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, 1999

                                       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, 1999.

                                       1

<PAGE>


                                INDEX

                 ERIE FAMILY LIFE INSURANCE COMPANY


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

        Statements of Financial Position--September 30, 1999 and
        December 31, 1998

        Statements of Operations--Three and nine months ended September 30, 1999
        and 1998

        Statements of Comprehensive Income--Three and nine months ended
        September 30, 1999 and 1998

        Statements of Cash Flows--Nine months ended September 30, 1999 and 1998

        Notes to Financial Statements--September 30, 1999

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


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>

                                                                           September 30,         December 31,
                                                                               1999                 1998
                                                                           -------------         ------------
                                                                             (Unaudited)
<S>                                                                        <C>                   <C>
ASSETS
Invested Assets:
   Fixed Maturities available-for-sale, at fair
     value (amortized cost of $639,756,018
     and $576,475,130, respectively)                                       $   627,722,189       $   605,523,237
   Equity Securities, at fair value
     (cost of $133,729,227 and $124,609,940,
     respectively)                                                             141,100,515           135,793,710
   Real Estate                                                                   1,479,300             1,541,445
   Policy Loans                                                                  6,519,804             6,013,130
   Real Estate Mortgage Loans                                                   10,020,416            10,070,394
   Other Invested Assets                                                        24,331,556            15,940,561
                                                                           ---------------       ---------------

       Total Invested Assets                                               $   811,173,780       $   774,882,477

   Cash and Cash Equivalents                                                     9,094,354            44,808,427
   Premiums Receivable from Policyholders                                        3,842,963             3,830,625
   Reinsurance Recoverable                                                         857,561               568,521
   Other Receivables                                                               259,337               355,067
   Accrued Investment Income                                                    13,692,241            10,282,002
   Deferred Policy Acquisition Costs                                            75,629,758            70,916,261
   Reserve Credit for Reinsurance Ceded                                          6,592,286             5,994,390
   Other Assets                                                                  6,545,994             5,967,858
                                                                           ---------------       ---------------

       Total Assets                                                        $   927,688,274       $   917,605,628
                                                                           ===============       ===============

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

                                       3

<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY
                        STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>


                                                                           September 30,          December 31,
                                                                               1999                   1998
                                                                           ---------------       --------------
                                                                            (Unaudited)
<S>                                                                        <C>                   <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Policy Liabilities and Accruals:
     Future Life Policy Benefits                                           $    68,896,789       $   64,539,220
     Policy and Contract Claims                                                  1,272,579            1,801,030
     Annuity Deposits                                                          554,949,236          524,122,492
     Universal Life Deposits                                                    90,977,959           81,354,026
     Supplementary Contracts Not Including
       Life Contingencies                                                          567,993              607,094
   Other Policyholder Funds                                                      5,483,953            8,166,371
   Federal Income Taxes Payable                                                     44,897              612,272
   Deferred Federal Income Tax                                                  16,990,271           31,252,214
   Reinsurance Premium Due                                                         588,577              301,487
   Accounts Payable and Accrued Expenses                                         4,844,812            4,215,186
   Note Payable to Erie Indemnity Company                                       15,000,000           15,000,000
   Due to Affiliate                                                              1,297,003            1,686,227
   Dividends Payable                                                             1,559,252            1,417,500
                                                                           ---------------       --------------

       Total Liabilities                                                   $   762,473,321       $  735,075,119
                                                                           ---------------       --------------

Shareholders' Equity:
   Common Stock, $.40 Par Value Per Share;
     Authorized 15,000,000 Shares; 9,450,000
     Shares Issued and Outstanding                                         $     3,780,000       $    3,780,000
   Additional Paid-In Capital                                                      630,000              630,000
   Accumulated Other Comprehensive (Loss) Income                                (2,399,545)          26,171,727
   Retained Earnings                                                           163,204,498          151,948,782
                                                                           ---------------       --------------

