SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549

                              FORM 10-K

            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year end                Commission File Number
 December 31, 1996                               0-671

                        MOTOR CLUB OF AMERICA                 
       (Exact name of registrant as specified in its charter)

        New Jersey                              22-0747730       
 (State of incorporation)                   (I.R.S. Employer
                                             Identification No.)

 95 Route 17 South, Paramus, New Jersey                   07653  
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code (201)291-2000

     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) $.50 per share

                          (Title of Class)

Indicate by check mark whether the registrant (l) 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 registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [x]

The aggregate market value of the voting Common Stock (par value
$.50 per share) held by non-affiliates on March 25, 1997 was
$11,137,760 based on the closing selling price.

2,047,504 shares of Common Stock were outstanding as of March 25,
1997.

Documents Incorporated by Reference:  Portions of the registrant's
definitive proxy statement issued in conjunction with the June 11,
1997 Annual Meeting of Shareholders (Part III).




                             PART I

Item 1. Description of Business

           (a) The Registrant and a group of affiliated
corporations, of which the Registrant is parent, are known as the
"Motor Club of America Companies" (the "Motor Club of America
Group") and provide property and casualty insurance services.  The
Registrant, incorporated in New Jersey in 1933 as "Automobile
Association of New Jersey", is the successor to a New Jersey
corporation organized in 1926.  The present name was adopted in
1958.

          The Registrant has two wholly-owned subsidiaries which
write property and casualty insurance, Motor Club of America
Insurance Company ("Motor Club") and Preserver Insurance Company
("Preserver").  Motor Club writes private passenger automobile
("PPA")  business; Preserver writes small commercial, homeowners
and ancillary coverages.  Motor Club and Preserver are collectively
referred to as the "Insurance Companies".  The Insurance Companies
are domiciled in the State of New Jersey.

          On December 2, 1996, the Registrant sold its wholly-owned
subsidiary, Motor Club of America Enterprises, Inc. ("Enterprises")
to JVL Holding Properties, Inc. ("JVL"), a non-affiliated Oklahoma
corporation.  Enterprises had operated a motor club under agency
programs in 22 states.  See "Motor Club Operations" for further
information. 

          (b)  The Registrant does not have any reportable industry
segments for the three fiscal years reported in this Form 10-K.

          (c)  See Items 1 (a) and 7.
     The Registrant and its subsidiaries distribute insurance
policies through independent producers.

Fire and Casualty Insurance Operations

          The Insurance Companies generate premium revenue in New
Jersey through approximately 160 independent producers.

          The Registrant seeks to increase its identification as a
provider of small commercial lines insurance.  The Registrant also
seeks to expand and diversify its insurance operations outside the
State of New Jersey.  The Registrant believes that both of these
objectives can be attained through the acquisition of other
insurance companies which present opportunities to write these
product lines in different geographic areas.  The Registrant
expects to pursue these objectives during 1997 and beyond.

          Concurrently, the Registrant anticipates continuing its
emphasis of the small commercial and ancillary coverages written by
Preserver in the State of New Jersey.  New PPA writings by Motor
Club are expected to continue as well.

New Jersey Private Passenger Automobile

          PPA direct premiums written by Motor Club increased 28%
in 1996 as compared to 1995 and increased 16% in 1995 as compared
to 1994.  The increases in 1996 and 1995 were attributable to Motor
Club writing new PPA insurance business, beginning in the first
quarter of 1995, for the first time since 1990.  During 1996 and
1995, Motor Club wrote $16,276,000 and $6,011,000 in new business,
respectively.

          Motor Club had received relief under certain of the
exemptive provisions of the New Jersey Fair Automobile Insurance
Reform Act of 1990 ("FAIRA").   See Item 7 - New Jersey Private
Passenger Automobile Insurance.

Small Commercial and Homeowners Insurance

          Preserver writes small commercial and ancillary coverages
along with homeowners and related coverages.  Direct premiums
written by Preserver increased 10% in 1996 as compared to 1995 and
24% in 1995 as compared to 1994.

          The Registrant believes Preserver offers a competitive
variety of small commercial lines products and coverages which will
enable this class of business to grow steadily in the future.  See
Item 7 - Results of Operations.

Motor Club Operations

          As referred to previously, on December 2, 1996, the
Registrant sold Enterprises to JVL for $1,125,000, resulting in a
gain of $702,000.

          Pursuant to an additional agreement entered into
concurrent with the sale of Enterprises, the Registrant will
provide certain services to Enterprises' members whose memberships
are written with PPA policies written by Motor Club.  In exchange,
the Registrant will receive a servicing fee from JVL.  The
Registrant will also receive certain fees for other memberships
written by Enterprises, as defined by this additional agreement. 
The Registrant expects these fees to total approximately $125,000
in 1997.

Employees

          At December 31, 1996, the Motor Club of America Group had
approximately 107 employees.

Item 2. Properties

          Effective January 1, 1996, the Registrant entered into a
lease at 95 Route 17 South, Paramus, New Jersey.  The Registrant's
home office is now located at this facility.  The lease expires on
December 31, 2005.  The Registrant has an option to terminate the
lease after six years, and an option to extend the lease for an
additional five years after the initial lease term expires. 

          Effective March 31, 1996, the Registrant entered into a
Mutual Release Agreement (the "Release") with Fairmount Central
Urban Renewal Corporation ("Fairmount"), Property-Casualty Company
of MCA ("PCCMCA") and MCA Insurance Company ("MCAIC").

          Pursuant to the terms of the Release, the lease of the
office building in Newark, New Jersey in which the Registrant and
its subsidiaries formerly operated was terminated in exchange for
$132,000.  The lease was to run to December 31, 2011 at an annual
rent of $324,000, plus expenses.  The Release also enabled the
Registrant to terminate the Joint Service Agreement ("JSA").  See
Note Q  to the Notes to Consolidated Financial Statements of Motor
Club of America and Subsidiaries ("Notes") for further information.

Item 3.  Legal Proceedings

          None.

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

          No matter was submitted to a vote of security holders in 
the fourth quarter of the fiscal year covered by this Report.

Item Pursuant to Instruction 3 to Paragraph (b) of Item 401 of
Regulation S-K. Executive Officers of the Registrant.

          At December 31, 1996, the executive officers of the
Registrant and their offices with the Registrant and principal
occupations were as follows:

                                                           Years in
                                                         Which Officer
                                                           Has Served
                                 Office and Principal         as
     Name               Age           Occupation            Such(3)  

Archer McWhorter (1)     75     Chairman of the Board of
                                Directors of the Registrant
                                and Director of Companies
                                in the Motor Club of America
                                Group                         1986-1996

Stephen A. Gilbert (2)   58     President, Chief Executive 
                                Officer, General Counsel and
                                Director of the Registrant and
                                President of the Companies in
                                the Motor Club of America 
                                Group                         1975-1996

Patrick J. Haveron (2)   35     Executive Vice President, Chief
                                Financial Officer and
                                Director of the Registrant and
                                Companies in the Motor Club of 
                                America Group; Treasurer of 
                                Motor Club of America Insurance
                                Company and Preserver Insurance
                                Company                       1988-1996

Peter K. Barbano         46     Secretary; Associate General
                                Counsel                       1993-1996

Myron Rogow              53     Vice President                1987-1996 

George B. Meyers         69     Vice President                1971-1996 

G. Bruce Patterson       52     Vice President                1989-1996 

Charles J. Pelosi        51     Vice President                1983-1996 

Theodore Green           50     Vice President                1987-1996 

Norma Rodriguez          47     Treasurer                     1984-1996 


(l)  Member of Executive Committee:  For the past five years,
     Mr. McWhorter has been President (to January 1996) of
     Acceptance, Inc., a finance company; from 1995 to March
     1997, Director of National Car Rental Systems, Inc. and
     affiliated corporations, a car rental enterprise ("NCR");
     from 1995 to February 1997, one-third owner of Santa Ana
     Holdings, Inc., which exchanged its 90% stock interest in
     NCR for stock in Republic Industries, Inc.; from February
     1997, consultant of NCR; consultant (to 1994) of Thrifty
     Rent-A-Car System, Inc., a car rental company; Director
     (to November 1992) of Baggage, Inc., an airline service
     and security company.

(2)  Member of Finance Committee.

(3)  Includes years during any portion of which the officer
     served as such.  All terms of office are until the date
     of the 1997 Annual Meetings of Stockholders and
     Directors.

          Except for Archer McWhorter, each of the officers devoted
substantially all of their business time to the affairs of the
Registrant or one or more other companies in the Motor Club of
America Group.  

                             PART II

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

          The Registrant's Common Stock trades on the NASDAQ Stock
Market under the symbol MOTR.  The following are the high and the
low selling prices for each quarter of 1995 and 1996, as reported
by the NASDAQ:

          1995
          Quarter                               High     Low
          I    ..............................   4 1/2    2 5/8
          II   ..............................   5 1/8    4    
          III  ..............................   7 1/2    4 3/8
          IV   ..............................   7 1/8    6 5/8

          1996
          Quarter                               High     Low
          I    ..............................   7        6 3/8
          II   ..............................   8 1/4    6 1/2
          III  ..............................   9 3/8    7 1/8
          IV   ..............................   9 5/8    7 3/4


          There were approximately 630 holders of record of the
Common Stock of the Registrant as of December 31, 1996.

          The Registrant paid no dividends in 1995 and 1996.

Item 6.  Selected Financial Data

         See Chart on Page 9.

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

Overview of Business Operations

          The Registrant provides property and casualty insurance
related services through the Insurance Companies.  The Registrant
also operated until December 1, 1996 a motor club through
Enterprises.  The Insurance Companies form the largest segment of
operations, which accounted for 96% of 1996 revenues. 

          One hundred percent of the Registrant's insurance
operations are in the State of New Jersey.  Please refer to the New
Jersey Private Passenger Automobile Insurance section for further
information on the Registrant's insurance operations in the State
of New Jersey.

          The Registrant anticipates continuing revenue growth in
the State of New Jersey through small commercial and ancillary
coverages written by Preserver as well as through new PPA writings
by Motor Club.

<TABLE>
<CAPTION>
Item 6. Selected Financial Data
<S>                              <C>        <C>      <C>      <C>      <C>

                                          Years ended December 31,
                                 1996      1995       1994     1993     1992 
                                (in thousands, except as to per share data)
Operating Results:
Revenues from operations         $46,525    $36,703  $29,471  $31,695  $36,402 
Realized gains (losses) on sale
 of investments                        5         57      (43)     288      136 
Realized gain on sale of
 subsidiary                          702        -        -        -        -  
Net investment income              3,087      2,764    2,730    2,784    2,853 
Total revenues                   $50,319    $39,524  $32,158  $34,767  $39,391 
Income (loss) before
  federal income taxes           $ 3,297    $ 2,455  $ 5,039  $ 3,827 ($21,882)
Net income (loss)                $ 5,330    $ 2,417  $ 5,035  $ 3,260 ($21,352)

Financial Condition:

Total assets                     $95,533    $81,959  $79,172  $86,669  $90,544 
Shareholders' equity             $18,786    $14,081  $10,546  $ 7,168  $ 7,154 

Per Common Share:

Net income (loss)                $  2.61    $  1.18  $  2.46  $  1.60 ($ 10.45)
Cash dividends                       -          -        -        -    $ 0.225 
Book Value                       $  9.17    $  6.89  $  5.16  $  3.51  $  3.50 

Weighted average number of
  shares outstanding           2,045,590  2,043,197 2,043,004 2,043,004 2,043,004 

Significant Insurance Indicators: 

Net premiums written             $47,337    $38,073    $31,797 $28,058  $26,714 
Loss and loss expense ratio         64.5%      58.7%      54.8%  54.1%    77.3% 
Expense ratio                       37.9%      43.9%      39.3%  45.7%    45.2% 
Combined ratio                     102.4%     102.6%      94.1%  99.8%   122.5% 

</TABLE>

          The Registrant seeks to increase its identification as a
provider of small commercial lines insurance.  The Registrant also
seeks to expand and diversify its insurance operations outside the
State of New Jersey.  The Registrant believes that both of these
objectives can be attained through the acquisition of other
insurance companies which present opportunities to write these
product lines in different geographic areas.  The Registrant
expects to pursue these objectives during 1997 and beyond.

          The Registrant also anticipates continued reductions in
its operating expenses, namely through the implementation of
operating efficiencies which should reduce other overhead
expenditures.

Insolvency of MCA Insurance Company

          On August 24, 1992, Hurricane Andrew struck the South
Florida coast, causing losses to MCAIC which exceeded its surplus
as regards policyholders.  MCAIC was placed in liquidation on
October 23, 1992 by the Oklahoma District Court, Oklahoma. The
Registrant in 1992 wrote off its investment in MCAIC and MCAIC's
subsidiaries, Property-Casualty Company of MCA ("PCCMCA") and
Fairmount Central Urban Renewal Corporation ("Fairmount").

          On December 30, 1994, the Oklahoma District Court
approved a settlement between the MCAIC Receiver and its
subsidiaries and the Registrant and its subsidiaries (the
"Settlement").  Under the Settlement, the Registrant agreed to pay
MCAIC approximately $5.4 million, $2 million of which was paid on
December 30, 1994.  The Settlement also dismissed with prejudice
the litigation previously brought (in August 1993) by the MCAIC
Receiver against the Registrant regarding the ownership of Motor
Club.  The Settlement released all parties from all potential
claims against one another, and put in place agreements regarding
the handling of consolidated taxes, common cost sharing and service
agreements. 

          On February 15, 1995, pursuant to the Settlement
Agreement, MCAIC was paid in full.

          The JSA entered into as part of the Settlement was
retroactive to May 1, 1994 and provided for the rendering of
certain services by the parties to the JSA and amounts due for
these services, as well as the sharing of certain common expenses. 
Common expenses emanated from the parties' co-tenancy in the office
building in which the parties' principal offices resided.  The JSA
was terminated effective March 31, 1996.

          In relation to the insolvency of MCAIC, there are no
additional liabilities, contingent or otherwise, which require
accrual or disclosure in the accompanying financial statements.

