As filed with the Securities and Exchange Commission on
                       September 12, 1996
                  Registration No. 333-_______
                                
_________________________________________________________________
_________________________________________________________________
               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549
               __________________________________
                            FORM S-8
                                
                     REGISTRATION STATEMENT
                              Under
                   THE SECURITIES ACT OF 1933
                                
                 AMERICAN TRAVELLERS CORPORATION
       (Exact name of registrant as specified in charter)

          Pennsylvania                      23-1738097
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification No.)

                       3220 Tillman Drive
                      Bensalem, Pennsylvania 19020
            (Address of Principal Executive Offices)

     AMERICAN TRAVELLERS CORPORATION 1996 STOCK OPTION PLAN
                    (Full title of the plan)
                                
                         John A. Powell
               Chairman of the Board and President
                 American Travellers Corporation
                       3220 Tillman Drive
                       Bensalem, PA 19020
             (Name and address of agent for service)
                                
                         [215] 244-1600
                                
  (Telephone number, including area code, of agent for service)
                           Copies to:
                     Ramon R. Obod, Esquire
                Fox Rothschild O'Brien & Frankel
                 2000 Market Street, 10th Floor
                     Philadelphia, PA  19103


                 Calculation of Registration Fee
- -----------------------------------------------------------------------------

                                    Proposed     Proposed
                                    Maximum      Maximum
                                    Offering     Aggregate
Title of Securities  Amount to be   Price        Offering        Registration
to be Registered     Registered(1)  Per Share(2) Price           Fee

Common Stock,        2,000,000      $ 31.1875    $62,375,000     $21,508.77
$.01 par value       Shares


_____________________________________________________________________________
(1)  In accordance with Rule 416 under the Securities Act of 1933, also
includes such additional shares as may be issued to prevent dilution
of the shares covered hereby as a result of stock splits, stock
dividends or similar transactions.

(2)  Estimated solely for purposes of computing the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933.



             INFORMATION NOT REQUIRED IN PROSPECTUS

                            PART II

Item 3.   Incorporation of Documents by Reference

     The Company hereby incorporates by reference, the following
documents, each of which shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing
thereof with the Securities and Exchange Commission:

          (a)  The Company's Annual Report on Form 10-K for the
          fiscal year ended December 31, 1995;

          (b)  The Company's Quarterly Reports on Form 10-Q for
          the three months ended March 31, 1996 and June 30,
          1996, respectively;

          (c)  The Company's Proxy Statement dated April 19,
          1996;
          
          (d)  The Company's Form 8-K filed on August 28, 1996;

          (e)  The description of the Company's Common Stock,
          $.01 par value, set forth on page 25 of Amendment No. 1
          to the Company's Registration Statement on Form S-2,
          dated July 18, 1990.

Item 4.   Description of Securities

          Not Applicable.

Item 5.   Interests of Named Experts and Counsel

          Legal Matters

      Legality of the shares offered hereby has been passed  upon
for  the  Company  by Fox, Rothschild, O'Brien  &  Frankel,  2000
Market  Street,  10th  Floor, Philadelphia,  Pennsylvania  19103.
Ramon  R.  Obod, a Director of the Company, is a partner  in  the
firm of Fox, Rothschild, O'Brien & Frankel.

Experts

      The consolidated financial statements and schedules of  the
Company  and  its subsidiaries contained in the Company's  Annual
Report  on Form 10-K for the fiscal year ended December 31,  1995
which  have  been  incorporated herein by  reference,  have  been
audited  by  Arthur Andersen LLP, independent public accountants,
as  indicated  in  their  report with  respect  thereto,  and  is
included  herein in reliance upon  the authority of such firm  as
experts  in accounting and auditing.

Item 6.   Indemnification of Directors and Officers

      Under  Sections  1741  through  1750  of  the  Pennsylvania
Business Corporation Law of 1988, as amended, and Section 8365 of
the  Pennsylvania Directors' Liability Act, the Company  has  the
power   to  indemnify  directors  and  officers,  under   certain
prescribed  circumstances  and subject  to  certain  limitations,
against  certain  costs and expenses, including attorney's  fees,
actually  and reasonably incurred in connection with any  action,
suit  or  proceeding, whether civil, criminal, administrative  or
investigative, to which any of them is a party by reason  of  his
being  a  director or officer of the Company if it is  determined
that  he  acted  in  accordance with the applicable  standard  of
conduct   set   forth   in  such  statutory   provisions.    Such
indemnification may be made whether or not the Company would have
the power to indemnify the director under any other provision  of
law  and whether or not the indemnified liability arises or arose
from any action by or in the right of the Company.

     The Company may also purchase and maintain insurance for the
benefit of any director or officer and which may cover claims for
which the Registrant could not indemnify such person.

      Article  8 of the Articles of Incorporation of the  Company
provides as follows:

      "The Corporation shall indemnify any and all of its present
or  former  directors and officers and any person who is  or  was
serving  at  the  request of the Corporation  as  a  director  or
officer  of  another  corporation  or  of  a  partnership,  joint
venture,  trust  or  other  enterprise,  including  service  with
respect  to  employee  benefit  plans,  to  the  fullest   extent
permitted  by  law.  Such right of indemnification shall  not  be
exclusive of any other right which such officers and directors of
the  Corporation and other persons may have or hereafter  acquire
and,  without  limiting the generality of  such  statement,  they
shall  be  entitled to their respective rights of indemnification
under  any By-Law, agreement, vote of shareholders, provision  of
law  or  otherwise, as well as their rights under  this  Article.
The foregoing indemnification provisions shall be retroactive  to
January 27, 1987 to the fullest extent permitted by law."

     Article X of the By Laws of the Company provides as follows:

      "1.   Right to Indemnification: Each person who was  or  is
made  a  party  or  is threatened to be made a  party  to  or  is
involved  in  any  action,  suit  or  proceeding  (hereinafter  a
"proceeding"),   whether  civil,  criminal,   administrative   or
investigative, including, without limitation, an action  or  suit
by or in the right of the Corporation, by reason of the fact that
he  or  she,  or  a  person  of whom  he  or  she  is  the  legal
representative,  is  or  was a director  or  officer  of  another
corporation  or of a partnership, joint venture, trust  or  other
enterprise,  including service with respect to  employee  benefit
plans, whether the basis of such proceeding is alleged action  in
an  official  capacity as director or officer, or  in  any  other
capacity,  shall  be  indemnified  and  held  harmless   by   the
Corporation  to  the  fullest extent  and  manner  authorized  or
permitted by the laws of the Commonwealth of Pennsylvania, as the
same exists or may hereafter be amended (but, in the case of  any
such  amendment,  only to the extent that such amendment  permits
the  Corporation to provide broader indemnification  rights  then
said  law  permitted  the Corporation to provide  prior  to  such
amendment),  against all expense, liability and  loss  (including
attorneys' fees, judgments, penalties, fines, ERISA excise  taxes
or  penalties  and  amounts paid or to  be  paid  in  settlement)
reasonably  incurred  or suffered by such  person  in  connection
therewith and such indemnification shall continue as to a  person
who has ceased to be a director or officer and shall inure to the
benefit  of  his  or  her  heirs, executors  and  administrators:
provided,  however,  that  except as  provided  in  subsection  4
hereof,  the Corporation shall indemnify any such person  seeking
indemnification in connection with a proceeding (or part thereof)
initiated  by  such  person  only if  such  proceeding  (or  part
thereof)  was  authorized  by  the  Board  of  Directors  of  the
Corporation.   The  right to indemnification  conferred  in  this
Section  shall be a contract right and each person to  whom  this
right   to  indemnification  applies  shall  be  a  third   party
beneficiary  of  such  right and shall  be  entitled  to  enforce
against  the  Corporation all indemnification  and  other  rights
granted to such person by this such proceeding in advance of  the
final  disposition  of  a proceedings shall  be  made  only  upon
delivery to the Corporation of an undertaking, by or on behalf of
such  director or officer to repay all amounts so advanced if  it
shall  ultimately be determined that such director or officer  is
not  entitled to be indemnified under this Section or  otherwise.
The Corporation may, by action of its Board of Directors, provide
indemnification  to  employees,  agents  or  fiduciaries  of  the
Corporation or to any person who is or was serving at the request
of  the Corporation as an employee, agent or fiduciary of another
corporation  or of a partnership, joint venture, trust  or  other
enterprise,  including  service  with  respect  to  any  employee
benefit  plan,  with the same or lesser scope and effect  as  set
forth  herein and in the other subsections of this  Section.   If
and  to  the  extent  that  the  laws  of  the  Commonwealth   of
Pennsylvania require that indemnification be provided in a  given
instance  only if the person acted in good faith and in a  manner
he or she reasonably believed to be in or not opposed to the best
interests  of the Corporation, and, with respect to any  criminal
proceeding, had no reasonable cause to believe his or her conduct
was  unlawful,  then termination of any proceeding  by  judgment,
order,  settlement, conviction, or upon a plea of nolo contendere
or  its equivalent, shall not of itself create a presumption that
the person did not act in good faith and in a manner which he  or
she  reasonably  believed to be in or not  opposed  to  the  best
interests  of the Corporation, and, with respect to any  criminal
proceedings, that he or she had reasonable cause to believe  that
his  or  her conduct was unlawful.  Termination of any proceeding
by  judgment, order, settlement, conviction, or upon  a  plea  of
nolo  contendere  or its equivalent, shall not  of  itself  be  a
determination  by a court that the act or failure to  act  giving
rise   to   a  claim  for  indemnification  constituted   willful
misconduct or recklessness.

      2.    Denial  of  Right to Indemnification: Indemnification
under  subsection 1 above shall be made by the Corporation unless
a   determination   is   reasonably  and   promptly   made   that
indemnification  of a director or officer is not  proper  in  the
circumstances  because  of  grounds for  denying  indemnification
under  this  Section or under applicable law.  Such determination
may be made only (i) by the Board of Directors by a majority vote
of  a quorum consisting of directors who were not parties to such
proceeding ("disinterested directors"), or (ii) if such quorum is
not   obtainable,  or  even  if  obtainable,  if  a   quorum   of
disinterested directors so directs, by independent legal  counsel
in a written opinion, or (iii) by the shareholders.

      3.    Expenses  in Successful Defense: Notwithstanding  any
other provision of this Section, to the extent that a director or
officer  of the Corporation has been successful on the merits  or
otherwise  in defense of any proceeding referred to in subsection
1  above or in defense of any claim, issue or matter therein,  he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.

      4.    Right  of  Claimant to Bring Suit: If a  claim  under
subsection  1  of  this  Section is  not  paid  in  full  by  the
Corporation  within thirty (30) days after a  written  claim  has
been  received by the Corporation, the claimant may at  any  time
thereafter  bring  suit against the Corporation  to  recover  the
unpaid  amount  of the claim and, if successful in  whole  or  in
part,  the claimant shall be entitled to be paid also the expense
of  prosecuting such claim.  It shall be a defense  to  any  such
action  (other  than  an action brought to enforce  a  claim  for
expenses incurred in defending any proceeding in advance  of  its
final  disposition  where the required  undertaking,  if  any  is
required, has been tendered to the Corporation) that the claimant
has  not  met  the standards of conduct which make it permissible
under  the  laws  of  the Commonwealth of  Pennsylvania  for  the
Corporation to indemnify the claimant for the amount claimed, but
the  burden  of proving such defense shall be on the Corporation.
Neither  the failure of the Corporation (including its  Board  of
Directors,  independent legal counsel, or its shareholders)  that
the  claimant  has not met such applicable standard  of  conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

        5.     Non-Exclusivity   of   Rights:   The   rights   to
indemnification  and  the  payment  of  expenses  incurred  in  a
proceeding in advance of its final disposition conferred in  this
Section shall not be exclusive of any right which any person  may
have  or  hereafter acquire under any statute, provision  of  the
Articles   of   Incorporation,   by-law,   agreement,   vote   of
shareholders or disinterested directors or otherwise.

      6.   Insurance: The Corporation may maintain insurance,  at
its  expense,  to  protect  itself  and  any  director,  officer,
employee,  agent  or  fiduciary of  the  Corporation  or  another
corporation,   partnership,  joint  venture,   trust   or   other
enterprise against any expense, liability or loss, whether or not
the  Corporation  would have the power to indemnify  such  person
against  such expense, liability or loss under the  laws  of  the
Commonwealth of Pennsylvania.

     7.   Interpretation: For purposes of this Section:

      (a)   References  to "the Corporation" shall  upon  written
resolution of the Board of Directors of the Corporation  include,
in  addition  to  the  Corporation, any  constituent  corporation
(including  any  constituent  of a  constituent)  absorbed  in  a
consolidation  or  merger which, if its  separate  existence  had
continued,  would have had the power and authority  to  indemnify
its  directors or officers, so that any person who is  or  was  a
director or officer of such constituent corporation, or is or was
serving  at  the  request of such constituent  corporation  as  a
director or officer of another corporation, shall for purposes of
this  Section  be  deemed  to  hold  the  same  position  in  the
Corporation as he or she held in such constituent corporation.

      (b)  A person who acted in good faith and in a manner he or
she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed  to
have acted in a manner "not opposed to the best interests of  the
Corporation" as referred to in this Section.

      8.    Amendment  or Repeal: This Section may  hereafter  be
amended  to  repealed; provided, however, that  no  amendment  or
repeal shall reduce, terminate or otherwise adversely affect  the
right  of a person who is or was a director or officer to  obtain
indemnification  or advancement of expenses  with  respect  to  a
proceeding that pertains to or arises out of actions or omissions
that  occur  prior  to the effective date of  such  amendment  or
repeal, which date cannot be retroactive."

Item 7.   Exemption from Registration Claimed

          Not Applicable.

Item 8.   Exhibits

        Exhibit No.           Description

           4(a)               1996 Stock Option Plan.

           4(b)               Articles of Incorporation, as
                              amended and restated
                              -  Incorporated by reference to  Exhibit
                              3(a)  of the Registrant's Form 10-K  for
                              the fiscal year ended December 31, 1995.

           4(c)               Articles  of
                              Amendment - Incorporated by reference to
                              Exhibit 3(a) of the Registrant's Form 10-
                              Q for the quarter ended June 30, 1996.

           4(d)               Amended  and
                              Restated   Bylaws   -  Incorporated   by
                              reference   to  Exhibit  3(b)   to   the
                              Registrant's  Registration Statement  on
                              Form S-3 (File No. 33-94614).