       Total Shareholders' Equity                                          $   165,214,953       $  182,530,509
                                                                           ---------------       --------------

       Total Liabilities and Shareholders' Equity                          $   927,688,274       $  917,605,628
                                                                           ===============       ==============

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

                                       4
<PAGE>

                       ERIE FAMILY LIFE INSURANCE COMPANY
                      STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
                                                                    Three Months Ended                      Nine Months Ended
                                                                       September 30                           September 30
                                                            ---------------------------------      ---------------------------------
<S>                                                         <C>              <C>                   <C>               <C>
                                                               1999                   1998            1999                   1998
Revenues:
   Policy:
   Life Premiums, net of premiums ceded of
     $947,927, $887,513, $2,443,748 and
     $2,629,820, respectively                               $     9,548,834  $      8,905,059      $     29,119,975  $    26,519,337
   Group Premiums                                                   627,310           588,617             1,877,507        1,788,737
                                                            ---------------  ----------------      ----------------  ---------------
       Total Policy Revenue                                 $    10,176,144  $      9,493,676      $     30,997,482  $    28,308,074
   Investment Income, net of expenses of
     $453,855, $328,078, $1,321,807 and
     $1,054,881, respectively                                    14,138,823        12,574,958            41,438,678       38,360,698
   Net Realized Gains on Investment                               2,236,192           775,430             4,886,833        3,477,700
   Other Income                                                     219,046           237,989               591,782          627,522
                                                            ---------------  ----------------      ----------------  ---------------
       Total Revenues                                       $    26,770,205  $     23,082,053      $     77,914,775  $    70,773,994
                                                            ---------------  ----------------      ----------------  ---------------

Benefits and Expenses:
   Death Benefits, net of reinsurance recoveries
     of $823,033, $275,635, $1,583,907 and
     $844,370, respectively                                 $     2,505,123  $      2,742,286      $      7,736,490  $     5,980,656
   Interest on Annuity Deposits                                   7,933,179         7,690,314            23,270,021       22,503,604
   Interest on Universal Life Deposits                            1,362,008         1,213,658             3,890,600        3,451,024
   Surrender and Other Benefits                                     279,198           262,445               823,696          828,126
   Increase in Future  Life  Policy  Benefits,  net of
     the  increase  in reserve credit for reinsurance
     ceded of $204,420, $186,972, $597,896 and $631,395,
     respectively                                                 1,438,409         1,227,423             3,759,672        3,299,768
   Amortization of Deferred Policy  Acquisition Costs             1,145,121         1,069,605             4,148,672        3,715,556
   Commissions, net of reinsurance reimbursements
     of $265,924, $328,245, $682,240 and $952,491,
     respectively                                                   403,927           418,405             1,471,755          988,556
   General Expenses                                               1,882,376         2,145,078             5,415,539        5,260,885
   Taxes, Licenses and Fees                                         370,854           402,953             1,176,436          201,954
                                                            ---------------  ----------------      ----------------  ---------------
       Total Benefits and Expenses                          $    17,320,195  $     17,172,167      $     51,692,881  $    46,230,129
                                                            ---------------  ----------------      ----------------  ---------------

Income From Operations                                      $     9,450,010  $      5,909,886      $     26,221,894  $    24,543,865
Federal Income Tax
   Current                                                        2,610,287           869,745             7,606,686        5,582,381
   Deferred                                                         107,368         1,377,224             1,122,485        3,236,412
                                                            ---------------  ----------------      ----------------  ---------------
       Total Federal Income Tax                                   2,717,655         2,246,969             8,729,171        8,818,793
                                                            ---------------  ----------------      ----------------  ---------------

Net Income                                                  $     6,732,355  $      3,662,917      $     17,492,723  $    15,725,072
                                                            ===============  ================      ================  ===============

Net Income Per Share                                        $          0.71  $           0.39      $           1.85  $          1.66
                                                            ===============  ================      ================  ===============

