UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D.C.  20549
                          FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 forthe fiscal year ended December 31, 1996     (No Fee Required)
                           - or -
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934         (No Fee Required)

                COMMISSION FILE NUMBER 1-9460
                LAWRENCE INSURANCE GROUP, INC.
         (Exact name of registrant as specified in its charter)
Delaware                                                          13-3370656
(State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

           430 State Street, Schenectady, New York 12305
            (Address of principal executive offices)
Registrant's telephone number, including area code:  (518) 372-0500
                ______________________________
     Securities registered pursuant to Section 12(b) of the Act:

                                              Name of each exchange on
Title of each class                          which registered
Common Stock, $.01 par value        None, common stock delisted March 14,1997

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

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  
                   Yes     X       No     
 
     Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will 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. [ ] 
 
     The aggregate market value on February 28, 1997 of voting stock held by 
non-affiliates of the registrant was $361,000.  February 28 was the day of
the last trade before delisting by the American Stock Exchange. As of March 20,
1997, 14,121,482 shares of the registrant's Common Stock, $.01 par value,
were outstanding.

<PAGE>
                      TABLE OF CONTENTS

Item  1   Business                                                    3
Item  2   Properties                                                 14
Item  3   Legal Proceedings                                          14
Item  4   Submission of Matters to a Vote of Security Holders        14
Item  5   Market for Registrant's Common Stock
             an Related Stockholder Matters                          14
Item  6   Selected Consolidated Financial Data                       15
Item  7   Management"s Discussion an Analysis of Financial 
            Condition and Results of Operations                      17
Item  8   Financial Statements and Supplemental Data                 20
Item  9   Changes and Disagreements with Accountants on
             Accounting and Financial Disclosures                    20
Item 10   Directors and Executive Officers                           21
Item 11   Executive Compensation                                     22
Item 12   Security Ownership of Certain Beneficial
             Owners and Management                                   23
Item 13   Certain Relationships and Related Transactions             24
Item 14   Exhibits, Financial Statement Schedules, 
             and Reports on Form 8K                                  24
Signatures                                                           26
Index to Consolidated Financial Statements and 
   Financial Statement Schedules                                     27
Consolidated Financial Statements                                    29
Financial Statement Schedules                                        50



<PAGE>
PART I
ITEM 1.  BUSINESS

General

     There have been several events in 1996 and early 1997 that have had a 
significant impact on the Company with some of the ramifications remaining
unknown at this time.  The Company recorded a net loss of $13,731,000 for
the year. This compares with a loss before extraordinary gain of $642,000 for 
1995 and a net loss of $7,091,000 in 1994. The losses in 1994 were
essentially attributable to the operations of United Community Insurance Com-
pany (UCIC).  Lawrence Group, Inc.(LGI), the Company's 93% owner and eleven of
its subsidiaries filed for bankruptcy under Chapter 11 on February 28, 1997. 
Senate Insurance Company (Senate) is heavily dependent upon several of the
subsidiaries for marketing, underwriting and claims handling of its products.
While Chapter 11 gives the filer protection from creditors as it attempts to 
reorganize there is no guarantee that the reorganization will be successful
or if it is what impact that may have on the Company.     
 
    Based upon the results of the Texas Department of Insurance (TDI)'s regul-
ar examination of United Republic Insurance Company (URIC), URIC was placed 
under confidential supervision on June 22, 1994.  This order was based upon dis-
agreements with valuations of several assets, chief among them Alpha Trust, in 
financial statements filed by URIC with the TDI and upon net operating losses 
reported during the first quarter of 1994.  On August 25, 1995 this Order was 
lifted. In exchange the Company agreed to certain minimum financial targets.  
URIC met the interim goals but had not met the December 31, 1995 policyholder 
surplus target of $8.0 million.  As a consequence, the TDI can place URIC into
conservatorship without the consent of the Company.  Based upon the filing of 
Chapter 11 by LGI and eleven subsidiaries on February 28, 1997 the TDI did 
place URIC under conservation. Under Texas insurance regulations an insurance 
company can remain in conservatorship 180 days before other action must be 
taken. Subsequent to the filing of URIC's 1996 Statutory financial statement 
which reflected policyholder surplus of $3.5 million, the Company received 
reports from its actuary that the loss and LAE reserves related to pooling 
with UCIC could be between $7 million and $10 million higher than reported on 
URIC's statutory statement.  This information has been received by the TDI.  
Based on minimum capital requirements and insolvency provisions of the Texas 
insurance law, the TDI has indicated that unless these reserves can be com-
muted or modified at an amount significantly less than presently stated the 
alternative would be to place URIC in liquidation.           

     On September 19, 1996, as a result of the purchase of real estate by 
Senate Insurance Company (Senate), a wholly owned subsidiary of URIC, from a 
former owner and director, the State of Arizona Department of Insurance (ADI) 
placed Senate and Senate National Insurance Company (SNLIC), a wholly owned 
subsidiary if Senate, under supervision.  A hearing was to be held by November 
19, 1996, in order to ascertain that the transaction was fair and that the 
obligations of LGI could be met without utilizing the assets of these compan-
ies. The hearing has been postponed at the request of the ADI.

   UCIC, which the New York State Supreme Court of Schenectady County with the
consent of the Company, ordered liquidated as of November 10, 1995, was a 
wholly owned subsidiary of the Company.  UCIC was incorporated in 1967 and 
acquired by Albert W. Lawrence on December 30, 1981.  UCIC was transferred by 
Mr. Lawrence to a subsidiary of Lawrence Group in 1982 and was transferred to 
the Company in 1986. UCIC wrote commercial and personal lines of Property and
Casualty (P&C) insurance until mid-February 1994, when it ceased writing new or
renewal business.  Amounts included in the pages that follow do not include 
UCIC after 1993.

    URIC is owned approximately 79% by the Company, and the remainder is owned 
by UCIC. URIC was incorporated in 1986 and was acquired by the Company on
October 24, 1989.  URIC assumed reinsurance and was also licensed to write
business directly in some states.  URIC voluntarily ceased writing business in 
1994. Under the conditions of its confidential supervision and subsequent re-
lease, the approval of the TDI to accept any new or renewal business is 
required.  

     Global Insurance Company (Global) is a wholly owned subsidiary of URIC.
Global was incorporated in 1969 and acquired by the Company effective January 
1, 1992.  Global wrote substandard automobile and excess and surplus lines of
P&C insurance. Global voluntarily ceased writing new or renewal business in
November 1993 although it continued to receive assignments from Georgia's
automobile assigned risk pool.  Global resumed writing during the fourth 
quarter of 1996.  

     Senate is a wholly owned subsidiary of URIC.  Senate was incorporated in 
1967, acquired by Albert W. Lawrence in 1978, transferred to a subsidiary of 
Lawrence Group in 1981 and transferred to the Company in 1986.  Senate writes
accident and health (A&H) insurance. 

     Senate National Life Insurance Company (SNLIC), is a wholly owned subsid-
iary of Senate.  SNLIC was incorporated in 1970 and acquired by Senate on Jan-
uary 13, 1983.  SNLIC is licensed to write life insurance and assumes A&H and 
credit life insurance.

     Senate Syndicate, Inc. (Syndicate) was formed in 1985 and was a syndicate
on the New York Insurance Exchange (Exchange) until its withdrawal in 1989.
It is dormant.

     The Company was formed in 1986 by Lawrence Group under the laws of 
Delaware to function as an insurance holding company.  Unless the context 
otherwise requires, URIC, Global, Senate, SNLIC and Syndicate each are 
sometimes referred to herein as the Company except for 1993 wherein the term 
Company also includes the accounts of UCIC. 

     The Company's executive offices are located at 430 State Street, 
Schenectady, New York 12305 and its telephone number is (518) 372-0500.

Relationship with Lawrence Group, Inc.

    LGI owns and operates subsidiaries principally engaged in insurance agency
and brokerage operations, in addition to its ownership interest in the Company. 
LGI, headquartered in Schenectady, New York, was established on December 30, 
1983, as a holding company for the various insurance related enterprises 
controlled by Albert W. Lawrence.  On February 28, 1997, LGI along with
eleven subsidiaries filed for Chapter 11 under federal bankruptcy laws.
At this time, it is unclear what the ultimate impact of this filing and the 
actions to be taken by LGI and its subsidiaries will be on LIG.  Since Senate
depends on several of LGI's subsidiaries for marketing, underwriting and claims
handling it has been the component of LIG that has been most adversely 
affected to date.         

     LGI owns approximately 93% of the common stock of the Company.  Albert W. 
Lawrence, Chairman of the Board of the Company, is the owner of 100% of the
common stock of LGI. 

Products

    The Company's current product mix consists primarily of A&H insurance with 
Global beginning to write non-standard automobile policies in Georgia.. A & H 
insurance comprises principally medical stop-loss insurance for self-insured
medical plans, short-term disability coverage and group dental programs and 
student accident insurance. The Company's A&H coverage are marketed by A.W. 
Lawrence & Co., Inc. (AWL), a subsidiary of Lawrence Agency Corp.(LAC), which 
is a subsidiary of LGI. SNLIC is licensed to write life insurance and assumes
credit A&H and credit life insurance.  Due to the lengthy inactivity of URIC 
in the market place it is uncertain what products, organization and 
relationships could be reestablished if it could resume business.

    The following table sets forth the Company's gross premiums written and 
earned by product line for the periods indicated:

                                           Year Ended December 31,          
                              1996     1995      1994    1993      1992  
                              -----------------------------------------------   
                                   (Dollars in thousands)
Gross premiums written:
 Property/casualty           $ 380    $   137  $    283 $111,838 $132,273 
 Reinsurance assumed           353      1,281   (12,171)   7,815   29,183 
 Accident/Health/Life        4,038      5,237     8,974   11,513   11,673 
                             -----      -----   -------   ------- -------
    Totals                  $4,771    $ 6,655  $ (2,914)$131,166 $173,129
                             =====      =====     =====  =======  =======
Gross premiums earned:
 Property/casualty           $161     $   222  $    658 $119,615 $136,633 
 Reinsurance assumed          365       2,091       451   14,480   26,349 
 Accident/Health/Life       4,126       5,222     8,857   11,547   11,686   
                           ------     -------    ------- -------  -------
   Totals                  $4,652     $ 7,535  $  9,966 $145,642 $174,668 
                            =====       =====     =====  =======  =======

     Gross premiums written or premiums assumed generally represent the annual 
cost of insurance at the time of inception. Premiums earned represent a pro 
rata portion of the business written or assumed in the current calendar year 
plus amounts carried over from the prior year that are taken into revenue in 
the current period. The decline in premiums written and earned during 1996 and
1995 compared with 1994, was related primarily to halt of new and renewal 
business by URIC and Global and the loss of business by Senate which was 
adversely impacted by the liquidation of UCIC.  

    The costs of reinsurance are deducted from gross premiums to arrive at net
premiums written or earned.  The Company, like the industry in general, util-
izes reinsurance to minimize the concentration of exposure to losses in any one
geographic area, type of coverage or any one insured or group of insureds.  
The following table shows the net premiums written and earned together with 
other key operating results, followed by a discussion of the individual 
products.

    Key operating results on a combined basis and for each product are 
summarized below:      
                                         
                                                  Year Ended December 31,    
                                               1996        1995         1994 
                                               ----        ----         ----
                                                   (Dollars in thousands)
All products combined:
 Net premiums written                          $3,490     $ 5,135     $(7,770)
 Net premiums earned                            3,571       5,533     $ 5,221  
 Percentage of Company's
  total earned premium                         100.0%      100.0%      100.0%

 Loss and LAE ratio                            231.0%       97.6%       77.0%  
 Expense ratio                                  42.8        65.7%       65.6%
 Combined ratio                                273.8%      163.3%      142.6%   

 Property/casualty:
 Net premiums written                         $   89      $  137     $   273  
 Net premiums earned                              88         222         641  
 Percentage of Company's
  total earned premium                           2.5%       4.0%       12.3%    
 Loss and LAE ratio                             15.3%     140.1%      130.9%    
 Expense ratio                                 309.6%     151.3%       69.0%  
 Combined ratio                                324.9%     291.4%      199.9%    
                              
                                                  Year Ended December 31,    
                                             1996        1995         1994 
                                               ----        ----         ----
                                                   (Dollars in thousands)
 Reinsurance assumed:
 Net premiums written                        $330       $1,063      $(13,802)   
 Net premiums earned                          342        1,490          (974)  
 Percentage of Company's
  total earned premium                       9.6%        26.9%       (18.7)%  

 Loss and LAE ratio                         -   %       208.6%           - % 
 Expense ratio                            107.1 %        89.9%           - %  
 Combined ratio                              -  %       298.5%           - % 

 Accident/health/life:
 Net premiums written                      $ 3,071      $3,935      $  5,759 
 Net premiums earned                         3,141       3,821      $  5,554   
 Percentage of Company's
  total earned premium                       87.9%        69.1%       106.4% 

 Loss and LAE ratio                          64.5%        51.9%        37.9%   
 Expense ratio                               53.2%        51.0%        44.3%   
 Combined ratio                             117.7%       102.9%        82.2% 

     All Products Combined:  For 1996 net premiums written totaled $3,490,000 
of which 88% were A&H premiums.  Net premiums earned were $3,571,000.  For 
1995, net premiums written were $5,135,000 and net premiums earned for 1994 
totaled $5,221,000.   The loss and LAE ratio was 231.0%, 97.6% and 77.0% for 
1996,1995 and 1994, respectively. In 1996 and 1995 the Company was impacted by
adverse development related to URIC's pooling agreement with UCIC. The 
operating expense ratio for 1996, 1995 and 1994 have been high as changes in 
operating expenses have not kept pace with reductions in premiums.  

    Property/Casualty:  Property and casualty results essentially reflected the
runoff of prior years' business as new business consisted only of personal 
automobile business in Global. The Company wrote very little products 
liability, professional malpractice and business containing environmental 
impact coverage. Consequently, the overall exposure to occupational diseases or
similar longtime emerging disabilities is considered by Management to be 
minimal.  

   Reinsurance Assumed:  Assumed reinsurance was underwritten for P&C coverage
which emphasize exposures in the automobile and general liability lines of 
business where claims develop over a shorter period of time than do claims
arising in such lines of business as medical malpractice and product liability.
 
Reinsurance assumed business for 1996,1995 and 1994  reflected the runoff of 
prior years business as new business was halted in 1994.  Negative written
premiums for 1994 were due largely to the termination of the pooling agreement 
between URIC and UCIC on January 1, 1994. 

    Accident/Health: Earned premiums from A&H insurance lines decreased by 18% 
in 1996, and 31% in 1995.  The Company's premium volume in A&H has been largely
from medical stop loss policies.  The growth in this business has slowed as 
many of the customers who purchased these policies in the past are self 
insuring at higher retentions.  In addition, the Company was impacted by the 
publicity related to the financial difficulties of UCIC.  The Company's A&H 
loss and LAE ratio increased to 64.5% in 1996 and 51.9% for 1995 from 37.9% 
in 1994. The expense ratio increased to 53.2% in 1996 and 51.0% in 1995 from 
44.3% for 1994. 

    Further discussion of operating results is provided in ITEM 7 - 
Management's Discussion and Analysis of Financial Condition and Results of 
Operations.

Markets

     The Company's markets for A&H insurance traditionally included school 
districts, municipalities, retail stores and other selected risks.  Public
school districts represents the Company's largest single market for its
A&H coverage. A&H insurance is generally marketed by affiliates of LAC with a 
lesser percentage of such coverage marketed by agents not otherwise affiliated 
with Lawrence Group or the Company.  A portion of this coverage is marketed
to members of sponsoring organizations.

Claims

     URIC's reinsurance assumed claims are monitored by a consultant, when 
necessary.  Individual claims originate from ceding companies and are sent by 
the reinsurance intermediaries to URIC.  Claims are monitored and appropriate
controls are established for each ceding company.  

     Global's reinsurance assumed claims are administered by its Finance 
Department as the individual claims are sent by the ceding companies to Global.
On the current business written through a managing general agent an outside
consulting firm is utilized to review the agent's claims operation.

     Claims on policies insured by Senate are handled by a related third party 
administrator.  Senate is provided with weekly reports on claims activity.

Reserves

     Insurance companies are required to maintain reserves for losses and LAE 
for all lines of business.  These reserves are intended to provide for the 
ultimate settlement and administration of claims for all losses incurred and
unpaid, including those incurred but not yet reported (IBNR).  

Property/Casualty and Accident/Health:

   Reserves for losses and LAE represent estimates of reported losses and LAE
and estimates of IBNR based upon past and current experience and is net of 
salvage and subrogation to be received and is increased for reinsurance 
assumed.  In developing reserve estimates, Global and Senate give consider-
ation to the impact of changes in demographics and/or line of business mix. 
The IBNR reserve is calculated by applying actuarial derived loss development 
factors to results recorded to date. 

Reinsurance Assumed:

     Reserves for losses on reinsurance assumed business are generally 
maintained by URIC at the amounts reported by the ceding companies.  

     The following table provides a reconciliation of the Company's beginning 
and ending property and casualty (P&C) loss and LAE liability balances for 
1996, 1995 and 1994. 
                                                                  
                                             Year Ended December 31,    
     (Dollars in thousands)               1996         1995        1994 
                                        --------     --------     --------
Reserves for losses and 
  LAE at January 1,                      $28,709    $45,560     $ 75,402
  Less reinsurance receivable              4,600      7,072        9,679 
                                          ------     -------      -------
      Total                               24,109      38,488      65,720  

  Provision for losses and  
    LAE for claims occurring 
    in the current year                       29         368       4,614 
    Increase (decrease) in estimated 
    losses and LAE for claims 
     occurring in prior years              6,195       3,051      (2,699)      
                                           -----       -----       ------
   Total incurred losses & LAE             6,224       3,419       1,915    
    Losses and LAE payments                -----       -----      -------
    for claims occurring during:
     Current year                             22         141       2,758  
     Prior years                           8,658      17,657      26,389       
                                          ------      ------     -------
   Total losses and LAE payments           8,680      17,798      29,147       
                                          ------      ------     -------
    Net reserves for losses 
    and LAE at December 31,               21,653      24,109      38,488 
    Reinsurance receivables                3,490       4,600       7,072       
                                          ------      ------     -------
  Gross reserves                         $25,143     $28,709    $ 45,560       
                                           =====      =====       =====

     The above table for 1996, 1995 and 1994 and the accompanying loss and LAE 
reserve summary, exclude UCIC and Senate and SNLIC. Net reserves for Senate
and SNLIC were $897,000, $1,102,000 and $1,180,000 at December 31, 1996 , 
1995 and 1994, respectively.
    
