FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities  Exchange
Act of 1934

For the quarterly period ended March 31, 2000

                                       or

[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from

                                       to
       ------------------------------    --------------------------

Commission file number 0-13972

                        PENN TREATY AMERICAN CORPORATION
                        --------------------------------
             (Exact name of registrant as specified in its charter)

       PENNSYLVANIA                                    23-1664166
       ------------                                    ----------
(State or other jurisdiction of                     (I.R.S. Employer
incorporation of organization)                     Identification No.)

                     3440 Lehigh Street, Allentown, PA 18103
                     ----------------------------------------
          (Address, including zip code, of principal executive offices)

                                 (610) 965-2222
                                 --------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
                                 --------------
                 (Former name, former address and former fiscal
                       year, if change since last report)

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 [ ]

The number of shares  outstanding on the  Registrant's  common stock,  par value
$.10 per share, as of May 8, 2000 was 7,807,589.


                                       1
<PAGE>


PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements

Penn Treaty  American  Corporation is one of the leading  providers of long-term
nursing home and home health care insurance.  Our Unaudited Consolidated Balance
Sheets, Statements of Operations and Comprehensive Income and Statements of Cash
Flows and Notes  thereto  required  under  this  item are  contained  on pages 3
through 7 of this report,  respectively.  Our financial statements represent the
consolidation  of our  operations  and our  subsidiaries,  Penn  Treaty  Network
America Insurance  Company ("Penn Treaty  Network"),  American Network Insurance
Company ("American Network"),  American Independent Network Insurance Company of
New York  ("American  Independent"),  Penn Treaty  (Bermuda) Ltd.  ("Penn Treaty
(Bermuda)"  (collectively "the Insurers"),  United Insurance Group Agency,  Inc.
("UIG"),  Network  Insurance  Senior  Health  Divisision  ("NISHD")  and  Senior
Financial Consultants (collectively "the Agencies"),  which are underwriters and
marketers of long-term care insurance  products.  Penn Treaty Network is also an
underwriter of life insurance products.


                                       2
<PAGE>

<TABLE>

                         PENN TREATY AMERICAN CORPORATION
                                 AND SUBSIDIARIES
                             Condensed Balance Sheets
                              (amounts in thousands)
<CAPTION>
                                                                                      March 31         December 31,
                                                                                        2000               1999
                                                                                      --------         ------------
                                                                                     (unaudited)
<S>                                                                                  <C>                <C>
                                      ASSETS
Investments:
  Bonds, available for sale at market (cost of $383,021 and $365,701, respectively)  $ 370,585          $ 353,688
  Equity securities at market value (cost of $19,089 and $17,853, respectively)         20,626             19,163
  Policy loans                                                                             158                150
                                                                                     ---------          ---------
Total investments                                                                      391,369            373,001
Cash and cash equivalents                                                               16,671             17,347
Property and equipment, at cost, less accumulated depreciation of
  $4,735 and $3,882, respectively                                                       11,078             10,614
Unamortized deferred policy acquisition costs                                          219,409            208,519
Receivables from agents, less allowance for
  uncollectable amounts of $199 and $199, respectively                                   2,267              2,713
Accrued investment income                                                                6,509              5,918
Federal income tax recoverable                                                           1,033              1,616
Cost in excess of fair value of net assets acquired, less
  accumulated amortization of $2,344 and $2,021, respectively                           28,049             22,357
Present value of future profits acquired                                                 2,663              2,767
Receivable from reinsurers                                                              15,028             15,070
Other assets                                                                            37,719             37,717
                                                                                     ---------            ------
    Total assets                                                                     $ 731,795          $ 697,639
                                                                                     =========          =========
                                   LIABILITIES
Policy reserves:
  Accident and health                                                                $ 282,987          $ 260,046
  Life                                                                                  12,306             12,167
Policy and contract claims                                                             142,056            137,534
Accounts payable and other liabilities                                                  14,201             12,887
Long-term debt                                                                          82,024             82,861
Deferred income taxes                                                                   34,150             33,459
                                                                                     ---------          ---------
    Total liabilities                                                                  567,724            538,954
                                                                                     ---------          ---------
Commitments and contingencies
                               SHAREHOLDERS' EQUITY
Preferred stock, par value $1.00; 5,000 shares authorized, none outstanding                  -                  -
Common stock, par value $.10; 25,000 shares authorized, 8,191 and 8,191 shares issued      819                819
Additional paid-in capital                                                              53,681             53,655
Accumulated other comprehensive income                                                  (7,193)            (7,064)
Retained earnings                                                                      123,469            117,980
                                                                                     ---------          ---------
                                                                                       170,776            165,390
Less 915 and 915, respectively, common shares held in treasury, at cost                 (6,705)            (6,705)
                                                                                     ---------          ---------
                                                                                       164,071            158,685
                                                                                     ---------          ---------
    Total liabilities and shareholders' equity                                       $ 731,795          $ 697,639
                                                                                     =========          =========

           See accompanying notes to consolidated financial statements.