Dividends Declared Per Share                                $         0.165  $           0.15      $           0.66  $          0.60
                                                            ===============  ================      ================  ===============

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

                                       5

<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY
                 STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
<TABLE>
<CAPTION>

                                                                    Three Months Ended                    Nine Months Ended
                                                                       September 30                          September 30
                                                            ---------------------------------     ---------------------------------
<S>                                                         <C>              <C>                  <C>               <C>
                                                                    1999             1998                1999              1998

Net Income                                                  $     6,732,355  $      3,662,917     $     17,492,723  $    15,725,072
                                                            ---------------  ----------------     ----------------  ---------------
Unrealized Gains (Losses) on Securities:
   Unrealized Holding (Losses) Gains Arising
     During Period                                              (14,524,321)       (8,651,292)         (39,068,868)       1,079,338
   Less:  Reclassification Adjustment for Gains
     Included in Net Income                                      (2,236,192)         (775,430)          (4,886,833)      (3,477,700)
                                                            ---------------  ----------------     ----------------  ---------------
     Net Unrealized Holding Losses
       Arising During Period                                $   (16,760,513) $     (9,426,722)    $    (43,955,701) $    (2,398,362)
                                                            ---------------  ----------------     ----------------  ---------------

Income Tax Benefit Related to
   Unrealized Losses                                              5,866,180         3,299,353           15,384,429          839,427
                                                            ---------------  ----------------     ----------------  ---------------

Other Comprehensive Loss,
   Net of Tax                                               $   (10,894,333) $     (6,127,369)    $    (28,571,272) $    (1,558,935)
                                                            ---------------  ----------------     ----------------  ---------------

Comprehensive (Loss) Income                                 $    (4,161,978) $     (2,464,452)    $    (11,078,549) $    14,166,137
                                                            ===============  ================     ================  ===============


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

                                       6
<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY
                      STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
                                                                                Nine Months Ended             Nine Months Ended
                                                                                September 30, 1999            September 30, 1998
                                                                             ------------------------     ------------------------
<S>                                                                          <C>                          <C>
Cash flows from operating activities:
Net income                                                                   $             17,492,723     $             15,725,072
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Net amortization of bond and mortgage premium                                            211,532                      370,567
     Amortization of deferred policy acquisition costs                                      4,148,672                    3,715,556
     Real estate depreciation                                                                  62,145                       62,145
     Deferred federal income taxes                                                          1,122,485                    3,236,412
     Realized gains on investments                                                         (4,886,833)                  (3,477,700)
(Increase) decrease in premium receivable                                                     (12,338)                      35,918
Decrease (increase) in other receivables                                                       95,730                      (80,873)
Increase in accrued investment income                                                      (3,410,239)                  (1,945,675)
Policy acquisition costs deferred                                                          (8,862,169)                  (7,977,273)
Increase in other assets                                                                     (578,136)                  (1,721,587)
Increase in reinsurance recoverable and reserve credits                                      (886,936)                    (543,597)
Increase in future policy benefits and claims                                               3,829,118                    3,287,935
Decrease in other policyholder funds                                                       (2,682,418)                  (1,964,343)
Increase (decrease) in reinsurance premium due                                                287,090                     (151,871)
Decrease in federal income tax                                                               (567,375)                  (1,678,288)
Increase in accounts payable and due to affiliate                                             240,402                    3,234,283
                                                                             ------------------------     ------------------------
       Net cash provided by operating activities                             $              5,603,453     $             10,126,681
                                                                             ------------------------     ------------------------

