SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   -----------

                                    FORM 10-K/A

[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934For the fiscal year ended December 31, 1998
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from ___________ to ___________
Commission file number 0-22342

                                  -----------
                               TRIAD GUARANTY INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                                    56-1838519
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
   incorporation or organization)

   101 South Stratford Road, Suite 500
      Winston-Salem, North Carolina                         27104
 (Address of principal executive offices)                (Zip Code)

       Registrant's telephone number, including area code: (336) 723-1282
                                   -----------

               Securities registered pursuant to Section 12(b) of
                                    the Act:

                                      None

               Securities registered pursuant to Section 12(g) of
                                    the Act:

                               Title of each class
                     Common Stock, par value $.01 per share

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes /X/ No / / .

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of 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 of the voting stock held by  nonaffiliates  of the
registrant  as of February 16, 1999,  computed by reference to the last reported
price at which the stock was sold on such date, was $122,850,797.

The number of shares of the registrant's common stock, par value $.01 per share,
outstanding as of February 16, 1999 was 13,346,869.

Portions of the following documents            Part of this Form 10-K into which
are incorporated by reference                  the document is incorporated by
into this Form 10-K:                           reference:
   TRIAD GUARANTY INC.
   Proxy Statement for 1999 Annual Meeting                 PART III
   of Stockholders

<PAGE>

                                    PART IV


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

           (a) The following documents are filed as a part of this Report:

            2. FINANCIAL STATEMENT SCHEDULES

               (a) Triad  Guaranty  Inc.  401(k) Profit  Sharing Plan  Financial
               Statements

               The  Financial  Statement  of Triad  Guaranty  Inc.  401(k)Profit
               Sharing Plan,  together with the report  thereon of Ernst & Young
               LLP, consisting of:

               Report of Independent Auditors

               Statements of Net Assets  Available for Benefits  (Modified  Cash
               Basis)

               Statements  of  Changes  in  Net  Asset  Available  for  Benefits
               (Modified Cash Basis)

               Notes to Financial Statements

               Schedule of Assets Held for Investment Purposes

               Schedule of Reportable Transactions

            3. EXHIBITS

               23.2 Consent of Ernst & Young LLP



<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to be signed
on its behalf by the  undersigned,  thereto duly  authorized  on the 28th day of
June 1999.

                                               TRIAD GUARANTY INC.





                                               By:/s/Michael R. Oswalt
                                               -----------------------
                                               Michael R. Oswalt
                                               Vice President and Controller
                                               Principal Accounting Officer




<PAGE>
                            FINANCIAL STATEMENTS AND
                             SUPPLEMENTAL SCHEDULES

                               TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                     YEARS ENDED DECEMBER 31, 1998 AND 1997
                       WITH REPORT OF INDEPENDENT AUDITORS



<PAGE>



                               Triad Guaranty Inc.
                           401(k) Profit-Sharing Plan

                              Financial Statements
                           and Supplemental Schedules

                     Years ended December 31, 1998 and 1997



                                    Contents

Report of Independent Auditors.................................................1

Financial Statements

Statements of Net Assets Available for Benefits (Modified Cash Basis)..........2
Statements of Changes  in Net Assets Available for Benefits
   (Modified Cash Basis).......................................................3
Notes to Financial Statements .................................................4

Supplemental Schedules

Line 27a --Schedule of Assets Held for Investment Purposes....................11
Line 27d --Schedule of Reportable Transactions................................12





<PAGE>



                         REPORT OF INDEPENDENT AUDITORS

Plan Administrator of the Triad Guaranty Inc.
    401(k) Profit-Sharing Plan

We have audited the accompanying statements of net assets available for benefits
(modified cash basis) of the Triad Guaranty Inc. 401(k) Profit-Sharing Plan (the
Plan) as of December 31, 1998 and 1997, and the related statements of changes in
net assets  available  for  benefits  (modified  cash  basis) for the years then
ended.  These  financial   statements  are  the  responsibility  of  the  Plan's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

As described in Note 2, these financial  statements and  supplemental  schedules
were prepared on a modified cash basis of accounting,  which is a  comprehensive
basis of accounting other than generally accepted accounting principles.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, information regarding the Plan's net assets available for
benefits (modified cash basis) as of December 31, 1998 and 1997, and the changes
there in  (modified  cash  basis)  for the  years  then  ended,  on the basis of
accounting described in Note 2.

Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying  supplemental  schedules (modified
cash basis) of assets held for  investment  purposes as of December 31, 1998 and
reportable  transactions  for the year then ended, are presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure  under the Employee  Retirement  Income Security Act of 1974, and are
not a required  part of the financial  statements.  The  supplemental  schedules
(modified cash basis) have been subjected to the auditing  procedures applied in
our audits of the financial statements and, in our opinion, are fairly stated in
all material respects in relation to the financial statements taken as a whole.


                                             ERNST & YOUNG LLP

June 3, 1999

                                       1
<PAGE>



                               Triad Guaranty Inc.
                           401(k) Profit-Sharing Plan

                 Statements of Net Assets Available for Benefits
                              (Modified Cash Basis)


                                                  December 31
                                             1998             1997
                                       --------------------------------
Assets
Investments:
   At fair value - (Note 3):
     Mutual funds                        $  906,570       $  446,087
     Common stock                         2,543,255        3,436,993
     Loans to participants                   11,460            8,948
                                       --------------------------------
Total investments                         3,461,285        3,892,028
Cash and cash equivalents                       560            8,939
                                       --------------------------------
Net assets available for benefits        $3,461,845       $3,900,967
                                       ================================


See notes to financial statements.



                                       2
<PAGE>



                               Triad Guaranty Inc.
                           401(k) Profit-Sharing Plan

           Statements of Changes in Net Assets Available for Benefits
                              (Modified Cash Basis)


                                                   Year ended December 31
                                                    1998             1997
                                              ---------------------------------
Additions to net assets attributed to:
Investment income:
   Net (depreciation) appreciation in
     fair valueof investments (Note 3)           $ (772,260)      $1,639,820
   Interest and dividends                            32,459           49,813
                                              ---------------------------------
                                                   (739,801)       1,689,633

Contributions:
   Participants'                                    581,080          552,512
   Employer's                                       242,119          119,007
                                              ---------------------------------
                                                    823,199          671,519
                                              ---------------------------------
Total additions                                      83,398        2,361,152

Deductions from net assets attributed to:
Benefits paid to participants                       522,520           16,899
                                              ---------------------------------
Net (decrease) increase                            (439,122)       2,344,253

Net assets available for benefits:
   Beginning of year                              3,900,967        1,556,714
                                              =================================
   End of year                                   $3,461,845       $3,900,967
                                              =================================


See notes to financial statements.



                                       3
<PAGE>

                               TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998




1. DESCRIPTION OF PLAN

The following  description of the Triad Guaranty Inc. 401(k) Profit-Sharing Plan
(the Plan) provides only general  information.  Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.

GENERAL

The Plan is a salary  deferral  401(k)  defined  contribution  plan covering all
employees of Triad  Guaranty  Inc. and its  subsidiaries  (the  "Company" or the
"Plan Sponsor") who have at least six months of service.  The Plan is subject to
the provisions of the Employee  Retirement  Income Security Act of 1974 (ERISA).
The Plan became effective November 1, 1993.

CONTRIBUTIONS

Each year,  participants may contribute up to 15% of their annual  compensation,
as defined in the Plan. However,  these elective deferral  contributions may not
exceed the dollar limitation contained in Section 402(g).  Participants may also
contribute  amounts  representing  distributions  from other  qualified  defined
benefit or defined  contribution  plans. In accordance with the Plan provisions,
the Company may match the  participant's  elective  deferral  contribution.  The
discretionary  percentage matched is determined by the Plan sponsor.  Additional
amounts may be contributed at the option of the Plan sponsor.

FORFEITURES

Forfeitures  of matching  contributions  of $10,606 and $2,545 for 1998 and 1997
were used to reduce employer contributions.