New Jersey Private Passenger Automobile Insurance

          Motor Club received relief from the New Jersey Department
of Banking and Insurance ("NJ DOBI") from certain provisions of the
FAIRA.  Such relief included the following: (1) exemption from its
obligation to pay surtaxes and assessments on business written
until December 31, 1992.  These exemptions allowed Motor Club to
reverse previously accrued surtaxes and assessments of $2,003,000
as a reduction of expense in 1994; (2) exemption (until January
1995) from the take-all-comers provisions of FAIRA, which requires
the writing of new PPA insurance; (3) payment in 1994 of only
$2,275,000 of the Market Transition Facility ("MTF") deficit 
(legislation retired the entire MTF deficit, enabling Motor Club to
eliminate its remaining $1,653,445 MTF liability in 1994 as a
reduction of expense); and (4) non-participation in the Personal
Automobile Insurance ("Assigned Risk") Plan, through December 1996.

          The NJ DOBI may grant an insurer relief, by written
notification, from writing new PPA pursuant to the take-all-comers
provisions of FAIRA described previously, if a showing finds that
the insurer's premium to surplus ("leverage") ratio exceeds 3 to 1.
Motor Club's present applicable leverage ratio for the twelve
months ended December 31, 1996 is 3.31 to 1.  Motor Club has not
received any notifications from the NJ DOBI nor made any requests
of the NJ DOBI in this regard.

          The New Jersey PPA market has historically been subject
to regulatory and legislative volatility which has, at times,
adversely affected the profitability of this line of business.  The
State of New Jersey also maintains an excess profits law which
provides that PPA insurers whose profits exceed a statutorily
computed maximum over a period of years will be required to pay
such excess to its policyholders. It would appear that Motor Club
does not have such excess profits.

Results of Operations

          Net income increased $2,913,000 or $1.43 per share in
1996 as compared to 1995, after decreasing $2,618,000 or $1.28 per
share in 1995 as compared to 1994.

          The table below reconciles operating net income to
reported net income for 1996, 1995 and 1994 with adjustments for
certain unusual and non-recurring items:
<TABLE>
<CAPTION>
<S>                          <C>            <C>    <C>            <C>      <C>            <C>
                                    1996                  1995                    1994        
                              Amount    Per Share    Amount   Per Share     Amount    Per Share
                                                                  
                
Operating net income         $3,436,343     $1.69  $2,416,779     $1.18    $  753,670     $0.37
Lease termination charge (1)   (359,077)    (0.18)       -          -           -           -  
Non-recurring tenancy and                                         
  relocation charges (2)       (327,916)    (0.16)       -          -           -           -  
Reinsurance settlement (3)     (197,196)    (0.10)       -          -           -           -  
Sale of Enterprises (4)         702,419      0.34        -          -           -           -  
Deferred tax asset 
  recognition (5)             2,075,535      1.02        -          -           -           -  
Reversal of MTF liability (6)     -           -          -          -       1,653,445      0.81
Reversal of FAIRA surtaxes
  and assessments (6)             -           -          -          -       2,002,682      0.98
Discounted Note due MCAIC
  Receiver (7)                    -           -          -          -         624,850      0.30
Net income                   $5,330,108     $2.61  $2,416,779     $1.18    $5,034,647     $2.46

</TABLE>

(1)  These non-recurring charges were incurred in connection with
     the termination of the lease of the office building in which
     the Registrant and its subsidiaries formerly operated.

(2)  These non-recurring charges were incurred in connection with
     the Registrant's tenancy at its former office building and its
     subsequent relocation.

(3)  These non-recurring charges were incurred in connection with
     the settlement of a previously reported dispute with a
     reinsurer of Motor Club.

(4)  This is a non-recurring gain.

(5)  The Registrant believes that it is more likely than not that
     it will generate future taxable income to realize the benefits
     of the net deferred tax asset, which consists primarily of net
     operating loss carryforwards. The Registrant has accordingly
     eliminated the valuation allowance on its net deferred tax
     asset in 1996, resulting in a benefit to net income.  The
     ultimate amounts realized, however, could be reduced if actual
     amounts of future taxable income differ from projected future
     taxable income.

(6)  See the New Jersey Private Passenger Automobile Insurance
     section for further information.
 
(7)  See the Insolvency of MCA Insurance Company section for
     further information.

            The increases in operating net income in 1996 and 1995
are attributable to higher revenues overall, improved expense and
combined ratios and reduced expenses from operations, primarily
salaries and related benefits, and in 1996, the Registrant's
relocation.

          Operating net income was decreased by $529,000 or $.26
per share in 1996 as compared to 1995 and increased by $1,039,000
or $.51 per share in 1995 as compared to 1994, due to changes in
the rate assessed for the New Jersey Unsatisfied Claim and Judgment
Fund ("UCJF"), which pertains to New Jersey Personal Injury
Protection claims in excess of Motor Club's statutory retention
limit of $75,000.  The premium rates assessed were approximately
4.5%, 1.4% and 6.4% in 1996, 1995 and 1994, respectively.  

Revenues

Insurance Premiums

          Insurance premiums increased $9,893,000 or 28% in 1996 as
compared to 1995, primarily as a result of increases in new
business written in 1996, particularly PPA.

          The following table depicts increases in net earned
premiums for 1996 as compared to 1995: 
                                 Increase in 
                                Net
      Program                 Premium     Percent 

  Private Passenger
    Automobile               $8,532,000     32%
  Commercial Lines            1,185,000     27%
  Personal Property             176,000      4%
       Total                 $9,893,000     28%

          Insurance premiums increased $7,409,000 or 27% in 1995 as
compared to 1994, primarily as a result of:(1) the termination in
February 1994 of Preserver's 80% quota share reinsurance treaty;
(2) the reduction in the UCJF assessment rate; and (3) increases in
new business written in 1995, particularly PPA.

          In 1995, Motor Club began to write new PPA business for
the first time since March 1990.

          The following table depicts the composition of direct
premiums written for the five years through 1996:
<TABLE>
<CAPTION>

                            Direct Written Premiums
             (Amounts in Thousands - Exclusive of Service Charges)

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

                          1996                  1995                 1994                1993                1992       
                     Direct   Percent      Direct   Percent     Direct    Percent   Direct    Percent   Direct    Percent 
     Program        Premium   of Total    Premium   ofTotal    Premium   of Total  Premium   of Total  Premium   of Total
Private Passenger                                          
     Automobile      $41,055      76.0%    $32,100   73.1%     $27,636    74.4%    $30,473    87.2%    $26,360    81.4%
Commercial Lines       6,744      12.5%      5,828   13.3%       4,431    12.0%      2,219     6.3%      2,331     7.2%
Personal Property      6,216      11.5%      5,972   13.6%       5,056    13.6%      2,285     6.5%      3,703    11.4%
           Total     $54,015     100.0%    $43,900  100.0%     $37,123   100.0%    $34,977   100.0%    $32,394   100.0%

</TABLE>

Net Investment Income

          Net investment income increased $323,000 or 12% in 1996
as compared to 1995.  Average invested assets were $46,296,000 in
1996 as compared to $41,806,000 in 1995.  The growth in average
invested assets and cash from operations is the result of the
growth in revenues previously described. The investment portfolio,
including short-term investments, yielded 6.25% in 1996 as compared
to 6.23% in 1995.  The Registrant's investment philosophy is to
hold fixed maturity investments until maturity. 

          Net investment income increased $34,000 or 1% in 1995 as
compared to 1994.  Average invested assets were $41,806,000 in 1995
as compared to $42,272,000 in 1994.  The investment portfolio,
including short-term investments, yielded 6.23% in 1995 as compared
to 6.21% in 1994.  Although interest rate levels declined 
significantly during 1995, the increase in the Registrant's
investment yield reflects investments made at higher interest rate
levels in 1994. 

Realized Gains on Sales of Investments

          The Registrant does not actively trade its investment
portfolio.  Securities have been occasionally sold to reflect
operating requirements or business circumstances, which have
resulted in realized gains and losses.

Other Revenues

          Other revenues decreased $11,000 or 9% in 1996 as
compared to 1995, and $72,000 or 37% in 1995 as compared to 1994. 
The decreases were due to reduced mortgage loan revenue and other
miscellaneous income reductions.

Losses and Expenses

Losses and Loss Expenses Incurred

          Losses and loss expenses incurred increased $8,411,000 or
41% in 1996 as compared to 1995 and increased $5,451,000 or 36% in
1995 as compared to 1994.

          The combined loss and loss expense ratios were 64.5% in
1996, 58.7% in 1995 and 54.8% in 1994.

          Motor Club's loss and loss expense ratio was 61.4% for
1996 as compared to 57.3% for 1995, while the Preserver loss and
loss expense ratio was 75.5% for 1996 as compared to 63.1% for
1995.  Despite the higher loss and loss expense ratio on a
comparative basis, no significant adverse trends were experienced
or identified during 1996.

          The increase in PPA loss and loss expense ratio in 1996
as compared to 1995 is largely due to the new business written by
Motor Club since January 1995.  The Registrant has reserved the
ultimate development of this new business at a loss and loss
expense ratio of 78%; however it will be approximately twelve to
eighteen months before the underlying loss development experience
on this new business fully emerges.

          Excluding the loss and loss expense ratio on the new PPA
business, the PPA loss and loss expense ratio was 52.2% in 1996,
which compares with the loss and loss expense ratios of 55.1% in
1995 and 52.9% in 1994 on the same business.  The Registrant
believes that it has reserved for the new business conservatively,
particularly as compared to its other PPA business.

          As the Registrant continues to write additional new PPA
business, PPA loss and loss expense ratios should generally
continue to trend higher, although within levels that should remain
profitable.  Concurrently, as was the case in 1996, the Registrant
also will continue to experience continued reductions in its
expense ratio, which should result in lower overall combined ratios
for the Registrant.

          The increase in Preserver's loss and loss expense ratio
in 1996 as compared to 1995 is primarily attributable to:  (1)
winter storm losses of $635,000; and (2) poor liability experience
caused by a limited number of large losses greater than $35,000. 
Frequency of losses has generally been at acceptable levels. This
increase has been partially offset by the improved experience
(excluding winter storm losses) in the homeowners line of business.

          This improvement is largely attributable to the
Registrant implementing certain measures in 1995 in this homeowner
book aimed at improving its profitability prospectively.  These
measures included: (1) redefining what risks constitute "standard"
risks and "preferred" risks.  The Registrant now defines a standard
risk as any home constructed before 1960 and a preferred risk is
any home constructed after 1960.  Previously, this definition was
based on the value of a home; and (2) in November 1995, a 7.3% rate
increase on standard risks (as now defined).

Amortization of Deferred Policy Acquisition Costs

          Acquisition costs incurred increased $2,856,000 or 25% in
1996 as compared to 1995 and increased $788,000 or 7% in 1995 as
compared to 1994.  The increase in acquisition related costs
generally corresponds to the premium growth previously described. 

Other Operating Expenses

          Other operating expenses in 1996 included the following: 
(1) certain non-recurring operational expenses (totaling $328,000
or $.16 per share) relating to the Registrant's tenancy at its
former office building and relocation; and (2) a $197,000 or $.10
per share charge incurred associated with the settlement of a
previously reported dispute with a reinsurer of Motor Club.

          Excluding these non-recurring items, other operating
expenses decreased $2,035,000 or 37% in 1996 as compared to 1995. 

          In February 1996, the Registrant relocated its
headquarters to a smaller facility commensurate with the scope of
its operations.  This relocation will reduce the Registrant's
expenses over $500,000 annually.

          The decrease in other operating expenses in 1996 as
compared to 1995 resulted from lower operating expenses in general,
including lower salaries and the savings realized from the
aforementioned relocation.

          The decrease in expenses has allowed for a decrease in
the expense ratio (as adjusted for the non-recurring charges
described above) to 36.8% for 1996 as compared to 43.9% for 1995. 
This decrease is the realization of the Registrant's previously
stated strategy to increase its revenue while decreasing its
overhead expenditures.

          The Registrant expects to reduce its expenses and expense
ratio further by converting its information systems to a smaller,
more contemporary computing platform which will allow for more
efficient operations and by re-doubling the efforts made previously
to reduce all unnecessary overhead expenditures.  

          During 1995 these expenditures decreased $990,000 or 15%
as compared to 1994.  The cause of the decrease in 1995 as compared
to 1994 was reduced salaries, benefits and professional services.

          Prior to 1995, the Registrant's expense ratio had
increased because the reduction of overhead expenditures had not
kept pace with the reduction in the Registrant's insurance
premiums.  With the commencement of new PPA writings in 1995, the
Registrant began to realize economies of scale which enhanced the
reduction of expenses and consequently expense ratio.

          See the New Jersey Private Passenger Automobile section
for an extended discussion of the New Jersey expenses mandated by
FAIRA.

Lease Termination Charge

          In 1996, the Registrant recorded $359,000 in lease
termination charges on its former headquarters location in Newark,
New Jersey, which consists of: (1) $132,000 for the termination of
the lease; and (2) $227,000 for the charge-off of leasehold
improvements on this facility.  See Item 2 - Properties and Note P
in the Notes for further information.

State Mandated Assessments

          The Registrant is subject to certain assessments and
required participations in mandated pools, associations and funds
in the State of New Jersey. The most substantial assessments have
been the FAIRA surtaxes and assessments.  The surtaxes expired in
1992; the assessments are schedule to expire after 1997.  FAIRA
assessments totaled $962,000, $843,000 and $620,000 in 1996, 1995
and 1994, respectively.

          During 1997, Motor Club will participate in the Assigned
Risk Plan.  Motor Club will pay a fee of approximately $300,000 to
a servicing carrier rather than processing these policies.  See the
section on New Jersey Private Passenger Automobile for further
information on these items. 

Motor Club of America Membership Program

          Motor Club membership fees written through Enterprises
decreased $30,000 or 3% in 1996 as compared to 1995, and decreased
$124,000 or 10% in 1995 as compared to 1994.  As previously
described, the Registrant operated Enterprises through November 30,
1996; the writings for 1996 are therefore only included through
that date.

