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

                                   FORM 10-Q

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

For the quarterly period ended March 31, 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 April 30, 1999.



                                       1            
<PAGE>




                                    INDEX

                       ERIE FAMILY LIFE INSURANCE COMPANY


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

        Statements of Financial Position--March 31, 1999 and December 31, 1998

        Statements of Operations--Three months ended March 31, 1999 and 1998

        Statements of Comprehensive Income--Three months ended March 31, 1999
        and 1998

        Statements of Cash Flows--Three months ended March 31, 1999 and 1998

        Notes to Financial Statements--March 31, 1999

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


PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K


SIGNATURES




                                       2
<PAGE>


PART I.  FINANCIAL INFORMATION

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

                                                                       March 31,                  December 31,
ASSETS                                                                   1999                         1998        
                                                                     -------------               -------------
                                                                      (Unaudited)
<S>                                                                  <C>                         <C>

Investments:
      Fixed Maturities at fair value (amortized cost
        of $599,997,161 and $576,475,130,
        respectively)                                                $ 616,856,693               $ 605,523,237
      Equity Securities, at fair value
        (cost of $130,884,988 and $124,609,940,
        respectively)                                                  143,412,220                 135,793,710
      Real Estate                                                        1,520,730                   1,541,445
      Policy Loans                                                       6,112,766                   6,013,130
      Real Estate Mortgage Loans                                        10,099,247                  10,070,394
      Other Invested Assets                                             16,898,579                  15,940,561
                                                                     -------------               -------------

        Total Investments                                            $ 794,900,235               $ 774,882,477

      Cash and cash equivalents                                         28,488,592                  44,808,427
      Premiums Receivable from Policyholders                             3,491,577                   3,830,625
      Reinsurance Recoverable                                               64,363                     568,521
      Other Receivables                                                    212,743                     355,067
      Accrued Investment Income                                         12,910,398                  10,282,002
      Deferred Policy Acquisition Costs                                 72,284,264                  70,916,261
      Reserve Credit for Reinsurance Ceded                               6,165,418                   5,994,390
      Other Assets                                                       6,252,575                   5,967,858
                                                                     -------------               -------------

        Total Assets                                                 $ 924,770,165               $ 917,605,628 
                                                                     =============               =============

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




                                       3
<PAGE>



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

                                                                       March 31,                  December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY                                     1999                         1998         
                                                                     -------------               -------------
                                                                      (Unaudited)
<S>                                                                  <C>                         <C>

Liabilities:
      Policy Liabilities and Accruals:
        Future Life Policy Benefits                                  $  65,868,269               $  64,539,220
        Policy and Contract Claims                                       1,255,641                   1,801,030
        Annuity Deposits                                               537,745,361                 524,122,492
        Universal Life Deposits                                         84,520,639                  81,354,026
        Supplementary Contracts Not
          including Life Contingencies                                     590,706                     607,094
      Other Policyholder Funds                                           4,502,570                   8,166,371
      Federal Income Taxes Payable                                       1,132,969                     612,272
      Deferred Income Taxes                                             27,746,134                  31,252,214
      Reinsurance Premium Due                                              155,171                     301,487
      Accounts Payable and Accrued Expenses                              4,388,066                   4,215,186
      Note Payable to Erie Indemnity Company                            15,000,000                  15,000,000
      Due to Affiliate                                                   1,420,154                   1,686,227
      Dividends Payable                                                  1,559,252                   1,417,500
                                                                     -------------               -------------

        Total Liabilities                                            $ 745,884,932               $ 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 Income                            19,204,023                  26,171,727
      Retained Earnings                                                155,271,210                 151,948,782
                                                                     -------------               -------------

        Total Shareholders' Equity                                   $ 178,885,233               $ 182,530,509
                                                                     -------------               -------------

        Total Liabilities and Shareholders'
          Equity                                                     $ 924,770,165               $ 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          Three Months Ended
                                                                       March 31, 1999              March 31, 1998     
                                                                     ------------------          ------------------
<S>                                                                  <C>                         <C>