PARTICIPANT ACCOUNTS

Each  participant's  account is credited  with the  participant's  contributions
(elective   deferral   contribution)   and  allocations  of  (a)  the  Company's
contributions   and  (b)  the  Plan's   earnings.   Allocations   are  based  on
participants' compensation and account balances. A portion of forfeited balances
of  terminated  participants'  nonvested  accounts  are  allocated to the active
participants'  account  balances  as  described  above.  The  benefit to which a
participant   is  entitled  is  the  benefit  that  can  be  provided  from  the
participant's account.

                                       4
<PAGE>

                              TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




1. DESCRIPTION OF PLAN (CONTINUED)

VESTING

Participants are immediately vested in their  contributions plus actual earnings
thereon.  Vesting in the Company  contribution  portion of their  accounts  plus
actual earnings  thereon is based on years of continuous  service.  Participants
are 20% vested after 1 year, 40% vested after 2 years, 60% vested after 3 years,
80% vested after 4 years and 100% vested after 5 years of service.

INVESTMENT OPTIONS

Upon  enrollment  in the Plan, a  participant  may direct  employer and employee
contributions in any of the following investment options:

          Oppenheimer   Income  &  Growth   Fund  -  Funds   are   invested   in
          growth-oriented   common  stocks,  plus  income-producing   securities
          including common and preferred stocks,  convertible bonds,  debentures
          and notes.

          Oppenheimer  Limited-Term  Government  Fund - Funds  are  invested  in
          obligations issued or guaranteed by the U.S. government, its agencies,
          or its instrumentalities.

          Oppenheimer Global Fund - Funds are invested in international stocks.

          Fidelity Income & Growth Fund - Funds are invested in  dividend-paying
          common stock with growth potential.

          Fidelity  Bond Fund - Funds are  invested  in high  quality  corporate
          obligations,  U.S.  government  securities,  obligations of major U.S.
          banks, prime commercial paper or similar investments.

          Triad Guaranty Inc. Stock Fund - Funds are invested in common stock of
          Triad  Guaranty Inc.  Purchases and sales of Triad Guaranty Inc. stock
          are made on the open market by brokers  selected by the agent retained
          by the Trustee.

Participants may change their investment options quarterly.

                                       5

<PAGE>

                             TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




1. DESCRIPTION OF PLAN (CONTINUED)

PAYMENT OF BENEFITS

On termination of service, a participant may receive a lump-sum payment equal to
the vested value of his or her account. Upon death, disability or retirement,  a
participant  may receive either a lump-sum  payment equal to the vested value of
his or her account, or choose from several annuity options.

2. SUMMARY OF ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The financial statements of the Plan are prepared under the modified cash method
of  accounting.  Contributions  are  recorded  when  received  and  benefits are
recorded when paid.

INVESTMENT VALUATION

The Plan's  investments  are stated at fair value.  The shares of the registered
investment  companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year-end.  Marketable  securities are
stated at fair  value.  The  participant  loans are valued at their  outstanding
balances, which approximate their fair value.

USE OF ESTIMATES

The preparation of financial  statements  requires  management to make estimates
that affect the amounts  reported in the financial  statements and  accompanying
notes. Actual results could differ from those estimates.


                                       6
<PAGE>

                             TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




3. INVESTMENTS

The Plan's investments are held by a bank administered  trust fund.  Investments
that  represent 5 percent or more of the Plan's net assets as of December 31 are
as follows:

                                                    1998             1997
                                              --------------------------------
 Investments at fair value as determined
    by quoted market price:
      Oppenheimer Income & Growth Fund         $   302,039       $         -
      Fidelity Income & Growth Fund                413,451                 -
      Triad Guaranty Inc. Stock Fund             2,543,255         3,436,993

For the  years  ended  December  31,  1998  and  1997,  the  Plan's  investments
(including  investments  bought and sold,  as well as held  during  the  period)
appreciated (depreciated) in value as follows:


                                                  Net Appreciation
                                                  (Depreciation) in   Fair Value
                                                  Fair Value During     at End
                                                         Year           of Year
                                                 -------------------------------
YEAR ENDED DECEMBER 31, 1998