           5                  Opinion of Fox, Rothschild,
                              O'Brien & Frankel.

          23(a)               Consent of Fox, Rothschild,
                              O'Brien & Frankel.  Reference
                              is made to item 5.

          23(b)               Consent of
                              Arthur Andersen LLP.


Item 9.   Undertakings

      The  Company  hereby  undertakes to  include  any  material
information  with  respect  to  the  plan  of  distribution   not
previously  disclosed  in  the  registration  statement  or   any
material   change   to  such  information  to  the   registration
statement.

       The  Company  hereby  undertakes  that,  for  purposes  of
determining any liability under the Securities Act of 1933,  each
filing   of  a  post-effective  amendment  to  this  registration
statement  shall  be  deemed to be a new  registration  statement
relating  to the securities offered therein, and the offering  of
such  securities at that time shall be deemed to be  the  initial
bona fide offering thereof.

     The Company hereby undertakes to remove from registration by
means  of a post-effective amendment any of the securities  being
registered which remain unsold at the termination of the Plan.

       The  Company  hereby  undertakes  that,  for  purposes  of
determining any liability under the Securities Act of 1933,  each
filing  of the Company's annual report pursuant to Section  13(a)
or  Section  15(d) of the Securities Exchange Act  of  1934  (and
where  applicable,  each  filing of an  employee  benefit  plan's
annual  report  pursuant to this Section 15(d) of the  Securities
Exchange  Act of 1934) that is incorporated by reference  in  the
registration  statement shall be deemed to be a new  registration
statement  relating to the securities offered  therein,  and  the
offering  of such securities at that time shall be deemed  to  be
the initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the
Securities  Act  of 1933 may be permitted to directors,  officers
and  controlling  persons  of  the  registrant  pursuant  to  the
foregoing  provisions,  or otherwise,  the  registrant  has  been
advised  that  in  the  opinion of the  Securities  and  Exchange
Commission  such  indemnification is  against  public  policy  as
expressed  in the Act and is, therefore, unenforceable.   In  the
event  that  a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid  by  a  director,  officer  or  controlling  person  of  the
registrant  in  the  successful defense  of  any  action,suit  or
proceeding)  is asserted by such director, officer or controlling
person  in  connection with the securities being registered,  the
registrant will, unless in the opinion of its counsel the  matter
has  been settled by controlling precedent, submit to a court  of
appropriate    jurisdiction    the    question    whether    such
indemnification  by it is against public policy as  expressed  in
the  Act  and will be governed by the final adjudication of  such
issue.

                           SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933,
the  registrant  certifies  that it  has  reasonable  grounds  to
believe that it meets all of the requirements for filing on  Form
S-8, and has duly caused this registration statement to be signed
on  its behalf by the undersigned, thereunto duly authorized,  in
the  City of Bensalem, Commonwealth of Pennsylvania, on September
4, 1996.

                              AMERICAN TRAVELLERS CORPORATION

                                  By:/s/    John    A.     Powell
                                            John A. Powell, President,
                                            Chairman of the Board and
                                            Chief Executive Officer


      KNOW  ALL  MEN  BY THESE PRESENTS, that each  person  whose
signature  appears below constitutes and appoints John A.  Powell
and  Walter  J.  Diener, and each of them, his or  her  true  and
lawful   attorneys-in-fact  and  agents,  with  full   power   of
substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and
all  amendments  (including post-effective  amendments)  to  this
registration  statement, and to file the same with  all  exhibits
thereto,  and other documents in connection therewith,  with  the
Securities and Exchange Commission, granting unto said attorneys-
in-fact  and  agents full power and authority to do  and  perform
each  and every act and thing requisite and necessary to be done,
as  fully to all intents and purposes as he or she might or could
do  in  person,  hereby ratifying and confirming  all  that  said
attorneys-in-fact and agents, or any of them,  or  their  or  his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

      Pursuant to the requirements of the Securities Act of 1933,
this  registration  statement  has  been  signed  below  by   the
following persons in the capacities and on the dates indicated.


Signature                   Title                    Date


/s/ John A. Powell          President, Chairman of   September 12,1996
    John A. Powell          the Board, Chief
                            Executive Officer and
                            Director


/s/Benedict J. Iacovetti    Treasurer and Chief      September 12, 1996
   Benedict J. Iacovetti    Financial and Accounting
                            Officer


/s/ Susan T. Mankowski      Vice-President           September 12, 1996
    Susan T. Mankowski      Administration,
                            Secretary and Director

/s/  Walter E. Conrad       Director                 September 12, 1996
     Walter E. Conrad

/s/  Walter J. Diener       Director                 September 12, 1996
     Walter J. Diener

/s/  Arnold H. Keehn        Director                 September 12, 1996
     Arnold H. Keehn

/s/  Alice E. Powell        Director                 September 12, 1996
     Alice E. Powell

/s/  Ramon R. Obod          Director                 September 12, 1996
     Ramon R. Obod

/s/  Henry G. Hager         Director                 September 12, 1996
     Henry G. Hager


                        Index to Exhibits


Number            Exhibit

4(a)              1996 Stock Option Plan

5                 Opinion of Fox, Rothschild,
                  O'Brien & Frankel

23(b)             Consent of Arthur Andersen LLP



               Exhibit 4(a) 1996 Stock Option Plan

1.   PURPOSES OF THE PLAN

The  purposes  of  this  1996 Stock Option  Plan  are  to  enable
American  Travellers Corporation and its Subsidiaries to  attract
and  retain  the  services  of  key employees  and  persons  with
managerial,   professional   or   supervisory   responsibilities,
including, but not limited to, members of the Board of Directors,
officers of, and consultants to, the Company, responsible for the
past  and continued success of the  Company, and to provide  them
with  increased  motivation and incentive  to  exert  their  best
efforts  on  behalf  of the Company by enlarging  their  personal
stake in its success.

2.   GENERAL PROVISIONS

2.1  Definitions

As used in the Plan:

(a)   "Act"  means the Securities Exchange Act of 1934, including
any and all amendments thereto.

(b)   "Board  of Directors" means the Board of Directors  of  the
Company.

(c)    Code"  means the Internal Revenue Code of 1986,  including
any and all amendments thereto.

(d)   "Committee" means the committee appointed by the  Board  of
Directors  from time to time to administer the Plan  pursuant  to
Section 2.2.

(e)   "Common Stock" means the Company's Common Stock,  $.01  par
value.

(f)    "Company"   means  American  Travellers   Corporation,   a
Pennsylvania corporation.

(g)  "Eligible Director" means a member of the Company's Board of
Directors who is not otherwise an employee of the Company or  any
Subsidiary.

(h)   "Fair Market Value" means, with respect to a specific date,
the last reported sale price of the Common Stock in the over-the-
counter  market, as reported by NASDAQ; however,  if  the  Common
Stock  is  listed or traded on a national securities exchange  on
the date Fair Market Value is being determined, Fair Market value
shall  mean the last reported sale price of Common Stock on  such
exchange,  as  reported  by a responsible reporting  service  the
Committee selects; or if there are no transactions in the  Common
Stock  on  such day, then Fair Market Value shall mean  the  last
reported  sale  price of the Common Stock in the over-the-counter
market  or  on  such exchange, as the case may be,  on  the  last
preceding  day  on which there was a transaction  in  the  Common
Stock.   In the event the Common Stock is not so listed or traded
on  a  date  Fair Market Value is being determined,  Fair  Market
Value shall be determined on the basis of an average of the  fair
market  values  as  of such date as determined  by  two  or  more
independent and well-qualified experts in the appraisal of  stock
values,  or  on  the basis of such other method as the  Committee
shall, in good faith, determine to be reasonable.

(I)   "Formula Award" means an option grant made to  an  Eligible
Director pursuant to Section 4.2.

(j)   "Incentive Stock Option" means an option granted under  the
Plan  which  is intended to qualify as an incentive stock  option
under Section 422 of the Code.

(k)   "NASDAQ"  means  the  National  Association  of  Securities
Dealers, Inc. Automated Quotation System.

(l)   "Non-Qualified Stock Option" means an option granted  under
the Plan which is not an Incentive Stock Option.

(m)   "Participant" means a person to whom a Stock  Option  other
than a Formula Award has been granted under the Plan.

(n)  "Plan" means this 1996 Stock Option Plan.

(o)   "Rule 16b-3" means Rule 16b-3 promulgated under the Act  or
any successor Rule.

(p)   "Stock Option" means an Incentive Stock Option  or  a  Non-
Qualified Stock Option granted under the Plan.

(q)   "Subsidiary" means any corporation (other than the Company)
in  an  unbroken chain of corporations beginning with the Company
if,  at the time of the granting of the Stock Option, each of the
corporations  other  than the last corporation  in  the  unbroken
chain  owns 50% or more of the  total voting power of all classes
of stock in one of the other corporations in such chain.

2.2  Administration of the Plan

(a)   The Plan shall be administered by the Committee which shall
at  all  times consist of two (2) or more persons, each  of  whom
shall  be members of the Board of Directors.  Each member of  the
Committee  shall  be  a "disinterested person"(as  such  term  is
defined  in  Rule  16b-3) and an "outside  director"  within  the
meaning of Section 162(m) of the Code and any regulations  issued
thereunder.  The Board of Directors may from time to time  remove
members from, or add members to, the Committee.  Vacancies on the
Committee,  howsoever caused, shall be filled  by  the  Board  of
Directors.   The  Committee shall select one of  its  members  as
Chairperson, and shall hold meetings at such times and places  as
it may determine.

(b)   The  Committee shall have the full power,  subject  to  and
within  the  limits of the Plan, to: (i) interpret and administer
the  Plan,  and  Stock Options granted under it;  (ii)  make  and
interpret  rules and regulations for the  administration  of  the
Plan and to make changes in and revoke such rules and regulations
(and in the exercise of this power, shall generally determine all
questions of policy and expediency that may arise and may correct
any  defect,  omission, or inconsistency  in  the  Plan  or   any
agreement  evidencing the grant of any Stock Option in  a  manner
and  to the extent it shall deem necessary to make the Plan fully
effective);  (iii) determine those persons to whom Stock  Options
other  than  Formula Awards shall be granted and  the  number  of
Stock  Options  other than Formula Awards to be  granted  to  any
person;  (iv) determine the terms of Stock Options granted  under
the  Plan,  consistent with the provisions of the Plan;  and  (v)
generally,  exercise  such  powers  and  perform  such  acts   in
connection with the Plan as are deemed necessary or expedient  to
promote  the  best interests of the Company.  The  interpretation
and construction by the Committee of any provision of the Plan or
of any Stock Option shall be final, binding and conclusive.

(c)  The Committee may act only by a majority of its members then
in  office; however, the Committee may authorize any one  (1)  or
more of its members or any officer of the Company to execute  and
deliver documents on behalf of the Committee.

(d)   No  member of the Committee shall be liable for any  action
taken or omitted to be taken or for any determination made by him
or  her  in good faith with respect to the Plan, and the  Company
shall  indemnify and hold harmless each member of  the  Committee
against any cost or expense (including counsel fees) or liability
(including  any  sum  paid in settlement  of  a  claim  with  the
approval of the Committee) arising out of any act or omission  in
connection with the administration or interpretation of the Plan,
unless arising out of such person's own fraud or bad faith.

2.3  Effective Date

The  Plan is and shall be effective March 14, 1996, the  date  of
its adoption by the Board of Directors, and Stock Options may  be
granted  from  time  to  time thereafter,  subject,  however,  to
approval of the Plan by the affirmative vote of the holders of  a
majority  of the shares of the Common Stock present in person  or
by  proxy  and  entitled  to vote at an  annual  meeting  of  the
shareholders  of  the  Company or at a  special  meeting  of  the
shareholders  of the Company expressly called for such  purposes,
or  any  adjournments thereof, held on or before March 13,  1997.
If  the Plan is not approved at such annual or special meeting or
at  any  adjournments  thereof, the Plan and  all  Stock  Options
previously granted thereunder shall become null and void.

2.4  Duration

If  approved  by the shareholders of the Company, as provided  in
Section  2.3, unless sooner terminated by the Board of Directors,
the Plan shall remain in effect until March 13, 2006.

2.5  Shares Subject to the Plan

The maximum number of shares of Common Stock which may be subject
to  Stock  Options granted under the Plan shall be 2,000,000,  of
which  the  number of such shares which shall be   available  for
issuance  pursuant  to Formula Awards made to Eligible  Directors
under  the  Plan shall be 50,000.  The Stock Options and  Formula
Awards shall be subject to  adjustment in accordance with Section
4.11  or  5.1,  as  appropriate, and shares  to  be  issued  upon
exercise  of  Stock  Options and Formula  Awards  may  be  either
authorized and unissued shares of Common Stock or authorized  and
issued   shares  of  Common Stock purchased or  acquired  by  the
Company  for any purpose.  If a Stock Option or Formula Award  or
portion  thereof  shall  expire or is  terminated,  cancelled  or
surrendered for any reason without being exercised in full,   the
unpurchased  shares of Common Stock that were  subject   to  such
Stock  Option  or  Formula  Award or  portion  thereof  shall  be
available  for future grants of Stock Options or Formula  Awards,
as the case may be, under the Plan.

2.6  Amendments

The Plan may be suspended, terminated or reinstated, in whole  or
in  part,  at any time by the Board of Directors.  The  Board  of
Directors may from time to time make such amendments to the  Plan
as  it  may  deem advisable, including, with respect to Incentive
Stock Options, amendments deemed necessary or desirable to comply
with   Section  422  of  the  Code  and  any  regulations  issued
thereunder;  provided, however, that (i) no  amendment  shall  be
made  more  than once every six (6) months that would change  the
amount,  price or timing of Formula Awards, and (ii) without  the
approval of the Company's shareholders no amendment shall be made
that:

(a)   Increases the maximum number of shares of Common Stock that
may  be subject to Stock Options or Formula Awards granted  under
the  Plan  (other  than as provided in Section 4.11  or  5.1,  as
appropriate); or (b)  Extends the term of the Plan; or
(c)   Increases  the period during which a Stock  Option  may  be
  exercised beyond ten (10) years from the date of grant; or
(d)   Otherwise  materially increases the  benefits  accruing  to
  Participants or Eligible Directors under the Plan; or
(e)   Materially modifies the requirements as to eligibility  for
participation in the Plan; or
(f)   Changes  the maximum number of shares of Common  Stock  for
  which options may be granted to any Participant during any year
  (a consecutive twelve (12) month period) (other than as provided
  in Section 5.1); or
(g)   Will cause Stock Options granted under the Plan to fail  to
meet the requirements of Rule 16b-3.
Except as otherwise provided herein, termination or amendment  of
the  Plan  shall  not, without the consent of  a  Participant  or
Eligible   Director,  affect  such  Participant's   or   Eligible
Director's  rights  under  any  Stock  Option  or  Formula  Award
previously  granted to such Participant or Eligible Director,  as
the case may be.