     Loss and LAE totaled $6,224,000 for 1996.  The adverse development was 
related primarily to the pooling agreement with UCIC. Loss and LAE incurred for
1995 totaled $3,419,000 reflecting the unfavorable impact of the adverse 
development of the URIC's pooling agreement with UCIC partially offset by the 
favorable impact of commuting several reinsurance treaties.  Loss and LAE for 
1994 totaled $1,915,000 and included approximately $1,600,000 related to the
Northridge California earthquake. Reserves related to prior years were reduced 
by $3,699,000 reflecting more favorable results in the reinsurance assumed 
business.  The favorable loss experience on the reinsurance assumed business
was related primarily to contracts that have retrospective rating provisions. 
This resulted in a commensurate reduction in earned premiums. 

    The following table presents the development of the Company's GAAP balance
sheet reserves for 1986 through 1996, excluding UCIC. The line "Reserves for 
Losses and LAE" reflects the reserves at the balance sheet date for each of the
indicated years and represents the estimated amount of losses and LAE arising
in all prior years that are unpaid at the balance sheet date.  The "Reserves 
Re-estimated" lines of the table reflect the re-estimated amount of the
previously recorded reserves based on experience as of the end of each succeed-
ing year.  The estimate changes as more information becomes known about the 
frequency and severity of claims for individual years.  The "Cumulative 
Redundancy (Deficiency)" represents the aggregate change in the estimates over 
all prior years. The "Cumulative Paid" lines of the table reflect the 
<PAGE>
cumulative amounts paid as of successive years with respect to the aforement-
ioned reserve liability.   
                                                 December 31,
Year                                   1986  1987 1988  1989   1990    1991
Dollars in thousands 
               ----------------------------------------------------------------
Reserves for losses & LAE             1,873   506   742 15,053  30,342 44,399 
Reserves - re-estimated:
One year later                          678   175   120 15,051  29,898 63,249
Two years later                         537   109   120 17,782  43,688 69,794
Three years later                       505   109   120 25,016  45,953 62,418
Four years later                        505   109   120 24,722  36,419 61,264
Five years later                        505   109   120 19,547  36,100 60,647
Six years later                         505   109   120 19,875  35,520
Seven years later                       505   109   120 19,472
Eight years later                       505   109   120 
Nine years later                        505   109
Ten years later                         505
Cumulative Redundancy
  (Deficiency)                        1,368   397   622 (4,419) (5,178)(16,248)

Cumulative paid as of:

One year later                          570    94   120  4,902  10,587  32,658
Two years later                         514   109   120  8,351  26,284  41,747
Three years later                       505   109   120 15,086  29,823  46,934
Four years later                        505   109   120 15,264  27,491  54,220
Five years later                        505   109   120 14,642  32,301  56,370
Six years later                         505   109   120 17,804  33,224  
Seven years later                       505   109   120 18,098
Eight years later                       505   109   120
Nine years later                        505   109
Ten years later                         505          
<PAGE>
                                                 December 31,
Year                                   1992   1993   1994    1995     1996
Dollars in thousands 
            -------------------------------------------------------------------
Reserves for losses & LAE            60,845  76,099  45,560 28,709   25,143

Reserves - re-estimated:
One year later                       78,590  65,338  49,230 35,113 
Two years later                      69,444  68,383  55,549
Three years later                    70,707  74,129  
Four years later                     73,528             
Five years later            
Six years later          
Seven years later          
Eight years later           
Nine years later            
Ten years later

Cumulative Redundancy
  (Deficiency)                      (12,683) 1,970   (9,989)  (6,404)

Cumulative paid as of:   
One year later                       24,586  23,297  20,745 10,888
Two years later                      40,771  42,158  31,490
Three years later                    54,708  51,791
Four years later                     60,491
Five years later 
Six years later
Seven years later
Eight years later 
Nine years later  
Ten years later

     The Company does not discount its loss and LAE reserves to present value, 
except as required for tax purposes under the Tax Reform Act of 1986.    

Reinsurance Ceded

     URIC, Global and Senate utilize reinsurance principally to reduce their 
net liability on individual risks and to protect against catastrophic losses.  
Reinsurance generally is written under contracts in which the coverage is
either on a proportional basis (quota share), where the reinsurer shares 
proportionately in premiums and losses, or on an excess of loss basis, where 
only losses above a fixed point are reinsured.

     URIC utilized reinsurance to limit its exposure to catastrophic exposures 
that it assumed.  Global used a combination of excess of loss reinsurance 
arrangements and quota share treaties to limit its liability on any one
loss to $100,000.  Senate also utilizes reinsurance to limit its maximum 
exposure to $250,000 on business written by it. 

     The ceding of reinsurance does not legally discharge the original insurer 
from its primary liability to the policyholder, and the ceding company is 
required to pay the loss even if the assuming company fails to meet its 
obligations under the reinsurance agreement.  The practice of insurers, 
however, subject to certain statutory limitations and as permitted by
regulatory authorities, is to account for reinsured risks to the extent of the 
reinsurance ceded as though they were not risks for which the original 
insurer is liable.  Under SFAS No. 113, for balance sheet presentations, 
companies are required to show reserves before reinsurance ceded.  
   
     UCIC and URIC had a pooling agreement in effect during 1992 and 1993.  
Under the terms of the agreement, the premiums and losses incurred during 
1992 and 1993 were to be combined between the carriers and then split: 
65% going to UCIC and 35% to URIC.  The agreement was terminated effective 
January 1, 1994; however, each company is responsible for its share of all 
premium, losses and LAE incurred prior to that date.  At December 31, 1996,
URIC had a net liability to UCIC of approximately $11.9 million under a quota 
share treaty  and the pooling agreement.

     Ceded premiums earned under reinsurance treaties were approximately
$1,082,000, $2,002,000 and $4,745,000 for 1996, 1995 and 1994, respectively. 
The decrease in 1996 and 1995 was due primarily to the lower premiums written.  

Investment Policy

     Insurance company investments must comply with the insurance law of the 
insurer's domiciliary state.  These laws prescribe the kind, quality and 
concentration of investments which may be made by insurance companies.  In 
general, these laws permit investments within specified limits and subject to
certain qualifications in federal, state and municipal obligations, corporate
bonds, preferred stocks, common stocks, real estate mortgages, real estate
and money market instruments. The TDI had taken issue with URIC's investment in
Alpha Trust.  This investment, which totaled $14,000,000 was made in January
1994.  On September 19, 1996, the ADI placed Senate and SNLIC under 
supervision as a result of an investment in real estate that had been purchased 
from a former officer and director.  Refer to Regulation for additional comment.

    The investment policy and investments of each of the Company's subsidiaries
are determined by its Investment Committee, consisting of certain Directors,
and all transactions are ratified by the Board of Directors.      

     As of December 31, 1996, the Company has classified its fixed investments 
as Fixed Maturities Available for Sale.  Securities to be held for indefinite 
periods of time and not intended to be held to maturity are classified as 
available for sale.

     The table set forth below reflects average investments and income earned 
thereon for the Company for each of the years in the three-year period ended 
December 31, 1996:
                                          Year Ended December 31,   
    Dollars in thousands)                 1996       1995        1994   
                                           ----       ----        ----   
Average investments                      $16,091     $23,370    $48,338    
Net investment income                      1,648       3,101      3,313  
Average yield excluding income  
  from Alpha Trust                          5.8%         6.8%      4.3%    

    Net investment income for 1996, 1995 and 1994 includes interest income from
Alpha Trust whose principal is not included in average investments.  Net 
investment income included $712,000, $1,513,000 and $1,226,000 from Alpha Trust
for 1996, 1995 and 1994, respectively. The decrease in yield for 1996 was 
attributable to the loss of income due to the default of Alpha Trust and a 
reserve against rental income for non-payment. The increase in average yield 
for 1995 compared with 1994 was attributable primarily to the general 
improvement in interest rates.

     The following table summarizes the combined cash, cash equivalents and 
investments of the Company as of December 31, 1996:                            
      (Dollars in thousands)             Amounts        % of Total
                                              
Cash and cash equivalents            $     943                5.5%
Short-term investments                   2,862               16.6
Common stocks                              942                5.4
Fixed maturities available for sale      9,682               56.0
Real estate                              2,581               14.9
Mortgage loans on real estate              154                 .9      
Other invested assets                      120                 .7 
                                         ------              -----  
Total                                 $ 17,284              100.0%
                                        ======              =====
     The table set forth below indicates the carrying amount of the fixed 
maturities portion of the investment portfolio by year of maturity as of 
December 31, 1996:
Period from December 31, 1996                           Percent of 
       to Maturity                            Amounts           Portfolio 
------------------------------               ---------          ----------
       (Dollars in thousands)
One year or less                          $     3,343                34.5%
More than one year to five years                2,158                22.3
More than ten years                                10                 1.1
                                                -----                ----
Sub-total                                       5,608                57.9
Mortgage backed securities                      4,074                42.1
                                                ------               -----
Total                                       $   9,682               100.0%
                                                =====                ====

     All securities in the Company's fixed investment portfolio as of December 
31, 1996 are rated A or better by Standard & Poor's Corporation or Moody's
Investor Services.  

Operations, Personnel and Management Agreements

     At December 31, 1996, URIC, Senate and Global had 3, 5 and 2 employees, 
respectively.  

     Senate and AWL are parties to a management agreement (Senate Management 
Agreement) pursuant to which AWL provides management services to Senate.
During 1996, 1995 and 1994, Senate expended $76,000, $74,000 and $60,000,
respectively, pursuant to the Senate Management Agreement. Senate also obtains
a majority of its medical stop-loss insurance and group business through 
subsidiaries of LAC.  During 1996, 1995, and 1994, Senate incurred commission 
expenses of $525,000, $605,000 and $963,000, respectively, on this business.  
LAC pays a portion of these commissions to external brokers and subagents.  As 
a result of the Chapter 11 filing, it is not certain under what conditions 
these relationships will continue.  

Competition

     The P&C and A&H industry is highly competitive and competitors have taken 
advantage of Senate's relationship with UCIC and LAC.  In addition, A. M. Best 
has downgraded Senate's rating to "under supervision". The Company's ability to
retain customers under these circumstances is a significant challenge.  

Regulation

     The Company and its subsidiaries are subject to regulation in each state 
in which they conduct business, including licensing and supervision by state
insurance departments.  Current statutes and regulations govern such matters
as the nature of and limitations on investments, the payment of dividends and 
capital and surplus requirements.  In addition, in most states, approval of
premium rates and policy forms is required.  The Company and its subsidiaries
are, and will continue to be subject to these regulations. 

     The Company and its subsidiaries also are subject to regulation under the
holding company statutes of Texas, Georgia and Arizona.  These holding company 
statutes generally require insurers that are subsidiaries of holding companies 
to register and file reports containing information concerning their capital 
structure, ownership, management, financial condition and general business 
operations and to provide such information regarding the holding company as
well.  Such regulations also generally require prior regulatory agency notice or
approval of intercompany transactions within the holding company structure.
The regulatory agencies of each state have statutory authorization to enforce
their laws and regulations through various administrative orders and 
enforcement proceedings.

     The insurance laws of Arizona, Georgia and Texas provide that no person,
as defined by the law may acquire control of an insurance company domiciled in 
that state, unless it has given notice to the insurance company and obtained
prior written approval from the Commissioner of Insurance for such acquisition 
of control.  Any purchaser of 10% or more of the Company in Georgia and Texas
and 25% or more in Arizona would be presumed to have acquired control of the
company, unless such presumption is rebutted.  

     The NAIC, which is not itself a regulatory authority but makes recommend-
ations to and takes other actions affecting state regulatory authorities, 
adopted a Risk-Based Capital (RBC) standard in the fourth quarter of 1993 for 
use by state insurance regulators.  RBC is intended to be a "tool" for 
regulators to assess the capital adequacy of property and casualty insurers and
to take action when capital under the standard is judged to be inadequate.  
This standard has four action levels based upon the relationship of actual 
capital to RBC. The mildest action occurs at a level of 2.5:1.  Based upon the
RBC standards developed by the NAIC,  all consolidated subsidiaries capital 
except URIC exceeded the authorized control level RBC by a substantial margin. 
URIC's ratio was .9:1.  URIC is currently under more stringent requirements 
than those imposed by the RBC standards.  
                                                      
     Insurance regulations of the states in which the Insurance companies are 
domiciled limit the level of dividends that can be paid without the approval
of the respective departments.  Dividends can only be paid out of earned 
surplus and are generally based on a component of net income or similar measure
or 10% of statutory surplus.  Based upon 1996 results only SNLIC could pay a
dividend.  Its maximum dividend payable to Senate  in 1997 is $20,000.

     The NYID completed an examination of UCIC for the years 1989 through 1993 
in 1994 and found UCIC to be insolvent, its capital impaired and a shortfall 
of $37,624,941 in its required surplus to policyholders at December 31, 1993.
As a result of that examination UCIC was placed in rehabilitation on July 7, 
1994 and following continued discussions and negotiations between the Company 
and the NYID, UCIC with the consent of the Company was placed into liquidation 
by court order on November 10, 1995.  As part of the order, the Company, its
directors, officers and employees were relieved of any liability for the 
deficit of UCIC except for obligations incurred in the ordinary course of 
business or due to fraudulent acts.  URIC was also given the right of first 
refusal to purchase the shares of its stock owned by UCIC.

     The Texas Department of Insurance (TDI) conducted its regular examination 
of URIC as of March 31, 1993.  TDI issued their audit report on May 25, 1994. 
On June 22, 1994, the TDI issued a confidential order creating a state of
supervision and appointing a supervisor of the operations of URIC.  The order 
was based upon disagreements with valuations of several assets, chief among 
them Alpha Trust, in financial statements filed by URIC with the TDI and upon
net operating losses reported during the first quarter of 1994. On August 25, 
1995 URIC was released from this order conditioned upon it achieving certain 
minimum policyholders' surplus and other goals.  If URIC did not achieve these
goals the TDI could place URIC into conservatorship.  Under conservatorship, 
the TDI would assume all control and decision making authority during the 
period of conservatorship.  As of December 31, 1995, URIC had not achieved all
of these goals.  On February 28, 1997 as a result of the bankruptcy filing by 
LIG's parent and other affiliates the TDI placed URIC under conservatorship. 
Under Texas insurance regulations an insurance company can remain in 
conservatorship 180 days before other action must be taken.  Subsequent to the 
filing of URIC's 1996 Statutory financial statement which reflected policy-
holder surplus of $3.5 million, the Company received reports from its actuary
that the loss and LAE reserves related to pooling with UCIC could be between
$6 million and $8 million higher than reported on URIC's statutory statement. 
This information has been received by the TDI.  Based on minimum capital
requirements and insolvency provisions of the Texas insurance law, the TDI has 
indicated that unless these reserves can be commuted or otherwise modified at
an amount  significantly less than presently stated the alternative would be 
to place URIC in liquidation.           

    On September 19,1996 the ADI issued a Notice of Determination and Order of
Supervision for Senate and SNLIC.  This Order arose over Senate's purchase of 
real estate from a former officer and director and the subsequent loan of these
proceeds to LGI.  The Order could be abated upon demonstrating that the 
purchase was fair and reasonable and complies with applicable Arizona statutes
and that Senate's controlling persons can meet their financial obligations 
without utilizing the assets of Senate or SNLIC except for dividends.  If the
Company should be unable to satisfy these items the ADI could place either or 
both companies under conservatorship. A hearing had been scheduled for 
November 18, 1996 but has been postponed at the request of the  ADI.
     
     Global, Senate and SNLIC underwent their regular examinations as of 
December 31, 1993, by the respective insurance departments. The reports showed 
no material findings.

     The National Association of Insurance Commissioners (NAIC) annually 
calculates eleven financial ratios to assist state insurance regulators in 
monitoring the  financial condition of P&C insurance companies.  Many of these 
ratios are intended to express operating activity over a one or two year period
as a factor of policyholders' statutory surplus.  A "usual range" of results
for each ratio is used as a benchmark.  Departure from the usual range on 
four or more of the ratios could lead to inquiries from individual state 
insurance commissioners as to certain aspects of a company's business. Global
fell outside the normal range on two ratios.  Both were related to the winding
down of Global's operations. URIC fell outside the normal range on four 
ratios. These ratios were outside the normal range as a result of the default 
of the Alpha Trust notes and adverse loss development. Senate fell outside the 
range on seven ratios as a result of  the increase in non-admitted assets 
related to the bankruptcy filing by LGI and certain of its subsidiaries and 
decreases in premiums written and income.  

     As a result of the financial difficulties, Best has downgraded URIC's and 
Senate's ratings to reflect the fact that they are under conservation or 
supervision. 

Tax Legislation

     During 1996, the IRS did not issue any new regulations which would have 
any material impact on the Company's tax position.

ITEM 2.  PROPERTIES

    The Company occupies leased office space in Texas and Georgia.  It occupies
owned facilities at its corporate headquarters located in Schenectady, New York.

ITEM 3. LEGAL PROCEEDINGS

    In addition to the proceedings with the NYID, TDI and ADI discussed  under 
Regulation, the Company is a defendant in other legal proceedings which 
Management believes will not have a material impact on the Company's financial
statements.  Management is defending these cases.  As a result of an unpaid 
judgement against LIG and two codefendants, LIG's bank accounts have been 
frozen.  The Company has filed suit against its former accountant and actuary 
seeking to recover damages for breach of contract and inaccurate certifications
of the Company's 1992 and prior loss and loss adjustment expense reserves.  The
Company is seeking $250 million.  The litigation is in its early stages. 

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     During the fourth quarter of 1996, there were no matters submitted to a 
vote of security holders.                         

PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Market Information

    The Company's common stock was traded on the American Stock Exchange under 
the symbol of LWR.  Trading of the Company's common stock was suspended by the
American Stock Exchange (AMEX) from May 16, 1994 to August 29, 1995 due to the
lack of current financial information.  On August 30, 1995 trading was resumed,
however, at that time the Company did not meet the minimum financial require-
ments of the Exchange and delisting procedures could have been resumed in the 
future.  Effective March 14, 1997 the Company consented to a delisting by 
AMEX as it did not meet the minimum financial requirements.  Trading had been 
halted on March 4, 1997.  It is expected that an over the counter market will 
develop for its shares.
   
