1

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549


                                   FORM 10-Q

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


    For the Quarter Ended June 30, 1997     Commission file number 1-10557
                          -------------                            -------


                     POLICY MANAGEMENT SYSTEMS CORPORATION
            (Exact name of registrant as specified in its charter)


     South  Carolina                         57-0723125
     ---------------                         ----------
(State  or  other  jurisdiction             (IRS Employer
 of  incorporation)                       Identification No.)


One  PMSC  Center  (PO  Box  Ten)
Blythewood,  SC  (Columbia,  SC)          29016  (29202)
--------------------------------          --------------
(Address  of  principal  executive          (Zip  Code)
  offices)


Registrant's  telephone  number,  including  area  code  (803)  735-4000

     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 the number of shares outstanding of each of the issuer's classes
of  common  stock,  as  of  the  latest  practicable  date.

        18,219,825 Common shares, $.01 par value, as of August 8, 1997


     The  information  furnished herein reflects all adjustments which are, in
the  opinion of management, necessary for the fair presentation of the results
for the periods reported.  Such information should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended December 31, 1996.

<PAGE>

                                POLICY MANAGEMENT SYSTEMS CORPORATION



                          INDEX



PART  I.  FINANCIAL  INFORMATION                      PAGE


Item 1. Financial Statements

Consolidated Statements of Income for the Three and 
Six Months ended June 30, 1997 and 1996                 3

Consolidated Balance Sheets as of June 30, 1997 
and December 31, 1996                                   4

Consolidated Statements of Cash Flows for the Six 
Months ended June 30, 1997 and 1996                     5

Notes to Consolidated Financial Statements              6

Item 2. Management's Discussion and Analysis of 
Financial Condition and Results of Operations           9


PART II. OTHER INFORMATION


Item 1. Legal Proceedings                              23

Item 4. Submission of Matters to a
    Vote of Security Holders                           23

Item 6. Exhibits and Reports on Form 8-K               23

Signatures                                             24




<PAGE>
<TABLE>
<CAPTION>

                                     PART I
                              FINANCIAL INFORMATION
                      POLICY MANAGEMENT SYSTEMS CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME

                                      Three  Months           Six Months
                                      Ended June 30,         Ended June 30,
                                      1997      1996         1997      1996
                                                   (Unaudited)
-------------------------------------------------------------------------------
                                      (In Thousands, Except Per Share Data)


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

Revenues
 Licensing                            $ 32,309   $ 25,838   $ 58,527   $ 50,133 
 Services. . . . . . . . . . . . . .   132,491    111,494    261,529    220,382 
                                      ---------  ---------  ---------  ---------
                                       164,800    137,332    320,056    270,515 
                                      ---------  ---------  ---------  ---------
Operating expenses
 Cost of revenues
  Employee compensation & benefits .    55,351     42,405    106,598     84,331 
  Computer and communications
   expenses                              8,792      8,096     17,302     16,071 
  Information services and
   data acquisition costs               30,950     29,871     61,464     57,909 
  Depreciation and amortization of
   property, equipment and
   capitalized software costs           14,308     11,839     28,367     22,973 
  Other costs & expenses                11,713      9,122     20,058     15,750 
 Selling, general and administrative
   expenses. . . . . . . . . . . . .    23,222     17,675     46,539     34,592 
 Amortization of goodwill and
   other intangibles                     2,647      2,617      5,329      5,160 
 Litigation settlement and
   expenses, net                             -     (9,358)         -     (9,422)
                                      ---------  ---------  ---------  ---------
                                       146,983    112,267    285,657    227,364 
                                      ---------  ---------  ---------  ---------

Operating income . . . . . . . . . .    17,817     25,065     34,399     43,151 

Equity in earnings of
   unconsolidated affiliate                321          -        690          - 

Other Income and Expenses
  Investment income                        344        926        771      1,522 
  Interest expense and other
   charges                              (1,356)    (1,358)    (2,573)    (2,069)
                                      ---------  ---------  ---------  ---------
                                        (1,012)    (  432)    (1,802)    (  547)
                                      ---------  ---------  ---------  ---------
Income before income taxes . . . . .    17,126     24,633     33,287     42,604 
Income taxes                             6,432      8,830     12,501     15,173 
                                      ---------  ---------  ---------  ---------
Net income                            $ 10,694   $ 15,803   $ 20,786   $ 27,431 
                                      =========  =========  =========  =========
Net income per share                  $    .59   $    .85   $   1.14   $   1.44 
                                      =========  =========  =========  =========

Weighted average number of shares       18,187     18,604     18,183     19,034 

<FN>

See  accompanying  notes
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                     POLICY MANAGEMENT SYSTEMS CORPORATION
                          CONSOLIDATED BALANCE SHEETS

                                               (Unaudited)    (Audited)
                                                 June  30,   December 31,                                                       
                                                   1997          1996
------------------------------------------------------------------------------
                                                    (In  Thousands,
Assets                                             Except Share Data)


<S>                                                <C>        <C>

Current assets
 Cash and equivalents                              $  9,626   $ 22,121
 Marketable securities                                2,496      2,234
 Receivables, net of allowance for uncollectible
  amounts of $764 ($883 at 1996)                    132,060    116,113
 Income tax receivable. . . . . . . . . . . . . .     1,365      1,383
 Deferred income taxes                               15,447     15,343
 Other                                               17,333     15,840
                                                   ---------  --------
   Total current assets                             178,327    173,034

Property and equipment, at cost less accumulated
 depreciation and amortization of $132,055
 ($122,462 at 1996)                                 116,802    115,757
Receivables . . . . . . . . . . . . . . . . . . .     3,639      4,866
Income tax receivable                                 4,041      4,041
Goodwill and other intangibles, net . . . . . . .    75,541     83,363
Capitalized software costs, net                     189,438    177,875
Deferred income taxes                                 1,241      1,560
Investments                                           6,442      6,483
Other                                                 4,566      5,239
                                                   ---------  --------
     Total assets                                  $580,037   $572,218
                                                   =========  ========

Liabilities
Current liabilities
 Accounts payable and accrued expenses             $ 52,077   $ 61,435
 Accrued restructuring charges. . . . . . . . . .       647      2,478
 Accrued contract termination costs                   1,022        407
 Current portion of long-term debt. . . . . . . .    26,191     31,222
 Income taxes payable                                 8,604      6,623
 Unearned revenues                                    9,556      9,840
 Other                                                  494        631
                                                   ---------  --------
   Total current liabilities                         98,591    112,636

Long-term debt                                       34,010     34,268
Deferred income taxes . . . . . . . . . . . . . .    63,184     58,370
Accrued restructuring charges                           964      1,340
Other . . . . . . . . . . . . . . . . . . . . . .     3,253      2,352
                                                   ---------  --------
    Total liabilities                               200,002    208,966
                                                   ---------  --------

Commitments and contingencies (Note 1)

Stockholders' Equity
Special stock, $.01 par value, 5,000,000 shares
 authorized                                               -          -
Common stock, $.01 par value, 75,000,000 shares
 authorized, 18,198,189 shares issued and
 outstanding (18,179,186 at December 31, 1996). .       182        182
Additional paid-in capital                          106,795    106,104
Retained earnings . . . . . . . . . . . . . . . .   276,896    256,110
Foreign currency translation adjustment              (3,838)       856
                                                   ---------  --------
    Total stockholders' equity. . . . . . . . . .   380,035    363,252
                                                   ---------  --------
     Total liabilities and stockholders' equity    $580,037   $572,218
                                                   =========  ========
<FN>

See  accompanying  notes
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                     POLICY MANAGEMENT SYSTEMS CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                    Six  Months
                                                  Ended  June  30,
                                                 1997         1996
--------------------------------------------------------------------
                                                  (In  Thousands)

<S>                                              <C>        <C>

Operating Activities
 Net income                                      $ 20,786   $ 27,431 
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization. . . . . . . .    35,063     29,596 
   Deferred income taxes                            4,999     12,106 
   Provision for uncollectible accounts             1,516        148 
   Impairment and restructuring charges               444          - 
 Changes in assets and liabilities:
   Accrued restructuring and lease
    termination costs                             ( 2,207)   ( 5,384)
   Receivables                                    (16,236)   ( 8,585)
   Income taxes receivable                             18        192 
   Accounts payable and accrued expenses          ( 9,358)   (21,677)
   Income taxes payable                             1,981      5,449 
 Other, net                                            17    ( 1,889)
                                                 ---------  ---------
      Cash provided by operations                  37,023     37,387 
                                                 ---------  ---------

Investing Activities
 Proceeds from sales/maturities of marketable
  securities                                          250      2,450 
 Acquisition of property and equipment            (16,428)   (12,897)
 Capitalized internal software development
  costs . . . . . . . . . . . . . . . . . . . .   (29,623)   (26,718)
 Purchased software                                     -    ( 1,040)
 Proceeds from disposal of property and
  equipment                                           805        685 
                                                 ---------  ---------
      Cash used by investing activities           (44,996)   (37,520)
                                                 ---------  ---------

Financing Activities
 Payments on long-term debt                       (77,427)   (63,393)
 Repurchase of common stock                             -    (73,595)
 Proceeds from borrowing under credit facility     72,138    113,500 
 Issuance of common stock under stock
  option plans                                        691      6,248 
                                                 ---------  ---------
      Cash used by financing activities           ( 4,598)   (17,240)
                                                 ---------  ---------

Effect of exchange rate changes on cash                76        169 
Net decrease in cash and
 equivalents                                      (12,495)   (17,204)
Cash and equivalents at beginning of period        22,121     35,094 
                                                 ---------  ---------
Cash and equivalents at end of period            $  9,626   $ 17,890 
                                                 =========  =========

Supplemental Information
 Interest paid                                   $  2,212   $  1,116 
 Income taxes paid(refunded)                        3,790    ( 3,425)

<FN>

See  accompanying  notes
</TABLE>



<PAGE>
                     POLICY MANAGEMENT SYSTEMS CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 JUNE 30, 1997


NOTE  1.          CONTINGENCIES

     In  June 1993, the Securities and Exchange Commission ("SEC") commenced a
formal  investigation  into possible violations of the Federal securities laws
in  connection with Policy Management Systems Corporation's ("Company") public
reports  and  financial  statements,  as  well  as  trading  in  the Company's
securities.

     On  July  22,  1997, the Company announced a settlement with the SEC that
closed  the  investigation  of the Company's 1990 to 1993 financial statements
and  reports.   The settlement became effective on July 22 simultaneously with
the  filing  of  an  SEC  civil  complaint  in the U.S. District Court for the
District  of  South  Carolina.    In consenting to the settlement, the Company
neither  admitted  nor  denied  the  SEC  allegations  of reporting, books and
records, and internal control violations. The key provisions of the settlement
are  an  injunction  requiring  future  compliance with the federal securities
laws,  payment  by  the  Company of a $1 million civil penalty and payments by
five  current  and  former  officers  of  $20,000  civil  penalties.

     In  March 1994, Security Life of Denver Insurance Company ("SLD") brought
suit  against the Company in the United States District Court for the District
of  Colorado  alleging  breach of a life insurance joint development contract,
unfair trade practices, and fraud. SLD sought direct, indirect, consequential,
and  punitive  damages  in excess of $80 million. In February 1997 following a
jury  trial,  the  Court  and  jury  entered judgments in favor of the Company
against  SLD  on the claims of fraud and unfair trade practices. A verdict and
judgment  was  returned against the Company for breach of contract and damages
of  $3.5  million,  together with pre-judgment interest. In addition, the jury
found that SLD was using the Company's trade secrets without permission.  As a
result  of post trial motions, the judgment was amended to delete the award of
pre-judgment  interest  and  SLD  was ordered to return the Company's systems.
Both  the Company and SLD have appealed to the United States Court of Appeals.
Changes  in  the  status  of  this  proceeding  could  result  in  a change in
subsequent  periods in the Company's estimate of anticipated liability for the
costs  associated  with  these  matters.

     The  Company  is also presently involved in litigation which commenced in
January  of  1996  in  the Circuit Court in Greenville County, South Carolina,
with  Liberty Life Insurance Company and certain of its affiliates ("Liberty")
arising  out  of  the  parties'  prior contractual relationship related to the
development  and  licensing  of  Series  III  life  insurance  systems and the
subsequent  licensing  of  the  Company's  Cybertek  life  insurance  systems.
Liberty's  complaint alleges breach of contract, breach of express and implied
warranties,  fraudulent  inducement,  breach  of  contract  accompanied  by  a
fraudulent  act,  and  recission. Liberty has alleged actual and consequential
damages  of  approximately  $30  million  and  also  seeks treble and punitive
damages. The Company has asserted various affirmative defenses and is pursuing
counterclaims  against  Liberty  for breach of contract, recoupment, breach of
good  faith  and  fair  dealing,  and  breach  of  contract  accompanied  by a
fraudulent act.  The Company is seeking equitable relief, including injunctive
relief,  and  currently  unspecified  actual,  compensatory  and consequential
damages.

     Based upon the allegations raised in a prior lawsuit and the SLD lawsuit,
the Company's insurer, St. Paul Mercury Insurance Company ("St. Paul"),in June
1995  commenced  a  declaratory  judgment action in the United States District
Court  for the District of South Carolina against the Company to determine St.
Paul's  obligation  for  defense  costs  and  to indemnify the Company for any
payment  related to these claims. The Company filed a counterclaim against St.
Paul  seeking to recover the Company's defense costs in both matters, coverage
for  damages, if any, awarded in those matters, and consequential and punitive
damages.

     In  connection  with the dismissal of the prior lawsuit, St. Paul and the
Company  agreed  to  dismiss with prejudice all claims against each other with
respect  to  the  matter, and St. Paul agreed to reimburse the Company for the
Company's legal fees. The action continues as to the parties claims related to
insurance  coverage  for  the  SLD  matter.

     In  addition  to  the  litigation described above, there are also various
other  litigation  proceedings  and  claims  arising in the ordinary course of
business.  The  Company believes it has meritorious defenses and is vigorously
defending  these  matters.

     While  the  resolution  of any of the above matters could have a material
adverse  effect  on  the  results of operations in future periods, the Company
does  not  expect  these  matters  to  have  a  material adverse effect on its
consolidated  financial  position.  The Company, however, is unable to predict
the  ultimate  outcome  or  the  potential  financial impact of these matters.


NOTE  2.          PREPARATION  OF  INTERIM  FINANCIAL  STATEMENTS

     The  consolidated  financial  statements  of  Policy  Management  Systems
Corporation have been prepared in accordance with the rules and regulations of
the  SEC.    These  consolidated  financial  statements  include estimates and
assumptions  that  affect  the  reported  amounts  of  assets and liabilities,
disclosure  of  contingent  assets and liabilities and the amounts of revenues
and  expenses.    Actual  results  could  differ from those estimated.  In the
opinion  of management, these statements include all adjustments necessary for
a fair presentation of the results of all interim periods reported herein. All
adjustments  are  of  a  normal  recurring  nature unless otherwise disclosed.
Certain  information  and  footnote  disclosures  prepared  in accordance with
generally accepted accounting principles have been either condensed or omitted
pursuant  to SEC rules and regulations.  However, management believes that the
disclosures  made  are  adequate  for  a  fair  presentation  of  results  of
operations,  financial  position and cash flows.  These consolidated financial
statements  should  be  read  in  conjunction  with the consolidated financial
statements  and  accompanying  notes  included  in the Company's latest annual
report  on  Form  10-K.


