arising outside the scope of this section (D)(2) 
shall be sent to the Administrator along with a copy of any 
material pertinent to the claim for damages arising outside of the 
scope of the matters set forth in this section (D)(2).
Following receipt of notice of such claim, the General 
Counsel (OGC), FEMA, shall review the cause and make a 
recommendation to FIA as to whether the claim is grounded in 
actions by the Company that are significantly outside the 
provisions of this Section (D)(2).  After reviewing the General 
Counsel's recommendation, the Administrator will make his/her 
decision and the Company will be notified, in writing, within 
thirty (30) days of the General Counsel's recommendation, if the 
decision is that any award or judgment for damages arising out 
of such actions will not be recognized under Article III of this 
Arrangement as a reimbursable loss cost, expense or expense 
reimbursement.  In the event that the Company wishes to petition 
for reconsideration of the notification that it will not be 
reimbursed for the award or judgment made under the above 
circumstances, it may do so by mailing, within thirty days of the 
notice declining to recognize any such award or judgment as 
reimbursable under Article III, a written petition to the 
Chairman of the WYO Standards Committee established under 
the Financial Control Plan.  The WYO Standards Committee 
will, then, consider the petition at its next regularly scheduled 
meeting or at a special meeting called for that purpose by the 
Chairman and issue a written recommendation to the 
Administrator, within thirty days of the meeting.  The 
Administrator's final determination will be made, in writing, to 
the Company within thirty days of the recommendation made by 
the WYO Standards Committee.

E.      Premium refunds to applicants and policyholders 
required pursuant to rules contained in the National Flood 
Insurance Program (NFIP) "Flood Insurance Manual" shall be 
made by the Company from Federal flood insurance funds 
referred to in Article II, Section E. and, if such funds are 
depleted, from funds derived by drawing against the Letter of 
Credit established pursuant to Article IV.

ARTICLE IV - UNDERTAKINGS OF THE 
GOVERNMENT

A.      Letter(s) of Credit shall be established by the 
Federal Emergency Management Agency (FEMA) against which 
the Company may withdraw funds daily, if needed, pursuant to 
prescribed procedures implemented by FEMA.  The amounts of 
the authorizations will be increased as necessary to meet the 
obligations of the Company under Article III, Sections C, D, and 
E.  Request for funds shall be made only when net premium 
income has been depleted.  The timing and amount of cash 
advances shall be as close as is administratively feasible to the 
actual disbursements by the recipient organization for allowable 
Letter of Credit expenses.
Request for payment on Letters of Credit shall not 
ordinarily be drawn more frequently than daily nor in amounts 
less than $5,000, and in no case more than $5,000,000 unless so 
stated on the Letter of Credit.  This Letter of Credit may be 
drawn by the Company for any of the following reasons:
1.      Payment of claim as described in Article 111, 
Section D;
2.      Refunds to applicants and policyholders for 
insurance premium overpayment, or if the application for 
insurance is rejected or when cancellation or endorsement of a 
policy results in a premium refund as described in Article III, 
Section E; and
3.      Allocated and unallocated Loss Adjustment 
Expenses as described in Article III, Section C.

B.      The FIA shall provide technical assistance to the 
Company as follows:
1.      The FIA's policy and history concerning 
underwriting and claims handling.
2.      A mechanism to assist in clarification of 
coverage and claims questions.
3.      Other assistance as needed.

ARTICLE V - COMMENCEMENT AND TERMINATION

A.      Upon signature of authorized officials for both 
the Company and the FIA, this Arrangement shall be effective 
for the period October 1 through September 30.  The FIA shall 
provide financial assistance only for policy applications and 
endorsements accepted by the Company during this period 
pursuant to the Program's effective date, underwriting and 
eligibility rules.

B.      By June 1, of each year, the FIA shall publish in 
the Federal Register and make available to the Company the 
terms for the re-subscription of this Financial 
Assistance/Subsidy Arrangement.  In the event the Company 
chooses not to re-subscribe, it shall notify the FIA to that effect 
by the following July 1.

C.      In the event the Company elects not to participate 
in the Program in any subsequent fiscal year, or the FIA chooses 
not to renew the Company's participation, the FIA, at its option, 
may require (1) the continued performance of this entire 
Arrangement for a period not to exceed one (1) year following 
the original term of this Arrangement, or any renewal thereof, or 
(2) the transfer to the FIA of:
a.      All data received, produced, and maintained 
through the life of the Company's participation in the Program, 
including certain data, as determined by FIA, in a standard 
format and medium; and
b.      A plan for the orderly transfer to the FIA of any 
continuing responsibilities in administering the policies issued 
by the Company under the Program including provisions for 
coordination assistance; and
c.      All claims and policy files, including those 
pertaining to receipts and disbursements that have occurred 
during the life of each policy In the event of a transfer of the 
services provided, the Company shall provide the FIA with a 
report showing, on a policy basis, any amounts due from or 
payable to insureds, agents, brokers, and others as of the 
transition date.

D.      Financial assistance under this Arrangement may 
be canceled by the FIA in its entirety upon 30 days written 
notice to the Company by certified mail stating one of the 
following reasons for such cancellation: (1) Fraud or 
misrepresentation by the Company subsequent to the inception of 
the contract, or (2) nonpayment to the FIA of any amount due the 
FIA.  Under these very specific conditions, the FIA may require 
the transfer of data as shown in Section C., above.  If transfer is 
required, the unearned expenses retained by the Company shall 
be remitted to the FIA.  In such event the Government will 
assume all obligations and liabilities owed to policyholders 
under such policies arising before and after the date of transfer.

E.      In the event the Act is amended, or repealed, or 
expires, or if the FIA is otherwise without authority to continue 
the Program, financial assistance under this Arrangement may be 
canceled for any new or renewal business, but the Arrangement 
shall continue for policies in force that shall be allowed to run 
their term under the Arrangement.

F.      In the event that the Company is unable to, or 
otherwise fails to, carry out its obligations under this 
Arrangement by reason of any order or directive duly issued by 
the Department of Insurance of any Jurisdiction to which the 
Company is subject, the Company agrees to transfer, and the 
Government will accept, any and all WYO policies issued by 
the Company and in force as of the date of such inability or 
failure to perform.  In such event the Government will assume 
all obligations and liabilities owed to policyholders under such 
policies arising before and after the date of transfer and the 
Company will immediately transfer to the Government all funds 
in its possession with respect to all such policies transferred 
and the unearned portion of the Company expenses for operating, 
administrative and loss adjustment on all such policies.

ARTICLE VI - INFORMATION AND ANNUAL 
STATEMENTS

The Company shall furnish to FEMA such summaries 
and analyses of information including claim file information in 
its records as may be necessary to carry out the purposes of the 
National Flood Insurance Act of 1968, as amended, in such form 
as the FIA, in cooperation with the Company, shall prescribe.  
The Company shall be a property/casualty insurer domiciled in 
a State or territory of the United States.  Upon request, the 
Company shall file with the FIA a true and correct copy of the 
Company's Fire and Casualty Annual Statement, and Insurance 
Expense Exhibit or amendments thereof, as filed with the State 
Insurance Authority of the Company's domiciliary State.

ARTICLE VII - CASH MANAGEMENT AND 
ACCOUNTING

A.      FEMA shall make available to the Company 
during the entire term of this Arrangement and any continuation 
period required by FIA pursuant to Article V, Section C , the 
Letter of Credit provided for in Article IV drawn on a 
repository bank within the Federal Reserve System upon which 
the Company may draw for reimbursement of its expenses as set 
forth in Article IV that exceed net written premiums collected by 
the Company from the effective date of this Arrangement or 
continuation period to the date of the draw.

B.      The Company shall remit all funds, including 
interest, not required to meet current expenditures to the United 
States Treasury, in accordance with the provisions of the WYO 
Accounting Procedures Manual or procedures approved in 
writing by the FIA.

C.      In the event the Company elects not to participate 
in the Program in any subsequent fiscal year, the Company and 
FIA shall make a provisional settlement of all amounts due or 
owing within three months of the termination of this 
Arrangement.  This settlement shall include net premiums 
collected, funds drawn on the Letter of Credit, and reserves for 
outstanding claims.  The Company and FIA agree to make a final 
settlement of accounts for all obligations arising from this 
Arrangement within 18 months of its expiration or termination, 
except for contingent liabilities that shall be listed by the 
Company.  At the time of final settlement, the balance, if any, 
due the FIA or the Company shall be remitted by the other 
immediately and the operating year under this Arrangement shall 
be closed.

ARTICLE VIII - ARBITRATION

If any misunderstanding or dispute arises between the 
Company and the FIA with reference to any factual issue under 
any provisions of this Arrangement or with respect to the FIA's 
nonrenewal of the Company's participation, other than as to 
legal liability under or interpretation of the standard flood 
insurance policy, such misunderstanding or dispute may be 
submitted to arbitration for a determination that shall be binding 
upon approval by the FIA.  The Company and the FIA may agree 
on and appoint an arbitrator who shall investigate the subject of 
the misunderstanding or dispute and make a determination.  If the 
Company and the FIA cannot agree on the appointment of an 
arbitrator, then two arbitrators shall be appointed, one to be 
chosen by the Company and one by the FIA.
The two arbitrators so chosen, if they are unable to reach 
an agreement, shall select a third arbitrator who shall act as 
umpire, and such umpire's determination shall become final only 
upon approval by the FIA.
The Company and the FIA shall bear in equal shares all 
expenses of the arbitration.  Findings, proposed awards, and 
determinations resulting from arbitration proceedings carried 
out under this section, upon objection by FIA or the Company, 
shall be inadmissible as evidence in any subsequent proceedings 
in any court of competent jurisdiction.
This Article shall indefinitely succeed the term of this 
Arrangement.

ARTICLE IX - ERRORS AND OMISSIONS

The parties shall not be liable to each other for damages 
caused by ordinary negligence arising out of any transaction or 
other performance under this Arrangement, nor for any 
inadvertent delay, error, or omission made in connection with 
any transaction under this Arrangement, provided that such 
delay, error, or omission is rectified by the responsible party as 
soon as possible after discovery.
However, in the event that the Company has made a 
claim payment to an insured without including a mortgagee (or 
trustee) of which the Company had actual notice prior to making 
payment, and subsequently determines that the mortgagee (or 
trustee) is also entitled to any part of said claim payment, any 
additional payment shall not be paid by the Company from any 
portion of the premium and any funds derived from any Federal 
Letter of Credit deposited in the bank account described in 
Article II, section E.  In addition, the Company agrees to hold 
the Federal Government harmless against any claim asserted 
against the Federal Government by any such mortgagee (or 
trustee), as described in the preceding sentence, by reason of 
any claim payment made to any insured under the circumstances 
described above.