Revenues:
  Policy:
  Life Premiums, net of premiums ceded of
    $732,821 and $771,233, respectively                              $   9,220,899               $   8,363,132
  Group Premiums                                                           622,611                     618,046
                                                                     -------------               -------------
    Total Policy Revenue                                             $   9,843,510               $   8,981,178
  Investment Income, Net of Expenses of
    $408,481 and $337,266, respectively                                 13,370,193                  12,790,228
  Net Realized Gains on Investments                                        824,849                   1,836,161
  Other Income                                                             237,293                     163,909
                                                                     -------------               -------------
    Total Revenues                                                   $  24,275,845               $  23,771,476
                                                                     -------------               -------------

Benefits and Expenses:
  Death Benefits, net of reinsurance recoveries
    of $625,895 and $515,351, respectively                               2,561,242                   1,478,145
  Interest on Annuity Deposits                                           7,303,422                   7,494,182
  Interest on Universal Life Deposits                                    1,274,119                   1,086,063
  Surrender and Other Benefits                                             282,749                     265,797
  Increase in Future Life Policy Benefits, net of
    the increase in reserve credit for reinsurance
    ceded of $171,028 and $251,585, respectively                         1,158,021                     932,831
  Amortization of Deferred Policy
    Acquisition Costs                                                    1,593,866                   1,295,790
  Commissions, net of reinsurance reimbursements
    of $214,606 and $209,310, respectively                                 532,536                     296,841
  General Expenses                                                       1,736,349                   1,450,373
  Taxes, Licenses and Fees                                                 400,886                    (544,986)
                                                                     -------------               -------------
    Total Benefits and Expenses                                      $  16,843,190               $  13,755,036
                                                                     -------------               -------------

Income From Operations                                               $   7,432,655               $  10,016,440
Provision for Federal Income Taxes:
  Current                                                                2,305,216                   2,633,643
  Deferred                                                                 245,760                     884,988
                                                                     -------------               -------------
    Total Provision for Federal Income Taxes                             2,550,976                   3,518,631
                                                                     -------------               -------------

Net Income                                                           $   4,881,679               $   6,497,809
                                                                     =============               =============

Net Income Per Share                                                 $        0.52               $        0.69
                                                                     =============               =============

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

<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          Three Months Ended
                                                                       March 31, 1999              March 31, 1998     
                                                                     ------------------          ------------------
<S>                                                                  <C>                         <C>

Net Income                                                           $   4,881,679               $   6,497,809
                                                                     -------------               -------------
Unrealized (Losses) Gains on Securities:
  Unrealized Holding (Losses) Gains Arising
    During Period                                                       (9,894,695)                  5,307,116
  Less:  Reclassification Adjustment for Gains
    Included in Net Income                                                (824,849)                 (1,836,161)
                                                                     -------------                ------------
    Net Unrealized Holding (Losses) Gains
      Arising During Period                                          $ (10,719,544)              $   3,470,955
                                                                     -------------               -------------

Income Tax Benefit (Expense) Related to
  Unrealized (Losses) Gains                                              3,751,840                  (1,214,834)
                                                                     -------------               -------------

Other Comprehensive (Loss) Income,
  Net of Tax                                                         $  (6,967,704)              $   2,256,121
                                                                     -------------               -------------

Comprehensive (Loss) Income                                          $  (2,086,025)              $   8,753,930
                                                                     =============               =============

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



                                       6
<PAGE>


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

                                                                     Three Months Ended          Three Months Ended
                                                                       March 31, 1999              March 31, 1998      
                                                                     ------------------          ------------------
<S>                                                                  <C>                         <C>

Cash flows from operating activities:
Net income                                                           $   4,881,679               $   6,497,809
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Net amortization of bond and mortgage
      premium                                                               70,626                     155,949
    Amortization of deferred policy acquisition costs                    1,593,866                   1,295,790
    Real estate depreciation                                                20,715                      20,715
    Deferred federal income taxes                                          245,760                     884,988
    Realized gains on investments                                         (824,849)                 (1,836,161)
Decrease in premiums receivable                                            339,048                     296,592
Decrease (increase) in other receivables                                   142,324                     (43,666)
Increase in accrued investment income                                   (2,628,396)                 (1,627,934)
Policy acquisition costs deferred                                       (2,961,869)                 (2,602,633)
Increase in other assets                                                  (284,717)                 (1,041,368)
Decrease (increase) in reinsurance receivables
  and reserve credits                                                      333,130                    (376,252)
Increase in future life policy benefits and claims                         783,660                     986,296
Decrease in other policyholder funds                                    (3,663,801)                 (2,064,079)
Decrease in reinsurance premium due                                       (146,316)                   (188,487)
Increase in federal income tax payable                                     520,697                   2,267,895
Decrease in accounts payable and due to affiliate                          (93,189)                   (783,648)
                                                                     -------------                ------------
    Net cash (used in) provided by operating activities              $  (1,671,632)              $   1,841,806
                                                                     -------------                ------------