NOTE  3.          NEW  ACCOUNTING  STANDARDS

     In  February  1997,  Statement of Financial Accounting Standards No. 128,
"Earnings  Per Share" ("FAS 128"), was issued.  FAS 128 is designed to improve
the  earnings  per  share  information  provided  in  financial  statements by
simplifying  the  existing  computational  guidelines, revising the disclosure
requirements,  and  increasing the comparability of earnings per share data on
an  international basis.  FAS 128 is effective for financial statements issued
for  periods  ending  after  December  15, 1997, including interim periods and
earlier  application  is not permitted.  The Company will adopt FAS 128 on its
effective  date.    Pro forma earnings per share of the Company computed using
FAS  128  is  not  different  from  earnings per share computed using existing
standards  and  guidelines.

     In  June  1997,  Statement  of  Financial  Accounting  Standards  No. 130
"Reporting  Comprehensive Income" ("FAS 130") was issued.  FAS 130 establishes
standards  for  reporting  and  display  of  comprehensive  income  and  its
components.    FAS  130 is effective for fiscal years beginning after December
15, 1997. The effect on the Company's financial statements will be immaterial.
The  Company  will  adopt  FAS  130  on  its  effective  date.

     In  June  1997,  Statement  of  Financial  Accounting  Standards  No. 131
"Disclosures  about  Segments  of an Enterprise and Related Information" ("FAS
131")  was issued.  FAS 131 is designed to improve the information provided in
financial statements about the different types of business activities in which
the  enterprise  engages  and  economic  environments  in which the enterprise
operates.   FAS 131 is effective for fiscal years beginning after December 15,
1997.    Earlier  application is encouraged.  The Company does not believe the
adoption  of  FAS 131 will have a material impact on its financial statements.

NOTE  4.          RECLASSIFICATION

     Certain  prior  year amounts have been reclassified to conform to current
year  presentation.

<PAGE>
                     POLICY MANAGEMENT SYSTEMS CORPORATION
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The  following  discussion  and  analysis  provides  information  which
management  believes  is  relevant  to  an assessment and understanding of the
Company's  consolidated  results  of  operations and financial condition.  The
discussion  should  be  read  in  conjunction  with the consolidated financial
statements  and  notes thereto contained in Part I of this report on Form 10-Q
and  with the Company's Annual Report on Form 10-K for the year ended December
31,  1996.

                             RESULTS OF OPERATIONS

     Set  forth below are certain operating items expressed as a percentage of
revenues  and  the  percent  increase  (decrease)  for those items between the
periods  presented:
<TABLE>
<CAPTION>

                                                                        1997  vs. 1996
                                                                         Percent
                                        Percentage  of  Revenues   Increase (Decrease)
                                      ---------------------------- ------------------
                                          Three           Six         Three     Six
                                       Months Ended    Months Ended   Months   Months
                                         June 30,        June 30,     Ended    Ended
                                      --------------   -------------
                                       1997   1996     1997    1996       June 30
                                      -----   ------   -----   ----- -----------------


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

Revenues
 Licensing                             19.6%   18.8%   18.3%   18.5%    25.0%    16.7%
 Services                              80.4    81.2    81.7    81.5     18.8     18.7 
                                      ------  ------  ------  ------                  
                                      100.0   100.0   100.0   100.0     20.0     18.3 
Operating expenses
 Cost of revenues
  Employee compensation and benefits   33.6    30.9    33.3    31.2     30.5     26.4 
  Computer & communication expenses     5.3     5.9     5.4     5.9      8.6      7.7 
  Information services & data
   acquisition costs                   18.8    21.8    19.2    21.4      3.6      6.1 
  Depreciation & amortization
   of property, equipment &
   capitalized software costs           8.7     8.6     8.9     8.5     20.9     23.5 
  Other costs & expenses                7.1     6.6     6.3     5.8     28.4     27.9 
 Selling, general &
   administrative expenses             14.1    12.9    14.5    12.8     31.4     34.5 
 Amortization of goodwill and
   other intangibles                    1.6     1.9     1.7     1.9      1.1      3.3 
 Litigation settlement and
   expenses, net                          -    (6.8)      -    (3.5)       -        - 
                                      ------  ------  ------  ------                  
                                       89.2    81.8    89.3    84.0     30.9     25.7 
Operating income . . . . . . . . . .   10.8    18.2    10.7    16.0    (28.9)   (20.4)
Equity in earnings of unconsolidated
   affiliate                            0.2       -     0.2       -        -        - 
Other income and expenses              (0.6)   (0.3)   (0.6)   (0.2)       -        - 
                                      ------  ------  ------  ------                  
Income before income taxes             10.4    17.9    10.3    15.8    (30.5)   (22.0)
Income taxes                            3.9     6.4     3.9     5.6    (27.2)   (17.6)
                                      ------  ------  ------  ------                  
Net income                              6.5%   11.5%    6.4%   10.2%  (32.3)%  (24.4)%
                                      ======  ======  ======  ======                  
</TABLE>



<PAGE>
THREE  MONTHS  COMPARISON

     Comparisons  of  revenues, operating income and margins for each business
unit  for  the  periods  presented  are  as  follows:


<TABLE>
<CAPTION>

                                          Three  Months
                                          Ended  June  30,
REVENUES                                   1997     1996    Change
-----------------------------------------------------------------------
                                    (Dollars  in  Millions)

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

Enterprise Software and Services
 Property & Casualty                       $ 55.8   $ 47.5     17.4 %
 Life                                        29.6     19.9      48.6 
Information Services
 Property & Casualty                         23.5     22.2       6.1 
 Life                                        13.8     14.0      (2.0)
                                           -------  -------  --------
  Total U.S. revenues                       122.7    103.6      18.4 
International                                42.1     33.7      25.0 
                                           -------  -------  --------
    Total revenues                         $164.8   $137.3     20.0 %
=========================================  =======  =======  ========


OPERATING INCOME
-----------------------------------------                            
Enterprise Software and Services
 Property & Casualty                       $ 13.3   $ 12.7      5.4 %
 Life                                         7.6      4.5      67.0 
Information Services
 Property & Casualty                          0.1      0.3    ( 65.2)
 Life                                         0.8      0.8       0.9 
Corporate                                    (7.4)     3.8*   (297.5)
                                           -------  -------  --------
  Total U.S. operating income                14.4     22.1    ( 34.9)
International                                 3.4      3.0      14.3 
                                           -------  -------  --------
    Total operating income                 $ 17.8   $ 25.1   ( 28.9)%
=========================================  =======  =======  ========


OPERATING INCOME AS PERCENTAGE OF REVENUE
-----------------------------------------                            
Enterprise Software and Services
 Property & Casualty                         23.9%    26.7%
 Life                                        25.5     22.7 
Information Services
 Property & Casualty                          0.4      1.3 
 Life                                         5.8      5.6 
                                           -------  -------          
  Total U.S                                  11.7     21.3 
International                                 8.2      9.0 
                                           -------  -------          
    Total                                    10.8%    18.2%
=========================================  =======  =======          

<FN>

*Corporate  operating  income  includes  a  special  credit  of  $9.4 million.
</TABLE>



<PAGE>
REVENUES
                                    Three  Months
                                    Ended  June  30,
  Licensing                         1997       1996     Change
---------------------------------------------------------------
                                (Dollars  in  Millions)
Initial  charges                  $  16.6      $  12.0   37.6%
Monthly  charges                     15.7         13.8   14.1
--------------------------------------------------------------
                                  $  32.3     $  25.8    25.0%
===============================================================

Percentage  of  total  revenues      19.6%       18.8%
------------------------------------------------------


     Initial  license  revenues increased $4.6 million from the second quarter
of  1996  to  the  second  quarter  of  1997,  with the following increases by
business  unit:    domestic property and casualty up 2.5% ($0.1 million); life
insurance  and  financial solutions up 47.6% ($2.4 million); and international
up  56.2%  ($2.1  million).

Property  and  casualty  licensing  revenues  in  the  United States are being
impacted  by  various  market factors.  Prospective customers are expressing a
desire  for a Windows NT version of Series III in a client server environment.
The  Company  believes the market priority is for personal lines functionality
in  a Windows NT environment.  The first release of Series III with Windows NT
functionality  is  currently  scheduled  to  be  available  by year end.  This
release  will  support  most  personal  lines  functionality  with  additional
personal  lines  and  commercial  lines functionality scheduled for subsequent
releases.  The Company's operating results could be negatively impacted if the
Company  experiences  delays  in  delivering  Windows  NT  to  its  customers.
Additionally,  many  insurance  companies  are spending significant amounts of
money  to  solve  their  year  2000  problems.   To date, the Company does not
believe  it  has  experienced  a significant impact, positively or negatively,
from  year  2000  issues and at this time is unable to predict what the future
impact,  if  any,  will  be.

Initial  license  charges  for the second quarter of 1997 include right-to-use
charges (licenses excluding further MESA obligations) of $1.4 million compared
to  $1.7  million for the same period of 1996. Initial license charges for the
second  quarter of 1997 do not include any termination charges (related to the
buyout  of monthly license charges).  Also, during the second quarter of 1997,
the property and casualty unit executed a license agreement covering a package
of  several  of  the  Company's  information  access  and  electronic commerce
software products for $1.75 million with Insurance Information Exchange L.L.C.
(iiX). This license was signed concurrently with the execution of an agreement
which  should  ultimately  lead  to  iiX  acquiring the Company's property and
casualty  information  services  unit.

     Monthly license charges increased $1.9 million from the second quarter of
1996  to  the  second quarter of 1997 with the following increases by business
unit:    domestic property and casualty up 3.5% ($0.3 million); life insurance
up  48.6%  ($1.0  million);  and  international  up  25.1% ($0.6 million). The
increase  in  international is principally related to an increase in licensing
activities  due  to  the  acquisition  of  Co-Cam  in  August  1996.

Because  a  significant  portion of initial licensing revenues are recorded at
the  time  new  systems are licensed, there can be significant fluctuations in
revenue  from  quarter to quarter.  Set forth below is a comparison of initial
license  revenues  for  the  last  eight quarters expressed as a percentage of
total  revenues  for  each  of  the  periods  presented:


                            1997                 1996                1995
                         -----------   -------------------------  -----------
                           2nd   1st    4th    3rd    2nd   1st    4th   3rd
                         ------------  -------------------------  -----------
                                         (Dollars  in  Millions)

Initial license  revenues $16.6 $11.3  $19.4 $10.1  $12.0  $10.4  $16.1 $11.3
% of total revenues        10.0%  7.3%  11.8%  6.9%   8.8%   7.8%  11.6%  8.6%


                                 Three Months
                                 Ended June 30,
  Services                       1997     1996      Change
------------------------------------------------------------
                               (Dollars  In  Millions)
Professional  and  outsourcing  $ 90.3    $ 70.6     27.9%
Information                       41.0      40.0      2.4
Other                              1.2       0.9    483.3
------------------------------------------------------------
                                $132.5    $111.5    18.8%
============================================================

Percentage  of  total  revenues  80.4%     81.2%
-------------------------------------------------


Domestic  property and casualty professional and outsourcing services revenues
increased 22.2% ($7.6 million) due to increases in implementation services and
increases  in  processing  volumes in the outsourcing areas related to new and
existing  customers.    International  professional  and  outsourcing services
revenues  increased 23.6% ($6.1 million), principally due to services activity
of  Co-Cam,  acquired  in August 1996, and increases in the volume of services
provided  to  new  and  existing  customers.

     Domestic  life  insurance professional and outsourcing services increased
57.7%  ($6.0 million) from the second quarter 1996 to the 1997 second quarter,
due  principally  to  increased  volumes of implementation services to new and
existing  domestic  customers.

     Information services revenues increased $1.0 million from the 1996 second
quarter  to  the  1997 second quarter.  This increase is due to an increase in
property  and  casualty  information  services  revenues of $1.3 million which
consists  principally  of  fees  for domestic motor vehicle reports, partially
offset  by  a decrease of $0.3 million in life insurance information services,
principally  comprised  of  attending  physician  statements  and  application
processing  services.

<PAGE>
OPERATING  EXPENSES

Cost  of  Revenues

     Employee compensation and benefits increased 30.5% for the second quarter
1997  compared  with  the  second  quarter  of 1996, principally the result of
increased salaries and related costs associated with the acquisition of Co-Cam
in August 1996, and increased costs associated with the growth in staffing for
additional  professional  services.  Compensation and benefits increased 53.4%
($5.6  million)  internationally, while domestic increased 23% ($7.4 million).

     Computer  and  communications  expenses  increased  8.6%  ($0.7  million)
principally  as  a  result  of  increased  communications,  data  circuit  and
maintenance  costs  associated  with  the growth of the Company's domestic and
international  outsourcing  operations.

     Information  services  and  data  acquisition  costs  increased 3.6%, due
principally  to  increases  in property and casualty information costs arising
from  increased  volume  of  motor  vehicle  reports  and  in  life  insurance
information  services  arising  from  increased  volume of attending physician
statements.

     Depreciation  and  amortization  of  property,  equipment and capitalized
software  costs  increased  20.9%.  This increase is principally due to higher
amortization  expense resulting from the 1996 release of the latest version of
CyberLife  client/server  life  insurance software and the 1996 release of the
Company's property and casualty insurance Series III (Release 8) client/server
software  systems.  In  addition,  depreciation  expense  increased due to the
Company's  increased  investment  in  its information technology equipment and
expanded  facilities  costs.

     Other  operating  costs  and  expenses  increased 28.4%. This increase is
primarily related to increased fees for the use of consultants and independent
contractors, increased training costs in new technologies and the satisfaction
of  staffing  needs  for  certain  development  and  services  activities.  In
addition,  third  party  commission, rent and other facilities costs rose over
amounts  in  the  same  period  last  year.  These increases were offset by an
increase  in  amounts  capitalized  principally  related  to  the  continued
enhancement  and development of the Company's Series III property and casualty
insurance  software,  CyberLife  life  insurance  software  and  Insure  Plus
international  property  and  casualty  software.


Selling,  general  and  administrative  expenses

     Selling,  general  and  administrative  expenses  increased 31.4% for the
second  quarter  of 1997 compared with the second quarter of 1996, principally
because  of  the  Company's  investment  in  its international sales force and
infrastructure,  mainly  as a result of the August 1996 acquisition of Co-Cam.
However  when  compared  to  the fourth quarter of 1996, the increase was only
1.9%.

Litigation  settlement  and  expenses,  net

     In  May  1996,  the  Company  resolved its litigation with the California
State  Automobile  Association Inter-Insurance Bureau and the California State
Automobile  Association  ("CSAA"), concluding with the mutual dismissal of all
related  claims and counterclaims as well as the Company's recovery of certain
defense  costs  incurred  relative  to  the  CSAA  matter, with interest. As a
result,  the Company recorded a $9.4 million gain for this recovery during the
second  quarter  of  1996.

Amortization  of  goodwill  and  other  intangibles

     The  1.1%  increase  in amortization of goodwill and other intangibles is
principally  the  result  of  amortization of intangible assets related to the
acquisition  of  Co-Cam  in  August  1996.