Loss Reserve Disclosures

          Reserves for unpaid losses and loss expenses at any
report date reflect the estimate of the liabilities for the
ultimate net loss of reported claims and estimated incurred but not
reported claims.

          The liability for unpaid losses and loss expenses are
determined using case-basis evaluations and statistical projections
and represent estimates of the ultimate net cost of all unpaid
losses and loss expenses through December 31 of each year.  These
estimates are continually reviewed and refined as historical      
experience develops, new information becomes known and the effects
of trends in future claim severity and frequency are considered.

          The liabilities are adjusted accordingly with such
adjustments being reflected in the current year operations.  No
trends that are considered abnormal have been identified as of the
most recent evaluation date, December 31, 1996.

          The Registrant's insurance subsidiaries generally
reinsure all risks in excess of $150,000 for casualty lines and
$75,000 for property lines.

          The following table presents a reconciliation of
beginning and ending liability balances for 1996, 1995 and 1994
reported under generally accepted accounting principles ("GAAP"):
<TABLE>
<CAPTION>

       RECONCILIATION OF LIABILITY FOR LOSSES AND LOSS EXPENSES
<S>                                              <C>       <C>      <C>

                                                    1996    1995      1994

                                                          
(Thousands of Dollars)
Liability for losses and loss expenses, net of
reinsurance recoverables at January 1              $23,409   $22,356  $25,334  
Incurred losses and loss expenses
 Provision for current year claims                  28,244    19,625   14,367 
 Increase in provision for prior years'
  claims                                               904     1,112      919 
 Total incurred losses and loss expenses            29,148    20,737   15,286 
Payments for losses and loss expenses
 Payments on current year claims                    13,029     8,577    5,953 
 Payments on prior years' claims                    11,414    11,107   12,311 
 Total payments for losses and loss expenses        24,443    19,684   18,264 
Liability  for losses and loss expenses, net
  of reinsurance recoverables at December 31        28,114    23,409   22,356 
Reinsurance recoverables, on unpaid losses
  and loss expenses at December 31                  19,553    16,415   19,309 
Liability for losses and loss expenses,
  gross of reinsurance recoverables,
  at December 31                                   $47,667   $39,824  $41,665 

</TABLE>

          The reconciliation shows a 1996 deficiency of $904,000 in
the liability recorded at December 31, 1995.  The deficiency is
primarily the result of the latent development of a limited number
of large losses incurred in 1995 and prior.  Management believes
this development does not indicate any adverse trends in the
Registrant's loss development.

          The difference between the reserves for unpaid losses and
loss expenses reported in the Registrant's consolidated financial
statements prepared in accordance with GAAP and those reported in
the annual statements filed by the Insurance Companies with State 
insurance departments in accordance with Statutory Accounting
Practices ("SAP") are reconciled as follows:

                                                    December 31,
                                            1996         1995      1994
                                               (thousands of dollars)
Reserves for unpaid losses and
  loss expenses on a SAP basis
  (net of reinsurance recoverables
  on unpaid losses)                       $30,686      $25,519   $24,473 
Reinsurance recoverables on unpaid
  losses and loss expenses                 19,553       16,415    19,309 
Anticipated salvage and subrogation
  recoveries                               (2,572)      (2,110)   (2,117)
Reserves for unpaid losses and loss
  expenses, as reported in the
  Registrant's GAAP basis financial
  statements                              $47,667      $39,824   $41,665 


          The anticipated effect of inflation is implicitly
considered when estimating liabilities for losses and loss
expenses.  While anticipated price increases due to inflation are
considered in estimating the ultimate claim costs, the increase in
average severities of claims is caused by a number of factors that
vary with the individual type of policy written.  These anticipated
trends are monitored based on actual development and are modified
if necessary.

          The table on Page 25 presents the development of the GAAP
balance sheet liabilities for 1992 through 1996; data is presented
for those years in which the Insurance Companies had operations.

          The top line on the table shows the estimated liability
for unpaid losses and loss expenses recorded at the balance sheet
date for each of the indicated years.  This liability represents
the estimated amount of losses and loss expenses for claims arising
in that and all prior years that are unpaid at the balance sheet
date, including losses that had been incurred but not yet reported.
The upper portion of the table shows the re-estimated amount of the
previously recorded liability, based on experience as of the end of
each succeeding year.  The estimate is increased or decreased as
more information becomes known about the frequency and severity of
claims for development years.  The "cumulative redundancy
(deficiency)" represents the aggregate change in the estimates over
all prior years.  The lower section of the table shows the
cumulative amount paid with respect to the previously recorded
liability as of the end of each succeeding year.

          In evaluating this information, it should be noted that
each amount includes the effects of all changes in amounts for
prior periods.  For example, the amount of deficiency relating to
losses settled in 1996, but incurred in 1993, will be included in
the cumulative deficiency for the 1996 year.

          This table does not present accident or policy year
development data, which readers may be more accustomed to
analyzing.  Conditions and trends that have 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. 
<TABLE>
<CAPTION>

LOSS AND LOSS EXPENSE DEVELOPMENT (In Thousands)
<S>                                    <C>       <C>      <C>     <C>        <S>

Year ended December 31                  1992      1993     1994    1995     1996 

Liability for unpaid
   losses and loss expenses, net
   of reinsurance recoverables        $28,469   $25,334  $22,356  $23,409  $28,114
Net Liability Re-estimated as of:
One year later                         27,145    26,253   23,468  24,313     -    
Two years later                        28,563    26,766   23,813    -        -    
Three years later                      28,454    26,819      -      -        -     
Four years later                       28,702       -        -      -        -    

Net Cumulative Deficiency            ($   233) ($ 1,485) ($ 1,457)($   904) $-   

Cumulative Amount of Liability Paid Through:

One year later                         12,314     12,311    11,106 11,414     -   
Two years later                        20,270     18,992    17,231   -        -   
Three years later                      24,546     23,032      -      -        -   
Four years later                       26,878       -         -      -        -   

Net liability - December 31           $28,469    $25,334  $22,356 $23,409  $28,114
Reinsurance recoverables               21,698     20,484   19,309  16,415   19,553
Gross liability - December 31         $50,167    $45,818  $41,665 $39,824  $47,667

</TABLE>

Financial Condition, Liquidity and Capital Resources

          The Registrant's book value increased to $9.17 per share
at December 31, 1996 from $6.89 per share at December 31, 1995. 
The principal sources of the net increase are: (1) net income of
$5,330,000 or $2.61 per share described previously; plus (2) an
increase in shareholders' equity of $487,000 or $.24 per share due
to the reduction of the minimum required pension liability for the
defined benefit pension plan sponsored by the Registrant; offset by
(3) a reduction in shareholders' equity of $1,122,000 or $.55 per
share due to the decrease in the fair value of the fixed maturity
investments accounted for as available-for-sale securities under
SFAS No. 115 ("Accounting for Certain Investments in Debt and
Equity Securities").  

          The reduction in the minimum pension liability was the
result of: (1)  an increase in the discount rate used to compute
pension plan liabilities to 7.50% at December 31, 1996, from 7.25%
at December 31, 1995; and (2) the performance of the Plan assets
was in excess of the expected return on these assets.  See Note K
of the Notes for additional information regarding the Registrant's
minimum pension liability.

          The Registrant's book value increased to $6.89 per share
at December 31, 1995 from $5.16 per share at December 31, 1994. 
The principal sources of the net increase are: (1) net income of
$2,417,000 or $1.18 per share; plus (2) an increase of $2,661,000
or $1.30 per share in the fair value of the fixed maturity
investments accounted for as available-for-sale securities under
SFAS No. 115; offset by (3) a reduction in shareholders' equity of
$1,545,000 or $.75 per share for recognition of additional minimum
required pension liability. The additional minimum required
liability was the result of a reduction in the discount rate used
to compute pension plan liabilities to 7.25% at December 31, 1995
from 8.25% at December 31, 1994.

          On July 1, 1996, the Insurance Companies obtained
catastrophe reinsurance coverage in the increased amount of $29.5
million in excess of $500,000 with only a modest increase in
premium.

          The Insurance Companies' need for liquidity arises
primarily from the obligation to pay claims.  The primary sources
of liquidity are premiums received, collections from reinsurers and
proceeds from investments.

          Reserving assumptions (except as noted in Loss Reserve
Disclosures) and payment patterns of the Insurance Companies did
not materially change from the prior year and there were no
unusually large retained losses resulting from claim activity. 
Unpaid losses are not discounted.

Operating and Investing Activities

          Net cash provided by operating activities was $6,851,000
in 1996 and $3,807,000 in 1995.  Net cash utilized by operating
activities was $3,060,000 in 1994.  The higher amounts in both 1996
and 1995 as compared to 1995 and 1994, respectively, are
attributable to the growth in premium revenue combined with the
reduction in overhead expenses described previously. 

          Net cash utilized in investing activities was $6,015,000
in 1996 and $3,255,000 in 1995.  Net cash provided by investing
activities was $3,458,000 in 1994.  The amounts used in both 1996
and 1995 reflect the investment of cash provided by operating
activities; the amounts used in 1996 were offset by the $1,125,000
proceeds from the sale of Enterprises described previously.  The
amount provided in 1994 reflects the liquidation of investments
required for the cash utilized by operating activities.

          Aside from the changes in operating expenditures noted
previously, particularly the State mandated assessments related to
FAIRA, no unusual or nonrecurring operating expenditures have been
incurred over this period.

          The Registrant's cash and cash equivalents at year end
1996 were enhanced by the proceeds of the sale of Enterprises.  As
part of its strategy to expand and diversify its insurance
operations, the Registrant seeks to increase the level of cash and
cash equivalents available to enable the execution of this
strategy.

          The payout ratio of losses has not fluctuated
substantially over this period.  Cash flow from operations is
expected to continue to increase as the Registrant increases its
revenue through additional premium writings, specifically
commercial lines and PPA and continues to reduce its expenses and
expense ratio.  This will be offset somewhat by the development and
payment of losses on the new PPA which Motor Club is writing.

          Management has maintained, in its opinion, a conservative
investing philosophy.  At December 31, 1996 and 1995, the
Registrant's investment portfolio was comprised of the following
types of securities:

                               December 31, 1996     December 31,1995 
                               Carrying              Carrying
                                Amount     Percent    Amount    Percent
Taxable Fixed Maturities      $47,927,093   95.3%   $44,630,457   97.9%
Short Term Investments          1,745,455    3.5%       200,719    0.4%
Mortgage Loans                    634,492    1.2%       766,101    1.7%
  Total Investment Portfolio  $50,307,040  100.0%   $45,597,277  100.0%

          Tax exempt securities have not been acquired.  Management
believes that the current tax position of the Registrant, which
includes substantial net operating loss carryforwards, dictates the
exclusion of tax exempt securities from the portfolio, which
historically provide substantially lower yields on a before tax
basis than taxable securities.

          Taxable fixed maturities consist of direct obligations of
the United States Government, obligations of United States
Government agencies, Government National Mortgage Association
mortgage-backed securities ("GNMA's") and high quality corporate
fixed maturity issues.  The goal of the portfolio is to enhance
investment returns within the structure of limited credit risk
assumption which management has utilized, with evaluations of
portfolio duration made in relation to the current interest rate
environment.

          At December 31, 1996 and 1995, the taxable fixed maturity
portfolio consisted of the following types of securities:

                                       December 31, 1996   December 31, 1995
                                        Carrying            Carrying
                                         Amount   Percent   Amount   Percent
     United States Treasuries         $27,758,603  57.9%  $25,924,344  58.1%
     United States Government
       Agencies                         6,637,485  13.9%    5,864,485  13.1%
     GNMA Mortgage-Backed Securities    8,363,964  17.4%    7,798,432  17.5%
     Corporate Bonds                    5,167,041  10.8%    5,043,196  11.3%
       Total                          $47,927,093 100.0%  $44,630,457 100.0%

          The fixed maturity portfolio duration at December 31,
1996 and 1995 is 3.35 and 3.32 years, respectively.

          United States Treasuries are weighted towards maturities
of five years or less, to reduce interest rate risk and match the
Insurance Companies claims payout ratio; corporate obligations are
generally weighted towards five to ten year maturities, to take
advantage of the yield curve; the average life of the GNMA
portfolio has been maintained at approximately 10 years to reduce
interest rate risk.  

          Please refer to Note D in the Notes for statistics
regarding portfolio maturity composition.

          The Registrant has not acquired, nor are there plans to
acquire, below investment grade or "junk" bonds.  Ninety-seven
percent of the fixed maturity portfolio as of December 31, 1996 is
graded Class 1 according to the National Association of Insurance
Commissioners' valuation system.  This classification is reserved
for only the highest quality securities, generally rated A or
better by two major rating services.

          Management anticipates continuing this minimum risk
approach to investing for the foreseeable future.

          Management believes that the mix of investments in both
type and maturity length is appropriate in order to preserve
capital, take advantage of investment opportunities as they are
presented, and provide the Registrant and its subsidiaries with
sufficient liquidity to react to economic and business
circumstances as they evolve.

          As noted previously, the investment portfolio yielded
6.25% in 1996 as compared to 6.23% in 1995.

          Including realized gains and losses, the investment
portfolio yielded 6.26% in 1996 as compared to 6.36% in 1995.

Financing Activities

          The Registrant paid no dividend on its common stock in
1996, 1995 and 1994. 

          The Registrant has no material outstanding capital
commitments which would require additional financing.  In 1995 the
Registrant repaid the $2,750,000 borrowed from Midlantic Bank, N.A.
in conjunction with the Settlement with the MCAIC Receiver. 

Risk-Based Capital

          The National Association of Insurance Commissioners
("NAIC") has adopted Risk-Based Capital ("RBC") requirements for
property/casualty insurance companies, to evaluate the adequacy of
statutory capital and surplus in relation to investment and
insurance risks such as asset quality, credit risk, 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 potentially are inadequately capitalized. 
Regulatory compliance is determined by a ratio of the insurer's
regulatory total adjusted capital to its authorized control level
RBC, as defined by the NAIC.  Insurers below specific trigger
points or ratios are classified within certain levels, each of
which requires specific corrective action.  The Insurance
Companies' ratios are in excess of that required, therefore
requiring no action.

