UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

For the quarterly period ended March 31, 2001

                                       OR

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

For the transition period from ______ to ______

                         Commission file number 2-39458

                       ERIE FAMILY LIFE INSURANCE COMPANY
            (Exact name of registrant as specified in its charter)

             PENNSYLVANIA                                      25-1186315
  (State or other jurisdiction of                          (I.R.S. Employer
  incorporation or organization)                           Identification No.)


100 Erie Insurance Place, Erie, Pennsylvania                     16530
  (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code   (814) 870-2000



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

        Yes  X        No ___



Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date: 9,450,000 shares of Common
Stock outstanding on April 30, 2001.

                                       1

<PAGE>


                                      INDEX

                       ERIE FAMILY LIFE INSURANCE COMPANY


PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

        Statements of Financial Position--March 31, 2001 and December 31, 2000

        Statements of Operations--Three months ended March 31, 2001 and 2000

        Statements of Comprehensive Income--Three months ended March 31, 2001
        and 2000

        Statements of Cash Flows--Three months ended March 31, 2001 and 2000

        Notes to Financial Statements--March 31, 2001

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

PART II. OTHER INFORMATION

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

Item 6. Exhibits and Reports on Form 8-K


SIGNATURES

                                       2
<PAGE>


PART I.  FINANCIAL INFORMATION

<TABLE>
<CAPTION>

                              ERIE FAMILY LIFE INSURANCE COMPANY
                               STATEMENTS OF FINANCIAL POSITION

                                                                  (Dollars in thousands)
                                                                  March 31,    December 31,
ASSETS                                                               2001         2000
                                                                 ----------    -----------
                                                                 (Unaudited)
<S>                                                              <C>           <C>
Investments:
      Fixed Maturities at fair value (amortized cost
        of $699,145 and $695,078, respectively)                  $  703,000    $  683,651
      Equity Securities at fair value
        (cost of $134,575 and $127,389, respectively)               137,739       137,918
      Limited Partnerships
        (cost of $35,860 and $35,504, respectively)                  43,277        42,074
      Real Estate                                                     1,360         1,376
      Policy Loans                                                    8,000         7,766
      Real Estate Mortgage Loans                                      8,234         8,284
                                                                 ----------    ----------
        Total Invested Assets                                    $  901,610    $  881,069

      Cash and Cash Equivalents                                      18,797        17,955
      Premiums Receivable from Policyholders                          4,392         4,609
      Reinsurance Recoverable                                           571           612
      Other Receivables                                                 360           392
      Accrued Investment Income                                      15,034        12,038
      Deferred Policy Acquisition Costs                              85,993        84,723
      Reserve Credit for Reinsurance Ceded                            9,424         9,076
      Prepaid Federal Income Taxes                                        0           167
      Other Assets                                                    9,610         9,702
                                                                 ----------    ----------
        Total Assets                                             $1,045,791    $1,020,343
                                                                 ==========    ==========
<FN>
See notes to financial statements.
</FN>

</TABLE>

                                       3
<PAGE>

<TABLE>
<CAPTION>

                                ERIE FAMILY LIFE INSURANCE COMPANY
                                 STATEMENTS OF FINANCIAL POSITION

                                                                     (Dollars in thousands)
                                                                     March 31,    December 31,
LIABILITIES AND SHAREHOLDER'S EQUITY                                    2001         2000
                                                                    ----------    -----------
                                                                    (Unaudited)
<S>                                                                 <C>           <C>
Liabilities:
      Policy Liabilities and Accruals:
       Future Life Policy Benefits                                  $   78,911    $   76,879
       Future Accident and Health Policy Benefits                            7             0
       Policy and Contract Claims                                        3,031         2,473
       Annuity Deposits                                                591,903       584,174
       Universal Life Deposits                                         110,600       107,192
       Supplementary Contracts Not
         Including Life Contingencies                                      554           550
      Other Policyholder Funds                                           4,441         4,615
      Federal Income Taxes Payable                                         936             0
      Deferred Income Taxes                                             26,799        23,819
      Reinsurance Premium Due                                              221           894
      Accounts Payable and Accrued Expenses                              7,230         5,297
      Note Payable to Erie Indemnity Company                            15,000        15,000
      Due to Affiliate                                                   1,302         2,029
      Dividends Payable                                                  1,843         1,701
                                                                    ----------    ----------
        Total Liabilities                                           $  842,778    $  824,623
                                                                    ----------    ----------