ARTICLE X - OFFICIALS NOT TO BENEFIT

No Member or Delegate to Congress, or Resident 
Commissioner, shall be admitted to any share or part of this 
Arrangement, or to any benefit that may arise therefrom; but this 
provision shall not be construed to extend to this Arrangement if 
made with a corporation for its general benefit.

ARTICLE XI - OFFSET

At the settlement of accounts the Company and the FIA 
shall have, and may exercise, the right to offset any balance or 
balances, whether on account of premiums, commissions, losses, 
loss adjustment expenses, salvage, or otherwise due one party to 
the other, its successors or assigns, hereunder or under any other 
Arrangements heretofore or hereafter entered into between the 
Company and the FIA.  This right of offset shall not be affected 
or diminished because of insolvency of the Company.
All debts or credits of the same class, whether 
liquidated or unliquidated, in favor of or against either party to 
this Arrangement on the date of entry, or any order of 
conservation, receivership, or liquidation, shall be deemed to be 
mutual debts and credits and shall be offset with the balance 
only to be allowed or paid.  No offset shall be allowed where a 
conservator, receiver, or liquidator has been appointed and 
where an obligation was purchased by or transferred to a party 
hereunder to be used as an offset.
Although a claim on the part of either party against the 
other may be unliquidated or undetermined in amount on the date 
of the entry of the order, such claim will be regarded as being in 
existence as of the date of such order and any credits or claims 
of the same class then in existence and held by the other party 
may be offset against it.

ARTICLE XII - EQUAL OPPORTUNITY

The Company shall not discriminate against any 
applicant for insurance because of race, color, religion, sex, 
age, handicap, marital status, or national origin.

ARTICLE XIII - RESTRICTION ON OTHER FLOOD 
INSURANCE

As a condition of entering into this Arrangement, the 
Company agrees that in any area in which the Administrator 
authorizes the purchase of flood insurance pursuant to the 
Program, all flood insurance offered and sold by the Company to 
persons eligible to buy pursuant to the Program for coverages 
available under the Program shall be written pursuant to this 
Arrangement.
However, this restriction applies solely to policies 
providing only flood insurance.  It does not apply to policies 
provided by the Company of which flood is one of the several 
perils covered, or where the flood insurance coverage amount is 
over and above the limits of liability available to the insured 
under the Program.

ARTICLE XIV - ACCESS TO BOOKS AND RECORDS

The FIA and the Comptroller General of The United 
States, or their duly authorized representatives, for the purpose 
of investigation, audit, and examination shall have access to any 
books, documents, papers and records of the Company that are 
pertinent to this Arrangement.  The Company shall keep records 
that fully disclose all matters pertinent to this Arrangement, 
including premiums and claims paid or payable under policies 
issued pursuant to this Arrangement.  Records of accounts and 
records relating to financial assistance shall be retained and 
available for three (3) years after final settlement of accounts, 
and to financial assistance, three (3) years after final adjustment 
of such claims.  The FIA shall have access to policyholder and 
claim records at all times for purposes of the review, defense, 
examination, adjustment, or investigation of any claim under a 
flood insurance policy subject to this Arrangement.

ARTICLE XV - COMPLIANCE WITH ACT AND 
REGULATIONS

This Arrangement and all policies of insurance issued 
pursuant thereto shall be subject to the provisions of the 
National Flood Insurance Act of 1968, as amended, the Flood 
Disaster Protection Act of 1973, as amended, the National 
Flood Insurance Reform Act of 1994, and Regulations issued 
pursuant thereto and all Regulations affecting the work that are 
issued pursuant thereto, during the term hereof.

ARTICLE XVI - RELATIONSHIP BETWEEN THE 
PARTIES (FEDERAL GOVERNMENT AND COMPANY) 
AND THE INSURED

Inasmuch as the Federal Government is a guarantor 
hereunder, the primary relationship between the Company and 
the Federal Government is one of a fiduciary nature, i.e., to 
assure that any taxpayer funds are accounted for and 
appropriately expended.
The Company is not the agent of the Federal 
Government.  The Company is solely responsible for its 
obligations to its insured under any flood policy issued pursuant 
hereto.


Notice of Acceptance Form 1996-1997
Federal Emergency Management Agency
Federal Insurance Administration
Financial Assistance/Subsidy Arrangement (Arrangement)


WHEREAS, in 1996, there was published a Notice of 
Offer by the Federal Emergency Management Agency to enter 
into a Financial Assistance/Subsidy Arrangement (hereinafter 
the Arrangement).

WHEREAS, the above cited Arrangement, as published 
in an reprinted from the Federal Register, does not provide 
sufficient space to type in the name of the Company.

WHEREAS, the Arrangement may include several 
individual companies within a Company Group and the 
Arrangement as published in and reprinted from the Federal 
Register does not provide sufficient space to type in a list of 
companies.

THEREFORE, the parties hereby agree that this Notice 
of Acceptance form is incorporated into and is an integral part 
of the entire Arrangement and is substituted in place of the 
signature block contained in the Federal Register under Article 
XVI of the Arrangement.  The above mentioned Arrangement is 
effective in the States in which the insurance company(ies) 
listed below is (are) duly licensed to engage in the business of 
property insurance.  List all companies covered by this 
Arrangement:


        SOUTH CAROLINA INSURANCE COMPANY

        CATAWBA INSURANCE COMPANY

        KENTUCKY INSURANCE COMPANY


        In witness whereof, the parties hereto have accepted this 
Arrangement on this 15th day of August, 1996.

                                The United States of America
                        Federal Emergency Management Agency
                                                By:  /s/
By:  /s/ Ernst N. Csiszar                       

Print Name:  Ernst N. Csiszar                   Title: Federal 
Insurance Administrator

        Title: President & Chief Executive Officer
 


                                                       EXHIBIT 10.13


 
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment.




MANAGING GENERAL AGENCY AGREEMENT


THIS AGREEMENT is effective January 1, 1996 and 
continues in force until terminated per Agreement and is entered 
into by and between GENERALI - U.S. BRANCH, hereinafter 
referred to as "Company" and SEIBELS BRUCE & 
COMPANY and AGENCY SPECIALTY OF KENTUCKY, 
INC., managing general agent, hereinafter referred to as 
"Agent".

In consideration of the covenants, conditions and agreements 
herein contained, the parties hereto agree as follows:

ARTICLE 1

Appointment, Authority and Duties of Agency

1.      Company does hereby appoint Agent for the production, 
underwriting, servicing, and administration of the types, lines, 
and classes of business outlined in Addendum 1 of this 
agreement, subject always to the restrictions imposed upon 
Company and Agent under the insurance laws and regulations of 
each State, and in accordance with the rates, filings, forms, 
procedures, and underwriting guidelines governing the 
acceptance of such business, all as filed, directed, and 
promulgated by the Company from time to time.

2.      Agent is authorized by Company to solicit, underwrite, 
and bind coverages authorized herein and in accordance with 
Addendum 1; to exercise underwriting judgment and accept or 
reject insurance applications in accordance with the Company's 
underwriting guidelines; to assemble, type and otherwise 
prepare policies, to make proper arrangements for the 
countersigning of all policies where required; to issue policies 
and endorsements on forms approved by the Company; utilizing 
rates filed or authorized by the Company; to price and rate 
individual risks in accordance with the Company's authorization 
and underwriting guidelines and the Company's filed rates; the 
Agent will on behalf of the Company, prepare and make all rate 
and policy filings with the appropriate regulatory bodies, to 
cancel such policies subject to and in compliance with 
applicable laws and regulations, and give notice of cancellation 
and any required notice of non-renewal to all parties entitled; to 
bill for and collect insurance premiums, hold them in a fiduciary 
capacity in a bank which is a member of the Federal Reserve 
System for the Company; and to report upon and remit premiums 
to the Company; to calculate and refund return premium; to 
handle claims arising under such insurance; and to otherwise 
administer upon and service such business; and Agent agrees to 
pay and perform the same faithfully and diligently, to the best of 
its knowledge, skill, and judgment, and to comply promptly with 
instructions pertaining thereto received from the Company 
during the period of this Agreement.

3.      Agent shall be responsible for all policies entrusted to it 
by Company, whether issued or not, and shall issue policies 
only in numerical sequence.  Agent shall not release blank 
policies without the prior written approval of Company.  Agent 
shall maintain all voided policies on behalf of the Company.

4.      Agent is authorized to conduct its operations on behalf of 
the Company only in the states and to bind insurance only of 
insureds and risks that are located in states listed in Addendum 
1.

5.      Agent agrees that all Commercial Lines business written 
will be on behalf of Generali-US Branch and Agent will not 
write such business for or on behalf of any other company unless 
declined by the Company in the territories specified in 
Addendum #1 without prior written approval.

6.      Company and Agent agree to a mutually exclusive 
arrangement for all commercial lines business in the territories 
specified in Addendum #1 for a period of five (5) years 
commencing with inception of this Agreement.  Company has the 
right to approve any carrier contracted by the agent for non-
competing commercial business.

7.      Agent agrees that if Agent appoints sub-producers on 
behalf of the Company, Agent shall do so only under a written 
sub-producer agreement, the form of which has been approved 
in writing by the Company (refer to Addendum #3).  Such 
agreement shall contain a warranty that the sub-producer and any 
employee authorized to solicit or bind insurance possesses 
errors and omission insurance, a valid agent's license in such 
jurisdiction in which he is being authorized to write, and that 
such licenses are not now and have never been the subject of any 
disciplinary action, and that the sub-producer and such 
employees are not restricted or prohibited in any manner from 
acting under the sub-producer agreement.  Agent agrees to notify 
the Company of the names of the sub-producers the Agent 
appoints promptly upon such appointment by Agent.  Any sub-
producer so appointed shall only be authorized to conduct its 
operations in the states authorized in Addendum 1 on risks 
located in as per Addendum 1. The Agent is solely responsible 
for payment of all commissions due to sub-producers and any 
countersignature fees as may be due.

8.      Agent shall not make any representation to any agent, 
broker, producer, applicant or insured regarding coverage under 
policies issued or to be issued hereunder which is inconsistent 
with the actual terms and conditions of such policies.

9.      Agent shall maintain a staff of professional, competent 
and trained personnel, supplies and equipment for the purpose of 
performing its duties hereunder and shall use its best efforts to 
serve the Company faithfully, to promote and safeguard the best 
interests of the Company and to perform all acts necessary to 
ensure the efficient, profitable, and proper conduct of the subject 
business on behalf of the Company.