Recent Accounting Pronouncements

          In February 1997, the Financial Accounting Standards
Board ("FASB") issued SFAS No. 129 - Disclosure of Information
About Capital Structure.  This Statement becomes effective for
financial statements for periods ending after December 15, 1997. 
This Statement establishes standards for disclosing information
about an entity's capital structure.  The Registrant does not
believe that this Statement will materially change its disclosures
regarding its capital structure.

          In February 1997, FASB issued SFAS No. 128 - Earnings per
Share.  This Statement becomes effective for financial statements
issued for periods ending after December 15, 1997.  This Statement
establishes standards for computing and presenting earnings per
share ("EPS").  This Statement simplifies the standards for
computing EPS previously found in APB Opinion No. 15, Earnings per
Share, and makes them comparable to international EPS standards. 
It replaces the presentation of primary EPS with a presentation of
basic EPS.  It also requires dual presentation of basic and diluted
EPS on the face of the income statement for all entities with
complex capital structures, which the Registrant is considered to
have, and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation.  This Statement
requires restatement of all prior-period EPS data presented.  The
Registrant anticipates presenting its EPS in compliance with the
dual presentation standards mandated by this Statement at December
31, 1997.

          In October 1995, FASB issued SFAS No. 123 - Accounting
for Stock-Based Compensation.  This Statement became effective
beginning in the first quarter of 1996 and applies to options
granted in 1995 and subsequent years.  No options were granted in
1995 and 1996 and therefore the adoption of this Statement does not
have any effect on the Registrant's financial position or results
of operations.  The Registrant will continue to measure
compensation expense for its stock-based employee compensation
plans using the intrinsic value method prescribed by APB Opinion
No. 25, Accounting for Stock Issued to Employees and will provide
pro forma disclosures of net income and earnings per share as if
the fair value-based method prescribed by SFAS No. 123 had been
applied in measuring compensation expense.

Item 8.  Financial Statements and Supplementary Data
          See Item 14 (a).

Item 9.  Disagreements with Accountants on Accounting and 
         Financial Disclosures

         None
                            PART III

          Items 10, 11, 12 and 13 are omitted from this Report on
Form 10-K; the Registrant shall file a definitive proxy statement
pursuant to Regulation 14A not later than April 30, 1997, which is
120 days after the close of the fiscal year of the Registrant.

                             PART IV

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

          (a) (1)  The following financial statements are
                   included in Part II, Item 8:
                                                         Page (s)

              Report of Independent Accountants           F-1
              Consolidated Balance Sheets at December 31,
                1996 and 1995                             F-2
              Consolidated Statements of Operations for
                the years ended December 31, 1996, 1995
                and 1994                                  F-3
              Consolidated Statements of Shareholders'
                Equity for the years ended December 31,
                1996, 1995 and 1994                       F-4
              Consolidated Statements of Cash Flows
                for the years ended December 31, 1996,
                1995 and 1994                             F-5 to F-6 
               Notes to Consolidated Financial Statements F-7 to F-30

              (2)  The following financial statement schedules
                   for the years 1996, 1995 and 1994 (pursuant
                   to Rule 5-04 of Regulation S-X) are presented
                   herewith:

              Schedule    I - Summary of Investments -
                               Other than Investments
                               in Related Parties*        F-31
              Schedule   II - Condensed Financial
                              Information of Registrant   F-32 to F-34

              Schedule   IV - Reinsurance*                F-35

              Schedule    V - Valuation and Qualifying
                              Accounts and Reserves       F-36

              Schedule   VI - Supplemental Information
                               Concerning Property/
                               Casualty Insurance
                               Operations*                F-37

          *Presented pursuant to Rule 7-05 of Regulation S-X.

Schedules other than those mentioned above are omitted because the
conditions requiring their filing do not exist, or because the
information is given in the financial statements filed herewith,
including the notes thereto.


         (b)  Exhibits:

Exhibit No.             Description                  Reference

 3-a        Restated and Amended Certificate    Exhibit 1(i) to Motor
            of Incorporation of Motor Club of   Club of America's
            America, dated June 12, 1972        Annual Report on Form
                                                10-K for fiscal year
                                                ended December 31, 1972

 3-l        By-Laws of Motor Club of America,   Exhibit 3-l to Motor
            effective March 15, 1989            Club of America's
                                                Annual Report on Form
                                                10-K for fiscal year
                                                ended December 31, 1988

 3-m        By-law Amendment of Motor Club      Exhibit 3-m to Motor
            of America, effective               Club of America's
            August 3, 1994                      Form 8-K dated
                                                July 21, 1994

 4-a        Specimen Certificate                Exhibit 4 to File
            representing Common Stock,          No. 2-39996 on
            $.50 par value                      Form S-1

10-o        Motor Club of America 1987 Stock    Exhibit 10-o to Motor
            Option Plan                         Club of America's
                                                Annual Report on Form
                                                10-K for fiscal year
                                                ended December 31, 1987

10-p        Specimen copy of Motor Club of      Exhibit 10-p to Motor
            America 1987 Stock Option           Club of America's
            Agreement                           Annual Report on Form
                                                10-K for fiscal year
                                                ended December 31, 1987

10-q        Motor Club of America 1992          Exhibit A to Motor
            Stock Option Plan                   Club of America's
                                                Proxy Statement for
                                                fiscal year ended
                                                December 31, 1991

10-r        Specimen copy Motor Club of         Exhibit 10-r to
            America 1992 Stock Option           Motor Club of
            Plan Agreement                      America's Annual
                                                Report on Form 10-K
                                                for fiscal year
                                                ended December 31, 1992

10-s        Settlement Agreement between        Exhibit 99 to Motor
            Motor Club of America et als.       Club of America's
            and Receiver of MCA Insurance       Form 8-K dated
            Company in Liquidation et als.      December 20, 1994
            and related documents

10-t        Term Note between Motor Club        Exhibit 99-B to Motor
            of America and Midlantic Bank,      Club of America's 
            N.A., and related documents         Form 8-K dated
                                                December 20, 1994

10-u        Order dated December 30, 1994       Exhibit 99-C to Motor
            Approving Settlement between        Club of America's
            Motor Club of America et als and    Form 8-K dated
            Receiver of MCA Insurance           December 30, 1994
            Company in Liquidation et als
            and related conformed documents

10-v        Cash Collateral Agreement between   Exhibit 99-D to Motor
            between Motor Club of America       Club of America's
            and Principal Shareholders          Form 8-K dated
                                                December 30, 1994

10-w        Term Note between Motor Club        Exhibit 99-E to Motor
            of America and Midlantic Bank,      Club of America's
            N.A., and related documents         Form 8-K dated
                                                December 30, 1994

10-x        Stock Purchase Agreement            Exhibit 99-F to Motor
            between Motor Club of America       Club of America's 
            and JVL Holding Properties, Inc.    Form 8-K dated
                                                December 2, 1996

10-y        Agreement dated December 2, 1996    Exhibit 99-G to Motor
            between Motor Club of America       Club of America's
            and Motor Club of America           Form 8-K dated
            Enterprises, Inc.                   December 2, 1996

22          Subsidiaries of Motor Club of
            America                             Page 38



          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.
                                         MOTOR CLUB OF AMERICA
                                              (Registrant)




Dated:  March 27, 1997             By   /s/ Stephen A. Gilbert  
                                        Stephen A. Gilbert
                                        President, General Counsel
                                        and Director




Dated:  March 27, 1997             By   /s/ Patrick J. Haveron    
                                        Patrick J. Haveron
                                        Executive Vice President, 
                                        Chief Financial Officer and
                                        Chief Accounting Officer

          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.


Dated:  March 27, 1997             By   /s/ Archer McWhorter      
                                        Archer McWhorter
                                        Chairman of the Board
                                        and Director

Dated:  March 27, 1997             By   /s/ Alvin E. Swanner      
                                        Alvin E. Swanner       
                                        Director

Dated:  March 27, 1997             By   /s/ Robert S. Fried       
                                        Robert S. Fried
                                        Director




                          MOTOR CLUB OF AMERICA

          Exhibit (22) Subsidiaries of the Registrant.

          The following are the subsidiaries of the Registrant as
of March 27, 1997:
                                                       State of
           Name                                      Organization


     Motor Club of America Finance Company            New Jersey

     Motor Club of America Insurance Company          New Jersey

     Preserver Insurance Company                      New Jersey
 


























                REPORT OF INDEPENDENT ACCOUNTANTS

                                     


To the Board of Directors of
Motor Club of America:

We have audited the consolidated financial statements and the
financial statement schedules of Motor Club of America and
Subsidiaries listed in Item 14(a) of this Form 10-K.  These
financial statements and financial statement schedules are the
responsibility of the Company's management.  Our responsibility is
to express an opinion on these financial statements and financial
statement schedules based on our audits.

We conducted our audits 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 Motor Club of America and Subsidiaries as of December
31, 1996 and 1995, and the consolidated 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.  In addition, in our opinion, the financial
statement schedules referred to above, when considered in relation
to the basic financial statements taken as a whole, present fairly,
in all material respects, the information required to be included
therein.








                                  COOPERS & LYBRAND L.L.P.

New York, New York
March 12, 1997



           MOTOR CLUB OF AMERICA AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEETS

                                   

                                                   December 31,
                                               1996            1995 
    
     ASSETS
Investments:
 Fixed maturity securities, available-
   for-sale, at fair value (amortized
   cost $47,657,056 - 1996 and 
   $43,238,185 - 1995)                      $47,927,093    $44,630,457 
 Mortgage loans on real estate - at the
   unpaid principal amount                      634,492        766,101 
 Short-term investments, at fair value
   which approximates cost                    1,745,455        200,719 
          Total investments                  50,307,040     45,597,277 
Cash and cash equivalents                     3,476,948      2,630,909 
Premiums receivable                           7,801,583      7,135,231 
Reinsurance recoverable on paid
 and unpaid losses & loss expenses           21,767,329     17,638,854 
Notes and accounts receivable                   248,875        209,953 
Deferred policy acquisition costs             5,761,496      5,069,222 
Fixed assets - at cost, less accumulated
  depreciation                                1,826,753      1,219,125 
Federal income tax recoverable - current          -             13,680 
Prepaid reinsurance premiums                  1,145,944      1,193,098 
Deferred tax asset                            2,075,535         -     
Other assets                                  1,121,599      1,251,419 
          Total assets                      $95,533,102    $81,958,768  

     LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Losses and loss expenses                    $47,666,856    $39,823,552 
Unearned premiums and
  membership fees ($524,896 -1995)           18,934,200     17,363,031 
Commissions payable                           1,444,660      1,357,752 
Accounts payable                                595,785        302,791 
Accrued expenses                              6,770,544      7,673,251 
Drafts outstanding                            1,309,437      1,357,315 
Federal income taxes payable - current           25,969         -     
          Total liabilities                  76,747,451     67,877,692 
Shareholders' Equity:
Common Stock, par value $.50 per share:
 Authorized - 10,000,000 shares;
 issued and outstanding - 1996
 2,047,504, 1995 - 2,043,754 shares           1,023,752      1,021,876 
Paid in additional capital                    1,730,508      1,722,539 
Unfunded accumulated benefit
 obligation in excess of Plan assets         (4,690,900)    (5,177,900)
Net unrealized gains on debt securities         270,037      1,392,415 
Retained earnings                            20,452,254     15,122,146 
    Total Shareholders' Equity               18,785,651     14,081,076 
    Total Liabilities and
      Shareholders' Equity                  $95,533,102    $81,958,768 


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

<TABLE>
<CAPTION>

              MOTOR CLUB OF AMERICA AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS
<S>                                       <C>            <C>          <C>

                                            For the years ended December 31, 
                                            1996           1995         1994 
  REVENUES

Insurance premiums (net of premiums
 ceded totaling $7,273,083, $5,750,247
 and $9,173,851)                        $45,194,073    $35,300,872  $27,891,943 
Net investment income                     3,087,112      2,764,188    2,730,211 
Realized gains (losses) on
 sales of investments (net)                   5,485         56,823      (43,292)
Realized gain on sale of subsidiary         702,419          -            -     
Motor Club membership fees                1,215,039      1,276,324    1,381,591 
Other revenues                              114,512        125,613      197,917 
     Total revenues                      50,318,640     39,523,820   32,158,370 

  LOSSES AND EXPENSES

Losses and loss expenses
  incurred (net of reinsurance
  recoveries totaling $6,840,459,
  $1,153,901 and $4,892,994)             29,148,280     20,737,548   15,286,301 
Amortization of deferred
  policy acquisition costs               13,678,710     10,611,978    9,353,336 
Other operating expenses                  3,569,564      5,438,359    6,428,328 
Lease termination charge                    359,077          -            -     
Reversal of prior years' accrual
  for New Jersey FAIR Act
  liabilities                                 -              -       (3,656,127)
Discount of note payable to
  Receiver of MCA Insurance
  Company in Liquidation                      -              -         (624,850)
Motor Club benefits                         266,112        280,836      332,315 
     Total losses and expenses           47,021,743     37,068,721   27,119,303 
Income before Federal income
  taxes                                   3,296,897      2,455,099    5,039,067 
Benefit (provision) for Federal
  income taxes:  current                    (42,324)       (38,320)      (4,420)
                 deferred                 2,075,535          -            -     
Total Federal income tax                  2,033,211        (38,320)      (4,420)

Net income                              $ 5,330,108   $  2,416,779  $ 5,034,647 

Per share data:
Net income                              $      2.61   $       1.18   $     2.46 
Weighted average number of
  common shares outstanding               2,045,590      2,043,197    2,043,004 

</TABLE>

          The accompanying notes are an integral part of
             these consolidated financial statements.
[CAPTION]
<TABLE>

                                 MOTOR CLUB OF AMERICA AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 <S>                         <C>         <C>         <C>         <C>  <C>        <C>            <C>           <C>

                                                                     Unrealized        Unfunded
                                                                     Appreciation     Accumulated
                                                                    (Depreciation)      Benefit
                              Common Stock (a)      Paid-In          of Available-   Obligation In
                               Shares                Additional       for-sale         Excess of       Retained
                               Issued       Amount   Capital         Securities       Plan Assets      Earnings    Total

 Balance at December 31, 1993  2,043,004   $1,021,501  $1,720,945  $    -          ($3,245,200)   $ 7,670,720   $ 7,167,966
Unrealized depreciation on 
  available-for-sale securities                                     (1,268,628)                                  (1,268,628)
Adjustment to recognize
  minimum required pension
  liability                                                                           (387,800)                    (387,800)
Net income                                                                                           5,034,647    5,034,647 
   Balance at December 31, 1994  2,043,004    1,021,501   1,720,945 (1,268,628)      (3,633,000)    12,705,367   10,546,185 

Common stock issued                    750          375       1,594                                                   1,969 
Unrealized appreciation on 
  available-for-sale securities                                       2,661,043                                   2,661,043 
Adjustment to recognize
  minimum required pension
 liability                                                                           (1,544,900)                 (1,544,900)
Net income                                                                                            2,416,779   2,416,779 
   Balance at December 31, 1995  2,043,754    1,021,876   1,722,539   1,392,415      (5,177,900)     15,122,146  14,081,076 

Common stock issued                  3,750        1,876       7,969                                                   9,845 
Unrealized depreciation on 
  available-for-sale securities                                      (1,122,378)                                 (1,122,378)
Adjustment to recognize
  minimum required pension
  liability                                                                              487,000                    487,000 
Net income                                                                                            5,330,108   5,330,108 
   Balance at December 31, 1996  2,047,504   $1,023,752  $1,730,508  $  270,037      ($4,690,900)   $20,452,254 $18,785,651 

</TABLE>

(a) Par value $.50 per share; authorized - 10,000,000 shares.