OPERATING  INCOME

     Second  quarter  1997  operating  income  decreased  28.9% ($7.2 million)
compared with the 1996 second quarter due primarily to a litigation settlement
credit  of  $9.4  million  in  1996.  Domestic life insurance operating income
increased  67.0%,  property and casualty insurance business increased 5.4% and
international  operating  income  increased  14.3%.  The property and casualty
results  were  negatively  impacted  due to results in its outsourcing unit in
Florida.    The negative impact was due to the fact that in 1996, the state of
Florida  legislatively  imposed six month homeowner policies as opposed to the
normal  twelve  months  policies.  This decision was reversed later that year,
but now has a carryover effect, which may last for several years, which places
most policy renewal dates in the latter part of the year.  Since a significant
percentage  of  the  Company's  revenue  under  this  contract is derived from
processing  renewals,  the  operating  income  from  this  unit  declined
significantly  versus  the  second  quarter  of  1996.  In addition, this unit
suffered approximately $1 million in one time operating expenses in the second
quarter  of  1997.


OTHER  INCOME  AND  EXPENSE

     Interest  expense  remained  relatively  unchanged  at  $1.4 million. The
average  nominal  interest  rate  applicable to borrowings under the Company's
credit  facilities  during  the  second  quarter  of  1997  was  6.2%.


INCOME  TAXES

     The  effective income tax rate (income taxes expressed as a percentage of
pre-tax  income)  was 37.6% and 35.8% for the three months ended June 30, 1997
and  1996,  respectively. The effective rate for the second quarter of 1997 is
higher  than the federal statutory rate principally due to the effect of state
and  local  income  taxes.

<PAGE>
SIX  MONTHS  COMPARISON


     Comparisons  of  revenues, operating income and margins for each business
unit  for  the  periods  presented  are  as  follows:
<TABLE>
<CAPTION>

                                            Six  Months
                                          Ended  June  30,
REVENUES                                   1997     1996    Change
----------------------------------------------------------------------
                                    (Dollars  in  Millions)

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

Enterprise Software and Services
 Property & Casualty                       $112.3   $  94.9    18.4 %
 Life                                        52.9      35.7     48.0 
Information Services
 Property & Casualty                         47.0      44.8      4.9 
 Life                                        27.0      27.0     (0.2)
                                           -------  --------  -------
  Total U.S. revenues                       239.2     202.4     18.2 
International                                80.9      68.1     18.7 
                                           -------  --------  -------
    Total revenues                         $320.1   $ 270.5    18.3 %
=========================================  =======  ========  =======


OPERATING INCOME
-----------------------------------------                            
Enterprise Software and Services
 Property & Casualty                       $ 29.0   $  27.6     4.7 %
 Life                                        11.6       6.9     69.3 
Information Services
 Property & Casualty                          0.3       0.4    (31.1)
 Life                                         1.3       1.3      3.9 
Corporate                                   (12.5)     (1.5)*  715.8 
                                           -------  --------  -------
  Total U.S. operating income                29.7      34.7    (14.4)
International                                 4.7       8.5    (44.5)
                                           -------  --------  -------
    Total operating income                 $ 34.4   $  43.2   (20.4)%
=========================================  =======  ========  =======


OPERATING INCOME AS PERCENTAGE OF REVENUE
-----------------------------------------                            
Enterprise Software and Services
 Property & Casualty                         25.8%     29.2%
 Life                                        21.9      19.2 
Information Services
 Property & Casualty                          0.6       0.8 
 Life                                         5.0       4.8 
                                           -------  --------         
  Total U.S                                  12.4      17.1 
International                                 5.8      12.4 
                                           -------  --------         
    Total                                    10.7%     16.0%
=========================================  =======  ========         
<FN>

*Corporate  operating  income  includes  a  special  credit  of  $9.4 million.
</TABLE>



<PAGE>
REVENUES
                               Six  Months
                             Ended  June  30,
  Licensing                  1997       1996    Change
------------------------------------------------------
                          (Dollars  in  Millions)
Initial  charges            $  27.8    $  22.4    24.0  %
Monthly  charges               30.7       27.7    10.9
------------------------------------------------------
                            $  58.5    $  50.1    16.7  %
======================================================

Percentage of total revenues  18.3%      18.5%
------------------------------------------------

     Initial  license charges increased $5.4 million from the first six months
of  1996  to  the  first  six  months of 1997, with the following increases or
decreases  by  business unit:  domestic life insurance and financial solutions
up  83.6%  ($5.2 million); international up 26.9% ($2.1 million); and domestic
property  and  casualty  down  23.2%  ($1.9  million).

  Property  and  casualty  licensing  revenues  in the United States are being
impacted  by  various  market factors.  Prospective customers are expressing a
desire  for a Windows NT version of Series III in a client server environment.
The  Company  believes the market priority is for personal lines functionality
in  a Windows NT environment.  The first release of Series III with Windows NT
functionality  is  currently  scheduled  to  be  available  by year end.  This
release  will  support  most  personal  lines  functionality  with  additional
personal  lines  and  commercial  lines functionality scheduled for subsequent
releases.  The Company's operating results could be negatively impacted if the
Company  experiences  delays  in  delivering  Windows  NT  to  its  customers.
Additionally,  many  insurance  companies  are spending significant amounts of
money  to  solve  their  year  2000  problems.   To date, the Company does not
believe  it  has  experienced  a significant impact, positively or negatively,
from  year  2000  issues and at this time is unable to predict what the future
impact,  if  any,  will  be.

     Initial  license  charges  for  the  first  six  months  of  1997 include
right-to-use  charges  (licenses  excluding  further MESA obligations) of $2.6
million  compared  to  $2.8  million for the first six months of 1996. Initial
license  charges  for  the period also include termination charges (related to
the  buyout  of  monthly  license  charges)  of $0.2 million for the first six
months  of  1997.  Also,  during  the second quarter of 1997, the property and
casualty  unit  executed  a license agreement covering a package of several of
the Company's information access and electronic commerce software products for
$1.75  million  with Insurance Information Exchange L.L.C. (iiX). This license
was  signed  concurrently  with  the  execution  of  an agreement which should
ultimately  lead  to  iiX  acquiring  the  Company's  property  and  casualty
information  services  unit.

     Monthly  license charges increased $3.0 million from the first six months
of  1996  to  the  first  six  months  of 1997 with the following increases by
business  unit:    domestic  life  insurance  up  46.4%  ($1.9  million);  and
international  up  26.3%  ($1.3  million).  Domestic property and casualty was
relatively  unchanged. The increase in international is principally related to
an increase in licensing activities due to the acquisition of Co-Cam in August
1996.
                                  Six  Months
                                 Ended  June  30,
  Services                       1997        1996     Change
-------------------------------------------------------------
                               (Dollars  In  Millions)
Professional and outsourcing     $177.6     $140.1     26.8%
Information                        81.1       78.8      3.0
Other                               2.8        1.5     87.5
-------------------------------------------------------------
                                 $261.5     $220.4     18.7%
=============================================================

Percentage of total revenues       81.7%      81.5%
----------------------------------------------------


Domestic  property and casualty professional and outsourcing services revenues
increased  27.5%  ($18.4  million) due to increases in implementation services
and  increases  in  processing volumes in the outsourcing areas related to new
and  existing  customers.  International professional and outsourcing services
revenues  increased 18.5% ($9.8 million), principally due to services activity
of  Co-Cam,  acquired  in August 1996, and increases in the volume of services
provided  to  new  and  existing  customers.

Domestic  life insurance professional and outsourcing services increased 45.5%
($9.3  million)  from  the second quarter 1996 to the 1997 second quarter, due
principally  to  increased  volumes  of  implementation  services  to  new and
existing  domestic  customers.

Information services revenues increased $2.3 million.  This increase is due to
an  increase  in  property  and  casualty information services revenues, which
consists  principally  of  fees  for  domestic  motor  vehicle  reports.


OPERATING  EXPENSES

Cost  of  Revenues

     Employee  compensation  and  benefits  increased 26.4% from the first six
months  of  1996  to  the  first six months of 1997, principally the result of
increased salaries and related costs associated with the acquisition of Co-Cam
in August 1996, and increased costs associated with the growth in staffing for
additional  professional  and  outsourcing services. Compensation and benefits
increased  57.1%  ($11.5  million)  internationally,  while domestic increased
16.7%  ($10.7  million).

     Computer  and  communications  expenses  increased 7.7%, principally as a
result  of  increased  communications,  data  circuit  and  maintenance  costs
associated  with  the  growth  of  the  Company's  domestic  and international
outsourcing  operations.

     Information  services  and  data  acquisition  costs  increased 6.1%, due
principally  to  increases  in property and casualty information costs arising
from  increased  volume  of  motor  vehicle  reports  and  in  life  insurance
information  services  arising  from  increased  volume of attending physician
statements.

     Depreciation  and  amortization  of  property,  equipment and capitalized
software  costs  increased  23.5%.  This increase is principally due to higher
amortization  expense resulting from the 1996 release of the latest version of
CyberLife  client/server  life  insurance software and the 1996 release of the
Company's property and casualty insurance Series III (Release 8) client/server
software systems. In addition, depreciation expense increased due to Company's
increased  investment  in  its  information  technology  equipment.

     Other  operating  costs  and  expenses increased 27.4%.  This increase is
primarily related to increased fees for the use of consultants and independent
contractors, increased training costs in new technologies and the satisfaction
of  staffing  needs  for  certain  development  and  services  activities.  In
addition,  third  party commissions, rent and other facilities costs rose over
amounts  in  the  same  period  last  year.  These increases were offset by an
increase  in  amounts  capitalized  principally  related  to  the  continued
enhancement  and development of the Company's Series III property and casualty
insurance  software,  CyberLife  life  insurance  software  and  Insure  Plus
international  property  and  casualty  software.


Selling,  general  and  administrative  expenses

Selling, general and administrative expenses increased 34.5% for the first six
months of 1997 compared with the first six months of 1996, principally because
of  the  Company's  investment  in  its  international  sales  force  and
infrastructure,  mainly  as a result of the August 1996 acquisition of Co-Cam.


Litigation  settlement  and  expenses,  net

     In  May  1996,  the  Company  resolved its litigation with the California
State  Automobile  Association Inter-Insurance Bureau and the California State
Automobile  Association  ("CSAA"), concluding with the mutual dismissal of all
related  claims and counterclaims as well as the Company's recovery of certain
defense  costs  incurred  relative  to  the  CSAA  matter, with interest. As a
result,  the Company recorded a $9.4 million gain for this recovery during the
second  quarter  of  1996.

Amortization  of  goodwill  and  other  intangibles

     The  3.3%  increase  in amortization of goodwill and other intangibles is
principally  the  result  of  amortization of intangible assets related to the
acquisition  of  Co-Cam  in  August  1996.


OPERATING  INCOME

     Operating  income  decreased  20.4%  ($8.8  million)  due  primarily to a
litigation settlement credit of $9.4 million in 1996.  Domestic life insurance
operating  income increased 69.2% and property and casualty insurance business
increased  4.7%  offset  by  a  decrease  in international operating income of
44.5%.    International operating income is lower than the first six months of
1996 due to the fact that expenses rose faster than revenues, primarily in the
sales,  marketing  and  administrative  areas  as the Company has built up its
international infrastructure.  While comparative results for international are
down  versus  the  first six months of 1996, the operating income has improved
significantly  from  the  fourth  quarter  of 1996.  The property and casualty
results  were  negatively  impacted  due to results in its outsourcing unit in
Florida.    The negative impact was due to the fact that in 1996, the state of
Florida  legislatively  imposed six month homeowner policies as opposed to the
normal  twelve  months  policies.  This decision was reversed later that year,
but now has a carryover effect, which may last for several years, which places
most  policy renewal dates in the latter part of the year. Since a significant
percentage  of  the  Company's  revenue  under  this  contract is derived from
processing  renewals,  the  operating  income  from  this  unit  declined
significantly  versus  the  first  six months of 1996.  In addition, this unit
suffered approximately $1 million in one time operating expenses in the second
quarter  of  1997.


OTHER  INCOME  AND  EXPENSES

     As  a  result  of  a  higher average level of borrowed funds, principally
borrowings  under  the Company's credit facilities, interest expense increased
$0.5 million. The average nominal interest rate applicable to borrowings under
these  facilities  during  the  first  six  months  of  1997  was  6.02%.

     Investment  income  decreased  $0.8  million,  principally due to a lower
average level of interest-bearing cash equivalents during the first six months
of  1997  as  compared  to  the  same  period  of  1996.


INCOME  TAXES

     The  effective income tax rate (income taxes expressed as a percentage of
pre-tax income) was 37.6% and 35.6% for the six months ended June 30, 1997 and
1996,  respectively. The effective rate for the 1997 period is higher than the
federal statutory rate due principally to the effect of state and local income
taxes.


<PAGE>
AGREEMENT  WITH  IIX

     The  Company agreed to enter into an agreement with Insurance Information
Exchange,  L.L.C.  (iiX),  that  should  result in iiX acquiring the Company's
property  and  casualty  information  services  business.

     The  Company  and  iiX  expect  to close the transaction during August or
September.

                        LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>

                                June 30,  December 31,
                                 1997          1996
--------------------------------------------------------
                                (Dollars  in  Millions)

<S>                               <C>     <C>

Cash and equivalents, marketable
  securities, and investments     $ 18.6  $ 30.8
Current assets                     178.3   173.0
Current liabilities                 98.6   112.6
Working capital                     79.7    60.4
Long-term debt                      34.0    34.3
</TABLE>


<TABLE>
<CAPTION>

                                 Six Months Ended
                                June 30,    June 30,
                                  1997        1996
----------------------------------------------------------
                               (Dollars  in  Millions)

<S>                                 <C>      <C>

Cash provided by operations         $ 37.0   $ 37.4 
Cash used for investing activities   (45.0)   (37.5)
Cash used for financing activities   ( 4.6)   (17.2)
</TABLE>



     The  Company's   current   ratio   (current  assets  divided  by  current
liabilities)  stood  at  1.8  at  June  30, 1997, which management believes is
sufficient  when  combined with the available credit facilities to provide for
day-to-day operating needs and the flexibility to take advantage of investment
opportunities.  The  Company had available under its credit facilities (net of
amounts  outstanding  at June 30, 1997) $75.0 million under its 364 day $100.0
million  facility  and $68.0 million under its 3 year $100.0 million facility,
should  management  choose  debt financing for any of the Company's operating,
investing  or  financing  activities.  Also,  the  Company  had  available  an
uncommitted $10.0 million operating line of credit with which it may choose to
fund  temporary operating cash needs.  On August 8, the Company entered into a
new  credit  facility  for $200 million for five years, which replaces the 364
day and 3 year credit facilities. Additionally, on August 5, the $10.0 million
uncommitted operating line of credit available to the Company has increased to
$15 million.

     Cash  provided  by operations remained relatively unchanged from June 30,
1996  to  June  30,  1997.

     During  the  six  months  ended  June  30,  1997  the Company capitalized
software  development  costs  of  $29.6  million  principally  related  to the
development  of  its  Series  III client/server property and casualty software
(including  the  incorporation  of  object-oriented technology and support for
Windows  NT), CyberLife object-oriented client/server life insurance software,
an  Insure  Plus international property and casualty solution as well as other
ongoing  projects  for  other  domestic  as  well  as  international products.

     Significant expenditures anticipated for the remainder of 1997, excluding
any  possible  business  acquisitions  or  common  stock  repurchases,  are as
follows:  acquisition  of data processing, communications equipment and office
furniture,  fixtures  and  equipment  ($15 million); and costs relating to the
internal  development  of  software  systems  ($30  million).