Cash flows from investing activities:
Purchase of investments:
   Fixed maturities                                                          $           (137,081,056)    $           (110,588,282)
   Equity securities                                                                      (42,994,613)                 (49,349,639)
   Mortgage loans                                                                             (66,286)                           0
   Other invested assets                                                                   (9,105,027)                  (9,849,688)
Sales/maturities of investments:
   Fixed maturities                                                                        79,518,818                   76,957,477
   Equity securities                                                                       32,820,528                   33,702,953
   Other invested assets                                                                    1,663,926                    3,669,984
Principal payments received on mortgage loans                                                 116,538                      103,284
Loans made to policyholders                                                                (1,107,867)                  (1,120,633)
Payments received on policy loans                                                             601,193                      452,517
                                                                             ------------------------     ------------------------
       Net cash used in investing activities                                 $            (75,633,846)    $            (56,022,027)
                                                                             ------------------------     ------------------------

Cash flows from financing activities:
   Increase in annuity and supplementary contract deposits                   $             30,787,643     $             21,748,009
   Increase in universal life deposits                                                      9,623,933                    9,178,165
   Dividends paid to shareholders                                                          (6,095,256)                  (4,110,752)
                                                                             ------------------------     ------------------------
       Net cash provided by financing activities                             $             34,316,320     $             26,815,422
                                                                             ------------------------     ------------------------
Net decrease in cash and cash equivalents                                                 (35,714,073)                 (19,079,924)
Cash and cash equivalents at beginning of year                                             44,808,427                   42,287,398
                                                                             ------------------------     ------------------------
Cash and cash equivalents at end of quarter                                  $              9,094,354     $             23,207,474
                                                                             ========================     ========================

Supplemental  disclosures  of cash flow  information:  Cash paid during
the year for:
   Income taxes                                                              $              7,967,531     $              7,060,000
   Interest                                                                                   483,750                      483,750

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

                                       7
<PAGE>


NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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, 1999 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 1999. 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, 1998.


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 stocks 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
(In Thousands)                                         Cost                Gains             Losses            Fair Value
<S>                                              <C>                 <C>                <C>                 <C>


September 30, 1999
Fixed Maturities:
U.S. Treasuries and Government
   Agencies                                      $         6,623     $           269    $             14    $         6,878
States and Political Subdivisions                          2,055                  63                   0              2,118
Special Revenue                                           11,045                 363                   0             11,408
Public Utilities                                          61,897                 946               2,011             60,832
U.S. Banks, Trusts and Insurance
   Companies                                             113,455               1,110               3,455            111,110
U.S. Industrial and Miscellaneous                        382,812               2,843               9,499            376,156
Foreign Governments-Agency                                 2,991                   0                 145              2,846
Foreign Banks, Trusts and Insurance
   Companies                                               9,980                  12                 329              9,663
Foreign Industrial and Miscellaneous                      43,898                 288               2,188             41,998
                                                 ---------------     ---------------    ----------------    ---------------
     Total Bonds                                 $       634,756     $         5,894    $         17,641    $       623,009
Redeemable Preferred Stock                                 5,000                   0                 287              4,713
                                                 ---------------     ---------------    ----------------    ---------------
     Total Fixed Maturities                      $       639,756     $         5,894    $         17,928    $       627,722
                                                 ---------------     ---------------    ----------------    ---------------

Equity Securities:
Common Stock                                     $        62,310     $        17,695    $          8,801    $        71,204
Non-Redeemable Preferred Stock                            71,419                 716               2,238             69,897
                                                 ---------------     ---------------    ----------------    ---------------
     Total Equity Securities                     $       133,729     $        18,411    $         11,039    $       141,101
                                                 ---------------     ---------------    ----------------    ---------------
       Total Available-for-Sale Securities       $       773,485     $        24,305    $         28,967    $       768,823
                                                 ===============     ===============    ================    ===============
</TABLE>

                                       8

<PAGE>


NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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 of the investment and the write down 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.

At  September  30,  1999,  the  amortized  cost of the  Company's  five  largest
investments in corporate debt  securities  totaled $35.5 million,  none of which
individually  exceeded $8.0  million.  These  investments  had a market value of
$35.3 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.

The fair values of the Company's  investments  in real estate,  mortgage  loans,
policy loans, and other invested assets, approximate the values presented in the
financial statements.

