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 September 30, 2000

                                       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 October 31, 2000.


                                       1
<PAGE>


                                      INDEX

                       ERIE FAMILY LIFE INSURANCE COMPANY


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

        Statements of Financial Position--September 30, 2000 and
        December 31, 1999

        Statements of Operations--Three and nine months ended September 30, 2000
        and 1999

        Statements of Comprehensive Income--Three and nine months ended
        September 30, 2000 and 1999

        Statements of Cash Flows--Nine months ended September 30, 2000 and 1999

        Notes to Financial Statements--September 30, 2000

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 6. Exhibits and Reports on Form 8-K


SIGNATURES


                                       2
<PAGE>


PART I.  FINANCIAL INFORMATION

                       ERIE FAMILY LIFE INSURANCE COMPANY

                        STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>

                                                                    (Dollars in thousands)
                                                            September 30,             December 31,
ASSETS                                                          2000                      1999
                                                            --------------            ------------
                                                              (Unaudited)
<S>                                                           <C>                      <C>
Investments:
      Fixed Maturities at fair value (amortized cost
        of $698,366 and $651,659, respectively)               $   677,267              $ 628,877
      Equity Securities at fair value
        (cost of $130,390 and $124,674, respectively)             150,539                142,095
      Real Estate                                                   1,397                  1,458
      Policy Loans                                                  7,508                  6,724
      Real Estate Mortgage Loans                                    8,331                  9,975
      Limited Partnerships                                         45,464                 28,331
                                                              -----------              ---------

        Total Invested Assets                                 $   890,506              $ 817,460

      Cash and Cash Equivalents                                         0                 27,358
      Premiums Receivable from Policyholders                        4,312                  4,056
      Reinsurance Recoverable                                       1,245                    464
      Other Receivables                                               230                    171
      Accrued Investment Income                                    14,898                 10,896
      Deferred Policy Acquisition Costs                            81,665                 77,588
      Reserve Credit for Reinsurance Ceded                          7,532                  6,927
      Prepaid Federal Income Taxes                                    863                    758
      Other Assets                                                  9,019                  8,854
                                                              -----------              ---------

        Total Assets                                          $ 1,010,270              $ 954,532
                                                              ===========              =========

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


                                       3
<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY

                        STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>

                                                                    (Dollars in thousands)
                                                            September 30,             December 31,
LIABILITIES AND SHAREHOLDER'S EQUITY                            2000                      1999
                                                            --------------            ------------
                                                              (Unaudited)
<S>                                                           <C>                      <C>
Liabilities:
      Policy Liabilities and Accruals:
        Future Life Policy Benefits                           $    74,806               $  70,329
       Policy and Contract Claims                                   2,263                   1,305
        Annuity Deposits                                          575,158                 569,218
        Universal Life Deposits                                   103,903                  94,640
        Supplementary Contracts Not
          Including Life Contingencies                                590                     581
      Other Policyholder Funds                                      4,012                   5,623
      Deferred Income Taxes                                        25,261                  17,853
      Reinsurance Premium Due                                         273                     692
      Accounts Payable and Accrued Expenses                         9,690                   5,116
      Note Payable to Erie Indemnity Company                       15,000                  15,000
      Due to Affiliate                                              2,983                   1,513
      Dividends Payable                                             1,701                   1,559
                                                              -----------               ---------

        Total Liabilities                                     $   815,640               $ 783,429
                                                              -----------               ---------

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 (Loss)                 7,874              (    2,344)
      Retained Earnings                                           182,346                 169,037
                                                              -----------               ---------

        Total Shareholders' Equity                            $   194,630               $ 171,103
                                                              -----------               ---------

        Total Liabilities and Shareholders' Equity            $ 1,010,270               $ 954,532
                                                              ===========               =========

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


                                       4
<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY

                      STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>

                                                                           (Dollars in thousands, except per share data)
                                                                          Three Months Ended              Nine Months Ended
                                                                             September 30                    September 30
                                                                       -----------------------         -----------------------
                                                                         2000            1999            2000            1999
<S>                                                                    <C>             <C>             <C>             <C>
Revenues:
   Policy:
   Life Premiums, net of premiums ceded of
     $638, $948, $2,741 and $2,444, respectively                       $10,741         $ 9,549         $31,523         $29,120
   Group Premiums                                                          632             627           1,965           1,877
                                                                       -------         -------         -------         -------
       Total Policy Revenue                                            $11,373         $10,176         $33,488         $30,997

