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


June 21, 1996   
- -----------------------------------------------------------------
Date of Report (Date of earliest event reported)


HIGHLANDS INSURANCE GROUP, INC.
- -----------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)


Delaware
- -----------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)

1-14028	
(Commission File Number) 

No. 75-2370945
(IRS Employer Indentification Number)


10370 Richmond Avenue, Houston, Texas		77042-4123
- -----------------------------------------------------------------
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, Including Area Code (713) 952-9555



INFORMATION TO BE INCLUDED IN REPORT

Item 5	Other Events

	The registrant, may at its option, report under this item any events,
 with respect to which information is not otherwise called for by this
 form, that the registrant deems of importance to security holders.

	(a)	On June 21, 1996, the registrant, Highlands Insurance Group,
 Inc., issued a press release entitled "Highlands Insurance Group, Inc.
 Signs Definitive Agreement to Acquire Vik Brothers Insurance, Inc."
 pertaining, among other things, to the announcement that the registrant
 had signed a definitive agreement to acquire Vik Brothers Insurance, Inc.
 of Lawrenceville, New Jersey for total consideration of $164 million,
 including the assumption and repayment of certain stock, bank debt and
 cash.  The transaction is subject to the registrant's shareholder and
 regulatory approval and is expected to close later this year.

	Following the acquisition, Alexander M. Vik and Gustav M. Vik, co-owners
 of Vik Brothers Insurance, Inc. will own approximately 2.3 million shares
 of the common stock of the registrant valued at $44 million, representing
 9.8% of the registrant on a fully diluted basis.  The Viks will both join
 the registrant's Board of Directors, and Alexander M. Vik will be named
 Vice Chairman.  The registrant has agreed to pay additional future
 consideration in the event that Vik Brothers' operating results for the
 years 1997-1999 exceed certain financial targets.
	
	(b)	Exhibits

	Exhibit 1 - Press release dated June 21, 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.

HIGHLANDS INSURANCE GROUP, INC.


Date:  July 2, 1996	

By:  /s/  Michael A. Weberpal

Michael A. Weberpal
Vice President and Secretary
 
- -----------------------------------------------------------------

EXHIBIT 1




FOR IMMEDIATE RELEASE	       	Contact:	Charles J. Bachand
June 21, 1996                	Vice President
                             	(713)267-8567
                             	(713)267-8688 (Facsimile)

			HIGHLANDS INSURANCE GROUP,  INC.
		SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
			VIK BROTHERS INSURANCE, INC.

	Highlands Insurance Group, Inc. (Highlands)(NYSE:HIC), a 
regional property and casualty insurer, announced today that it 
has signed a definitive agreement to acquire VIK Brothers 
Insurance, Inc. of Lawrenceville, NJ (VIK Brothers) for total 
consideration of $164 million, including the assumption and 
repayment of certain debt and preferred stock.  Highlands will 
finance the acquisition with a combination of common stock, bank 
debt and cash.  The transaction is subject to Highlands' 
shareholder and regulatory approval and is expected to close 
later this year.

	VIK Brothers is an insurance holding company that primarily 
writes commercial property and casualty business for small to 
medium sized companies and, to a lesser extent, personal lines 
business.  The company is licensed in 44 states and operates 
through more than 3,150 independent agents and twelve regional 
offices.  For the year ended December 31, 1995, VIK Brothers had 
net premiums earned of $297 million and operating income, 
excluding realized gains, interest charges and purchase 
accounting adjustments, of approximately $12 million.

	Richard M. Haverland, Chairman and Chief Executive Officer 
of Highlands, states, "The acquisition of VIK Brothers is 
consistent with our goal of establishing Highlands as a platform 
for the acquisition of specialty and regionally based property 
and casualty companies.  The transaction will almost triple 
Highlands' premium base and is expected to be immediately 
accretive to earnings per share, which we believe will 
demonstrate that a disciplined and opportunistic acquisition 
strategy can create and enhance shareholder value."

	Following the acquisition, Alexander M. Vik and Gustav M. 
Vik, co-owners of VIK Brothers, will own approximately 2.3 
million shares of the common stock of Highlands valued at $44 
million, representing 9.8% of the company on a fully diluted 
basis.  The Viks will both join the Highlands' Board of Directors 
and Alexander M. Vik will be named Vice Chairman.  Highlands has 
agreed to pay additional future consideration in the event that 
VIK Brothers operating results for the years 1997 - 1999 exceed 
certain financial targets.

	Alexander M. Vik states, "We are excited about the 
opportunity to join the Highlands' platform.  Both companies 
share a commitment to achieving underwriting profitability and 
the financial strength of Highlands should enhance our 
competitive position.  We believe that VIK Brothers can add to 
Highlands' expertise and we look forward to contributing to the 
growth of their overall business."