10.     Agent agrees that as a result of a transfer of ownership to 
an unaffiliated Company representing more than 50% of the 
outstanding shares of Seibels Bruce & Company, Company has 
the right to purchase the book of business or cancel this 
Agreement in compliance with state insurance regulations.  
Should the right to purchase the existing book of business be 
invoked, Company shall submit a proposed purchase price.  In 
the event agreement between Company and Agent cannot be 
reached, within 30 days from the Company invoking the right of 
purchase, a mutually agreed upon independent party shall be 
appointed to determine the purchase price.  In the event that the 
parties do not agree with the purchase price established by the 
independent party, then agreement may be canceled in 
compliance with Article IX - Termination.

11.     If Agent is declared financially insolvent, impaired or 
placed in rehabilitation by any Insurance Department or 
regulatory authority, ownership of the commercial book of 
business described in Addendum #1 shall immediately transfer 
to the Company at no cost.

ARTICLE II

Premium Liability and Accounting

1.      Agent shall account for and be liable to Company for all 
written premiums owed to Company by insureds on business 
produced under this Agreement.

2.      All premiums collected by Agent on business produced 
hereunder, net of commissions allowed in accordance with 
Addendum 2 to this Agreement, are the property of the Company 
and shall be immediately deposited and held by Agent as trustee 
for the Company in a fiduciary account until remitted to the 
Company as set forth in Provision 3 of this Article II.  Interest 
bearing accounts are permitted; and all interest earned as result 
of Agent holding funds as trustee for the Company shall be 
property of Agent.

3.      Within thirty (30) days after the close of each month the 
Agent shall render the monthly account current specified in 
Article IV, and the balance due thereunder whether or not 
collected by Agent shall be payable by Agent within sixty (60) 
days after the close of the month reported.

4.      If an insured under a policy written by Agent shall be 
entitled to the return of premium because of policy cancellation 
or for any other reason, the Agent shall in the next account return 
to Company the pro rata portion of the commissions applicable 
to such return premium at the same rate originally retained by or 
paid to Agent; provided, however, that if the premium return 
becomes due before the Agent has remitted the premium to 
Company, Agent shall return the premium, including the pro rata 
portion of the commissions, to the policyholder.

5.      Premium taxes due on premium written under this 
Contract shall be the responsibility of the Company, however, 
Agent will likewise be responsible for any premium tax liability 
incurred arising from fees, etc., which are retained by Agent.

ARTICLE III

Claims Handling

1.      The Agent shall be designated the Company's claims 
representative for the business written under this Agreement.  
Subject to criteria established by the Company and revised on 
an on-going basis, the Agent shall report to Company all claims 
which arise from business written hereunder.  The Agent will 
promptly upon receipt of such notice or information however 
obtained or received, forward to the Company immediately all 
letters, legal documents, or other written information received 
pertaining thereto and, upon the request of the Company, shall 
give to the Company further details of any claim.

2.      Subject to Paragraph 3 of this Article, Agent will act as 
the Company's designated claims representative for the 
monitoring, supervision, reporting and handling of all claims 
arising out of policies issued by Agent hereunder.

3.      Agent shall handle claims on behalf of the Company 
pursuant to the following general terms and conditions:

a.      Subject to subparts (b) (c) (d) (e) and (f) of this 
provision 3, Agent will diligently pursue and supervise 
investigation, appraisal, adjustment and secure all rights of 
salvage and subrogation or other recovery arising under such 
claims.  All salvage and subrogation funds received by Agent 
shall be remitted to Company in the very next premium 
remittance to the Company.  All adjusters will be licensed 
where so required by law.

b.      In the course of such duties, Agent will (1) conduct an 
investigation of each reported claim; (2) record and report each 
claim promptly to the Company with a recommended reserve; 
(3) maintain a file for each reported claim, which shall be 
available for inspection, review and/or copying by the Company 
or its duly authorized representatives; (4) perform reasonable 
and necessary administrative and clerical work in connection 
with reported claims which, subject to subparts (c) and (e) of 
this provision 3, shall include preparation of drafts and 
vouchers, compromises, releases, agreements and any other 
documents reasonably necessary to finalize a claim; (5) provide 
to the Company ongoing review and updating of recommended 
reserves to include any changes; (6) coordinate investigated or 
litigated claims with counsel on the negotiation of claims 
settlement; (7) record and report promptly to the Company each 
loss and allocated loss expense payment, utilizing Company 
claims drafts and coding procedures; (8) consult with the 
Company on sensitive claims; (9) periodically review the 
development of its claims handling procedures with the 
Company or its duly authorized representatives to identify 
problems and recommended corrective action; and (10) exercise 
reasonable care at all times in the performance of its duties 
hereunder.

c.      Agent will comply with limitations described in 
Addendum 1 of this Agreement on the amount of Agent's draft 
authority, and obtain prior Company written approval for 
payments exceeding such authority.

d.      Agent will report as soon as practical to Company: (1) 
All reports of serious injury, including but not limited to 
fatalities, burns, amputations, paraplegia, quadriplegia , brain 
stem injury, etc. (2) all claims in which suit has been or is 
expected to be filed, (3) all Insurance Department complaints, 
(4) matters involving questions of policy coverage, and (5) 
matters involving Reservation of Rights.

e.      Company shall have the unqualified right to specify, 
approve or disapprove counsel and independent adjusters that 
Agent is or is not allowed to use for business written on behalf 
of Company and to place limitations on the amount of work 
assigned to each.  The Company shall be the sole and final judge 
of the acceptability of any denial of, or any compromise or 
settlement involving, or coverage issue, or outstanding reserve 
with respect to any claim.

f.      Legal Counsel for the Company involving matters arising 
out of the policies of insurance written pursuant to this 
Agreement will be selected by the Agent subject to approval by 
the Company. The expense related to litigation and legal 
representation shall be borne by the Company.

4.      Company may conduct claim audits from time to time, 
with the full cooperation of Agent.

5.      Company will promptly provide Agent with drafts with 
which Agent shall pay claims on its behalf consistent with 
authority extended in Addendum I.

6.      Any claim file open after six (6) months shall have 
pertinent portions sufficient to evaluate exposure copied and 
sent to the Company.

ARTICLE IV

Records and Reporting

1.      The agent shall maintain a complete record of all 
transactions involving the interests of the Company and its 
policyholders, including, but not limited to, copies of policies 
and endorsements, billing and accounting transactions, and 
notices of all claims or occurrences representing potential 
claims.  Upon request Agent shall provide copy of any and all 
records requested by Company.

2.      Agent will report to Company, in accordance with 
Company's instructions, as expeditiously as practicable, all 
risks bound and policies issued with Company, and all 
endorsements, cancellations, renewals and similar actions that 
affect or change a risk previously bound with Company.

3.      Agent shall assist Company in monitoring, recording, 
and reporting the business underwritten for Company by Agent.  
Within thirty (30) days after the end of each month, Agent will 
furnish the company with the following reports:

A. MONTHLY:

1)      Accounts current consisting of:
        A)      Total written premiums, being:  gross premiums 
less return premium.
        B)      Total commissions paid to Agent.
        C)      Facultative premiums.
        D)      Facultative commissions.
        E)      Non-premium fees collected by Agent; such as 
policy fees (Kentucky Surcharge Tax, Kentucky 
Municipal Licenses Taxes, etc.)
        F)      The paid amount of surveys and underwriting 
reports exceeding $10,000 per month.
        G)      Balance due being: (A) - (B) - (C) + (D) + (E) - 
(F).
        H)      Losses (claims) and Allocated Loss Adjustment 
expenses paid during month.

2)      Reserve for losses outstanding and allocated loss 
adjustment expense reserve at the end of the month.

3)      Reserve for unearned premium at end of month.

B)      IN ADDITION TO THE MONTHLY REPORTS AS 
DESCRIBED:

1.      The Agent in a timely manner will provide the Company 
with data of the policies and claims which will provide the 
necessary information for the Company to record the data 
correctly on its books as required by the National Association of 
Insurance Commissioners and/or state insurance departments 
(NAIC Annual Statement).  The Company may request the Agent 
to provide a report of premiums in force by policy number, 
effective date, and policy term.

2.      Upon request by the Company, Agent will provide the 
Company with (1) additional analysis, reports and services, and 
(2) narrative and analytical reports of major and litigated 
claims.  Agent shall, in addition, provide the Company with an 
annual loss analysis by underwriting year and claims register 
providing date of loss, individual claim paid loss and LAE and 
change in outstanding loss and LAE information on a claim-by-
claim basis as well as open and closed claim count data as 
required for Schedule P filings.  Such information shall be made 
available to the Company on diskette.

3.      The monthly premium and loss reports referred to in 
Article IV(A) shall be reported in underwriting year format.

4.      The Agent, at the Company's request, will provide 
premium and loss data in a format that will allow the Company 
to report premium and loss data to its reinsurers.

ARTICLE V

Indemnity

1.      Agent hereby agrees to fully indemnify, defend, and save 
harmless the Company and its directors, officers and employees 
of and from any and all claims, demands, suits, fines and 
penalties, expenses, costs and attorney's fees, made or assessed 
against or incurred by the Company or the officers, directors, or 
affiliates of the Company, that may arise by reason of any act, 
error, or omission of or any misrepresentation by Agent, its 
officers or employees.

2.      Company hereby agrees to fully indemnify, defend, and 
save harmless the Agent and its Directors, officers and 
employees of and from any and all claims, demands, suits, fines 
and penalties, expenses, costs and attorney's fees, made or 
assessed against or incurred by the Agent or the officers, 
directors or affiliates of the Agent, that may arise by reason of 
any act, error, or omission of or any misrepresentation by 
Company, its officers or employees.

3.      Promptly after receipt by a party (the "indemnified 
party") of notice of any claim or other matter (the "Claim") in 
respect of which the indemnified party may seek indemnification 
from the other party hereto (the "indemnifying party") pursuant 
to this Article V, the indemnified party shall notify the 
indemnifying party of the Claim, and shall thereafter promptly 
convey all further communications and information in respect 
thereof to the indemnifying party.  The indemnifying party shall, 
if it so elects, have sole control at its own expense over the 
contest, settlement, adjustment or compromise (the 
"Resolution") of the Claim in respect of which this Article V 
requires it to indemnify the indemnified party, and the 
indemnified party shall cooperate with the reasonable requests 
of the indemnifying party in connection with the Resolution; 
provided, however, that (i) the indemnified party may, if it so 
elects, employ counsel at its own expense to assist in the 
handling of such claim, action, suit or proceeding, and (ii) the 
indemnified party's consent must be obtained before entering 
into any settlement, adjustment or compromise of the claim, if 
pursuant thereto or as a result thereof injunctive relief or 
criminal sanctions would be imposed upon the indemnified 
party.

