SECURITIES AND EXCHANGE COMMISSION

                    Washington, D.C.  20549



                          FORM 8-K


        Current Report Pursuant to Section 13 or 15(d)
           of the Securities Exchange Act of 1934



      Date of Report (Date of earliest event reported):

                      October 7, 1996

                   CAPITAL RE CORPORATION
                   -----------------------
               (Exact name of registrant as
                 specified in its charter)



     DELAWARE                1-10995           52-1567009
------------------       --------------        ----------
(State or other          Commission File         I.R.S.
 jurisdiction of              Number           (Employer
 incorporation or                            Identification
 organization)                                   Number)


1325 AVENUE OF THE AMERICAS      NEW YORK, NY       10019
-----------------------------------------------------------
  (Address of principal executive offices)       (Zip code)



     Registrant's telephone number, including area code:

                         (212) 974-0100



------------------------------------------------------------
(Former name or former address, if changed since last report)







                    CAPITAL RE CORPORATION

Item 5.  Other Events.

On October 7, 1996, Capital Re Corporation (the "Company")
issued a press release announcing an agreement to acquire RGB
Underwriting Agencies, Ltd.  A copy of the press release
is included herein as Exhibit 99.1.


                         EXHIBITS



Exhibit Number           Description
---------------          -------------

99.1                     Press release, dated October 7, 1996




                        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 hereunto duly authorized.


                                     CAPITAL RE CORPORATION


Date:  October 9, 1996              By:  /s/ ALAN S. ROSEMAN
                                        ----------------------
                                        Alan S. Roseman
                                        Senior Vice President
                                        and General Counsel




                                                  Exhibit 99.1


NEWS RELEASE

Contact: Alan S. Roseman     Robin Bruce-Gardner
Senior Vice President        RGB Underwriting Agencies Ltd.
General Counsel              10th Floor
Catherine C. Bailey          2 Minster Court
Director of Communications   Mincing Lane
212-974-0100                 London EC3R 7FX
                             0171-283-0802
                              
                              
  CAPITAL RE CORPORATION ANNOUNCES AGREEMENT TO ACQUIRE RGB
                UNDERWRITING AGENCIES LTD.


NEW YORK, N.Y. October 7, 1996---Capital Re Corporation (NYSE:
KRE)  and  the  shareholders of Tower Street Holdings  Limited
announced  today  that  they  have  signed  a  memorandum   of
understanding for the acquisition by Capital Re of 100% of the
issued  shares of Tower Street Holdings Limited, the  ultimate
parent  company of RGB Underwriting Agencies Ltd.   RGB  is  a
Lloyd's   managing   agency   and  presently   manages   three
syndicates,  non-marine syndicate 490 and two life syndicates,
1171  and  332,  with  capacity  of  over 100  million pounds
sterling.   In connection  with this acquisition and with the
completion  of reconstruction  and  renewal  at  Lloyd's,
Capital  Re   will establish   a   corporate  member  at
Lloyd's   to   support underwriting   on  the  managed
syndicates.    Capital   Re's participation in RGB and its
syndicates will provide  it  with access  to  the  principal
international market for  specialty insurance  and  reinsurance
products.  RGB  has  an  excellent reputation at Lloyd's and
is recognized as a market leader  in many lines of business.

The acquisition is subject to the completion of due diligence,
Lloyd's  approval, and the execution of definitive  documents,
in  addition  to customary closing conditions.  Completion  of
the acquisition is expected by year end 1996.

Michael  E.  Satz, Chairman, President and CEO of  Capital  Re
said, "The acquisition of RGB is consistent with the strategic
direction  of Capital Re to diversify into specialty  products
in  order  to maintain earnings growth and target a return  on
equity  in  the  mid-teens.   In  partnership  with  RGB,   we
anticipate  a  coordinated strategic initiative  allowing  the
Capital   Re   corporate   group  to  more   actively   pursue
diversification of its specialty businesses.  The  opportunity
for  product  development and the business  expansion  arising
from   this   acquisition  should  produce  a   material   and
sustainable accretion to earnings."
          
Peter   Brotherton,   Director  of  RGB   in   welcoming   the
collaboration   commented,  "The  proposed  partnership   with
Capital  Re will provide the financial strength and  stability
required for the group's development into the next millennium.
In  acquiring  RGB,  Capital Re has not  only  recognized  the
quality of our Underwriters, but also the unique opportunities
that exist at Lloyd's for global expansion."
          
Capital Re Corporation, headquartered in New York City, is the
holding   company   for   several   specialized   professional
reinsurance  companies, Capital Reinsurance  Company,  Capital
Mortgage   Reinsurance  Company,  Capital  Credit  Reinsurance
Company, Ltd. and Capital Title Reinsurance Company.   Capital
Reinsurance  Company,  rated triple-A  by  Standard  &  Poor's
Corporation  and  Moody's Investors Service,  is  the  leading
reinsurer  of  financial guarantees of  investment-grade  debt
obligations.  Capital Mortgage Reinsurance Company,  rated  AA
by  Standard & Poor's Corporation, is a professional reinsurer
dedicated   exclusively  to  serving  the  mortgage   guaranty
insurance industry.  Capital Credit Reinsurance Company,  Ltd.
specializes  in providing reinsurance capacity  to  the  trade
credit  insurance market and to other credit-related insurance
lines.   Capital  Title  Reinsurance  Company,  rated  AA-  by
Standard & Poor's Corporation and Duff & Phelps, Inc., is  the
first  professional  reinsurer dedicated  exclusively  to  the
title  insurance industry.  Capital Re's total assets at  June
30,  1996  reached  $1.1 billion. Total  stockholders'  equity
stood at $448.6 million.
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SECURITIES AND EXCHANGE COMMISSION