    The high and low sales prices for each quarterly period are summarized in
the following schedule:

                                        1996                  1995   
Quarter Ended                      High       Low         High      Low
--------------                     ----       ---         ----      ---   
March 31                            3/4       7/8          N/A       N/A  
June 30                             3/4     1 1/8          N/A       N/A   
September 30                        5/8     1            1 3/16      7/8   
December 31                         3/8       3/4         15/16      7/8   

     As of April 8, 1997, there were approximately 1,500 holders of the
Company's common stock and 14,121,482 common shares were issued and outstanding.
The Company has not declared or paid any dividends in 1996 or 1995.      

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     The following GAAP basis tables should be read in conjunction with the 
consolidated financial statements of the Company and the notes thereto. 
                       
                                                Year Ended December 31,     
  ($ in thousands)              1996    1995    1994    1993     1992  
Operating Data:                -----   -----   -----    -----    -----
Revenues:                                                
 Net premiums earned           $3,571  $5,533  $5,221  $121,015 $131,799
 Net investment income          1,648   3,101   3,313     7,165   12,188 
 Realized gains (losses) 
  on investments              (12,673)   (743)   (598)   (5,471)   5,888   
                               -----     -----   -----   -------  -------
    Total revenues             (7,454)   7,891   7,936  122,709  149,875  
Operating expenses:
 Losses and loss 
  adjustment expenses           8,249    5,402   4,019  148,437  107,583 
 Losses-government pools           -        -       -       897    2,864    
 Policy acquisition expenses        8    1,863   2,068   35,378   24,799 
 Other operating expenses       1,519    1,769   1,360   14,771   14,706 
                               ------    ------  ------ --------  -------
Total operating expenses        9,776    9,034   7,447  199,483  149,952
                               ------   ------   -----  -------  -------
Operating income (loss)       (17,230)  (1,143)    489  (76,774)     (77) 
Equity in loss of non-
 consolidated subsidiary           -        -   (7,309)      -         -     
Equity in earnings 
  (loss) of investee               -        -     (103)     632       413  
                               ------   ------   ------ --------    ------
Income (loss) before income
  taxes, minority interest and
  extraordinary items          (17,230)(1,143)  (6,923)  (76,142)     336  
Income tax expense(benefit)       (133)  (282)     168       962     (919)   
                                  ----   -----  -------   -------    -----
Income (loss) before minority
   interest and other items    (17,097)  (861)  (7,091)   (77,104)   1,255   
Minority interest               (3,366)   219        -         -        -      
Extraordinary gain                  -  38,387        -         -        - 
Change in accounting principle      -      -         -         -      (233)
                                ------ ------   ------    --------    -----
Net income (loss)             $(13,731) $37,745 $(7,091) $(77,104) $ 1,022     
                                =====    =====    =====    =====     =====

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA
                                                                 
                                            Year Ended December 31,         
                                1996     1995    1994        1993       1992 
                                (Amounts in thousands, except per share data)

Balance Sheet Data:

Total investments                $16,341  $16,935  $27,994 $121,036 $181,818 
Total assets                      29,701   46,502   67,041  257,315  305,018 
 Reserves for losses 
 and loss adjustment 
 expenses (1)                     26,441   30,974   47,165  200,845  160,857 
 Total stockholders' 
 equity (deficiency)              (2,800)     145  (56,252) (19,251)  58,908 
    
Per Share Data:
Net income(loss) before
  extraordinary items             $ (.97) $ (.05)  $  (.50) $ (5.46) $   .09 
Net income (loss)                   (.97)   2.67      (.50)   (5.46)     .07 
Dividends                             -       -         -       .27      .46    
Total stockholders' 
 equity (deficiency)              $ (.20) $  .01  $  (3.98) $ (1.36) $  4.17  
     
Average shares 
 outstanding                      14,121   14,121   14,121   14,121   14,121

Certain GAAP 
 Financial Ratios:
Loss and LAE ratio                 231.0%  97.6%    77.0%   122.7%     81.6% 
Losses - government 
   pools ratio                       -       -       -         .7       2.2     
 Acquisition expense 
   ratio                              .2   33.7     39.6     29.2      18.8 
 Dividend ratio                      -       -       -         .2        .2    
 Underwriting expense 
   ratio                            42.6   32.0     26.0     12.0      11.0 
 Combined ratio                    273.8% 163.3%   142.6%   164.8%    113.8%   

(1) Reserves for loss and loss adjustment expenses have been  restated for the 
year ended December 31, 1992 to reflect the gross reporting provisions of 
Statement of  Financial Accounting Standard No. 113  "Accounting and Reporting 
for Reinsurance of Short-Duration and Long-Duration Contracts". 

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

      There have been several events in 1996 and early 1997 that have had a 
significant impact on the Company with some of the ramifications remaining 
unknown at this time.  The Company recorded a net loss of $13,731,000 for the
year.  This compares with a loss before extraordinary gain of $642,000 for 1995 
and a net loss of $7,091,000 in 1994. The losses in 1994 were essentially 
attributable to the operations of United Community Insurance Company (UCIC). 
Lawrence Group, Inc.(LGI)  and eleven of its subsidiaries filed for bankruptcy 
under Chapter 11 on February 28, 1997.  Senate Insurance Company (Senate) is 
heavily dependent upon several of the subsidiaries for marketing, underwriting
and claims handling of its products.  While Chapter 11 gives the filer protect-
ion from creditors as it attempts to reorganize there is no guarantee that the 
reorganization will be successful or if it is what impact that may have on the
Company.
 
     All significant intercompany transactions have been eliminated in 
consolidation.  Amounts in 1994 include UCIC financial results only through the
date of the Order of Rehabilitation (July 7, 1994) and on an unconsolidated 
basis (ie. results of operations are reflected as "Equity in loss of non-
consoldated subsidiary" and the Company's investment as "Deficit of non-
consolidated subsidiary"). As a result of the formal order of liquidation 
entered on November 10, 1995 the Company reversed these amounts resulting in 
the extraordinary gain. 

     URIC had been under a confidential order of supervision by the Texas 
Department of Insurance (TDI) since June, 1994, until its release on August 
25, 1995.  As a condition to the release of the order the Company agreed to 
achieving certain financial goals.  The financial goals included increasing 
statutory surplus to $8 million at December 31, 1995. The statutory surplus as 
filed with the TDI at December 31, 1995 was $6.6 million and $3.6 million at
December 31, 1996.  These amounts did not include the effect of the loss and 
LAE adjustments of approximately $4.0 million and $7.8 million at December 31,
1995 and 1996, respectively, included in the accompanying financial statements.
The TDI could have placed URIC under conservatorship at any time based upon the
1995 policyholder surplus.  Under conservation, the TDI assumes all control and
decision making authority during the rehabilitation period.  On February 28, 
1997, as a result of the bankruptcy filing by LIG's parent and eleven of its 
subsidiaries the TDI did place URIC into conservatorship. Under Texas insurance
regulations an insurance company can remain in conservatorship 180 days before
other action must be taken.  Subsequent to the filing of URIC's 1996 Statutory
financial statement which reflected policyholder surplus of $3.6 million, the 
Company received a report from its actuary that indicated that the reserves 
related to pooling with UCIC could be between $7 and $10 million higher than 
reported on URIC's statutory statement.  This information has been received by 
the TDI. Based on minimum capital requirements and insolvency provisions of the
Texas insurance law, the TDI has indicated that unless these reserves can be
commuted at an amount significantly less than presently stated, the alternative
would be to place URIC in liquidation.      

      On September 19, 1996, as a result of the purchase of real estate by 
Senate Insurance Company (Senate) from Barbara Lawrence, a former owner and 
director, the State of Arizona Department of Insurance (ADI) placed Senate and
Senate National Insurance Company (SNLIC) under supervision.  A hearing was to
be held by November 19, 1996, in order to ascertain that the transaction was 
fair and that the obligations of LGI could be met without utilizing the assets 
of these companies. The hearing has been postponed at the request of the ADI.

     Global Insurance Company (Global) resumed writing business on a modest 
scale beginning in the fourth quarter of 1996.

Results of Operations

     For 1996, the Company recorded a net loss of  $13,731,000.  For 1996, 
realized losses on investments totaled $12,673,000 and underwriting losses 
totaled $6,205,000.  These were partially offset by investment income and the
minority interest share of the losses. For 1995, the Company recorded net 
income of $37,745,000 including the extraordinary gain related to UCIC of 
$38,387,000. Net loss from ongoing operations was $642,000.  The Company's 
results for 1996 and 1995 continued to be adversely impacted by  adverse 
development related to URIC's pooling agreement with UCIC, partially offset by
Company's ability to commute several reinsurance agreements at favorable terms.
For 1994, the Company lost $7,091,000 as LIG recorded a loss related to UCIC of
$7,307,000 for the first six months of 1994.  In addition to the loss related
to UCIC's own operations since UCIC owns 21.4% of URIC, LIG does not 
consolidate the full amount of income or loss earned by URIC.  For 1994, this 
amounted to $2,000 in URIC earnings not consolidated by LIG.  Excluding UCIC 
for 1994, the Company would have earned $216,000.
 
    Net Premiums Earned:  Net premiums earned represent the pro rata portion of
the business written in the calendar year plus amounts carried over from the 
prior year that are taken into revenue in the current period reduced by 
applicable reinsurance. 
   
     Net premiums earned for 1996 totaled $3,571,000 compared with $5,533,000 
for 1995 and $5,221,000 for 1994. The decrease in 1996 was due primarily to the
continued decline in the accident and health (A&H) business. The increase from
1994 to 1995 was attributable primarily to favorable adjustments to URIC assum-
ed premiums partially offset by the decrease in Senate's  stop loss business. 

      Net Investment Income:  Net investment income was $1,648,000 for 1996, 
$3,101,000 for 1995 and $3,313,000 for 1994.  The decrease for 1996 compared to
1995 was due to the loss of interest from the Alpha Trust due to default and 
a valuation reserve established for rent due from an affiliate as a result of 
its bankruptcy filing and the lower level of invested assets of the Company.
The decrease for 1995 compared with 1994 was due to the lower level of invested
assets as yields were higher. 

     Realized Gains (Losses) on Investments: Realized losses for 1996 totaled 
$12,673,000 and consisted of gains of $739,000 on the sale of Mechanical 
Technology, Inc. (MTI) common stock to LGI offset by the charge off to 
operations of the unpaid balance of the Alpha Trust ($13,093,000) and by 
valuation allowances established against amounts due from affiliates as a 
result of the Chapter 11 bankruptcy filing of LGI and certain subsidiaries. 
Since Receivable from Alpha Trust was carried as a contra equity account in 
stockholders' equity the impact on total stockholders' equity of this charge 
off was $0. The Realized losses for 1995 totaled $946,000 and were related to 
the loss on the disposition of notes of Aquatic Development Corporation and 
losses on fixed investments.  Realized gains totaled $203,000.  Realized losses
totaled $598,000 for the year 1994 with approximately $503,000 due to the write
down of an equity investment in Aquatic Development Corporation.  

     Losses and Loss Adjustment Expenses: Loss and LAE totaled $8,249,000 for 
1996 compared with $5,402,000 for 1995 and $4,019,000 for 1994. The increase in
1996 compared with 1995 was attributable primarily to higher adverse develop-
ment of losses related to the pooling agreement with UCIC . The increase for 
1995 vs 1994 was attributable to the adverse impact of URIC's pooling agreement
with UCIC partially offset by favorable results related to the commutation of
several reinsurance agreements and the reduced business volume at Senate.  In
addition, for 1994 the Company incurred losses of approximately $1,600,000 
related to the Northridge, California earthquake for which it had no 
counterpart in 1995.     

     Reinsurance assumed loss and LAE expenses have been adversely impacted by 
the pooling agreement with UCIC. Earned premium in 1994 was negative as a 
result of a moratorium on new business and adjustments to retrospectively rated
treaties as some of these treaties showed favorable loss experience in 1994. 
The favorability was offset by losses incurred of approximately $1,600,000 
related to the Northridge California earthquake.

    The accident and health business, which constitutes the current majority of
the Company's business, continues to enjoy good results although the trend has 
been unfavorable.  The loss and LAE ratio was 64%, 52% and 38% for 1996, 1995
and 1994, respectively as some customers who had been experiencing excellent 
loss ratios have in a number of instances selfinsured or kept higher 
retentions. Senate has also been impacted by the publicity surrounding UCIC and
LGI and its subsidiaries.  

     Loss and LAE are based on the ability to collect from reinsurers amounts 
due under reinsurance contracts. URIC's reinsurance is allocated to numerous 
companies.  Senate reinsured through Lloyd's of London on a combined quota 
share/excess of loss basis.  Senate claims with insureds are settled quickly 
and reimbursed by Lloyd's of London promptly.  This minimizes any significant 
credit risk associated with longer tail business where premiums are remitted to
reinsurers long before claims are paid and reimbursed.  Global has quota share 
reinsurance spread among a number of companies.  Management believes the 
credit risk to be minimal.
 
     Policy Acquisition Costs:  Commissions and other acquisition expenses were
approximately $8,000 in 1996, $1,863,000 in 1995 and $2,068,000 in 1994.  The 
changes in policy acquisition costs for these years are attributable to the 
change in the volume of business, changes in the mix of business from premium 
with a lower commission rate to premium with a higher commission rate and 
changes in reinsurance ceding commission income.  The Company offsets 
reinsurance ceding commission income against commissions and other acquisition 
costs to arrive at the Company's net expense.  The Company's net expense is 
impacted by changes in reinsurance ceding commission, in addition to changes
in direct commissions associated with the Company's direct and assumed premium.
 
     Policy acquisition expenses decreased in 1996 primarily as a result of 
adjustments to incentive rated reinsurance contracts of URIC and lower premium 
volume at Senate.  Policy acquisition expenses for 1995 decreased by $205,000
compared with 1994 primarily as a result of lower premium volume at Senate.  

    Other Operating Expenses:  The Company's other operating expenses were 
approximately $1,519,000, $1,769,000 and $1,360,000 for the years ended Decemb-
er 31, 1996, 1995 and 1994, respectively. Other operating expenses for 1996 and
1995 reflected increased costs of litigation relative to URIC and the TDI as 
well as costs associated with complying with other regulatory agencies as well 
as additional costs associated with positioning the Company to be able to move
forward in 1996 compared with 1994.  

    Equity in Earnings of Investee:  During 1992, the Company acquired 49% of 
the outstanding common stock of MTI. The Company's pro rata share of MTI's 
undistributed earnings since the date of acquisition has been included in the
Company's operating results in the amount of $(103,000) for 1994.  Based upon 
events subsequent to December 31, 1993, the investment was written down as of 
December 31, 1993 to reflect an impairment.

     Income Taxes: For 1996, the Company recorded an income tax benefit of 
$133,000 reflecting primarily a truing up of prior years income tax receivables 
and payables.  For 1995, the Company recorded a tax benefit of $282,000 
representing an amount recoverable against prior expense by URIC partially 
offset by a provision for state income taxes of Senate.  For 1994, the 
Company recorded a tax expense of approximately $168,000 which consisted of 
state income taxes due. The statutory Federal rate was 34% for 1996, 1995 and 
1994. 

Liquidity and Capital Resources

     Insurance premiums generally are collected prior to the disbursement of 
claims and related expenses resulting in a favorable cash flow from operations 
for the insurance subsidiaries. Funds are then used to purchase investments 
ranging in maturity from short-term to long-term, reflecting the varying 
duration of insurance liabilities for losses, as well as the investment 
market conditions.

     During 1994 the Company implemented SFAS No. 115 - "Accounting for Certain
Investment in Debt and Equity Securities." This requires that fixed investments
be classified into categories for financial statement presentation:  Fixed
Maturities Held to Maturity and Fixed Maturities Available for Sale.  Fixed 
Maturities Held to Maturity are carried at amortized cost. Securities to be 
held for indefinite periods of time and not intended to be held to maturity are
classified as available for sale.  Securities available for sale include 
securities that Management intends to use as part of its asset/liability 
management strategy and that may be sold in response to changes in interest 
rates, prepayment risk and other similar economic factors, as well as to fund 
catastrophic losses and other unexpected cash needs.  Fixed Maturities 
Available for Sale are carried at fair value after 1993.  After 1994 the 
Company considered all fixed investments to be available for sale. 

     Operating activities used cash and cash equivalents of approximately 
$6,349,000, $8,233,000 and $18,221,000 in 1996, 1995 and 1994, respectively.
The decrease in operating cash flow for the three years reflects the reduction 
in premiums written and the change in income from underwriting operations and 
the reduction in investment income.  In addition, in January, 1994, UCIC and
URIC loaned $13,000,000 and $14,000,000, respectively, to Alpha Trust.  These
loans consisted of term notes with differing maturities and repayment schedules
with the initial principal repayment commencing April 1, 1996 and ending on
January 1, 2001.  Interest is at the prime rate plus 2%.  Interest is payable
quarterly beginning April 1, 1994.  Alpha Trust loaned $27,000,000 to Lawrence
Group, which owns approximately 93% of the Company. This represented a use of 
cash by URIC of $14,000,000.  Principal and interest payments due after July 1, 
1996 are in default and LGI has filed for bankruptcy under Chapter 11.  On 
April 4, 1996,  Senate purchased real estate from Barbara Lawrence (a former 
owner and director). This utilized $2,600,000 of cash and short term invest-
ments.  This property was also subject to a blanket mortgage (approximately 
$2.9 million at December 31, 1996) of the previous owner being held by a 
financial institution   The previous owner filed for protection under the
federal bankruptcy laws and it is uncertain as to what impact this may have on 
LIG. 

     A significant portion of the parent company's internal sources of funds 
historically consisted of dividends from its subsidiaries. Since the insurance 
subsidiaries are subject to regulatory restrictions on the amount of dividends 
that may be paid, their earnings are not necessarily available to the Company 
on a current basis.  The restrictions are generally based on specific levels of
statutory surplus and investment income, as determined under statutory 
insurance accounting practices.  Based upon their restrictions as of December 
31, 1996, the insurance subsidiaries will not be able to pay any dividends to 
the Company during 1997 without prior approval of regulatory authorities.  
Dividend payments from the Company's subsidiaries have been suspended since the
fourth quarter of 1993 due to statutory limitations.  Dividends from the 
Company to its shareholders have also been suspended pending future dividends 
from the subsidiaries.