ARTICLE VI

Auditing

1       As respects business subject to this Agreement, 
Company or its duly authorized representatives shall have the 
continuing right to conduct audits of any and every aspect of 
Agent's operations and accounts which pertain to this 
Agreement, at any time and from time to time, during normal 
business hours.  Agent shall in all things cooperate and render 
assistance in such examination.  Agent shall make copies of any 
such books, accounts, and records and shall furnish them to 
Company, as may be reasonably requested by Company.  Agent 
will provide suitable office space for a representatives of the 
Company in carrying out inspections and audits.

ARTICLE VII

Observance of Insurance Laws and Licensing

1.      Agent warrants and agrees that it shall have or obtain, 
prior to solicitation or acceptance of any business on behalf of 
the Company, a license as agent, where required, in such 
jurisdictions Agent has been authorized to write on behalf of the 
Company.  Agent represents that such licenses are not now and 
have never been the subject of any disciplinary action, and that it 
is not restricted or prohibited in any manner from acting 
hereunder.

2.      Agent undertakes to observe and comply with all 
applicable state laws regarding licensing of Agent and sub-
producers and the performance of all duties hereunder, and to 
pay all costs relating thereto.  Agent also agrees to be solely 
responsible for compliance by all its sub-producers with all 
applicable laws and regulations.

3.      In the event Agent is notified that its license or 
authorization to engage in the insurance business has been or is 
threatened to be revoked or suspended by any State Insurance 
Department or other public authority, Agent shall thereupon 
immediately notify Company and cease and desist from binding 
or issuing any further insurance coverage under this Agreement 
in the affected State or jurisdiction, but shall continue to provide 
all other services aforesaid on business produced prior thereto.  
Agent shall then take all necessary action required to fully 
restore its license or authorization.  Agent should also notify the 
Company whenever it receives notice of any regulatory action or 
sanction charged against the Company or becomes apprised of 
any claims asserted by any third party against either party to this 
Agreement.

4.      Company reserves the right to prior approval of all rates 
and forms.  Company may, at its discretion, authorize Agent to 
make filings of rates and forms on its behalf.

5.      Upon request of Company, Agent shall make filings and 
secure approval of all rates, rules and forms that are required by 
and are in conformity with applicable laws and regulations and 
shall promptly reimburse the Company upon demand for any 
fines, penalties, charges or assessments levied against the 
Company for not using approved filings, forms or rates.  In the 
event fines and penalties are assessed as a result of market 
conduct examinations, Agent shall indemnify Company for 50% 
of such fines or penalties within thirty (30) days after 
notification of such fines and penalties.

ARTICLE VIII

Ownership of Records and Supplies

1.      In the event of termination of this Agreement, the use and 
control of policy expirations and renewals shall remain the 
property of the Agent and be left in its possession; provided, 
however, that if Agent has not accounted for and paid to 
Company all monies owed Company, in accordance with the 
terms of this agreement, then the records of the Agent and the use 
and control of policy expirations and renewals shall vest in the 
Company and shall be forwarded to the Company immediately 
upon written request therefor.

2.      All policy forms, records, and other like supplies 
furnished by the Company  to Agent shall remain the property of 
the Company and shall be returned immediately upon request.  
Upon termination of this Agreement or the Agent's authority 
hereunder, the Agent, shall immediately return all such property 
to the Company or to its designated representative.

3.      Ownership of all claim files, notices, etc. shall be vested 
in the Company.  Agent shall be custodian of such records and 
shall send to Company all such records as directed.  The Agent 
shall have access to all claim files sent to the Company.

ARTICLE IX

Termination

1.      Irrespective of Article I, Paragraph 6, either party has 
the privilege to terminate this agreement at will, with or without 
cause, at any time upon the expiration of at least ONE 
HUNDRED EIGHTY (180) days from the date of mailing of 
written notice sent by prepaid registered or certified mail to the 
other party.

2.      In the event of a breach of any duty or obligation under 
this Agreement by either party, the other party may, at its sole 
election, terminate this Agreement by written notice sent at least 
fourteen (14) days prior to the termination date stated in the 
notice.  Said notice shall be conveyed by prepaid certified or 
registered mail to the other party.  Upon such termination, 
notwithstanding clause 4 of Article II, Agent shall immediately 
remit to Company all premiums collected by Agent on behalf of 
Company, and all other premiums owed to Company by insureds 
on business produced under this Agreement.

3.      In the event that the license or authorization of either 
party is revoked or suspended as described in clause 3 of 
Article VII, and, for any reason, that party fails to restore its 
license or authorization within thirty (30) days from the date of 
notification to such party of the revocation or suspension, this 
Agreement shall be automatically terminated, without notice.

4.      This Agreement shall be automatically terminated, 
without notice in the event either party files a petition in 
bankruptcy or becomes insolvent, or makes an assignment for the 
benefit of creditors, or in the event either party is placed into 
bankruptcy involuntarily.

5a.     Upon any termination of this Agreement, the Agent shall 
cease and desist from binding or issuing any further insurance 
coverage under this Agreement, but shall continue to provide all 
other services described in this Agreement on business 
produced prior to termination of this Agreement, until all such 
obligations on the part of Agent shall have been fully satisfied.

5b.     Any termination of this Agreement shall not affect the 
rights and obligations of the parties hereto as to transactions or 
acts done by either party prior to the effective date of 
termination.

5c.     The Agent will handle, to conclusion, the run-off of:

        (1)     Any administrative duties and

        (2)     Final resolution of any open or subsequently 
reported claims on policies issued during the 
term of this Agreement relating thereto.

6.      In the event that Agent refuses to provide such services 
as set forth in paragraph 5c or in the opinion of the Company, is 
unable to provide such services, the Company may provide such 
services itself or arrange to have such services provided by 
others and the expense thereof shall be borne by Agent.  Agent 
shall, in such event, promptly return to the Company all records 
pertaining to claims then being handled by it, and shall assist the 
Company in all ways possible to ensure a smooth transfer of 
files in its possession relating to such claims, it being expressly 
understood that on termination of this Agreement, or upon 
suspension of Agent's duties hereunder, any and all claims files 
shall be and remain the property of the Company.

ARTICLE X

Confidentiality

1.      Any reports, information and data obtained by, given to, 
or prepared or assembled by the parties under this Agreement, 
or by reason of or relating to the transactions contemplated by 
this Agreement, shall not be made available at any time by either 
party, to or for the benefit of any corporation, individual or 
entity whatsoever, without the express prior written consent and 
approval of the other party, except as required by applicable 
law or in connection with any inquiry or examination by any 
proper governmental authority.  Such approval will not be 
unreasonably withheld by the Company.

2.      Each party to this Agreement shall take all reasonable 
steps to maintain the confidentiality of information and reports 
regarding the business written under this Agreement or any of 
the transactions contemplated hereunder.

3.      At the request of either party, the other party shall cause 
its officers and employees to enter into confidentiality 
agreements to protect the confidentiality of the undertakings 
hereunder.

ARTICLE XI

E & 0 Insurance

Agent shall be required to maintain at all times Errors and 
omissions Insurance with a Minimum Limit of $5,000,000.  A 
copy of the policy evidencing that Errors and Omissions 
insurance is in force shall be provided to the Company at each 
renewal.  The insurance shall continue to be maintained until 
Agent has fully satisfied all of its obligations under this 
Agreement.

ARTICLE XII

Cancellation of Insurance

1.      Nothing in the Agreement shall be construed as limiting 
or restricting the right of the Company to reject, cancel or non-
renew or cause agent to reject, cancel or non-renew any risk or 
any binder, policy or other contract of insurance issued under 
this Agreement in accordance with the cancellation provision of 
such binder, policy or contract and any applicable law.

2       Agent agrees to promptly non-renew or cancel, at the 
direction of Company, such insurance.  Agent agrees not to 
initiate arbitrary cancellations or non-renewals of policies of 
insurance.  In the event of non-payment of premium, Agent is 
authorized and agrees to cancel or non-renew without awaiting 
direction from the Company.

ARTICLE XIII

Independent Contractors

Agent is an independent contractor and not an employee of the 
Company.  The Company, therefore, shall not be responsible for 
expenses of Agent such as rent, transportation, postage, 
countersignature fees, or any other expenses, except as 
otherwise agreed herein.  In addition, Agent shall be responsible 
for all salaries and other related labor costs and Social Security 
obligations of its personnel whether or not related to the 
Company's business.  Furthermore, it is expressly understood by 
the parties hereto that the relationship existing between the 
Company and Agent under this Agreement constitutes Agent as 
the Company's proxy or representative only in connection with 
the services or transactions set forth in this Agreement and 
directly related to the Agent's functions under this Agreement.  
Therefore, Agent is not authorized to undertake or create any 
obligation, responsibility or commitment with or to third parties 
on behalf of the Company except in connection with the services 
stated in this Agreement, and the Agent undertakes not to 
perform any action which might lead to a misinterpretation by 
third parties of the scope of the relationships created hereunder.

ARTICLE XIV

Addresses

1.      All notices, requests, demands and other 
communications under this Agreement or in connection therewith 
shall be given or made as follows:

        a.      If to the Company:

        PRESIDENT
        GENERALI - U.S. BRANCH
        ONE LIBERTY PLAZA
        NEW YORK, NEW YORK  10006

        b.      If to Agent:

        PRESIDENT
        SEIBELS, BRUCE & COMPANY
        P.O. BOX ONE
        COLUMBIA, SOUTH CAROLINA  29202

2.      Any notice or communication required or permitted to be 
given in terms of this Agreement shall be valid and effective 
only if in writing.

3.      Either party may by written notice to the other sent by 
prepaid registered mail change its address to another physical 
address provided that change of address shall only become 
effective on the seventh day after dispatch of the notice.

4.      Any notice or communication sent pursuant to this 
Agreement shall be deemed to have been received within ten 
(10) days of the date of posting.

ARTICLE XV

Arbitration

1.      In the event of any dispute or difference of opinion 
hereafter arising with respect to the rights and obligations of the 
parties under this Agreement, it is hereby mutually agreed that 
such dispute or difference of opinion shall be submitted to 
arbitration and that arbitration shall be the exclusive remedy for 
resolution of such dispute.

2.      The arbitration process shall begin upon written demand 
being served by one party upon the other to choose an arbitrator. 
 Within thirty (30) days after service of said demand, one arbiter 
shall be chosen by the Company, the other by Agent, and an 
umpire shall be chosen by the arbiters before they enter upon 
arbitration, all of whom shall be active or retired disinterested 
insurance executive officers.  In the event that either party 
should fail to choose an arbiter within thirty (30) days following 
receipt of written demand from the other party requesting it to do 
so, the requesting party may nominate two arbiters.  In the event 
the arbiters do not agree on selection of the umpire within 30 
days after both are named, the Company or Agent shall petition 
the American Arbitration Association to select the umpire.