     The  Company has historically used the cash generated from operations for
the  following:  development  and  acquisition of new products, acquisition of
businesses  and  repurchase  of  the Company's stock.  The Company anticipates
that  it will continue to use its cash for all of these purposes in the future
and  that  projected  cash from operations, cash and investment reserves along
with  amounts available under the Company's debt facilities will be sufficient
to  meet  presently  anticipated  operating  needs  and to accomplish specific
objectives  in  these  areas  and  for  other  general  corporate  purposes.


                    FACTORS THAT MAY AFFECT FUTURE RESULTS

     The  Company's  operating results and financial condition can be impacted
by  a  number of factors, including, but not limited to, the following, any of
which  could  cause  actual  results  to  vary  materially  from  current  and
historical  results  or  the  Company's  anticipated  future  results:

-  Currently,  the Company's business is focused principally within the global
property  and  casualty  and  life  insurance  industries;

-  There  is  increasing  competition for the Company's products and services;

- The market for the Company's products and services is characterized by rapid
changes  in  technology;

-  Contracts  with  governmental  agencies involve a variety of special risks,
including  the  risk  of early contract termination by the governmental agency
and  changes  associated  with  newly  elected  state administrations or newly
appointed  regulators;

-  The  timing and amount of the Company's revenues are subject to a number of
factors,  including, but not limited to, the timing of customers' decisions to
enter  into  large  license  agreements  with  the  Company;

-  Unforeseen  events or adverse economic or business trends may significantly
increase  cash  demands  beyond  those  currently  anticipated  or  affect the
Company's  ability  to  generate/raise  cash  to  satisfy  financing  needs;

-  The  Company's  operations  have  not  proven to be significantly seasonal,
although  quarterly  revenues and net income can be expected to vary at times;

-  Although  the  Company cannot accurately determine the amounts attributable
thereto, the Company has been affected by inflation through increased costs of
employee  compensation  and  other  operating  expenses.

-  Many  of  the  Company's  current and potential customers are or will spend
significant  amounts  of  money  to  make  their  existing information systems
capable  of  handling  the  year  2000.

     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 date of the financial
statements,  as  well  as the reported amounts of revenues and expenses during
the  reporting  period.  Changes  in the status of certain matters or facts or
circumstances  underlying  these estimates could result in material changes in
these  estimates,  and  actual  results  could  differ  from  these estimates.

     Because  of the foregoing factors, as well as other factors affecting the
Company's  operating  results,  past  financial  performance  should  not  be
considered  to  be  a  reliable indicator of future performance, and investors
should  not  use  historical  trends to anticipate results or trends in future
periods.


SAFE  HARBOR  STATEMENT  UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:  Statements in this report that are not descriptions of historical facts
may be forward-looking statements that are subject to risks and uncertainties,
including  economic,  competitive  and  technological  factors  affecting  the
Company's operations, markets, products, services and prices, as well as other
specific  factors  discussed  in the Company's filings with the Securities and
Exchange  Commission.  These  and  other  factors  may cause actual results to
differ  materially  from  those  anticipated.

<PAGE>

                                    PART II
                               OTHER INFORMATION

                     POLICY MANAGEMENT SYSTEMS CORPORATION


ITEM  1.    LEGAL  PROCEEDINGS

     See Note 1, Contingencies, of Notes to Consolidated Financial Statements,
which  is  incorporated  by  reference  in  this  Item.


ITEMS  2  AND  3  are  not  applicable


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

     At  the  Company's  Annual Meeting of Stockholders, held on May 13, 1997,
the  Company's  stockholders  approved:   (i) the election of three directors,
Alfred  R. Berkeley, III (14,077,050 votes for and 39,806 abstentions), Donald
W. Feddersen (14,075,998 votes for and 40,858 abstentions) and Richard G. Trub
(14,077,102  votes for and 39,754 abstentions) to serve a term of three years;
and (ii) the ratification of the selection of independent auditors (14,101,552
votes  for,  13,274  votes  against  and  2,030  abstentions).

     The  following  directors'  terms continued through the Annual Meeting of
Stockholders,  held on May 13, 1997:  G. Larry Wilson (Chairman of the Board),
Dr.  John  M.  Palms,  John  P.  Seibels  and  Joseph  D.  Sargent.


ITEM  5  IS  NOT  APPLICABLE


ITEM  6.    EXHIBITS  AND  REPORTS  ON  FORM  8-K.

Exhibits

     Exhibits required to be filed with this Quarterly Report on Form 10-Q are
listed  in  the  following  Exhibit  Index.

Reports  on  Form  8-K

     The Company did not file any reports on Form 8-K during the quarter ended
June  30,  1997.

<PAGE>







                     POLICY MANAGEMENT SYSTEMS CORPORATION


                                  SIGNATURES


Pursuant  to  the  requirements  of  the  Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to be signed on its behalf by the
undersigned  thereunto  duly  authorized.


                     POLICY MANAGEMENT SYSTEMS CORPORATION
                     -------------------------------------
                                 (Registrant)




Date:    August  12,  1997:          Timothy  V.  Williams
                                     Executive  Vice  President
                                     (Chief  Financial  Officer)

<PAGE>
                     POLICY MANAGEMENT SYSTEMS CORPORATION


                                 EXHIBIT INDEX


Exhibit
Number

 3.          ARTICLES  OF  INCORPORATION  AND  BY-LAWS

     A.          Bylaws  of  the  Company,  as  amended  through July 19, 1994
incorporating all amendments thereto subsequent to December 31, 1993 (filed as
an  Exhibit  to  Form  10-K  for  the  year  ended  December  31, 1994, and is
incorporated  herein  by  reference)

     B.          Articles  of Incorporation of the Company, as amended through
October  13, 1994, incorporating all amendments thereto subsequent to December
31,  1993  (filed  as  an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

 4.          INSTRUMENTS  DEFINING  THE  RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES

     A.        Specimen forms of certificates for Common Stock of the Company
(filed as an Exhibit to Registration Statement No. 2-74821, dated December 16,
1981,  and  is  incorporated  herein  by  reference)

     B.          Articles  of Incorporation of the Company, as amended through
October  13, 1994, incorporating all amendments thereto subsequent to December
31,  1993  (filed  as  an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

10.          MATERIAL  CONTRACTS

     A.          Policy  Management Systems Corporation 1986 Stock Option Plan
(filed as an Exhibit to Form 10-K for the year ended December 31, 1986, and is
incorporated  herein  by  reference)

     B.          Conformed copy of Development and Marketing Agreement between
International  Business  Machines  Corporation  and  Policy Management Systems
Corporation, dated July 26, 1989 (File No. 0-10175 - filed under cover of Form
SE  filed  on  September  29,  1989,  and is incorporated herein by reference)

     C.     Policy Management Systems Corporation 1989 Stock Option Plan (File
No.  0-10175  -  filed  under  cover  of  Form  SE  on  March 22, 1991, and is
incorporated  herein  by  reference)

     D.      Deferred Compensation Agreement with G. Larry Wilson (filed as an
Exhibit to Form 10-K for the year ended December 31, 1993, and is incorporated
herein  by  reference)

     E.     Executive Compensation Agreement with G. Larry Wilson (filed as an
Exhibit to Form 10-K for the year ended December 31, 1993, and is incorporated
herein  by  reference)

     F.     Employment Agreement with Stephen G. Morrison (filed as an Exhibit
to  Form 10-Q for the quarter ended March 31, 1994, and is incorporated herein
by  reference)

     G.     Stock Option/Non-Compete Agreement with Stephen G. Morrison (filed
as  an  Exhibit  to  Form  10-Q  for  the quarter ended March 31, 1994, and is
incorporated  herein  by  reference)

     H.          Shareholders'  Agreement,  dated April 26, 1994, among Policy
Management  Systems  Corporation,  General  Atlantic Partners 14, L.P. and GAP
Coinvestment  Partners (filed as an Exhibit to Form 10-Q for the quarter ended
September  30,  1994,  and  is  incorporated  herein  by  reference)

     I.       Registration Rights Agreement, dated April 26, 1994 among Policy
Management  Systems  Corporation,  General  Atlantic Partners 14, L.P. and GAP
Coinvestment  Partners (filed as an Exhibit to Form 10-Q for the quarter ended
September  30,  1994,  and  is  incorporated  herein  by  reference)

     J.     Employment Agreement with Timothy V. Williams (filed as an Exhibit
to  Form 10-K for the year ended December 31, 1994, and is incorporated herein
by  reference)

     K.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as  an  Exhibit to Form 10-Q for the quarter ended
September  30,  1992,  and  is  incorporated  herein  by  reference)

     L.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as  an  Exhibit to Form 10-Q for the quarter ended
September  30,  1994,  and  is  incorporated  herein  by  reference)

     M.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as  an  Exhibit  to  Form  10-K for the year ended
December  31,  1994,  and  is  incorporated  herein  by  reference)

     N.         Policy Management Systems Corporation 1993 Long-Term Incentive
Plan  for  Executives  (filed  as  an  Exhibit to Form 10-K for the year ended
December  31,  1994,  and  is  incorporated  herein  by  reference)

     O.      First Amendment to the Policy Management Systems Corporation 1989
Stock  Option  Plan  (filed  as  an  Exhibit  to  Form 10-K for the year ended
December  31,  1994,  and  is  incorporated  herein  by  reference)

     P.     Fourth Amendment to the Policy Management Systems Corporation 1989
Stock  Option  Plan  (filed  as an Exhibit to Form 10-Q for the quarter ending
March  31,  1995,  and  is  incorporated  herein  by  reference)

     Q.          Second  and Third Amendments to the Policy Management Systems
Corporation  1989  Stock  Option  Plan (filed as Exhibits to Form 10-Q for the
quarter  ended  June  30,  1995,  and  is  incorporated  herein  by reference)

     R.        Stock  Option/Non-Compete  Form  Agreement  for named executive 
officers  together  with  schedule  identifying  particulars  for  each  named 
executive  officer  (filed  as an  Exhibit  to Form 10-Q for the quarter ended 
June 30, 1995, and  is  incorporated  herein  by  reference)

     S.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as an Exhibit to Form 10-K for year ended December
31,  1995,  and  is  incorporated  herein  by  reference)

     T.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as an Exhibit to Form 10-K for year ended December
31,  1995,  and  is  incorporated  herein  by  reference)

     U.          Stock  Option/Non-Compete  Agreement  Amendment  No. 1  dated 
November 8, 1995  to  Stock  Option/Non-Compete Agreement dated  July 20, 1995 
with Paul R. Butare (filed as an Exhibit to Form 10-K for year  ended December 
31, 1995, and is  incorporated  herein  by  reference)

     V.         Stock  Option/Non-Compete Agreement  with  Timothy V. Williams 
dated  February 1, 1994  (filed  as an  Exhibit  to  Form  10-K for year ended 
December 31, 1995,  and  is  incorporated  herein  by  reference)

     W.      Stock Option/Non-Compete Agreement with Timothy V. Williams dated
May  10, 1995  (filed  as an Exhibit  to Form 10-K for year ended December 31, 
1995, and  is  incorporated  herein  by  reference)

     X.     Registration Rights Agreement, dated March 8, 1996, between Policy
Management  Systems  Corporation and Continental Casualty Company (filed as an
Exhibit to Form 10-Q for the quarter ended March 31, 1996, and is incorporated
herein  by  reference)

     Y.   Shareholders Agreement dated March 8, 1996 between Policy Management
Systems  Corporation  and Continental Casualty Company (filed as an Exhibit to
Form  10-Q for the quarter ended March 31, 1996, and is incorporated herein by
reference)

     Z.   Stock Option/Non-Compete Form Agreement for named executive officers
together  with  schedule  identifying  particulars  for  each  named executive
officer (filed as an Exhibit to Form 10-Q for the quarter ended June 30, 1996,
and  is  incorporated  herein  by  reference)
    
    AA.      364-Day Credit Agreement dated as of August 11, 1995 among Policy
Management Systems Corporation, the Guarantors Party thereto, the Banks Listed
therein  and  Morgan  Guaranty Trust Company of New York as Agent (filed as an
Exhibit  to Form 10-Q for the quarter ended June 30, 1996, and is incorporated
herein  by  reference)

    BB.          Three-Year Credit Agreement dated as of August 11, 1995 among
Policy Management Systems Corporation, the Guarantors Party thereto, the Banks
Listed  therein  and Morgan Guaranty Trust Company of New York as Agent (filed
as  an  Exhibit  to  Form  10-Q  for  the  quarter ended June 30, 1996, and is
incorporated  herein  by  reference)

    CC.        Amendment No. 1 to 364-Day Credit Agreement dated September 29,
1995  among  Policy  Management  Systems Corporation and Morgan Guaranty Trust
Company  of  New  York (filed as an Exhibit to Form 10-Q for the quarter ended
June  30,  1996,  and  is  incorporated  herein  by  reference)

    DD.         Amendment No. 1 to Three-Year Credit Agreement dated September
29, 1995 among Policy Management Systems Corporation and Morgan Guaranty Trust
Company  of   New York (filed as an Exhibit to Form 10-Q for the quarter ended
June  30,  1996,  and  is  incorporated  herein  by  reference)

    EE.       Amendment No. 2 to 364-Day Credit Agreement dated March 29, 1996
among  Policy Management Systems Corporation and Morgan Guaranty Trust Company
of   New York (filed as an Exhibit to Form 10-Q for the quarter ended June 30,
1996,  and  is  incorporated  herein  by  reference)

    FF.         Amendment No. 2 to Three-Year Credit Agreement dated March 29,
1996  among  Policy  Management  Systems Corporation and Morgan Guaranty Trust
Company  of  New  York (filed as an Exhibit to Form 10-Q for the quarter ended
June  30,  1996,  and  is  incorporated  herein  by  reference)

    GG.       Amendment No. 3 to 364-Day Credit Agreement dated August 9, 1996
among  Policy Management Systems Corporation and Morgan Guaranty Trust Company
of  New York (filed as an Exhibit to Form 10-Q for the quarter ended September
30,  1996,  and  is  incorporated  herein  by  reference)

    HH.         Amendment No. 3 to Three-Year Credit Agreement dated August 9,
1996  among  Policy  Management  Systems Corporation and Morgan Guaranty Trust
Company of New York  (filed as an Exhibit to Form 10-K for year ended December
31,  1996,  and  is  incorporated  herein  by  reference)

    II.           Employment Agreement Form dated November 7, 1996 for Messrs.
Butare, Morrison and Williams together with a schedule identifying particulars
for  each  executive  officer (filed as an Exhibit to Form 10-K for year ended
December  31,  1996,  and  is  incorporated  herein  by  reference)

    JJ.      Stock Option/Non-Compete Agreement with Stephen G. Morrison dated
October 22, 1996 (filed as an Exhibit to Form 10-K for year ended December 31,
1996,  and  is  incorporated  herein  by  reference)

    KK.      Stock Option/Non-Compete Form Agreement dated January 8, 1997 for
named  executive  officers  together with schedule identifying particulars for
each executive officer (filed as an Exhibit to Form 10-Q for the quarter ended
March  31,  1997,  and  is  incorporated  herein  by  reference)

    LL.       Annual Bonus Program for Executive Officers (filed as an Exhibit
to  Form 10-Q for the quarter ended March 31. 1997, and is incorporated herein
by  reference)

    MM.      Form of Amendment No. 1 to the Employment Agreements with Messrs.
Butare,  Morrison  and  Williams    (filed  herewith)

11.          STATEMENT  REGARDING  COMPUTATION  OF  PER  SHARE  EARNINGS

     A.      Filed  herewith

27.          FINANCIAL  DATA  SCHEDULE

     A.      Filed  herewith  (EDGAR  version  only)
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1

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                   FORM 10-Q

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

    For the Quarter Ended June 30, 1997     Commission file number 1-10557
                          -------------                            -------

                     POLICY MANAGEMENT SYSTEMS CORPORATION
            (Exact name of registrant as specified in its charter)

     South  Carolina                         57-0723125
     ---------------                         ----------
(State  or  other  jurisdiction             (IRS Employer
 of  incorporation)                       Identification No.)