    In the absence of dividends from its subsidiaries the Company has had to 
rely on tax refunds and other miscellaneous sources of cash to fund its own 
activities.  While these requirements are not expected to be substantial it 
is uncertain to what degree they can be met in the future.  Senate, Global and 
SNLIC are deemed to have ample cash and invested assets to meet their 
foreseeable cash requirements.  However, it is uncertain that URIC can meet
it long term cash requirements if the loss and LAE reserves related to pooling 
are not commuted or otherwise modified substantially.

Economy

     Periods of economic recession and inflation can have varying effects on 
members of the insurance industry.  Due to the current nature of the Company's 
operations it is not anticipated that fluctuations in the economy would have a
significant impact on the Company. The underwriting policy of each subsidiary is
geared to obtaining an adequate return for the risk it is underwriting.  For 
example, policies exclude environmental and pollution coverages, due to their
uncertainty.

New Accounting Pronouncements

     There were no new accounting pronouncements that would upon implementation
have a significant impact on the Company.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

     The consolidated financial statements required in response to this Item 
are submitted as part of ITEM 14 (a) of this report.
                             
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES

     For the year ended December 31, 1996, the Company engaged the firm of
Weaver and Tidwell L.L.P, Fort Worth, Texas as it Accountant.  Coopers & 
Lybrand L.L.P. had been the Accountant for the preceding three years.  There 
were no disagreements with the current or prior accountants during the time of 
their engagement.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS

     The Directors and Executive Officers of the Company at December 31, 1996 
were as follows:

Name                      Age                     Position

Albert W. Lawrence        68           Chairman of the Board     
Albert F. Kilts           51           Chief Executive Officer,   
                                           President, Director     
Floyd N. Adams            54            Treasurer       
              
Randall F. Ezick          48            Secretary, Director       
                  
Nevin D. Harkness (1)     75            Director                  
Milos R. Knorr (1)        78            Director                  
William J. Mather         59            Director                  
Janet H. Lawrence         38            Director                  

(1)  Member of the Audit Committee.  All members of the Audit Committee serve
only as Directors and have no management responsibilities with respect to the 
Company. 

     All Directors hold office until the next annual meeting of stockholders
and until their successors are duly elected and qualified.  Officers are 
elected annually by the Board of Directors and serve at the discretion of the 
Board of Directors. 

     Mr. Lawrence has been a Director since June 30, 1986.  Messrs. Harkness  
and Knorr became Directors on October 19, 1986.  Mr. Mather became a Director on
October 7, 1987. Mr. Kilts  became a Director on December 8, 1994. Ms. 
Lawrence became a director on June 20,1996. 

     Albert W. Lawrence is the founder of Lawrence Group and its subsidiaries. 
He is the Chairman of the Board and Chief Executive  Officer of Lawrence Group 
and has held various offices in the subsidiaries of Lawrence Group since 
prior to 1990.
                            
     Albert F. Kilts has been President and Chief Executive Officer since May 
1996 and had been Vice President and Treasurer of Lawrence Insurance Group, 
Inc. since December 1994 and Chief Operating Officer of LIG since May 1994. 
From October 1993 to July 1994 he also held several positions within UCIC. 
He previously served as Corporate Auditor for Lawrence Management Group, Inc. 
from August, 1991 through September, 1993. From 1975 until joining the 
Lawrence Group in August, 1991, Mr. Kilts was affiliated with Key Corp where he
most recently served as Senior Vice President of Banking Administration at the
parent company.

     Nevin D. Harkness had been a Director of UCIC since October 1983.  During 
1993, Mr. Harkness retired from the position of Chief Executive Officer and 
President of The Olympic Regional Development Authority, Lake Placid, New York.
Mr. Harkness has been involved in the field of athletics as administrator and 
coach since prior to 1989.

     Milos R. Knorr is active as an independent consultant and advisor in 
insurance, reinsurance and related fields, and acts as an arbitrator.  He also 
serves as a Director of several companies.  Prior to 1982, he held various 
senior executive positions with the INA Group (now CIGNA), including head of 
European Reinsurance Operations, President of INA Insurance Company of Canada 
and Senior Vice President of INA Reinsurance Company.

     William J. Mather is President of Global, Senate, SNLIC and held various 
offices in various subsidiaries of Lawrence Group.  He is currently the Chief 
Marketing Officer of Lawrence Group and was President of the LAC since prior 
to 1989 until February 1997.  Mr Mather has resigned his positions as a 
director and officer of LIG and its subsidiaries effective March 21, 1997. 

     Janet H. Lawrence has been President of Lawrence Healthcare Administrative
Services (LHAS), which is a subsidiary of LAC since 1995.  She previously 
served as Vice President of Litigation Management and Vice President of Product
Development of UCIC.  Prior to that she had been employed within LGI in 
positions of increasing responsibility since 1981.

     Randall J. Ezick has been Secretary of Lawrence Insurance Group, Inc. since
April 1996.  He has been General Counsel for Lawrence Group, Inc. since August 
1995.  Prior to that time he was stockholder in the law firm of Roemer and 
Featherstonaugh P.C. since 1989.  During that time he was actively involved in 
providing legal services to Lawrence Group,Inc. And its subsidiaries.  He is a 
member of the New York State and Albany county Bar Associations and the 
Defense Research Institute.  Mr. Ezick resigned as a director and officer of 
the Company effective April 18,1997.  
    
     Under the securities laws of the United States, the Company's Directors, 
its Executive Officers, and any persons holding more than ten percent of the 
Company's common stock are required to report their ownership of the Company's
common stock and any changes in that ownership to the SEC.  The Company is 
required to report in this Form 10-K any failure to file during 1996.

ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth all compensation that the Company and its 
subsidiaries paid or accrued for the year ended December 31, 1996 for Herbert F.
Brantlinger and his successor, Albert F. Kilts as President and Chief Executive
Officer of LIG. The Company did not have any other Executive Officer whose 
compensation exceeded $100,000 during 1996.
                                                     All other 
                        Year     Salary     Bonus   Compensation
                        ----    --------   -------  -----------
 F. Herbert Brantlinger 1996    $ 75,912   $   -     $     -                 
                        1995     118,922       -           -
                        1994      96,827       -           -
                                             
Albert F. Kilts         1996     116,346       -           -

     The Company does not have any long-term compensation plans based upon the 
issuance of restricted stock awards, stock options and/or stock appreciation 
rights (SARs).
     
      Mr. Brantlinger resigned his positions effective April 19, 1996.
 
Compensation Committee Interlocks and Insider Participation 

     There were no compensation interlocks. Mr. Kilts received an increase when
he became President and CEO. 

Retirement Plans

      URIC, Global and Senate are participating employers in a profit sharing 
plan under Section 401(k) of the Internal Revenue Code, maintained by 
Lawrence Group (401(k) Plan).  The 401(k) Plan covers all employees of URIC,
Global and Senate who have completed one year of service and have attained age 
twenty and one-half. Each year, URIC, Global and Senate contribute to the 401(k)
Plan such amounts as the Boards of Directors, in their discretion, may 
determine.  In addition, participants may elect to reduce their salary and to 
have such amounts contributed by the Company to the 401(k) Plan.  The 
participants' accounts are fully vested at all times.  The 401(k) Plan was 
adopted effective as of January 1, 1986.  Cost were  $0 in 1996, 1995 and 1994 
for executive officers. 

Directors' Fees

     Directors of the Company are paid $600 for each regular meeting of the 
Board of Directors which they attend.

 Five Year Performance Graph

     Comparison of Five-Year Cumulative Returns Among the Company,
American Stock Exchange Composite ("AMEX") and the Insurance
Industry Listed Companies:

                                               Year ended December 31,
                                         ---------------------------------- 
                                         1991  1992  1993  1994  1995 1996
                                         ----  ----  ----  ----  ---- ---- 
   
LIG                                       100    83    35   25     16   7
AMEX Stock Market(US)                     100   105   124  116    149 159
NYSE,AMEX,NASDAQ listed
 insurance carriers                       100   128   139  130    188 226

     The Stock Performance Graph, as presented above, reflects the cumulative 
return on the common stocks of the Company, AMEX and the Insurance Industry, 
respectively, assuming an original investment in each of $100 on December 31, 
1991 (the "base") and reinvestment of quarterly dividends.  Cumulative returns 
for each fiscal year subsequent to 1991 are measured as a change from this base.

     Since 1991, the Company's return declined substantially, reflecting an 
earnings decline in 1992 and significant losses for 1993 and 1994.  Trading in 
the Company's stock was suspended on May 13, 1994.  The suspension was lifted
on August 30, 1995. Trading has been in a narrow range since the suspension was
lifted. On March 3, 1997 trading in the Company's stock was halted by AMEX and 
the Company delisted as of March 14, 1997.
 .
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The following table sets forth the holdings of Common Stock by each of the
Company's Directors and by all Officers and Directors as a group as of December
31, 1996.  Except as otherwise indicated, to the Company's knowledge all 
shares are beneficially owned, and investment and voting power is held by the 
persons named as owners. 

                                                   Percent of                  
Name of Beneficial Owner   Beneficial Ownership  Outstanding Shares

Albert W. Lawrence (1)          13,157,769                 93.2 %       
Nevin D. Harkness                      300                     *          
Milos R. Knorr                       3,000                     *          
William J. Mather (2)               27,664                     *          
Albert F. Kilts                         -                      *          
Randall J. Ezick                        -                      * 
Janet H. Lawrence                      196                     * 
All Officers and Directors 
 as a group (1)(2)              13,190,130                 93.4%        

*Less than 1%

(1)  Includes 13,144,395 shares held by Lawrence Group.  In addition, there are
8,374 shares in the account of Mr. Lawrence in the 401(k) Plan.
   
(2)  Includes 26,839 shares in the account of Mr. Mather in the 401(k) Plan.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     URIC, Global and Senate with the approval of the requisite state insurance
departments sold their shares of MTI stock to LGI for $739,000 in 1996.  The 
carrying value of  the stock had previously been written down to $0 in 1994.

     Since August 1996, Global has subleased office space located in Atlanta, 
Georgia to LAC. Annual rent is $30,000.

     The Company's subsidiaries held various notes receivable and other 
receivables from various Lawrence Group affiliates at December 31, 1996.  Based 
upon the bankruptcy filing the Company has established a valuation allowance
totaling $545,000 reducing the balance to $0.  Interest income earned with 
respect to these receivables totaled $9,000, $11,000 and $40,000 for the years 
ended December 31, 1996, 1995 and 1994, respectively.

     Senate obtains a significant portion of its business from LAC to which it
pays commissions.  These commission expenses totaled $525,000, $605,000 and 
$963,000 in 1996, 1995 and 1994, respectively.  LAC pays a portion of these
to external brokers and subagents.  Senate also pays AWL for management 
services associated with Senate business.  These payments were $76,000, $74,000
and $60,000 for 1996, 1995 and 1994, respectively.

     URIC loaned $14,000,000 to Alpha Trust which in turn invested in notes 
issued by Lawrence Group, which owns approximately 93% of the Company during 
1994.  Principal payments totaling $908,000 were made during 1996.  The loan 
is currently in default and LGI filed for protection under Chapter 11 of the 
Federal Bankruptcy Law.   Based on the above, the remaining balance was written
off in 1996.  There was no impact on stockholder's equity.  

     At December 31, 1996 URIC carried a $120,000 note receivable from a 
corporation owned by Albert Lawrence, the ultimate parent of LIG.  Interest 
earned in 1996 totaled $16,000.

     At December 31, 1996, URIC carried a note payable due to LGI of $300,000.
Interest is at 8%.  LIG had received advances of $210,000 from affiliates which
were outstanding at December 31, 1996. 
  
PART IV

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

(a) 1.  Financial Statements

     The 1996 financial statements listed on the accompanying Index to Financial
Statements and Financial Statement Schedules Covered by Report of Independent 
Accountants are filed as part of this report. 

    2.  Schedules

    The 1996 schedules listed on the accompanying Index to Financial Statements
and Financial Statement Schedules Covered by Report of Independent Accountants 
are filed as part of this report. 

    3.  Exhibits

     The exhibits listed on the accompanying Index to Exhibits are filed as part
of this report.

(b)  Reports on Form 8-K

     On December 18, 1996, the Company reported that the Board of Directors had 
approved Weaver and Tidwell L.L.P. as its accountants for 1996.  The Board 
decided not to retain Coopers & Lybrand L.L.P. who had been its accountants
for the preceding three years.  For the two preceding years and the interim 
1996 period there had been no disagreements with the previous accountants nor 
did their reports contain any adverse opinions or disclaimers.
<PAGE>
SIGNATURES

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

Dated:    April 9, 1997              By: /s/ ALBERT F. KILTS 
                                   ------------------------------
                                   Albert F. Kilts
                                   President

     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 date indicated.

Name                           Title                       Date

/s/ ALBERT W. LAWRENCE      Chairman of the Board      April 9, 1997
Albert W. Lawrence

ALBERT F. KILTS             President and Director     April 9, 1997
Albert F. Kilts         (Principal Executive Officer)

/s/ FLOYD N. ADAMS          Treasurer                  April 9, 1997
Floyd N. Adams          ( Principal Accounting                 
                           and Financial Officer)

/s/ RANDALL J. EZICK      Secretary and Director        April 9, 1997
Randall J. Ezick
                                       
/s/ NEVIN D. HARKNESS     Director                       April 9, 1997
Nevin D. Harkness

/s/ MILOS R. KNORR        Director                       April 9, 1997 
Milos R. Knorr

/s/ JANET H. LAWRENCE     Director                       April 9, 1997 
Janet H. Lawrence

<PAGE>
                 LAWRENCE INSURANCE GROUP, INC.
        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 
           AND FINANCIAL STATEMENT SCHEDULES
                                                                  
                        ITEM 14 (a)                                        
                                                                   Form 10-K
                                                                  
                                                                      Page 
  
Reports of Independent Auditor                                          28 

Consolidated Balance Sheets as of December 31, 1996 and 1995            29 
      
Consolidated Statements of Operations for the Years Ended         
  December 31, 1996, 1995 and 1994                                      31 
                     
Consolidated Statements of Stockholders' Equity (Deficiency)
  for the Years Ended December 31, 1996, 1995 and 1994                  32 
          
Consolidated Statements of Cash Flows for the Years
  Ended December 31, 1996, 1995 and 1994                                33 
 
Notes to Consolidated Financial Statements                              35 
                      
Schedules: 
    I - Summary of Investments Other than Investments
        in Related Parties at December 31, 1996                         51 
                                           
   II - Condensed Financial Information of Registrant 
        at December 31, 1996 and 1995 and for the Years
        Ended December 31, 1996, 1995 and 1994                          52 
                                             
  III - Supplementary Insurance Information for the
        Years Ended December 31, 1996, 1995 and 1994                    55 

  IV - Reinsurance for the Years Ended December 31, 
        1996, 1995 and 1994                                             58
                                             
   V - Valuation and Qualifying Accounts for the
        Years Ended December 31, 1996, 1995 and 1994                    59
                      
  VI - Supplementary Information Concerning Property
        and Casualty Insurance Operations for the 
        Years Ended December 31, 1996, 1995 and 1994                    60









                        INDEPENDENT AUDITOR'S REPORT


     We have audited the consolidated financial statements and the financial 
statement schedules of Lawrence Insurance Group, Inc. and subsidiaries (the 
Company) as of  and for the year ended December 31, 1996 as 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 the 
financial statement schedules based on our audit.  The 1995 and 1994 financial 
statements were audited by other auditors whose report dated April 8, 1996 on
those statements included an explanatory paragraph that described the 
regulatory actions against the Company discussed in Note 1 to the financial 
statements.

     We conducted our audits in accordance with generally accepted audited  
standards.  Those standards require that we plan and perform the audit to ob-
tain reasonable assurance about whether the financial statements are free from 
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 audit 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 Lawrence 
Insurance Group, Inc. and subsidiaries as of December 31, 1996, and the 
consolidated results of their operations and their cash flows for the year
then ended 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.

     The accompanying consolidated financial statements and financial state-
ment schedules have been prepared assuming that the Company will continue as
a going concern.  As discussed in Note 1, a subsidiary, United Republic Insur-
ance Company (URIC), was under confidential supervision by the Texas Depart-
ment of Insurance (TDI) under an order issued in June 1994.  On August 25, 
1995, the Commissioner of Insurance of the TDI issued a Release From Confid-
ential Supervision Order and an Article 1.32 Order of Consent for URIC.  The 
effect of these orders was to release URIC from confidential supervision 
contingent upon increasing its statutory policyholder surplus to $8 million and
other administrative requirements. In addition, an Appointment of Conservator 
by Consent was signed by URIC and could be executed by TDI should URIC fail to 
abide by the above mentioned financial and other administrative requirements.
URIC has failed to meet several of these requirements, including the policy-
holder surplus requirements. URIC could have been placed in to conservatorship 
by the TDI at any time.  On February 28,1997, as a result of the filing of 
bankruptcy by the Company's parent and various other related entities, the TDI 
placed URIC into conservatorship.  Additionally, subsequent to the filing of 
URIC's 1996 statutory financial statement which reflected policyholder surplus 
of $3.5 million, the Company received reports from its actuary which resulted
in an increase to URIC's loss and loss adjustment expense reserves of 
approximately $8 million.  Based upon minimum capital requirements and 
insolvency provisions of the Texas insurance law, the TDI has indicated that
unless these reserves can be commuted or otherwise modified at an amount 
significantly less than presently stated, the alternative would be to place 
URIC into liquidation.  As discussed further in Note 1, Senate Insurance Comp-
any (Senate), a subsidiary of URIC, and Senate National Life Insurance Company 
(SNLIC), a subsidiary of Senate, were placed under supervision of the Arizona
Department of Insurance on September 19,1996, as a result of Senate's purchase 
of real estate from a former owner and director of the company.  They remain 
under supervision. The above actions raise substantial doubt about the 
Company's ability to continue as a going concern. Management's plans in regard 
to these matters are described in Note 1.  The consolidated financial 
statements and financial statement schedules do not include any adjustments 
that might result from the outcome of these uncertainties.