3.      The petitioning party shall present its case to the arbiters 
within thirty (30) days following the date of appointment of the 
umpire.  The arbiters shall consider this agreement as an 
honorable engagement rather than merely as a legal obligation 
and they are relieved of all judicial formalities and may abstain 
from following the strict rules of the law.  The arbiters shall 
prepare a written decision which shall be final and binding on 
both parties, but failing to agree, they shall call in the umpire 
and a written decision of the majority shall be final and binding 
upon both parties.  Judgment upon the final written decision of 
the arbiters may be entered in any court of competent 
jurisdiction.

4.      Each party shall bear the expense of its own arbiter, and 
shall jointly and equally bear with the other the expense of the 
umpire and of the arbitration.  In the event that the two arbiters 
are chosen by one party, as above provided, the expense of the 
arbiters, the umpire and arbitration shall be equally divided 
between the two parties.

5.      Any arbitration proceedings shall take place at a 
location mutually agreed upon by the parties to this Agreement.  
If the parties to this Agreement fail to agree upon a location, 
such arbitration proceedings shall take place in New York, New 
York.

ARTICLE XVI

Reinsurance

The Agent is prohibited from purchasing reinsurance of any kind 
for or on behalf of the Company except as provided for and 
approved by the Company as discussed in the Underwriting 
Guide.

ARTICLE XVII

Miscellaneous Provision

1.      This Agreement shall be governed by and interpreted 
according to the laws of the State of New York and parties 
agree to submit themselves to the jurisdiction of any competent 
New York Court, both State and Federal.  The concession of 
jurisdiction shall not affect the obligation to arbitrate pursuant to 
Article XV.

2.      This instrument embodies the final, complete and entire 
agreement between the parties.  No other representation, 
understandings or agreements have been made or relied upon in 
the making of this Agreement other than those specifically set 
forth or referred to herein.

3.      Any alterations, modifications, amendments, variations 
or additions to this Agreement shall only be valid if in writing 
and executed with the same formalities as this instrument.

4.      The failure of either party to enforce at any time any of 
the provisions of the Agreement shall in no way be construed to 
be a waiver of such provisions, nor in any way to affect the 
validity of this Agreement, or any part thereof, or the rights of 
either party to thereafter enforce each and every such provision.

5.      This Agreement shall not be assigned, delegated, sub-
delegated, charged or otherwise disposed of by either party 
hereto without the express written consent of the other.

6.      The captions of the various sections of this Agreement 
shall not be deemed to be a part of this Agreement and shall not 
be construed in any way to limit the content thereof, but are 
inserted herein only for reference and the convenience of the 
parties.

7.      Agent shall not use any advertising or promotional 
material referring to Company, or identifying any insurance that 
could be written by Agent pursuant to the terms of this 
Agreement, without the prior written approval of Company.  
Such approval shall not in any event be construed as charging or 
binding Company to bear any part of the cost or expenses 
thereof.  Agent shall not issue or circulate any illustration, 
circular, statement or memorandum of any sort misrepresenting 
the terms, conditions, benefits, or advantages of any policy 
issued by Company, or make any misleading statement as to the 
financial security or condition of Company.  Notwithstanding 
any other provision in this Agreement, Company may, at its sole 
option, at any time, and from time to time, apply any sums due 
Agent hereunder against any Payment due whatsoever of Agent 
to Company under this Agreement.

8.      Agent has no authority to, nor shall it represent itself as 
having authority to, nor shall it do any of the following:

a.      Waive a forfeiture.

b.      Waive premium payment.

c.      Extend the time for the payment of premiums or other 
monies due Company, except for premium payment plans 
offered in the normal course of business.

d.      Institute, prosecute, or maintain any legal proceedings in 
connection with any matter pertaining to Company's 
business, other than, and with prior written approval of 
Company, the institution, prosecution, and maintenance 
of legal proceedings for the collection of premiums due 
on policies issued hereunder or recoveries on claims.

e.      Hold itself out as an agent of Company in any other 
manner, or for any other purpose, than is specifically 
prescribed in this Agreement; or

f.      Make any representation, pledge the credit of or create 
any obligation on behalf of the Company other than as 
specifically prescribed in this Agreement.

9.      Agent shall immediately:

a.      Forward to Company any legal process or notice served 
on Agent in a suit or proceeding against Company;

b.      Notify Company of any change in the ownership of 
shares of stock of Agent or if the disposition of any 
substantial portion of the assets of Agent.

10.     If any provision of this Agreement shall contravene or be 
invalid under the laws of the United States or the state in which 
enforcement is sought, it is agreed that such provision shall not 
invalidate the whole Agreement but the Agreement shall be 
construed as if not containing the particular provision or 
provisions held to be invalid.

11.     Except as specified in Addendum #2, referring to 
termination and withholding of additional contingent 
commission due agent, the Company and/or Agent may exercise 
the right of offset to settle balances due the other.

Integration Clause

This Agreement embodies the entire Agreement and 
understanding between the parties hereto and supersedes all 
prior agreements and understandings relating to the subject 
matter hereof and no party hereto has made any representation, 
warranty or covenant in connection with the matters set forth 
herein except as expressly stated herein.  All the terms of this 
Agreement shall be binding upon the successors and assigns of 
the parties hereto and shall inure to the benefit of and be 
enforceable by the parties hereto, their successors and assigns; 
provided however, that this Agreement may not be assigned by 
any party hereto without the prior written consent of the other; 
and that this Agreement may not be amended orally, but only in 
writing signed by both parties.

IN WITNESS WHEREOF, the Company and the Agent have 
executed this Agreement.


GENERALI - U.S. BRANCH          SEIBELS, BRUCE AND 
COMPANY/
        AGENCY 
SPECIALTY OF KENTUCKY, 
INC.


BY:  /s/ John DeGregoria                        BY:  /s/ Ernst N. 
Csiszar         


DATE:  February 2               1996            DATE:  March 20
                1996    

WITNESS:                                        WITNESS:


BY:  /s/                                        BY:  /s/ Priscilla 
C. Brooks               

DATE:  February 2, 1996            DATE:  March 20, 1996    


ADDENDUM NO. 1


This addendum is attached to and made a part of the Agency 
Agreement by and between the GENERALI - U.S. BRANCH, 
hereinafter referred to as "Company" and SEIBELS BRUCE & 
COMPANY and AGENCY SPECIALTY OF KENTUCKY, 
INC., managing general agent, hereinafter referred to as "Agent" 
being effective January 1, 1996.

The purpose of this addendum is to summarize the marketing and 
underwriting authorization granted by the Company to the Agent. 
 The Company's underwriting guidelines are incorporated by 
reference herein.  THIS AUTHORIZATION SO GIVEN IS 
SUBJECT TO AND LIMITED BY THE COMPANY'S 
LATEST UNDERWRITING GUIDELINES AND ANY 
AMENDMENTS THERETO, THESE GUIDELINES AND 
AMENDMENTS, IF ANY, HAVING BEEN RECEIVED AND 
ACKNOWLEDGED BY AN OFFICER OF THE AGENT.

A)      Territory

        The Agent is authorized to market and underwrite 
commercial insurance products on behalf of the 
Company in the states of (CONFIDENTIAL TREATMENT REQUESTED)

B)      Products

        The Agent is authorized to market and underwrite on 
behalf of the Company the following commercial 
insurance policies:

        Businessowners
        Commercial Automobile
        Commercial Fire
        Commercial Package
        Commercial Umbrella
        Crime
        Fidelity
        Garage
        General Liability
        Glass
        Inland Marine
        Mine Subsidence

C)      Maximum Policy Limits

        The Agent is authorized to market and underwrite on 
behalf of the Company up to a maximum policy limit of 
(CONFIDENTIAL TREATMENT REQUESTED) for commercial property coverage and 
(CONFIDENTIAL TREATMENT REQUESTED) for commercial casualty coverage.

D)      Catastrophe Caps

        The Agent is authorized to market and underwrite on 
behalf of the Company the following maximum 
aggregate exposure for loss due to windstorm.

        In no event shall the Company's Total Insured Value 
property exposure in any one three-digit coastal zip 
code, in the states of (CONFIDENTIAL TREATMENT REQUESTED) 
, exceed a (CONFIDENTIAL TREATMENT REQUESTED) maximum aggregate.

        Coastal zip codes as used herein shall mean the 
following three-digit zip codes:

(CONFIDENTIAL TREATMENT REQUESTED)
                

        It is further understood and agreed that in no event shall 
the Company's Total Insured Value property exposure in 
any one three-digit inland zip code, in the states of 
(CONFIDENTIAL TREATMENT REQUESTED), exceed a 
(CONFIDENTIAL TREATMENT REQUESTED) maximum aggregate.

E)      Draft Authority

        The Agent is authorized to settle up to a maximum of 
(CONFIDENTIAL TREATMENT REQUESTED) per claim, to issue drafts payable on the 
Company's draft account, provided that such authority 
shall be solely for the payment of losses, and loss 
adjustment expenses.  Authorization to issue drafts in 
excess of (CONFIDENTIAL TREATMENT REQUESTED) may be increased as of a date
 agreed upon between the Company and the General Agent.


F)      Production

        The Agent is authorized to produce through its marketing 
and underwriting of commercial insurance products a 
total annual premium volume of (CONFIDENTIAL TREATMENT REQUESTED) for the 
calendar year 1996.  The production in subsequent 
calendar years will be agreed upon between the 
Company and the General Agent and so endorsed.

G)      Agent's Provisional Commission

        Agent's provisional commission shall be (CONFIDENTIAL TREATMENT 
REQUESTED)(percent) of written premiums except as respects all 
business accepted and ceded to the (CONFIDENTIAL TREATMENT REQUESTED) 
for which the allowance will be 
(CONFIDENTIAL TREATMENT REQUESTED) and the (CONFIDENTIAL TREATMENT REQUESTED)
 for which the allowance will be (CONFIDENTIAL TREATMENT REQUESTED)

H)      Guarantee of Premium Due

        Agent, as surety and principle debtor, hereby 
unconditionally guarantees timely payment of premiums 
to the Company, whether or not such premiums have 
been collected.

GENERALI        U.S. BRANCH             SEIBELS BRUCE & COMPANY


BY:  /s/ John DeGregoria                        BY:  /s/ Ernst N. Csiszar    

DATE:  February 2, 1996                 DATE:  March 20, 1996            

WITNESS:                                        WITNESS:


BY:  /s/                                        BY:  /s/ Priscilla C. Brooks 

DATE:  February 2, 1996                 DATE:  March 20, 1996            


AGENCY SPECIALTY OF KENTUCKY, INC.