                     The accompanying notes are an integral part 
                      of these consolidated financial statements.
<TABLE>
<CAPTION>
                         MOTOR CLUB OF AMERICA AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS

  <S>                                       <C>              <C>            <C>
                                             For the years ended December 31,  
                                              1996            1995            1994  
  Net income                                $ 5,330,108      $2,416,779     $ 5,034,647 

  Adjustments to reconcile net income
    to cash provided by
    (utilized in) operating activities:
    Discount of Note due Receiver of
      MCA Insurance Company in Liquidation        -               -            (624,850)
    Depreciation expense                        379,453         297,291         325,029 
    Amortization (accretion) of bond
      premium (discount) - net                   98,738          66,843         236,602 
    Gain on sale of subsidiary                 (702,419)          -               -   
 
    Loss (gain) on sale of investments           (5,485)        (56,823)         43,292 
    Write-off of leasehold improvement
      (net) due to lease termination            227,077           -               -   
 
    Deferred tax benefit                     (2,075,535)          -               -   
 

  Changes in:
    Net assets of Motor Club of America
      Enterprises, Inc.                        (422,581)          -               -   
 
    Premiums receivable                        (666,352)     (1,587,853)       (458,911)
    Notes and accounts receivable               (38,922)         74,146         336,444 
    Deferred policy acquisition costs          (692,274)       (902,854)     (1,373,682)
    Federal income tax - current                 39,649          19,600       1,405,876 
    Reinsurance recoverable on paid and
      unpaid losses                          (4,128,475)      3,127,417       1,747,075 
    Prepaid reinsurance premiums                 47,154        (511,033)      3,415,982 
    Other assets                                129,820         406,825        (108,468)
    Losses and loss expenses                  7,843,304      (1,841,549)     (4,153,102)
    Unearned premiums and membership fees     1,571,169       3,179,001         404,424 
    Commissions payable                          86,908         230,872        (524,190)
    Accounts payable                            292,994          33,361         (17,776)
    Accrued expenses                           (415,706)      1,406,751      (7,165,753)
    Drafts outstanding                          (47,878)        198,247         125,286 
    Amount due to/from MCA Insurance 
      Company in Liquidation and 
      subsidiaries                                -          (2,750,000)     (1,707,760)
  Total cash provided by (utilized in)
    operating activities                      6,850,747       3,807,021      (3,059,835)

</TABLE>
                              (Continued)
<TABLE>
<CAPTION>

                MOTOR CLUB OF AMERICA AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (CONTINUED)
                                        
    <S>                                       <C>             <C>             <C>
                                                    For the years ended December 31,   
                                                1996            1995             1994 
  Investing activities:

  Proceeds from:
    Maturities of fixed maturities            4,442,716       4,128,756       6,708,618 
    Sales of fixed maturities                 1,396,522       4,417,499       7,749,369 
    Sale of subsidiary                        1,125,000           -               -   
 
    Payments received on mortgage
      loan principal                            131,609         106,835         308,584 
    Sale or maturities of short-
      term investments                          200,000       1,916,411       5,093,063 
    Sale of fixed assets                         13,400           -               1,751 

  Purchase of:
    Fixed maturities                        (10,350,787)    (13,289,423)    (12,671,277)
    Short-term investments                   (1,745,455)       (201,134)     (3,483,016)
    Fixed assets                             (1,227,558)       (333,635)       (248,770)
  Total cash (utilized in)
    provided by
   investing activities                      (6,014,553)     (3,254,691)      3,458,322 

  Financing activities:
   Common stock issued                            9,845           1,969           -   
 
   (Repayment) Borrowing from
    Midlantic Bank, N.A.                          -          (2,750,000)      2,750,000 
  Total cash provided by (utilized
    in) financing activities                      9,845      (2,748,031)      2,750,000 
  Net increase (decrease) in cash               846,039      (2,195,701)      3,148,487 
  Cash and cash equivalents
    at beginning of year                      2,630,909       4,826,610       1,678,123 
  Cash and cash equivalents
    at end of year                          $ 3,476,948     $ 2,630,909    $  4,826,610 

</TABLE>

Supplemental Disclosures of Cash Flow Information

     (1)  Total interest paid was $8,166 (1996), $33,934 (1995) and
          $53 (1994).
     (2)  Total Federal income taxes paid was $38,462 (1996), $52,000
          (1995) and $54,227 (1994).

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

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A - Summary of Significant Accounting Policies:

     (a) Basis of Presentation and Principles of Consolidation:

          The consolidated financial statements of Motor Club of
          America (the "Company") include its accounts and those of
          its wholly-owned subsidiary companies.  The financial
          statements have been prepared on the basis of generally
          accepted accounting principles ("GAAP").  The preparation
          of financial statements in conformity with these
          practices requires management to make estimates and
          assumptions that affect the reported amounts of assets
          and liabilities and disclosure of contingent assets and
          liabilities at the date of the financial statements and
          the reported amounts of revenues and expenses during the
          period.  Actual results could differ from those
          estimates.

          The Company's insurance subsidiaries, Motor Club of
          America Insurance Company ("Motor Club") and Preserver
          Insurance Company ("Preserver") are collectively referred
          to as the "Insurance Companies".  All material
          intercompany items and transactions have been eliminated
          in consolidation.

     (b)  Nature of Operations:

          The Company is a New Jersey corporation which owns the
          Insurance Companies and a finance company.  The Company's
          subsidiary, Motor Club of America Enterprises, Inc.,
          ("Enterprises") was sold on December 2, 1996 (See Note B,
          Sale of Subsidiary for further details).  Enterprises
          operates a motor club.  The Insurance Companies engage in
          property and casualty insurance produced by independent
          agents; one hundred percent of the Insurance Companies'
          operations are conducted in the State of New Jersey.  The
          Company generates 96% of its revenues from insurance
          revenues.  There is one agent who individually produces
          more than ten percent of the Company's insurance
          premiums.






                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note A - Summary of Significant Accounting Policies (Continued):

     (c) Insurance Premiums:

          Insurance premiums are credited to income by the monthly
          pro rata method over the terms of the contracts. 
          Contracts for private passenger automobile insurance are
          for terms of six months. Insurance contracts for policies
          other than private passenger automobile are for terms of
          twelve months.

     (d) Motor Club Operations:

          Motor Club membership fees are credited to income by the
          straight-line method over the terms of the contracts. 
          Commission expense is deferred and amortized in the same
          manner as the related unearned membership fees.  Other
          related costs are charged to expense as incurred.

     (e) Investments:

          All of the Company's fixed maturity securities are
          classified as available-for-sale securities, and are
          therefore reported at fair value, with unrealized gains
          and losses excluded from earnings and reported as a
          separate component of shareholders' equity, net of
          applicable deferred taxes.
  
          The Company recognizes income for the mortgage-backed
          bond portion of its fixed maturity securities portfolio
          using the constant effective yield method.  Premium and
          discount amounts are amortized based on the stated
          contractual life of the securities.

          When actual prepayments differ from this assumption, the
          effective yield is recalculated to reflect actual
          payments to date.  The net investment in the security is
          adjusted to the amount that would have existed had the
          new effective yield been applied since the acquisition of
          the security.  That adjustment is included in net
          investment income.

          Gains and losses on investments are recognized when
          investments are sold or redeemed on a specific
          certificate basis.  




                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note A - Summary of Significant Accounting Policies (Continued):

     (f) Other Revenues:

          Other revenues consist principally of interest on
          mortgage loans.

     (g) Losses and Loss Expenses:

          The estimated liability for losses is based on (i) the
          accumulation of cost estimates for unpaid losses reported
          prior to the close of the accounting period; and (ii)
          estimates of incurred but unreported losses based upon
          past experience; less (iii) estimates of anticipated
          salvage and subrogation recoveries. In the normal course
          of business, the Company seeks to reduce the loss that
          may arise from catastrophes or other events that cause
          unfavorable underwriting results by reinsuring certain
          levels of risk in various areas of exposure with other
          insurance enterprises or reinsurers.

          Changes to the estimated liabilities are reflected in the
          results of operations currently.

          Amounts recoverable from reinsurers are estimated in a
          manner consistent with the claim liability associated
          with the reinsured policy.  The liability for loss
          expenses is based on estimates of expenses to be 
          incurred in the settlement of claims.

     (h) Deferred Policy Acquisition Costs:

          Deferred policy acquisition costs are costs that vary
          with and are directly related to the production of new 
          and renewal business.  Such costs include commissions,
          premium taxes, certain State mandated assessments and
          certain underwriting and policy issuance costs which are
          deferred when incurred (subject to a maximum) and  
          amortized to income as the related written premiums are
          earned.  Investment income is anticipated in determining 
          whether a premium deficiency relating to these costs
          exists.







                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note A - Summary of Significant Accounting Policies (Continued):

     (i) Fixed Assets:

          Depreciation on leasehold improvements is computed by the
          straight-line method over the remaining lease term.  
          Depreciation on furniture and fixtures, data processing 
          and other equipment, is computed by the straight-line
          method over the estimated useful lives, ranging from
          three to twenty years.

          Expenditures for major renewals and betterments are
          capitalized, and expenditures for maintenance and repairs
          are charged to income as incurred.  When property units
          are retired, or otherwise disposed of, the cost thereof
          and related accumulated depreciation are eliminated from
          the accounts.  Any gain or loss on disposal is credited
          or charged to operations.

     (j) Federal Income Taxes:

          Deferred Federal income taxes are provided for temporary
          differences between the financial statement and tax bases
          of assets and liabilities using enacted tax rates
          expected to apply in the years in which the differences
          are expected to reverse.

     (k) Statement of Cash Flows:

          For purposes of the statement of cash flows, the Company
          considers demand deposits held with financial
          institutions and money market mutual fund holdings to be
          cash equivalents.

     (l) Per Share Data:

          Earnings per share are computed based upon the weighted
          average number of common shares outstanding during each
          year.

Note B - Sale of Subsidiary:

          On December 2, 1996, the Company sold Enterprises to JVL
          Holding Properties, Inc., ("JVL") a non-affiliated
          Oklahoma corporation, for $1,125,000.  As a result of
          this transaction, the Company recorded a gain of
          $702,419.


                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note B - Sale of Subsidiary (Continued):

          Pursuant to an additional agreement entered into
          concurrent with the sale, the Company will provide
          certain services to members whose memberships are written
          with private passenger automobile ("PPA") policies
          written by Motor Club.  In exchange the Company will
          receive a servicing fee from JVL.  The Company will also
          receive certain fees for other memberships written by
          Enterprises, as defined by this additional agreement. 
          During 1996, these fees collectively totaled $11,000.

Note C - PPA Business:

          Motor Club received relief from the New Jersey Department
          of Banking and Insurance ("NJ DOBI") from certain
          provisions of the New Jersey Fair Automobile Insurance
          Reform Act of 1990 ("FAIRA").  Such relief included the
          following: (1) exemption from its obligation to pay
          surtaxes and assessments on business written until
          December 31, 1992 (these exemptions allowed Motor Club to
          reverse previously accrued surtaxes and assessments of
          $2,003,000, as a reduction of expense in 1994); (2)
          exemption (until January 1995) from the take-all-comers
          provisions of FAIRA, which requires the writing of new
          PPA insurance; (3) payment in 1994 of only $2,275,000 of
          the Market Transition Facility ("MTF") deficit 
          (legislation retired the entire MTF deficit, enabling
          Motor Club to eliminate its remaining $1,653,000 MTF
          liability in 1994 as a reduction of expense); and (4)
          non-participation in the Personal Automobile Insurance
          ("Assigned Risk") Plan, through December 1996.

          The New Jersey PPA market has historically been subject
          to regulatory and legislative volatility which has, at
          times, adversely affected the profitability of this line
          of business.  The State of New Jersey also maintains an
          excess profits law which provides that PPA insurers whose
          profits exceed a statutorily computed maximum over a
          period of years will be required to pay such excess to
          its policyholders.  It would appear that Motor Club does
          not have such excess profits.