Cash flows from investing activities:
Purchase of investments:
  Fixed maturities                                                   $ (55,916,993)              $ (41,709,780)
  Equity securities                                                    (12,057,506)                 (6,215,468)
  Mortgage loans                                                           (66,286)                          0
  Other invested assets                                                   (848,937)                 (4,009,279)
Sales/maturities of investments:
  Fixed maturities                                                      32,502,381                  13,952,283
  Equity securities                                                      6,429,169                  12,491,060
  Other invested assets                                                     16,488                     148,031
Principal payments received on mortgage loans                               37,523                      34,870
Loans made to policyholders                                               (348,394)                   (294,345)
Payments received on policy loans                                          248,758                     132,041
                                                                     -------------               -------------
Net cash used in investing activities                                $ (30,003,797)              $ (25,470,587)
                                                                     -------------               -------------

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



                                       7
<PAGE>


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

                                                                     Three Months Ended          Three Months Ended
                                                                       March 31, 1999              March 31, 1998      
                                                                     ------------------          ------------------
<S>                                                                  <C>                         <C>

Cash flows from financing activities:
  Increase in annuity and supplementary
    contracts                                                        $  13,606,481               $  12,185,188
  Increase in universal life deposits                                    3,166,613                   3,259,398
  Dividends paid to shareholders                                        (1,417,500)                 (1,275,752)
                                                                     -------------               -------------
      Net cash provided by financing
        activities                                                   $  15,355,594               $  14,168,834
                                                                     -------------               -------------
Net decrease in cash and cash equivalents                              (16,319,835)                 (9,459,947)
Cash and cash equivalents at beginning of year                          44,808,427                  42,287,398
                                                                     -------------               -------------
Cash and cash equivalents at end of quarter                          $  28,488,592               $  32,827,451
                                                                     =============               =============


Supplemental  disclosures of cash flow information:  Cash paid during the period
for:
  Income taxes                                                       $   1,700,000               $     300,000


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



                                       8
<PAGE>


                       ERIE FAMILY LIFE INSURANCE COMPANY
                    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  three-month  period  ended  March 31,  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

The  Company  has   classified   all  of  its  fixed   maturity   portfolio   as
available-for-sale  at March 31, 1999. Management believes that having all fixed
maturities classified as available-for-sale securities will allow the Company to
meet its liquidity  needs and provide  greater  flexibility  for its  investment
managers to  restructure  the  Company's  investments  in response to changes in
market   conditions   or   strategic   direction.   Securities   classified   as
available-for-sale are carried at market value with unrealized gains and losses,
net of tax, included in shareholders' equity.

At March 31, 1999, the amortized cost, gross unrealized gains,  gross unrealized
losses and estimated fair value for fixed maturities were as follows:

                                                     Fixed Maturities at 3-31-99
                                                            (In Thousands)
<TABLE>
<CAPTION>

                                                                   Gross            Gross
                                              Amortized         Unrealized        Unrealized        Estimated
                                                 Cost              Gains            Losses          Fair Value   
<S>                                           <C>               <C>               <C>               <C>

U.S. Treasuries and Government
  Agencies                                    $  17,617         $     801         $      11         $  18,407
States and Political Subdivisions                 2,056               113                 0             2,169
Special Revenue                                  11,063               617                 0            11,680
Public Utilities                                 67,377             2,704               178            69,903
U.S. Banks, Trusts and Insurance
  Companies                                     113,773             4,901             1,816           116,858
U.S. Industrial and Miscellaneous               358,448            11,450             1,842           368,056
Foreign Governments-Agency                        2,990                 0               135             2,855
Foreign Banks, Trusts and Insurance
  Companies                                       1,989                 0                 3             1,986
Foreign Industrial & Miscellaneous               24,684               690               431            24,943
                                              ---------         ---------         ---------         ---------
Total Fixed Maturities                        $ 599,997         $  21,276         $   4,416         $ 616,857
                                              =========         =========         =========         =========
</TABLE>

Included in the fixed maturity  category are high-quality  bonds with a carrying
value of  $604,434,443  that are rated at  investment  grade levels  (Baa/BBB or
better).   Included  in  this  investment-grade   category  are  $336.9  million
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.