Investments at fair value as determined
   by quoted market price:
     Oppenheimer Income & Growth Fund                 $   39,353     $  302,039
     Oppenheimer Global Fund                               4,982        154,976
     Fidelity Income & Growth Fund                        40,155        413,451
     Fidelity Bond Fund                                      261         35,986
     Fidelity Limited Term Municipal Income Fund               -            118
     Triad Guaranty Inc. Stock Fund                     (857,011)     2,543,255
                                                 -------------------------------
                                                      $ (772,260)    $3,449,825
                                                 ===============================

                                       7
<PAGE>

                             TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




3.  INVESTMENTS (CONTINUED)

                                                  Net Appreciation
                                                  (Depreciation) in   Fair Value
                                                  Fair Value During     at End
                                                         Year           of Year
                                                --------------------------------
YEAR ENDED DECEMBER 31, 1997

Investments at fair value as determined
   by quoted market price:
     Oppenheimer Income & Growth Fund               $   19,232     $   185,258
     Oppenheimer Global Fund                            (1,806)        120,822
     Fidelity Income & Growth Fund                      13,538         110,797
     Fidelity Bond Fund                                    352          29,210
     Triad Guaranty Inc. Stock Fund                  1,608,504       3,436,993
                                                --------------------------------
                                                    $1,639,820      $3,883,080
                                                ================================


                                       8
<PAGE>



                               TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




4. CHANGES IN NET ASSETS BY FUND

The following table illustrates the Plan's activity between participant directed
funds for the years ended December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                               Oppenheimer
                                    Oppenheimer  Limited               Fidelity
                                     Income &      Term    Oppenheimer Income &  Fidelity      Loans        Triad
                                      Growth    Government    Global    Growth     Bond         to      Guaranty Inc.
                                       Fund        Fund        Fund      Fund      Fund    Participants   Stock Fund     Total
                                    ------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>     <C>        <C>        <C>         <C>          <C>          <C>
Net assets available for benefits
   at December 31, 1996              $ 115,796      $ 197   $  63,342  $  32,077  $  6,226    $ 10,414     $1,328,662   $1,556,714
Net appreciation (depreciation) in
   fair value of investments
                                        19,232          -      (1,806)    13,538       352           -      1,608,504    1,639,820
Interest and dividends                  15,071          -      25,675      5,377     1,428         916          1,346       49,813
Contributions:
   Participants                         48,407          -      37,121     49,969    20,395           -        396,620      552,512
   Employer                              5,602       (715)      2,980     10,883       809           -         99,448      119,007
Benefit payments                        (2,968)      (363)          -       (394)        -         607        (13,781)     (16,899)
Net transfers between funds            (15,882)       881       2,386       (653)        -      (2,989)        16,257            -
                                    ------------------------------------------------------------------------------------------------
Net assets available for benefits
   at December 31, 1997                185,258          -     129,698    110,797    29,210       8,948      3,437,056    3,900,967
Net appreciation (depreciation)
   in fair value of investments
                                        39,353          -       4,982     40,155       261           -       (857,011)    (772,260)
Interest and dividends                  12,180          -       2,318     15,079     1,617         909            356       32,459
Contributions:
   Participants                         42,547          -      16,530     82,888     7,352           -        431,763      581,080
   Employer                             19,032          -       7,731     34,531     3,017           -        177,808      242,119
Benefit payments                       (10,481)         -        (440)    (3,035)      (59)          -       (508,505)    (522,520)
Net transfers between funds             14,233          -      (5,839)   133,307    (5,263)      1,603       (138,041)           -
                                    ------------------------------------------------------------------------------------------------
Net assets available for benefits
   at December 31, 1998               $302,122      $   -   $ 154,980  $ 413,722  $ 36,135    $ 11,460     $2,543,426   $3,461,845
                                    ================================================================================================
</TABLE>

                                       9
<PAGE>

                              TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




5. PLAN TERMINATION

Although  it has not  expressed  any intent to do so, the  Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan  subject  to the  provisions  of ERISA.  In the event of Plan  termination,
participants will become 100 percent vested in their accounts.

6. EXEMPT PARTY-IN-INTEREST TRANSACTIONS

All  Plan  investments  are  managed  by  the  Trustee,  and,  therefore,  these
transactions qualify as  party-in-interest.  All fees for the investment manager
services were paid by the Plan sponsor.