                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note D - Investments: 

     (a)  The amortized cost and estimated fair value of
          investments in fixed maturity securities at December 31,
          1996 were as follows:

                               Gross        Gross
                  Amortized  Unrealized   Unrealized      Fair 
                     Cost      Gains        Losses        Value   
U.S. Government
 securities     $34,036,186   $543,591    ($183,689)   $34,396,088
GNMA Mortgage-
 backed
 securities       8,409,509     63,883     (109,428)     8,363,964
Corporate
 securities       5,211,361     37,865      (82,185)     5,167,041
 Total          $47,657,056   $645,339    ($375,302)   $47,927,093

          The amortized cost and estimated fair value of
          investments in fixed maturities at December 31, 1995 were
          as follows:

                               Gross        Gross
                  Amortized  Unrealized   Unrealized      Fair 
                     Cost      Gains        Losses        Value   
U.S. Government
 securities     $30,583,393  $1,221,968   ($16,532)    $31,788,829
GNMA Mortgage-
 backed
 securities       7,684,299     150,474   ( 36,341)      7,798,432
Corporate
 securities       4,970,493      82,902   ( 10,199)      5,043,196
 Total          $43,238,185  $1,455,344   ($63,072)    $44,630,457

          The amortized cost and fair value of investments in   
          fixed maturities at December 31, 1996, by contractual   
          maturity, are as follows:

                                  Amortized        Fair
                                     Cost          Value    

Due in one year or less          $ 7,035,350    $ 7,038,256
Due after one year through
  five years                      23,064,172     23,376,093
Due after five years through
  ten years                        7,833,142      7,914,145
Due after ten years                9,724,392      9,598,599
                                 $47,657,056    $47,927,093

                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note D - Investments (Continued):

          The above maturity tables includes $8,363,964 (at fair
          value) of Government National Mortgage Association
          mortgage-backed securities, which are classified as due
          after ten years based on the contractual life of the
          securities.

          Expected maturities may differ from contractual
          maturities because borrowers may have the right to call
          or prepay obligations with or without call or prepayment
          penalties.  Gross gains of $5,485, $53,851 and $44,783,
          were realized in 1996, 1995 and 1994, respectively, on
          those sales and calls.  Gross losses of $88,064 were
          realized in 1994 on those sales and calls.

     (b)  Investment income (including net realized gains and
          losses) by category of investments consists of the
          following:

       Category               1996        1995         1994       
                                       
    Fixed maturities      $3,093,534   $2,837,597   $2,741,045
    Other, principally
     short-term
     investments             196,457      168,335      126,268
      Total investment
        income             3,289,991    3,005,932    2,867,313
    Investment
     expenses                197,394      184,921      180,394
      Net investment
        income            $3,092,597   $2,821,011   $2,686,919

     (c)  At December 31, 1996 and 1995, fixed maturity investments
          deposited with various state insurance departments (at
          fair value) amounted to $220,275 and $439,821,
          respectively.

     (d)  There were no investments in any persons and its
          affiliates in excess of ten percent of shareholders'
          equity.





                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note D - Investments (Continued):

     (e)  The change in net unrealized gains (losses) on
          investments are as follows:

                                   Years Ended December 31,    
                                1996         1995         1994
         Fixed
          maturities         ($1,122,378)  $2,661,043  ($3,416,148)

     (f)  In the opinion of management there has been no permanent
          impairment in the carrying amount of investments.

Note E - Unpaid Losses and Loss Expenses:

     (a)  The following table provides a reconciliation of the
          beginning and ending balances for unpaid losses and loss
          expenses for 1996, 1995 and 1994: 

                                  1996         1995         1994 
Balance at January 1          $39,823,552  $41,665,101  $45,818,203

Less: Reinsurance recover-
 ables                         16,414,610   19,311,132   20,485,582

Net balance at January 1       23,408,942   22,353,969   25,332,621

Incurred losses and loss
 expenses:
 Provision for current
  year claims                  28,244,599   19,625,070   14,367,183

 Increase in provision for
  prior years' claims             903,681    1,112,478      919,118

Total incurred losses and
  loss expenses                29,148,280   20,737,548   15,286,301

Payment for losses and
 loss expenses:
 Payment on current
  year claims                  13,029,214    8,577,000    5,953,183

 Payment on prior
    years' claims              11,414,375   11,105,578   12,311,770

Total payments for losses
  and loss expenses            24,443,589   19,682,578   18,264,953

Net balance at December 31     28,113,633   23,408,939   22,353,969

Plus: Reinsurance recover-
 ables                         19,553,223   16,414,613   19,311,132

Balance at December 31        $47,666,856  $39,823,552  $41,665,101



                      (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note E - Unpaid Losses and Loss Expenses (Continued):

          The reconciliation shows a 1996 deficiency of $904,000 in
          the liability recorded at December 31, 1995.  The
          deficiency is primarily the result of the latent
          development of a limited number of large losses incurred
          in 1995 and prior.  Management believes this development
          does not indicate any adverse trends in the Company's
          loss development.

     (b)  Losses incurred are reduced by salvage and subrogation
          approximating $2,188,000, $1,661,000 and $1,495,000 for
          the years ended December 31, 1996, 1995 and 1994,
          respectively.

Note F - Fixed Assets:

          Fixed assets consist of the following:

                                             1996          1995
          
          Leasehold improvements         $  191,142    $  446,744
          Office furniture, fixtures and
           data processing equipment      2,934,793     2,375,989
                                          3,125,935     2,822,733
          Less accumulated depre-
           ciation                        1,299,182     1,603,608
                                         $1,826,753    $1,219,125

Note G - Reinsurance:

     (a)  Unearned premiums and unpaid loss and loss expenses are
          stated gross of the effects of reinsurance.

     (b)  Reinsurance contracts do not relieve the Insurance
          Companies from their obligations to policyholders. 
          Failure of reinsurers to honor their obligations could
          result in losses to the Insurance Companies.  Generally,
          all risks in excess of $150,000 for liability lines and
          $75,000 for property lines are reinsured.






                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note G - Reinsurance (Continued):

          The Insurance Companies also maintained an 80% quota
          share reinsurance agreement for their non-automobile
          business.  The quota share reinsurance agreement was
          terminated as of February 19, 1994, and covers policies
          inforce as of the termination date through the policies'
          respective expiration dates.  

          The Insurance Companies evaluate the financial condition
          of their reinsurers and monitor concentrations of credit
          risk arising from activities or economic characteristics
          of the reinsurers to minimize their exposure to
          significant losses from reinsurer insolvencies.  

          As referred to in Note A, one hundred percent of the
          Company's insurance operations are located in the State
          of New Jersey, the laws of which require participation in
          certain reinsurance funds.  

          Reinsurance recoverable on paid and unpaid loss and loss
          expenses are principally attributable to the amounts of
          reinsurance recoverable from the Unsatisfied Claim and
          Judgment Fund ("UCJF") of the State of New Jersey, which
          pertains to New Jersey Personal Injury Protection claims
          in excess of Motor Club's statutory retention limit of
          $75,000.  Reinsurance recoverable from the UCJF was
          $12,955,544 and $11,717,543 as of December 31, 1996 and
          1995, respectively.

          Motor Club is required to participate in the New Jersey
          Automobile Insurance Risk Exchange ("NJ AIRE").  NJ AIRE
          is designed to balance differences between company bodily
          injury exposures and loss payments as compared to
          industry exposures and loss payments under New Jersey's
          dual tort threshold system.  

          Assessments paid to NJ AIRE based on subject bodily
          injury exposures are accounted for as ceded premiums
          written and totaled $1,613,095, $1,541,875 and $1,578,064
          in 1996, 1995 and 1994, respectively.  Reimbursements
          from NJ AIRE based on subject claim payment experience
          are accounted for as ceded losses incurred and totaled
          $482,105, $800,872 and $1,057,817 in 1996, 1995 and 1994,
          respectively.

                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note G - Reinsurance (Continued):

          Prepaid reinsurance premiums of $1,145,944 and $1,193,098
          as of December 31, 1996 and 1995, respectively, are
          attributable to the Insurance Companies' excess of loss
          reinsurance treaties which are with one reinsurer.

          The effect of reinsurance on premiums written and earned
          is as follows:
<TABLE>
<CAPTION>
<S>         <C>           <C>           <C>          <C>           <C>           <C>

                     1996                       1995                      1994
             Written      Earned        Written     Earned        Written      Earned
Direct      $54,563,224   $52,467,156   $44,334,501  $41,051,119   $37,555,248   $37,065,794 
Ceded        (7,225,929)   (7,273,083)   (6,261,282)  (5,750,247)   (5,757,866)   (9,173,851)
Net         $47,337,295   $45,194,073   $38,073,219  $35,300,872   $31,797,382   $27,891,943 
</TABLE>

     (c)  During 1993, Motor Club was notified by one of its
          reinsurers of a dispute.  The reinsurer did not deny the
          validity of coverage; rather, the reinsurer indicated
          that it believed that a right of set-off existed for the
          reinsurance which Motor Club had ceded to the reinsurer
          for accident years 1973 to 1975 against reinsurance which
          MCA Insurance Company ("MCAIC") had assumed from the
          reinsurer between 1968 and 1976.  Motor Club assumed the
          ceded reinsurance from MCAIC in 1991.  The reinsurer had
          indicated that payments to Motor Club would be held in
          abeyance pending resolution of the dispute.  Motor Club
          had recorded a liability of $1,695,774 at December 31,
          1995.

          On November 6, 1996, Motor Club and the reinsurer settled
          the dispute.  Motor Club paid the reinsurer $1,950,000,
          in three installments prior to December 31, 1996.  In
          return, the reinsurer agreed to: (1) pay Motor Club all
          past amounts due under the reinsurance agreement
          applicable to accident years 1973 to 1975, totaling
          $640,698 as of June 30, 1996; and (2) to pay  Motor Club
          future amounts which may be recoverable from the
          reinsurer under the terms of the same reinsurance
          agreement.

          The Consolidated Statement of Operations includes in
          other operating expenses $254,226, $239,357 and $100,084
          for this matter in 1996, 1995 and 1994, respectively.



                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note H - Taxes:

     (a)  The Company and its subsidiaries (including MCAIC and its
          subsidiaries - see Note Q) file a consolidated Federal
          income tax return.  The benefit (provision) for Federal
          income taxes consists of the following:

                                              1996        1995    1994 

              Current provision           ($   42,324) ($38,320) ($4,420)
              Deferred benefit              2,075,535     -         -    
              Total benefit (provision)    $2,033,211  ($38,320) ($4,420)

     (b)  The tax effects of temporary differences that give rise
          to significant portions of the deferred tax assets and
          liabilities were as follows:
                                                         December 31, 
                                                     1996         1995   
          Deferred tax assets:
            Net operating loss carryforward       $2,549,738   $3,645,058 
            Unpaid losses and loss expenses        1,137,478    1,006,482 
            Unearned premium                       1,209,601    1,063,862 
            Other deferred tax assets                  -          189,068 
            Alternative minimum tax and
             general business credit carry-
             forwards                                128,701       64,270 
          Total deferred tax assets                5,025,518    5,968,740 

          Deferred tax liabilities:
            Deferred acquisition costs            (1,958,909)  (1,723,535)
            Unrealized gain on debt securities       (91,693)    (473,421)
            Prepaid pension cost                    (753,512)    (665,338)
            Other deferred tax liabilities          (145,869)    (132,038)
          Total deferred tax liabilities          (2,949,983)  (2,994,332)
          Less: valuation allowance for
            deferred tax assets                        -       (2,974,408)
          Net deferred tax asset                  $2,075,535    $  -      

          The Company believes it is more likely than not that it
          will generate future taxable income to realize the
          benefits of the net deferred tax asset.  Accordingly, the
          Company has  not provided a valuation allowance at
          December 31, 1996.  The ultimate amounts realized,
          however, could be reduced if actual amounts of future
          taxable income differ from projected future taxable
          income.
                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note H - Taxes (Continued):

          The net operating loss carryforward of $7,499,229 expires
          beginning in 2007.

     (c)  The provision for Federal income taxes resulted in
          effective tax rates lower than the statutory Federal
          income tax rates, as follows:
                                          1996           1995         1994
        Tax provision 
         computed at statutory
         federal income tax rates      ($1,120,945  ($  834,734) ($1,713,283)
        Change in valuation allowance    2,075,535    1,191,781    1,713,283 
        Impact of alternative
         minimum tax ("AMT")
         calculation                       (36,298)     (38,320)       -     
        Effect of net operating
         loss carryforward               1,095,320         -           -     
        Other-net                           19,599     (357,047) (     4,420)
        Benefit (provision)             $2,033,211   ($  38,320) ($    4,420)

     (d)  The Consolidated Statements of operations for the years
          ended December 31, 1996, 1995 and 1994 include state
          taxes based on insurance premiums of $143,262, $116,410
          and $98,625 and state income tax expense (benefit) of
          $8,244, ($19,928) and $9,255, respectively.

Note I - Shareholders' Equity:

     (a)  The Insurance Companies are domiciled in the State of New
          Jersey and therefore prepare their statutory financial
          statements in accordance with accounting practices
          prescribed or permitted by the NJ DOBI.

          Prescribed statutory accounting practices include a
          variety of publications of the National Association of
          Insurance Commissioners, as well as state laws,
          regulations and general administrative rules.  Permitted
          statutory accounting practices encompass all accounting
          practices not so prescribed.






                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note I - Shareholders' Equity (Continued):

          The maximum amount of dividends which the Insurance
          Companies can pay to shareholders without approval of the
          Insurance Commissioner is subject to restrictions. The
          maximum amount distributable is limited to the greater
          of: (1) ten percent of statutory surplus as regards
          policyholders; or (2) net income, excluding realized
          capital gains.  Accordingly, the maximum dividend which
          the Insurance Companies may pay without prior approval in
          1997 is $1,721,000.

     (b)  The consolidated financial statements of the Company's
          insurance subsidiaries have been prepared in accordance
          with GAAP, which differ in certain respects from
          accounting practices prescribed or permitted by insurance
          regulatory authorities (statutory basis).