/s/ Weaver and Tidwell L.L.P.
Fort Worth, Texas
April 9, 1997






               LAWRENCE INSURANCE GROUP, INC.
                 CONSOLIDATED BALANCE SHEETS
                                    ASSETS
                           (SEE NOTES 1 & 2)
                                                                               
                     
                                                                               
                                            
                         
($ in thousands)                                        December 31,   
                                                     -------------------
                                                        1996         1995 
                                                       -------     -------
Investments:
  Fixed maturities available for sale, at 
    fair value (Amortized Cost: 1996 - $9,915,
    1995 - $3,875)                                      9,682        3,921 
  Equity securities, at fair value 
    (Cost: 1996 and 1995 - $997)                          942          941
  Short-term investments, at cost which 
    approximates fair value                             2,862       11,898
  Real estate at cost less depreciation (1996-$19)      2,581           -
  Mortgage loans on real estate, at                               
    aggregate outstanding principal balance               154          171      
  Other invested assets, at cost which
    approximates fair value                               120            4
                                                       -------        ------
    Total investments                                  16,341       16,935
Cash and cash equivalents                                 943        5,688  
Accrued investment income                                 159          475 
Accounts receivable (Net of allowance for 
  doubtful accounts of $0 in 1996 and 1995)             5,279       10,777  
Reinsurance recoverable                                 1,695        5,690
Reinsurance receivable                                  3,891        5,764
Prepaid reinsurance premiums                              243           44  
Deferred policy acquisition costs                          64           68  
Property and equipment, net                                11           23      
Income taxes recoverable                                    5           69 
Other assets                                            1,070          969      
                                                      --------     -------
Total assets                                          $29,701     $ 46,502
                                                       ======       ======
 







  See accompanying notes to consolidated financial statements.






                  LAWRENCE INSURANCE GROUP, INC.
                   CONSOLIDATED BALANCE SHEETS                    
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
                         (SEE NOTES 1 & 2)
                                                                  
($ in thousands)                                         December 31,  
                                                        _ ___________  
                                                       1996       1995  
                                                     -------    -------- 
Liabilities:
  Reserves for losses and loss adjustment
    expenses                                         $26,441   $ 30,974 
  Unearned premiums                                      719        505   
  Reinsurance balances payable                         3,401     11,526
 Accrued expenses and other liabilities                  882        955 
  Payable to affiliate, net                              597        441 
  Income taxes payable                                     2        113  
  Excess of fair value of acquired subsidiaries
    over purchase price                                  459      1,414 
                                                       ------    ------- 
  Total liabilities                                   32,501     45,928 
                                                     -------     ------- 
Contingencies and commitments (Notes 7 & 8)               -          -  
Minority interest                                         -         429     
                                                        ----       ---- 
Stockholders' equity (deficiency):
  Preferred stock, $.01 par value; 2,000,000
    shares authorized; no shares outstanding              -           -  
  Common stock, $.01 par value; 20,000,000
    shares authorized; 14,121,482 shares 
    issued and outstanding                                141        141
  Additional paid-in-capital                           39,739     39,739
  Net unrealized losses on investments                            
    (Net of deferred income tax of $0                             
    in 1996 and 1995)                                    (226)        (8)    
  Receivable from Alpha Trust (Note 3)                     -     (11,004)  
  Accumulated deficit                                 (42,454)   (28,723) 
                                                       -------   --------
    Total stockholders' equity (deficiency)            (2,800)       145 
                                                        ------     ----- 
Total liabilities and stockholders' equity (deficiency)$29,701   $46,502 
                                                        =====      ===== 
   


 See accompanying notes to consolidated financial statements.  
   
               LAWRENCE INSURANCE GROUP, INC.
       CONSOLIDATED STATEMENTS OF OPERATIONS
                            (SEE NOTES 1 &  2 )
 (Amounts in thousands except               Year Ended December 31, 
 per share data)                          -------------------------- 
                                           1996       1995       1994 
                                          --------   --------   --------
Revenues:
  Net premiums earned                     $3,571    $5,533     $5,221     
  Net investment income                    1,648     3,101      3,313       
  Realized (losses) on investments       (12,673)     (743)      (598)  
                                         -------     -----    ------- 
    Total revenues                        (7,454)    7,891      7,936    
Operating expenses:
  Loss and loss adjustment expenses        8,249     5,402      4,019    
  Policy acquisition expenses                  8     1,863      2,068      
  Other operating expenses                 1,519     1,76       1,360 
                                          ------     ------    ------- 
    Total operating expenses               9,776     9,034      7,447     
                                          ------     ------    ------- 
Operating income (loss)                  (17,230)   (1,143)       489   
Equity in loss of non-consolidated                                
   subsidiary                                 -         -      (7,309)          
Equity in (loss) of investee                  -         -        (103) 
                                          ------     ------    -------
Loss before income taxes, minority
  interest and extraordinary gain        (17,230)   (1,143)    (6,923)  
Income tax expense (benefit)                (133)     (282)       168  
                                          ------     ------    ------- 
Net income (loss) before minority                            
  interest and extraordinary gain        (17,097)     (861)    (7,091)  
Minority interest                         (3,366)      219          -   
                                          ------      ------   ------- 
Net loss before extraordinary gain       (13,731)     (642     (7,091)          
Extraordinary gain (net of $0 tax)            -     38,387          -   
                                          ------   --------    ------- 
Net income (loss)                       $(13,731)  $37,745   $ (7,091)   
                                          =====     =====       ===== 
Per share data:
 Income (loss) before                                            
    extraordinary gain                   $ (.97)   $ (.05)   $  (.50)   
  Extraordinary gain                         -       2.72         -        
                                          -------    -------    --------
Net income (loss)                        $ (.97)  $  2.67    $  (.50)
                                            ===       ===        ===
Average shares outstanding                14,121    14,121     14,121 

See accompanying notes to consolidated financial statements






                 LAWRENCE INSURANCE GROUP, INC.
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
         YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
($ in thousands)                                            Net unreal- 
                                                            ized gains  
                                                   Add'l    (losses) on 
                                Preferred Common  Paid-in  investments 
                                 Stock     Stock  Capital   net of tax
                                --------  ------  --------  ---------- 
Balance at January 1, 1994         -        141    39,739       246 
Change in net unrealized gains                               (2,910)
                                 ------   ------  -------    -------      
Balance at December 31, 1994        -       141    39,739    (2,664)
Change in net unrealized losses                               2,656 
                                 ------   ------  -------    -------
Balance at December 31, 1995        -       141    39,739        (8)
Change in net unrealized losses                                (218)
                                 ------   ------  --------   -------
Balance at December 31, 1996    $   -     $ 141  $ 39,739    $ (226)
                                   ===      ===    =====        ===
                                Receivable   Retained Stockholders'
                                  from       earnings    equity
                               Alpha Trust   (deficit) (deficiency)
                                -----------  ----------  -----------
Balance at January 1, 1994          -        (59,377)    (19,251)
Change in net unrealized gains                            (2,910)
Net loss                                      (7,091)     (7,091)
Receivable from Alpha Trust     (27,000)                 (27,000)
                                -------       -------    ------- 
Balance at December 31, 1994    (27,000)     (66,468)    (56,252)
Change in net unrealized losses                            2,656 
Net income                                    37,745      37,745 
Liquidation of subsidiary        15,996                   15,996 
                                 ------      -------     -------- 
Balance at December 31, 1995    (11,004)     (28,723)        145 
Change in net unrealized loss                               (218) 
Net loss                                     (13,731)    (13,731)        
Received from Alpha Trust           713                      713
Writeoff of Alpha Trust          10,291                   10,291  
                                -------     ---------     -------
Balance at December 31, 1996   $     -    $  (42,454)    $(2,800) 
                                  =====       =====        ==== 


See accompanying notes to consolidated financial statements.      







                 LAWRENCE INSURANCE GROUP, INC.
              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                  
($ in thousands)                                    Year Ended December 31, 
                                                    -----------------------
                                                  1996       1995     1994   
                                                -------     -------    -------- 
Operating activities:
 Net income (loss)                              $(13,731) $37,745  $(7,091)  
 Adjustments to reconcile net income  
   (loss) to net cash and cash 
   equivalents used in 
   operating activities:   
 Realized losses on investments                   12,673      743      598      
 Equity in loss of                                                
    non-consolidated subsidiary                       -              7,309      
 Equity in (earnings) loss of investee                -        -       103      
 Minority interest in subsidiary                  (3,366)    (219)      -   
 Extraordinary gain                                   -   (38,387)      -       
 Depreciation and amortization                      (904)  (1,061)  (1,047)     
 Accrued investment income                           315      194     (426)     
 Accounts receivable                               5,498    1,690    3,959     
 Reinsurance recoverable                           3,995    8,018   (3,289)     
 Reinsurance receivable                            1,873    1,557    3,382    
 Prepaid reinsurance premiums                       (199)     424     (111)   
 Deferred policy acquisition costs                     4      220    2,220  
 Income taxes recoverable                            (46)      81    2,503    
 Other assets                                       (101)     454    3,876      
 Reserves for losses and loss 
   adjustment expenses                            (4,533) (16,191) (30,654)   
 Unearned premiums                                   215     (880) (12,880)  
 Reinsurance balances payable                     (8,125)  (1,790)  14,287    
 Accrued expenses and other                       
   liabilities                                        83     (831)    (960)     
                                                   ------   ------   ------ 
   Net cash and cash equivalents
     used by operating activities                 (6,349)  (8,233) (18,221)
                                                  ------   ------  ------- 
 

     See accompanying notes to consolidated financial statements.

              
<PAGE>
                               LAWRENCE INSURANCE GROUP, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                                               
($ in thousands)                                  Year Ended December 31, 
                                                  ----------------------- 
                                                   1996    1995     1994   
                                                 -------  -------    ------- 
Investing activities:
 Proceeds on sales of:                                           
  Fixed maturities held to maturity             $    -    $ 3,179   $     -     
  Fixed maturities available for sale              2,037    5,090     7,760    
  Other                                              739      682         -    
 Proceeds on redemptions of: 
  Fixed maturities held to maturity                  -      3,850         -     
  Fixed maturities available for sale                984      286     2,192    
  Other                                              464      520        -      
 Payments for purchases of:                 
  Fixed maturities available for sale             (9,077)  (2,111) (12,997)
  Real estate                                     (2,600)      -        -
  Other                                             (885)      -    (2,260)
(Increase)decease short-term investments           9,035     (375)  23,144  
                                                   ------   ------  ------ 
  Net cash & cash equivalents provided
    by investing activities                          697     11,121 17,839     
                                                   ------    ------ ------ 
Financing activities:
  Receivable from Alpha Trust                        907         -  (14,000)    
  Notes payable to affiliate                          -         300      -      
                                                   -----     ------ --------
   Net cash and cash equivalents (used)
     provided by financing activities                907        300 (14,000)  
                                                   -----      ------ -------
Increase (decrease) in cash and cash               
  equivalents                                    (4,745)      3,188 (14,382) 
Cash and cash equivalents -
  beginning of year                               5,688       2,500  16,882    
                                                  ------      ------ ------- 
Cash and cash equivalents-end of year           $   943      $5,688 $ 2,500   
                                                   ====        ====    ==== 
Supplemental disclosure of cash flow information:
Cash paid (received) for income taxes               (50)   $     24 $(3,324) 
Non cash financing - elimination of Alpha
  Trust receivable due to liquidation  of subsidiary -      $15,996      -      

   See accompanying notes to consolidated financial statements.

  <PAGE>
           LAWRENCE INSURANCE GROUP, INC.
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               
NOTE 1 - GENERAL

     Lawrence Insurance Group, Inc. (the Company or LIG) was incorporated in 
Delaware on June 30, 1986, as an insurance holding company, which is presently 
93% owned by Lawrence Group, Inc. (Lawrence Group).

     Subsidiaries of the Company include United Republic Insurance Company 
(URIC), Global Insurance Company (Global), Senate Insurance Company (Senate), 
Senate National Life Insurance Company (SNLIC), and Senate Syndicate, Inc.
(Syndicate).  Senate and Global are wholly owned subsidiaries of URIC.  SNLIC 
is a wholly owned subsidiary of Senate.  United Community Insurance Company 
(UCIC) is no longer considered a subsidiary of the Company as a result of the 
Order of Rehabilitation issued on July 7, 1994 which transferred management 
and control to the New York Insurance Department (NYID) and the subsequent 
Order of Liquidation entered on November 10, 1995 by the New York Supreme 
Court, Schenectady County.  URIC and Global, which are property and casualty 
insurance companies, had been in run-off since early 1994. Global resumed 
writing business during the fourth quarter 1996. Senate is an accident and 
health insurer doing business almost exclusively in New York.  SNLIC and 
Syndicate are inactive.

(a)  BASIS OF PRESENTATION
     
     The consolidated financial statements  include the accounts of LIG and all 
wholly owned subsidiaries (collectively, the Company).  All significant 
intercompany transactions have been eliminated in consolidation.  Amounts 
include the financial results of UCIC through the date of the Order of 
Rehabilitation on an unconsolidated basis, that is results of operations are 
reflected as "Equity in loss of non-consolidated subsidiary" and the Company's
investment as "Deficit of non-consolidated subsidiary".  The Company continued 
to reflect this liability until UCIC was entered into liquidation on November
10, 1995. See Note 2. 

     The accompanying financial statements have been prepared assuming the 
Company will continue as a going concern.  The Company incurred substantial 
losses in 1993 and 1994 and 1996 and even though UCIC's stockholder's 
deficiency has been eliminated, the Company's subsidiaries continue to be 
adversely impacted by UCIC's demise.

     URIC had been under a confidential order of supervision by the Texas 
Department of Insurance (TDI) since June, 1994, until its release on August 25,
1995.  As a condition to the release of the order the Company agreed to 
achieving certain financial goals.  The financial goals included increasing 
statutory surplus to $8 million at December 31, 1995.  The statutory surplus 
as filed with the TDI at December 31, 1995 was $6.6 million and $3.6 million 
at December 31, 1996.  These amounts did not include the effect of the loss and
LAE adjustments of approximately $7 million and $4 million at December 31, 
1996 and 1995, respectively, described under (e) of Note 1. The TDI could 
have placed URIC under conservatorship at any time.  Under conservation, the 
TDI assumes all control and decision making authority during the rehabilitation
period.  On February 28, 1997, as a result of the bankruptcy filing by LIG's 
parent and eleven of its subsidiaries the TDI did place URIC into 
conservatorship. Under Texas insurance regulations an insurance company can 
remain in conservatorship 180 days before other action must be taken.  
Subsequent to the filing of URIC's 1996 Statutory financial statement which 
reflected policyholder surplus of $3.5 million, the Company received reports 
from its actuary that the loss and LAE reserves related to pooling with UCIC 
could be between $6 million and $8 million higher than reported on URIC's 
statutory statement.  This information has been received by the TDI.  Based 
on minimum capital requirements and insolvency provisions of the Texas 
insurance law, the TDI has indicated that unless these reserves can be commuted
or otherwise modified at an amount significantly less than presently stated the
alternative would be to place URIC in liquidation.          
 
     Senate and SNLIC were placed under supervision of the State of Arizona 
Department of Insurance (ADI) on September 19, 1996 as a result of Senate's 
purchase of real estate from Barbara Lawrence (a former director and owner of
the Company) and concern over whether the ultimate parent (LGI) obligations 
could be met without utilizing the assets of Senate and SNLIC.  They remain 
under supervision.     
    
    In addition, liquidity for the parent company has deteriorated significant-
ly and is expected to remain in that condition as its principal source of cash 
was dividends from its subsidiaries.     
   
     Company management continues to work with the respective insurance 
departments on these and other issues and during the fourth quarter of 1996 
Global was permitted to resume writing business.  In addition,  the Company 
has also filed suit against its former outside accountant and actuary seeking
to recover damages for breach of contract and inaccurate certifications of the 
Company's 1992 and prior loss and loss adjustment expense (LAE) reserves. The
amount being sought is $250 million.  The litigation is in its early stages.
     
     The accompanying consolidated financial statements are presented in 
accordance with generally accepted accounting principles, which differ in 
certain respects from those followed by subsidiaries of the Company in their 
reports to regulatory authorities.  See Note 8.  The preparation of financial 
statements in conformity with generally accepted accounting principles 
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and 
liabilities at the dates of the financial statements and the reported amounts
of revenues and expenses during the reporting periods. Actual results could 
differ from those estimates.

     Certain amounts in the accompanying 1995 and 1994 consolidated financial 
statements have been reclassified to conform with the 1996 presentation.  These
reclassifications have no effect on consolidated net income (loss) or 
stockholders' equity (deficit).  

(b)  INVESTMENTS

     Fixed maturities, which consist of bonds and notes, are presented as Fixed
Maturities Available for Sale. Securities to be held for indefinite periods of
time and not intended to be held to maturity are classified as available for 
sale and carried at fair value.  Unrealized gain or losses on securities 
carried at fair value are recorded directly in stockholders' equity, net of 
applicable deferred income tax.  The estimated fair value of financial 
instruments has been determined using available information and appropriate 
value methodologies. The estimated fair value of financial instruments are not 
necessarily indicative of the amounts the company might pay or receive in 
actual market transactions. Potential taxes and other transaction costs have 
not been considered in estimating fair value.  

    Equity Securities, which consist of common stock are carried at fair value.
Negotiable certificates of deposit are carried at cost which approximates fair 
value. Mortgage Loans on Real Estate are recorded at their aggregate 
outstanding principal balance; and Short-Term Investments are stated at cost 
which approximates market.  Short-Term Investments consist primarily of 
commercial paper, repurchase agreements with banks and other financial 
institutions and treasury bills. Collateral loans are carried at cost which 
approximates fair value.  Real estate is carried at depreciated cost which 
approximates fair value. Other Invested Assets, are carried at fair value.
See Note 3. 

     Realized gains and losses on disposition of investments are reported in 
the Statement of Operations based upon the average cost method.  Unrealized 
gains and losses on securities carried at fair value are recorded directly in
stockholders' equity, net of applicable deferred income taxes.  Provision for 
impairments of investments that are considered other than temporary is 
included in realized capital loss.  See Note 3.

(c)  CASH AND CASH EQUIVALENTS

     The Company considers cash to be funds held in checking and money market 
accounts. Non-negotiable certificates of deposit with original maturity less 
than thirty days are considered to be cash equivalents. 