Shareholders' Equity:
      Common Stock, $.40 Par Value Per Share;
        Authorized 15,000,000 Shares; 9,450,000
        Shares Issued and Outstanding                               $    3,780    $    3,780
      Additional Paid-In Capital                                           630           630
      Accumulated Other Comprehensive Income                             9,382         3,687
      Retained Earnings                                                189,221       187,623
                                                                    ----------    ----------
        Total Shareholders' Equity                                  $  203,013    $  195,720
                                                                    ----------    ----------
        Total Liabilities and Shareholders' Equity                  $1,045,791    $1,020,343
                                                                    ==========    ==========
<FN>
See notes to financial statements.
</FN>

</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>

                                   ERIE FAMILY LIFE INSURANCE COMPANY
                                  STATEMENTS OF OPERATIONS (Unaudited)

                                                      (Dollars in thousands, except per share data)
                                                              Three Months Ended March 31,
                                                                   2001          2000
                                                                ---------     ---------
<S>                                                            <C>            <C>
Revenues:
  Policy:
  Life Premiums, net of premiums ceded of
    $1,446 and $903, respectively                               $  10,316     $   9,797
  Group and Other Premiums                                            681           675
                                                                ---------     ---------
    Total Policy Revenue                                        $  10,997     $  10,472

  Investment Income, net of expenses of
    $450 and $442, respectively                                    14,709        14,764
  Equity in (Losses) Earnings of Limited Partnerships          (      965)          970
  Net Realized Gains on Investments                                   594         2,249
  Other Income                                                        191           305
                                                                ---------     ---------
    Total Revenues                                              $  25,526     $  28,760
                                                                ---------     ---------

Benefits and Expenses:
  Death Benefits, net of reinsurance recoveries
    of $541 and $1,023, respectively                            $   3,328     $   2,726
  Interest on Annuity Deposits                                      8,357         8,552
  Interest on Universal Life Deposits                               1,655         1,458
  Surrender and Other Benefits                                        137           275
  Increase in Future Life Policy Benefits, net of
    the increase in reserve credit for reinsurance
    ceded of $348 and $133, respectively                            1,688         1,094
  Amortization of Deferred Policy
    Acquisition Costs                                               1,646         1,478
  Commissions, net of reinsurance reimbursements
    of $848 and $379, respectively                                    593           477
  General Expenses                                                  2,343         2,218
  Taxes, Licenses and Fees                                            518           534
                                                                ---------     ---------
    Total Benefits and Expenses                                 $  20,265     $  18,812
                                                                ---------     ---------
Income From Operations                                          $   5,261     $   9,948
Provision for Federal Income Taxes (Benefits):
  Current                                                           1,906         2,975
  Deferred                                                     (       86)          467
                                                                ---------     ---------
    Total Provision for Federal Income Taxes                        1,820         3,442
                                                                ---------     ---------
Net Income                                                      $   3,441     $   6,506
                                                                =========     =========
Net Income Per Share                                            $    0.36     $    0.69
                                                                =========     =========
Dividends Declared Per Share                                    $   0.195     $    0.18
                                                                =========     =========

<FN>
See notes to financial statements.
</FN>

</TABLE>
                                       5
<PAGE>

<TABLE>
<CAPTION>

                             ERIE FAMILY LIFE INSURANCE COMPANY
                       STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

                                                                 (Amounts in thousands)
                                                              Three Months Ended March 31,
                                                                   2001          2000
                                                                ---------      ---------

<S>                                                            <C>            <C>
Net Income                                                      $   3,441      $   6,506
                                                                ---------      ---------
Unrealized Gains on Securities:
  Unrealized Holding Gains Arising
    During Period                                                   9,356         22,402
  Less:  Reclassification Adjustment for Gains
    Included in Net Income                                     (      594)    (    2,249)
                                                                ---------      ---------
    Net Unrealized Holding Gains
      Arising During Period                                     $   8,762      $  20,153
                                                                ---------      ---------
Income Tax Expense Related to
  Unrealized Gains                                                  3,067          7,054
                                                                ---------      ---------
Other Comprehensive Income,
  net of Tax                                                    $   5,695      $  13,099
                                                                ---------      ---------
Comprehensive Income                                            $   9,136      $  19,605
                                                                =========      =========

<FN>
See notes to financial statements.
</FN>

</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>
                                   ERIE FAMILY LIFE INSURANCE COMPANY
                                  STATEMENTS OF CASH FLOWS (Unaudited)