Certain  administrative  functions are performed by officers or employees of the
Company.  No such officer or employee  receives  compensation from the Plan. All
administrative expenses are paid directly by the Plan sponsor.

7. INCOME TAX STATUS

The Plan sponsor  believes that the Plan meets the  requirements  of a qualified
plan under applicable  provisions of the Internal Revenue Code.  Therefore,  the
related trust is not subject to tax under present  income tax laws.  The Plan is
required to operate in  conformity  with the IRC to maintain its  qualification.
The Plan  administrator is not aware of any course of action or series of events
that have occurred that might adversely affect the Plan's qualified status.

8. YEAR 2000 ISSUE (UNAUDITED)

The Plan sponsor has  developed  and  implemented  a plan to modify its internal
information  technology  to be ready  for the  year  2000  including  converting
critical data processing systems.  The project also included determining whether
third party service providers have reasonable plans in place to become year 2000
compliant.  As a  result,  the  Company  does  not  anticipate  that  year  2000
compliance  issues arising from interfaces with third-party  systems will have a
material impact on its operations.  The Plan Sponsor substantially completed the
project in March 1999.  This project did not have a  significant  effect on plan
operations.




                                       10
<PAGE>


                             SUPPLEMENTAL SCHEDULES





























<PAGE>

                               TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN
                                 EIN: 56-1838519
                                PLAN NUMBER: 001

            LINE 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES

                                DECEMBER 31, 1998




                                       Description of
                                         Investment,
                                     Including Maturity
                                        Date, Rate of
     Identity of Issue, Borrower,     Interest, Par or                  Current
        Lessor or Similar Party        Maturity Value       Cost         Value
--------------------------------------------------------- ----------  ----------

Common Stock:
* Triad Guaranty Inc.                    115,275 shares   $1,810,345  $2,543,255

Mutual Funds:
   Fidelity Bond Fund                      3,504 shares       35,561      35,986
   Fidelity Growth and Income Fund         9,019 shares      360,060     413,451
   Oppenheimer Income & Growth Fund        7,568 shares      244,194     302,039
   Oppenheimer Global Fund                 3,638 shares      150,546     154,976
   Fidelity Limited Term Municipal
    Income Fund                               12 shares          121         118
                                                          ----------  ----------
                                                             790,482     906,570

* Participant loans                                           11,460      11,460
                                                          ----------  ----------

                                                          $2,612,287  $3,461,285
                                                          ==========  ==========


* Indicates party in interest to the Plan

                                       11
<PAGE>




                               TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN
                                 EIN: 56-1838519
                                PLAN NUMBER: 001

                 LINE 27D --SCHEDULE OF REPORTABLE TRANSACTIONS

                          YEAR ENDED DECEMBER 31, 1998




<TABLE>
<CAPTION>

                                                                                                              (h)
                                                  (b)                                                    Current Value
                                    Description of Asset including     ( c )         (d)          (g)     of Asset on        (i)
               (a)                   interest rate and maturity in   Purchase      Selling        Cost    Transaction      Net Gain
   Identity of Party Involved               case of a loan             Price        Price       of Asset     Date           (Loss)
-------------------------------- ---------------------------------- -----------  -----------  ---------- --------------  -----------

CATEGORY (III)--SERIES OF TRANSACTIONS IN EXCESS OF 5 PERCENT OF PLAN ASSETS
<S>                                <C>                              <C>           <C>         <C>          <C>            <C>

Fidelity                           Growth and Income Fund           $  271,661    $      -    $  271,661   $ 271,661       $      -
                                                                             -       9,164         8,386       9,164            788


Triad Guaranty Inc.                Common Stock                        649,069           -       649,069     649,069              -
                                                                             -     685,790       323,586     685,790        362,204


Wachovia Prime Cash Management     Authorized Demand Notes             980,335           -       980,335     980,335              -
                                                                             -     988,887       988,887     988,887              -


There were no category (i), (ii) or (iv) transactions  during 1998.  Columns (e)
and (f) have not been presented as this information is not applicable.

</TABLE>