2.7  Participants and Grants

Stock  Options  may be granted by the Committee to those  persons
who  the  Committee  determines  have  the  capacity  to  make  a
substantial  contribution to the success  of  the  Company.   The
Committee  may  grant Stock Options to purchase  such  number  of
shares  of  Common Stock (subject to the limitations  of  Section
2.5)  as  the  Committee may, in its sole discretion,  determine.
Notwithstanding  the foregoing, no Participant shall  be  granted
Stock  Options  in  any  year (a consecutive  twelve  (12)  month
period) to purchase in excess of 750,000 shares of Common  Stock.
In granting Stock Options, the Committee, on an individual basis,
may  vary  the number of Incentive Stock Options or Non-Qualified
Stock  Options  as between Participants and may  grant  Incentive
Stock Options and/or Non-Qualified Stock Options to a Participant
in   such  amounts  as the Committee may determine  in  its  sole
discretion.

3.   STOCK OPTIONS

3.1  General

All  Stock  Options granted under the Plan shall be evidenced  by
written agreements executed by the Company and the Participant to
whom  granted and dated as of the applicable date of grant, which
agreement shall state the number of shares of Common Stock  which
may be purchased upon the exercise thereof and shall contain such
investment representation and other terms and conditions  as  the
Committee  may from time to time determine, or, in  the  case  of
Incentive Stock Options, as may be required by Section 422 of the
Code,  or  any  other applicable law.  Each such grant  shall  be
signed  on behalf of the Company by a member of the Committee  or
by an officer delegated such authority by the Committee.

3.2  Price

Subject  to the provisions of Sections 3.6(d), 4.11 and 5.1,  the
purchase  price  per  share of Common Stock subject  to  a  Stock
Option shall, in no case, be less than one hundred percent (100%)
of  the Fair Market Value of a share of Common Stock on  the date
the Stock Option is granted.

3.3  Period

The  duration or term of each Stock Option granted under the Plan
shall be for such period as the Committee shall determine but  in
no  event  more  than  ten  (10) years from  the  date  of  grant
thereof.

3.4  Exercise

Subject to Sections 2.3 and 5.4, Stock Options may be exercisable
immediately upon the grant of the Stock Option or at  such  other
time  or  times as the Committee shall specify when granting  the
Stock  Option.   Once  exercisable,  a  Stock  Option   shall  be
exercisable, in whole or in part, by delivery of a written notice
of  exercise  to  the Secretary of the Company at  the  principal
office  of  the Company specifying the number of whole shares  of
Common Stock as to which the Stock Option is then being exercised
together  with payment of the full purchase price for the  shares
being  purchased upon such exercise.  Until the shares of  Common
Stock  as  to  which a Stock Option is exercised are issued,  the
Participant shall have none of the rights of a shareholder of the
Company with respect to such shares.

3.5  Payment

The purchase price for shares of Common Stock as to which a Stock
Option has been exercised and any amount required to be withheld,
as contemplated by Section 5.3, may be paid:

(a)  In United States dollars in cash, or by check, bank draft or
money order payable in United States dollars to the order of  the
Company; or

(b)   By the delivery by the Participant to the Company of  whole
shares  of Common Stock having an aggregate Fair Market Value  on
the  date of payment equal to the aggregate of the purchase price
of  Common  Stock  as  to which the Stock Option  is  then  being
exercised  or by the withholding of whole shares of Common  Stock
having  such  Fair Market Value upon the exercise of  such  Stock
Option; or

(c)  By a combination of both (a) and (b) above.

The   Committee  may,  in  its  discretion,  impose  limitations,
conditions and prohibitions on the use by a Participant of shares
of  Common  Stock  to  pay the purchase  price  payable  by  such
Participant upon the exercise of a Stock Option.

3.6  Special Rules for Incentive Stock Options

Notwithstanding  any other provision of the Plan,  the  following
provisions  shall apply to Incentive Stock Options granted  under
the Plan:

(a)    Incentive   Stock  Options  shall  only  be   granted   to
Participants who are employees of the Company or a Subsidiary.

(b)  To the extent that the aggregate Fair Market Value of stock,
with respect to which Incentive Stock Options are exercisable for
the  first  time by a Participant during any calendar year  under
the  Plan  and  any other Stock Option Plan of the Company  or  a
Subsidiary, exceeds $100,000, such Stock Options shall be treated
as Non-Qualified Stock Options.

(c)   Any  Participant  who disposes of shares  of  Common  Stock
acquired upon the exercise of an Incentive Stock Option  by  sale
or  exchange  either within two (2) years after the date  of  the
grant  of the Incentive Stock Option under which the shares  were
acquired  or  within  one  (1) year of the  acquisition  of  such
shares, shall promptly notify the Secretary of the Company at the
principal  office of the Company of such disposition, the  amount
realized, the purchase price per share paid upon exercise and the
date of disposition.

(d)   No Incentive Stock Option shall be granted to a Participant
  who, at the time of the grant, owns stock representing more than
  ten  percent  (10%) of the total combined voting power  of  all
  classes  of  stock  either  of the Company  or  any  parent  or
  Subsidiary  of the Company, unless the purchase  price  of  the
  shares  of  Common  Stock purchasable  upon  exercise  of  such
  Incentive Stock Option is at least one hundred ten percent (110%)
  of the Fair Market Value (at the time  the Incentive Stock Option
  is granted) of the Common stock and the Incentive Stock Option is
  not  exercisable more than five (5) years from the date  it  is
  granted.

3.7  Termination of Employment or Relationship

(a)   In the event a Participant's employment by, or relationship
with,  the  Company or its Subsidiaries shall terminate  for  any
reason  other  than those reasons specified in  Sections  3.7(b),
(c),  (d), (e) or (f) while such participant holds Stock  Options
granted  under  the Plan, then all rights of any kind  under  any
outstanding Stock Option held by such Participant which shall not
have previously lapsed or terminated shall expire immediately.

(b)   If a Participant's employment by, or relationship with, the
Company  or its Subsidiaries shall terminate as a result of  such
Participant's total disability, each Stock Option  held  by  such
Participant (which has not previously lapsed or terminated) shall
immediately  become fully exercisable as to the total  number  of
shares   of  Common  Stock  subject  thereto  (whether   or   not
exercisable  to that extent at the time of such termination)  and
shall  remain so exercisable by such Participant for a period  of
six (6) months after termination unless such Stock Option expires
earlier  by  its  terms.   For  purposes  of  the  Plan,   "total
disability" shall mean permanent mental or physical disability as
determined by the Committee.

(c)   In  the  event  of the death of a Participant,  each  Stock
Option  held by such Participant (which has not previously lapsed
or  terminated) shall immediately become fully exercisable as  to
the  total  number  of  shares of Common  Stock  subject  thereto
(whether or not exercisable to that extent at the time of  death)
by  the executor or administrator of the Participant's estate  or
by  the  person  or  persons to whom the  deceased  Participant's
rights  thereunder shall have passed by will or by  the  laws  of
descent or distribution, and shall remain  so exercisable  for  a
period  of six (6) months after  such Participant's death  unless
such Stock Option expires earlier by its terms.

(d)  If a Participant's employment by the Company or a Subsidiary
  shall  terminate by reason of such Participant's retirement  in
  accordance with Company policies, each Stock Option held by such
  Participant at the date of termination (which has not previously
  lapsed or terminated) shall immediately become fully exercisable
  as to the total number of shares of Common Stock subject hereto
  (whether or not exercisable to hat extent at the time  of  such
  termination) and shall remain so exercisable by such Participant
  for a period of three (3) months after termination, unless such
  Stock Option expires earlier by its terms.

(e)    In  the event the Company terminates the employment  of  a
Participant who at the time of such termination was an officer of
the  Company  and had been continuously employed  by the  Company
during  the  five  (5)  year  period immediately  preceding  such
termination,  for  any  reason  except  "good  cause"  (hereafter
defined)   and  except  upon  such  Participant's  death,   total
disability  or  retirement in accordance with  Company  policies,
each  Stock  Option  held  by  such Participant  (which  has  not
previously lapsed or terminated and which has been held  by  such
Participant  for  more  than  six  (6)  months  prior   to   such
termination) shall immediately become fully exercisable as to the
total  number of shares of Common Stock subject thereto  (whether
or   not  exercisable  to  that  extent  at  the  time  of   such
termination)  and shall remain so exercisable  for  a  period  of
three  (3)months after such termination unless such Stock  Option
expires  earlier  by its terms. A termination  for  "good  cause"
shall  have  occurred  only  if the Participant  in  question  is
terminated,  by  written  notice  (i)  because  of  his  or   her
conviction of a felony for a crime involving an act of  fraud  or
dishonesty,   (ii)   intentional  acts  or  omissions   on   such
Participant's  part causing material injury to  the  property  or
business of the Company, or (iii) because such Participant  shall
have  breached any material term of any employment  agreement  in
place  between  such Participant and the Company and  shall  have
failed  to  correct such breach within any grace period  provided
for  in  such agreement.  "Good cause" for termination shall  not
include  bad judgment or any act or omission reasonably  believed
by  such  Participant, in good faith, to have  been  in,  or  not
opposed to, the best interests of the Company.

(f)   In  the event of the termination of a Participant's service
as a Director of the Company, who at the time of such termination
was  an  Eligible  Director  and had  continuously  served  as  a
Director  of  the  Company  during  the  five  (5)  year   period
immediately  preceding such termination, and such termination  is
for  any  reason  except for such participant's  death  or  total
disability or the removal of such Participant as Director (by the
shareholders,  the  Board of Directors or  otherwise)  for  "good
cause"  (as  defined in Section 3.7(e)(i) and (ii)),  each  Stock
Option  held by such Participant (which has not previously lapsed
or  terminated  and which has been held by such  Participant  for
more  than  six  (6)  months prior  to  such  termination)  shall
immediately  become fully exercisable as to the total  number  of
shares   of  Common  Stock  subject  thereto  (whether   or   not
exercisable  to that extent at the time of such termination)  and
shall  remain  so  exercisable for a period of three  (3)  months
after  such termination unless such Stock Option expires  earlier
by its terms.

3.8  Effect of Leaves of Absence

It  shall  not be considered a termination of employment  when  a
Participant  is on military or sick leave or such other  type  of
leave  of  absence  which  is considered  continuing  intact  the
employment  relationship of the Participant with the  Company  or
any  of  its Subsidiaries. In case of such leave of absence,  the
employment  relationship shall be deemed to have continued  until
the  later  of  (i)  the date when such leave shall  have  lasted
ninety  (90) days in duration, or (ii) the date as of  which  the
Participant's  right to re-employment shall have no  longer  been
guaranteed either by statute or contract.

4.   FORMULA AWARDS TO ELIGIBLE DIRECTORS

4.1  General

Each Formula Award granted under the Plan shall be evidenced by a
written  agreement executed by the Company and  by  the  Eligible
Director  to whom such Formula Award is granted and dated  as  of
the applicable date of grant.  Each Agreement shall be signed  on
behalf  of  the  Company by a member of the Committee  or  by  an
officer  delegated  such authority by the Committee.   Each  such
agreement  shall  comply with and be subject  to  the  terms  and
conditions  of  the Plan.  Any such agreement  may  contain  such
other terms, provisions and conditions not inconsistent with  the
Plan or this Section 4 as may be determined by the Committee. All
Formula  Awards granted under the Plan shall, except  where  this
Section  4  or the context clearly indicates to the contrary,  be
subject to the provisions of the Plan applicable to Non-Qualified
Stock Options.

4.2  Formula Awards

Subject  to the limitations in Sections 4.13 and 4.14, an  option
to purchase 1,500 shares of Common Stock (as adjusted pursuant to
Section   4.11)  shall  be  granted  automatically   each   year,
immediately  following  the  annual  meeting  of  the   Company's
shareholders,   to  each  member  of  the  Company's   Board   of
Directors(each, a "Director") who is an Eligible Director at such
time immediately following such annual meeting beginning with the
annual  meeting  of  the shareholders at which  the  shareholders
approve the Plan.

4.3  Formula Award Exercise Price

The  exercise  price per share for a Formula Award shall  be  the
average of the Fair Market Values for the fifth (5th) through the
ninth  (9th)  business days (which, for purposes of this  Section
4.3 shall mean those days on which the NASDAQ National Market  is
open for trading) following the date of grant.

4.4  Vesting and Exercisability

Except  as  otherwise provided in Section 4.7,  a  Formula  Award
shall  immediately vest and become non-forfeitable upon the grant
of  the  Formula Award.  Except as otherwise provided in  Section
4.7,  a  Formula Award shall become exercisable immediately  upon
vesting  for  all Directors who have served as Directors  of  the
Company for a total of five (5) consecutive years as  of the date
of  the  grant.  If a Director has not served as a  Director  for
such  period, a Formula Award shall become exercisable  according
to the following schedule:

Period of Optionee's Continuous        Portion of
Service as a Director of the        Formula Award
Company following the Grant     That is Exercisable

        Twelve months                   33-1/3%
      Eighteen months                   66-2/3%
   Twenty-four months                      100%


4.5  Time and Manner of Exercise

Except  as  otherwise provided in this Section  4.5,  any  vested
Formula  Award,  to  the  extent  the  same  is  exercisable   in
accordance with Section 4.4, is exercisable in whole or  in  part
at   any  time  from  time  to  time  until  the  expiration   or
termination of its term in accordance with Section 4.7 by  giving
written  notice,  signed  by the person  exercising  the  Formula
Award,  to  the  Company  (to  the  attention  of  the  Company's
Corporate Secretary) stating the number of whole shares of Common
Stock with respect to which the Formula Award is being exercised,
accompanied by payment in full of the option exercise  price  for
the  number of shares of Common Stock to be purchased.  The  date
both  such notice and payment are received by the office  of  the
Corporate Secretary of the Company shall be the date of  exercise
of the Formula Award as to such number of shares.