                                                                             (Dollars in Thousands)
                                                                           Three Months Ended March 31,
                                                                               2001            2000
                                                                           ----------       ----------
<S>                                                                        <C>              <C>
Cash flows from operating activities:
Net income                                                                  $   3,441        $   6,506
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Net amortization of bond and mortgage premium                                 52               53
     Amortization of deferred policy acquisition costs                          1,646            1,478
     Real estate depreciation                                                      21               21
     Software amortization                                                         62               62
     Deferred federal income tax (benefit) expense                         (       86)             467
     Realized gains on investments                                         (      594)      (    2,249)
Decrease in premiums receivable                                                   217              168
Decrease (increase) in other receivables                                           32       (       38)
Increase in accrued investment income                                      (    2,996)      (    3,468)
Policy acquisition costs deferred                                          (    2,916)      (    2,849)
Decrease (increase) in other assets                                                31       (       43)
(Increase) decrease in reinsurance recoverables
   and reserve credits                                                     (      307)             244
Increase in future policy benefits and claims                                   2,597            1,819
Decrease in other policyholder funds                                       (      174)      (      893)
Decrease in reinsurance premium due                                        (      673)      (      516)
Increase in federal income taxes payable                                        1,103            2,917
Increase (decrease) in accounts payable and due to affiliate                    1,205       (      237)
                                                                            ---------        ---------
       Net cash provided by operating activities                            $   2,661        $   3,442
                                                                            ---------        ---------

Cash flows from investing activities:
Purchase of investments:
   Fixed maturities                                                        ($  42,537)      ($  36,557)
   Equity securities                                                       (    5,645)      (    7,342)
   Limited partnerships                                                    (    1,649)      (    1,011)
Sales/maturities of investments:
   Fixed maturities                                                            31,047           14,676
   Equity securities                                                            6,421            2,867
   Limited partnerships                                                         1,293            1,589
Principal payments received on mortgage loans                                      50            1,558
Real estate improvements                                                   (        5)               0
Loans made to Policyholders                                                (      545)      (      457)
Payments received on policy loans                                                 311              284
                                                                            ---------        ---------
       Net cash used in investing activities                               ($  11,259)      ($  24,393)
                                                                            ---------        ---------

Cash flows from financing activities:
Increase in annuity and supplementary contract deposits                     $   7,733        $     897
Increase in universal life deposits                                             3,408            3,151
Dividends paid to Shareholders                                             (    1,701)      (    1,559)
                                                                            ---------        ---------
       Net cash provided by financing activities                            $   9,440        $   2,489
                                                                            ---------        ---------
Net increase (decrease) in cash and cash equivalents                              842       (   18,462)
Cash and cash equivalents at beginning of year                                 17,955           27,358
                                                                            ---------        ---------
Cash and cash equivalents at end of quarter                                 $  18,797        $   8,896
                                                                            =========        =========

Supplemental disclosures of cash flow information: Cash paid during the year
for:
   Interest                                                                 $      52        $      59
   Income taxes                                                                   750                0

<FN>
See notes to financial statements
</FN>

</TABLE>
                                       7
<PAGE>

                       ERIE FAMILY LIFE INSURANCE COMPANY
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                     All amounts are in thousands of dollars

NOTE A -- BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and with  the  instructions  to Form  10-Q and  Rule  10-01 of  Regulation  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results  for the  three-month  period  ended  March 31,  2001 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2001. For further  information,  refer to the financial  statements
and footnotes  thereto  included in the Company's annual report on Form 10-K for
the year ended December 31, 2000.

NOTE B -- INVESTMENTS

Management  considers all fixed  maturities  and  marketable  equity  securities
available-for-sale. Marketable equity securities consist primarily of common and
non-redeemable  preferred  stock  while  fixed  maturities  consist of bonds and
notes.  Available-for-sale  securities  are  stated  at  fair  value,  with  the
unrealized  gains and losses,  net of tax,  reported as a separate  component of
Shareholders' equity.  Management  determines the appropriate  classification of
fixed  maturities at the time of purchase and reevaluates such designation as of
each statement of financial position date.

The following is a summary of available-for-sale securities:

<TABLE>
<CAPTION>

                                                                         Gross               Gross
                                                    Amortized          Unrealized         Unrealized           Estimated
                                                       Cost              Gains              Losses            Fair Value
                                                 --------------------------------------------------------------------------
<S>                                              <C>                 <C>                <C>                 <C>
March 31, 2001
Fixed Maturities:
U.S. Treasuries and Government
   Agencies                                      $        12,096     $           964    $              0    $        13,060
States and Political Subdivisions                            195                   8                   0                203
Special Revenue                                            9,455                 269                   0              9,724
Public Utilities                                          71,650               1,997               1,076             72,571
U.S. Banks, Trusts and Insurance
   Companies                                             125,306               4,566               2,413            127,459
U.S. Industrial and Miscellaneous                        412,813               9,764               7,940            414,637
Foreign                                                   67,630                 682               2,966             65,346
                                                 ---------------     ---------------    ----------------    ---------------
     Total Fixed Maturities                      $       699,145     $        18,250    $         14,395    $       703,000
                                                 ---------------     ---------------    ----------------    ---------------

