8-K

              SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C. 20549

                     --------------------

                           Form 8-K
                        CURRENT REPORT

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


      Date of Report (Date of earliest event reported)
                      December 3, l998


                      TIG HOLDINGS, INC.

    (Exact name of registrant as specified in its charter)


    Delaware                1-11856           94-3172455
 (State or other        (Commission File     (IRS Employer
  jurisdiction              Number)         Identification
of incorporation)                              Number)


65 East 55th Street, 28th Floor, New York, New York    10022
     (Address of principal executive offices)        (Zip Code)


   Registrant's telephone number, including area code (212)
                           446-2700


                             None
    (Former name or former address, if changed since last
                           report)





Item 5.   Other Events.

          On December 3, 1998, TIG Holdings, Inc. (the
"Registrant") announced that it had entered into an Agreement
and Plan of Merger dated December 3, 1998, among Fairfax
Financial Holdings Limited ("Fairfax"), FFHL Inc.("FFHL"),
and the Registrant, pursuant to which FFHL will merge with
and into the Registrant.

          The Registrant issued a press release announcing
the Merger Agreement on December 3, 1998, which is filed
herewith as Exhibit 99.1.


Item 7.   Financial Statements.

          (c)  Exhibits:


Exhibit
  No.                    Description


99.1      Press Release dated December 3, 1998, announcing
          approval and adoption of the Agreement and Plan of
          Merger.


                          SIGNATURES


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



                                   TIG Holdings, INC.
                              ------------------------------
                                      (Registrant)

Date  December 4, 1998     By: /s/ Peter Acton
                              ------------------------------
                                    (Signature)
                              Name:   Peter Acton
                              Title:  Senior Vice President
                                      and General Counsel





                        EXHIBIT INDEX


                                                           Sequentially
Exhibit                                                      Numbered
 Number                  Exhibit                              Page

 99.1    TIG Holdings, Inc. Press Release dated December 3,
         1998*


- --------------------------
*        Filed herewith.

EX-99.1

                               [Letterhead of

                            TIG HOLDINGS, INC.]





Media Contacts: Jill Renken              Investor Contacts: Louis Paglia
                TIG Holdings, Inc.                          TIG Holdings, Inc.
                (972) 831-4666                              (212) 446-2708

                Fred Spar/Tracey T. Stearns                 John Swanson
                Kekst and Company                           TIG Holdings, Inc.
                (212) 521-4800                              (972) 831-4648



                             TIG HOLDINGS, INC.
                     ENTERS INTO MERGER AGREEMENT WITH
                     FAIRFAX FINANCIAL HOLDINGS LIMITED



NEW YORK, NY, December 3, 1998 - TIG Holdings, Inc. (NYSE: TIG) announced
today that it entered into a definitive agreement with Toronto-based
Fairfax Financial Holdings Limited (Fairfax). Under the terms of the
agreement, Fairfax will acquire TIG at a price of US$16.50 per share in a
cash merger. This transaction is valued at approximately US$840 million and
is subject to, among other things, the approval of the holders of a
majority of TIG's outstanding common stock and of the necessary regulatory
authorities.

"This transaction reflects the conclusion of the previously announced
review of strategic alternatives," said Jon Rotenstreich, chairman and
chief executive officer of TIG. "We are pleased we are able to deliver
shareholder value, organizational continuity for our employees and a stable
market for our insureds."

Fairfax Financial Holdings Limited is a financial services holding company
which, through its subsidiaries, is engaged in property, casualty and life
insurance and reinsurance, investment management and insurance claims
management.

The addition of TIG Reinsurance to the Fairfax group enhances their
strategy to become a leader in the broker reinsurance market. TIG's
insurance group will continue to operate independently in its current
primary insurance markets and will maintain its focus on specialized
property/casualty programs.





"We are happy to be joining the Fairfax group of companies which has
demonstrated a commitment to both the primary and reinsurance markets,"
said Mary Hennessy, president and chief operating officer of TIG Holdings.
"Fairfax and TIG are a good fit because we share the same key attributes of
strong producer relationships, profitable underwriting disciplines and a
dedication to the highest levels of service for clients," added Hennessy.

In an unrelated move, TIG also announced its plans to consolidate many of
the activities now performed at the TIG Holdings' office in New York to its
Dallas, Texas office. This consolidation is in response to TIG's commitment
to managing expenses, efficiency and productivity.

TIG Holdings, Inc. is the holding company for a property/casualty insurance
group that offers reinsurance under TIG Reinsurance and, primarily,
specialty insurance products under TIG Insurance. The Company markets its
products and services nationwide through a select number of producer
partners.

The statements made by the Company in this release, which are not
historical facts, are forward-looking statements. Actual results may differ
materially from those projected in these statements. These forward-looking
statements involve risks and uncertainties, including but not limited to
the following: changes in interest rates; changes in premium volumes; the
frequency and severity of catastrophic events; increased competition;
regulatory and legislative changes; changes in loss payment patterns;
changes in estimated overall adequacy of loss and LAE reserves; changes in
key management personnel; changes in general market or economic conditions;
and other risk factors listed from time to time in the Company's filings
with the Securities and Exchange Commission, including the Annual Report on
Form 10-K for the year ended December 31, 1997 and the Quarterly Report on
Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and
September 30, 1998.