                                       9

<PAGE>

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

The following  discussion and analysis  should be read in  conjunction  with the
financial  statements  and related  notes found on pages 3 through 9, since they
contain  important  information  that is helpful  in  evaluating  the  Company's
operating results and financial condition.


OVERVIEW

Net income  increased  83.8% to  $6,732,355,  or $0.71 per  share,  in the third
quarter  of 1999 from  $3,662,917  or $0.39 per share,  in the third  quarter of
1998. Solid premium growth and investment  gains  contributed to the outstanding
financial  results for the third quarter of 1999. Net income for the nine months
ended  September 30, 1999 increased  11.2% to  $17,492,723,  or $1.85 per share,
compared to $15,725,072 or $1.66 per share for the same period in 1998.


REVENUES

Analysis of Policy Revenue

Total policy  revenue  increased  $682,468 or 7.2%, to  $10,176,144 in the third
quarter of 1999.  Premiums on traditional life insurance policies increased 6.2%
to  $7,793,150  for the quarter  ended  September  30,  1999.  Annuity  products
generated  deposits  of  $12,650,232  in the third  quarter of 1999  compared to
$9,254,180 generated in the third quarter of 1998, an increase of $3,396,052, or
36.7%. Of this amount, ordinary annuity deposits increased $1,769,446, or 33.5%,
to $7,047,687 for the quarter ended September 30, 1999.  Universal life products
generated  premiums  and  deposits of  $5,453,252  in the third  quarter of 1999
compared to  $4,923,456  produced in the third  quarter of 1998,  an increase of
10.8%. Total policy revenue increased $2,689,408 or 9.5%, to $30,997,482 for the
nine months ended September 30, 1999.

Analysis of Investment-related Income

Net investment  income  increased  $1,563,865,  or 12.4% in the third quarter of
1999 due to  increased  levels of  investment  from cash flows  generated by the
Company's  operations and by cash from annuity and universal life deposits.  For
the nine months  ended  September  30, 1999,  net  investment  income  increased
$3,077,980, or 8.0%, to $41,438,678.

During the third  quarter of 1999 and 1998, the Company  generated  net realized
gains on  investments  of  $2,236,192  and $775,430, respectively, from the sale
of equity and fixed maturity investments.

Total invested assets of the Company were  $811,173,780  at September 30, 1999,
an increase of $36,291,303,  or 4.7%, over the December 31, 1998 levels.


BENEFITS AND EXPENSES

Analysis of Policy-related Benefits and Expenses

Death  benefits  on  life  insurance  policies  were  down  $237,163  or 8.6% to
$2,505,123 in the third quarter of 1999. For the nine months ended September 30,
1999, death benefits on life insurance policies increased $1,755,834,  or 29.4%,
to $7,736,490.  This comparison is heavily influenced by death benefits incurred
on life  insurance  policies the first six months of 1998,  which were unusually
low. Random fluctuations of this kind can be expected when mortality results are
measured  over a short time  period,  due to the fairly  small  number of claims
involved.  These short-term  fluctuations can significantly  influence quarterly
results  without  impacting  long-term  profitability.  The Company's  mortality
experience  has been  favorable  over  the past  several  years  and  management
believes that its underwriting philosophy and practices continue to be sound.

                                       10

<PAGE>


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

Interest on deposits held by the Company for Policyholders  increased  $391,215,
or 4.4%, to  $9,295,187 in the third quarter of 1999.  Interest on deposits held
by the  Company  increased  $1,205,993,  or  4.6%,  for the  nine  months  ended
September  30,  1999.  The  increase in interest on deposits  for the first nine
months of 1999 was caused by the 6.7%  increase  in annuity and  universal  life
deposits  during the first nine  months of 1999.  The  interest  rate  currently
credited on  universal  life  deposits  ranges from 6.0% to 6.75% while the rate
currently credited on annuity deposits ranges from 5.0% to 5.75%.