One  PMSC  Center  (PO  Box  Ten)
Blythewood,  SC  (Columbia,  SC)          29016  (29202)
--------------------------------          --------------
(Address  of  principal  executive          (Zip  Code)
  offices)

Registrant's  telephone  number,  including  area  code  (803)  735-4000

     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 the number of shares outstanding of each of the issuer's classes
of  common  stock,  as  of  the  latest  practicable  date.

        18,219,825 Common shares, $.01 par value, as of August 8, 1997

     The  information  furnished herein reflects all adjustments which are, in
the  opinion of management, necessary for the fair presentation of the results
for the periods reported.  Such information should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended December 31, 1996.
POLICY MANAGEMENT SYSTEMS CORPORATION

                          INDEX

PART  I.  FINANCIAL  INFORMATION                      PAGE

Item 1. Financial Statements

Consolidated Statements of Income for the Three and 
Six Months ended June 30, 1997 and 1996                 3

Consolidated Balance Sheets as of June 30, 1997 
and December 31, 1996                                   4

Consolidated Statements of Cash Flows for the Six 
Months ended June 30, 1997 and 1996                     5

Notes to Consolidated Financial Statements              6

Item 2. Management's Discussion and Analysis of 
Financial Condition and Results of Operations           9

PART II. OTHER INFORMATION

Item 1. Legal Proceedings                              23

Item 4. Submission of Matters to a
    Vote of Security Holders                           23

Item 6. Exhibits and Reports on Form 8-K               23

Signatures                                             24
PART I
                              FINANCIAL INFORMATION
                      POLICY MANAGEMENT SYSTEMS CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME

                                      Three  Months           Six Months
                                      Ended June 30,         Ended June 30,
                                      1997      1996         1997      1996
                                                   (Unaudited)
-------------------------------------------------------------------------------
                                      (In Thousands, Except Per Share Data)
Revenues
 Licensing                            $ 32,309   $ 25,838   $ 58,527   $ 50,133 
 Services. . . . . . . . . . . . . .   132,491    111,494    261,529    220,382 
                                      ---------  ---------  ---------  ---------
                                       164,800    137,332    320,056    270,515 
                                      ---------  ---------  ---------  ---------
Operating expenses
 Cost of revenues
  Employee compensation & benefits .    55,351     42,405    106,598     84,331 
  Computer and communications
   expenses                              8,792      8,096     17,302     16,071 
  Information services and
   data acquisition costs               30,950     29,871     61,464     57,909 
  Depreciation and amortization of
   property, equipment and
   capitalized software costs           14,308     11,839     28,367     22,973 
  Other costs & expenses                11,713      9,122     20,058     15,750 
 Selling, general and administrative
   expenses. . . . . . . . . . . . .    23,222     17,675     46,539     34,592 
 Amortization of goodwill and
   other intangibles                     2,647      2,617      5,329      5,160 
 Litigation settlement and
   expenses, net                             -     (9,358)         -     (9,422)
                                      ---------  ---------  ---------  ---------
                                       146,983    112,267    285,657    227,364 
                                      ---------  ---------  ---------  ---------

Operating income . . . . . . . . . .    17,817     25,065     34,399     43,151 

Equity in earnings of
   unconsolidated affiliate                321          -        690          - 

Other Income and Expenses
  Investment income                        344        926        771      1,522 
  Interest expense and other
   charges                              (1,356)    (1,358)    (2,573)    (2,069)
                                      ---------  ---------  ---------  ---------
                                        (1,012)    (  432)    (1,802)    (  547)
                                      ---------  ---------  ---------  ---------
Income before income taxes . . . . .    17,126     24,633     33,287     42,604 
Income taxes                             6,432      8,830     12,501     15,173 
                                      ---------  ---------  ---------  ---------
Net income                            $ 10,694   $ 15,803   $ 20,786   $ 27,431 
                                      =========  =========  =========  =========
Net income per share                  $    .59   $    .85   $   1.14   $   1.44 
                                      =========  =========  =========  =========

Weighted average number of shares       18,187     18,604     18,183     19,034
See  accompanying  notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                          CONSOLIDATED BALANCE SHEETS

                                               (Unaudited)    (Audited)
                                                 June  30,   December 31,                                                       
                                                   1997          1996
------------------------------------------------------------------------------
                                                    (In  Thousands,
Assets                                             Except Share Data)
Current assets
 Cash and equivalents                              $  9,626   $ 22,121
 Marketable securities                                2,496      2,234
 Receivables, net of allowance for uncollectible
  amounts of $764 ($883 at 1996)                    132,060    116,113
 Income tax receivable. . . . . . . . . . . . . .     1,365      1,383
 Deferred income taxes                               15,447     15,343
 Other                                               17,333     15,840
                                                   ---------  --------
   Total current assets                             178,327    173,034

Property and equipment, at cost less accumulated
 depreciation and amortization of $132,055
 ($122,462 at 1996)                                 116,802    115,757
Receivables . . . . . . . . . . . . . . . . . . .     3,639      4,866
Income tax receivable                                 4,041      4,041
Goodwill and other intangibles, net . . . . . . .    75,541     83,363
Capitalized software costs, net                     189,438    177,875
Deferred income taxes                                 1,241      1,560
Investments                                           6,442      6,483
Other                                                 4,566      5,239
                                                   ---------  --------
     Total assets                                  $580,037   $572,218
                                                   =========  ========

Liabilities
Current liabilities
 Accounts payable and accrued expenses             $ 52,077   $ 61,435
 Accrued restructuring charges. . . . . . . . . .       647      2,478
 Accrued contract termination costs                   1,022        407
 Current portion of long-term debt. . . . . . . .    26,191     31,222
 Income taxes payable                                 8,604      6,623
 Unearned revenues                                    9,556      9,840
 Other                                                  494        631
                                                   ---------  --------
   Total current liabilities                         98,591    112,636

Long-term debt                                       34,010     34,268
Deferred income taxes . . . . . . . . . . . . . .    63,184     58,370
Accrued restructuring charges                           964      1,340
Other . . . . . . . . . . . . . . . . . . . . . .     3,253      2,352
                                                   ---------  --------
    Total liabilities                               200,002    208,966
                                                   ---------  --------

Commitments and contingencies (Note 1)

Stockholders' Equity
Special stock, $.01 par value, 5,000,000 shares
 authorized                                               -          -
Common stock, $.01 par value, 75,000,000 shares
 authorized, 18,198,189 shares issued and
 outstanding (18,179,186 at December 31, 1996). .       182        182
Additional paid-in capital                          106,795    106,104
Retained earnings . . . . . . . . . . . . . . . .   276,896    256,110
Foreign currency translation adjustment              (3,838)       856
                                                   ---------  --------
    Total stockholders' equity. . . . . . . . . .   380,035    363,252
                                                   ---------  --------
     Total liabilities and stockholders' equity    $580,037   $572,218
                                                   =========  ========
See  accompanying  notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                    Six  Months
                                                  Ended  June  30,
                                                 1997         1996
--------------------------------------------------------------------
                                                  (In  Thousands)
Operating Activities
 Net income                                      $ 20,786   $ 27,431 
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization. . . . . . . .    35,063     29,596 
   Deferred income taxes                            4,999     12,106 
   Provision for uncollectible accounts             1,516        148 
   Impairment and restructuring charges               444          - 
 Changes in assets and liabilities:
   Accrued restructuring and lease
    termination costs                             ( 2,207)   ( 5,384)
   Receivables                                    (16,236)   ( 8,585)
   Income taxes receivable                             18        192 
   Accounts payable and accrued expenses          ( 9,358)   (21,677)
   Income taxes payable                             1,981      5,449 
 Other, net                                            17    ( 1,889)
                                                 ---------  ---------
      Cash provided by operations                  37,023     37,387 
                                                 ---------  ---------

Investing Activities
 Proceeds from sales/maturities of marketable
  securities                                          250      2,450 
 Acquisition of property and equipment            (16,428)   (12,897)
 Capitalized internal software development
  costs . . . . . . . . . . . . . . . . . . . .   (29,623)   (26,718)
 Purchased software                                     -    ( 1,040)
 Proceeds from disposal of property and
  equipment                                           805        685 
                                                 ---------  ---------
      Cash used by investing activities           (44,996)   (37,520)
                                                 ---------  ---------

Financing Activities
 Payments on long-term debt                       (77,427)   (63,393)
 Repurchase of common stock                             -    (73,595)
 Proceeds from borrowing under credit facility     72,138    113,500 
 Issuance of common stock under stock
  option plans                                        691      6,248 
                                                 ---------  ---------
      Cash used by financing activities           ( 4,598)   (17,240)
                                                 ---------  ---------

Effect of exchange rate changes on cash                76        169 
Net decrease in cash and
 equivalents                                      (12,495)   (17,204)
Cash and equivalents at beginning of period        22,121     35,094 
                                                 ---------  ---------
Cash and equivalents at end of period            $  9,626   $ 17,890 
                                                 =========  =========

Supplemental Information
 Interest paid                                   $  2,212   $  1,116 
 Income taxes paid(refunded)                        3,790    ( 3,425)
See  accompanying  notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 JUNE 30, 1997

NOTE  1.          CONTINGENCIES

     In  June 1993, the Securities and Exchange Commission ("SEC") commenced a
formal  investigation  into possible violations of the Federal securities laws
in  connection with Policy Management Systems Corporation's ("Company") public
reports  and  financial  statements,  as  well  as  trading  in  the Company's
securities.

     On  July  22,  1997, the Company announced a settlement with the SEC that
closed  the  investigation  of the Company's 1990 to 1993 financial statements
and  reports.   The settlement became effective on July 22 simultaneously with
the  filing  of  an  SEC  civil  complaint  in the U.S. District Court for the
District  of  South  Carolina.    In consenting to the settlement, the Company
neither  admitted  nor  denied  the  SEC  allegations  of reporting, books and
records, and internal control violations. The key provisions of the settlement
are  an  injunction  requiring  future  compliance with the federal securities
laws,  payment  by  the  Company of a $1 million civil penalty and payments by
five  current  and  former  officers  of  $20,000  civil  penalties.

     In  March 1994, Security Life of Denver Insurance Company ("SLD") brought
suit  against the Company in the United States District Court for the District
of  Colorado  alleging  breach of a life insurance joint development contract,
unfair trade practices, and fraud. SLD sought direct, indirect, consequential,
and  punitive  damages  in excess of $80 million. In February 1997 following a
jury  trial,  the  Court  and  jury  entered judgments in favor of the Company
against  SLD  on the claims of fraud and unfair trade practices. A verdict and
judgment  was  returned against the Company for breach of contract and damages
of  $3.5  million,  together with pre-judgment interest. In addition, the jury
found that SLD was using the Company's trade secrets without permission.  As a
result  of post trial motions, the judgment was amended to delete the award of
pre-judgment  interest  and  SLD  was ordered to return the Company's systems.
Both  the Company and SLD have appealed to the United States Court of Appeals.
Changes  in  the  status  of  this  proceeding  could  result  in  a change in
subsequent  periods in the Company's estimate of anticipated liability for the
costs  associated  with  these  matters.

     The  Company  is also presently involved in litigation which commenced in
January  of  1996  in  the Circuit Court in Greenville County, South Carolina,
with  Liberty Life Insurance Company and certain of its affiliates ("Liberty")
arising  out  of  the  parties'  prior contractual relationship related to the
development  and  licensing  of  Series  III  life  insurance  systems and the
subsequent  licensing  of  the  Company's  Cybertek  life  insurance  systems.
Liberty's  complaint alleges breach of contract, breach of express and implied
warranties,  fraudulent  inducement,  breach  of  contract  accompanied  by  a
fraudulent  act,  and  recission. Liberty has alleged actual and consequential
damages  of  approximately  $30  million  and  also  seeks treble and punitive
damages. The Company has asserted various affirmative defenses and is pursuing
counterclaims  against  Liberty  for breach of contract, recoupment, breach of
good  faith  and  fair  dealing,  and  breach  of  contract  accompanied  by a
fraudulent act.  The Company is seeking equitable relief, including injunctive
relief,  and  currently  unspecified  actual,  compensatory  and consequential
damages.

     Based upon the allegations raised in a prior lawsuit and the SLD lawsuit,
the Company's insurer, St. Paul Mercury Insurance Company ("St. Paul"),in June
1995  commenced  a  declaratory  judgment action in the United States District
Court  for the District of South Carolina against the Company to determine St.
Paul's  obligation  for  defense  costs  and  to indemnify the Company for any
payment  related to these claims. The Company filed a counterclaim against St.
Paul  seeking to recover the Company's defense costs in both matters, coverage
for  damages, if any, awarded in those matters, and consequential and punitive
damages.

     In  connection  with the dismissal of the prior lawsuit, St. Paul and the
Company  agreed  to  dismiss with prejudice all claims against each other with
respect  to  the  matter, and St. Paul agreed to reimburse the Company for the
Company's legal fees. The action continues as to the parties claims related to
insurance  coverage  for  the  SLD  matter.

     In  addition  to  the  litigation described above, there are also various
other  litigation  proceedings  and  claims  arising in the ordinary course of
business.  The  Company believes it has meritorious defenses and is vigorously
defending  these  matters.

     While  the  resolution  of any of the above matters could have a material
adverse  effect  on  the  results of operations in future periods, the Company
does  not  expect  these  matters  to  have  a  material adverse effect on its
consolidated  financial  position.  The Company, however, is unable to predict
the  ultimate  outcome  or  the  potential  financial impact of these matters.

NOTE  2.          PREPARATION  OF  INTERIM  FINANCIAL  STATEMENTS

     The  consolidated  financial  statements  of  Policy  Management  Systems
Corporation have been prepared in accordance with the rules and regulations of
the  SEC.    These  consolidated  financial  statements  include estimates and
assumptions  that  affect  the  reported  amounts  of  assets and liabilities,
disclosure  of  contingent  assets and liabilities and the amounts of revenues
and  expenses.    Actual  results  could  differ from those estimated.  In the
opinion  of management, these statements include all adjustments necessary for
a fair presentation of the results of all interim periods reported herein. All
adjustments  are  of  a  normal  recurring  nature unless otherwise disclosed.
Certain  information  and  footnote  disclosures  prepared  in accordance with
generally accepted accounting principles have been either condensed or omitted
pursuant  to SEC rules and regulations.  However, management believes that the
disclosures  made  are  adequate  for  a  fair  presentation  of  results  of
operations,  financial  position and cash flows.  These consolidated financial
statements  should  be  read  in  conjunction  with the consolidated financial
statements  and  accompanying  notes  included  in the Company's latest annual
report  on  Form  10-K.