(d)  DEFERRED POLICY ACQUISITION COSTS

     The costs of acquiring new business, principally commissions and premium 
taxes are deferred and amortized as the related premiums are earned. The method
used in computing deferred acquisition costs limits the amounts of such 
deferred costs to their net realizable value based upon the related unearned 
premiums and investment income less anticipated losses and loss adjustment 
expenses.  The amortization of deferred acquisition costs results in a charge
against current operations as follows:
     ($ in thousands)                             1996       1995      1994  
                                                 -----    -------   ------- 
  Direct commission expense                     $ (43)    $ 1,803   $1,962 
  Premium taxes                                    51          60      106 
                                                  -----    ------   ------ 
                                               $    8     $ 1,863   $ 2,068 
                                                   ===       ====      ==== 
                                                          
     On the accompanying Consolidated Statements of Operations, commissions 
and premium taxes are presented as Policy Acquisition Expenses.
                                                          
(e)  RESERVES FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

     Reserves for losses and loss adjustment expenses (LAE) represent estimates
of reported losses and estimates of incurred but not reported (IBNR) losses 
based on past and current experience.  Such liability is net of salvage and 
subrogation to be received, and is increased for reinsurance assumed.  To the 
extent claims settlement underlying the recent losses and LAE may differ 
perhaps significantly from those underlying the historical losses and LAE, this
adds uncertainty to the estimated reserves for loss and LAE.  Accordingly, the 
ultimate settlement of losses and LAE may vary perhaps significantly from the
amounts included in the accompanying financial statements. 

     As discussed in Note 4, URIC has a reinsurance pooling arrangement with 
UCIC.  UCIC has provided the Company with estimates of URIC's share of its 
reserve for loss and LAE under the pooling agreement of approximately $12.5
million as of December 31,1996 and $12 million as of December 31, 1995.  URIC 
had included approximately $5.5 and $8 million of these amounts in its 
statutory financial statements for the years ended December 31,1996 and 1995,
respectively. The Company's independent actuary certified URIC's 1995 loss 
and LAE reserves of which this was a part. For 1996, URIC's actuary could not
form an estimate of the impact of this pooling agreement on URIC's reserves at
the time the statement was filed.  The Company has included approximately $12.5
million and $12 million of these amounts in the accompanying balance sheets as 
of December 31, 1996 and 1995, respectively. The recording of the UCIC esti-
mates for loss and LAE had the effect of decreasing the Company's net income 
and stockholders' equity by approximately $3.2 million for 1995 and $3.7 
million for 1996.  The following table provides a reconciliation of the 
Company's beginning and ending loss and LAE liability balances for 1996, 1995 
and 1994:  

                                                  Year Ended December 31, 
                                                ------------------------- 
  ($ in thousands)                               1996      1995    1994  
                                               ------    -------  ------- 
  Reserves for losses and LAE                       
    at January 1,                               $30,974 $ 47,165 $ 78,518 
     Less reinsurance receivable                  5,764    7,320   10,701 
                                                 ------   ------   ------ 
      Net balance at January 1                   25,931   39,845   67,817 
  Provision for losses & LAE for claims
    occurring in the current year                 2,328    2,926    7,332 
  Increase (decrease) in estimated 
    losses and LAE for claims      
    occurring in prior years                      5,921    2,476   (3,313) 
                                                  ------  ------   ------- 
      Total incurred losses and LAE               8,249    5,402    4,019 
                                                  ------  ------   ------- 
  Losses and LAE payments for claims
     occurring during:
                                                  Year Ended December 31, 
                                                 ------------------------- 
  ($ in thousands)                                1996      1995      1994  
                                                 ------    -------     -------
       Current year                              1,591      1,772      4,555 
       Prior years                               9,318     18,265     27,436 
                                                -------    -------   -------- 
       Total losses and LAE payments            10,909     20,037     31,991 
                                               -------    -------    ------- 
  Net reserves for losses and LAE                  
    at December 31,                             22,550     25,210     39,845 
  Reinsurance receivables                        3,891      5,764      7,320   
                                               --------    ------    ------- 
  Gross reserves                              $ 26,441    $30,974    $47,165 
                                                 ====      =====      ===== 

(f)  PREMIUM REVENUE
 
    Premium revenue, which is net of reinsurance ceded, is recognized as earned
on a pro rata basis over the terms of the policies and includes audit premiums 
and estimates for retrospectively rated premiums.  Accident/health unearned
premiums are calculated on a monthly basis.  Unearned premiums on the remaining 
lines of business are calculated on a monthly pro rata basis. 

(g)  AMORTIZATION OF EXCESS OF FAIR VALUES OF ACQUIRED SUBSIDIARIES OVER 
PURCHASE PRICES

     The excess of the fair value of the net assets of URIC and Global over the
respective purchase prices at the dates of acquisition is being amortized on 
the straight-line basis over a period of seven years.  Amortization in the 
amount of $954,000 for 1996 and $1,094,000 for 1995 and 1994 is reflected in
the accompanying Consolidated Statements of Operations as a reduction of Other
Operating Expenses.

(h)  INCOME TAXES

     The Company and its subsidiaries are included in the consolidated Federal 
income tax return of Lawrence Group.  The current income tax provision has been
computed as if each company filed a separate return.  See Note 6.

      Deferred tax assets and liabilities are recognized for the future tax 
consequences attributable to differences between the financial statement 
carrying amounts of existing assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax 
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.  The effect on deferred 
tax assets and liabilities of a change in tax rates is recognized in income 
in the period that includes the enactment date. 

(I)  EARNINGS PER SHARE

     Net income (loss) per share is calculated by dividing net income (loss) by
the weighted average number of shares outstanding during the period.

NOTE 2 - NON-CONSOLIDATED SUBSIDIARY

     As a result of the order of rehabilitation and assumption of management and
control of UCIC on July 7, 1994 by the NYID, the Company has included the 
results of UCIC for 1994 on a deconsolidated basis up to the point of the 
court order.  On November 10, 1995 UCIC, with the Company's consent, was 
ordered liquidated and as a consequence the Company has no further legal or 
financial interest in UCIC except for any contractual arrangements that arose 
in the ordinary course of business and any tax consequences that may result 
from UCIC's continued inclusion in the consolidated federal income tax return. 

     The following table presents condensed financial information for UCIC 
through July 7, 1994. Amounts exclude the effect of eliminating UCIC's 21.4% 
ownership of URIC which is included in the "Deficit of non-consolidated 
subsidiary" and "Equity in loss of non-consolidated subsidiary" on the balance 
sheet and statement of operations, respectively for 1994 and as "Minority 
interest" for 1996 and 1995.                                                    
  
   ($ in thousands)                              As of and for the period: 
                  (Unaudited)                    January 1 to July 7,1994      
                                                 ----------------------------   
  Cash and invested assets                             $  50,872   
  Amounts due from reinsurers                             48,990   
  Premiums receivable                                      1,808    
  Deferred policy acquisition expenses                     3,424   
  Other assets                                             5,626       
                                                          ------        
  Total assets                                         $ 110,720   
                                                         =======     
   Reserves for loss and LAE expenses                   $132,201      
  Unearned premiums                                       18,249    
  Amounts due to reinsurers                               17,221   
  Other liabilities                                          670               
                                                         -------   
          Total liabilities                              168,341       
  Stockholder's deficiency                               (57,621)               
                                                         -------  
  Total liabilities and stockholders' deficiency       $ 110,720               
                                                          ======    
 Revenues                                             $   43,959   
 Operating loss                                           (3,531)    
 Net loss                                                 (7,307)      
                   
     In the fourth quarter of 1995 the Company recorded the following to 
eliminate the stockholder's deficiency carried for UCIC and record minority
interest:
    Extraordinary gain                                  $  38,387
    Minority interest                                         429
    Stockholders's equity-
    Receivable from Alpha Trust                            15,996
    Unrealized loss on investments                          1,953
    Deficit of non-consolidated subsidiary                (56,765)
 
     In January 1994, UCIC loaned $13,000,000 to the Alpha Trust, a business 
trust, which in turn invested in notes issued by Lawrence Group, which owns 93%
of LIG.  This loan and unrealized losses on investments for the period January
1, 1994 to July 7, 1994, is included in the Company's statement of 
stockholders' equity for the year ended December 31, 1994. 

NOTE 3 - INVESTMENTS

     Net investment income for the Company was as follows:
                                                                  
         ($ in thousands)                   Year Ended December 31,
                                            -----------------------
                                             1996      1995      1994 
                                           ------    ------      ------ 
  Investment income:
  Fixed maturities held to maturity        $    -    $  237     $  531 
  Fixed maturities available for sale          492      433        538 
  Equity securities                             52       55         46 
  Short-term investments                       382      778        786 
  Collateral loans                             712    1,514      1,258
  Mortgage loans on real estate                 14       15         19 
  Other                                         40      119        166 
                                             -----     -----     ----- 
    Total investment income                  1,692    3,151      3,344 
  Less:  Investment expenses                    44       50         31 
                                             -----    -----      ------ 
         Net investment income              $1,648   $3,101   $  3,313 
                                              ====     ====       ==== 
     Realized gains (losses) on investments of the Company were:
        
       ($ in thousands)                   Year Ended December 31,
                                        -------------------------- 
                                              1996    1995     1994 
                                            -----     -----    -----
   Fixed maturities held to maturity         $   -   $  203    $   -  
   Fixed maturities available for sale         (7)     (249)      (95) 
   Equity securities                          739        -       (503) 
   Collateral loans                             -      (683)       - 
   Other invested assets                     (313)      (14)       -
   Receivable from Alpha Trust            (13,092)        -        -   
                                           ------      -----    ----- 
     Net realized losses 
      on investments                     $(12,673)  $  (743)   $ (598)
                                           ======      ====     ===== 

      Proceeds from the sale of fixed maturities held to maturity with an 
amortized cost of $2,976,000 were $3,179,000 in 1995. Gross gains were 
$203,000.  There were no losses.  These securities were sold to meet cash
requirements.  Based upon the circumstances leading to the sale of held to 
maturity securities in 1995, all remaining investments which were classified
as held to maturity were transferred to available for sale.  The amortized cost
of the investments were $795,000 with unrealized gains of $14,000 at the date 
transferred. There were no sales of securities held to maturity in prior years.

     Proceeds from sales of fixed maturities available for sale during 1996, 
1995 and 1994 were $2,037,000, $5,090,000 and $7,760,000, respectively.  Gross 
gains of $0, $37,000 and $0, for 1996, 1995 and 1994, respectively, were 
realized on those proceeds.   Gross losses of $7,000, $286,000 and $95,000 for 
1996, 1995 and 1994, respectively were realized.

     Based upon the default in 1996 and subsequent bankruptcy filing of LGI and
eleven of its subsidiaries, the Company charged off  to operations the unpaid 
balance of the Receivable from Alpha Trust that was carried as a contra account
in Stockholders' Equity.  There was no impact on overall stockholders' equity 
as a result of this action.
    
     The amortized cost and estimated fair values of the Company's investments 
which are all classified as available for sale at December 31, 1996 are as 
follows:
        
  ($ in thousands)              ------ Gross ------          Esti-
                                  Amort-   Unrealized         mated
                                   ized     ----------         Fair
                                   Cost   Gains  Losses       Value
                               ------     ------ ------      ------
  Fixed maturities   
  US Treasury securities and                                      
    obligations of US government                                  
    corporations and agencies      $5,018  $ 17 $    1       $ 5,034
  Obligations of states and                                       
    political subdivisions            567     7      -           574
  Mortgage-backed securities        4,330     -    256         4,074
                                   ------   ----  -----        ------
  Total fixed maturities            9,915    24    257         9,682
  Equity securities                   997     -     55           942
  Short term investments            2,862     -     -          2,862
  Real estate                       2,581     -     -          2,581
  All other                           274     -     -            274
                                   ------   ----   ----       ------
 Investments available for sale   $16,629   $ 24  $ 312      $16,341
                                   ======    ===    ===       ======
                                                                   
     The amortized cost and estimated fair values of the Company's investments 
as of December 31, 1995 are as follows:
 
        ($ in thousands)                          ------- Gross ------  Esti-
                                             Amort-   Unrealized       mated
                                              ized     ----------       Fair
                                              Cost  Gains   Losses      Value
                                            ------  ------  ------      ------
Available for sale:
  Fixed maturities   
  US Treasury securities and                                      
    obligations of US government                                  
    corporations and agencies              $ 2,336 $  22    $  -      $ 2,358
  Obligations of states and                                       
    political subdivisions                     590    13       -          603
  Mortgage-backed securities                   949    11       -          960
                                             ------  ----   ----       ------
   Total fixed maturities                                        
      available for sale                      3,875   46       -        3,921
  Equity securities                             997   -       56          941
  Short term investments                     11,898   -        -       11,898
  All other                                     175   -        -          175
                                             ------   ----    ----     ------
   Total investments available 
      for sale                              $16,945  $  46  $  56     $16,935
                                              =====     ==     ==       =====
     The amortized cost and estimated market value of fixed maturities at 
December 31, 1996 and 1995 , by contractual maturity, are shown below.  
Expected maturities will differ from contractual maturities because borrowers 
may  have the right to call or prepay obligations with or without call or 
prepayment penalties. Mortgage-backed securities are stated separately as such 
securities produce a principal return on a monthly basis. Fixed maturities 
available for sale are carried at fair value.
                                                    December 31, 1996   
         ($ in thousands)                            Fixed maturities    
                                                    Available for sale
                                                    ------------------ 
                                                   Amortized    Estimated 
                                                      Cost      Fair value
                                                   -------       --------
  Due in one year or less                          $ 3,335       $ 3,343 
  Due after one year through five years              2,145         2,158 
  Due after ten years                                  105           107 
                                                    ------        ------ 
     Subtotal                                        5,585         5,608
  Mortgage-backed securities                         4,330         4,074
                                                     ----          ----- 
     Total                                          $9,915        $9,682 
                                                     =====         ===== 

                                                      December 31, 1995   
         ($ in thousands)                               Fixed maturities    
                                                       Available for sale
                                                       ------------------ 
                                                     Amortized    Estimated 
                                                       Cost        Fair value
                                                    -------        --------
  Due in one year or less                            $ 2,286       $ 2,301 
  Due after one year through five years                  150           155 
  Due after five years through ten years                 385           396 
  Due after ten years                                    105           109 
                                                       ------        ------ 
     Subtotal                                          2,926         2,961 
  Mortgage-backed securities                             949           960 
                                                       -----         ----- 
     Total                                            $3,875        $3,921 
                                                         ====        ==== 
    At December 31, 1996 and 1995, bonds and short-term investments with a 
carrying amount of $3,704,000 and $4,695,000, respectively, were on deposit 
with various regulatory authorities. 

   At December 31, 1996, the Company wrote down $545,000 in amounts due from 
affiliates as a result of the bankruptcy filing by LGI and certain of its 
subsidiaries.

NOTE 4 - REINSURANCE

     Reinsurance is ceded under both pro rata and excess of loss arrangements.
The Company utilizes reinsurance principally to reduce the net liability of its
subsidiaries on individual risks and to protect against catastrophic losses.

     In addition to a quota share treaty with UCIC, URIC and UCIC also had a 
pooling agreement in effect during 1992 and 1993.  The agreement was terminated
effective January 1, 1994; however, each company is responsible for its share
of all premium, losses and LAE incurred prior to that date.  At December 31, 
1996, URIC had a net liability to UCIC under these reinsurance agreements of 
approximately $10.6 million.   
    
     Senate reinsures a portion of its exposure on a quota share/excess of loss
basis and Global reinsures the business that it began writing during the fourth
quarter utilizing quota share reinsurance.
  
     Premiums written, premiums earned and losses and loss adjustment expenses 
information by  direct, assumed and ceded for the years ended December 31 is as
follows: 
      ($ in thousands)                         1996    1995     1994  
                                             ------   ------  -------- 
   Premiums written:                      
     Direct business                        $4,417  $ 5,374  $  9,257 
     Reinsurance assumed                       353    1,281   (12,172) 
     Reinsurance ceded                      (1,280)  (1,520)   (4,855)
                                             -----   ------   ------- 
       Premiums written                     $3,490  $ 5,135  $  7,770 
                                             ====      ====     ==== 
   Premiums Earned:
     Direct business                        $4,288  $ 5,444  $  9,515 
     Reinsurance assumed                       365    2,091       451 
     Reinsurance ceded                      (1,082)  (2,002)   (4,745)
                                             -----    -----    ------ 
       Premiums earned                      $3,571  $ 5,533   $ 5,221 
                                             =====     ====     ==== 
   Losses and LAE
     Direct business                        $2,854  $ 4,292  $  3,646 
     Reinsurance assumed                     6,211    3,510     4,054 
     Reinsurance ceded                        (816)  (2,400)   (3,681)
                                             -----    -----     ------ 
         Losses and LAE                     $8,249  $ 5,402  $  4,019 
                                             ====      ====      ==== 
                             
    Contingent liabilities exist with respect to reinsurance ceded, which would
become liabilities of the Company in the event the assuming reinsurers were 
unable to meet their obligations under reinsurance agreements.  The Company
evaluates the financial condition of its reinsurers to minimize its exposure 
to losses and an allowance for uncollectible reinsurance is provided when 
collection is in doubt.

NOTE 5 - INCOME TAXES

     The Company's current taxable income is included in the consolidated 
Federal tax return of Lawrence Group.  The consolidated tax or benefit is 
allocated proportionately between the subsidiaries of Lawrence Group pursuant
to a tax allocation agreement (Tax Agreement) based on the contribution of each
company in the consolidated Federal tax return as if each company calculated 
its tax on a separate return basis.  The Tax Agreement provides that if the 
Company's tax liability as calculated on a separate return basis exceeds the 
Company's portion of the consolidated tax liability, the Company is to pay 
the excess of the separate return liability over its allocated portion of the
consolidated tax liability to Lawrence Group.  If the Company should have a
claim for refund of Federal income taxes, Lawrence Group will pay to the 
Company an amount equal to the refund that would have been received from the 
Internal Revenue Service if a separate return would have been filed.  In 1994, 
approximately $2,900,000 of income tax recoveries was paid by Lawrence Group
to the Company.

     At December 31, 1996, the Company had a net recoverable for income taxes 
of $5,000 for state income taxes. 
    