Equity Securities:
Common Stock                                     $        64,224     $        14,338    $         12,333    $        66,229
Non-Redeemable Preferred Stock                            70,351               2,463               1,304             71,510
                                                 ---------------     ---------------    ----------------    ---------------
     Total Equity Securities                     $       134,575     $        16,801    $         13,637    $       137,739
                                                 ---------------     ---------------    ----------------    ---------------
       Total Available-for-Sale Securities       $       833,720     $        35,051    $         28,032    $       840,739
                                                 ===============     ===============    ================    ===============

</TABLE>
                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                  ERIE FAMILY LIFE INSURANCE COMPANY
                                         NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (Continued)


NOTE B -- INVESTMENTS (Continued)

                                                                               Gross         Gross
                                                    Amortized          Unrealized         Unrealized           Estimated
                                                       Cost                Gains             Losses            Fair Value
                                                 --------------------------------------------------------------------------
<S>                                              <C>                 <C>                <C>                 <C>
December 31, 2000
Fixed Maturities:
U.S. Treasuries and Government
   Agencies                                      $        12,114     $           835    $              6    $        12,943
States and Political Subdivisions                            195                   8                   0                203
Special Revenue                                            9,458                 271                   0              9,729
Public Utilities                                          71,732               1,774               1,439             72,067
U.S. Banks, Trusts and Insurance
   Companies                                             125,125               2,162               4,163            123,124
U.S. Industrial and Miscellaneous                        401,160               5,645              13,105            393,700
Foreign                                                   67,630                 489               4,394             63,725
                                                 ---------------     ---------------    ----------------    ---------------
     Total Bonds                                 $       687,414     $        11,184    $         23,107    $       675,491

Redeemable Preferred Stock                                 7,664                 496                   0              8,160
                                                 ---------------     ---------------    ----------------    ---------------
     Total Fixed Maturities                      $       695,078     $        11,680    $         23,107    $       683,651
                                                 ---------------     ---------------    ----------------    ---------------

Equity Securities:
Common Stock                                     $        62,081     $        21,621    $         10,177    $        73,525
Non-Redeemable Preferred Stock                            65,308                 804               1,719             64,393
                                                 ---------------     ---------------    ----------------    ---------------
     Total Equity Securities                     $       127,389     $        22,425    $         11,896    $       137,918
                                                 ---------------     ---------------    ----------------    ---------------
       Total Available-for-Sale Securities       $       822,467     $        34,105    $         35,003    $       821,569
                                                 ===============     ===============    ================    ===============

</TABLE>

If management  determines that any declines in market value of these investments
are other than temporary,  the securities will be written down to the realizable
value and reflected in income.  If a bond is in default of interest payments and
it is determined that liquidation of the security would be in the Company's best
interest,  the security will be sold to return the proceeds to income  producing
assets.

In the third  quarter  2000,  the Company  began  participating  in a securities
lending  program  whereby  certain  securities  from its portfolio are loaned to
other  institutions  for short  periods of time. A fee is paid to the Company by
the borrower.  Collateral that exceeds the market value of the loaned securities
is maintained by the lending agent. The Company has an indemnification agreement
with the lending  agents in the event a borrower  becomes  insolvent or fails to
return  securities.  At March 31, 2001, the Company had loaned securities with a
market value of $28.4 million and secured by collateral of $29.5 million.

Limited  partnerships  include U.S. and foreign private equity,  real estate and
fixed income  investments.  The private  equity limited  partnerships  invest in
small- to medium-sized  companies.  The private equity limited  partnerships are
carried at  estimated  market  value with  unrealized  gains and losses,  net of
deferred  taxes,   reflected  in  Shareholder's   equity  in  accumulated  other
comprehensive income. Investment income or loss is recognized on the sale of the
equity  investment.  Real  estate  and fixed  income  limited  partnerships  are
recorded using the equity method,  which approximates the Company's share of the
carrying value of the partnership.

                                       9
<PAGE>


                         ERIE FAMILY LIFE INSURANCE COMPANY
               NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (Continued)

NOTE B -- INVESTMENTS (Continued)

The  components  of equity in  (losses)  earnings  of  limited  partnerships  as
reported on the Statements of Operations are as follows:


                                    Three Months Ended March 31,
                                         2001         2000
                                      ---------     --------

     Private Equity                   ($  1,237)    $     55
     Real Estate                            267          209
     Fixed Income                             5          706
                                      ---------     --------
                                      ($    965)    $    970
                                      ==========    ========

The Company began using forward currency contracts to hedge the risks related to
investments  in  partnerships  in  2001.  A loss  of $33 was  recognized  in the
Statements of Operations during the quarter ended March 31, 2001.