NOTE  3.          NEW  ACCOUNTING  STANDARDS

     In  February  1997,  Statement of Financial Accounting Standards No. 128,
"Earnings  Per Share" ("FAS 128"), was issued.  FAS 128 is designed to improve
the  earnings  per  share  information  provided  in  financial  statements by
simplifying  the  existing  computational  guidelines, revising the disclosure
requirements,  and  increasing the comparability of earnings per share data on
an  international basis.  FAS 128 is effective for financial statements issued
for  periods  ending  after  December  15, 1997, including interim periods and
earlier  application  is not permitted.  The Company will adopt FAS 128 on its
effective  date.    Pro forma earnings per share of the Company computed using
FAS  128  is  not  different  from  earnings per share computed using existing
standards  and  guidelines.

     In  June  1997,  Statement  of  Financial  Accounting  Standards  No. 130
"Reporting  Comprehensive Income" ("FAS 130") was issued.  FAS 130 establishes
standards  for  reporting  and  display  of  comprehensive  income  and  its
components.    FAS  130 is effective for fiscal years beginning after December
15, 1997. The effect on the Company's financial statements will be immaterial.
The  Company  will  adopt  FAS  130  on  its  effective  date.

     In  June  1997,  Statement  of  Financial  Accounting  Standards  No. 131
"Disclosures  about  Segments  of an Enterprise and Related Information" ("FAS
131")  was issued.  FAS 131 is designed to improve the information provided in
financial statements about the different types of business activities in which
the  enterprise  engages  and  economic  environments  in which the enterprise
operates.   FAS 131 is effective for fiscal years beginning after December 15,
1997.    Earlier  application is encouraged.  The Company does not believe the
adoption  of  FAS 131 will have a material impact on its financial statements.

NOTE  4.          RECLASSIFICATION

     Certain  prior  year amounts have been reclassified to conform to current
year  presentation.
POLICY MANAGEMENT SYSTEMS CORPORATION
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The  following  discussion  and  analysis  provides  information  which
management  believes  is  relevant  to  an assessment and understanding of the
Company's  consolidated  results  of  operations and financial condition.  The
discussion  should  be  read  in  conjunction  with the consolidated financial
statements  and  notes thereto contained in Part I of this report on Form 10-Q
and  with the Company's Annual Report on Form 10-K for the year ended December
31,  1996.

                             RESULTS OF OPERATIONS

     Set  forth below are certain operating items expressed as a percentage of
revenues  and  the  percent  increase  (decrease)  for those items between the
periods  presented:
1997  vs. 1996
                                                                         Percent
                                        Percentage  of  Revenues   Increase (Decrease)
                                      ---------------------------- ------------------
                                          Three           Six         Three     Six
                                       Months Ended    Months Ended   Months   Months
                                         June 30,        June 30,     Ended    Ended
                                      --------------   -------------
                                       1997   1996     1997    1996       June 30
                                      -----   ------   -----   ----- -----------------
Revenues
 Licensing                             19.6%   18.8%   18.3%   18.5%    25.0%    16.7%
 Services                              80.4    81.2    81.7    81.5     18.8     18.7 
                                      ------  ------  ------  ------                  
                                      100.0   100.0   100.0   100.0     20.0     18.3 
Operating expenses
 Cost of revenues
  Employee compensation and benefits   33.6    30.9    33.3    31.2     30.5     26.4 
  Computer & communication expenses     5.3     5.9     5.4     5.9      8.6      7.7 
  Information services & data
   acquisition costs                   18.8    21.8    19.2    21.4      3.6      6.1 
  Depreciation & amortization
   of property, equipment &
   capitalized software costs           8.7     8.6     8.9     8.5     20.9     23.5 
  Other costs & expenses                7.1     6.6     6.3     5.8     28.4     27.9 
 Selling, general &
   administrative expenses             14.1    12.9    14.5    12.8     31.4     34.5 
 Amortization of goodwill and
   other intangibles                    1.6     1.9     1.7     1.9      1.1      3.3 
 Litigation settlement and
   expenses, net                          -    (6.8)      -    (3.5)       -        - 
                                      ------  ------  ------  ------                  
                                       89.2    81.8    89.3    84.0     30.9     25.7 
Operating income . . . . . . . . . .   10.8    18.2    10.7    16.0    (28.9)   (20.4)
Equity in earnings of unconsolidated
   affiliate                            0.2       -     0.2       -        -        - 
Other income and expenses              (0.6)   (0.3)   (0.6)   (0.2)       -        - 
                                      ------  ------  ------  ------                  
Income before income taxes             10.4    17.9    10.3    15.8    (30.5)   (22.0)
Income taxes                            3.9     6.4     3.9     5.6    (27.2)   (17.6)
                                      ------  ------  ------  ------                  
Net income                              6.5%   11.5%    6.4%   10.2%  (32.3)%  (24.4)%
                                      ======  ======  ======  ======
THREE  MONTHS  COMPARISON

     Comparisons  of  revenues, operating income and margins for each business
unit  for  the  periods  presented  are  as  follows:
Three  Months
                                          Ended  June  30,
REVENUES                                   1997     1996    Change
-----------------------------------------------------------------------
                                    (Dollars  in  Millions)
Enterprise Software and Services
 Property & Casualty                       $ 55.8   $ 47.5     17.4 %
 Life                                        29.6     19.9      48.6 
Information Services
 Property & Casualty                         23.5     22.2       6.1 
 Life                                        13.8     14.0      (2.0)
                                           -------  -------  --------
  Total U.S. revenues                       122.7    103.6      18.4 
International                                42.1     33.7      25.0 
                                           -------  -------  --------
    Total revenues                         $164.8   $137.3     20.0 %
=========================================  =======  =======  ========

OPERATING INCOME
-----------------------------------------                            
Enterprise Software and Services
 Property & Casualty                       $ 13.3   $ 12.7      5.4 %
 Life                                         7.6      4.5      67.0 
Information Services
 Property & Casualty                          0.1      0.3    ( 65.2)
 Life                                         0.8      0.8       0.9 
Corporate                                    (7.4)     3.8*   (297.5)
                                           -------  -------  --------
  Total U.S. operating income                14.4     22.1    ( 34.9)
International                                 3.4      3.0      14.3 
                                           -------  -------  --------
    Total operating income                 $ 17.8   $ 25.1   ( 28.9)%
=========================================  =======  =======  ========

OPERATING INCOME AS PERCENTAGE OF REVENUE
-----------------------------------------                            
Enterprise Software and Services
 Property & Casualty                         23.9%    26.7%
 Life                                        25.5     22.7 
Information Services
 Property & Casualty                          0.4      1.3 
 Life                                         5.8      5.6 
                                           -------  -------          
  Total U.S                                  11.7     21.3 
International                                 8.2      9.0 
                                           -------  -------          
    Total                                    10.8%    18.2%
=========================================  =======  =======
*Corporate  operating  income  includes  a  special  credit  of  $9.4 million.
REVENUES
                                    Three  Months
                                    Ended  June  30,
  Licensing                         1997       1996     Change
---------------------------------------------------------------
                                (Dollars  in  Millions)
Initial  charges                  $  16.6      $  12.0   37.6%
Monthly  charges                     15.7         13.8   14.1
--------------------------------------------------------------
                                  $  32.3     $  25.8    25.0%
===============================================================

Percentage  of  total  revenues      19.6%       18.8%
------------------------------------------------------

     Initial  license  revenues increased $4.6 million from the second quarter
of  1996  to  the  second  quarter  of  1997,  with the following increases by
business  unit:    domestic property and casualty up 2.5% ($0.1 million); life
insurance  and  financial solutions up 47.6% ($2.4 million); and international
up  56.2%  ($2.1  million).

Property  and  casualty  licensing  revenues  in  the  United States are being
impacted  by  various  market factors.  Prospective customers are expressing a
desire  for a Windows NT version of Series III in a client server environment.
The  Company  believes the market priority is for personal lines functionality
in  a Windows NT environment.  The first release of Series III with Windows NT
functionality  is  currently  scheduled  to  be  available  by year end.  This
release  will  support  most  personal  lines  functionality  with  additional
personal  lines  and  commercial  lines functionality scheduled for subsequent
releases.  The Company's operating results could be negatively impacted if the
Company  experiences  delays  in  delivering  Windows  NT  to  its  customers.
Additionally,  many  insurance  companies  are spending significant amounts of
money  to  solve  their  year  2000  problems.   To date, the Company does not
believe  it  has  experienced  a significant impact, positively or negatively,
from  year  2000  issues and at this time is unable to predict what the future
impact,  if  any,  will  be.

Initial  license  charges  for the second quarter of 1997 include right-to-use
charges (licenses excluding further MESA obligations) of $1.4 million compared
to  $1.7  million for the same period of 1996. Initial license charges for the
second  quarter of 1997 do not include any termination charges (related to the
buyout  of monthly license charges).  Also, during the second quarter of 1997,
the property and casualty unit executed a license agreement covering a package
of  several  of  the  Company's  information  access  and  electronic commerce
software products for $1.75 million with Insurance Information Exchange L.L.C.
(iiX). This license was signed concurrently with the execution of an agreement
which  should  ultimately  lead  to  iiX  acquiring the Company's property and
casualty  information  services  unit.

     Monthly license charges increased $1.9 million from the second quarter of
1996  to  the  second quarter of 1997 with the following increases by business
unit:    domestic property and casualty up 3.5% ($0.3 million); life insurance
up  48.6%  ($1.0  million);  and  international  up  25.1% ($0.6 million). The
increase  in  international is principally related to an increase in licensing
activities  due  to  the  acquisition  of  Co-Cam  in  August  1996.

Because  a  significant  portion of initial licensing revenues are recorded at
the  time  new  systems are licensed, there can be significant fluctuations in
revenue  from  quarter to quarter.  Set forth below is a comparison of initial
license  revenues  for  the  last  eight quarters expressed as a percentage of
total  revenues  for  each  of  the  periods  presented:

                            1997                 1996                1995
                         -----------   -------------------------  -----------
                           2nd   1st    4th    3rd    2nd   1st    4th   3rd
                         ------------  -------------------------  -----------
                                         (Dollars  in  Millions)

Initial license  revenues $16.6 $11.3  $19.4 $10.1  $12.0  $10.4  $16.1 $11.3
% of total revenues        10.0%  7.3%  11.8%  6.9%   8.8%   7.8%  11.6%  8.6%

                                 Three Months
                                 Ended June 30,
  Services                       1997     1996      Change
------------------------------------------------------------
                               (Dollars  In  Millions)
Professional  and  outsourcing  $ 90.3    $ 70.6     27.9%
Information                       41.0      40.0      2.4
Other                              1.2       0.9    483.3
------------------------------------------------------------
                                $132.5    $111.5    18.8%
============================================================

Percentage  of  total  revenues  80.4%     81.2%
-------------------------------------------------

Domestic  property and casualty professional and outsourcing services revenues
increased 22.2% ($7.6 million) due to increases in implementation services and
increases  in  processing  volumes in the outsourcing areas related to new and
existing  customers.    International  professional  and  outsourcing services
revenues  increased 23.6% ($6.1 million), principally due to services activity
of  Co-Cam,  acquired  in August 1996, and increases in the volume of services
provided  to  new  and  existing  customers.

     Domestic  life  insurance professional and outsourcing services increased
57.7%  ($6.0 million) from the second quarter 1996 to the 1997 second quarter,
due  principally  to  increased  volumes of implementation services to new and
existing  domestic  customers.

     Information services revenues increased $1.0 million from the 1996 second
quarter  to  the  1997 second quarter.  This increase is due to an increase in
property  and  casualty  information  services  revenues of $1.3 million which
consists  principally  of  fees  for domestic motor vehicle reports, partially
offset  by  a decrease of $0.3 million in life insurance information services,
principally  comprised  of  attending  physician  statements  and  application
processing  services.
OPERATING  EXPENSES

Cost  of  Revenues

     Employee compensation and benefits increased 30.5% for the second quarter
1997  compared  with  the  second  quarter  of 1996, principally the result of
increased salaries and related costs associated with the acquisition of Co-Cam
in August 1996, and increased costs associated with the growth in staffing for
additional  professional  services.  Compensation and benefits increased 53.4%
($5.6  million)  internationally, while domestic increased 23% ($7.4 million).

     Computer  and  communications  expenses  increased  8.6%  ($0.7  million)
principally  as  a  result  of  increased  communications,  data  circuit  and
maintenance  costs  associated  with  the growth of the Company's domestic and
international  outsourcing  operations.

     Information  services  and  data  acquisition  costs  increased 3.6%, due
principally  to  increases  in property and casualty information costs arising
from  increased  volume  of  motor  vehicle  reports  and  in  life  insurance
information  services  arising  from  increased  volume of attending physician
statements.

     Depreciation  and  amortization  of  property,  equipment and capitalized
software  costs  increased  20.9%.  This increase is principally due to higher
amortization  expense resulting from the 1996 release of the latest version of
CyberLife  client/server  life  insurance software and the 1996 release of the
Company's property and casualty insurance Series III (Release 8) client/server
software  systems.  In  addition,  depreciation  expense  increased due to the
Company's  increased  investment  in  its information technology equipment and
expanded  facilities  costs.

     Other  operating  costs  and  expenses  increased 28.4%. This increase is
primarily related to increased fees for the use of consultants and independent
contractors, increased training costs in new technologies and the satisfaction
of  staffing  needs  for  certain  development  and  services  activities.  In
addition,  third  party  commission, rent and other facilities costs rose over
amounts  in  the  same  period  last  year.  These increases were offset by an
increase  in  amounts  capitalized  principally  related  to  the  continued
enhancement  and development of the Company's Series III property and casualty
insurance  software,  CyberLife  life  insurance  software  and  Insure  Plus
international  property  and  casualty  software.

Selling,  general  and  administrative  expenses

     Selling,  general  and  administrative  expenses  increased 31.4% for the
second  quarter  of 1997 compared with the second quarter of 1996, principally
because  of  the  Company's  investment  in  its international sales force and
infrastructure,  mainly  as a result of the August 1996 acquisition of Co-Cam.
However  when  compared  to  the fourth quarter of 1996, the increase was only
1.9%.

Litigation  settlement  and  expenses,  net

     In  May  1996,  the  Company  resolved its litigation with the California
State  Automobile  Association Inter-Insurance Bureau and the California State
Automobile  Association  ("CSAA"), concluding with the mutual dismissal of all
related  claims and counterclaims as well as the Company's recovery of certain
defense  costs  incurred  relative  to  the  CSAA  matter, with interest. As a
result,  the Company recorded a $9.4 million gain for this recovery during the
second  quarter  of  1996.

Amortization  of  goodwill  and  other  intangibles

     The  1.1%  increase  in amortization of goodwill and other intangibles is
principally  the  result  of  amortization of intangible assets related to the
acquisition  of  Co-Cam  in  August  1996.