   Equity in Earnings of Limited Partnerships                            1,122             314           3,492             658
   Investment Income, net of expenses of
     $456, $454, $1,373 and $1,322, respectively                        14,259          13,824          43,989          40,781
   Net Realized Gains on Investments                                     1,628           2,236           5,480           4,887
   Other Income                                                            244             220             759             592
                                                                       -------         -------         -------         -------

       Total Revenues                                                  $28,626         $26,770         $87,208         $77,915
                                                                       -------         -------         -------         -------

Benefits and Expenses:
   Death Benefits, net of reinsurance recoveries
     of $961, $823, $2,246 and
     $1,584, respectively                                              $ 3,069         $ 2,505         $ 9,239         $ 7,736
   Interest on Annuity Deposits                                          8,496           7,933          25,379          23,270
   Interest on Universal Life Deposits                                   1,590           1,362           4,558           3,891
   Surrender and Other Benefits                                            327             279             873             824
   Increase in Future Life Policy Benefits, net of
     the increase in reserve credit for reinsurance
     ceded of $216, $204, $605 and
     $598, respectively                                                  1,249           1,439           3,872           3,760
   Amortization of Deferred Policy Acquisition Costs                     1,643           1,145           5,576           4,149
   Commissions, net of reinsurance reimbursements
     of $165, $266, $1,089 and $682, respectively                          580             404           1,282           1,472
   General Expenses                                                      1,994           1,882           6,714           5,415
   Taxes, Licenses and Fees                                                464             371           1,561           1,176
                                                                       -------         -------         -------         -------
       Total Benefits and Expenses                                     $19,412         $17,320         $59,054         $51,693
                                                                       -------         -------         -------         -------

Income From Operations                                                 $ 9,214         $ 9,450         $28,154         $26,222
Provision for Federal Income Taxes:
   Current                                                               2,455           2,610           7,835           7,607
   Deferred                                                                733             108           1,906           1,122
                                                                       -------         -------         -------         -------
       Total Provision for Federal Income Taxes                          3,188           2,718           9,741           8,729
                                                                       -------         -------         -------         -------

Net Income                                                             $ 6,026         $ 6,732         $18,413         $17,493
                                                                       =======         =======         =======         =======

Net Income Per Share                                                   $  0.64         $  0.71         $  1.95         $  1.85
                                                                       =======         =======         =======         =======

Dividends Declared Per Share                                           $  0.00         $ 0.165         $  0.54         $  0.66
                                                                       =======         =======         =======         =======

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


                                       5
<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY

                   STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

<TABLE>
<CAPTION>

                                                                           (Dollars in thousands, except per share data)
                                                                          Three Months Ended               Nine Months Ended
                                                                            September 30                     September 30
                                                                        -----------------------         -----------------------
                                                                         2000            1999            2000            1999
<S>                                                                    <C>             <C>             <C>             <C>
Net Income                                                              $6,026          $ 6,732         $18,413         $17,493
                                                                        ------          -------         --------        -------
Unrealized Gains (Losses) on Securities:
   Unrealized Holding Gains (Losses) Arising
     During Period                                                       6,027         ( 14,524)         21,200        ( 39,069)
   Less:  Reclassification Adjustment for Gains
     Included in Net Income                                            ( 1,628)        (  2,236)       (  5,480)       (  4,887)
                                                                        ------          -------         -------         -------
     Net Unrealized Holding Gains (Losses)
       Arising During Period                                            $4,399         ($16,760)        $15,720        ($43,956)
                                                                        ------          -------         -------         -------

Income Tax (Expense) Benefit Related to
   Unrealized Gains (Losses)                                           ( 1,539)           5,866        (  5,502)         15,385
                                                                        ------          -------         -------         -------

Other Comprehensive Income (Loss), Net of Tax                           $2,860         ($10,894)        $10,218        ($28,571)
                                                                        ------          -------         -------         -------