Analysis of Other Expenses

Total operating expenses,  excluding taxes, licenses and fees, declined 10.8% to
$2,286,303 for the quarter ended September 30, 1999 from $2,563,483 for the same
period in 1998.  Included in the third quarter 1998  expenses were  nonrecurring
costs associated with the  implementation  of the policy  administration  system
"Cyberlife". As a result, third quarter 1999 operating expenses relative to 1998
operating  expenses were lower. For the nine months ended September 30, 1999 and
1998, these operating expenses totaled $6,887,294 and $6,249,441,  respectively,
an increase of $637,853, or 10.2%.

Certain  operating  expenses of the Company are paid by Erie Indemnity  Company,
the management company of the Erie Insurance Exchange, and reimbursed monthly by
the Company. Additionally, a portion of the common overhead expenses of the Erie
Insurance Group are allocated to Erie Family Life.  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  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 bonuses paid to branch sales
Employees  for the  production of life and annuity  business,  are all deferred.
Deferred policy  acquisition  costs are amortized over the premium paying period
of the related policies in proportion to the ratio of the annual premium revenue
to the total anticipated premium revenue.

Another component of total operating expenses is commissions.  Direct commission
costs  include  new and  renewal  commissions,  production  bonuses  and Company
contest awards.  These direct commission expenses are reported on the Statements
of  Operations  net of  commissions  received  from  reinsurers  and  commission
expenses  capitalized as part of the deferred  policy  acquisition  costs (DAC).
Most  first-year  and incentive  commissions  and some  second-year  commissions
qualify for deferral as DAC. These deferred policy  acquisition  costs are being
amortized over the premium  paying period of the related  policies in proportion
to the ratio of the  annual  premium  revenue to the total  anticipated  premium
revenue.

Taxes,  licenses  and fees  declined  $32,099  in the third  quarter  of 1999 to
$370,854 and increased  $974,482 in the first nine months of 1999 to $1,176,436.
This year to date increase was the result of a $954,000  refund due the Company,
in the first quarter of 1998, from the  Pennsylvania  Life and Health  Insurance
Guaranty Association which reduced the 1998 expense.


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, 1999,
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.

                                       11

<PAGE>


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

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 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  September  30,  1999,  the  Company's  investment  portfolio
consisting of cash, marketable short-term  investments,  investment grade bonds,
common  stock,  and  preferred  stock,  totaled  $769  million or 82.9% of total
assets.

Included in the fixed maturity  category are high-quality  bonds with a carrying
value of  $618,984,939  that are rated at  investment  grade levels  (Baa/BBB or
better).  This represents  98.6% of the Company's total fixed maturities held at
September 30, 1999. Included in this investment-grade  category are $339 million
or 54.0% of total fixed  maturities,  characterized as the "highest"  quality or
"Class 1"  securities  as  defined  by the  National  Association  of  Insurance
Commissioners (NAIC).  Generally, the fixed maturity securities in the Company's
portfolio are rated by external rating agencies.  If not externally  rated, they
are rated by the Company on a basis consistent with the basis used by the rating
agencies.

As with the fixed maturity  portfolio,  the Company's  non-redeemable  preferred
stock portfolio provides a source of highly  predictable  current income that is
very  competitive with high-grade  bonds.  These securities are well diversified
within each market sector.  The preferred  stocks are of a high-quality  (all of
the almost $70 million of preferred  stock are rated "highest" or "high" quality
as defined by the NAIC) and extremely marketable.  There are no preferred stocks
in the Company's portfolio rated in the "low," "lowest," or "in or near default"
quality  categories  established  by the NAIC.  Common  stock  provides  capital
appreciation potential within the portfolio. Common stock investments inherently
provide no assurance of producing income since dividends are not guaranteed.  As
with all investments,  the continuing value of common stock is subject to change
based on the underlying  value of the issuer.  Common stocks also are subject to
valuation fluctuations driven by investment market conditions.