                    Washington, D.C.  20549

                          FORM 8-K

        Current Report Pursuant to Section 13 or 15(d)
           of the Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported):

                      October 7, 1996

                   CAPITAL RE CORPORATION
                   -----------------------
               (Exact name of registrant as
                 specified in its charter)

     DELAWARE                1-10995           52-1567009
------------------       --------------        ----------
(State or other          Commission File         I.R.S.
 jurisdiction of              Number           (Employer
 incorporation or                            Identification
 organization)                                   Number)

1325 AVENUE OF THE AMERICAS      NEW YORK, NY       10019
-----------------------------------------------------------
  (Address of principal executive offices)       (Zip code)

     Registrant's telephone number, including area code:

                         (212) 974-0100

------------------------------------------------------------
(Former name or former address, if changed since last report)

                    CAPITAL RE CORPORATION

Item 5.  Other Events.

On October 7, 1996, Capital Re Corporation (the "Company")
issued a press release announcing an agreement to acquire RGB
Underwriting Agencies, Ltd.  A copy of the press release
is included herein as Exhibit 99.1.

                         EXHIBITS

Exhibit Number           Description
---------------          -------------

99.1                     Press release, dated October 7, 1996

                        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 hereunto duly authorized.

                                     CAPITAL RE CORPORATION

Date:  October 9, 1996              By:  /s/ ALAN S. ROSEMAN
                                        ----------------------
                                        Alan S. Roseman
                                        Senior Vice President
                                        and General Counsel

                                                  Exhibit 99.1

NEWS RELEASE

Contact: Alan S. Roseman     Robin Bruce-Gardner
Senior Vice President        RGB Underwriting Agencies Ltd.
General Counsel              10th Floor
Catherine C. Bailey          2 Minster Court
Director of Communications   Mincing Lane
212-974-0100                 London EC3R 7FX
                             0171-283-0802
                              
                              
  CAPITAL RE CORPORATION ANNOUNCES AGREEMENT TO ACQUIRE RGB
                UNDERWRITING AGENCIES LTD.

NEW YORK, N.Y. October 7, 1996---Capital Re Corporation (NYSE:
KRE)  and  the  shareholders of Tower Street Holdings  Limited
announced  today  that  they  have  signed  a  memorandum   of
understanding for the acquisition by Capital Re of 100% of the
issued  shares of Tower Street Holdings Limited, the  ultimate
parent  company of RGB Underwriting Agencies Ltd.   RGB  is  a
Lloyd's   managing   agency   and  presently   manages   three
syndicates,  non-marine syndicate 490 and two life syndicates,
1171  and  332,  with  capacity  of  over 100  million pounds
sterling.   In connection  with this acquisition and with the
completion  of reconstruction  and  renewal  at  Lloyd's,
Capital  Re   will establish   a   corporate  member  at
Lloyd's   to   support underwriting   on  the  managed
syndicates.    Capital   Re's participation in RGB and its
syndicates will provide  it  with access  to  the  principal
international market for  specialty insurance  and  reinsurance
products.  RGB  has  an  excellent reputation at Lloyd's and
is recognized as a market leader  in many lines of business.

The acquisition is subject to the completion of due diligence,
Lloyd's  approval, and the execution of definitive  documents,
in  addition  to customary closing conditions.  Completion  of
the acquisition is expected by year end 1996.

Michael  E.  Satz, Chairman, President and CEO of  Capital  Re
said, "The acquisition of RGB is consistent with the strategic
direction  of Capital Re to diversify into specialty  products
in  order  to maintain earnings growth and target a return  on
equity  in  the  mid-teens.   In  partnership  with  RGB,   we
anticipate  a  coordinated strategic initiative  allowing  the
Capital   Re   corporate   group  to  more   actively   pursue
diversification of its specialty businesses.  The  opportunity
for  product  development and the business  expansion  arising
from   this   acquisition  should  produce  a   material   and
sustainable accretion to earnings."
          
Peter   Brotherton,   Director  of  RGB   in   welcoming   the
collaboration   commented,  "The  proposed  partnership   with
Capital  Re will provide the financial strength and  stability
required for the group's development into the next millennium.
In  acquiring  RGB,  Capital Re has not  only  recognized  the
quality of our Underwriters, but also the unique opportunities
that exist at Lloyd's for global expansion."
          
Capital Re Corporation, headquartered in New York City, is the
holding   company   for   several   specialized   professional
reinsurance  companies, Capital Reinsurance  Company,  Capital
Mortgage   Reinsurance  Company,  Capital  Credit  Reinsurance
Company, Ltd. and Capital Title Reinsurance Company.   Capital
Reinsurance  Company,  rated triple-A  by  Standard  &  Poor's
Corporation  and  Moody's Investors Service,  is  the  leading
reinsurer  of  financial guarantees of  investment-grade  debt
obligations.  Capital Mortgage Reinsurance Company,  rated  AA
by  Standard & Poor's Corporation, is a professional reinsurer
dedicated   exclusively  to  serving  the  mortgage   guaranty
insurance industry.  Capital Credit Reinsurance Company,  Ltd.
specializes  in providing reinsurance capacity  to  the  trade
credit  insurance market and to other credit-related insurance
lines.   Capital  Title  Reinsurance  Company,  rated  AA-  by
Standard & Poor's Corporation and Duff & Phelps, Inc., is  the
first  professional  reinsurer dedicated  exclusively  to  the
title  insurance industry.  Capital Re's total assets at  June
30,  1996  reached  $1.1 billion. Total  stockholders'  equity
stood at $448.6 million.