Comprehensive Income (Loss)                                             $8,886         ($ 4,162)        $28,631        ($11,078)
                                                                        ======          =======         =======         =======

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


                                       6
<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY

                      STATEMENTS OF CASH FLOWS (Unaudited)

<TABLE>
<CAPTION>
                                                                            (Dollars in Thousands)
                                                                     Nine Months Ended     Nine Months Ended
                                                                    September 30, 2000    September 30, 1999
                                                                    ------------------    ------------------
<S>                                                                        <C>               <C>
Cash flows from operating activities:
Net income                                                                  $18,413           $ 17,493
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Net amortization of bond and mortgage premium                              156                211
     Amortization of deferred policy acquisition costs                        5,576              4,149
     Real estate depreciation                                                    62                 62
     Deferred federal income taxes                                            1,906              1,122
Realized gains on investments                                              (  5,480)         (   4,887)
Increase in premiums receivable                                            (    256)         (      12)
(Increase) decrease in other receivables                                   (     59)                96
Increase in accrued investment income                                      (  4,002)         (   3,410)
Policy acquisition costs deferred                                          (  9,652)         (   8,862)
Increase in other assets                                                   (    166)         (     578)
Increase in reinsurance recoverables
   and reserve credits                                                     (  1,386)         (     887)
Increase in future policy benefits and claims                                 5,435              3,829
Decrease in other policyholder funds                                       (  1,610)         (   2,682)
(Decrease) increase in reinsurance premium due                             (    419)               287
Decrease in federal income taxes payable                                   (    104)         (     567)
Increase in accounts payable and due to affiliate                             6,040                240
                                                                            -------           --------
       Net cash provided by operating activities                            $14,454           $  5,604
                                                                            -------           --------

Cash flows from investing activities:
Purchase of investments:
   Fixed maturities                                                        ($84,210)         ($137,081)
   Equity securities                                                       ( 28,686)         (  42,995)
   Mortgage loans                                                                 0          (      66)
   Limited Partnerships                                                    (  7,790)         (   9,105)
Sales/maturities of investments:
   Fixed maturities                                                          41,028             79,519
   Equity securities                                                         24,765             32,820
   Limited Partnerships                                                       1,966              1,664
Principal payments received on mortgage loans                                 1,645                116
Loans made to Policyholders                                                (  1,586)         (   1,108)
Payments received on policy loans                                               804                601
                                                                            -------           --------
       Net cash used in investing activities                               ($52,064)         (  75,635)
                                                                            -------           --------

Cash flows from financing activities:
Increase in annuity and supplementary contract deposits                     $ 5,950           $ 30,788
Increase in universal life deposits                                           9,263              9,624
Dividends paid to Shareholders                                             (  4,961)         (   6,095)
                                                                            -------           --------
       Net cash provided by financing activities                            $10,252           $ 34,317
                                                                            -------           --------
Net decrease in cash and cash equivalents                                  ( 27,358)         (  35,714)
Cash and cash equivalents at beginning of year                               27,358             44,808
                                                                            -------           --------
Cash and cash equivalents at end of quarter                                 $     0           $  9,094
                                                                            =======           ========

Supplemental  disclosures  of cash flow  information:
Cash paid during the year for:
   Interest                                                                 $   648           $    484
   Income taxes                                                               7,800              7,967

<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  nine-month  period ended  September 30, 2000 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2000. 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, 1999.

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,  notes
and redeemable preferred stock. 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>
September 30, 2000
Fixed Maturities:
U.S. Treasuries and Government Agencies                      $ 12,117          $    396          $     20          $ 12,493
States and Political Subdivisions                                 195                 8                 0               203
Special Revenue                                                 9,497               252                 0             9,749
Public Utilities                                               71,743             1,045             2,430            70,358
U.S. Banks, Trusts and Insurance Companies                    121,124             1,008             4,605           117,527
U.S. Industrial and Miscellaneous                             407,323             2,829            15,012           395,140
Foreign Governments-Agency                                      2,993                 0                71             2,922
Foreign Banks, Trusts and Insurance Companies                   9,982                10               431             9,561
Foreign Industrial and Miscellaneous                           57,728               383             4,804            53,307
                                                             --------          --------          --------          --------
     Total Bonds                                             $692,702          $  5,931          $ 27,373          $671,260
Redeemable Preferred Stock                                      5,664               343                 0             6,007
                                                             --------          --------          --------          --------
Total Fixed Maturities                                       $698,366          $  6,274          $ 27,373          $677,267
                                                             --------          --------          --------          --------