4.6  Payment of Exercise Price

Payment of the exercise price for a Formula Award may be in  cash
or  by  check, bank draft or money order payable in United States
dollars to the order of the Company or payment may be  n whole or
in part by

(a)   transfer to the Company of shares of Common Stock having  a
  Fair Market Value (as determined in Section 4.3) on  the date of
  exercise equal to the exercise price; or
(b)    delivery  of instructions to the Company to withhold  from
the  shares  of Common Stock that would otherwise  be  issued  on
exercise of that number of such shares having a Fair Market Value
(as  determined in Section 4.3) equal to the exercise price.   If
the  Fair  Market  Value (as determined in Section  4.3)  of  the
number of whole shares of Common Stock transferred or  the number
of  whole shares of Common Stock withheld is less than the  total
exercise  price, the shortfall must be paid in cash, check,  bank
draft or money order, as aforesaid.

4.7  Term of Formula Awards

Each  Formula Award shall expire ten (10) years from its date  of
grant, but shall be subject to earlier termination as follows:

(a)  In  the event of the termination of a Formula Award holder's
service  as  a  Director, by reason of  his  or  her  removal  as
Director  (by  the  shareholders,  the  Board  of  Directors   or
otherwise),  the then outstanding Formula Awards of  such  holder
(whether  or not then exercisable) shall automatically expire  on
(and  may  not  be  exercised  on) the  effective  date  of  such
termination.

(b)  In  the event of the termination of a Formula Award holder's
service   as  a  Director  by  reason  of  retirement  or   total
disability,  the then outstanding Formula Awards of  such  holder
shall  become  exercisable, to the full extent of the  number  of
shares  of Common Stock remaining covered by such Formula Awards,
regardless   of  whether  such  Formula  Awards  were  previously
exercisable,  and each such Formula Award shall  expire  one  (1)
year  after  the date of such termination or on the stated  grant
expiration  date,  whichever  is earlier.  or  purposes  of  this
Section  4.7,  the  phrase "by reason of  retirement"  means  (a)
mandatory  retirement pursuant to Board policy or (b) termination
of service on  or after the holder's 65th birthday.

(c)  In  the  event of the death of a Formula Award holder  while
such holder is a Director, the then outstanding Formula Awards of
such  holder shall become exercisable, to the full extent of  the
number  of  shares  of  Common Stock remaining  covered  by  such
Formula  Awards, regardless of whether such Formula  Awards  were
previously exercisable, and each such Formula Award shall  expire
one  (1)  year after the date of death of such holder or  on  the
stated grant expiration date, whichever is earlier. Exercise of a
deceased holder's Formula Awards that are still exercisable shall
be  by the estate of such holder  or by the person or persons  to
whom  the  holder's rights have passed by will  or  the  laws  of
descent and distribution.

(d)  In  the event of the termination of a Formula Award holder's
service  as  a  Director  by  reason of  the  expiration  of  the
Director's term in office (without renomination or reelection) or
by  reason  of resignation, or for any other reason except  those
described  in  Sections 4.7(a), (b) or (c), the then  outstanding
Formula  Awards of such holder shall become exercisable,  to  the
full  extent  of  the number of shares of Common Stock  remaining
covered  by  such  Formula  Awards, regardless  of  whether  such
Formula Awards were previously exercisable, and each such Formula
Award  shall expire three (3)months after the effective  date  of
such termination.

4.8  Transferability

The  right to exercise a Formula Award shall, during the lifetime
of  the Eligible Director to whom such Formula Award was granted,
be  exercisable only by such recipient or pursuant to a qualified
domestic relations order as defined by the Code or Title l of the
Employee  Retirement Income Security Act, or the rules thereunder
(a  "QDRO")  and shall not be assignable or transferable by  such
recipient  other  than  by  will  or  the  laws  of  descent  and
distribution or a QDRO. Any purported transfer contrary  to  this
provision will be null and void and without effect.

4.9  Limitation of Rights

Neither  the recipient of a Formula Award under the Plan nor  the
recipient's  successor or successors in interest shall  have  any
rights as a shareholder of the Company with respect to any shares
of Common Stock subject to a Formula Award granted to such person
until the date of issuance of a stock certificate for such shares
of Common Stock.

4.10      Limitation as to Directorship

Neither the Plan, nor the grant of a Formula Award, nor any other
action taken pursuant to the Plan shall constitute or be evidence
of  any  agreement or understanding, express or implied, that  an
Eligible Director has a right to continue as a Director  for  any
period of time or at any particular rate of compensation.

4.11 Capital Adjustments

The  number and class of shares with respect to which  a  Formula
Award may be granted to an Eligible Director under the Plan,  the
number  and  class of shares subject to each outstanding  Formula
Award,  and the exercise price per share specified in  each  such
Formula  Award  shall be proportionately adjusted  in  accordance
with  the provisions  Section 5.1   For purposes of the preceding
sentence,   the   Company  shall  be  deemed  to  have   received
consideration for any shares issued pursuant to this or any other
employee benefit plan meeting the requirements of Rule 16b-3.

4.12 Limit on Grants to Eligible Directors

Notwithstanding any provision to the contrary, the Committee may,
but  shall not be obligated to, grant an Eligible Director  Stock
Options  under the Plan and such grant, if any, shall not  affect
the  Eligible Director's entitlement to be granted Formula Awards
pursuant to Section 4.2.

4.13 Commencement of Grants of Formula Awards

Notwithstanding any provision to the contrary, no  Formula  Award
shall  be  granted  pursuant to the  Plan  unless  and  until  no
additional  Formula  Awards  may  be  granted  pursuant  to   the
Company's 1993 Stock Option Plan and 1995 Stock Option Plan.

4.14 Termination of Formula Awards

Notwithstanding any provision to the contrary, no  Formula  Award
shall  be granted pursuant to the Plan on a date when the  number
of shares of Common Stock authorized for issuance pursuant to the
Plan  and  then  available for issuance pursuant to  new  Formula
Awards  is  less  than the aggregate number of such  shares  that
would  be  issuable pursuant to Formula Awards otherwise required
to  be  granted  on  such date, assuming  the  full  vesting  and
exercise of such Formula Awards.  In the event Formula Awards are
not  granted as a result of the application of this Section 4.14,
no  Formula  Awards shall thereafter be granted pursuant  to  the
Plan.

4.15 Conflicting Provisions

In  the event of any conflict between a provision of this Section
4 and a provision in any other paragraph of the Plan with respect
to  Formula  Awards, such provision of this  Section 4  shall  be
deemed to control.


5. MISCELLANEOUS PROVISIONS

5.1  Adjustments Upon Changes in Capitalization

In the event of changes to the outstanding shares of Common Stock
of  the  Company  through reorganization, merger,  consolidation,
recapitalization, reclassification, stock split-up,  (except  for
the  3-for-2  stock split approved by the Board of  Directors  on
March  4,  1996,  payable April 10, 1996), stock dividend,  stock
consolidation or otherwise, or in the event of a sale of  all  or
substantially  all of the assets of the Company,  an  appropriate
and  proportionate  adjustment shall be made in  the  number  and
class of shares as to which Stock Options and Formula Awards  may
be  granted.  A corresponding adjustment changing the  number  or
class   of  shares  and/or  the  exercise  price  per  share   of
unexercised Stock Options and Formula Awards or portions  thereof
which  shall  have  been granted prior to any such  change  shall
likewise be made. Notwithstanding the foregoing, in the case of a
reorganization,  merger  or consolidation,  or  sale  of  all  or
substantially  all  of  the assets of the  Company,  in  lieu  of
adjustments  as  aforesaid, the Committee may in  its  discretion
accelerate  the date after which a Stock Option or Formula  Award
may  or  may  not  be  exercised or the  stated  expiration  date
thereof.  Adjustments or changes under this Section 5.1 shall  be
made by the Committee, whose determination as to what adjustments
or changes shall be made, and the extent thereof, shall be final,
binding and conclusive.

5.2  Non-Transferability

No  Stock Option shall be transferable except by will or the laws
of  descent  and  distribution, nor shall  any  Stock  Option  be
exercisable during the Participant's lifetime by any person other
than the Participant or his guardian or legal representative.

5.3  Withholding

The  Company's  obligations under the Plan shall  be  subject  to
applicable federal, state and local tax withholding requirements.
Federal,  state and local withholding tax due  at the time  of  a
grant  or  upon  the  exercise of any Stock Option  may,  in  the
discretion  of the Committee, be paid in shares of  Common  Stock
already  owned  by the Participant or through the withholding  of
shares  otherwise issuable to such Participant, upon  such  terms
and    conditions  as  the  Committee  shall  determine.  If  the
Participant  shall fail to pay, or make arrangements satisfactory
to  the  Committee  for the payment to the Company  of  all  such
federal,  state  and local taxes required to be withheld  by  the
Company, then the Company shall, to the extent permitted by  law,
have  the  right to deduct from any payment of any kind otherwise
due to such Participant an amount equal to any federal, state  or
local taxes of any kind required to be withheld by the  Company.

5.4  Compliance with Law and Approval of Regulatory Bodies

No  Stock  Option  or Formula Award shall be exercisable  and  no
shares will be delivered under the Plan except in compliance with
all  applicable federal and state laws and regulations  ncluding,
without  limitation,  compliance  with  all  federal  and   state
securities  laws and withholding tax requirements  and  with  the
rules of NASDAQ and of all domestic stock exchanges on which  the
Common  Stock  may  be listed.  Any share certificate  issued  to
evidence  shares  for which a Stock Option or  Formula  Award  is
exercised  may  bear legends and statements the  Committee  shall
deem  advisable to assure compliance with federal and state  laws
and  regulations.   No  Stock Option or Formula  Award  shall  be
exercisable and no shares will be delivered under the Plan, until
the  Company has obtained the consent or approval from regulatory
bodies,  federal or state, having jurisdiction over such  matters
as the Committee may deem advisable.  In the case of the exercise
of  a  Stock  Option  or  Formula Award by  a  person  or  estate
acquiring the right to exercise the Stock Option or Formula Award
as  a  result of the death of the Participant, the Committee  may
require  reasonable  evidence as to the ownership  of  the  Stock
Option or Formula Award and may require consents and releases  of
taxing authorities that it may deem advisable.

5.5  No Right to Employment

Neither  the  adoption  of the Plan nor its  operation,  nor  any
document  describing  or  referring to  the  Plan,  or  any  part
thereof,  nor the granting of any Stock Options hereunder,  shall
confer  upon any Participant under the Plan any right to continue
in  the employ of the Company or any Subsidiary, or shall in  any
way  affect  the right and power of the Company or any Subsidiary
to  terminate the employment of any Participant at any time  with
or  without  assigning a reason therefor, to the same  extent  as
might have been done if the Plan had not been adopted.

5.6  Exclusion from Pension Computations

By  acceptance of a grant of a Stock Option under the  Plan,  the
recipient shall be deemed to agree that any income realized  upon
the  receipt or exercise thereof or upon the disposition  of  the
shares  received upon exercise will not be taken into account  as
"base  remuneration",  "wages",  "salary"  or  "compensation"  in
determining the amount of any  contribution to or payment or  any
other  benefit under any pension, retirement, incentive,  profit-
sharing  or  deferred compensation plan of  the  Company  or  any
Subsidiary.

5.7  Abandonment of Options

A  Participant  or Eligible Director may at any  time  abandon  a
Stock Option or Formula Award prior to its expiration date.   The
abandonment  shall be evidenced in writing, in such form  as  the
Committee  may  from time to time prescribe.   A  Participant  or
Eligible  Director shall have no further rights with  respect  to
any Stock Option or Formula Award so abandoned.

5.8  Severability

If  any of the terms or provisions of the Plan conflict with  the
requirements  of Rule 16b-3, then such terms or provisions  shall
be  deemed  inoperative to the extent they so conflict  with  the
requirements of Rule 16b-3.

5.9  Interpretation of the Plan

Headings  are  given  to the sections of the  Plan  solely  as  a
convenience to facilitate reference, such headings, numbering and
paragraphing shall not in any case be deemed in any way  material
or  relevant  to  the construction of the Plan or  any  provision
hereof.   The  use  of  the masculine gender shall  also  include
within  its  meaning the feminine. The use of the singular  shall
also include within Its meaning the plural and vice versa.

5.10 Use of Proceeds

Funds  received by the Company upon the exercise of Stock Options
and  Formula  Awards  shall  be used for  the  general  corporate
purposes of the Company.

5.11 Construction of Plan

The  place  of  administration  of  the  Plan  shall  be  in  the
Commonwealth  of  Pennsylvania, and the  validity,  construction,
interpretation, administration and effect of the Plan and of  its
rules and regulations, and rights relating to the Plan, shall  be
determined   solely  in  accordance  with  the   laws   of    the
Commonwealth of Pennsylvania.

     Exhibit 5 Opinion of Fox, Rothschild, O,Brien & Frankel

September 11, 1996

American Travellers Corporation
3220 Tillman Drive
Bensalem, PA 19020

Gentlemen:

We  have  acted as your counsel in connection with the filing  of  a
Registration  Statement  on Form S-8 (the "Registration  Statement")
with  the  Securities  and  Exchange Commission  covering  2,000,000
shares  of Common Stock, $.01 par value (the "Shares"), of  American
Travellers  Corporation, a Pennsylvania corporation (the "Company").
The Shares may be issued pursuant to the Company's 1996 Stock Option
Plan ( the "Plan").

As counsel for the Company, we have examined such corporate records,
certificates  and other documents and questions of law  as  we  have
considered  necessary or appropriate for purposes of  this  opinion.
For  the  purposes of this opinion, we have assumed that the  shares
will  be  issued in accordance with the term and conditions  of  the
Plan.   Based on the foregoing, we advise you that, in our  opinion,
such of the Shares as are issued and paid for in accordance with the
terms and conditions of the Plan, will be legally issued, fully-paid
and non-assessable.

We  consent  to  the  filing of this opinion as an  exhibit  to  the
Registration  Statement.  In giving this consent, we do  not  hereby
admit  that we come within the category of persons whose consent  is
required  under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations thereunder.

Very truly yours,

/s/Fox, Rothschild, O'Brien & Frankel


          Exhibit 23(b) Consent of Arthur Andersen LLP


Arthur Andersen LLP

As   independent  public  accountants,  we  hereby  consent  to  the
incorporation  in  this Registration Statement of our  report  dated
March  4, 1996 included in the American Travellers Corporation From
10-K for  the year ended December 31, 1995 and to all references  to 
our firm included in the Registration Statement.