Real estate  investments are carried on the Statements of Financial  Position at
cost, less allowances for depreciation and possible losses.  Commercial mortgage
loans  on real  estate  are  carried  at their  unpaid  balances,  adjusted  for
amortization  of premium or discount,  less allowances for possible loan losses.
Policy loans are carried at their unpaid balances.

NOTE C -- SEGMENT INFORMATION

The  Company's  portfolio of  Traditional  insurance  includes  permanent  life,
endowment and term policies,  including whole life. The Group and Other category
presented in the table below includes group life insurance and disability income
products.  The Corporate category includes investment income earned from surplus
not specifically attached to any one product type.

<TABLE>
<CAPTION>

                                                      Universal                  Group &
                                        Traditional       Life     Annuities       Other     Corporate       Total
                                        -----------   -----------  ---------    ----------   ---------    ------------
<S>                                     <C>          <C>          <C>           <C>          <C>          <C>
March 31, 2001
--------------
Total policy revenue, net of
   reinsurance                          $     7,635  $     2,681  $         1   $      680   $         0  $    10,997
Total investment-related
  and other income                            1,397        1,702        9,228           33         2,169       14,529
                                        -----------  -----------  -----------   ----------   -----------  -----------
     Total revenues                     $     9,032  $     4,383  $     9,229   $      713   $     2,169  $    25,526
                                        -----------  -----------  -----------   ----------   -----------  -----------
Less: Total benefits and
   expenses                                   7,228        4,102        8,830          105             0       20,265
                                        -----------  -----------   ----------   ----------   -----------  -----------
   Income from operations,
     before taxes                       $     1,804  $       281  $       399   $      608   $     2,169  $     5,261
                                        ===========  ===========  ===========   ==========   ===========  ===========

March 31, 2000
--------------
Total policy revenue, net of
   reinsurance                          $     7,249  $     2,548  $         1   $      674   $         0  $    10,472
Total investment-related
  and other income                            1,662        1,986       11,591           39         3,010       18,288
                                        -----------  -----------  -----------   ----------   -----------  -----------
     Total revenues                     $     8,911  $     4,534  $    11,592   $      713   $     3,010  $    28,760
                                        -----------  -----------  -----------   ----------   -----------  -----------
Less: Total benefits and
   expenses                                   6,066        3,255        9,144          347             0       18,812
                                        -----------  -----------   ----------   ----------   -----------  -----------
   Income from operations,
     before taxes                       $     2,845  $     1,279  $     2,448   $      366   $     3,010  $     9,948
                                        ===========  ===========  ===========   ==========   ===========  ===========

</TABLE>
                                       10
<PAGE>

                       ERIE FAMILY LIFE INSURANCE COMPANY
                NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (Continued)

NOTE D -- REINSURANCE

The Company has entered  into  various  reinsurance  treaties for the purpose of
ceding the excess of life insurance over retention limits. Reinsurance contracts
do not relieve the Company from its  obligations  to  Policyholders.  Failure of
reinsurers to honor their obligations could result in losses to the Company. The
Company  evaluates  the  financial  condition  of its  reinsurers  and  monitors
concentrations  of credit risk to minimize  its exposure to  significant  losses
from reinsurer insolvencies. The Company considers all of its reinsurance assets
to  be   collectible,   therefore,   no  allowance  has  been   established  for
uncollectible  amounts.  The Company's  retention limit is $300,000 per life for
individual and $200,000 per life for group coverage.  For its disability  income
product, the Company also has a 50% coinsurance agreement with its reinsurer. As
of December 31, 2000, $2.6 billion of life insurance in force was ceded to other
companies.  Reinsurance recoveries for the three months ended March 31, 2001 and
2000 were $541 and $1,023, respectively.

NOTE E -- RECLASSIFICATION

Certain amounts, as previously reported in the 2000 financial  statements,  have
been  reclassified  to  conform  to  the  current  year's  financial   statement
presentation.

                                       11
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following  discussion and analysis  should be read in  conjunction  with the
historical financial  information and related notes found on pages 3 through 11,
herein,  and  Management's  Discussion  and Analysis of Financial  Condition and
Results of  Operations  contained in our Annual Report on Form 10-K for the year
ended December 31, 2000 as filed with the Securities and Exchange  Commission on
March 19, 2001.

FINANCIAL OVERVIEW

First quarter net income decreased  $3,065,780 or 47.1%, to $3,440,644,  or $.36
per share,  in 2001.  While  premium  revenue  continued  to grow, a decrease in
realized  gains on  investments  of $1,654,822 and a decrease in the income from
the limited partnerships of $1,935,560 were the primary reasons for the decrease
in net income in the first quarter of 2001.