Equity Securities:
Common Stock                                                 $ 65,082          $ 29,337          $  6,924          $ 87,495
Non-Redeemable Preferred Stock                                 65,308               555             2,819            63,044
                                                             --------          --------          --------          --------
     Total Equity Securities                                 $130,390          $ 29,892          $  9,743          $150,539
                                                             --------          --------          --------          --------
       Total Available-for-Sale Securities                   $828,756          $ 36,166          $ 37,116          $827,806
                                                             ========          ========          ========          ========

</TABLE>


                                       8
<PAGE>



                       ERIE FAMILY LIFE INSURANCE COMPANY

              NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (Continued)

NOTE B -- INVESTMENTS (Continued)

<TABLE>
<CAPTION>
                                                                               Gross             Gross
                                                            Amortized        Unrealized        Unrealized         Estimated
                                                               Cost            Gains             Losses          Fair Value
                                                            ---------        ----------        ----------        ----------
<S>                                                          <C>               <C>               <C>               <C>
December 31, 1999
Fixed Maturities:
U.S. Treasuries and Government Agencies                      $  9,390          $     75          $     63          $  9,402
States and Political Subdivisions                               2,055                45                 0             2,100
Special Revenue                                                 6,860               220                 0             7,080
Public Utilities                                               61,886               765             2,939            59,712
U.S. Banks, Trusts and Insurance Companies                    115,616               693             4,740           111,569
U.S. Industrial and Miscellaneous                             396,128             2,257            16,076           382,309
Foreign Governments-Agency                                      2,991                 0               111             2,880
Foreign Banks, Trusts and Insurance Companies                   9,981                 0               444             9,537
Foreign Industrial and Miscellaneous                           46,752               295             2,759            44,288
                                                             --------          --------          --------          --------
     Total Fixed Maturities                                  $651,659          $  4,350          $ 27,132          $628,877
                                                             --------          --------          --------          --------

Equity Securities:
Common Stock                                                 $ 61,075          $ 28,171          $  5,852          $ 83,394
Non-Redeemable Preferred Stock                                 63,599               274             5,172            58,701
                                                             --------          --------          --------          --------
     Total Equity Securities                                 $124,674          $ 28,445          $ 11,024          $142,095
                                                             --------          --------          --------          --------
       Total Available-for-Sale Securities                   $776,333          $ 32,795          $ 38,156          $770,972
                                                             ========          ========          ========          ========
</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.

The  Company  participates  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's policy is to require collateral equal to 102 percent of the market
value of the loaned  securities.  The Company has an  indemnification  agreement
with the lending  agents in the event a borrower  becomes  insolvent or fails to
return securities. At September 30, 2000, the Company had loaned securities with
a market value of $20.2 million and secured collateral of $20.7 million.

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.  Limited partnerships include
U.S.  domestic  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   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  earnings  (loss) of limited  partnerships  are as
follows:

<TABLE>
<CAPTION>
                                                          Three Months Ended             Nine Months Ended
                                                             September 30                   September 30
                                                        ----------------------        ----------------------
                                                          2000           1999           2000           1999
<S>                                                     <C>            <C>            <C>            <C>
Limited Partnerships - Private Equity                   $   728        $    32        $   692        ($   42)
Limited Partnerships - Real Estate                          229            257          1,783            661
Limited Partnerships - Fixed Income                         165             25          1,017             39
                                                        -------        -------        -------         ------
                                                        $ 1,122        $   314        $ 3,492         $  658
                                                        =======        =======        =======         ======

</TABLE>


NOTE C -- SEGMENT AND PREMIUM INFORMATION

The  Company  offers a range of  products  and  services,  but  operates  as one
reportable  life insurance  segment.  The Company's  portfolio of life insurance
includes  permanent  life,  endowment and term policies,  including  whole life,
mortgage and decreasing term, group, and universal life insurance.