OPERATING  INCOME

     Second  quarter  1997  operating  income  decreased  28.9% ($7.2 million)
compared with the 1996 second quarter due primarily to a litigation settlement
credit  of  $9.4  million  in  1996.  Domestic life insurance operating income
increased  67.0%,  property and casualty insurance business increased 5.4% and
international  operating  income  increased  14.3%.  The property and casualty
results  were  negatively  impacted  due to results in its outsourcing unit in
Florida.    The negative impact was due to the fact that in 1996, the state of
Florida  legislatively  imposed six month homeowner policies as opposed to the
normal  twelve  months  policies.  This decision was reversed later that year,
but now has a carryover effect, which may last for several years, which places
most policy renewal dates in the latter part of the year.  Since a significant
percentage  of  the  Company's  revenue  under  this  contract is derived from
processing  renewals,  the  operating  income  from  this  unit  declined
significantly  versus  the  second  quarter  of  1996.  In addition, this unit
suffered approximately $1 million in one time operating expenses in the second
quarter  of  1997.

OTHER  INCOME  AND  EXPENSE

     Interest  expense  remained  relatively  unchanged  at  $1.4 million. The
average  nominal  interest  rate  applicable to borrowings under the Company's
credit  facilities  during  the  second  quarter  of  1997  was  6.2%.

INCOME  TAXES

     The  effective income tax rate (income taxes expressed as a percentage of
pre-tax  income)  was 37.6% and 35.8% for the three months ended June 30, 1997
and  1996,  respectively. The effective rate for the second quarter of 1997 is
higher  than the federal statutory rate principally due to the effect of state
and  local  income  taxes.
SIX  MONTHS  COMPARISON

     Comparisons  of  revenues, operating income and margins for each business
unit  for  the  periods  presented  are  as  follows:
Six  Months
                                          Ended  June  30,
REVENUES                                   1997     1996    Change
----------------------------------------------------------------------
                                    (Dollars  in  Millions)
Enterprise Software and Services
 Property & Casualty                       $112.3   $  94.9    18.4 %
 Life                                        52.9      35.7     48.0 
Information Services
 Property & Casualty                         47.0      44.8      4.9 
 Life                                        27.0      27.0     (0.2)
                                           -------  --------  -------
  Total U.S. revenues                       239.2     202.4     18.2 
International                                80.9      68.1     18.7 
                                           -------  --------  -------
    Total revenues                         $320.1   $ 270.5    18.3 %
=========================================  =======  ========  =======

OPERATING INCOME
-----------------------------------------                            
Enterprise Software and Services
 Property & Casualty                       $ 29.0   $  27.6     4.7 %
 Life                                        11.6       6.9     69.3 
Information Services
 Property & Casualty                          0.3       0.4    (31.1)
 Life                                         1.3       1.3      3.9 
Corporate                                   (12.5)     (1.5)*  715.8 
                                           -------  --------  -------
  Total U.S. operating income                29.7      34.7    (14.4)
International                                 4.7       8.5    (44.5)
                                           -------  --------  -------
    Total operating income                 $ 34.4   $  43.2   (20.4)%
=========================================  =======  ========  =======

OPERATING INCOME AS PERCENTAGE OF REVENUE
-----------------------------------------                            
Enterprise Software and Services
 Property & Casualty                         25.8%     29.2%
 Life                                        21.9      19.2 
Information Services
 Property & Casualty                          0.6       0.8 
 Life                                         5.0       4.8 
                                           -------  --------         
  Total U.S                                  12.4      17.1 
International                                 5.8      12.4 
                                           -------  --------         
    Total                                    10.7%     16.0%
=========================================  =======  ========
*Corporate  operating  income  includes  a  special  credit  of  $9.4 million.
REVENUES
                               Six  Months
                             Ended  June  30,
  Licensing                  1997       1996    Change
------------------------------------------------------
                          (Dollars  in  Millions)
Initial  charges            $  27.8    $  22.4    24.0  %
Monthly  charges               30.7       27.7    10.9
------------------------------------------------------
                            $  58.5    $  50.1    16.7  %
======================================================

Percentage of total revenues  18.3%      18.5%
------------------------------------------------

     Initial  license charges increased $5.4 million from the first six months
of  1996  to  the  first  six  months of 1997, with the following increases or
decreases  by  business unit:  domestic life insurance and financial solutions
up  83.6%  ($5.2 million); international up 26.9% ($2.1 million); and domestic
property  and  casualty  down  23.2%  ($1.9  million).

  Property  and  casualty  licensing  revenues  in the United States are being
impacted  by  various  market factors.  Prospective customers are expressing a
desire  for a Windows NT version of Series III in a client server environment.
The  Company  believes the market priority is for personal lines functionality
in  a Windows NT environment.  The first release of Series III with Windows NT
functionality  is  currently  scheduled  to  be  available  by year end.  This
release  will  support  most  personal  lines  functionality  with  additional
personal  lines  and  commercial  lines functionality scheduled for subsequent
releases.  The Company's operating results could be negatively impacted if the
Company  experiences  delays  in  delivering  Windows  NT  to  its  customers.
Additionally,  many  insurance  companies  are spending significant amounts of
money  to  solve  their  year  2000  problems.   To date, the Company does not
believe  it  has  experienced  a significant impact, positively or negatively,
from  year  2000  issues and at this time is unable to predict what the future
impact,  if  any,  will  be.

     Initial  license  charges  for  the  first  six  months  of  1997 include
right-to-use  charges  (licenses  excluding  further MESA obligations) of $2.6
million  compared  to  $2.8  million for the first six months of 1996. Initial
license  charges  for  the period also include termination charges (related to
the  buyout  of  monthly  license  charges)  of $0.2 million for the first six
months  of  1997.  Also,  during  the second quarter of 1997, the property and
casualty  unit  executed  a license agreement covering a package of several of
the Company's information access and electronic commerce software products for
$1.75  million  with Insurance Information Exchange L.L.C. (iiX). This license
was  signed  concurrently  with  the  execution  of  an agreement which should
ultimately  lead  to  iiX  acquiring  the  Company's  property  and  casualty
information  services  unit.

     Monthly  license charges increased $3.0 million from the first six months
of  1996  to  the  first  six  months  of 1997 with the following increases by
business  unit:    domestic  life  insurance  up  46.4%  ($1.9  million);  and
international  up  26.3%  ($1.3  million).  Domestic property and casualty was
relatively  unchanged. The increase in international is principally related to
an increase in licensing activities due to the acquisition of Co-Cam in August
1996.
                                  Six  Months
                                 Ended  June  30,
  Services                       1997        1996     Change
-------------------------------------------------------------
                               (Dollars  In  Millions)
Professional and outsourcing     $177.6     $140.1     26.8%
Information                        81.1       78.8      3.0
Other                               2.8        1.5     87.5
-------------------------------------------------------------
                                 $261.5     $220.4     18.7%
=============================================================

Percentage of total revenues       81.7%      81.5%
----------------------------------------------------

Domestic  property and casualty professional and outsourcing services revenues
increased  27.5%  ($18.4  million) due to increases in implementation services
and  increases  in  processing volumes in the outsourcing areas related to new
and  existing  customers.  International professional and outsourcing services
revenues  increased 18.5% ($9.8 million), principally due to services activity
of  Co-Cam,  acquired  in August 1996, and increases in the volume of services
provided  to  new  and  existing  customers.

Domestic  life insurance professional and outsourcing services increased 45.5%
($9.3  million)  from  the second quarter 1996 to the 1997 second quarter, due
principally  to  increased  volumes  of  implementation  services  to  new and
existing  domestic  customers.

Information services revenues increased $2.3 million.  This increase is due to
an  increase  in  property  and  casualty information services revenues, which
consists  principally  of  fees  for  domestic  motor  vehicle  reports.

OPERATING  EXPENSES

Cost  of  Revenues

     Employee  compensation  and  benefits  increased 26.4% from the first six
months  of  1996  to  the  first six months of 1997, principally the result of
increased salaries and related costs associated with the acquisition of Co-Cam
in August 1996, and increased costs associated with the growth in staffing for
additional  professional  and  outsourcing services. Compensation and benefits
increased  57.1%  ($11.5  million)  internationally,  while domestic increased
16.7%  ($10.7  million).

     Computer  and  communications  expenses  increased 7.7%, principally as a
result  of  increased  communications,  data  circuit  and  maintenance  costs
associated  with  the  growth  of  the  Company's  domestic  and international
outsourcing  operations.

     Information  services  and  data  acquisition  costs  increased 6.1%, due
principally  to  increases  in property and casualty information costs arising
from  increased  volume  of  motor  vehicle  reports  and  in  life  insurance
information  services  arising  from  increased  volume of attending physician
statements.

     Depreciation  and  amortization  of  property,  equipment and capitalized
software  costs  increased  23.5%.  This increase is principally due to higher
amortization  expense resulting from the 1996 release of the latest version of
CyberLife  client/server  life  insurance software and the 1996 release of the
Company's property and casualty insurance Series III (Release 8) client/server
software systems. In addition, depreciation expense increased due to Company's
increased  investment  in  its  information  technology  equipment.

     Other  operating  costs  and  expenses increased 27.4%.  This increase is
primarily related to increased fees for the use of consultants and independent
contractors, increased training costs in new technologies and the satisfaction
of  staffing  needs  for  certain  development  and  services  activities.  In
addition,  third  party commissions, rent and other facilities costs rose over
amounts  in  the  same  period  last  year.  These increases were offset by an
increase  in  amounts  capitalized  principally  related  to  the  continued
enhancement  and development of the Company's Series III property and casualty
insurance  software,  CyberLife  life  insurance  software  and  Insure  Plus
international  property  and  casualty  software.

Selling,  general  and  administrative  expenses

Selling, general and administrative expenses increased 34.5% for the first six
months of 1997 compared with the first six months of 1996, principally because
of  the  Company's  investment  in  its  international  sales  force  and
infrastructure,  mainly  as a result of the August 1996 acquisition of Co-Cam.

Litigation  settlement  and  expenses,  net

     In  May  1996,  the  Company  resolved its litigation with the California
State  Automobile  Association Inter-Insurance Bureau and the California State
Automobile  Association  ("CSAA"), concluding with the mutual dismissal of all
related  claims and counterclaims as well as the Company's recovery of certain
defense  costs  incurred  relative  to  the  CSAA  matter, with interest. As a
result,  the Company recorded a $9.4 million gain for this recovery during the
second  quarter  of  1996.

Amortization  of  goodwill  and  other  intangibles

     The  3.3%  increase  in amortization of goodwill and other intangibles is
principally  the  result  of  amortization of intangible assets related to the
acquisition  of  Co-Cam  in  August  1996.

OPERATING  INCOME

     Operating  income  decreased  20.4%  ($8.8  million)  due  primarily to a
litigation settlement credit of $9.4 million in 1996.  Domestic life insurance
operating  income increased 69.2% and property and casualty insurance business
increased  4.7%  offset  by  a  decrease  in international operating income of
44.5%.    International operating income is lower than the first six months of
1996 due to the fact that expenses rose faster than revenues, primarily in the
sales,  marketing  and  administrative  areas  as the Company has built up its
international infrastructure.  While comparative results for international are
down  versus  the  first six months of 1996, the operating income has improved
significantly  from  the  fourth  quarter  of 1996.  The property and casualty
results  were  negatively  impacted  due to results in its outsourcing unit in
Florida.    The negative impact was due to the fact that in 1996, the state of
Florida  legislatively  imposed six month homeowner policies as opposed to the
normal  twelve  months  policies.  This decision was reversed later that year,
but now has a carryover effect, which may last for several years, which places
most  policy renewal dates in the latter part of the year. Since a significant
percentage  of  the  Company's  revenue  under  this  contract is derived from
processing  renewals,  the  operating  income  from  this  unit  declined
significantly  versus  the  first  six months of 1996.  In addition, this unit
suffered approximately $1 million in one time operating expenses in the second
quarter  of  1997.

OTHER  INCOME  AND  EXPENSES

     As  a  result  of  a  higher average level of borrowed funds, principally
borrowings  under  the Company's credit facilities, interest expense increased
$0.5 million. The average nominal interest rate applicable to borrowings under
these  facilities  during  the  first  six  months  of  1997  was  6.02%.

     Investment  income  decreased  $0.8  million,  principally due to a lower
average level of interest-bearing cash equivalents during the first six months
of  1997  as  compared  to  the  same  period  of  1996.

INCOME  TAXES

     The  effective income tax rate (income taxes expressed as a percentage of
pre-tax income) was 37.6% and 35.6% for the six months ended June 30, 1997 and
1996,  respectively. The effective rate for the 1997 period is higher than the
federal statutory rate due principally to the effect of state and local income
taxes.
AGREEMENT  WITH  IIX

     The  Company agreed to enter into an agreement with Insurance Information
Exchange,  L.L.C.  (iiX),  that  should  result in iiX acquiring the Company's
property  and  casualty  information  services  business.

     The  Company  and  iiX  expect  to close the transaction during August or
September.

                        LIQUIDITY AND CAPITAL RESOURCES
June 30,  December 31,
                                 1997          1996
--------------------------------------------------------
                                (Dollars  in  Millions)
Cash and equivalents, marketable
  securities, and investments     $ 18.6  $ 30.8
Current assets                     178.3   173.0
Current liabilities                 98.6   112.6
Working capital                     79.7    60.4
Long-term debt                      34.0    34.3
Six Months Ended
                                June 30,    June 30,
                                  1997        1996
----------------------------------------------------------
                               (Dollars  in  Millions)
Cash provided by operations         $ 37.0   $ 37.4 
Cash used for investing activities   (45.0)   (37.5)
Cash used for financing activities   ( 4.6)   (17.2)
The  Company's   current   ratio   (current  assets  divided  by  current
liabilities)  stood  at  1.8  at  June  30, 1997, which management believes is
sufficient  when  combined with the available credit facilities to provide for
day-to-day operating needs and the flexibility to take advantage of investment
opportunities.  The  Company had available under its credit facilities (net of
amounts  outstanding  at June 30, 1997) $75.0 million under its 364 day $100.0
million  facility  and $68.0 million under its 3 year $100.0 million facility,
should  management  choose  debt financing for any of the Company's operating,
investing  or  financing  activities.  Also,  the  Company  had  available  an
uncommitted $10.0 million operating line of credit with which it may choose to
fund  temporary operating cash needs.  On August 8, the Company entered into a
new  credit  facility  for $200 million for five years, which replaces the 364
day and 3 year credit facilities. Additionally, on August 5, the $10.0 million
uncommitted operating line of credit available to the Company has increased to
$15 million.

     Cash  provided  by operations remained relatively unchanged from June 30,
1996  to  June  30,  1997.

     During  the  six  months  ended  June  30,  1997  the Company capitalized
software  development  costs  of  $29.6  million  principally  related  to the
development  of  its  Series  III client/server property and casualty software
(including  the  incorporation  of  object-oriented technology and support for
Windows  NT), CyberLife object-oriented client/server life insurance software,
an  Insure  Plus international property and casualty solution as well as other
ongoing  projects  for  other  domestic  as  well  as  international products.

     Significant expenditures anticipated for the remainder of 1997, excluding
any  possible  business  acquisitions  or  common  stock  repurchases,  are as
follows:  acquisition  of data processing, communications equipment and office
furniture,  fixtures  and  equipment  ($15 million); and costs relating to the
internal  development  of  software  systems  ($30  million).

     The  Company has historically used the cash generated from operations for
the  following:  development  and  acquisition of new products, acquisition of
businesses  and  repurchase  of  the Company's stock.  The Company anticipates
that  it will continue to use its cash for all of these purposes in the future
and  that  projected  cash from operations, cash and investment reserves along
with  amounts available under the Company's debt facilities will be sufficient
to  meet  presently  anticipated  operating  needs  and to accomplish specific
objectives  in  these  areas  and  for  other  general  corporate  purposes.