REVENUES

Analysis of Policy Revenue

Total policy revenue  increased  $524,775,  or 5.0%, to $10,996,777 in the first
quarter  of  2001.  Contributing  to  this  growth  was  increased  premiums  on
traditional life insurance  policies of 5.0% to $8,316,658 for the quarter ended
March 31, 2001. Total policies in force on traditional  life insurance  products
increased  4.4% to 167,262 at March 31,  2001  compared  to 160,147  policies at
March 31, 2000.

The Company's  sales of the ERIE  Flagship Term product have  continued to grow.
This product,  introduced late in 1999, is more  competitively  priced at larger
policy face amounts.  As such,  the  Company's  reinsurance  premiums  ceded and
related  commission  and expense  allowance has increased for the year 2001 when
compared  with 2000.  Under the  reinsurance  treaty for this new  product,  the
reinsurer  assumes 50% of all insurance up to $600,000 (the Company's  retention
limit is $300,000) and assumes all insurance after that amount. The total dollar
retention  amount  on this  product  is the same as the other  traditional  life
insurance   policies  the  Company  currently  offers.   This  product,   before
consideration  of reinsurance  ceded,  contributed  $1,177,801 and $111,680,  to
total life  premiums  for the three  months  ended  March 31, 2001 and March 31,
2000,  respectively.  The  reinsurance  premiums ceded  recognized in total life
premiums for the ERIE Flagship  Term product  amount to $776,033 and $94,954 for
the three months ended March 31, 2001 and March 31, 2000, respectively.

Analysis of Investment-related Income

Net realized  gains from the sale of  investments  decreased to $593,915 in 2001
compared to  $2,248,737  in 2000  primarily as the result of the Company  taking
advantage of favorable stock market conditions in the first quarter 2000. Equity
in earnings of limited partnerships decreased $1,935,560 in the first quarter of
2001 when compared  with the same period in 2000 as a result of the  partnership
losses in private equity limited partnerships.

BENEFITS AND EXPENSES

Analysis of Policy-related Benefits and Expenses

Net death  benefits  on life  insurance  policies  increased  22.1% in the first
quarter of 2001 to $3,327,979,  compared to  $2,725,779,  for the same period in
2000.  Random  fluctuations  in death  benefits  incurred  can be expected  when
mortality  results are measured over a short time period due to the small number
of claims  involved.  These short-term  fluctuations can influence  quarterly or
annual results without impacting  long-term  profitability.  Management believes
that its underwriting philosophy and practices are sound.

Interest  expense  incurred on deposits was  $10,011,678 in the first quarter of
2001,  which  is  level  with  the  $10,009,989  in  the  first quarter of 2000.
This  was  the   result  of   a  decrease  in  new   annuity  deposits  and  an

                                       12
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (Continued)


increase in annuity  surrenders  during the twelve  month period ended March 31,
2001 when  compared  to the twelve  month  period  ended March 31,  2000.  After
annuity  funds have been in force for one year,  the interest  rate  credited on
them drops 25 basis points.  The rate credited on annuity  deposits  ranges from
5.0% to 6.25% in 2001. In February 2000, the rates on annuity deposits increased
to its current range from 5.0% to 5.75%.

The liability for future life policy  benefits is computed  considering  various
factors such as anticipated mortality, future investment yields, withdrawals and
anticipated  credit for  reinsurance.  The 2001 first quarter future life policy
benefits were  $1,688,249,  compared to $1,094,240 in the first quarter of 2000,
an increase of 54.3%.

Analysis of Other Expenses

Total operating expenses,  excluding taxes,  licenses and fees increased 8.9% to
$2,935,772 at March 31, 2001 compared to $2,695,223 at March 31, 2000.

Certain  operating  expenses  of the  Company  are  paid by the  Erie  Indemnity
Company,  the  management  Company of the Erie Insurance  Group,  and reimbursed
monthly by the  Company.  Additionally,  a portion of the Erie  Insurance  Group
common overhead expenses  attributed to the Company are also reimbursed monthly.
These expenses comprise the majority of the Company's general expenses.

General  expenses,  a component of total operating  expenses,  include wages and
salaries,  Employee benefits,  data processing expenses,  occupancy expenses and
other office and general administrative expenses of the Company. Certain general
expenses of the Company,  related to the  acquisition  and  underwriting  of new
policies, are deferred as policy acquisition costs (DAC). Medical inspection and
exam fees  related to new  business  production,  wages,  salaries  and Employee
benefits of underwriting personnel, and salaries,  employee benefits and bonuses
paid to branch sales Employees for the production of life and annuity  business,
are all deferred.