          The principal differences relate to (1) acquisition costs
          incurred in connection with acquiring new business which
          are charged to expense under statutory practices but
          under GAAP are deferred and amortized as the related
          premiums are earned; (2) anticipated salvage and
          subrogation recoveries which have not been credited to
          losses incurred for statutory purposes; (3) net deferred
          tax assets created by the tax effects of temporary
          differences; (4) unpaid losses, unpaid loss adjustment
          expenses and unearned premium reserves are presented
          gross of reinsurance with a corresponding asset recorded;
          and (5) fixed maturity portfolios that qualify as
          available for sale are carried at fair value and changes
          in fair value are reflected directly in unassigned
          surplus, net of related deferred taxes. 

          The consolidated capital and surplus, shareholders'
          equity and income (loss) of Motor Club and Preserver on
          a statutory and GAAP basis were as follows:
                                           December 31,       
                                         1996         1995
             Capital and surplus -
              Statutory basis         $14,753,760  $13,877,312 
             Shareholders' equity -
              GAAP basis              $24,704,123  $23,323,722

                                     Years ended December 31,   
                                   1996       1995         1994  
            Net income (loss):
            Statutory basis     $  212,807 $1,811,612  ($  905,394)
            GAAP basis          $2,737,318  $2,808,466  $5,076,289 

                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note I - Shareholders' Equity (Continued):

          Distribution by the Insurance Companies of the excess of
          GAAP shareholders' equity over statutory capital and
          surplus to the Company is prohibited by law.

Note J - Contingencies:

          The Company and its subsidiaries are parties to various
          legal actions and administrative proceedings and subject
          to various claims arising in the ordinary course of
          business.  The Company believes that the disposition of
          these matters will not have a material adverse effect on
          the financial position, the results of operations or cash
          flows of the Company.

Note K - Pensions:

     (a)  The Company has a non-contributory defined benefit plan
          (the "Plan").  Eligible salaried and hourly employees of
          the Company participate in the Plan after twelve months
          of continuous employment with the Company when age 21 has
          been attained.  Retirement benefits are based on each
          participant's average compensation and years of service. 
          Vesting of benefits  begins after five years of service
          commencing from the minimum age of 21 or date of hire, if
          later.

          The Company's contributions are designed to fund the
          Plan's normal costs on a current basis and to  fund the
          unfunded prior service costs, including accrued benefits
          arising from qualifying employee service occurring prior
          to the establishment of the Plan, over 40 years.

          On January 15, 1992, the Company suspended the accrual of
          benefits arising from participant service.  The Company
          continues to fund the Plan for benefits earned through
          January 31, 1992. 

          The Plan maintains a significant amount of assets in
          group annuity contracts with Mutual Benefit Life
          Insurance Company ("Mutual"), which was placed in
          rehabilitation by the NJ DOBI on July 16, 1991.  The Plan
          has not received payment on the group annuity contracts
          that matured on July 15, 1991 and thereafter.

                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note K - Pensions (Continued):

          On November 10, 1993, a Plan of Rehabilitation for Mutual
          was confirmed by the Superior Court of New Jersey.  As a
          result, certain amendments were made to the Plan's
          contracts ("the restructured contract"), which is now
          transferred to the MBL Life Assurance Corporation
          ("MBLLAC"), the successor corporation of Mutual, where
          the restructured contract continues.

          Under the Plan of Rehabilitation, as amended, payment of
          all maturities and interest will be held subject to
          payout which will not begin until December 31, 1999, the
          end of the Rehabilitation period.

          In October 1994, MBLLAC approved and subsequently paid a
          "hardship withdrawal" of $2,666,204 (net of an
          administrative charge of $470,507) to the Plan. 

          The Plan also received $177,517, $167,368 and $61,449 in
          distributions from MBLLAC and Mutual in 1996, 1995 and
          1994, respectively, under provisions of the Plan of
          Rehabilitation.

     (b)  Pension expense for 1996, 1995 and 1994 included the
          following components:
                                             1996      1995     1994   

      Interest cost on projected
        benefit obligation              $  831,800   $862,600  $818,400 
      Actual return on assets           (1,027,700)  (809,900) (371,600)
      Net amortization and deferral        542,800    214,400  (295,800)
      Net periodic pension cost         $  346,900   $267,100  $151,000 

          Net amortization and deferral consists of amortization of
          net assets at transition, amortization of unrecognized
          prior service cost and deferral of subsequent net gains
          and losses.  The assumptions used included a discount
          rate of 7.25% (1996), 8.25% (1995) and 7.5% (1994) and an
          expected long-term rate of return on assets of 10.0%.





                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note K - Pensions (Continued):

     (c)  The following table sets forth the funded status of the
          Plan and amounts recognized in the Company's balance
          sheet at December 31, 1996 and 1995.  The discount rate
          assumed as of December 31, 1996 and 1995 is 7.50% and
          7.25%, respectively.

                                                          1996        1995
              Actuarial present value of
               benefit obligations:
              Vested benefit obligation               $11,591,100  $11,856,000 
              Accumulated benefit obli-
               gation                                 $11,591,100  $11,856,000 
              Projected benefit obli-
               gation                                 $11,591,100  $11,856,000 
              Plan assets at fair value,
               including guaranteed insurance
               contracts with MBL Life Assurance
               Corporation, in rehabil-
               itation, $3,088,000 (1996) and
               $3,080,000 (1995)                        8,791,900    8,462,000 
              Projected benefit obligation
               in excess of plan assets                 2,799,200    3,394,000 
              Unrecognized net loss                    (4,690,000)  (5,177,900)
              Adjustment required to recognize
               minimum liability                        4,690,000    5,177,900 
              Pension liability recognized
               in the statement   
               of financial position                  $ 2,799,200  $ 3,394,900 

          The adjustment required to recognize the minimum
          liability is reflected as a reduction of shareholders'
          equity as of December 31, 1996 and 1995, respectively.

     (d)  The Company maintains a defined contribution plan for
          substantially all employees (including those of MCAIC).
          Employer contributions of a discretionary amount are made
          by the Company and its subsidiaries.  MCAIC and its
          subsidiaries provide similar employer contributions. 
          Employer contributions in the amount of $116,938,
          $134,987 and $110,458 were made by the Company in 1996,
          1995 and 1994, respectively, for its employees and 
          charged to expense.


                          (Continued) 
             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note L - Post-retirement Benefits:

          The Company currently provides certain life and health
          benefits to retired employees with twenty-five or more
          years of service, subject to certain eligibility
          restrictions.  These benefits consist of the payment of
          medical, life and dental premiums for the retired
          employees.  The Company's funding policy is to pay for
          the premiums currently; any future increases in the cost
          of these benefits will be borne by the retirees and not
          the Company.   The following table sets forth the funded
          status and amounts recognized in the Company's balance
          sheet: 
                                                      December 31,
                                                    1996      1995 

              Accumulated postretirement
               benefit obligation:
              Retirees                            $266,000  $362,000 
              Fully eligible active
               plan participants                   186,000   194,000 
              Other active plan
               participants                         75,000    56,000 
                 Total                             527,000   612,000 
              Plan assets at fair value              -          - 
   
              Accumulated postretirement
               benefit obligation in excess
               of plan assets                      527,000   612,000 
              Unrecognized net (gain)
               from past experience different
               from that assumed and from 
               changes in assumptions             (189,000) (219,000)
              Unrecognized transition obli-
               gation                             (445,000) (473,000)
              Prepaid postretirement benefit
               cost recognized in the state-
               ment of financial position        ($107,000) ($80,000)










                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note L - Post-retirement Benefits (Continued):

          Net periodic postretirement benefit cost for 1996 and
          1995, respectively, included the following components:

                                                     1996     1995 

              Service cost of benefits attributed
               to service during the period        $ 2,000  $ 2,000
              Interest cost on accumulated post-
               retirement benefit obligation        40,000   45,000
              Net amortization and deferral         45,000   37,000
              Net periodic postretirement
               benefit cost                        $87,000  $84,000

          It is the policy of the Company that any future increase
          in life and health care benefits will be borne by the
          retirees and not the Company; as a result, there will be
          no increase in either the accumulated postretirement
          benefit obligation or the service and interest cost
          components of net periodic postretirement benefit cost
          related to a 1% increase in the health care trend rate.

          The weighted average discount rate used in determining
          the accumulated postretirement benefit obligation was
          7.50% in 1996 and 7.25% in 1995.

Note M - Selected Quarterly Financial Data (Unaudited):

     (a)  Year ended December 31, 1996:

                       1st            2nd          3rd          4th
                     Quarter        Quarter      Quarter      Quarter
       Revenues    $11,690,835    $12,225,704   $12,838,694 $13,563,407

       Losses and
         expenses  $11,757,187    $11,255,479   $11,947,466 $12,061,611

       Net income
         (loss)    $   (69,827)   $   950,658   $   891,999  $3,557,278

       Net income
         (loss) per
         common
         share     $      (.03)   $       .46   $       .44  $     1.74

                                (Continued)

                  MOTOR CLUB OF AMERICA AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note M - Selected Quarterly Financial Data (Unaudited) (Continued):

               During the 1996 fourth quarter, the Company
               determined that it was more likely than not that
               sufficient future taxable income will be generated
               to realize the benefits of the net deferred tax
               assets; therefore, the deferred tax asset valuation
               allowance was reversed during the fourth quarter.

          (b)  Year ended December 31, 1995:

                       1st            2nd          3rd          4th
                     Quarter        Quarter      Quarter      Quarter

       Revenues    $9,497,890     $9,517,606   $10,185,612 $10,322,712

       Losses and
         expenses  $9,047,624     $8,867,995   $ 9,525,441  $9,627,661

       Net income  $  439,266     $  638,611   $   646,171  $  692,731

       Net income
         per common
         share     $      .22     $      .31   $       .31  $      .34

Note N - Stock Option Plans:

          The Motor Club of America 1987 and 1992 Stock Option
          Plans ("the 1987 Option Plan" and "the 1992 Option Plan",
          respectively) provide for the issuance of options to
          purchase 100,000 common shares, respectively, by key
          executives at the  market price at date of grant.  

          Options under the 1987 Option Plan are exercisable for a
          five year period in twenty-five percent increments each
          year, commencing one year from the date of grant. As of
          December 31, 1996, 61,000 shares under the 1987 Option
          Plan are available for grant; 25,875 shares were
          exercisable and 4,500 shares had been exercised as as of
          that date.

          Options under the 1992 Option Plan are exercisable for a
          five year period in twenty-five percent increments each
          year, commencing one year from the date of grant.  As of
          December 31, 1996, 49,000 shares under the 1992 Option
          Plan are available for grant and 51,000 shares were
          exercisable as of that date.

                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note N - Stock Option Plans (Continued):

          Transactions during 1994, 1995 and 1996 relating to the
          1987 Option Plan are as follows:

                                                       Exercise
                                           Number of   Price per    Aggregate
                                            Shares       Share        Amount

            Options outstanding at
             December 31, 1993              70,000     $2.625 to    $356,407 
            Options lapsed in 1994         (28,750)     $10.75      (248,126)
            Options outstanding at
             December 31, 1994              41,250                   108,281 
            Options exercised in 1995         (750)     $2.625        (1,969)
            Options lapsed in 1995          (2,250)     $2.625        (5,906)
            Options outstanding at
             December 31, 1995              38,250      $2.625       100,406 
            Options exercised in 1996       (3,750)     $2.625        (9,844)
            Options outstanding at
             December 31, 1996              34,500      $2.625      $ 90,562 

          Transactions during 1994, 1995 and 1996 relating to the
          1992 Option Plan are as follows:
                                                       Exercise
                                           Number of   Price per    Aggregate
                                             Shares      Share        Amount 

            Options outstanding
             at December 31, 1993           65,000                  $390,000 
            Options lapsed in 1994         (10,000)     $6.00        (60,000)
            Options outstanding at
             December 31, 1994              55,000                   330,000 
            Options lapsed in 1995          (4,000)     $6.00        (24,000)
            Options outstanding at
             December 31, 1996 and 1995     51,000      $6.00       $306,000 










                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note N - Stock Option Plans (Continued):

          The Financial Accounting Standards Board has issued SFAS
          No. 123 - Accounting for Stock-Based Compensation.  This
          Statement became effective beginning in the first quarter
          of 1996 and applies to options granted in 1995 and
          subsequent years.  No options were granted in 1995 and
          1996 and therefore the adoption of this Statement does
          not have any effect on the Company's financial position
          or results of operations.  The Company will continue to
          measure compensation expense for its stock-based employee
          compensation plans using the intrinsic value method
          prescribed by APB Opinion No. 25, Accounting for Stock
          Issued to Employees and will provide, when necessary, pro
          forma disclosures of net income and earnings per share as
          if the fair value-based method prescribed by SFAS No. 123
          had been applied in measuring compensation expense.

Note O - Related Party Transactions:

          Thrifty Rent-A-Car System, Inc. ("Thrifty") owned 39.2%
          of the outstanding common stock of the Company through
          July 25, 1994.

          On July 25, 1994, Thrifty sold all of its shares to three
          of the Company's directors ("Acquisition Group").  The
          Acquisition Group owns 43.5% of the outstanding common
          stock of the Company at December 31, 1996.  The Company
          paid directors fees and certain expenses to the
          Acquisition Group of $180,000, $180,000 and $256,530
          during 1996, 1995 and 1994, respectively. 

          At December 31, 1996 and 1995, mortgage loans receivable
          from directors, officers and employees amounted to
          $336,101 and $462,068, respectively, all of which are
          collateralized by real property.










                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note P - Lease Obligations:

          Effective January 1, 1996, the Company entered into a
          lease ("the Paramus Lease") at 95 Route 17 South,
          Paramus, New Jersey.  The Paramus Lease expires on
          December 31, 2005.  The Company has an option to
          terminate the Paramus Lease after six years, and an
          option to extend the Paramus Lease for an additional five
          years after the initial lease term expires. The Company
          will pay a base annual rental of $371,745 through 
          December 31, 2000 and $416,805 thereafter until the
          Paramus Lease expires.  Additional charges for
          electricity and escalation of certain operating costs
          apply.  In 1996, rent expense paid by the Company on the
          Paramus Lease was $310,000.