        BY:  /s/ Ernst N. Csiszar         


        DATE:  March 20, 1996            

        WITNESS:


        BY:  /s/ Priscilla C. Brooks               

        DATE:  March 20,  1996            



ADDENDUM NO. 2


This addendum is attached to and made a part of the Agency 
Agreement by and between the GENERALI - U.S. BRANCH, 
hereinafter referred to as "Company" and SEIBELS BRUCE & 
COMPANY and AGENCY SPECIALTY OF KENTUCKY, 
INC., managing general agent, hereinafter referred to as "Agent" 
being effective January 1, 1996.

The Company shall allow the Agent a further allowance, being a 
contingent commission of (CONFIDENTIAL TREATMENT REQUESTED), of the Net Profit 
for the contingent period (defined below).

As soon as possible, but no later than one hundred twenty (120) 
days following each December 31, the Company will prepare a 
Contingent Commission Statement.  The initial Contingent 
Commission Statement shall be prepared within one hundred 
twenty (120) days following December 31, 1996.  The 
Contingent Commission Statement(s) shall be prepared on an 
inception-to-date basis and will be determined on the Net Profit 
of the total of all agreement periods.

The Contingent Commission Statement(s) will segregate each 
agreement (underwriting) period and also will total all 
agreement periods.  The initial agreement period shall be for 
policies effective during the period beginning with the inception 
date of the agreement through and including December 31, 1996. 
 The subsequent agreement periods shall be annual for new and 
renewal policies with effective dates during the period 
beginning with January 1st, and ending December 31st.

In the event of termination the contingent commission shall 
continue to be recalculated annually and shall be paid out to 
agent as follows:  end of first year following termination, 0% 
increasing in increments of 10% per year until the full contingent 
commission has been paid to agent.  However if subsequent 
events have proven that the contingent commission calculation 
has been overestimated, the Agent shall return to the Company 
such amounts as will give effect to the revision(s).

Upon verification of the Contingent Commission Statement, 
settlement shall be paid immediately by the debtor party.  The 
settlement balance shall be calculated in the following manner:

A.      Contingent Commission Due
B.      Contingent Commission Previously Paid
C.      Balance:  (A) - (B)

If balance is positive number, the balance will be additional 
Contingent Commission due Agent.  If balance is a negative 
number, the balance will be Return Contingent Commission due 
Company to the extent of prior positive additional Contingent 
Commissions paid to the Agent.  To the extent additional 
Contingent Commissions have not been paid, a deficit carry-
forward shall be created and carried forward.

The Contingent Commission calculation shall be calculated in 
accordance with the following formula:

Agreement       Agreement       
Period  Period  Total

(A)     Earned Premium:

        1)      Total Premiums Written

        2)      Less Unearned
                Premium as at
                12/31/XX

        3)      Premium Earned:
                (l) - (2)

(B)     Cost of Reinsurance

(C)     Losses Incurred

        1)      Losses and
                Loss Expenses paid.

        2)      Reserve for Outstanding Loss
                and Loss Adj. Expenses

        3)      Reserve for Incurred but Not
                Reported (IBNR) losses

                The value of IBNR reserve shall be twenty seven 
and seven-tenths percent (27.7%) of the earned 
premium of the most current agreement period, 
thirteen and seven-tenths (13.7%) of the earned 
premium of the second most current agreement, 
six and six-tenths percent (6.6%) of the earned 
premium of the third most current agreement 
period.  Three and one-half percent (3.5%) of the 
earned premium of the fourth most current 
agreement period.

        4)      Losses and LAE Incurred:
                (1) + (2) + (3)

(D)     Loss and Loss Expenses
        Recoverable under
        Reinsurance Programs:

        1)      Loss and Loss Adjustment
                Expenses recovered

        2)      Reserve for Loss and
                Loss Adjustment Expenses

        3)      Total Recoverable:
                (1) + (2)

(E)     Expenses Incurred:

        1)      Commission as described in Addendum #1,
                paragraph (G).

        2)      Company Management Expenses shall be five
                percent (5%) of net premium written during
                each period.

        3)      Market conduct examination costs and fines,
                penalties and expenses which are incurred by the
                Company in accordance with any state
                regulatory authority and not previously
                reimbursed by Agent.

        4)      Costs associated with direct production
                such as premium taxes, inspection costs
                and survey costs, ISO, AMS and NISS costs
                and fees.

        5)      Total Expenses Incurred:
                (1) + (2) + (3) + (4)

(F)     Net Profit (Deficit)

        Balance:  (A) + (D) - (B) - (C) - (E)

(G)     Profit:

        1)      Contingent Commission Due (CONFIDENTIAL TREATMENT REQUESTED)
                of Net Profit.

        2)      Less Contingent Commission
                previously paid to Agent

        3)      Balance Now Due Agency/
                Return Contingent Now Due
                Company:

                (l) - (2)

GENERALI        U.S. BRANCH             SEIBELS BRUCE 
& COMPANY


BY:  /s/ John DeGregoria                        BY:  /s/ Ernst N. Csiszar   


DATE:  February 2, 1996                 DATE:  March 20, 1996            

WITNESS:                                        WITNESS:


BY:  /s/                                        BY:  /s/ Priscilla C. Brooks  

DATE:  February 2, 1996                 DATE:  March 20, 1996            


AGENCY  SPECIALTY OF KENTUCKY, INC.


        BY:  /s/ Ernst N. Csiszar         


        DATE:  March 20,  1996            

        WITNESS:


        BY:  /s/ Priscilla C. Brooks               

        DATE:  March 20,   1996            


ADDENDUM NO. 3
Sub-Producer Agreement Approval

This addendum is attached to and made a part of the Managing 
General Agency Agreement by and between GENERALI - U.S. 
BRANCH, hereinafter referred to as "Company" and SEIBELS, 
BRUCE &: COMPANY and AGENCY SPECIALTY OF 
KENTUCKY, INC., managing general agent, hereinafter 
referred to as "Agent".

In accordance with ARTICLE 1, Appointment, Authority and 
Duties of Agency, provision No. 6 of the AGENCY 
AGREEMENT, we have received The Seibels Bruce Insurance 
Companies Agency Agreement form PR 128 (4/93), hereinafter 
referred to as the Sub-Producer Agreement, and approve the 
form for use in entering into sub-producer agreements on behalf 
of Generali - U.S. Branch.

Generali - U.S. Branch agrees that Seibels, Bruce & Company 
shall be and act as the duly authorized manager of Generali - 
U.S. Branch under the terms provided by the Sub-Producer 
Agreement.

Generali - U.S. Branch further agrees that, if, upon the 
termination of a Sub-Producer Agreement entered into with a 
producing agency by Generali - U.S. Branch through the agency 
of Seibels, Bruce & Company, the producing agency has failed 
to account for and pay over to Generali - U.S. Branch all 
premiums and other money for which it is liable to Generali - 
U.S. Branch, Generali - U.S. Branch will assign, for the duration 
of the Agreement to which this addendum is attached, to Seibels, 
Bruce & Company all of the rights to and interests in the 
producing agency's records and rights to the use and control of 
expirations to which Generali - U.S. Branch is entitled under the 
Sub-Producer Agreement and will cooperate with Seibels, 
Bruce & Company in the enforcement of those rights, or, at the 
option of Seibels, Bruce & Company, Generali - U.S. Branch 
will enforce such rights and interests and, to the extent a 
recovery is effected, assign and turn over to Seibels, Bruce & 
Company all of the records and rights to the use and control of 
expirations, or, if some or all of such property is sold as 
provided in the Sub-Producer Agreement, it will assign and pay 
over to Seibels, Bruce & Company its part of the proceeds of 
such sale.

GENERALI - U.S. BRANCH          SEIBELS, BRUCE AND COMPANY/
                                AGENCY SPECIALTY OF KENTUCKY, INC.


BY:  /s/ John DeGregoria                        BY:  /s/ Ernst N. Csiszar    


DATE:  February 2 1996                         DATE:  March 20 1996    

WITNESS:                                        WITNESS:


BY:  /s/                                        BY:  /s/ Priscilla C. Brooks  

DATE:  February 2  1996                         DATE:  March 20 1996    
 



 

 