/s/ Arthur Andersen LLP
Philadelphia, PA
September 12, 1996
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 68387}]
{"company-data": {"conformed-name": "AMERICAN TRAVELLERS CORP", "cik": "0000790928", "assigned-sic": "6321", "irs-number": "231738097", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-11851", "film-number": "96629243"}, "business-address": {"street1": "3220 TILLMAN DR", "city": "BENSALEM", "state": "PA", "zip": "19020", "phone": "2152441600"}, "mail-address": {"street1": "3220 TILLMAN DR", "city": "BENSALEM", "state": "PA", "zip": "19020"}}
As filed with the Securities and Exchange Commission on
                       September 12, 1996
                  Registration No. 333-_______
                                
_________________________________________________________________
_________________________________________________________________
               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549
               __________________________________
                            FORM S-8
                                
                     REGISTRATION STATEMENT
                              Under
                   THE SECURITIES ACT OF 1933
                                
                 AMERICAN TRAVELLERS CORPORATION
       (Exact name of registrant as specified in charter)

          Pennsylvania                      23-1738097
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification No.)

                       3220 Tillman Drive
                      Bensalem, Pennsylvania 19020
            (Address of Principal Executive Offices)

     AMERICAN TRAVELLERS CORPORATION 1996 STOCK OPTION PLAN
                    (Full title of the plan)
                                
                         John A. Powell
               Chairman of the Board and President
                 American Travellers Corporation
                       3220 Tillman Drive
                       Bensalem, PA 19020
             (Name and address of agent for service)
                                
                         [215] 244-1600
                                
  (Telephone number, including area code, of agent for service)
                           Copies to:
                     Ramon R. Obod, Esquire
                Fox Rothschild O'Brien & Frankel
                 2000 Market Street, 10th Floor
                     Philadelphia, PA  19103

                 Calculation of Registration Fee
- -----------------------------------------------------------------------------

                                    Proposed     Proposed
                                    Maximum      Maximum
                                    Offering     Aggregate
Title of Securities  Amount to be   Price        Offering        Registration
to be Registered     Registered(1)  Per Share(2) Price           Fee

Common Stock,        2,000,000      $ 31.1875    $62,375,000     $21,508.77
$.01 par value       Shares

_____________________________________________________________________________
(1)  In accordance with Rule 416 under the Securities Act of 1933, also
includes such additional shares as may be issued to prevent dilution
of the shares covered hereby as a result of stock splits, stock
dividends or similar transactions.

(2)  Estimated solely for purposes of computing the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933.

             INFORMATION NOT REQUIRED IN PROSPECTUS

                            PART II

Item 3.   Incorporation of Documents by Reference

     The Company hereby incorporates by reference, the following
documents, each of which shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing
thereof with the Securities and Exchange Commission:

          (a)  The Company's Annual Report on Form 10-K for the
          fiscal year ended December 31, 1995;

          (b)  The Company's Quarterly Reports on Form 10-Q for
          the three months ended March 31, 1996 and June 30,
          1996, respectively;

          (c)  The Company's Proxy Statement dated April 19,
          1996;
          
          (d)  The Company's Form 8-K filed on August 28, 1996;

          (e)  The description of the Company's Common Stock,
          $.01 par value, set forth on page 25 of Amendment No. 1
          to the Company's Registration Statement on Form S-2,
          dated July 18, 1990.

Item 4.   Description of Securities

          Not Applicable.

Item 5.   Interests of Named Experts and Counsel

          Legal Matters

      Legality of the shares offered hereby has been passed  upon
for  the  Company  by Fox, Rothschild, O'Brien  &  Frankel,  2000
Market  Street,  10th  Floor, Philadelphia,  Pennsylvania  19103.
Ramon  R.  Obod, a Director of the Company, is a partner  in  the
firm of Fox, Rothschild, O'Brien & Frankel.

Experts

      The consolidated financial statements and schedules of  the
Company  and  its subsidiaries contained in the Company's  Annual
Report  on Form 10-K for the fiscal year ended December 31,  1995
which  have  been  incorporated herein by  reference,  have  been
audited  by  Arthur Andersen LLP, independent public accountants,
as  indicated  in  their  report with  respect  thereto,  and  is
included  herein in reliance upon  the authority of such firm  as
experts  in accounting and auditing.

Item 6.   Indemnification of Directors and Officers

      Under  Sections  1741  through  1750  of  the  Pennsylvania
Business Corporation Law of 1988, as amended, and Section 8365 of
the  Pennsylvania Directors' Liability Act, the Company  has  the
power   to  indemnify  directors  and  officers,  under   certain
prescribed  circumstances  and subject  to  certain  limitations,
against  certain  costs and expenses, including attorney's  fees,
actually  and reasonably incurred in connection with any  action,
suit  or  proceeding, whether civil, criminal, administrative  or
investigative, to which any of them is a party by reason  of  his
being  a  director or officer of the Company if it is  determined
that  he  acted  in  accordance with the applicable  standard  of
conduct   set   forth   in  such  statutory   provisions.    Such
indemnification may be made whether or not the Company would have
the power to indemnify the director under any other provision  of
law  and whether or not the indemnified liability arises or arose
from any action by or in the right of the Company.

     The Company may also purchase and maintain insurance for the
benefit of any director or officer and which may cover claims for
which the Registrant could not indemnify such person.

      Article  8 of the Articles of Incorporation of the  Company
provides as follows:

      "The Corporation shall indemnify any and all of its present
or  former  directors and officers and any person who is  or  was
serving  at  the  request of the Corporation  as  a  director  or
officer  of  another  corporation  or  of  a  partnership,  joint
venture,  trust  or  other  enterprise,  including  service  with
respect  to  employee  benefit  plans,  to  the  fullest   extent
permitted  by  law.  Such right of indemnification shall  not  be
exclusive of any other right which such officers and directors of
the  Corporation and other persons may have or hereafter  acquire
and,  without  limiting the generality of  such  statement,  they
shall  be  entitled to their respective rights of indemnification
under  any By-Law, agreement, vote of shareholders, provision  of
law  or  otherwise, as well as their rights under  this  Article.
The foregoing indemnification provisions shall be retroactive  to
January 27, 1987 to the fullest extent permitted by law."

     Article X of the By Laws of the Company provides as follows:

      "1.   Right to Indemnification: Each person who was  or  is
made  a  party  or  is threatened to be made a  party  to  or  is
involved  in  any  action,  suit  or  proceeding  (hereinafter  a
"proceeding"),   whether  civil,  criminal,   administrative   or
investigative, including, without limitation, an action  or  suit
by or in the right of the Corporation, by reason of the fact that
he  or  she,  or  a  person  of whom  he  or  she  is  the  legal
representative,  is  or  was a director  or  officer  of  another
corporation  or of a partnership, joint venture, trust  or  other
enterprise,  including service with respect to  employee  benefit
plans, whether the basis of such proceeding is alleged action  in
an  official  capacity as director or officer, or  in  any  other
capacity,  shall  be  indemnified  and  held  harmless   by   the
Corporation  to  the  fullest extent  and  manner  authorized  or
permitted by the laws of the Commonwealth of Pennsylvania, as the
same exists or may hereafter be amended (but, in the case of  any
such  amendment,  only to the extent that such amendment  permits
the  Corporation to provide broader indemnification  rights  then
said  law  permitted  the Corporation to provide  prior  to  such
amendment),  against all expense, liability and  loss  (including
attorneys' fees, judgments, penalties, fines, ERISA excise  taxes
or  penalties  and  amounts paid or to  be  paid  in  settlement)
reasonably  incurred  or suffered by such  person  in  connection
therewith and such indemnification shall continue as to a  person
who has ceased to be a director or officer and shall inure to the
benefit  of  his  or  her  heirs, executors  and  administrators:
provided,  however,  that  except as  provided  in  subsection  4
hereof,  the Corporation shall indemnify any such person  seeking
indemnification in connection with a proceeding (or part thereof)
initiated  by  such  person  only if  such  proceeding  (or  part
thereof)  was  authorized  by  the  Board  of  Directors  of  the
Corporation.   The  right to indemnification  conferred  in  this
Section  shall be a contract right and each person to  whom  this
right   to  indemnification  applies  shall  be  a  third   party
beneficiary  of  such  right and shall  be  entitled  to  enforce
against  the  Corporation all indemnification  and  other  rights
granted to such person by this such proceeding in advance of  the
final  disposition  of  a proceedings shall  be  made  only  upon
delivery to the Corporation of an undertaking, by or on behalf of
such  director or officer to repay all amounts so advanced if  it
shall  ultimately be determined that such director or officer  is
not  entitled to be indemnified under this Section or  otherwise.
The Corporation may, by action of its Board of Directors, provide
indemnification  to  employees,  agents  or  fiduciaries  of  the
Corporation or to any person who is or was serving at the request
of  the Corporation as an employee, agent or fiduciary of another
corporation  or of a partnership, joint venture, trust  or  other
enterprise,  including  service  with  respect  to  any  employee
benefit  plan,  with the same or lesser scope and effect  as  set
forth  herein and in the other subsections of this  Section.   If
and  to  the  extent  that  the  laws  of  the  Commonwealth   of
Pennsylvania require that indemnification be provided in a  given
instance  only if the person acted in good faith and in a  manner
he or she reasonably believed to be in or not opposed to the best
interests  of the Corporation, and, with respect to any  criminal
proceeding, had no reasonable cause to believe his or her conduct
was  unlawful,  then termination of any proceeding  by  judgment,
order,  settlement, conviction, or upon a plea of nolo contendere
or  its equivalent, shall not of itself create a presumption that
the person did not act in good faith and in a manner which he  or
she  reasonably  believed to be in or not  opposed  to  the  best
interests  of the Corporation, and, with respect to any  criminal
proceedings, that he or she had reasonable cause to believe  that
his  or  her conduct was unlawful.  Termination of any proceeding
by  judgment, order, settlement, conviction, or upon  a  plea  of
nolo  contendere  or its equivalent, shall not  of  itself  be  a
determination  by a court that the act or failure to  act  giving
rise   to   a  claim  for  indemnification  constituted   willful
misconduct or recklessness.

      2.    Denial  of  Right to Indemnification: Indemnification
under  subsection 1 above shall be made by the Corporation unless
a   determination   is   reasonably  and   promptly   made   that
indemnification  of a director or officer is not  proper  in  the
circumstances  because  of  grounds for  denying  indemnification
under  this  Section or under applicable law.  Such determination
may be made only (i) by the Board of Directors by a majority vote
of  a quorum consisting of directors who were not parties to such
proceeding ("disinterested directors"), or (ii) if such quorum is
not   obtainable,  or  even  if  obtainable,  if  a   quorum   of
disinterested directors so directs, by independent legal  counsel
in a written opinion, or (iii) by the shareholders.

      3.    Expenses  in Successful Defense: Notwithstanding  any
other provision of this Section, to the extent that a director or
officer  of the Corporation has been successful on the merits  or
otherwise  in defense of any proceeding referred to in subsection
1  above or in defense of any claim, issue or matter therein,  he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.

      4.    Right  of  Claimant to Bring Suit: If a  claim  under
subsection  1  of  this  Section is  not  paid  in  full  by  the
Corporation  within thirty (30) days after a  written  claim  has
been  received by the Corporation, the claimant may at  any  time
thereafter  bring  suit against the Corporation  to  recover  the
unpaid  amount  of the claim and, if successful in  whole  or  in
part,  the claimant shall be entitled to be paid also the expense
of  prosecuting such claim.  It shall be a defense  to  any  such
action  (other  than  an action brought to enforce  a  claim  for
expenses incurred in defending any proceeding in advance  of  its
final  disposition  where the required  undertaking,  if  any  is
required, has been tendered to the Corporation) that the claimant
has  not  met  the standards of conduct which make it permissible
under  the  laws  of  the Commonwealth of  Pennsylvania  for  the
Corporation to indemnify the claimant for the amount claimed, but
the  burden  of proving such defense shall be on the Corporation.
Neither  the failure of the Corporation (including its  Board  of
Directors,  independent legal counsel, or its shareholders)  that
the  claimant  has not met such applicable standard  of  conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

        5.     Non-Exclusivity   of   Rights:   The   rights   to
indemnification  and  the  payment  of  expenses  incurred  in  a
proceeding in advance of its final disposition conferred in  this
Section shall not be exclusive of any right which any person  may
have  or  hereafter acquire under any statute, provision  of  the
Articles   of   Incorporation,   by-law,   agreement,   vote   of
shareholders or disinterested directors or otherwise.

      6.   Insurance: The Corporation may maintain insurance,  at
its  expense,  to  protect  itself  and  any  director,  officer,
employee,  agent  or  fiduciary of  the  Corporation  or  another
corporation,   partnership,  joint  venture,   trust   or   other
enterprise against any expense, liability or loss, whether or not
the  Corporation  would have the power to indemnify  such  person
against  such expense, liability or loss under the  laws  of  the
Commonwealth of Pennsylvania.

     7.   Interpretation: For purposes of this Section:

      (a)   References  to "the Corporation" shall  upon  written
resolution of the Board of Directors of the Corporation  include,
in  addition  to  the  Corporation, any  constituent  corporation
(including  any  constituent  of a  constituent)  absorbed  in  a
consolidation  or  merger which, if its  separate  existence  had
continued,  would have had the power and authority  to  indemnify
its  directors or officers, so that any person who is  or  was  a
director or officer of such constituent corporation, or is or was
serving  at  the  request of such constituent  corporation  as  a
director or officer of another corporation, shall for purposes of
this  Section  be  deemed  to  hold  the  same  position  in  the
Corporation as he or she held in such constituent corporation.

      (b)  A person who acted in good faith and in a manner he or
she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed  to
have acted in a manner "not opposed to the best interests of  the
Corporation" as referred to in this Section.

      8.    Amendment  or Repeal: This Section may  hereafter  be
amended  to  repealed; provided, however, that  no  amendment  or
repeal shall reduce, terminate or otherwise adversely affect  the
right  of a person who is or was a director or officer to  obtain
indemnification  or advancement of expenses  with  respect  to  a
proceeding that pertains to or arises out of actions or omissions
that  occur  prior  to the effective date of  such  amendment  or
repeal, which date cannot be retroactive."

Item 7.   Exemption from Registration Claimed

          Not Applicable.

Item 8.   Exhibits

        Exhibit No.           Description

           4(a)               1996 Stock Option Plan.

           4(b)               Articles of Incorporation, as
                              amended and restated
                              -  Incorporated by reference to  Exhibit
                              3(a)  of the Registrant's Form 10-K  for
                              the fiscal year ended December 31, 1995.

           4(c)               Articles  of
                              Amendment - Incorporated by reference to
                              Exhibit 3(a) of the Registrant's Form 10-
                              Q for the quarter ended June 30, 1996.