The  following  is a detail of life  premiums  and  annuity and  universal  life
deposits by major product grouping.

<TABLE>
<CAPTION>

                                                          Three Months Ended             Nine Months Ended
                                                             September 30                   September 30
                                                        ----------------------        ----------------------
                                                          2000           1999           2000           1999
<S>                                                     <C>            <C>            <C>            <C>
Life insurance premiums earned:
  Term                                                  $ 7,195        $ 6,573        $21,750        $19,893
  Whole life                                              1,346          1,232          4,090          3,771
  Universal life                                          2,837          2,695          8,424          7,899
  Other                                                     633            624          1,965          1,878
                                                        -------        -------        -------        -------
      Total direct premiums earned                      $12,011        $11,124        $36,229        $33,441
  Reinsurance, net                                          638            948          2,741          2,444
                                                        -------        -------        -------        -------
Total policy revenue                                    $11,373        $10,176        $33,488        $30,997
                                                        =======        =======        =======        =======

Deposits:
  Universal life                                        $ 2,528        $ 2,759        $ 8,241        $ 8,676
  Annuity                                                10,073         12,649         34,430         47,709
                                                        -------        -------        -------        -------
      Total deposits                                    $12,601        $15,408        $42,671        $56,385
                                                        =======        =======        =======        =======

</TABLE>


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 group  coverage.  As of December 31, 1999,  $1.4 billion of life
insurance in force was ceded to other  companies.  The Company had assumed $33.4
million  of life  insurance  in  force as of  December  31,  1999  (all of which
pertains  to  Pennsylvania   Employees'  Group  Life   Insurance).   Reinsurance
recoveries for the three months ended  September 30, 2000 and 1999 were $961 and
$823,  respectively.  For the nine  months  ended  September  30, 2000 and 1999,
reinsurance recoveries were $2,246 and $1,584, respectively.


                                       10
<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY

              NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (Continued)

NOTE E -- GEOGRAPHIC EXPANSION

On March 7, 2000,  the Erie Insurance  Group,  of which the Company is a member,
announced  its  intention  to expand its  marketing  territory  into  Wisconsin.
Wisconsin  will be the tenth  state  served by the  Company,  in addition to the
District of Columbia.  In Wisconsin,  the Company  intends to write all lines of
life and annuity products it currently offers.

NOTE F -- RECLASSIFICATION

Certain amounts, as previously reported in the 1999 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  information  should be read in  conjunction  with the  historical
financial information and the notes thereto included in Item 1 of this Quarterly
Report  on Form 10-Q 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, 1999 as filed with the  Securities and Exchange
Commission on March 29, 2000.

FINANCIAL OVERVIEW

Net income  decreased to  $6,026,086  or $0.64 per share in the third quarter of
2000, compared to $6,732,355, or $0.71 per share, for the third quarter of 1999.
While the Company continued to produce strong investment gains and solid premium
growth, a 12.1% increase in total benefits and expenses,  including a 10.0% rise
in benefits to Policyholders,  contributed to the decrease in earnings per share
for the third quarter 2000.  Net income for the nine months ended  September 30,
2000 increased 5.3% to $18,412,617, or $1.95 per share, compared to $17,492,723,
or $1.85 per share, for the same period in 1999.

REVENUES

Analysis of Policy Revenue

Total policy revenue increased $1,197,088, or 11.8%, to $11,373,232 in the third
quarter of 2000.  Contributing  to this  growth was an  increase  in premiums on
traditional life insurance  policies of 9.4% to $8,541,560 for the quarter ended
September  30,  2000.  Total  policies in force on  traditional  life  insurance
products  increased  4.5% to 163,946 at September  30, 2000  compared to 156,899
policies at September 30, 1999. Total policy revenue  increased  $2,490,669,  or
8.0%, to $33,488,151 for the nine months ended September 30, 2000, when compared
to the same period in 1999.