EXHIBIT 10.12




SOUTH CAROLINA REINSURANCE FACILITY
CONTRACT WITH DESIGNATED CARRIER FOR 
SERVICING
OF DESIGNATED AGENT BUSINESS

This agreement made and entered into this 1st day of 
October, 1994, by and between the South Carolina Reinsurance 
Facility, a nonprofit, unincorporated legal entity created 
pursuant to the South Carolina Automobile Reparation Reform 
Act of 1975 [hereinafter referred to as "Facility"], and Catawba 
Insurance Company, an insurance company licensed to write and 
to engage in writing automobile insurance within the State of 
South Carolina [hereinafter referred to as "Designated 
Carrier"];
WHEREAS, the Facility wishes to contract with the 
Designated Carrier to service one or more of such licensed 
agents meeting the standards and criteria as determined by the 
Facility in accordance with Section 38-77-590 of the South 
Carolina Code of Laws (1976), as amended; and
WHEREAS, the Designated Carrier has, upon its bid 
submission, been found to be the lowest responsive and 
responsible bidder for a certain block of business produced by 
certain specified designated agents and is Drilling to service 
and to contract with one or more of such specified designated 
licensed agents upon the terms and conditions as set forth in the 
bid documents and/or as hereinafter specified;
NOW, THEREFORE, the Facility hereby agrees to 
appoint the Designated Carrier as a servicing carrier for the 
Facility and the Designated Carrier hereby accepts such 
appointment as a servicing carrier for the Facility subject to the 
following terms and conditions:
1.      Duties of the Designated Carrier
(a)     The Designated carrier shall administer the 
activities of all designated agents assigned to it in accordance 
with this Agreement, the terms of the bid specifications upon 
which this contract has been awarded and the laws of South 
Carolina and shall perform under any contract entered into 
between Designated Agents and Designated Carriers which the 
Facility has agreed, on behalf of the Designated Agent, to cause 
the Designated Carrier to perform and shall notify the Facility of 
the failure or refusal of any Designated Agent to comply with 
any provision of this agreement, the contract between the 
Designated Agent and Designated Carrier and the laws of South 
Carolina.
(b)     The Designated Carrier shall comply with all of 
the terms and conditions of this Agreement, with all written 
bulletins or directives issued by the Facility, and with the laws 
of South Carolina.
(c)     The Designated Carrier shall carry out and 
perform all Facility services in compliance with the Servicing 
Standards, in accordance with the Rules of Operation and Claim 
Guidelines contained in the South Carolina Reinsurance Facility 
Manual, as reasonably applied, and shall exercise ordinary care 
and diligence in the performance of such Facility services.
(d)     The Designated Carrier shall make internal 
audits of its Facility business, at such times and in such detail as 
the Facility shall reasonably require, but not less than annually.  
Such audits shall include at a minimum compliance as -set out in 
this agreement and compliance with the provisions of the South 
Carolina Reinsurance Facility Manual, Claim Guidelines and 
any other written bulletin or directive of the Facility.
(e)     The Designated Carrier shall cooperate fully 
with all officers, employees, agents and other representatives of 
the Facility during audits, investigations or examinations made 
and conducted by them and shall permit such persons to have 
full access, during normal business hours, to all books and 
records of the Designated Carrier pertaining to its Facility 
insureds and its Facility business.
(f)     The Designated Carrier shall submit to the 
Facility, at such intervals as shall be requested by the Facility, 
but not less than annually, the operating expenses incurred by it 
in the performance of the Facility Services, such report to 
contain the information called for by any uniform operating 
expense form adopted by the Facility.
(g)     The Designated Carrier shall implement all 
reasonable changes, revisions, amendments and modifications in 
rates, endorsements, renewals and policy forms on the effective 
date of their approval by the Commissioner.
(h)     The Designated Carrier shall designate, in 
writing, the person or persons within its organization to whom 
all correspondence, bulletins, circulars and related materials 
shall be sent by the Facility and such person shall be directed to 
acknowledge receipt of any of the foregoing when so requested 
by the Facility and such acknowledgment shall be binding on the 
Designated carrier.
(i)     The Designated Carrier agrees to appoint such 
licensed agent or agents, as determined eligible and assigned to 
it by-the Facility, as the agent or agents of the Designated 
Carrier for the purpose of writing mandatory automobile 
insurance coverages for eligible risks; provided, however, that 
the Designated Carrier shall be obligated to accept agents only 
in such numbers and in such geographical areas as the 
Designated Carrier is able to adequately serve consistent with 
the capacity of the Designated Carrier and consistent with sound 
business practices; provided, further, that in any event the 
Designated Carrier shall be obligated to appoint such licensed 
agents as were identified or profiled in the bid documents upon 
which this contract is based and was awarded.
(j)     The Designated Carrier must cede to the Facility 
all mandated automobile insurance coverages for risks 
submitted by the designated agents assigned to it and written by 
the Designated Carrier, provided such risks are "eligible risks" 
as defined in Sections 38-77-510, 38-77-30 (5.5) and (11), 38-
77-110 and 38-77-280 of the South Carolina Code of Laws 
(1976), as amended, and in Article II of the Plan of Operation 
and further provided that the coverage and coverage limits 
written are eligible for cession to the Facility.
        (k)     [Reserved for future use].

        (l)     The Designated Carrier must develop reasonable 
procedures to assure that all business submitted by its 
designated agents and written by the Designated Carrier shall be 
in compliance with the Performance Standards specified in the 
bid documents upon which this contract is based, in the South 
Carolina Reinsurance Facility Manual, in the South Carolina 
Reinsurance Facility claim Handling Guidelines and/or as listed 
below:
        (1)     Issuance of Policy
                The Designated Carrier must mail an appropriate 
policy to the insured within 30 calendar days of 
receipt of the completed application.
        (2)     Acknowledgment
                The Designated Carrier will act on all requests 
within 30 days or acknowledge the receipt of 
such a request.
        (3)     Renewal Policies or Certification
                Renewal policies or certification will be issued 
and mailed within 30 days of the Designated 
carrier receipt of renewal premium.
        (4)     Endorsement
                Within 30 days of receipt of request for 
endorsement, the Designated Carrier will issue 
such endorsement or acknowledge receipt of the 
request.
        (5)     Cancellation
                Any request for cancellation of the policy shall 
be processed and notice mailed within 30 
calendar days of the Designated carrier's receipt 
of such request.
(6)     Return Premium
                The Designated Carrier must mail the return 
premium check within 30 days of a request for 
cancellation or endorsement resulting in return 
premium.
(7)     Minimum Underwriting Standards
        The Designated Carrier is responsible to meet 
the following minimum underwriting standards 
for all Designated Agent business ceded to the 
Facility.  The Designated Carrier is responsible 
to determine that all business ceded to the 
Facility is correctly classified and rated to 
develop the correct and proper premium and:
                (a)     Obtain the identification, age, and driver 
license number of the applicant, of all operators 
resident in the applicant's household, and of any 
non-residents who are regular operators.
                (b)     Determine the use of each vehicle by all 
operators to determine the correct rates and 
classifications.
                (c)     Obtain within 60 days of the effective 
date, for each initial cession, a current MVR for 
each insured and operator whose record would 
affect the sub-class for any vehicle subject to the 
South Carolina Uniform Merit Rating Plan.
(d)     Develop sufficient classification 
information for all types -identified in the 
commercial, Public, Garage, Non-Owned, 
Miscellaneous and Fleet sections of the 
Designated carrier manual.
                (e)     Make all underwriting records of 
business ceded to the Facility available for audit 
by the Audit Committee.
(8)     For the Servicing of "All Other" risks, as 
appropriate:
                (a)     Provide engineering and loss control 
service equivalent to voluntary market practice 
including follow-up for compliance with all 
reasonable safety requirements.
                (b)     Attempt to secure and verify account loss 
history from the previous carrier/carriers to 
insure proper application of any applicable 
premium surcharge or rating plans.
                (c) Audit following account expiration or 
cancellation.
                (d)     Make, maintain and cancel all certificates 
and filings in accordance with any municipal, 
state or federal requirements.
(9)     The Designated Carrier must commit itself to all 
performance standards set out for Designated 
Carriers and demonstrate on a continuing basis 
that it is complying with those performance 
standards.
        (10)    Designated Carrier must comply with all 
reporting requirements in accordance with 
Section 3, Part C - Accounting and Statistical 
Requirements of the South Carolina Reinsurance 
Facility.
        (11)    A Designated Carrier will not be provided an 
interim settlement unless the reports indicated in 
number 10 are received on an accurate and 
timely basis.
        (m)     With regard to designated agents assigned to it, 
the Designated Carrier must maintain records and reports as 
required by the Facility.  Such records and reports shall be 
furnished by the Designated Carrier either periodically as 
specified by the Facility or upon request.  The Designated 
Carrier further agrees that the books, records, accounts and files 
of the Designated Carrier with regard to said designated agents 
and the business produced by said agents may be audited as 
directed by the Facility.  Copies of any such books, records, 
accounts and files shall be furnished to the Facility upon request.
(n)     The commission paid on insurance coverages 
produced by the designated agents of the Designated Carrier and 
ceded to the Facility shall be that commission provided for by 
the terms of Rule 12 of Rules of Operation of the South Carolina 
Reinsurance Facility, but shall increase or decrease if said Rule 
12 is amended to provide an increase or decrease during the 
term of this Agreement.  The same commission shall apply 
uniformly statewide.  In the event the commission paid on 
insurance coverages produced by the designated agents of the 
Designated Carrier is increased or decreased during the term of 
this Agreement, the percentage of written premium the 
Designated Carrier is allowed to retain to cover expenses 
involved in the appointment and maintenance of designated 
agents and the issuance -and servicing of automobile insurance 
policies will be adjusted proportionately to reflect the net 
increase or decrease in the commission paid to designated 
agents by the Designated Carrier.
(o)     The Designated Carrier agrees to give the same 
type of service to business produced by its designated agents 
that it provides for its voluntary market, including but, not 
limited to premium billings, collections, submission of 
applications, reporting of losses, and claims adjustment.  If the 
service or performance requirements imposed by the Facility 
are more stringent than the service or performance requirements 
provided by the Designated Carrier to its voluntary market, the 
Facility's minimum service and performance standards shall 
apply to business produced by its designated agents.
(p)     The Designated Carrier agrees to establish and to 
enforce reporting standards requiring designated agents to report 
all business bound to the Designated Carrier within two working 
days after binding.
(q)     The Designated Carrier agrees to comply in all 
respects with Chapter 77 of Title 38 of the South Carolina Code 
of Laws, (1976), as amended, the Plan of Operation of the 
Facility and any rules or regulations promulgated thereto by the 
Board of Governors of the Facility and all written directives or 
bulletins of the Facility.
(r)     The Designated Carrier shall require that no 
automobile insurance risks applying for coverage at limits 
which may be ceded to the Facility be accepted under any form 
of brokerage arrangement for submission to the Designated 
Carrier by a designated agent, nor shall the designated agent 
accept any application referred by any other agent or agency, for 
monetary or other considerations.
(s)     The Designated Carrier agrees that it will 
require each of its designated agents to enter into a written 
contract or agreement which shall:
                        (1)     include a provision providing for 
termination of the contract or agreement between 
the Designated Carrier and the designated agent 
should the designated agent acquire an 
automobile insurance insurer voluntarily;
                        (2)     include a personal undertaking by 
the designated agent and any persons exercising 
control over operations of the designated agency 
to reimburse the Designated Carrier the full 
amount of any financial loss caused by 
unremitted premiums or contributed to by bad 
faith, fraud, dishonesty, or misfeasance on the 
part of the designated agent or any persons 
exercising control over the operations of the 
designated agency.
(3)     The undertakings provided for in 
subsection (2) shall be in terms sufficient to 
enable the Designated Carrier to recover 
judgment against the obligators without first 
having to exhaust remedies against the designated 
agent.
(4)     include a provision whereby the 
Designated Carrier, on behalf of the Facility, 
shall, if it incurs financial loss caused by 
unremitted premiums, or other breach of duty, 
bad faith, fraud, dishonesty or misfeasance on the 
part of the designated agent, be vested with 
ownership of the designated agent's records 
relating to business placed by the designated 
agent with the Designated Carrier and shall be 
vested with use and control of expirations with 
respect to such business.  The contract shall 
further entitle the Designated Carrier, on behalf 
of the Facility and with due consideration for 
mitigation of any loss, to make such use or 
disposition as it deems fit of the designated 
agent's records, the expirations and the 
Designated Carrier's own records.
(5)     include a provision whereby 
neither the Facility nor the Designated Carrier 
shall be responsible for any expenses of the 
designated agent, including, without limitation, 
rent, transportation, salaries, license fees, 
collection fees, solicitors fees, postage and 
advertising.
                        (6)     include a provision that during the 
term of this Contract and after termination, the 
designated agent will not hold himself out or 
represent himself as a producer, agent or 
representative of the Designated Carrier in 
voluntary market, unless the producer represents 
the Designated Carrier in the voluntary market.
(7)     The designated agent will not 
intentionally or willfully provide any 
misinformation on applications or with respects 
to claims or other material matters submitted to 
the Facility or to the Designated Carrier.
(t)     Upon learning of any default by a designated 
agent under the terms of the contract with the Designated 
Carrier, the Designated Carrier agrees to:
                        (1)     immediately report the default to 
the Facility and to the Chief Insurance 
Commissioner or such person as either may 
direct;
                        (2)     act to suspend the binding 
authority of the designated agent if, in the 
discretion of the Designated Carrier, such action 
is warranted to protect the Facility from loss and, 
if otherwise directed by the Facility, to terminate 
the designated agent's contract and the contract 
of any other agent associated with the designated 
agent and licensed by the Designated Carrier 
incidental to the operations of the designated 
agent;
(3)     immediately remove from any 
terminated designated agent's control all 
application, policy and binder forms and other 
materials and supplies furnished by the 
Designated Carrier;
(4)     provide the Facility with (i) a 
chronological background statement of events 
leading up to and encompassing the default; (ii) 
copies of all contracts and agreements between 
the Designated Carrier and any other person or 
organization relating to the designated agent 
covering the period or periods during which the 
loss was incurred; and (iii) copies of all 
pertinent correspondence between the 
Designated Carrier and the designated agent' s 
bonding company, if any;
(5)     provide the Facility with 
complete information on collection efforts after 
default, including but not limited to contacts with 
the agent, his attorney, his bonding company and 
all other persons who may be liable to the 
Designated Carrier on account of the designated 
agent's default.  Such information shall include a 
description of legal action taken, copies of all 
legal documents and pleadings and the results of 
such legal actions;
                        (6)     provide the Facility with a final 
accounting pertaining to the agent's unpaid 
account and all documentation relevant thereto., 
including but not limited to a listing in policy 
number order showing separately the amount of 
premium and surcharge generated for each policy 
and the amount of premium and surcharge 
received, the accounting month in which each 
premium and surcharge amount was reported to 
the Facility, and the commission or other 
compensation paid or withheld to offset 
indebtedness.
                        (7)     provide, upon request, proof of 
premium and surcharges paid to the agent and not 
forwarded to the Designated Carrier and any 
other information deemed pertinent by the 
Facility.