           4(d)               Amended  and
                              Restated   Bylaws   -  Incorporated   by
                              reference   to  Exhibit  3(b)   to   the
                              Registrant's  Registration Statement  on
                              Form S-3 (File No. 33-94614).

           5                  Opinion of Fox, Rothschild,
                              O'Brien & Frankel.

          23(a)               Consent of Fox, Rothschild,
                              O'Brien & Frankel.  Reference
                              is made to item 5.

          23(b)               Consent of
                              Arthur Andersen LLP.

Item 9.   Undertakings

      The  Company  hereby  undertakes to  include  any  material
information  with  respect  to  the  plan  of  distribution   not
previously  disclosed  in  the  registration  statement  or   any
material   change   to  such  information  to  the   registration
statement.

       The  Company  hereby  undertakes  that,  for  purposes  of
determining any liability under the Securities Act of 1933,  each
filing   of  a  post-effective  amendment  to  this  registration
statement  shall  be  deemed to be a new  registration  statement
relating  to the securities offered therein, and the offering  of
such  securities at that time shall be deemed to be  the  initial
bona fide offering thereof.

     The Company hereby undertakes to remove from registration by
means  of a post-effective amendment any of the securities  being
registered which remain unsold at the termination of the Plan.

       The  Company  hereby  undertakes  that,  for  purposes  of
determining any liability under the Securities Act of 1933,  each
filing  of the Company's annual report pursuant to Section  13(a)
or  Section  15(d) of the Securities Exchange Act  of  1934  (and
where  applicable,  each  filing of an  employee  benefit  plan's
annual  report  pursuant to this Section 15(d) of the  Securities
Exchange  Act of 1934) that is incorporated by reference  in  the
registration  statement shall be deemed to be a new  registration
statement  relating to the securities offered  therein,  and  the
offering  of such securities at that time shall be deemed  to  be
the initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the
Securities  Act  of 1933 may be permitted to directors,  officers
and  controlling  persons  of  the  registrant  pursuant  to  the
foregoing  provisions,  or otherwise,  the  registrant  has  been
advised  that  in  the  opinion of the  Securities  and  Exchange
Commission  such  indemnification is  against  public  policy  as
expressed  in the Act and is, therefore, unenforceable.   In  the
event  that  a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid  by  a  director,  officer  or  controlling  person  of  the
registrant  in  the  successful defense  of  any  action,suit  or
proceeding)  is asserted by such director, officer or controlling
person  in  connection with the securities being registered,  the
registrant will, unless in the opinion of its counsel the  matter
has  been settled by controlling precedent, submit to a court  of
appropriate    jurisdiction    the    question    whether    such
indemnification  by it is against public policy as  expressed  in
the  Act  and will be governed by the final adjudication of  such
issue.

                           SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933,
the  registrant  certifies  that it  has  reasonable  grounds  to
believe that it meets all of the requirements for filing on  Form
S-8, and has duly caused this registration statement to be signed
on  its behalf by the undersigned, thereunto duly authorized,  in
the  City of Bensalem, Commonwealth of Pennsylvania, on September
4, 1996.

                              AMERICAN TRAVELLERS CORPORATION

                                  By:/s/    John    A.     Powell
                                            John A. Powell, President,
                                            Chairman of the Board and
                                            Chief Executive Officer

      KNOW  ALL  MEN  BY THESE PRESENTS, that each  person  whose
signature  appears below constitutes and appoints John A.  Powell
and  Walter  J.  Diener, and each of them, his or  her  true  and
lawful   attorneys-in-fact  and  agents,  with  full   power   of
substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and
all  amendments  (including post-effective  amendments)  to  this
registration  statement, and to file the same with  all  exhibits
thereto,  and other documents in connection therewith,  with  the
Securities and Exchange Commission, granting unto said attorneys-
in-fact  and  agents full power and authority to do  and  perform
each  and every act and thing requisite and necessary to be done,
as  fully to all intents and purposes as he or she might or could
do  in  person,  hereby ratifying and confirming  all  that  said
attorneys-in-fact and agents, or any of them,  or  their  or  his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

      Pursuant to the requirements of the Securities Act of 1933,
this  registration  statement  has  been  signed  below  by   the
following persons in the capacities and on the dates indicated.

Signature                   Title                    Date

/s/ John A. Powell          President, Chairman of   September 12,1996
    John A. Powell          the Board, Chief
                            Executive Officer and
                            Director

/s/Benedict J. Iacovetti    Treasurer and Chief      September 12, 1996
   Benedict J. Iacovetti    Financial and Accounting
                            Officer

/s/ Susan T. Mankowski      Vice-President           September 12, 1996
    Susan T. Mankowski      Administration,
                            Secretary and Director

/s/  Walter E. Conrad       Director                 September 12, 1996
     Walter E. Conrad

/s/  Walter J. Diener       Director                 September 12, 1996
     Walter J. Diener

/s/  Arnold H. Keehn        Director                 September 12, 1996
     Arnold H. Keehn

/s/  Alice E. Powell        Director                 September 12, 1996
     Alice E. Powell

/s/  Ramon R. Obod          Director                 September 12, 1996
     Ramon R. Obod

/s/  Henry G. Hager         Director                 September 12, 1996
     Henry G. Hager

                        Index to Exhibits

Number            Exhibit

4(a)              1996 Stock Option Plan

5                 Opinion of Fox, Rothschild,
                  O'Brien & Frankel

23(b)             Consent of Arthur Andersen LLP

               Exhibit 4(a) 1996 Stock Option Plan

1.   PURPOSES OF THE PLAN

The  purposes  of  this  1996 Stock Option  Plan  are  to  enable
American  Travellers Corporation and its Subsidiaries to  attract
and  retain  the  services  of  key employees  and  persons  with
managerial,   professional   or   supervisory   responsibilities,
including, but not limited to, members of the Board of Directors,
officers of, and consultants to, the Company, responsible for the
past  and continued success of the  Company, and to provide  them
with  increased  motivation and incentive  to  exert  their  best
efforts  on  behalf  of the Company by enlarging  their  personal
stake in its success.

2.   GENERAL PROVISIONS

2.1  Definitions

As used in the Plan:

(a)   "Act"  means the Securities Exchange Act of 1934, including
any and all amendments thereto.

(b)   "Board  of Directors" means the Board of Directors  of  the
Company.

(c)    Code"  means the Internal Revenue Code of 1986,  including
any and all amendments thereto.

(d)   "Committee" means the committee appointed by the  Board  of
Directors  from time to time to administer the Plan  pursuant  to
Section 2.2.

(e)   "Common Stock" means the Company's Common Stock,  $.01  par
value.

(f)    "Company"   means  American  Travellers   Corporation,   a
Pennsylvania corporation.

(g)  "Eligible Director" means a member of the Company's Board of
Directors who is not otherwise an employee of the Company or  any
Subsidiary.

(h)   "Fair Market Value" means, with respect to a specific date,
the last reported sale price of the Common Stock in the over-the-
counter  market, as reported by NASDAQ; however,  if  the  Common
Stock  is  listed or traded on a national securities exchange  on
the date Fair Market Value is being determined, Fair Market value
shall  mean the last reported sale price of Common Stock on  such
exchange,  as  reported  by a responsible reporting  service  the
Committee selects; or if there are no transactions in the  Common
Stock  on  such day, then Fair Market Value shall mean  the  last
reported  sale  price of the Common Stock in the over-the-counter
market  or  on  such exchange, as the case may be,  on  the  last
preceding  day  on which there was a transaction  in  the  Common
Stock.   In the event the Common Stock is not so listed or traded
on  a  date  Fair Market Value is being determined,  Fair  Market
Value shall be determined on the basis of an average of the  fair
market  values  as  of such date as determined  by  two  or  more
independent and well-qualified experts in the appraisal of  stock
values,  or  on  the basis of such other method as the  Committee
shall, in good faith, determine to be reasonable.

(I)   "Formula Award" means an option grant made to  an  Eligible
Director pursuant to Section 4.2.

(j)   "Incentive Stock Option" means an option granted under  the
Plan  which  is intended to qualify as an incentive stock  option
under Section 422 of the Code.

(k)   "NASDAQ"  means  the  National  Association  of  Securities
Dealers, Inc. Automated Quotation System.

(l)   "Non-Qualified Stock Option" means an option granted  under
the Plan which is not an Incentive Stock Option.

(m)   "Participant" means a person to whom a Stock  Option  other
than a Formula Award has been granted under the Plan.

(n)  "Plan" means this 1996 Stock Option Plan.

(o)   "Rule 16b-3" means Rule 16b-3 promulgated under the Act  or
any successor Rule.

(p)   "Stock Option" means an Incentive Stock Option  or  a  Non-
Qualified Stock Option granted under the Plan.

(q)   "Subsidiary" means any corporation (other than the Company)
in  an  unbroken chain of corporations beginning with the Company
if,  at the time of the granting of the Stock Option, each of the
corporations  other  than the last corporation  in  the  unbroken
chain  owns 50% or more of the  total voting power of all classes
of stock in one of the other corporations in such chain.

2.2  Administration of the Plan

(a)   The Plan shall be administered by the Committee which shall
at  all  times consist of two (2) or more persons, each  of  whom
shall  be members of the Board of Directors.  Each member of  the
Committee  shall  be  a "disinterested person"(as  such  term  is
defined  in  Rule  16b-3) and an "outside  director"  within  the
meaning of Section 162(m) of the Code and any regulations  issued
thereunder.  The Board of Directors may from time to time  remove
members from, or add members to, the Committee.  Vacancies on the
Committee,  howsoever caused, shall be filled  by  the  Board  of
Directors.   The  Committee shall select one of  its  members  as
Chairperson, and shall hold meetings at such times and places  as
it may determine.

(b)   The  Committee shall have the full power,  subject  to  and
within  the  limits of the Plan, to: (i) interpret and administer
the  Plan,  and  Stock Options granted under it;  (ii)  make  and
interpret  rules and regulations for the  administration  of  the
Plan and to make changes in and revoke such rules and regulations
(and in the exercise of this power, shall generally determine all
questions of policy and expediency that may arise and may correct
any  defect,  omission, or inconsistency  in  the  Plan  or   any
agreement  evidencing the grant of any Stock Option in  a  manner
and  to the extent it shall deem necessary to make the Plan fully
effective);  (iii) determine those persons to whom Stock  Options
other  than  Formula Awards shall be granted and  the  number  of
Stock  Options  other than Formula Awards to be  granted  to  any
person;  (iv) determine the terms of Stock Options granted  under
the  Plan,  consistent with the provisions of the Plan;  and  (v)
generally,  exercise  such  powers  and  perform  such  acts   in
connection with the Plan as are deemed necessary or expedient  to
promote  the  best interests of the Company.  The  interpretation
and construction by the Committee of any provision of the Plan or
of any Stock Option shall be final, binding and conclusive.

(c)  The Committee may act only by a majority of its members then
in  office; however, the Committee may authorize any one  (1)  or
more of its members or any officer of the Company to execute  and
deliver documents on behalf of the Committee.

(d)   No  member of the Committee shall be liable for any  action
taken or omitted to be taken or for any determination made by him
or  her  in good faith with respect to the Plan, and the  Company
shall  indemnify and hold harmless each member of  the  Committee
against any cost or expense (including counsel fees) or liability
(including  any  sum  paid in settlement  of  a  claim  with  the
approval of the Committee) arising out of any act or omission  in
connection with the administration or interpretation of the Plan,
unless arising out of such person's own fraud or bad faith.

2.3  Effective Date

The  Plan is and shall be effective March 14, 1996, the  date  of
its adoption by the Board of Directors, and Stock Options may  be
granted  from  time  to  time thereafter,  subject,  however,  to
approval of the Plan by the affirmative vote of the holders of  a
majority  of the shares of the Common Stock present in person  or
by  proxy  and  entitled  to vote at an  annual  meeting  of  the
shareholders  of  the  Company or at a  special  meeting  of  the
shareholders  of the Company expressly called for such  purposes,
or  any  adjournments thereof, held on or before March 13,  1997.
If  the Plan is not approved at such annual or special meeting or
at  any  adjournments  thereof, the Plan and  all  Stock  Options
previously granted thereunder shall become null and void.

2.4  Duration

If  approved  by the shareholders of the Company, as provided  in
Section  2.3, unless sooner terminated by the Board of Directors,
the Plan shall remain in effect until March 13, 2006.

2.5  Shares Subject to the Plan

The maximum number of shares of Common Stock which may be subject
to  Stock  Options granted under the Plan shall be 2,000,000,  of
which  the  number of such shares which shall be   available  for
issuance  pursuant  to Formula Awards made to Eligible  Directors
under  the  Plan shall be 50,000.  The Stock Options and  Formula
Awards shall be subject to  adjustment in accordance with Section
4.11  or  5.1,  as  appropriate, and shares  to  be  issued  upon
exercise  of  Stock  Options and Formula  Awards  may  be  either
authorized and unissued shares of Common Stock or authorized  and
issued   shares  of  Common Stock purchased or  acquired  by  the
Company  for any purpose.  If a Stock Option or Formula Award  or
portion  thereof  shall  expire or is  terminated,  cancelled  or
surrendered for any reason without being exercised in full,   the
unpurchased  shares of Common Stock that were  subject   to  such
Stock  Option  or  Formula  Award or  portion  thereof  shall  be
available  for future grants of Stock Options or Formula  Awards,
as the case may be, under the Plan.

2.6  Amendments

The Plan may be suspended, terminated or reinstated, in whole  or
in  part,  at any time by the Board of Directors.  The  Board  of
Directors may from time to time make such amendments to the  Plan
as  it  may  deem advisable, including, with respect to Incentive
Stock Options, amendments deemed necessary or desirable to comply
with   Section  422  of  the  Code  and  any  regulations  issued
thereunder;  provided, however, that (i) no  amendment  shall  be
made  more  than once every six (6) months that would change  the
amount,  price or timing of Formula Awards, and (ii) without  the
approval of the Company's shareholders no amendment shall be made
that:

(a)   Increases the maximum number of shares of Common Stock that
may  be subject to Stock Options or Formula Awards granted  under
the  Plan  (other  than as provided in Section 4.11  or  5.1,  as
appropriate); or (b)  Extends the term of the Plan; or
(c)   Increases  the period during which a Stock  Option  may  be
  exercised beyond ten (10) years from the date of grant; or
(d)   Otherwise  materially increases the  benefits  accruing  to
  Participants or Eligible Directors under the Plan; or
(e)   Materially modifies the requirements as to eligibility  for
participation in the Plan; or
(f)   Changes  the maximum number of shares of Common  Stock  for
  which options may be granted to any Participant during any year
  (a consecutive twelve (12) month period) (other than as provided
  in Section 5.1); or
(g)   Will cause Stock Options granted under the Plan to fail  to
meet the requirements of Rule 16b-3.
Except as otherwise provided herein, termination or amendment  of
the  Plan  shall  not, without the consent of  a  Participant  or
Eligible   Director,  affect  such  Participant's   or   Eligible
Director's  rights  under  any  Stock  Option  or  Formula  Award
previously  granted to such Participant or Eligible Director,  as
the case may be.