          Through March 31, 1996, the Company was party to a lease
          ("the Newark Lease") with Fairmount Central Urban Renewal
          Corporation ("Fairmount"), a subsidiary of MCAIC, for the
          lease of the office building in which the Company and its
          subsidiaries formerly operated. Rent of $324,000 per
          year, subject to adjustment for property taxes in excess
          of $200,000, was paid by the Company, along with other
          costs as defined in the Newark Lease.

          Effective March 31, 1996, the Company entered into a
          Mutual Release Agreement (the "Release") with Fairmount,
          Property-Casualty Company of MCA and MCAIC.  Pursuant to
          the terms of the Release, the Newark Lease was terminated
          in exchange for $132,000.

          The Newark Lease was to run to December 31, 2011.  The
          Release also enabled the Company to terminate the Joint
          Service Agreement ("JSA") (See Note Q "Insolvency of MCA
          Insurance Company"). Concurrent with the execution of the
          Release in 1996, the Company charged off $227,000 in
          leasehold improvements at that facility.
  
          In 1996, 1995 and 1994, rent expense paid by the Company
          (net of amounts paid by MCAIC) on the Newark Lease was
          $75,000, $252,000 and $261,000, respectively.





                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     

Note Q - Insolvency of MCA Insurance Company: 

          On August 24, 1992, Hurricane Andrew struck the South
          Florida coast, causing losses to MCAIC which exceeded its
          surplus as regards policyholders.  MCAIC was placed in
          liquidation on October 23, 1992 by the Oklahoma District
          Court, Oklahoma.

          On December 30, 1994, the Oklahoma District Court
          approved a settlement between the MCAIC Receiver and its
          subsidiaries and the Company and its subsidiaries (the
          "Settlement").  Under the Settlement, the Company agreed
          to pay MCAIC approximately $5.4 million, $2 million of
          which was paid on December 30, 1994.  The Settlement also
          dismissed with prejudice the litigation previously
          brought (in August 1993) by the MCAIC Receiver against
          the Company regarding the ownership of Motor Club.  The
          Settlement released all parties from all potential claims
          against one another, and put in place agreements
          regarding the handling of consolidated taxes, common cost
          sharing and service agreements. 

          On February 15, 1995, pursuant to the Settlement
          Agreement, MCAIC was paid in full.

          The JSA entered into as part of the Settlement was
          retroactive to May 1, 1994 and provided for the rendering
          of certain services by the parties to the JSA and amounts
          due for these services, as well as the sharing of certain
          common expenses. Common expenses emanate from the
          parties' co-tenancy in the office building in which the
          parties' principal offices resided.  The JSA was
          terminated effective March 31, 1996 as part of the
          Release for the Newark Lease.

          In relation to the insolvency of MCAIC, there are no
          additional liabilities, contingent or otherwise, which
          require accrual or disclosure in the accompanying
          financial statements.









             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
              SCHEDULE I.  SUMMARY OF INVESTMENTS-
            OTHER THAN INVESTMENTS IN RELATED PARTIES
                      at December 31, 1996

                                     

     Column A               Column B      Column C     Column D
                                                       Amount at
                                                      which shown
                                                        in the
                             Cost(a)       Market    balance sheet
 
Type of investment

Fixed maturity securities
 available-for-sale:

United States Government
 and government agencies
 and authorities           $42,445,695   $42,760,052  $42,760,052
Industrial and 
 miscellaneous               4,668,881     4,617,591    4,617,591
Public utilities               542,480       549,450      549,450

Total fixed maturities      47,657,056                 47,927,093

Mortgage loans on real 
 estate                        634,492                    634,492

Short-term investments,
 available-for-sale          1,745,455     1,745,455    1,745,455

Total investments          $50,037,003                $50,307,040

 
Note: (a) Represents original cost of investments reduced by
          repayment and as to fixed maturities, adjusted for
          amortization of premiums or accrual of discounts.
 
         










                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
          SCHEDULE II. CONDENSED FINANCIAL INFORMATION
                 OF REGISTRANT (PARENT COMPANY)

                                     

                         BALANCE SHEETS

                                                December 31,   
                                          1996             1995

Assets:

  Cash and cash equivalents           $   354,465     $     -    

  Investments in subsidiaries          25,614,714      25,072,857

  Insurance premiums receivable         7,538,716       7,018,662

  Deferred tax asset                    2,075,535           -    

  Other assets                          3,868,956       1,444,902

         Total assets                 $39,452,386     $33,536,421

Liabilities and shareholders' equity:

  Indebtedness to subsidiaries        $15,563,850     $13,968,869

  Other liabilities                     5,102,885       5,486,476

         Total liabilities             20,666,735      19,455,345

  Shareholders' equity                 18,785,651      14,081,076
         Total liabilities and
           shareholders' equity       $39,452,386     $33,536,421



                          Notes to Schedule

     The Notes to Consolidated Financial Statements of Motor Club
     of America and Subsidiaries are incorporated by reference to
     this schedule.

     The Statements of Shareholders' Equity are the same as those
     presented for Motor Club of America and Subsidiaries.




                           (Continued)

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
          SCHEDULE II.  CONDENSED FINANCIAL INFORMATION
                 OF REGISTRANT (PARENT COMPANY)

                    STATEMENTS OF OPERATIONS

                                          For the years ended December 31,   
                                          1996          1995       1994
 
Revenues:

  Motor Club membership fees          $   21,481   $      113   $  35,566 
  Commission income                        9,960       10,093       8,425 
  Realized gain on sale of
   subsidiary                            702,419        -           -     
  Other income (1)                       135,704      157,012     160,576 
       Total revenues                    869,564      167,218     204,567 

Expenses:
         
  General and administrative                       
   expenses (2)                          (32,945)      52,759     806,473 
  Discount of Note Payable to
   Receiver of MCA Insurance
   Insurance Company in
   Liquidation                             -            -        (624,850)
       Total expenses                    (32,945)      52,759     181,623 

Income before 
   Federal income taxes                  902,509      114,459      22,944 
Benefit (provision) for
   Federal income taxes:  current        (42,324)     (38,320)     (4,420)
                          deferred     2,075,535        -           -     
Total Federal income tax               2,033,211      (38,320)     (4,420)

Income before item
   shown below                         2,935,720       76,139      18,524 
Equity in net income 
 of subsidiaries                       2,394,388    2,340,640   5,016,123 
       Net income                     $5,330,108   $2,416,779  $5,034,647 

     (1)  Amount includes $31,559 (1996), $67,117 (1995)
          and $94,676 (1994) of interest due from Motor
          Club.

     (2)  Amount is net of $520,579 (1996), $223,691
          (1995) and  $335,590 (1994) of management fees
          charged to subsidiaries.

                           (Continued)

<TABLE>
<CAPTION>

             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
          SCHEDULE II.  CONDENSED FINANCIAL INFORMATION
                 OF REGISTRANT (PARENT COMPANY)

                    STATEMENTS OF CASH FLOWS

<S>                                             <C>                   <C>                <C>
                                                             For the years ended December 31,        
                                                    1996                1995               1994    

Net income                                      $5,330,108            $2,416,779         $5,034,647 
Adjustments to reconcile net 
  income to net cash provided by
  (utilized in) operating
  activities:
  Discount of Note due Receiver of
   MCA Insurance Company in
   Liquidation                                       -                    -                (624,850)
  Write-off of leasehold improvement
   (net) due to lease termination                  227,077                -                   -     
  Depreciation expense                             309,875              248,540             286,305 
  Gain on sale of subsidiary                      (702,419)               -                   -     
  Accretion of bond discount                            10              (16,368)             (3,823)
  Deferred tax benefit                          (2,075,535)               -                   -     

Changes in:
  Net assets of Motor Club of America
   Enterprises, Inc.                              (422,581)               -                   -     
  Premiums receivable                             (520,054)          (1,487,855)           (342,333)
  Investments in subsidiaries                   (1,663,715)          (1,978,815)         (2,929,014)
  Other assets                                    (146,637)             284,074           1,344,928 
  Other liabilities                                103,409             (712,909)         (1,162,720)
  Indebtedness to related parties                1,594,981            2,501,916           1,689,614 
  Amounts due to MCA Insurance Company
   in Liquidation and subsidiaries                   -               (2,750,000)         (1,458,624)
Net cash provided by (utilized in)
  operating activities                           2,034,519           (1,494,638)          1,834,130 

Investing activities:
  Proceeds from:
    Sale of subsidiary                           1,125,000                -                   -     
    Disposal of short-term
      investments                                    -                1,665,897               -     
    Disposal of fixed
      maturities                                    15,039              596,783           1,448,129 
    Sale of fixed assets                            13,400        
        -                   -     

  Purchase of:
    Fixed maturities                                 -            
     (608,402)         (1,447,525)
    Short-term investments                      (1,745,455)       
        -              (1,649,740)
    Fixed assets                                (1,097,883)       
     (232,003)           (114,600)
Net cash provided by (utilized in)
  investing activities                          (1,689,899)       
    1,422,275          (1,763,736)

Financing activities:
  (Repayment to) borrowing from 
    Midlantic Bank, N.A.                             -            
   (2,750,000)          2,750,000 
  Common stock issued                                9,845        
        1,969               -     
Net cash provided by (utilized in)
  financing activities                               9,845        
   (2,748,031)          2,750,000 
Increase (decrease) in cash and
  cash equivalents                                 354,465        
   (2,820,394)          2,820,394 
Cash and cash equivalents at 
  beginning of year                                  -                2,820,394               -     
Cash and cash equivalent at end of year         $  354,465           $    -              $2,820,394 

</TABLE>

Supplemental Disclosures of Cash Flow Information
(1)  Total interest paid was $8,166 (1996), $33,934 (1995) and
     $53 (1994). 
(2)  Total federal income taxes paid was $38,462 (1996),
     $52,000 (1995) and $54,227 (1994).

                         (Continued)

<TABLE>
<CAPTION>

           MOTOR CLUB OF AMERICA AND SUBSIDIARIES
                  SCHEDULE IV.  REINSURANCE
    FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 and 1994

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


        Column A                  Column B      Column C     Column D     Column E    Column F
                                                                                         % of
                                                Ceded to    Assumed from               Amount
                                                  other        other                   Assumed
                                 Gross Amount   Companies    Companies    Net Amount   to Net 


December 31, 1996:

  Total property and casualty
   insurance premiums earned     $52,467,156    $7,273,083   $   -        $45,194,073    0.0%

December 31, 1995:

  Total property and casualty
   insurance premiums earned     $41,051,119    $5,750,247   $   -        $35,300,872    0.0%

December 31, 1994:

  Total property and casualty
   insurance premiums earned     $37,065,794    $9,173,851   $   -        $27,891,943    0.0%

</TABLE>



                         (Continued)


             MOTOR CLUB OF AMERICA AND SUBSIDIARIES
              SCHEDULE V. VALUATION AND QUALIFYING
                      ACCOUNTS AND RESERVES
      FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 and 1994

                                     


  Column A          Column B          Column C           Column D  Column E 
                                      Additions
                   Balance at   Charged to  Charged to              Balance
                   Beginning     Cost and     Other                 at end
 Description       of Period     Expenses    Accounts   Deductions of Period

Allowance for
doubtful 
receivables:

December 31, 1996  $  656,083   $  -       $   -       $  614,743 $   41,340

December 31, 1995  $  439,309   $316,774   $   -       $  100,000 $  656,083

December 31, 1994  $  200,000   $239,309   $   -       $   -      $  439,309


Valuation allowance
for deferred taxes:

December 31, 1996  $2,974,408   $  -       $  722,894  $3,697,302 $   -     

December 31, 1995  $5,070,974   $  -       $  682,329  $2,778,895 $2,974,408

December 31, 1994  $7,057,259   $  -       $1,309,191  $3,295,476 $5,070,974

                           (Continued)
<TABLE>
<CAPTION>
                               MOTOR CLUB OF AMERICA AND SUBSIDIARIES
                          SCHEDULE VI. SUPPLEMENTAL INFORMATION CONCERNING
                               PROPERTY/CASUALTY INSURANCE OPERATIONS

                        For the years ended December 31, 1996, 1995 and 1994

                                                       
<C>                 <C>            <C>           <C>        <C>          <C>       <C>

 
 Column A           Column B      Column C       Column D    ColumnE    Column F   Column G 
                                 Reserves for                                                     
                    Deferred     Unpaid Claims   Discount,
                     Policy       and Claim      if any,                              Net
                   Acquisition    Adjustment    Deducted in  Unearned    Earned   Investment
                      Costs         Expenses      Column C   Premiums   Premiums  Income (a)
 
Year ended
December 31, 1996   $ 5,761,496    $47,666,856         -   $18,934,200  $45,194,073 $2,998,897

Year ended
December 31, 1995   $ 5,069,222    $39,823,552         -   $16,838,135  $35,300,872 $2,759,337

Year ended
December 31, 1994   $ 4,166,368    $41,665,101         -   $13,554,754  $27,891,943 $2,506,701

</TABLE>


Note:  (a)  Excludes non-insurance subsidiaries' investment
            income and realized investment gains.












<TABLE>
<CAPTION>

                               MOTOR CLUB OF AMERICA AND SUBSIDIARIES
                          SCHEDULE VI. SUPPLEMENTAL INFORMATION CONCERNING
                               PROPERTY/CASUALTY INSURANCE OPERATIONS

                        For the years ended December 31, 1996, 1995 and 1994

<C>                          <C>          <C>            <C>          <C>           <C>
                                                       

 Column A                        Column H               Column I     Column J     Column K 
                               Claims and Claim
                             Adjustment Expenses       Amortization    Paid
                              Incurred Related to       of deferred    Claims
                              (1)         (2)            policy      and Claim
                              Current     Prior         acquisition  Adjustment    Premium
                            Year        Years              Costs      Expenses     Written
Year ended
December 31, 1996          $28,244,599  $  903,681     $13,678,710  $24,443,589   $46,789,538

Year ended
December 31, 1995          $19,625,070  $1,112,475     $10,611,978  $19,682,580   $37,639,344

Year ended
December 31, 1994          $14,367,136  $  919,165     $ 9,353,336  $18,264,953   $31,365,121

</TABLE>

Note:  (a)  Excludes non-insurance subsidiaries' investment
            income and realized investment gains.