                    FACTORS THAT MAY AFFECT FUTURE RESULTS

     The  Company's  operating results and financial condition can be impacted
by  a  number of factors, including, but not limited to, the following, any of
which  could  cause  actual  results  to  vary  materially  from  current  and
historical  results  or  the  Company's  anticipated  future  results:

-  Currently,  the Company's business is focused principally within the global
property  and  casualty  and  life  insurance  industries;

-  There  is  increasing  competition for the Company's products and services;

- The market for the Company's products and services is characterized by rapid
changes  in  technology;

-  Contracts  with  governmental  agencies involve a variety of special risks,
including  the  risk  of early contract termination by the governmental agency
and  changes  associated  with  newly  elected  state administrations or newly
appointed  regulators;

-  The  timing and amount of the Company's revenues are subject to a number of
factors,  including, but not limited to, the timing of customers' decisions to
enter  into  large  license  agreements  with  the  Company;

-  Unforeseen  events or adverse economic or business trends may significantly
increase  cash  demands  beyond  those  currently  anticipated  or  affect the
Company's  ability  to  generate/raise  cash  to  satisfy  financing  needs;

-  The  Company's  operations  have  not  proven to be significantly seasonal,
although  quarterly  revenues and net income can be expected to vary at times;

-  Although  the  Company cannot accurately determine the amounts attributable
thereto, the Company has been affected by inflation through increased costs of
employee  compensation  and  other  operating  expenses.

-  Many  of  the  Company's  current and potential customers are or will spend
significant  amounts  of  money  to  make  their  existing information systems
capable  of  handling  the  year  2000.

     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 date of the financial
statements,  as  well  as the reported amounts of revenues and expenses during
the  reporting  period.  Changes  in the status of certain matters or facts or
circumstances  underlying  these estimates could result in material changes in
these  estimates,  and  actual  results  could  differ  from  these estimates.

     Because  of the foregoing factors, as well as other factors affecting the
Company's  operating  results,  past  financial  performance  should  not  be
considered  to  be  a  reliable indicator of future performance, and investors
should  not  use  historical  trends to anticipate results or trends in future
periods.

SAFE  HARBOR  STATEMENT  UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:  Statements in this report that are not descriptions of historical facts
may be forward-looking statements that are subject to risks and uncertainties,
including  economic,  competitive  and  technological  factors  affecting  the
Company's operations, markets, products, services and prices, as well as other
specific  factors  discussed  in the Company's filings with the Securities and
Exchange  Commission.  These  and  other  factors  may cause actual results to
differ  materially  from  those  anticipated.
PART II
                               OTHER INFORMATION

                     POLICY MANAGEMENT SYSTEMS CORPORATION

ITEM  1.    LEGAL  PROCEEDINGS

     See Note 1, Contingencies, of Notes to Consolidated Financial Statements,
which  is  incorporated  by  reference  in  this  Item.

ITEMS  2  AND  3  are  not  applicable

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

     At  the  Company's  Annual Meeting of Stockholders, held on May 13, 1997,
the  Company's  stockholders  approved:   (i) the election of three directors,
Alfred  R. Berkeley, III (14,077,050 votes for and 39,806 abstentions), Donald
W. Feddersen (14,075,998 votes for and 40,858 abstentions) and Richard G. Trub
(14,077,102  votes for and 39,754 abstentions) to serve a term of three years;
and (ii) the ratification of the selection of independent auditors (14,101,552
votes  for,  13,274  votes  against  and  2,030  abstentions).

     The  following  directors'  terms continued through the Annual Meeting of
Stockholders,  held on May 13, 1997:  G. Larry Wilson (Chairman of the Board),
Dr.  John  M.  Palms,  John  P.  Seibels  and  Joseph  D.  Sargent.

ITEM  5  IS  NOT  APPLICABLE

ITEM  6.    EXHIBITS  AND  REPORTS  ON  FORM  8-K.

Exhibits

     Exhibits required to be filed with this Quarterly Report on Form 10-Q are
listed  in  the  following  Exhibit  Index.

Reports  on  Form  8-K

     The Company did not file any reports on Form 8-K during the quarter ended
June  30,  1997.
POLICY MANAGEMENT SYSTEMS CORPORATION

                                  SIGNATURES

Pursuant  to  the  requirements  of  the  Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to be signed on its behalf by the
undersigned  thereunto  duly  authorized.

                     POLICY MANAGEMENT SYSTEMS CORPORATION
                     -------------------------------------
                                 (Registrant)

Date:    August  12,  1997:          Timothy  V.  Williams
                                     Executive  Vice  President
                                     (Chief  Financial  Officer)
POLICY MANAGEMENT SYSTEMS CORPORATION

                                 EXHIBIT INDEX

Exhibit
Number

 3.          ARTICLES  OF  INCORPORATION  AND  BY-LAWS

     A.          Bylaws  of  the  Company,  as  amended  through July 19, 1994
incorporating all amendments thereto subsequent to December 31, 1993 (filed as
an  Exhibit  to  Form  10-K  for  the  year  ended  December  31, 1994, and is
incorporated  herein  by  reference)

     B.          Articles  of Incorporation of the Company, as amended through
October  13, 1994, incorporating all amendments thereto subsequent to December
31,  1993  (filed  as  an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

 4.          INSTRUMENTS  DEFINING  THE  RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES

     A.        Specimen forms of certificates for Common Stock of the Company
(filed as an Exhibit to Registration Statement No. 2-74821, dated December 16,
1981,  and  is  incorporated  herein  by  reference)

     B.          Articles  of Incorporation of the Company, as amended through
October  13, 1994, incorporating all amendments thereto subsequent to December
31,  1993  (filed  as  an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

10.          MATERIAL  CONTRACTS

     A.          Policy  Management Systems Corporation 1986 Stock Option Plan
(filed as an Exhibit to Form 10-K for the year ended December 31, 1986, and is
incorporated  herein  by  reference)

     B.          Conformed copy of Development and Marketing Agreement between
International  Business  Machines  Corporation  and  Policy Management Systems
Corporation, dated July 26, 1989 (File No. 0-10175 - filed under cover of Form
SE  filed  on  September  29,  1989,  and is incorporated herein by reference)

     C.     Policy Management Systems Corporation 1989 Stock Option Plan (File
No.  0-10175  -  filed  under  cover  of  Form  SE  on  March 22, 1991, and is
incorporated  herein  by  reference)

     D.      Deferred Compensation Agreement with G. Larry Wilson (filed as an
Exhibit to Form 10-K for the year ended December 31, 1993, and is incorporated
herein  by  reference)

     E.     Executive Compensation Agreement with G. Larry Wilson (filed as an
Exhibit to Form 10-K for the year ended December 31, 1993, and is incorporated
herein  by  reference)

     F.     Employment Agreement with Stephen G. Morrison (filed as an Exhibit
to  Form 10-Q for the quarter ended March 31, 1994, and is incorporated herein
by  reference)

     G.     Stock Option/Non-Compete Agreement with Stephen G. Morrison (filed
as  an  Exhibit  to  Form  10-Q  for  the quarter ended March 31, 1994, and is
incorporated  herein  by  reference)

     H.          Shareholders'  Agreement,  dated April 26, 1994, among Policy
Management  Systems  Corporation,  General  Atlantic Partners 14, L.P. and GAP
Coinvestment  Partners (filed as an Exhibit to Form 10-Q for the quarter ended
September  30,  1994,  and  is  incorporated  herein  by  reference)

     I.       Registration Rights Agreement, dated April 26, 1994 among Policy
Management  Systems  Corporation,  General  Atlantic Partners 14, L.P. and GAP
Coinvestment  Partners (filed as an Exhibit to Form 10-Q for the quarter ended
September  30,  1994,  and  is  incorporated  herein  by  reference)

     J.     Employment Agreement with Timothy V. Williams (filed as an Exhibit
to  Form 10-K for the year ended December 31, 1994, and is incorporated herein
by  reference)

     K.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as  an  Exhibit to Form 10-Q for the quarter ended
September  30,  1992,  and  is  incorporated  herein  by  reference)

     L.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as  an  Exhibit to Form 10-Q for the quarter ended
September  30,  1994,  and  is  incorporated  herein  by  reference)

     M.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as  an  Exhibit  to  Form  10-K for the year ended
December  31,  1994,  and  is  incorporated  herein  by  reference)

     N.         Policy Management Systems Corporation 1993 Long-Term Incentive
Plan  for  Executives  (filed  as  an  Exhibit to Form 10-K for the year ended
December  31,  1994,  and  is  incorporated  herein  by  reference)

     O.      First Amendment to the Policy Management Systems Corporation 1989
Stock  Option  Plan  (filed  as  an  Exhibit  to  Form 10-K for the year ended
December  31,  1994,  and  is  incorporated  herein  by  reference)

     P.     Fourth Amendment to the Policy Management Systems Corporation 1989
Stock  Option  Plan  (filed  as an Exhibit to Form 10-Q for the quarter ending
March  31,  1995,  and  is  incorporated  herein  by  reference)

     Q.          Second  and Third Amendments to the Policy Management Systems
Corporation  1989  Stock  Option  Plan (filed as Exhibits to Form 10-Q for the
quarter  ended  June  30,  1995,  and  is  incorporated  herein  by reference)

     R.        Stock  Option/Non-Compete  Form  Agreement  for named executive 
officers  together  with  schedule  identifying  particulars  for  each  named 
executive  officer  (filed  as an  Exhibit  to Form 10-Q for the quarter ended 
June 30, 1995, and  is  incorporated  herein  by  reference)

     S.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as an Exhibit to Form 10-K for year ended December
31,  1995,  and  is  incorporated  herein  by  reference)

     T.          Stock  Option/Non-Compete  Form Agreement for named executive
officers  together  with  schedule  identifying  particulars  for  each  named
executive  officer  (filed  as an Exhibit to Form 10-K for year ended December
31,  1995,  and  is  incorporated  herein  by  reference)

     U.          Stock  Option/Non-Compete  Agreement  Amendment  No. 1  dated 
November 8, 1995  to  Stock  Option/Non-Compete Agreement dated  July 20, 1995 
with Paul R. Butare (filed as an Exhibit to Form 10-K for year  ended December 
31, 1995, and is  incorporated  herein  by  reference)

     V.         Stock  Option/Non-Compete Agreement  with  Timothy V. Williams 
dated  February 1, 1994  (filed  as an  Exhibit  to  Form  10-K for year ended 
December 31, 1995,  and  is  incorporated  herein  by  reference)

     W.      Stock Option/Non-Compete Agreement with Timothy V. Williams dated
May  10, 1995  (filed  as an Exhibit  to Form 10-K for year ended December 31, 
1995, and  is  incorporated  herein  by  reference)

     X.     Registration Rights Agreement, dated March 8, 1996, between Policy
Management  Systems  Corporation and Continental Casualty Company (filed as an
Exhibit to Form 10-Q for the quarter ended March 31, 1996, and is incorporated
herein  by  reference)

     Y.   Shareholders Agreement dated March 8, 1996 between Policy Management
Systems  Corporation  and Continental Casualty Company (filed as an Exhibit to
Form  10-Q for the quarter ended March 31, 1996, and is incorporated herein by
reference)

     Z.   Stock Option/Non-Compete Form Agreement for named executive officers
together  with  schedule  identifying  particulars  for  each  named executive
officer (filed as an Exhibit to Form 10-Q for the quarter ended June 30, 1996,
and  is  incorporated  herein  by  reference)
    
    AA.      364-Day Credit Agreement dated as of August 11, 1995 among Policy
Management Systems Corporation, the Guarantors Party thereto, the Banks Listed
therein  and  Morgan  Guaranty Trust Company of New York as Agent (filed as an
Exhibit  to Form 10-Q for the quarter ended June 30, 1996, and is incorporated
herein  by  reference)

    BB.          Three-Year Credit Agreement dated as of August 11, 1995 among
Policy Management Systems Corporation, the Guarantors Party thereto, the Banks
Listed  therein  and Morgan Guaranty Trust Company of New York as Agent (filed
as  an  Exhibit  to  Form  10-Q  for  the  quarter ended June 30, 1996, and is
incorporated  herein  by  reference)

    CC.        Amendment No. 1 to 364-Day Credit Agreement dated September 29,
1995  among  Policy  Management  Systems Corporation and Morgan Guaranty Trust
Company  of  New  York (filed as an Exhibit to Form 10-Q for the quarter ended
June  30,  1996,  and  is  incorporated  herein  by  reference)

    DD.         Amendment No. 1 to Three-Year Credit Agreement dated September
29, 1995 among Policy Management Systems Corporation and Morgan Guaranty Trust
Company  of   New York (filed as an Exhibit to Form 10-Q for the quarter ended
June  30,  1996,  and  is  incorporated  herein  by  reference)

    EE.       Amendment No. 2 to 364-Day Credit Agreement dated March 29, 1996
among  Policy Management Systems Corporation and Morgan Guaranty Trust Company
of   New York (filed as an Exhibit to Form 10-Q for the quarter ended June 30,
1996,  and  is  incorporated  herein  by  reference)

    FF.         Amendment No. 2 to Three-Year Credit Agreement dated March 29,
1996  among  Policy  Management  Systems Corporation and Morgan Guaranty Trust
Company  of  New  York (filed as an Exhibit to Form 10-Q for the quarter ended
June  30,  1996,  and  is  incorporated  herein  by  reference)

    GG.       Amendment No. 3 to 364-Day Credit Agreement dated August 9, 1996
among  Policy Management Systems Corporation and Morgan Guaranty Trust Company
of  New York (filed as an Exhibit to Form 10-Q for the quarter ended September
30,  1996,  and  is  incorporated  herein  by  reference)

    HH.         Amendment No. 3 to Three-Year Credit Agreement dated August 9,
1996  among  Policy  Management  Systems Corporation and Morgan Guaranty Trust
Company of New York  (filed as an Exhibit to Form 10-K for year ended December
31,  1996,  and  is  incorporated  herein  by  reference)

    II.           Employment Agreement Form dated November 7, 1996 for Messrs.
Butare, Morrison and Williams together with a schedule identifying particulars
for  each  executive  officer (filed as an Exhibit to Form 10-K for year ended
December  31,  1996,  and  is  incorporated  herein  by  reference)

    JJ.      Stock Option/Non-Compete Agreement with Stephen G. Morrison dated
October 22, 1996 (filed as an Exhibit to Form 10-K for year ended December 31,
1996,  and  is  incorporated  herein  by  reference)

    KK.      Stock Option/Non-Compete Form Agreement dated January 8, 1997 for
named  executive  officers  together with schedule identifying particulars for
each executive officer (filed as an Exhibit to Form 10-Q for the quarter ended
March  31,  1997,  and  is  incorporated  herein  by  reference)

    LL.       Annual Bonus Program for Executive Officers (filed as an Exhibit
to  Form 10-Q for the quarter ended March 31. 1997, and is incorporated herein
by  reference)

    MM.      Form of Amendment No. 1 to the Employment Agreements with Messrs.
Butare,  Morrison  and  Williams    (filed  herewith)

11.          STATEMENT  REGARDING  COMPUTATION  OF  PER  SHARE  EARNINGS

     A.      Filed  herewith

27.          FINANCIAL  DATA  SCHEDULE

     A.      Filed  herewith  (EDGAR  version  only)