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
and deposits 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, 1999 was $5,603,453  compared to $10,126,681 for the
nine months ended September 30, 1998. The Company's  liquidity  position remains
strong as total invested assets  increased by $36 million,  or 4.7%,  during the
first nine months of 1999 to $811 million at September 30, 1999.

Annuity  and  universal  life  deposits,  which do not  appear as revenue on the
financial statements, provide cash. 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  $15,408,713  in the third quarter of
1999 and $11,730,903 in the third quarter of 1998.

                                       12

<PAGE>


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

The Company's current  commitments for expenditures as of September 30, 1999 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 in place a $10 million line of credit with a bank. At
September 30, 1999, there were no borrowings on this line of credit.

Dividends  declared and unpaid to shareholders  totaled  $1,559,252 at September
30, 1999.

The Company's 1998 year-end Risk Based Capital Analysis as reflected in its 1998
statutory  annual  statement shows total adjusted  capital of  $107,639,503  and
authorized  control level risk based capital of  $19,737,569.  These results are
indicative of the strong capital position of the Company.


YEAR 2000 READINESS DISCLOSURE

Erie Family Life  Insurance  Company is dependent on electronic  processing  and
information   systems  to  conduct  business.   Like  all  companies  with  such
dependencies,  the Company is continually  faced with significant  decisions and
technology  challenges.  Among  these  challenges  is the  so-called  "Year 2000
Issue," the inability of many computer systems to recognize dates beginning with
the year 2000 and beyond. The Year 2000 Issue is perhaps more pervasive than any
previous risk management  issue faced by businesses of all types. To effectively
manage  the risks  associated  with the Year 2000  Issue,  management  has taken
measures over the past six years designed to reduce the Company's  potential for
business interruption.

The effect of the Year 2000 Issue cannot be measured exactly with certainty; any
forecasts  about the effect of the Year 2000 Issue and  remediation  projections
are  necessarily  forward-looking  statements  and are  subject to the risks and
uncertainties noted on page 14.

Company's State of Readiness

Exposure to systems failure is a risk faced by the Company every day. Unlike the
every day risks,  the date  change to the Year 2000 is  predictable.  Efforts to
mitigate the Company's exposure through effective  identification,  remediation,
testing and  contingency  planning are organized and have been  conducted on all
major business processes to minimize the risks.

To assure that the Company  effectively  addresses this risk,  management put in
place a structure that provides oversight of Year 2000 project activities, which
were organized along the major business  processes of the Company.  Oversight by
Executive and Senior Management is being facilitated through a dedicated project
office. This office, (the "Y2K Office") works in consultation with each business
area to assure  consistency  and adequacy of risk  management  activities and to
collect companywide project status and cost information.

Each key business  process was evaluated to assure that  underlying  systems and
components exposed to potential Year 2000 failure were appropriately  identified
and addressed.  Underlying system components  include internal operating systems
(hardware and  software),  infrastructure  elements,  including  non-information
technology   components  and  systems,   communications   systems  and  devices,
internally  developed  mainframe  applications,  personal  computer hardware and
software, external parties and providers and peripheral devices.

Each underlying  component supporting key business processes were identified and
mission critical business processes were prioritized  during 1998.  Priority was
assigned  based on the  relative  importance  of the  component  to the business
process and based on the  importance of the business  process  relative to other
business processes.

                                       13

<PAGE>


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

Remediation of the Company's mainframe  applications was completed and component
testing was conducted during the first quarter of 1999. As individual components
were  re-coded,  component  functionality  was tested.  To supplement  component
testing and to provide a greater  degree of assurance  that  business  functions
will be uninterrupted,  full systems Year 2000 simulation  testing was conducted
in the  second  and  third  quarters  of  1999.  Full  systems  testing  entails
simultaneous  testing of the  underlying  components  necessary  to support  key
business processes.  Where possible and practical,  this effort incorporated key
third parties with whom we were coordinating our testing efforts. The results of
testing  did  not  indicate  that  key  business  processing  applications  will
encounter  any  material  problems  in the  Year  2000 due to the  inability  to
recognize dates in the Year 2000.