   Income tax expense (benefit) attributable to income from operations consists
of:
                                                                
         ($ in thousands)                 1996    1995    1994  
                                          ------  ------    ------
      Current U.S. Federal              $ (108)  $  (307)   $   -
      Current State                        (25)       25      168 
                                          -----     -----    ----- 
          Total current                   (133)     (282)     168
                                          ----      -----     ----- 
       Total income taxes (benefit)     $ (133)   $ (282)   $ 168 
                                           ===       ===      ===
     Income tax expense (benefit) attributable to pretax operating income 
(excluding equity in loss of non-consolidated subsidiary) differed from the 
expected amounts computed by applying the U.S. Federal income tax rate of 34%
as a result of the following:
                                                  Year Ended December 31, 
                                                  ----------------------- 
     ($ in thousands)                               1996    1995    1994  
                                                    ------  -----  -------- 
    Computed expected Federal tax          
      expense (benefit)                          $(5,858)  $ (389)  $   131
    State income taxes, net of Federal
      income tax benefit                             (17)      17       109
    Change in valuation allowance                  6,198      702       105 
    Amortization of negative goodwill               (324)    (372)     (372)
    Tax exempt investment income                      (9)     (17)      (44)
    Amortization of bonds                             -         -       (11)
    Other, net                                      (123)     (223)     250
                                                   -----      ----     ------ 
      Total income tax expense (benefit)          $ (133)   $ (282)  $  168
                                                     ===       ===      ===
 
     The tax effects of the Company's temporary differences that give rise to 
significant portions of the deferred tax assets and liabilities at December 31,
1996 and 1995 (excluding those associated with its non-consolidated 
subsidiary) are presented below:
        ($ in thousands)                            1996       1995 
                                                   ------     ------ 
     Deferred tax assets:
       Reserves for losses, due to discounting
         for Federal tax purposes                 $   1,291  $  1,563
       Tax loss carryforwards                        12,477     5,394
       Valuation allowances on investments              131       924
       Other                                            152        87
                                                       -----     ----- 
          Total gross deferred tax assets            14,051     7,968
                                                      -----     -----
     Deferred tax liabilities:
       Deferred policy acquisition costs,
         principally due to deferral for 
         financial reporting purposes                   (26)      (27)     
      Loss deferred on intercompany sale                (23)       -  
      Equity in undistributed (losses) of investee       -       (137)
                                                        -----     ----- 
          Total gross deferred tax liabilities          (49)     (164)

           ($ in thousands)                             1996       1995 
                                                       ------     ------ 
 Net deferred tax asset before                                
         valuation allowance                            14,002    7,804     
     Less valuation allowance                          (14,002   (7,804) 
                                                         -----     ----- 
     Net deferred tax asset                           $    -      $    - 
                                                         =====     ===== 
      
      A valuation allowance is provided when it is more likely than not that 
some portion of the deferred tax asset will not be realized.  The Company's 
valuation allowance for deferred tax assets was $14,002,000 at December 31, 
1996. The Company's conclusion is that more likely than not, it will not 
realize the benefit of all of its deductible temporary differences and net 
operating loss carryovers and as a result has maintained a full valuation 
allowance against its net deferred tax assets.  

     The Company has approximately $85 million in net operating loss carry 
forwards at December 31, 1996, of which approximately $46 million attributable 
to the non-consolidated subsidiary, UCIC, may be limited in their availability 
to offset future taxable income of the Company.  The net operating loss 
carryforwards begin to expire in 2008.

NOTE 6 - RELATED PARTY TRANSACTIONS

     URIC, Global and Senate with the approval of the requisite state insurance
departments sold their shares of MTI stock to LGI for $739,000 in 1996.  The 
carrying value of  the stock had previously been written down to $0 in 1994.

     Since August 1996, Global has subleased office space located in Atlanta, 
Georgia to LAC. Annual rent is $30,000.

     The Company's subsidiaries held various notes receivable and other 
receivables from various Lawrence Group affiliates at December 31, 1996.  Based
upon the bankruptcy filing the Company has established a valuation allowance
totaling $545,000. Interest income earned with respect to these receivables 
totaled $9,000, $11,000 and $40,000 for the years ended December 31, 1996, 1995
and 1994, respectively.  The Company also had a note receivable at December 31,
1996 due from a corporation owned by Mr. Lawrence in the amount of $120,000. 
Interest earned was 16,000.  

     Senate obtains a significant portion of its business from LAC to which it 
pays commissions.  These commission expenses totaled $525,000, $605,000 and 
$963,000 in 1996, 1995 and 1994, respectively.  LAC pays a portion of these
to external brokers and subagents.  Senate also pays AWL for management 
services associated with Senate business.  These payments were $76,000, $74,000
and $60,000 for 1996, 1995 and 1994, respectively.

     URIC loaned $14,000,000 to Alpha Trust which in turn invested in notes 
issued by Lawrence Group, which owns approximately 93% of the Company during 
1994.  Principal payments totaling $908,000 were made during 1996.  The loan is
currently in default and LGI filed for protection under Chapter 11 of the 
Federal Bankruptcy Law.  Based on the above, the remaining balance was written 
off in 1996.  There was no impact on stockholder's equity.  
     
     At December 31, 1996, URIC carried a note payable due to LGI of  $300,000.
Interest is at 8%.  LIG had received advances of $210,000 from affiliates which
were outstanding at the end of 1996. 
  
NOTE 7 - STATE EXAMINATIONS, DIVIDEND RESTRICTIONS, INSURANCE DEPARTMENT
REGULATIONS AND RELATED LEGAL PROCEEDINGS 

     The Texas Department of Insurance (TDI) conducted its regular examination 
of URIC as of March 31, 1993.  TDI issued their audit report on May 25, 1994.  
On June 22, 1994, the TDI issued a confidential order creating a state of 
supervision and appointing a supervisor of the operations of URIC.  The order 
was based upon disagreements with valuations of several assets, chief among 
them Alpha Trust, in financial statements filed by URIC with the TDI and upon 
net operating losses reported during the first quarter of 1994. On August 25, 
1995 URIC was released from this order conditioned upon it achieving certain 
minimum policyholders' surplus and other goals.  If URIC did not achieve these 
goals the TDI could place URIC into conservatorship.  Under conservatorship the
TDI would assume all control and decision making authority during the period of
conservatorship.  As of December 31, 1995, URIC had not achieved all of these
goals.  On February 28, 1997 as a result of the bankruptcy filing by LIG's 
parent and  other affiliates the TDI placed URIC under Conservatorship.  Under 
Texas insurance regulations an insurance company can remain in conservatorship
180 days before other action must be taken.  Subsequent to the filing of URIC's
1996 Statutory financial statement which reflected policyholder surplus of $3.5
million, the Company received reports from its actuary that the loss and LAE
reserves related to pooling with UCIC could be between $6 million and $8 
million higher than reported on URIC's statutory statement.  This information 
has been received by the TDI.  Based on minimum capital requirements and 
insolvency provisions of the Texas insurance law, the TDI has indicated that 
unless these reserves can be commuted or otherwise modified at an amount 
significantly less than presently stated the alternative would be to place 
URIC in liquidation.          

     On September 19,1996 the State of Arizona Department of Insurance (ADI) 
issued a Notice of Determination and Order of Supervision for Senate and SNLIC.
This Order arose over Senate's purchase of real estate from a former officer
and director and the subsequent loan of these proceeds to LGI.  The Order could
be abated upon demonstrating that the purchase was fair and reasonable and 
complies with applicable Arizona statutes and that Senate's controlling 
persons can meet their financial obligations without utilizing the assets of 
Senate or SNLIC except for dividends.  If the Company should be unable to 
satisfy these items the ADI could place either or both companies under 
conservatorship.  A hearing had been scheduled for November 18, 1996 but has
been postponed at the request of the ADI.

     The NYID completed an examination of UCIC for the years 1989 through 1993 
in 1994 and found UCIC to be insolvent, its capital impaired and a shortfall of
$37,624,941 in its required surplus to policyholders at December 31, 1993.
As a result of that examination UCIC was placed in rehabilitation on July 7, 
1994 and following continued discussions and negotiations between the Company 
and the NYID, UCIC with the consent of the Company was placed into liquidation
by court order on November 10, 1995.  As  part of the order, the Company, its 
directors, officers and employees were relieved of any liability for the 
deficit of UCIC except for obligations incurred in the ordinary course of 
business or due to fraudulent acts.  URIC was also given the right of first 
refusal to purchase the shares of its stock owned by UCIC. 
     
     Global, Senate and SNLIC underwent their regular examinations as of 
December 31, 1993, by the respective insurance departments.  The reports showed
no material findings. 
     
     The NAIC, which is not itself a regulatory authority but makes recommend-
ations to and takes other actions affecting state regulatory authorities, 
adopted a Risk-Based Capital (RBC) standard in the fourth quarter of 1993 for 
use by state insurance regulators.  RBC is intended to be a "tool" for 
regulators to assess the capital adequacy of property and casualty insurers and
to take action when capital under the standard is judged to be inadequate.  
This standard has four action levels based upon the relationship of actual 
capital to RBC.  The mildest action occurs at a level of 2.5:1.  Based upon the
RBC standards developed by the NAIC,  all consolidated subsidiaries capital 
except URIC exceeded the authorized control level RBC by a substantial margin.
URIC's ratio was .9:1.  URIC is currently under more stringent requirements 
than those imposed by the RBC standards. 
                                                      
     Insurance regulations of the states in which the Insurance companies are 
domiciled limit the level of dividends that can be paid without the approval of
the respective departments.  Dividends can only be paid out of earned surplus 
and are generally based a  the component of net income or similar measure or 
10% of statutory surplus.  Based upon 1996 results only SNLIC could pay a 
dividend.  Its maximum dividend payable to SIC in 1997 is $20,000.

     Net income (loss) and policyholders' surplus of UCIC, URIC, Global, Senate
and SNLIC as filed with insurance regulatory authorities, are as follows:
                                                       
                         STATUTORY NET INCOME (LOSS) 
     ($ in thousands)     (Unaudited)        Year ended December 31, 
                                            ------------------------
                                           1996      1995     1994 
                                          ------      ------      ------ 
 United Republic Insurance Company       $ (1,929) $   631   $     75 
 Global Insurance Company                    (993)    (290)    (1,488)
 Senate Insurance Company                    (244)     134        731 
 Senate National Life Insurance Company        13       10        (11) 

                       POLICYHOLDERS' SURPLUS 
       ($ in thousands)    (Unaudited)            December 31
                                              --------------------  
                                                 1996       1995    
                                               ------       ------  
     United Republic Insurance Company (1)    $  3,552    $  6,611
     Global Insurance Company                    3,540       3,429           
     Senate Insurance Company                    1,705       4,705            
     Senate National Life Insurance Company        616         654    
 
         (1)  Does not include 7,818,000 and $4,000,000 in loss and LAE expense
for 1996 and 1995, respectively.  See Note 1
    
      Statutory accounting differs from GAAP primarily as follows:
 (1) the costs related to acquiring business are charged to income in the year 
incurred and thus are not amortized over the periods benefitted, whereas the 
related premiums are taken into income on a pro rata basis over the periods 
covered by the policies;  (2) adjustments reflecting the equity in earnings 
of affiliated companies are carried to the surplus account as net unrealized 
capital gains or losses rather than income;  (3) adjustments reflecting the
revaluation of  stocks and bonds are carried to the surplus account as 
unrealized investment gains or losses, without provision for federal income
taxes, or income tax reductions;  (4) assets must be included in the statutory 
statements of admitted assets, liabilities, and surplus at "admitted asset 
value" and "non-admitted assets" are excluded through a charge against surplus;
(5) deferred federal income taxes are not provided for temporary differences 
between book and tax income; (6) certain income and expense items are charged 
or credited to surplus; (7) majority owned subsidiaries are not consolidated; 
(8) no provision is made for the effect of Financial Accounting Standards Board 
Statement No. 115, whereby equity securities that have readily determinable 
fair values and all investments in debt securities are classified into three 
categories: held to maturity; trading; and available for sale; and would be
reported in the financial statements at amortized cost; fair value, with 
unrealized gains and losses included in earnings; fair value, with unrealized 
gains and losses excluded from earnings and reported as a separate component of
surplus, respectively; and (9) insurance liabilities (reserves for policy 
and contract claims and loss and LAE and unearned premium) are presented net of
reinsurance ceded.  

NOTE 8 - CONTINGENCIES AND COMMITMENTS

     The Company leases office space and equipment under various terms. The 
Company has no material leases with terms in excess of one year.   Rent expense
under leases for office space was approximately $67,000, 62,000 and $56,000 
for 1996, 1995 and 1994.  Amounts due for future lease payments with terms 
beyond one year are $50,000, $50,000 and$29,000 for 1997, 1998 and 1999, 
respectively.
 
     The Company is a defendant in other legal proceedings which Management 
believes will not have a material impact on the Company's financial statements.
Management is defending these cases.  As a result of a unpaid judgment against 
LIG and two other co-defendants, LIG's bank accounts have been frozen. 

     The Company had outstanding letters of credit in favor of insureds of 
approximately $1,048,000 and $1,300,000 at December 31, 1996 and 1995, 
respectively.  These letters of credit were collateralized by investments of 
approximately $1,250,000 and $2,150,000 at December 31, 1996 and 1995, 
respectively. 

     The real estate that the Company purchased from a former owner and 
director of LIG is currently subject to a blanket mortgage of the former owner
totaling approximately $2.9 million.  The former owner has filed for protection
under the federal bankruptcy laws and it is possible that the Company could be 
adversely impacted as a result of proceedings that may be initiated by the 
lending institution to collect amounts due them.

NOTE 9 - QUARTERLY FINANCIAL INFORMATION  (UNAUDITED)     
                                                  
     The quarterly unaudited financial information for the periods since LIG 
resumed trading on the AMEX are as follows:
   
    (Amounts in thousands except                  Quarter ended   
       per share data)                   ---------------------------------- 
                                          March 31,June 30, Sept. 30,Dec. 31    
                                           1996      1996     1996     1996
                                           -----    ------  ------   -------
Revenues:
  Net premiums earned                     $1,156     $ 751   $ 982    $ 682     
  Net investment income                      631       582     341       94   
  Realized gains(losses) on investments      733       (74)     -   (13,332)  
                                           ------    ------   -----   -----
    Total revenues                         2,520     1,259   1,323  (12,556) 
Operating expenses                         1,526       965   1,076    6,209    
                                           ------   ------  -------  -------
Operating income(loss)                       994       294     247  (18,765) 
Income tax expense (benefit)                 (14)       (1)     20     (138) 
                                            -----     -----   -----  ------
Net income (loss) before minority                            
  interest                                  1,008      295     227  (18,627) 
Minority interest                             159       41       3   (3,569)
                                            ------   -----    -----  ------
Net income (loss)                         $   849    $ 254   $ 224$ (15,058)   
                                              ===      ===     ===   =====
Per share data:
Net income (loss)                        $    .06   $  .02   $ .02    (1.07)   
Number of shares outstanding               14,121   14,121  14,121   14,121 

      (Amounts in thousands except                  Quarter ended   
       per share data)                          ------------------------ 
                                                December 31  September 30,
                                                    1995         1995
                                                  --------     --------  
Revenues:
  Net premiums earned                             $2,652         $1,342   
  Net investment income                              718            807   
  Realized (losses) on investments                  (175)          (568)  
                                                    ------         ------   
    Total revenues                                 3,195          1,581   
Operating expenses                                 4,900          1,398   
                                                   -----          -----   
Operating income                                  (1,705)           183   

      (Amounts in thousands except                   Quarter ended   
       per share data)                           ------------------------ 
                                                  December 31  September 30,
                                                   1995               1995
                                                  --------           -------
Equity in loss of non-consolidated                      
  subsidiary                                           83            (83)  
                                                     ----             -----  
Income (loss) before income taxes,
  minority interest and 
  extraordinary gain                               (1,622)            100   
Income tax expense (benefit)                           98            (364)  
                                                     -----           ----- 
Net income (loss) before minority                            
  interest and extraordinary gain                  (1,720)            464   
Minority interest                                    (219)             -   
                                                   ------            -----  
Net Income before extraordinary gain               (1,501)            464   
Extraordinary gain                                 38,387              -   
                                                   -------            ---- 
Net income (loss)                                  $36,886         $  464   
                                                    =====             ==== 
Per share data:
Income (loss) before extraordinary 
   gain                                          $    (.11)        $  .03   
Extraordinary gain                                    2.72             -  
                                                      -----          ---- 
Net income (loss)                                  $  2.61         $  .03   
                                                      ====            ===   
Average shares outstanding                           14,121        14,121   

                                                            
<PAGE>
           LAWRENCE INSURANCE GROUP, INC.
       INDEX TO FINANCIAL STATEMENT SCHEDULES

                                                           
  
                                                                  
                                                              Page

I   -  Summary of Investments Other than Investments
         in Related Parties at December 31, 1996               51 
     
II  -  Condensed Financial Information of Registrant 
         at December 31, 1996 and 1995 and for the Years
         Ended December 31, 1996, 1995 and 1994                 52 

III -  Supplementary Insurance Information for the
         Years Ended December 31, 1996, 1995 and 1994           55 

IV  -  Reinsurance for the Years Ended December 31,
         1996, 1995 and 1994                                    58

V   -  Valuation and Qualifying Accounts for the 
         Years Ended December 31, 1996, 1995 and 1994           59

VI  -  Supplementary Information Concerning Property
         and Casualty Insurance Operations for the
         Years Ended December 31, 1996, 1995 and 1994           60
 






                              





                      

                                      



                                           






                                                             Schedule I

            LAWRENCE INSURANCE GROUP, INC.
              SUMMARY OF INVESTMENTS 
                      DECEMBER 31, 1996
                                                                  
 
           ($ in thousands)                             
                                                               Amount at
                                                              Which Shown
                                                  Estimated       on the 
                                                    Fair          balance  
                                           Cost     Value          sheet
                                          ------    --------    ----------
Fixed maturities available for sale:
   United States government and                                   
     government agencies and                                      
       political subdivisions              $ 5,018  $ 5,034        $5,034   
   States, municipalities and                           
     political subdivisions                    567      574           574    
   Mortgage backed securities                4,330    4,074         4,074   
                                            ------    ------       ------
      Total fixed maturities                                      
        available for sale                   9,915    9,682         9,682  
                                            ------    ------       ------
Common Stock                                   997      942           942   
Short-term investments                       2,862    2,862         2,862  
Mortgage loans on real estate                  154      154           154  
Real Estate                                  2,581    2,581         2,581
                                            ------   ------        ------
   Total investments                       $16,509 $ 16,221      $ 16,221  
                                            =====     =====         =====
                                                                  
                           



















                                                                             
                                                           Schedule II
             LAWRENCE INSURANCE GROUP, INC.
       CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                 BALANCE SHEETS

                                                                  
            ($ in thousands)                                December 31, 
                                                          -------------- 
                                                          1996       1995 
                                                        ------       ------ 
ASSETS
  Investment in subsidiaries                           $     -      $  649 
  Other invested assets, at fair value                       -           4 
  Cash                                                      30           2      
  Other assets                                               -          68  
                                                           ----      ----- 
      Total assets                                      $   30      $  723 
                                                           ====        === 