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.





                                       9
<PAGE>


NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (Continued)

At March 31, 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 $36.4 million.

Equity securities  consist of common and preferred stocks,  which are carried on
the balance sheet at market value.  As with the fixed  maturity  portfolio,  the
Company's  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 very
high-quality (all of the $76.3 million of preferred stock are rated "highest" or
"high"  quality as defined by the NAIC) and extremely  marketable.  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.

                                                    Equity Securities at 3-31-99
                                                            (In Thousands)
<TABLE>
<CAPTION>

                                                                  Gross             Gross
                                              Amortized         Unrealized        Unrealized        Estimated
                                                 Cost             Gains             Losses          Fair Value   
<S>                                           <C>               <C>               <C>               <C>

Common Stock:
  U.S. Banks, Trusts and
    Insurance Companies                       $   7,849         $   4,974         $     235         $  12,588
  U.S. Industrial and Miscellaneous              46,992            13,049             6,182            53,859
  Foreign Industrial and
    Miscellaneous                                   725                 0                80               645
                                              ---------         ---------         ---------         ---------
    Total Common Stock                           55,566            18,023             6,497            67,092
Preferred Stock:
  Public Utilities                                4,000                10                 0             4,010
  U.S. Banks, Trusts and
    Insurance Companies                          41,106             1,676               115            42,667
  U.S. Industrial and Miscellaneous              13,440               210             1,094            12,556
  Foreign Banks, Trusts and
    Insurance Companies                          12,873               472               318            13,027
  Foreign Industrial and
    Miscellaneous                                 3,900               160                 0             4,060
                                              ---------         ---------         ---------         ---------
    Total Preferred Stock                        75,319             2,528             1,527            76,320
                                              ---------         ---------         ---------         ---------

Total Equity Securities                       $ 130,885         $  20,551         $   8,024         $ 143,412
                                              =========         =========         =========         =========
</TABLE>

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.





                                       10
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS 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 10, since they
contain  important  information  that is helpful  in  evaluating  the  Company's
operating results and financial condition.


FINANCIAL OVERVIEW

Net income  decreased to $4,881,679,  or $.52 per share, in the first quarter of
1999  from  $6,497,809  or $.69 per  share,  in the  first  quarter  of 1998.  A
$1,011,312 reduction in realized gains on investments,  to $824,849 in the first
quarter of 1999, an increase in death  benefits of 73.3% in the first quarter of
1999 and a $954,000  refund due from the  Pennsylvania  Life and Health Guaranty
Association  in the first  quarter  of 1998  were the  primary  reasons  for the
decline in net income.  Revenue  growth  continued  to be strong as total policy
revenue increased by 9.6% to $9,843,510 in the current period.


REVENUES

Analysis of Policy Revenue

Total policy  revenues  increased  $862,332 or 9.6%,  to $9,843,510 in the first
quarter  of 1999 from  $8,981,178  in the first  quarter  of 1998.  Premiums  on
traditional life insurance policies increased 9.7% to $7,442,458 for the quarter
ended March 31, 1999.  Annuity products generated deposits of $18,228,042 in the
first quarter of 1999 compared to $16,773,956  generated in the first quarter of
1998, an increase of $1,454,086,  or 8.7%. Of this amount, structured settlement
deposits  increased  $1,762,093,  or 29.5%,  to  $7,730,853  at March 31,  1999.
Universal  life  products  generated  premiums and deposits of $5,555,962 in the
first quarter of 1999  compared to  $5,079,635  produced in the first quarter of
1998, an increase of 9.4%.

Overall  application  production for the Company was strong in the first quarter
of 1999,  up 2.4% from the first  quarter of 1998.  During the first  quarter of
1999, more than 7,150 life and annuity applications have been submitted.  Of the
total  submissions,  1,986,  or 27.8%  were  from our  "Term  Protector  Series"
products and 1,020, or 14.3% were from our universal life products.