General  expenses,  net of DAC,  increased 5.6% to $2,342,832 at March 31, 2001.
This  increase is  attributable  to normal  increases in salaries and  benefits,
including  an  increase  in the  Company's  matching  contribution  rate  to the
Employee 401(K) plan, effective January 1, 2001.

Another  component of total  operating  expenses is  commissions  to independent
Agents. Direct commission costs include new and renewal commissions,  production
bonuses and promotional  incentives to Agents.  These direct commission expenses
are reported on the Statements of Operations  net of  commissions  received from
reinsurers.  The reported  expense is also  affected by the amount of commission
expenses  capitalized  as DAC.  Commissions,  which  vary  with and are  related
primarily  to the  production  of new  business,  have  been  deferred  and  are
capitalized  as  DAC.  Most  first-year  and  incentive   commissions  and  some
second-year commissions qualify for deferral as DAC. During the first quarter of
2001,  commissions  net of DAC,  increased  $115,782 or 24.3%,  to $592,940.  To
better  distribute  the  reinsurance   expense  allowance,   the  Company  began
allocating some of the allowance to the general expenses in the first quarter of
2001, thus reducing the amount of commission capitalized as DAC.

                                       13
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (Continued)

FINANCIAL CONDITION

Reserve Liabilities

The Company's primary commitment is its obligation to meet the payment of future
policy benefits under the terms of its life insurance and annuity contracts.  To
meet these future  obligations,  the Company establishes life insurance reserves
based upon the type of policy,  the age of the insured,  and the number of years
the policy has been in force. The Company also establishes annuity and universal
life reserves  based on the amount of  Policyholder  deposits  (less  applicable
policy charges) plus interest earned on those deposits. On March 31, 2001, there
was no  material  difference  between the  carrying  value and fair value of the
Company's  investment-type  policies.  These life insurance and annuity reserves
are supported primarily by the Company's long-term, fixed-income investments, as
the underlying policy reserves are generally also of a long-term nature.

Investments

The Company's  investment  strategies are designed and portfolios are structured
to match the features of the life  insurance  and annuity  products  sold by the
Company.   Annuities  and  life  insurance  policies  are  long-term   products,
therefore,  the  Company's  investment  strategy  takes a long-term  perspective
emphasizing  investment  quality,   diversification,   and  superior  investment
returns.  The  Company's  investments  are managed  prudently  on a total return
approach that focuses on current income and capital appreciation.

The Company's  invested  assets are liquid in order to meet  commitments  to our
Policyholders.  At March 31, 2001, the Company's investment portfolio consisting
of cash,  marketable  short-term  investments,  investment  grade bonds,  common
stock,  and preferred  stock,  totaled  $846.2 million or 80.9% of total assets.
These  resources  provide  the  liquidity  the  Company  requires  to  meet  the
unforeseen demands on its funds.

The Company's investments are subject to certain risks,  including interest rate
and price risk.  The Company  monitors  exposure to interest  rate risk  through
periodic reviews of asset and liability  positions.  Estimates of cash flows and
the impact of interest rate  fluctuations  relating to the investment  portfolio
are  monitored  regularly.  Price  risk  is  defined  as the  potential  loss in
estimated fair value  resulting from an adverse change in prices.  The Company's
objective  is to earn  competitive  relative  returns by  investing in a diverse
portfolio of high-quality,  liquid  securities.  Portfolio  characteristics  are
analyzed  regularly  and market  risk is actively  managed  through a variety of
techniques.   Portfolio   holdings  are   diversified   across   industries  and
concentrations  in any  one  company  or  industry  are  limited  by  parameters
established by management and the Company's Board of Directors.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is a measure of the  Company's  ability to secure  enough cash to meet
its contractual obligations and operating needs.  Generally,  insurance premiums
are  collected  prior to claims and  benefit  disbursements  and these funds are
invested to provide  necessary cash flows in future years.  The Company's  major
sources of cash from  operations  are life  insurance  premiums  and  investment
income.  The net positive cash flow is used to fund Company  commitments  and to
build the investment  portfolio,  thereby increasing future investment  returns.
Net cash provided by operating  activities  for the three months ended March 31,
2001 was  $2,660,737  compared  to cash  provided  by  operating  activities  of
$3,441,703  for the three months ended March 31, 2000.  The Company's  liquidity
position  remains  strong as invested  assets  increased  by  approximately  $21
million during the first three months of 2001 to almost $902 million.