2.7  Participants and Grants

Stock  Options  may be granted by the Committee to those  persons
who  the  Committee  determines  have  the  capacity  to  make  a
substantial  contribution to the success  of  the  Company.   The
Committee  may  grant Stock Options to purchase  such  number  of
shares  of  Common Stock (subject to the limitations  of  Section
2.5)  as  the  Committee may, in its sole discretion,  determine.
Notwithstanding  the foregoing, no Participant shall  be  granted
Stock  Options  in  any  year (a consecutive  twelve  (12)  month
period) to purchase in excess of 750,000 shares of Common  Stock.
In granting Stock Options, the Committee, on an individual basis,
may  vary  the number of Incentive Stock Options or Non-Qualified
Stock  Options  as between Participants and may  grant  Incentive
Stock Options and/or Non-Qualified Stock Options to a Participant
in   such  amounts  as the Committee may determine  in  its  sole
discretion.

3.   STOCK OPTIONS

3.1  General

All  Stock  Options granted under the Plan shall be evidenced  by
written agreements executed by the Company and the Participant to
whom  granted and dated as of the applicable date of grant, which
agreement shall state the number of shares of Common Stock  which
may be purchased upon the exercise thereof and shall contain such
investment representation and other terms and conditions  as  the
Committee  may from time to time determine, or, in  the  case  of
Incentive Stock Options, as may be required by Section 422 of the
Code,  or  any  other applicable law.  Each such grant  shall  be
signed  on behalf of the Company by a member of the Committee  or
by an officer delegated such authority by the Committee.

3.2  Price

Subject  to the provisions of Sections 3.6(d), 4.11 and 5.1,  the
purchase  price  per  share of Common Stock subject  to  a  Stock
Option shall, in no case, be less than one hundred percent (100%)
of  the Fair Market Value of a share of Common Stock on  the date
the Stock Option is granted.

3.3  Period

The  duration or term of each Stock Option granted under the Plan
shall be for such period as the Committee shall determine but  in
no  event  more  than  ten  (10) years from  the  date  of  grant
thereof.

3.4  Exercise

Subject to Sections 2.3 and 5.4, Stock Options may be exercisable
immediately upon the grant of the Stock Option or at  such  other
time  or  times as the Committee shall specify when granting  the
Stock  Option.   Once  exercisable,  a  Stock  Option   shall  be
exercisable, in whole or in part, by delivery of a written notice
of  exercise  to  the Secretary of the Company at  the  principal
office  of  the Company specifying the number of whole shares  of
Common Stock as to which the Stock Option is then being exercised
together  with payment of the full purchase price for the  shares
being  purchased upon such exercise.  Until the shares of  Common
Stock  as  to  which a Stock Option is exercised are issued,  the
Participant shall have none of the rights of a shareholder of the
Company with respect to such shares.

3.5  Payment

The purchase price for shares of Common Stock as to which a Stock
Option has been exercised and any amount required to be withheld,
as contemplated by Section 5.3, may be paid:

(a)  In United States dollars in cash, or by check, bank draft or
money order payable in United States dollars to the order of  the
Company; or

(b)   By the delivery by the Participant to the Company of  whole
shares  of Common Stock having an aggregate Fair Market Value  on
the  date of payment equal to the aggregate of the purchase price
of  Common  Stock  as  to which the Stock Option  is  then  being
exercised  or by the withholding of whole shares of Common  Stock
having  such  Fair Market Value upon the exercise of  such  Stock
Option; or

(c)  By a combination of both (a) and (b) above.

The   Committee  may,  in  its  discretion,  impose  limitations,
conditions and prohibitions on the use by a Participant of shares
of  Common  Stock  to  pay the purchase  price  payable  by  such
Participant upon the exercise of a Stock Option.

3.6  Special Rules for Incentive Stock Options

Notwithstanding  any other provision of the Plan,  the  following
provisions  shall apply to Incentive Stock Options granted  under
the Plan:

(a)    Incentive   Stock  Options  shall  only  be   granted   to
Participants who are employees of the Company or a Subsidiary.

(b)  To the extent that the aggregate Fair Market Value of stock,
with respect to which Incentive Stock Options are exercisable for
the  first  time by a Participant during any calendar year  under
the  Plan  and  any other Stock Option Plan of the Company  or  a
Subsidiary, exceeds $100,000, such Stock Options shall be treated
as Non-Qualified Stock Options.

(c)   Any  Participant  who disposes of shares  of  Common  Stock
acquired upon the exercise of an Incentive Stock Option  by  sale
or  exchange  either within two (2) years after the date  of  the
grant  of the Incentive Stock Option under which the shares  were
acquired  or  within  one  (1) year of the  acquisition  of  such
shares, shall promptly notify the Secretary of the Company at the
principal  office of the Company of such disposition, the  amount
realized, the purchase price per share paid upon exercise and the
date of disposition.

(d)   No Incentive Stock Option shall be granted to a Participant
  who, at the time of the grant, owns stock representing more than
  ten  percent  (10%) of the total combined voting power  of  all
  classes  of  stock  either  of the Company  or  any  parent  or
  Subsidiary  of the Company, unless the purchase  price  of  the
  shares  of  Common  Stock purchasable  upon  exercise  of  such
  Incentive Stock Option is at least one hundred ten percent (110%)
  of the Fair Market Value (at the time  the Incentive Stock Option
  is granted) of the Common stock and the Incentive Stock Option is
  not  exercisable more than five (5) years from the date  it  is
  granted.

3.7  Termination of Employment or Relationship

(a)   In the event a Participant's employment by, or relationship
with,  the  Company or its Subsidiaries shall terminate  for  any
reason  other  than those reasons specified in  Sections  3.7(b),
(c),  (d), (e) or (f) while such participant holds Stock  Options
granted  under  the Plan, then all rights of any kind  under  any
outstanding Stock Option held by such Participant which shall not
have previously lapsed or terminated shall expire immediately.

(b)   If a Participant's employment by, or relationship with, the
Company  or its Subsidiaries shall terminate as a result of  such
Participant's total disability, each Stock Option  held  by  such
Participant (which has not previously lapsed or terminated) shall
immediately  become fully exercisable as to the total  number  of
shares   of  Common  Stock  subject  thereto  (whether   or   not
exercisable  to that extent at the time of such termination)  and
shall  remain so exercisable by such Participant for a period  of
six (6) months after termination unless such Stock Option expires
earlier  by  its  terms.   For  purposes  of  the  Plan,   "total
disability" shall mean permanent mental or physical disability as
determined by the Committee.

(c)   In  the  event  of the death of a Participant,  each  Stock
Option  held by such Participant (which has not previously lapsed
or  terminated) shall immediately become fully exercisable as  to
the  total  number  of  shares of Common  Stock  subject  thereto
(whether or not exercisable to that extent at the time of  death)
by  the executor or administrator of the Participant's estate  or
by  the  person  or  persons to whom the  deceased  Participant's
rights  thereunder shall have passed by will or by  the  laws  of
descent or distribution, and shall remain  so exercisable  for  a
period  of six (6) months after  such Participant's death  unless
such Stock Option expires earlier by its terms.

(d)  If a Participant's employment by the Company or a Subsidiary
  shall  terminate by reason of such Participant's retirement  in
  accordance with Company policies, each Stock Option held by such
  Participant at the date of termination (which has not previously
  lapsed or terminated) shall immediately become fully exercisable
  as to the total number of shares of Common Stock subject hereto
  (whether or not exercisable to hat extent at the time  of  such
  termination) and shall remain so exercisable by such Participant
  for a period of three (3) months after termination, unless such
  Stock Option expires earlier by its terms.

(e)    In  the event the Company terminates the employment  of  a
Participant who at the time of such termination was an officer of
the  Company  and had been continuously employed  by the  Company
during  the  five  (5)  year  period immediately  preceding  such
termination,  for  any  reason  except  "good  cause"  (hereafter
defined)   and  except  upon  such  Participant's  death,   total
disability  or  retirement in accordance with  Company  policies,
each  Stock  Option  held  by  such Participant  (which  has  not
previously lapsed or terminated and which has been held  by  such
Participant  for  more  than  six  (6)  months  prior   to   such
termination) shall immediately become fully exercisable as to the
total  number of shares of Common Stock subject thereto  (whether
or   not  exercisable  to  that  extent  at  the  time  of   such
termination)  and shall remain so exercisable  for  a  period  of
three  (3)months after such termination unless such Stock  Option
expires  earlier  by its terms. A termination  for  "good  cause"
shall  have  occurred  only  if the Participant  in  question  is
terminated,  by  written  notice  (i)  because  of  his  or   her
conviction of a felony for a crime involving an act of  fraud  or
dishonesty,   (ii)   intentional  acts  or  omissions   on   such
Participant's  part causing material injury to  the  property  or
business of the Company, or (iii) because such Participant  shall
have  breached any material term of any employment  agreement  in
place  between  such Participant and the Company and  shall  have
failed  to  correct such breach within any grace period  provided
for  in  such agreement.  "Good cause" for termination shall  not
include  bad judgment or any act or omission reasonably  believed
by  such  Participant, in good faith, to have  been  in,  or  not
opposed to, the best interests of the Company.

(f)   In  the event of the termination of a Participant's service
as a Director of the Company, who at the time of such termination
was  an  Eligible  Director  and had  continuously  served  as  a
Director  of  the  Company  during  the  five  (5)  year   period
immediately  preceding such termination, and such termination  is
for  any  reason  except for such participant's  death  or  total
disability or the removal of such Participant as Director (by the
shareholders,  the  Board of Directors or  otherwise)  for  "good
cause"  (as  defined in Section 3.7(e)(i) and (ii)),  each  Stock
Option  held by such Participant (which has not previously lapsed
or  terminated  and which has been held by such  Participant  for
more  than  six  (6)  months prior  to  such  termination)  shall
immediately  become fully exercisable as to the total  number  of
shares   of  Common  Stock  subject  thereto  (whether   or   not
exercisable  to that extent at the time of such termination)  and
shall  remain  so  exercisable for a period of three  (3)  months
after  such termination unless such Stock Option expires  earlier
by its terms.

3.8  Effect of Leaves of Absence

It  shall  not be considered a termination of employment  when  a
Participant  is on military or sick leave or such other  type  of
leave  of  absence  which  is considered  continuing  intact  the
employment  relationship of the Participant with the  Company  or
any  of  its Subsidiaries. In case of such leave of absence,  the
employment  relationship shall be deemed to have continued  until
the  later  of  (i)  the date when such leave shall  have  lasted
ninety  (90) days in duration, or (ii) the date as of  which  the
Participant's  right to re-employment shall have no  longer  been
guaranteed either by statute or contract.

4.   FORMULA AWARDS TO ELIGIBLE DIRECTORS

4.1  General

Each Formula Award granted under the Plan shall be evidenced by a
written  agreement executed by the Company and  by  the  Eligible
Director  to whom such Formula Award is granted and dated  as  of
the applicable date of grant.  Each Agreement shall be signed  on
behalf  of  the  Company by a member of the Committee  or  by  an
officer  delegated  such authority by the Committee.   Each  such
agreement  shall  comply with and be subject  to  the  terms  and
conditions  of  the Plan.  Any such agreement  may  contain  such
other terms, provisions and conditions not inconsistent with  the
Plan or this Section 4 as may be determined by the Committee. All
Formula  Awards granted under the Plan shall, except  where  this
Section  4  or the context clearly indicates to the contrary,  be
subject to the provisions of the Plan applicable to Non-Qualified
Stock Options.

4.2  Formula Awards

Subject  to the limitations in Sections 4.13 and 4.14, an  option
to purchase 1,500 shares of Common Stock (as adjusted pursuant to
Section   4.11)  shall  be  granted  automatically   each   year,
immediately  following  the  annual  meeting  of  the   Company's
shareholders,   to  each  member  of  the  Company's   Board   of
Directors(each, a "Director") who is an Eligible Director at such
time immediately following such annual meeting beginning with the
annual  meeting  of  the shareholders at which  the  shareholders
approve the Plan.

4.3  Formula Award Exercise Price

The  exercise  price per share for a Formula Award shall  be  the
average of the Fair Market Values for the fifth (5th) through the
ninth  (9th)  business days (which, for purposes of this  Section
4.3 shall mean those days on which the NASDAQ National Market  is
open for trading) following the date of grant.

4.4  Vesting and Exercisability

Except  as  otherwise provided in Section 4.7,  a  Formula  Award
shall  immediately vest and become non-forfeitable upon the grant
of  the  Formula Award.  Except as otherwise provided in  Section
4.7,  a  Formula Award shall become exercisable immediately  upon
vesting  for  all Directors who have served as Directors  of  the
Company for a total of five (5) consecutive years as  of the date
of  the  grant.  If a Director has not served as a  Director  for
such  period, a Formula Award shall become exercisable  according
to the following schedule:

Period of Optionee's Continuous        Portion of
Service as a Director of the        Formula Award
Company following the Grant     That is Exercisable

        Twelve months                   33-1/3%
      Eighteen months                   66-2/3%
   Twenty-four months                      100%

4.5  Time and Manner of Exercise

Except  as  otherwise provided in this Section  4.5,  any  vested
Formula  Award,  to  the  extent  the  same  is  exercisable   in
accordance with Section 4.4, is exercisable in whole or  in  part
at   any  time  from  time  to  time  until  the  expiration   or
termination of its term in accordance with Section 4.7 by  giving
written  notice,  signed  by the person  exercising  the  Formula
Award,  to  the  Company  (to  the  attention  of  the  Company's
Corporate Secretary) stating the number of whole shares of Common
Stock with respect to which the Formula Award is being exercised,
accompanied by payment in full of the option exercise  price  for
the  number of shares of Common Stock to be purchased.  The  date
both  such notice and payment are received by the office  of  the
Corporate Secretary of the Company shall be the date of  exercise
of the Formula Award as to such number of shares.