In late 1999, the Company introduced a new life insurance product: ERIE Flagship
Term.  This new term  insurance  product is designed for sale of face amounts of
$300,000 and above and  complements  the Company's  Term Protector  series.  The
Company  retains 50% of the risk up to a maximum of $300,000 on each  individual
life. This new product, net of reinsurance premiums ceded,  contributed $923,029
to total life premiums for the nine months ended September 30, 2000.

Because  this new term  product is more  competitively  priced  for larger  face
amounts,  the Company's  reinsurance  premiums ceded and related  commission and
expense  allowances have increased  during 2000. The reinsurance  premiums ceded
recognized in total life  premiums for the Erie Flagship Term product  amount to
$271,487 for the nine months ended September 30, 2000.

Analysis of Investment-related Income

Net investment income increased $434,961,  or 3.2%, in the third quarter of 2000
due to increased levels of investment from cash flows generated by the Company's
operations  and  universal  life  deposits.   Net  investment  income  increased
$3,208,197 or 7.9%, for the nine months ended September 30, 2000. Total invested
assets of the Company were  $890,505,883  at September  30, 2000, an increase of
$73,046,002, or 8.9%, over the December 31, 1999 levels.

The Company invests in U.S. domestic and foreign private equity, real estate and
fixed income limited  partnerships.  These  investments  represent 4.5% of total
assets of the  Company.  The  Company's  equity  in  earnings  of these  limited
partnerships  increased  $807,706 to $1,122,031 for the quarter ended  September
30, 2000.  For the nine months  ended  September  30, 2000,  income from limited
partnerships increased $2,834,234 to $3,492,283.


                                       12
<PAGE>


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

BENEFITS AND EXPENSES

Analysis of Policy-related Benefits and Expenses

Net death benefits on life insurance  policies increased  $564,001,  or 22.5% in
the third quarter of 2000 to $3,069,124. For the nine months ended September 30,
2000, death benefits on life insurance policies increased $1,502,835,  or 19.4%,
to $9,239,325.  This increase is consistent with the increase in the face amount
of life  insurance  policies  issued by the  Company.  The total face  amount of
policies in force at September  30, 2000 was  approximately  $15.1  billion,  an
increase  of $1.7  billion,  or 12.7%,  over the  September  30,  1999 amount of
approximately  $13.4  billion.  The  Company's  mortality  experience  has  been
favorable over the long term and management believes its underwriting philosophy
and practices are sound.

Interest expense incurred on deposits increased 8.5% to $10,086,656 in the third
quarter of 2000,  from  $9,295,187  in the third  quarter of 1999.  For the nine
months ended September 30, 2000, interest expense incurred on deposits increased
$2,776,781  or 10.2%.  The  increase  in  interest  expense was the result of an
increase in the  credited  interest  rate on annuity  deposits  during the first
quarter of 2000 combined with the $33,134,592  increase in deposits at September
30, 2000 when  compared to September  30, 1999.  The interest  rate  credited on
universal  life  deposits  ranges  from 6.0% to 6.75% in 2000 and 1999 while the
rate credited on annuity deposits in 2000 increased to a range of 5.25% to 6.25%
from 5.0% to 5.75% in 1999.

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 third quarter 2000 future life policy
benefit expenses were $1,248,684, compared to $1,438,409 in the third quarter of
1999, a decrease of 13.2%.  For the nine months ended  September 30, 2000,  life
policy benefits increased $112,353 or 3.0%.

Amortization of deferred policy  acquisition costs increased 43.4% to $1,642,431
in the third quarter of 2000. For the nine months ended  September 30, 2000, the
increase in amortization of deferred policy acquisition costs was $1,426,868, or
34.4%.  The  increase  in  amortization  expense  was caused by  refinements  in
amortization  methods used during interim periods during 2000 which more closely
reflect actual results.

Analysis of Other Expenses

Total operating expenses, excluding taxes, licenses and fees, increased 12.6% to
$2,573,899  in the third  quarter of 2000  compared to  $2,286,303  in the third
quarter of 1999.  For the nine months ended  September 30, 2000,  these expenses
increased $1,108,637 or 16.1% to $7,995,929.