Analysis of Investment-related Income

Net investment income in the first quarter of 1999 increased $579,965,  or 4.5%,
to  $13,370,193.  The  majority  of the  increase  in  income  generated  by the
investment  portfolio was due to increased  levels of investment from cash flows
generated by the Company's operations and annuity and universal life deposits.

During the first quarter of 1999 and 1998, the Company generated  realized gains
of  $824,849  and  $1,836,161,  respectively,  from the sale of equity and fixed
maturity investments.


BENEFITS AND EXPENSES

Analysis of Policy-related Benefits and Expenses

Net death  benefits  on life  insurance  policies  increased  73.3% in the first
quarter of 1999 to $2,561,242,  compared to  $1,478,145,  for the same period in
1998.  Mortality  experience is best viewed over the long term, since short-term
fluctuations  may  significantly  influence  results.  The  Company's  mortality
experience  has been good over the past several  years and  management  believes
that its underwriting philosophy and practices are sound.




                                       11
<PAGE>


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

Interest on deposits held by the Company for Policyholders decreased slightly to
$8,577,541 in the first quarter of 1999 from  $8,580,245 in the first quarter of
1998.  During the first quarter of 1999, the interest rate credited on universal
life and annuity deposits decreased slightly.  The overall reduction in credited
interest was caused by a reduction in the credited interest rate approved by the
Board of Directors in the fourth  quarter of 1998.  The interest rate  currently
credited on universal  life  deposits  ranges from 6.00% to 6.75% while the rate
currently credited on annuity deposits ranges from 5.00% to 5.75%.

The liability for future life policy  benefits is computed  considering  various
factors such as anticipated mortality, future investment yields, withdrawals and
anticipated  credit for  reinsurance.  The 1999 first quarter increase in future
life policy benefits was  $1,158,021,  compared to $932,831 in the first quarter
of 1998, an increase of 24.1%.

Analysis of Other Expenses

During the first  quarter  of 1999  commission  expense  increased  $235,695  to
$532,536. A portion of this increase is the result of an increase in premiums of
9.6%  and an  increase  in  promotional  incentive  costs to  agents  due to the
Company's  participation in the "Caribbean  Classic" contest.  This contest runs
from June 1998 to August 1999.  Direct  commission costs include new and renewal
commissions,  production  bonuses  and  Company  contest  awards.  These  direct
commission  expenses are reduced by  commissions  received from  reinsurers  and
commission expenses capitalized as part of the deferred policy acquisition costs
(DAC).  Commission  costs,  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.  These 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.

General expenses amounted to $1,736,349 in the first quarter of 1999 compared to
$1,450,373  for the same period in 1998,  an increase  of 20%.  Personnel  costs
included in general expenses  increased  $387,798 due to a 10.3% increase in the
number of employees plus normal merit-based salary growth.

Erie  Indemnity  Company  is a 21.6  percent  shareholder  of Erie  Family  Life
Insurance  Company and the Management  Company for the Erie Insurance  Exchange.
Certain operating expenses of the Company are paid by Erie Indemnity Company 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 Company 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 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 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.

Taxes,  licenses and fees increased $945,872 to $400,880 in the first quarter of
1999 compared to ($544,986) in the first quarter of 1998.  This 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  because of a
recalculation of annuity assessments paid in previous years.



                                       12
<PAGE>


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

FINANCIAL CONDITION

Reserve Liabilities

The Company's primary commitment is its obligation to meet the payment of future
policy benefits under the terms of its life insurance and annuity contracts.  To
meet these future  obligations,  the Company establishes life insurance reserves
based upon the type of policy,  the age of the insured,  and the number of years
the policy has been in force. The Company also establishes annuity and universal
life reserves  based on the amount of  Policyholder  deposits  (less  applicable
policy charges) plus interest earned on those deposits. On March 31, 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.

Investments

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

The Company's  invested  assets are liquid in order to meet  commitments  to our
Policyholders.  At March 31, 1999, the Company's investment portfolio consisting
of cash,  marketable  short-term  investments,  investment  grade bonds,  common
stock, and preferred stock, totaled $776.3 million or 84% of total assets. These
resources  provide the  liquidity  the Company  requires to meet the  unforeseen
demands on its funds.