LIABILITIES AND STOCKHOLDERS' EQUITY
  (DEFICIENCY) 
    Liabilities:
     Liability of subsidiary                            $ 2,383     $   -
    Accrued expenses and other liabilities                  447       578 
                                                           ----       ----
     Total liabilities                                    2,830       578       
    Stockholders' equity:
    Preferred stock, $.01 par value; 2,000,000 
      shares authorized; no shares outstanding               -         -  
    Common stock, $.01 par value; 20,000,000 
      shares authorized; 14,121,482 shares 
        issued and outstanding                              141       141 
    Additional paid-in capital                           39,739    39,739 
    Net unrealized gains (losses) on                              
      investments (Net of deferred income                         
        taxes of $0 in 1996 and 1995)                      (226)       (8) 
   Receivable from Alpha Trust                               -    (11,004)
   Accumulated deficit                                  (42,454)  (28,723)
                                                        --------   -------- 
       Total stockholders' equity(deficiency)            (2,800)      145    
                                                          ------     ------ 
       Total liabilities and stockholders'                        
         equity (deficiency)                          $      30   $   723 
                                                           ====       === 









                                                                 Schedule II 
                                                                  Continued 
         LAWRENCE INSURANCE GROUP, INC.
     CONDENSED FINANCIAL INFORMATION OF REGISTRANT
          STATEMENTS OF OPERATIONS


        ($ in thousands)                   Year Ended December 31, 
                                           ------------------------ 
                                           1996      1995         1994 
                                         ------      ------       ------ 
Net investment income                   $     -    $     1     $     (7)    
Equity in net income (loss) of
  subsidiaries                           (13,816)     (424)      (6,625)  
Other operating expenses                     (81)      232          688
Income tax( benefit)                          (4)      (13)        (229)        
Extraordinary gain                            -      38,387          -         
                                           ------   --------      ------ 
     Net income (loss)                   $(13,731) $ 37,745   $  (7,091)
                                            ====      =====        ==== 

































                                                                Schedule II 
                                                                Continued 
             LAWRENCE INSURANCE GROUP, INC.
      CONDENSED FINANCIAL INFORMATION OF REGISTRANT
              STATEMENTS OF CASH FLOWS
                                                                  
        ($ in thousands)                  Year Ended December 31, 
                                          -----------------------  
                                            1996     1995    1994   
                                           ------   ------  ------
Operating activities:
  Net income (loss)                     $(13,731) $37,745 $ (7,091)
 Adjustments to reconcile net
    income to net cash provided
    (used) by operating activities:
  Equity in net (income) loss of
    subsidiaries                          13,816       424   6,625  
  Extraordinary gain                          -    (38,387)     -  
  Other assets                                73       191    (153)    
  Accrued expenses and liabilities 
    and all other                           (130)        6     444     
                                           ------     -----  ------ 
     Net cash generated (used)
       by operating activities                28       (21)   (175)  
                                           ------     ------ ------ 
Investing activities:
    Repayment of long-term investments:
    Mortgage loans on real estate             -          -       22       
    Other invested assets                     -          20      21 
                                           ------     ------  ------
     Net cash provided by investing 
        activities                            -          20      43 
                                           ------     ------   ------ 
 Increase (decrease) in cash                  28         (1)   (132) 
Cash-beginning of year                         2          3     135     
                                            ----       ----    ---- 
Cash-end of year                          $   30     $    2   $   3 
                                             ===         ==      ==
Supplemental disclosure of
  cash flow information:
Cash paid (received) during
  year for income taxes                    $ (75)      $ (13)  $  70     











                     LAWRENCE INSURANCE GROUP INC.             
               SUPPLEMENTARY INSURANCE INFORMATION
                     YEAR ENDED DECEMBER 31, 1996
           ($ in thousands)                          Schedule III
    Column A               Column B         Column C             Column D 
---------------          -----------      ------------           ----------
      1996                               Future Policy
                        Deferred            Benefits,
                       Policy                Losses,
                       Acquisition          Claims &              Unearned 
 Segment                 Costs             Loss expense            Premium
---------------       -----------           -----------          ----------
Property/casualty       $     6              $    603               $   252
Reinsurance assumed           -                24,539                    -
Accident & Health            58                 1,299                   467
                        ---------            ---------             -------
  Total                 $    64              $ 26,441               $   719
                        =========            ========               ========
    Column E          Column F         Column G         Column  H 
---------------     -----------        ------------    ----------
                                                      Benefits, Claims, 
Other policy                             Net             Losses and
Claims and          Premium           Investment          Settlement 
Benefits payable     Revenue           Income(1)           Expenses
--------------     -----------       -----------          ----------
 $        -      $     88               $    220            $     13 
          -           342                  1,221               6,211 
          -         3,141                    207               2,025 
  ----------        ---------           ---------           --------
          -      $  3,571                $ 1,648             $ 8,249 
   =========       =======                =======            ========
    Column I          Column J         Column K                   
---------------         -----------         ------------               
 Amortization of                                
   Deferred policy        Other                   
     Acquisition        Operating         Premiums
        Costs          Expenses(1)        Written
    --------------   -----------           --------   
    $      26        $    246           $       89 
         (634)            215                  330
          616           1,058                3,071    
      -------         ---------            ---------                
  $         8        $  1,519             $  3,490
   ======              ======                =====                









          ($ in thousands)                          Schedule III (continued)
    Column A               Column B         Column C         Column D 
---------------        -----------          ------------    ----------
      1995                              Future Policy
                       Deferred            Benefits,
                       Policy                Losses,
                      Acquisition          Claims &          Unearned 
 Segment                 Costs             Loss expense      Premium
---------------        -----------         -----------       ----------
Property/casualty     $     7              $    849             $    34
Reinsurance assumed         3                27,860                  12
Accident & Health          58                 2,265                 459
                        ---------           ---------             -------
  Total               $    68              $ 30,974             $   505
                       =========          =========             ========
    Column E          Column F         Column G         Column  H   
 ---------------     -----------      ------------            ----------
                                                        Benefits, Claims, 
Other policy                                  Net          Losses and
Claims and                Premium           Investment      Settlement 
Benefits payable          Revenue           Income(1)       Expenses
--------------           -----------        -----------      ----------
 $        -               $    222           $    278         $    311 
          -                  1,490              2,463            3,108 
          -                  3,821                360            1,983 
  ----------                ---------         ---------       --------
          -               $  5,533           $  3,101         $  5,402 
     =========             =======            =======         ========
    Column I               Column J            Column K                 
---------------            -----------         ------------               
 Amortization of                                
   Deferred policy           Other                   
     Acquisition            Operating           Premiums
        Costs               Expenses(1)         Written
    --------------          -----------         --------   
    $      51                $    285           $    137 
          926                     413              1,063
          886                   1,071              3,935    
      -------                ---------          ---------                
    $   1,863                $  1,769            $ 5,135
       ======                  ======              =====                












              ($ in thousands)                   Schedule III (cont)
    Column A                   Column B      Column C         Column D  
---------------               -----------   ------------     ----------
 1994                                        Future policy
                               Deferred          Benefits,
                                 Policy            Losses,
                              Acquisition       Claims &        Unearned 
 Segment                          Costs          Loss expense    Premium
---------------                -----------        -----------  ----------
Property/casualty              $     24           $   2,369       $    119 
Reinsurance assumed                 231              43,191            822 
Accident & Health                    34               1,605            443 
                                 ---------         ---------        --------
  Total                        $    289           $  47,165        $ 1,384 
                                   ====               =====           ====
    Column E           Column F             Column G               Column H  
---------------       -----------         ------------            ----------
                                                       Benefits, claims,
Other policy                                  Net         Losses and
Claims and              Premium           Investment      Settlement 
Benefits payable         Revenue           Income(1)        Expenses
--------------        -----------         -----------    ------------
$      -               $   641           $    378           $   839  
       -                  (973)             2,678             1,076  
       -                 5,553                257             2,104  
 -----------          ---------           ---------         --------
$      -               $ 5,221            $ 3,313            $4,019  
 ======                   =====             ====               ====
    Column I                 Column J           Column K                   
---------------             -----------        ------------               
 Amortization of                                 
 Deferred policy          Other                    
   Acquisition           Operating             Premiums                
      Costs              Expenses(1)            Written                 
 --------------         -----------           -----------               
$         (27)           $      297           $     273
          565                    60             (13,802)
        1,530                 1,003               5,759  
   -----------             --------            ---------                
$       2,068             $   1,360            $ (7,770)
         ====                 =====               ======                
(1) The allocation among segments is based upon the actual income
or expense of each underlying subsidiary of the parent.  Each
subsidiary generally represents only one segment.
                                









                LAWRENCE INSURANCE GROUP, INC.
                      REINSURANCE                               Schedule IV

    ($ in thousands)

                                                          
                                     Ceded    Assumed              
                           Gross      To        From     Net      Assumed
                           Amount   Others     Others    Amount    To Net
                           ------    ------     ------   ------     ------
For year ended
  December 31, 1996
  Premiums earned:
    Property/casualty       $ 161  $    73      $    -     $     88       -%
    Accident/health         4,125      984           -        3,141       -%
    Reinsurance assumed         -       23        365         342     106.7%
                            -----     -----      -----        ----     
   Total                   $4,286   $1,080      $ 365        $3,571 
                            =====    =====       =====        ===== 

For year ended
  December 31, 1995 
  Premiums earned:
    Property/casualty      $  222  $   -       $    -      $  222        -%
    Accident/health         5,222   1,401           -       3,821        -%
    Reinsurance assumed        -      601         2,091     1,490       140.3%
                            -----   -----         -----     -----       
   Total                   $5,444  $2,002         $2,091   $5,533       
                            =====   ====           ====      ==== 
For year ended
  December 31, 1994 
  Premiums earned:
    Property/casualt       $  658 $    17          $  -    $  641         -%
    Accident/health         8,857   3,303             -     5,554         -%
    Reinsurance assumed        -    1,425            451     (974)        -%
                            -----   -----          -----     -----    
   Total                   $9,515  $4,745          $ 451    $5,221      
                            =====   ====             ===      ====  





   










          LAWRENCE INSURANCE GROUP, INC.             Schedule V
               VALUATION ACCOUNTS

($ in thousands)                        Additions                  
                                       -------------                 
                                        Charged to      
                            Balance    --------------                Balance
                             Jan 1,   Cost &   Other      Deduct-    Dec 31,
                            of year expenses  Accounts    ions        of year
                             ------  ------    ------     ------      ------ 
December 31, 1996
Receivables from  
   affiliates              $     -     $ 313    $ 232    $     -     $   545
Deferred Income 
  Taxes -                     7,804       -     6,198          -      14,002
Reinsurance 
  Recoverable                   148       -                  (148)        - 
Income tax recoverable
  recoverable                    -        -       108           -        108  
                              ------     ----     ----       -----      ----- 
Total (1)                   $ 7,952    $ 313  $ 6,538      $ (148)  $ 14,655
                              =====      ===     ====         ===      =====

December 31, 1995
Equity securities            $  502    $   -    $   -     $  (502)    $   -
Deferred Income 
  Taxes -                     7,102        -       702         -       7,804 
Reinsurance 
  Recoverable                    -        148       -          -         148 
                              -----       ----     ----       -----    ----- 
Total (1)                   $ 7,604    $  148   $  702   $   (502)  $  7,952
                              =====       ===      ===        ===       ====

December 31, 1994
Equity in common
 stock of investee          $ 2,651   $    -     $   -   $ (2,651)  $     -
Equity securities                -        502        -         -         502
Deferred Income 
  Taxes -                     6,997        -         105       -       7,102
                             ------      ----        ----   ------     ------
Total (1)                  $  9,648    $  502     $  105  $ (2,651)  $ 7,604
                              =====      ====       ====     =====      ====

(1) Excludes UCIC.









              LAWRENCE INSURANCE GROUP INC.
 SUPPLEMENTARY INFORMATION CONCERNING PROPERTY AND CASUALTY
INSURANCE
OPERATIONS          
                DECEMBER 31, 1996   
 ($ in thousands)                                            SCHEDULE VI
    Column A                Column B     Column C          Column D  
---------------           -----------   ------------       ----------
       1996                               Future policy
                          Deferred          Benefits          
                           Policy         Losses,claims      Discount
                         Acquisition       and loss        Deducted in
 Company                   Costs           Expenses         Column C
---------------          -----------       -----------          ----------
United Republic                                             
 Insurance Company     $     -          $   24,539           $         -
Global Insurance Co.          6                603                     -
                          ---------         ---------             --------
  Total                $      6          $  25,142            $        -
                            ======          ======                   =====
 Column E              Column F          Column G           Column H  
---------------       -----------       ------------        ----------
                                          Net             Settlement &
Unearned              Premium         Investment         Claim expense   
Premiums              Revenue           Income              Current Yr 
--------------       -----------       -----------        ----------
                                                            
$        -         $        342          $   1,221        $        -
         252                 88                220                  29
------------             ---------         ---------           --------
$        252       $        430          $   1,441         $        29
        ====               ======            =====               =====
    Column H          Column I         Column J         Column K 
---------------      -----------        ------------     ---------
 Claim and          Amortization      Paid claims,
 Settlement        deferred policy     and claim
 Expense              Acquisition       Adjustment        Premium 
 Prior Yrs             Costs             Expenses          Written 
 -----------          -----------       -----------       ---------

$   6,211             $    (634)         $   8,521       $      330
      (16)                   26                159               89
 ----------             ---------         ---------        ---------
$   6,195             $    (608)          $  8,680        $      419
    =====                  =====            ======             =====









 ($ in thousands)                               SCHEDULE VI (continued)
    Column A                Column B         Column C           Column D  
---------------            -----------      ------------        ----------
       1995                                 Future policy
                             Deferred          Benefits          
                              Policy         Losses,claims       Discount
                            Acquisition       and loss           Deducted in
 Company                      Costs           Expenses            Column C
---------------               -----------       -----------          ----------
United Republic                                             
 Insurance Company           $      3          $  27,860        $        -
Global Insurance
 Company                            7                849                 -
                                ---------       ---------             --------
  Total                      $     10          $  28,709         $        -
                                 ======            ======              =====
 Column E              Column F              Column G           Column H  
---------------       -----------           ------------        ----------
                                                           Claim and
                                              Net          Settlement
Unearned              Premium              Investment      Expense   
Premiums              Revenue                 Income       Current Yr 
--------------         -----------          -----------     ----------
                                                            
$        12            $     1,490          $   2,462        $     288
                   
         33                    22                 278               80
------------             ---------            ---------        --------
$        45            $    1,712            $  2,740         $    368
       ====                ======               =====             =====
    Column H          Column I         Column J         Column K 
---------------       -----------        ------------          ---------
 Claim and          Amortization         Paid claims,
 Settlement        deferred policy        and claim
 Expense              Acquisition          Adjustment        Premium 
 Prior Yrs                Costs             Expenses          Written 
 -----------          -----------          -----------          ---------

$   2,820             $     926             $  15,897         $   1,063

      231                    51                 1,901               137
 ----------             ---------            ---------          ---------
$   3,051             $     977            $   17,798         $   1,200
    =====                 =====                ======             =====









        ($ in thousands)                         SCHEDULE VI(cont)
    Column A                 Column B           Column C        Column D  
---------------             -----------        ------------    ----------
       1994                                 Future policy
                             Deferred          Benefits          
                              Policy         Losses,claims      Discount
                           Acquisition         and loss        Deducted in
 Company                       Costs           Expenses         Column C
---------------              -----------      -----------       ----------
United Republic                                             
 Insurance Company           $    231          $  43,191        $    -
Global Insurance
 Company                           24              2,369             -
                               ---------        ---------        --------
  Total                      $    255           $ 45,560         $   -
                                  ====             =====            ===
    Column E          Column F         Column G         Column H  
---------------      -----------       ------------     ----------
                                                         Claim and
                                         Net              Settlement
Unearned              Premium           Investment          Expense   
Premiums              Revenue           Income             Current Yr 
--------------        -----------       -----------        ----------
                                                            
$    822              $     (896)            $   2,684       $  4,106
                   
     119                     565                   378            508
------------            ---------             ---------       --------
$    941              $     (331)            $   3,062        $ 4,614
    ====                    ====                 ====            ====
    Column H          Column I         Column J           Column K 
---------------     -----------         ------------      ---------
 Claim and          Amortization       Paid claims,
 Settlement        Deferred Policy      and claim
 Expense              Acquisition       Adjustment           Premium 
 Prior Yrs               Costs           Expenses             Written 
 -----------          -----------       -----------         ---------
                                                           
$   (3,030)           $     565           $  24,315        $ (13,726)

       331                  (28)              4,832              197 
-----------             ---------          ---------        ---------
$   (2,699)           $     537           $  29,147         $ (13,529)
     =====                 ====               =====            ======










                LAWRENCE INSURANCE GROUP INC
                         INDEX TO EXHIBITS
                             ITEM  601

Exhibit
Number            Description                                     Reference

1        Certification of Incorporation                               (1) 
2-1      Bylaws                                                       (2) 
4-1      Specimen Certificate of Common Stock                         (3) 
10-1     Management Agreement between Senate Insurance
           Company and A.W.Lawrence and Company Inc.                  (2) 
21-1     Subsidiaries of Registrant                                  EX-21
27-1     Financial Data Schedule                                     EX-27
28-1     Information from reports furnished to 
           State insurance Regulatory Authorities                    EX-28











(1) Previously filed on December 10,1986 in Amendment No. 3 to Form

   S-1 Registration Statement (Registration No. 33-9898)

(2) Previously filed on October 31, 1986 in Form S-1 Registration 
    Statement (Registration No. 33-9898) 

(3) Previously filed on December 29, 1986 in Amendment No. 5 to   
    Form S-1 Registration Statement (Registration No. 33-9898)





















                LAWRENCE INSURANCE GROUP INC
                        EXHIBIT 21
                 SUBSIDIARIES OF REGISTRANT
                  YEAR ENDED DECEMBER 31, 1996

                                                                Percent
                                                                 Owned   
                                                                 _____ 

   Lawrence Insurance Group Inc.                   Del.           
     United Republic Insurance Company              Tx.           78.6%  
       Global Insurance Company                     Ga.          100.0%  
       Senate Insurance Company                     Az.          100.0%  
           Senate National Life Insurance Company   Az.          100.0%  
     Senate Syndicate Inc.                          NY.          100.0%  
      
























                                                          EX 21-1