As testing neared  completion,  each business area consulted with the Y2K Office
to develop contingency plans to address the possibility of component or business
process  failures.  Contingency plans were developed during the third quarter of
1999.  Testing and  facilitation of the plans began during the third quarter and
will be complete by mid-fourth quarter 1999.

Cost to Address Year 2000 Issues

Costs  incurred  to address  the Year 2000  Issue  include  personnel  costs (to
re-code and test internal  systems,  test  external  party  interfaces,  develop
contingency  plans and replace  software and hardware  devices that are not Year
2000  compliant)  consulting  fees and personal  computer  software and hardware
replacement  costs.  Costs that have been  incurred to date have been charged to
operations  as incurred.  The  estimated  cost incurred to date and future costs
through completion approximate $150,000. Total third quarter 1999 costs incurred
approximated $50,000.

Risk of the Company's Year 2000 Issues

The proper  functioning of the Company's  computer  systems and  applications is
critical  to  the  continued   operations  of  the  Company.  By  systematically
addressing the Year 2000 Issue,  the costs and  uncertainty  associated  with it
have been reduced significantly.  Management believes that all critical business
process  systems and  applications  will be Year 2000 compliant  sufficiently in
advance  of  January  1, 2000 and,  therefore,  will not  adversely  affect  the
operations of the Company.

It is possible  that certain key external  parties will certify their systems as
year 2000  compliant  when in fact they are not. The inability of the Company to
respond to  uncontrollable  circumstances is always a concern.  For example,  if
numerous key third parties are unable to support the  operations of the Company,
operations  could be adversely  affected.  The Company,  as part of overall risk
management,  is preparing  contingency plans during the last nine months of 1999
in response to the  possibility of key third party failure.  Management does not
anticipate  these  scenarios  as having a greater  than  remote  possibility  of
occurrence.

Company's Contingency Plans if a Vendor or the Company fail to Address Year
2000 Issues

The risk described above will be addressed  through  contingency  planning.  The
level of contingency  planning will be commensurate with the relative importance
of the external  party to the  operations  of the Company and the relative  risk
that  the  party  will  be  unable  to  operate  satisfactorily  in  2000.  Such
contingency  plans are being  developed  and will be  finalized  during the last
three months of 1999.


The statements herein are forward-looking  statements  containing the beliefs of
management that involve risks and  uncertainties.  These risks and uncertainties
include,  but are not limited to, human or mechanical  errors in correcting Year
2000 issues; incorrect or improper (intentional or otherwise) representations by
third parties as to their  compliance  or  remediation  efforts;  the failure of
third parties to follow through on their  remediation  efforts and the inability
to  identify  and/or  locate  processing  chips  that are  subject  to Year 2000
problems.

                                       14

<PAGE>


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

 "Safe Harbor" Statement Under the Private  Securities  Litigation Reform Act of
1995:  Statements  contained herein expressing the beliefs of management such as
those  contained  in the  "Benefits  and  Expenses - Analysis of  Policy-related
Benefits  and  Expenses",   the  "Liquidity  and  Capital   Resources"  and  the
"Investments" sections hereof, and the other statements which are not historical
facts contained in this report are forward looking statements that involve risks
and uncertainties. These risks and uncertainties include but are not limited to:
legislative,  judicial,  and  regulatory  changes,  the  impact  of  competitive
products  and  pricing,   product   development,   geographic  spread  of  risk,
catastrophic  events,  better (or worse)  mortality  rates,  securities  markets
fluctuations and technological difficulties and advancements.

                                       15




<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

Exhibit 27 - Financial 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, 1999.


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 8, 1999
                                               \s\ Stephen A. Milne
                                         (Stephen A. Milne, President & CEO)


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

                                       16

<PAGE>