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 used in operating  activities for the three months ended March 31, 1999
was $1,671,632  compared to cash provided by operating  activities of $1,841,806
for the three months  ended March 31, 1998.  The  Company's  liquidity  position
remains  strong as invested  assets  increased  by $20 million  during the first
three months of 1999 to almost $795 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  $21,151,535 in the
first quarter of 1999 and $19,492,758 in the first quarter of 1998.

The Company's  current  commitments  for  expenditures  as of March 31, 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




                                       13
<PAGE>


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

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.  The Company has also
arranged for a $10 million line of credit with a commercial  bank.  At March 31,
1999, there were no borrowings on this line of credit.

Dividends  declared to shareholders  totaled  $1,559,250 in the first quarter of
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 presents a risk management  issue
which is perhaps more  pervasive  than any previous issue faced by businesses of
all types. To effectively  manage the risks associated with the Year 2000 Issue,
management  has  taken  measures   designed  to  reduce   exposure  to  business
interruption.

The effect of the Year 2000 Issue cannot be measured  exactly with certainty and
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 16.

Company's State of Readiness

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

To assure that the Company  effectively  addresses  this risk  management has in
place  a  structure  that  provides  oversight  of  Year  2000  risk  management
activities.  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 unit to assure  consistency and adequacy of risk
management  activities  and to  collect  companywide  project  status  and  cost
information.

Each key business  process is being evaluated to assure that underlying  systems
and  components  exposed  to  potential  Year  2000  failure  are  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  of the  underlying  components  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.




                                       14
<PAGE>


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

Efforts to remediate  non-compliant internal components began in January of 1999
and are  continuing  throughout  the first quarter of 1999. It is estimated that
the total effort for all remediation, including application reviews conducted in
1998, will amount to  approximately  1,000 hours.  Management  believes  minimal
effort remains to be completed during 1999.

As individual  components are being re-coded,  component  functionality is being
tested  prior to placing  remediated  systems  into  production.  To  supplement
component testing and to provide a greater degree of assurance that our business
functions will be  uninterrupted,  full systems Year 2000 simulation  testing is
planned  for the second  quarter  of 1999.  Full  systems  testing  will  entail
simultaneous  testing of the  underlying  components  necessary  to support  key
business processes. This effort incorporates key third parties with which we are
coordinating our testing efforts.

As testing is nearing completion,  each business unit is consulting with the Y2K
Office to develop  contingency  plans to address the possibility of component or
business  process  failures  addresses  both  business   continuity  and  system
recovery.

Cost to Address Year 2000 Issues

Based upon known  factors and the measures  taken to date,  management  does not
anticipate  significant  total  costs in order to address  the Year 2000  Issue.
Costs incurred include personnel costs (to 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.Estimates of both the cost incurred
to date and future costs are not material to the financial position and  results
of operations of the Company.

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,  will be preparing  contingency plans during 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 first
nine months of 1999.






                                       15
<PAGE>


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

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.




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




"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 "Note B to the  Financial  Statements",  the  "Benefits  and
Expenses - Analysis of  Policy-related  Benefits and  Expenses",  the "Financial
Condition -  Investments"  and the "Liquidity  and Capital  Resources"  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.





                                       16
<PAGE>


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

On April 27, 1999, the Registrant held its Annual Meeting of Shareholders:

A.   The Following  Directors were elected at the Annual Meeting of Shareholders
     for a one-year term and until a successor is elected and qualified:

           Peter B. Bartlett              Edmund J. Mehl
           Samuel P. Black, III           Stephen A. Milne
           J. Ralph Borneman, Jr.         John M. Petersen
           Patricia A. Goldman            Jan R. Van Gorder, Esq.
           Susan Hirt Hagen               Harry H. Weil, Esq.
           F. William Hirt

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

         The  proposal to ratify the  selection  of Brown,  Schwab,  Bergquist &
         Company as  independent  public  accountants  to examine the  financial
         statements  and  perform  the annual  audit of the Company for the year
         ending December 31, 1999 was ratified. This proposal received 8,836,906
         affirmative votes, 760 negative votes with 15,412 abstentions.

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 March 31, 1999.






                                       17
<PAGE>


                                   SIGNATURES

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


                                              Erie Family Life Insurance Company
                                                         (Registrant)

Date:   May 10, 1999   
                                                    \s\ Stephen A. Milne
                                             (Stephen A. Milne, President & CEO)



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




                                       18