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 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.  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 deferred policy acquisition costs,  increased $111,286
or 5.9% to  $1,993,657  for the quarter ended  September 30, 2000.  For the nine
months ended September 30, 2000, net general  expenses  increased  $1,298,561 or
24.0%, to $6,714,098.  During 1999,  certain  expenses,  including  salaries and
benefits,   associated  with  the   implementation   of  the  Company's   policy
administration system,  CyberLife,  were capitalized in accordance with SOP 98-1
and therefore not charged  against income in 1999. The  capitalization  of these
costs ended in 1999 when the system was placed into use.  These expenses are now
being charged against income. In addition, amortization of the capitalized costs
of the CyberLife system began in late 1999, when the system was placed into use.


                                       13
<PAGE>

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


Excluding   the  effect  of  the  1999   capitalized   costs  and  current  year
amortization,  general  expenses  remained  level  for  the  nine  months  ended
September 30, 2000, as compared to the same period in 1999.

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.  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 deferred policy  acquisition costs (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. For
the nine months ended September 30, 2000,  commission expense decreased $189,923
or 12.9%, to $1,281,831.  The commission  allowance received from reinsurers has
increased $407,164 to $1,089,403,  for the nine months ended September 30, 2000,
due primarily to the  introduction of the new ERIE Flagship Term product in late
1999.

Taxes,  licenses and fees increased  $93,361 to $464,215 in the third quarter of
2000  compared  to $370,854  in the third  quarter of 1999.  For the nine months
ended  September 30, 2000,  these  expenses  increased  $384,919,  or 32.7%,  to
$1,561,355, compared to $1,176,436 for the nine months ended September 30, 1999.
A portion of this is the result of an increase in state  premium tax expense due
to increased  premium  volume and decreased  guarantee  association  tax credits
allowed to offset premium tax expenses.  The remaining increase is due primarily
to a second quarter 2000 refund of premium tax  reimbursements  collected from a
reinsurer in prior years.

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 September 30, 2000,
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
has not held or issued derivative financial instruments in 2000 or 1999.

The Company's  invested  assets are liquid in order to meet  commitments  to our
Policyholders.  At  September  30,  2000,  the  Company's  investment  portfolio
consisting of cash, marketable short-term  investments,  investment grade bonds,
common stock,  and preferred  stock,  totaled  $811.3  million or 80.3% of total
assets.  These resources  provide the liquidity the Company requires to meet the
unforeseen demands on its funds.

At  September  30,  2000,  the  amortized  cost of the  Company's  five  largest
investments in corporate debt  securities  totaled $33.2 million,  none of which
individually  exceeded $8.0  million.  These  investments  had a market value of
$33.4 million.


                                       14
<PAGE>


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


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 nine months ended  September
30, 2000 was  $14,454,418  compared  to  $5,603,453  for the nine  months  ended
September 30, 1999. The Company's  liquidity position remains strong as invested
assets  increased by more than $73 million  during the first nine months of 2000
to $891 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  $12,600,873 in the
third quarter of 2000 and $15,408,713 in the third quarter of 1999.

The Company's current  commitments for expenditures as of September 30, 2000 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 September  30, 2000 and 1999,  there
were no borrowings on this line of credit.

The Company's  fourth quarter dividend was approved by the Board of Directors on
October 10, 2000.  The $0.18 per share  dividend will be paid on January 2, 2001
to  Shareholders  of record as of December  19,  2000.  In 1999,  the  Company's
quarterly dividend was declared on September 14, to be paid on January 3, 2000.

The Company's 1999 year-end Risk Based Capital Analysis as reflected in its 1999
statutory  annual  statement shows total adjusted  capital of  $128,324,572  and
authorized  control level risk based capital of  $26,506,217.  These results are
indicative of the strong capital  position of the Company and are well in excess
of levels that would require regulatory action.


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  1999  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 nine  months  ended  September  30,  2000.  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.

                              ********************

"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.

                                       15
<PAGE>


PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

Exhibit 27 - Fianacial Data Schedule

All  other  exhibits  for  which  provision is made in the applicable accounting
regulation  of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore, have been omitted.

The Company did not file any reports on Form 8-K during the  three-month  period
ended September 30, 2000.


                                   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: November 13, 2000                           \s\   Stephen A. Milne
                                             (Stephen A. Milne, President & CEO)


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



                                       16
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