	Highlands is a regional insurance holding company that is 
primarily engaged in the commercial property and casualty 
insurance business, specializing in workers' compensation, 
general liability and other related coverages.  Highlands was 
spun-off from Halliburton Company in January 1996, at which time 
Insurance Partners, L.P. and certain members of senior management 
at Highlands invested approximately $62.8 million in the company.
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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

June 21, 1996   
- -----------------------------------------------------------------
Date of Report (Date of earliest event reported)

HIGHLANDS INSURANCE GROUP, INC.
- -----------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)

Delaware
- -----------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)

1-14028	
(Commission File Number) 

No. 75-2370945
(IRS Employer Indentification Number)

10370 Richmond Avenue, Houston, Texas		77042-4123
- -----------------------------------------------------------------
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, Including Area Code (713) 952-9555

INFORMATION TO BE INCLUDED IN REPORT

Item 5	Other Events

	The registrant, may at its option, report under this item any events,
 with respect to which information is not otherwise called for by this
 form, that the registrant deems of importance to security holders.

	(a)	On June 21, 1996, the registrant, Highlands Insurance Group,
 Inc., issued a press release entitled "Highlands Insurance Group, Inc.
 Signs Definitive Agreement to Acquire Vik Brothers Insurance, Inc."
 pertaining, among other things, to the announcement that the registrant
 had signed a definitive agreement to acquire Vik Brothers Insurance, Inc.
 of Lawrenceville, New Jersey for total consideration of $164 million,
 including the assumption and repayment of certain stock, bank debt and
 cash.  The transaction is subject to the registrant's shareholder and
 regulatory approval and is expected to close later this year.

	Following the acquisition, Alexander M. Vik and Gustav M. Vik, co-owners
 of Vik Brothers Insurance, Inc. will own approximately 2.3 million shares
 of the common stock of the registrant valued at $44 million, representing
 9.8% of the registrant on a fully diluted basis.  The Viks will both join
 the registrant's Board of Directors, and Alexander M. Vik will be named
 Vice Chairman.  The registrant has agreed to pay additional future
 consideration in the event that Vik Brothers' operating results for the
 years 1997-1999 exceed certain financial targets.
	
	(b)	Exhibits

	Exhibit 1 - Press release dated June 21, 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.

HIGHLANDS INSURANCE GROUP, INC.

Date:  July 2, 1996	

By:  /s/  Michael A. Weberpal

Michael A. Weberpal
Vice President and Secretary
 
- -----------------------------------------------------------------

EXHIBIT 1

FOR IMMEDIATE RELEASE	       	Contact:	Charles J. Bachand
June 21, 1996                	Vice President
                             	(713)267-8567
                             	(713)267-8688 (Facsimile)

			HIGHLANDS INSURANCE GROUP,  INC.
		SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
			VIK BROTHERS INSURANCE, INC.

	Highlands Insurance Group, Inc. (Highlands)(NYSE:HIC), a 
regional property and casualty insurer, announced today that it 
has signed a definitive agreement to acquire VIK Brothers 
Insurance, Inc. of Lawrenceville, NJ (VIK Brothers) for total 
consideration of $164 million, including the assumption and 
repayment of certain debt and preferred stock.  Highlands will 
finance the acquisition with a combination of common stock, bank 
debt and cash.  The transaction is subject to Highlands' 
shareholder and regulatory approval and is expected to close 
later this year.

	VIK Brothers is an insurance holding company that primarily 
writes commercial property and casualty business for small to 
medium sized companies and, to a lesser extent, personal lines 
business.  The company is licensed in 44 states and operates 
through more than 3,150 independent agents and twelve regional 
offices.  For the year ended December 31, 1995, VIK Brothers had 
net premiums earned of $297 million and operating income, 
excluding realized gains, interest charges and purchase 
accounting adjustments, of approximately $12 million.

	Richard M. Haverland, Chairman and Chief Executive Officer 
of Highlands, states, "The acquisition of VIK Brothers is 
consistent with our goal of establishing Highlands as a platform 
for the acquisition of specialty and regionally based property 
and casualty companies.  The transaction will almost triple 
Highlands' premium base and is expected to be immediately 
accretive to earnings per share, which we believe will 
demonstrate that a disciplined and opportunistic acquisition 
strategy can create and enhance shareholder value."

	Following the acquisition, Alexander M. Vik and Gustav M. 
Vik, co-owners of VIK Brothers, will own approximately 2.3 
million shares of the common stock of Highlands valued at $44 
million, representing 9.8% of the company on a fully diluted 
basis.  The Viks will both join the Highlands' Board of Directors 
and Alexander M. Vik will be named Vice Chairman.  Highlands has 
agreed to pay additional future consideration in the event that 
VIK Brothers operating results for the years 1997 - 1999 exceed 
certain financial targets.

	Alexander M. Vik states, "We are excited about the 
opportunity to join the Highlands' platform.  Both companies 
share a commitment to achieving underwriting profitability and 
the financial strength of Highlands should enhance our 
competitive position.  We believe that VIK Brothers can add to 
Highlands' expertise and we look forward to contributing to the 
growth of their overall business."

	Highlands is a regional insurance holding company that is 
primarily engaged in the commercial property and casualty 
insurance business, specializing in workers' compensation, 
general liability and other related coverages.  Highlands was 
spun-off from Halliburton Company in January 1996, at which time 
Insurance Partners, L.P. and certain members of senior management 
at Highlands invested approximately $62.8 million in the company.