4.6  Payment of Exercise Price

Payment of the exercise price for a Formula Award may be in  cash
or  by  check, bank draft or money order payable in United States
dollars to the order of the Company or payment may be  n whole or
in part by

(a)   transfer to the Company of shares of Common Stock having  a
  Fair Market Value (as determined in Section 4.3) on  the date of
  exercise equal to the exercise price; or
(b)    delivery  of instructions to the Company to withhold  from
the  shares  of Common Stock that would otherwise  be  issued  on
exercise of that number of such shares having a Fair Market Value
(as  determined in Section 4.3) equal to the exercise price.   If
the  Fair  Market  Value (as determined in Section  4.3)  of  the
number of whole shares of Common Stock transferred or  the number
of  whole shares of Common Stock withheld is less than the  total
exercise  price, the shortfall must be paid in cash, check,  bank
draft or money order, as aforesaid.

4.7  Term of Formula Awards

Each  Formula Award shall expire ten (10) years from its date  of
grant, but shall be subject to earlier termination as follows:

(a)  In  the event of the termination of a Formula Award holder's
service  as  a  Director, by reason of  his  or  her  removal  as
Director  (by  the  shareholders,  the  Board  of  Directors   or
otherwise),  the then outstanding Formula Awards of  such  holder
(whether  or not then exercisable) shall automatically expire  on
(and  may  not  be  exercised  on) the  effective  date  of  such
termination.

(b)  In  the event of the termination of a Formula Award holder's
service   as  a  Director  by  reason  of  retirement  or   total
disability,  the then outstanding Formula Awards of  such  holder
shall  become  exercisable, to the full extent of the  number  of
shares  of Common Stock remaining covered by such Formula Awards,
regardless   of  whether  such  Formula  Awards  were  previously
exercisable,  and each such Formula Award shall  expire  one  (1)
year  after  the date of such termination or on the stated  grant
expiration  date,  whichever  is earlier.  or  purposes  of  this
Section  4.7,  the  phrase "by reason of  retirement"  means  (a)
mandatory  retirement pursuant to Board policy or (b) termination
of service on  or after the holder's 65th birthday.

(c)  In  the  event of the death of a Formula Award holder  while
such holder is a Director, the then outstanding Formula Awards of
such  holder shall become exercisable, to the full extent of  the
number  of  shares  of  Common Stock remaining  covered  by  such
Formula  Awards, regardless of whether such Formula  Awards  were
previously exercisable, and each such Formula Award shall  expire
one  (1)  year after the date of death of such holder or  on  the
stated grant expiration date, whichever is earlier. Exercise of a
deceased holder's Formula Awards that are still exercisable shall
be  by the estate of such holder  or by the person or persons  to
whom  the  holder's rights have passed by will  or  the  laws  of
descent and distribution.

(d)  In  the event of the termination of a Formula Award holder's
service  as  a  Director  by  reason of  the  expiration  of  the
Director's term in office (without renomination or reelection) or
by  reason  of resignation, or for any other reason except  those
described  in  Sections 4.7(a), (b) or (c), the then  outstanding
Formula  Awards of such holder shall become exercisable,  to  the
full  extent  of  the number of shares of Common Stock  remaining
covered  by  such  Formula  Awards, regardless  of  whether  such
Formula Awards were previously exercisable, and each such Formula
Award  shall expire three (3)months after the effective  date  of
such termination.

4.8  Transferability

The  right to exercise a Formula Award shall, during the lifetime
of  the Eligible Director to whom such Formula Award was granted,
be  exercisable only by such recipient or pursuant to a qualified
domestic relations order as defined by the Code or Title l of the
Employee  Retirement Income Security Act, or the rules thereunder
(a  "QDRO")  and shall not be assignable or transferable by  such
recipient  other  than  by  will  or  the  laws  of  descent  and
distribution or a QDRO. Any purported transfer contrary  to  this
provision will be null and void and without effect.

4.9  Limitation of Rights

Neither  the recipient of a Formula Award under the Plan nor  the
recipient's  successor or successors in interest shall  have  any
rights as a shareholder of the Company with respect to any shares
of Common Stock subject to a Formula Award granted to such person
until the date of issuance of a stock certificate for such shares
of Common Stock.

4.10      Limitation as to Directorship

Neither the Plan, nor the grant of a Formula Award, nor any other
action taken pursuant to the Plan shall constitute or be evidence
of  any  agreement or understanding, express or implied, that  an
Eligible Director has a right to continue as a Director  for  any
period of time or at any particular rate of compensation.

4.11 Capital Adjustments

The  number and class of shares with respect to which  a  Formula
Award may be granted to an Eligible Director under the Plan,  the
number  and  class of shares subject to each outstanding  Formula
Award,  and the exercise price per share specified in  each  such
Formula  Award  shall be proportionately adjusted  in  accordance
with  the provisions  Section 5.1   For purposes of the preceding
sentence,   the   Company  shall  be  deemed  to  have   received
consideration for any shares issued pursuant to this or any other
employee benefit plan meeting the requirements of Rule 16b-3.

4.12 Limit on Grants to Eligible Directors

Notwithstanding any provision to the contrary, the Committee may,
but  shall not be obligated to, grant an Eligible Director  Stock
Options  under the Plan and such grant, if any, shall not  affect
the  Eligible Director's entitlement to be granted Formula Awards
pursuant to Section 4.2.

4.13 Commencement of Grants of Formula Awards

Notwithstanding any provision to the contrary, no  Formula  Award
shall  be  granted  pursuant to the  Plan  unless  and  until  no
additional  Formula  Awards  may  be  granted  pursuant  to   the
Company's 1993 Stock Option Plan and 1995 Stock Option Plan.

4.14 Termination of Formula Awards

Notwithstanding any provision to the contrary, no  Formula  Award
shall  be granted pursuant to the Plan on a date when the  number
of shares of Common Stock authorized for issuance pursuant to the
Plan  and  then  available for issuance pursuant to  new  Formula
Awards  is  less  than the aggregate number of such  shares  that
would  be  issuable pursuant to Formula Awards otherwise required
to  be  granted  on  such date, assuming  the  full  vesting  and
exercise of such Formula Awards.  In the event Formula Awards are
not  granted as a result of the application of this Section 4.14,
no  Formula  Awards shall thereafter be granted pursuant  to  the
Plan.

4.15 Conflicting Provisions

In  the event of any conflict between a provision of this Section
4 and a provision in any other paragraph of the Plan with respect
to  Formula  Awards, such provision of this  Section 4  shall  be
deemed to control.

5. MISCELLANEOUS PROVISIONS

5.1  Adjustments Upon Changes in Capitalization

In the event of changes to the outstanding shares of Common Stock
of  the  Company  through reorganization, merger,  consolidation,
recapitalization, reclassification, stock split-up,  (except  for
the  3-for-2  stock split approved by the Board of  Directors  on
March  4,  1996,  payable April 10, 1996), stock dividend,  stock
consolidation or otherwise, or in the event of a sale of  all  or
substantially  all of the assets of the Company,  an  appropriate
and  proportionate  adjustment shall be made in  the  number  and
class of shares as to which Stock Options and Formula Awards  may
be  granted.  A corresponding adjustment changing the  number  or
class   of  shares  and/or  the  exercise  price  per  share   of
unexercised Stock Options and Formula Awards or portions  thereof
which  shall  have  been granted prior to any such  change  shall
likewise be made. Notwithstanding the foregoing, in the case of a
reorganization,  merger  or consolidation,  or  sale  of  all  or
substantially  all  of  the assets of the  Company,  in  lieu  of
adjustments  as  aforesaid, the Committee may in  its  discretion
accelerate  the date after which a Stock Option or Formula  Award
may  or  may  not  be  exercised or the  stated  expiration  date
thereof.  Adjustments or changes under this Section 5.1 shall  be
made by the Committee, whose determination as to what adjustments
or changes shall be made, and the extent thereof, shall be final,
binding and conclusive.

5.2  Non-Transferability

No  Stock Option shall be transferable except by will or the laws
of  descent  and  distribution, nor shall  any  Stock  Option  be
exercisable during the Participant's lifetime by any person other
than the Participant or his guardian or legal representative.

5.3  Withholding

The  Company's  obligations under the Plan shall  be  subject  to
applicable federal, state and local tax withholding requirements.
Federal,  state and local withholding tax due  at the time  of  a
grant  or  upon  the  exercise of any Stock Option  may,  in  the
discretion  of the Committee, be paid in shares of  Common  Stock
already  owned  by the Participant or through the withholding  of
shares  otherwise issuable to such Participant, upon  such  terms
and    conditions  as  the  Committee  shall  determine.  If  the
Participant  shall fail to pay, or make arrangements satisfactory
to  the  Committee  for the payment to the Company  of  all  such
federal,  state  and local taxes required to be withheld  by  the
Company, then the Company shall, to the extent permitted by  law,
have  the  right to deduct from any payment of any kind otherwise
due to such Participant an amount equal to any federal, state  or
local taxes of any kind required to be withheld by the  Company.

5.4  Compliance with Law and Approval of Regulatory Bodies

No  Stock  Option  or Formula Award shall be exercisable  and  no
shares will be delivered under the Plan except in compliance with
all  applicable federal and state laws and regulations  ncluding,
without  limitation,  compliance  with  all  federal  and   state
securities  laws and withholding tax requirements  and  with  the
rules of NASDAQ and of all domestic stock exchanges on which  the
Common  Stock  may  be listed.  Any share certificate  issued  to
evidence  shares  for which a Stock Option or  Formula  Award  is
exercised  may  bear legends and statements the  Committee  shall
deem  advisable to assure compliance with federal and state  laws
and  regulations.   No  Stock Option or Formula  Award  shall  be
exercisable and no shares will be delivered under the Plan, until
the  Company has obtained the consent or approval from regulatory
bodies,  federal or state, having jurisdiction over such  matters
as the Committee may deem advisable.  In the case of the exercise
of  a  Stock  Option  or  Formula Award by  a  person  or  estate
acquiring the right to exercise the Stock Option or Formula Award
as  a  result of the death of the Participant, the Committee  may
require  reasonable  evidence as to the ownership  of  the  Stock
Option or Formula Award and may require consents and releases  of
taxing authorities that it may deem advisable.

5.5  No Right to Employment

Neither  the  adoption  of the Plan nor its  operation,  nor  any
document  describing  or  referring to  the  Plan,  or  any  part
thereof,  nor the granting of any Stock Options hereunder,  shall
confer  upon any Participant under the Plan any right to continue
in  the employ of the Company or any Subsidiary, or shall in  any
way  affect  the right and power of the Company or any Subsidiary
to  terminate the employment of any Participant at any time  with
or  without  assigning a reason therefor, to the same  extent  as
might have been done if the Plan had not been adopted.

5.6  Exclusion from Pension Computations

By  acceptance of a grant of a Stock Option under the  Plan,  the
recipient shall be deemed to agree that any income realized  upon
the  receipt or exercise thereof or upon the disposition  of  the
shares  received upon exercise will not be taken into account  as
"base  remuneration",  "wages",  "salary"  or  "compensation"  in
determining the amount of any  contribution to or payment or  any
other  benefit under any pension, retirement, incentive,  profit-
sharing  or  deferred compensation plan of  the  Company  or  any
Subsidiary.

5.7  Abandonment of Options

A  Participant  or Eligible Director may at any  time  abandon  a
Stock Option or Formula Award prior to its expiration date.   The
abandonment  shall be evidenced in writing, in such form  as  the
Committee  may  from time to time prescribe.   A  Participant  or
Eligible  Director shall have no further rights with  respect  to
any Stock Option or Formula Award so abandoned.

5.8  Severability

If  any of the terms or provisions of the Plan conflict with  the
requirements  of Rule 16b-3, then such terms or provisions  shall
be  deemed  inoperative to the extent they so conflict  with  the
requirements of Rule 16b-3.

5.9  Interpretation of the Plan

Headings  are  given  to the sections of the  Plan  solely  as  a
convenience to facilitate reference, such headings, numbering and
paragraphing shall not in any case be deemed in any way  material
or  relevant  to  the construction of the Plan or  any  provision
hereof.   The  use  of  the masculine gender shall  also  include
within  its  meaning the feminine. The use of the singular  shall
also include within Its meaning the plural and vice versa.

5.10 Use of Proceeds

Funds  received by the Company upon the exercise of Stock Options
and  Formula  Awards  shall  be used for  the  general  corporate
purposes of the Company.

5.11 Construction of Plan

The  place  of  administration  of  the  Plan  shall  be  in  the
Commonwealth  of  Pennsylvania, and the  validity,  construction,
interpretation, administration and effect of the Plan and of  its
rules and regulations, and rights relating to the Plan, shall  be
determined   solely  in  accordance  with  the   laws   of    the
Commonwealth of Pennsylvania.

     Exhibit 5 Opinion of Fox, Rothschild, O,Brien & Frankel

September 11, 1996

American Travellers Corporation
3220 Tillman Drive
Bensalem, PA 19020

Gentlemen:

We  have  acted as your counsel in connection with the filing  of  a
Registration  Statement  on Form S-8 (the "Registration  Statement")
with  the  Securities  and  Exchange Commission  covering  2,000,000
shares  of Common Stock, $.01 par value (the "Shares"), of  American
Travellers  Corporation, a Pennsylvania corporation (the "Company").
The Shares may be issued pursuant to the Company's 1996 Stock Option
Plan ( the "Plan").

As counsel for the Company, we have examined such corporate records,
certificates  and other documents and questions of law  as  we  have
considered  necessary or appropriate for purposes of  this  opinion.
For  the  purposes of this opinion, we have assumed that the  shares
will  be  issued in accordance with the term and conditions  of  the
Plan.   Based on the foregoing, we advise you that, in our  opinion,
such of the Shares as are issued and paid for in accordance with the
terms and conditions of the Plan, will be legally issued, fully-paid
and non-assessable.

We  consent  to  the  filing of this opinion as an  exhibit  to  the
Registration  Statement.  In giving this consent, we do  not  hereby
admit  that we come within the category of persons whose consent  is
required  under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations thereunder.

Very truly yours,

/s/Fox, Rothschild, O'Brien & Frankel

          Exhibit 23(b) Consent of Arthur Andersen LLP

Arthur Andersen LLP

As   independent  public  accountants,  we  hereby  consent  to  the
incorporation  in  this Registration Statement of our  report  dated
March  4, 1996 included in the American Travellers Corporation From
10-K for  the year ended December 31, 1995 and to all references  to 
our firm included in the Registration Statement.

/s/ Arthur Andersen LLP
Philadelphia, PA
September 12, 1996