</TABLE>

                                       3
<PAGE>

<TABLE>


                 PENN TREATY AMERICAN CORPORATION
                         AND SUBSIDIARIES
  Consolidated Statements of Operations and Comprehensive Income
                           (unaudited)
          (amounts in thousands, except per share data)
<CAPTION>

                                                                       Three Months Ended March 31,
                                                                       ----------------------------
                                                                          2000              1999
                                                                          ----              ----
<S>                                                                     <C>               <C>
 Revenue:
   Accident and health premiums                                         $ 84,947          $ 66,166
   Life premiums                                                           1,091               893
                                                                        --------          --------
                                                                          86,038            67,059

   Net investment income                                                   6,161             5,183
   Net realized capital gains                                              2,155               616
   Other income                                                            2,138             1,440
                                                                        --------          --------
                                                                          96,492            74,298
 Benefits and expenses:
   Benefits to policyholders                                              59,911            45,404
   Commissions                                                            25,286            21,608
   Net policy acquisition costs deferred                                 (10,890)          (11,070)
   General and administrative expense                                     11,073             9,842
   Reserve for claim litigation                                            1,500                 -
   Interest expense                                                        1,281             1,195
                                                                        --------          --------
                                                                          88,161            66,979
                                                                        --------          --------

 Income before federal income taxes                                        8,331             7,319
 Provision for federal income taxes                                        2,840             2,415
                                                                        --------          --------
     Net income                                                            5,491             4,904
                                                                        --------          --------

  Other comprehensive income:
     Unrealized holding gain (loss) arising during period                  1,959            (7,353)
     Income (tax) benefit from unrealized holdings                          (666)            2,500
     Reclassification adjustment for (gain) loss included in net income   (2,155)             (616)
     Income (tax) benefit from reclassification adjustment                   733               210
                                                                        --------          --------

     Comprehensive income                                                  5,362              (355)
                                                                        ========          =========

 Basic earnings per share                                               $   0.75            $ 0.65
 Diluted earnings per share                                             $   0.64            $ 0.56


 Weighted average number of shares outstanding                             7,277             7,583
 Weighted average number of shares outstanding (diluted)                   9,948            10,355

   See accompanying notes to consolidated financial statements.
</TABLE>


                                       4
<PAGE>

<TABLE>

          PENN TREATY AMERICAN CORPORATION
                  AND SUBSIDIARIES
       Consolidated Statements of Cash Flows
        for the Three Months Ended March 31,
                    (unaudited)
               (amounts in thousands)
<CAPTION>
                                                            2000          1999
                                                            ----          ----
<S>                                                       <C>           <C>
Net cash flow from operating activities:
  Net income                                              $  5,491      $  4,904
  Adjustments to reconcile net income to cash
    provided by operations:
    Amortization of intangible assets                          502           452
    Policy acquisition costs, net                          (10,890)      (11,070)
    Deferred income taxes                                      758           807
    Depreciation expense                                       220           216
    Net realized capital gains                              (2,155)         (616)
  Increase (decrease) due to change in:
    Receivables from agents                                    446            96
    Receivable from reinsurers                                  42          (344)
    Policy and contract claims                               4,522         5,656
    Policy reserves                                         23,080        15,950
    Accounts payable and other liabilities                   1,314         3,730
    Federal income taxes recoverable                           583           937
    Accrued investment income                                 (591)         (287)
    Other, net                                                 (69)       (1,431)
                                                          --------      --------
      Cash provided by operations                           23,253        19,000
Cash flow from (used in) investing activities:
  Net cash purchase of subsidiary                           (6,000)       (9,194)
  Proceeds from sales of bonds                              18,501        12,190
  Proceeds from sales of equity securities                   7,535         3,236
  Maturities of investments                                  4,207         2,869
  Purchase of bonds                                        (38,521)      (32,282)
  Purchase of equity securities                             (8,130)       (3,352)
  Acquisition of property and equipment                       (684)          608)
                                                          --------      --------
      Cash used in investing                               (23,092)      (27,141)
Cash flow from (used in) financing activities:
  Proceeds from exercise of stock options                        -             6
  Repayments of long-term debt                                (837)          (23)
                                                          --------      --------
      Cash used in financing                                  (837)          (17)
                                                          --------      --------
Decrease in cash and cash equivalents                         (676)       (8,158)
Cash balances:
  Beginning of period                                       17,347        38,402
                                                          --------      --------
  End of period                                           $ 16,671      $ 30,244
                                                          ========      ========