Annuity  and  universal  life  deposits,  which do not  appear as revenue on the
financial  statements,  are a source of funds.  These  deposits do not involve a
mortality or morbidity  risk and are accounted  for using methods  applicable to
comparable   "interest-bearing   obligations"   of  other  types  of   financial
institutions.  This method of accounting  records deposits as a liability rather
than as a revenue.  Annuity and universal life deposits were  $16,676,624 in the
first quarter of 2001 and $14,557,260 in the first quarter of 2000.

                                       14
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (Continued)

The Company's  current  commitments  for  expenditures  as of March 31, 2001 are
primarily for policy death benefits, policy surrenders and withdrawals,  general
operating expenses,  federal income taxes, and dividends to shareholders.  These
commitments  are met by cash flows from policy  revenue,  annuity and  universal
life  deposits and  investment  income.  Management  believes its cash flow from
operations  and its liquid  assets and  marketable  securities  will  enable the
Company  to meet any  foreseeable  cash  requirements.  As an added  measure  of
liquidity,  the Company  has  arranged  for a $10 million  line of credit with a
commercial  bank.  At March 31, 2001 and 2000,  there were no borrowings on this
line of credit.

The Company's 2000 year-end Risk Based Capital Analysis as reflected in its 2000
statutory  annual  statement shows total adjusted  capital of  $126,211,070  and
authorized  control level risk based capital of  $26,845,262.  These results are
indicative of the strong capital  position of the Company and are well in excess
of levels that would require regulatory action.

FACTORS THAT MAY EFFECT FUTURE RESULTS

Information Technology

Emerging technologies are increasingly  facilitating  transactions between firms
and their  customers.  Electronic  transactions  between life insurers and their
customers  or  potential  customers  are becoming  more  generally  accepted and
utilized over time. In 2001,  the Erie Insurance  Group,  including the Company,
began the development of several eCommerce initiatives in support of the Group's
business  model  of  distributing   insurance   products   exclusively   through
independent  agents.  The  initiatives  are  intended  to  improve  service  and
efficiency,  as well as result in increased sales. The cost of these initiatives
will be allocated among member companies of the Erie Insurance Group.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's  exposure to market risk is primarily  related to  fluctuations in
prices and interest rates. Quantitative and qualitative disclosures about market
risk  resulting  from changes in prices and interest  rates are included in Item
7A. in the  Company's  2000  Annual  Report  on Form  10-K.  There  have been no
material  changes in such risks or the Company's  periodic  reviews of asset and
liability   positions  during  the  three  months  ended  March  31,  2001.  The
information contained in the Investments section of Management's  Discussion and
Analysis of Financial Condition and Results of Operations is incorporated herein
by reference.

                                       15
<PAGE>

PART II.  OTHER INFORMATION

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

On April 24, 2001, the Registrant held its Annual Meeting of Shareholders:

A.   The  following  Directors  were  elected  for  a  one-year term and until a
     successor is elected and qualified:

           Samuel P. Black, III           Claude C. Lilly, III
           J. Ralph Borneman, Jr.         Stephen A. Milne
           Patricia Garrison-Corbin       Henry N. Nassau
           Susan Hirt Hagen               John M. Petersen
           F. William Hirt                Jan R. Van Gorder, Esq.
           Samuel P. Katz                 Robert C. Wilburn


B.   The following other matter  was voted upon at the meeting and the following
     number of votes were cast with respect to such matter:

          The  proposal  to  ratify  the  selection of Brown, Schwab,  Bergquist
          & Company as  independent  public  accountants  to perform  the annual
          audit of the Company financial statements for the year ending December
          31, 2000 was ratified.  This proposal received  8,729,560  affirmative
          votes, 2,027 negative votes with 3,814 abstentions.

Item 6.  Exhibits and Reports on Form 8-K

The Company did not file any reports on  Form 8-K during  the three-month period
ended March 31, 2001.


"Safe Harbor"  Statement Under the Private  Securities  Litigation Reform Act of
1995:  Certain  forward-looking  statements  contained  herein involve risks and
uncertainties. Many factors could cause future results to differ materially from
those discussed. Examples of such factors include but are not limited to: better
(or worse) mortality rates, changes in insurance regulations or legislation that
disadvantage the Company in the marketplace and recession,  economic  conditions
or stock market changes  affecting  pricing or demand for insurance  products or
ability to generate  investment  income.  Growth and profitability have been and
will be potentially materially affected by these and other factors.

                                       16
<PAGE>

                         SIGNATURES

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


                                   Erie Family Life Insurance Company
                                               (Registrant)

Date: May 4, 2001                  \s\  Stephen A. Milne
                                  (Stephen A. Milne, President & CEO)


                                   \s\  Philip A. Garcia
                             (Philip A. Garcia, Executive Vice President & CFO)