2.      Duties of Facility
(a)     After the designated agent assignment has been 
made, the Facility shall furnish all information at the disposal of 
the Facility with regard to the name, location, premium volume, 
previous number of risks insured and any other past business 
history of each agent assigned to that Designated Carrier.
(b)     In recognition of the expenses involved in the 
appointment and maintenance of a designated agent or agents and 
the issuance and servicing of automobile insurance policies, the 
Facility agrees to allow the Designated Carrier for designated 
agent business to retain that percentage of written premiums set 
forth in the bid documents upon which this contract has been 
awarded (i.e., 8.99% of written premium).  In recognition of the 
expenses involved in adjusting and settling claims under -
automobile insurance policies, the Facility agrees to reimburse 
the Designated Carrier's unallocated claim adjustment expense 
based upon that percentage of paid claim losses set forth in the 
bid documents upon which this    contract has been awarded 
(i.e., 10.98% of paid losses).  Allocated expenses (defined by 
the Rules of operation as outside legal expense) will be 
reimbursed to the Designated Carrier as a separate item.  All 
reimbursements shall be calculated and paid to the Designated 
Carrier at such times and in such manner as prescribed in the 
Facility Manual.
(c)     For purposes of determining Facility 
participation ratios by the Designated Carrier, private passenger 
net direct written car years, and all other automobile premiums 
as required to be reported to the appropriate statistical agent, on 
any business ceded to the Facility as designated agent business 
shall not be included in the Designated Carrier's share of total 
market for purposes of Paragraph 2 of Article IX of the Plan of 
Operation of the Facility.
(d)     In the event the Designated Carrier shall incur 
financial loss arising from the appointment of any agent pursuant 
to this agreement and such loss is caused by the unremitted 
premiums or any other breach of duty, bad faith, fraud, 
dishonesty or misfeasance on the part of such agent, the Facility 
shall, upon written request by the Designated Carrier and 
compliance with the substantial and procedural requirements as 
may be established by the Facility with respect to 
indemnification, indemnify the Designated Carrier for such f4-
nancial loss.  Provided, however, that any such indemnification 
shall be made only after a showing by the Designated Carrier 
satisfactory to the Facility that:
                        (1)     neither any negligent act or 
omission by the Designated Carrier nor any 
failure to abide by the terms of this Agreement, 
the Facility Act, The Plan of operations or the 
rules of the Facility in any way contributed to 
such loss; and
                        (2)     the Designated Carrier at all 
times properly supervised and audited said agent 
and otherwise conducted its dealings with said 
agent in accordance with good business 
practices; and
                        (3)     the Designated Carrier has 
exhausted all reasonable and appropriate efforts 
to recover its loss from sources other than the 
Facility.
If the Designated carrier incurs any extraordinary out-of-
pocket expense in attempting to recover its loss from sources 
other than the Facility, the Facility at its election may reimburse 
the Designated Carrier for all or any portion of such out-of-
pocket expenses; provided, however, that no reimbursement 
shall be made on account of out-of-pocket expense which has 
not been approved in writing in advance by the Facility. out-of-
pocket expenses which are eligible for reimbursement do not 
include collection agency fees or charges, court costs or 
attorneys' fees and expenses; provided, however, that the 
Facility at its election may, in a special case, consider 
reimbursement of such out-of-pocket expenses if it determines 
such reimbursement to be necessary or warranted.
As a condition to indemnification under this Agreement, 
the Designated Carrier shall execute an assignment (to the extent 
of the indemnity), in form and content satisfactory to the Facility, 
of its rights, claims and causes of action against the designated 
agent and all other persons, firms, corporations or other entities 
which may be liable to the Designated Carrier on account of the 
designated agent's default.  Said assignment shall include an 
assignment of the Designated Carrier's rights, claims, and 
causes of action against the assets of such persons.  Following 
execution and delivery of the aforesaid assignment, the 
Designated Carrier shall promptly notify the Facility in the event 
it learns of assets or sources of funds available for satisfaction 
of the assigned claim, and any monies collected by the 
Designated Carrier from the designated agent or from other 
persons who may be liable to the Designated Carrier or from the 
designated agent's bonding company or which are in any way 
related to or connected with the indemnified loss shall be paid 
over by the Designated Carrier to the Facility until the Facility 
shall have recovered its indemnity payments in full.
3.      Duration and Conditions
(a)     This Agreement shall be for a period of five (5) 
years and shall extend from October 1, 1994, up to and including 
September 30, 1999, unless earlier terminated as provided for 
herein.  Upon termination of this Agreement, the Designated 
Carrier will continue to service all designated agent business 
written by it prior to the effective date of termination, shall 
continue to make such reports to the Facility as may be required, 
and shall fulfill all obligations theretofore undertaken by it to the 
Facility, designated agents, insureds, claimants under policies 
and to all other persons with respect to such business.
(b)     If either party to this Agreement shall be in 
default of this Agreement, and such default shall continue for 
thirty days after written notice of such default is given to the 
party in default, then at the election of the party not in default 
and upon written notice to the party in default, this Agreement 
may be terminated not less than ten days after the mailing of said 
written notice.    In addition, the party not in default shall be 
entitled to claim and prove actual damages against the defaulting 
party and may resort to any other legal or equitable remedy.
(c)     Upon termination of this Agreement by the 
expiration of the contract period, all rights and obligations of the 
parties under this Agreement shall cease except as is otherwise 
provided in 3(a) above for the servicing of run-off business and 
claims.
(d)     Upon termination of this Agreement as a result of 
a default by the Designated Carrier, the Facility shall endeavor 
to contract with another company for the remainder of this 
contract's term.  Such other company shall appoint any 
designated agent previously assigned to the Designated Carrier 
as its own agent and undertake to fulfill the Designated Carrier's 
duties and obligations with respect to new business as set forth 
in this Agreement.  The Designated Carrier shall remain 
responsible for servicing all existing business written by it prior 
to the date of termination.  The Designated Carrier shall deliver 
to the Facility copies of such records, reports, claim files and 
other documents relating to any agents appointed by the 
Designated Carrier pursuant to this Agreement as the Facility 
shall request.  Nothing herein shall be construed as a limitation 
on the Facility's right to seek damages against the Designated 
Carrier after default in an amount at least equal to the increase in 
cost or expenses incurred by the Facility to obtain a replacement 
carrier for the remainder of the contract term.
(e)     The Designated Carrier's failing two (2) claims 
audits, including a re-audit, within any three (3) year period 
shall be a default by the Designated Carrier and sufficient basis 
for termination of this Agreement by the Facility as provided for 
in paragraph 3(d) above.
(f)     In the event any statute creating the Facility is 
repealed by the legislature during the term of this Agreement or 
amended in such a way as to prohibit Designated Carriers from 
writing new business produced by its Designated Agents, such 
statutory repeal or amendment shall, upon its effective date, 
constitute a termination of this Agreement by expiration of the 
contract period and treated as if occurring under paragraph 3(c) 
and 3(a) above.
(g)     In the event any statute, regulation or other 
practice or procedure governing or pertaining to the transactions 
contemplated by this Agreement shall be judicially determined 
to be unconstitutional, illegal or otherwise unenforceable, and 
the Facility and Designated Carrier agree in writing that further 
performance of this Agreement has thereby been rendered 
impossible, then either party hereto shall have the option to 
terminate this Agreement upon the giving of written notice to the 
other party.  Any such termination shall be construed as a 
termination of this Agreement by expiration of the contract 
period effective on the date written notice of termination is 
received by the other party, unless the notice specifies a later 
date in which event termination shall be effective on the date 
specified in the notice.
(h)     In the event the Facility for any reason 
whatsoever is unable to reimburse the Designated Carrier for 
losses arising under automobile insurance policies issued 
through designated agents in the manner provided in the 
Facility's Plan of operation and Rules of Operation and such 
inability shall continue for a period of 90 days after the due date 
of such reimbursement, then such losses shall be apportioned 
among and reimbursed by the Facility's member companies on 
the basis of the applicable participation ratios determined under 
the Plan of Operation and Rules of Operation in effect at the 
time such policies were last issued or renewed.     Provided, 
further, that in the event the Designated Carrier is precluded by 
law from canceling or refusing to renew any such policies, the 
foregoing provisions for reimbursement shall continue to apply 
to any losses resulting therefrom.
        IN WITNESS WHEREOF the parties have caused this 
Agreement to be executed by their duly authorized 
representative.

WITNESSES:                                      
        CATAWBA INSURANCE COMPANY
                                                        
        (Name of Designated Carrier)

/s/                                                     BY:  /s/ 
W. Thomas Reichard              
/s/                                                     TITLE:  
President                       
DATE:  
8/29/94 
                


SOUTH CAROLINA REINSURANCE FACILITY


                                            BY:  /s/ D. A. Gay                  
                                            TITLE:  General Manager         
                                            DATE:  8-30-94