  Acquisition of subsidiary with note payable             $      -      $ (7,167)
                                                          ========      ========

             See accompanying notes to consolidated financial statements.
</TABLE>


                                       5
<PAGE>

NOTES TO CONSOLIDATED  FINANCIAL  STATEMENTS
March 31, 2000
(unaudited)
(amounts in thousands, except per share data)

The Consolidated  Financial  Statements should be read in conjunction with these
notes and with the Notes to Consolidated  Financial  Statements  included in the
Annual  Report on Form 10-K for the year ended  December 31, 1999 of Penn Treaty
American Corporation (the "Company").

In the opinion of management,  the summarized financial information reflects all
adjustments   (consisting  only  of  normal  recurring  adjustments)  which  are
necessary  for a fair  presentation  of the  financial  position  and results of
operations  for the interim  periods.  Certain  prior  period  amounts have been
reclassified to conform to current period presentation.

1.       Investments

         Management  has  categorized  all  of  its  investment   securities  as
available for sale since they may be sold in response  to  changes  in  interest
rates, prepayments, and  similar factors.  Investments  in  this  classification
are reported at their current market value with net unrealized gains and losses,
net of  the  applicable deferred  income tax effect,  being added to or deducted
from the Company's total  shareholders' equity on the balance sheet. As of March
31, 2000,  shareholders' equity was decreased by $7,193 due to unrealized losses
of $10,899 in the investment portfolio.  As of December 31,  1999, shareholders'
equity  was  decreased  by $7,064  due to  unrealized  losses of  $10,703 in the
investment portfolio.

         The amortized cost and estimated market  value of investments available
for sale as of March 31, 2000 and December 31, 1999 are as follows:


<TABLE>
<CAPTION>
                                                March 31, 2000                       December 31, 1999
                                                --------------                       -----------------
                                           Amortized      Estimated              Amortized       Estimated
                                             Cost        Market Value               Cost       Market Value
   <S>                                     <C>            <C>                    <C>             <C>
   U.S. Treasury securities
     and obligations of U.S
     Government authorities
     and agencies                          $ 120,335      $ 118,778              $ 118,547       $ 116,698

   Obligations of states and
     political sub-divisions                     572            572                    571             575

   Mortgage backed securities                 21,419         20,409                 20,888          20,126

   Debt securities issued by
    foreign governments                       17,501         17,589                 18,533          17,599

   Corporate securities                      223,194        213,237                207,162         198,690

   Equities                                   19,089         20,626                 17,853          19,163

   Policy Loans                                  158            158                    150             150
                                            --------      ---------              ---------       ---------

   Total Investments                       $ 402,268      $ 391,369              $ 383,704       $ 373,001
                                           =========      =========             ==========       =========

   Net unrealized gain (loss)                (10,899)                              (10,703)
                                           ---------                              --------

                                           $ 391,369                             $ 373,001
                                           =========                             =========
</TABLE>


                                       6
<PAGE>

2.       New Accounting Principle:

         In June 1998, the Financial  Accounting Standards Board issued SFAS No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities,"  which
establishes  accounting  and  reporting  standards for  derivative  instruments,
including   certain   derivative   instruments   embedded  in  other   contracts
(collectively referred to as "derivatives") and for hedging activities. SFAS No.
133, as amended by SFAS  No. 137 "Deferral  of the  Effective Date  of FAS 133",
which is effective for all fiscal  quarters of all  fiscal years beginning after
June 15, 2000,  requires an entity to recognize all derivatives as either assets
or  liabilities  in  the  statement  of  financial position  and  measure  those
instruments at fair value.  We are currently evaluating the  impact of  SFAS No.
133 as relates to the  embedded option value of  our  investments in convertible
bonds.

3.       Statutory Regulation:

         In 1998,  the NAIC adopted the  Codification  of  Statutory  Accounting
Principles  guidance,  which will replace the current  Accounting  Practices and
Procedures  manual as the NAIC's primary guidance on statutory  accounting.  The
Codification  provides  guidance for areas where  statutory  accounting has been
silent and changes current statutory accounting in some areas.

         The  Pennsylvania  Insurance  Department  has adopted the  Codification
guidance,  effective January 1, 2001. The New York Insurance  Department has not
yet adopted the Codification  guidance. The Company has not estimated the effect
of the  Codification  guidance  upon  its  financial  condition  or  results  of
operations.

4.       Acquisition of Business:

         On January 10, 2000,  PTNA entered a purchase  agreement to acquire all
of the common stock of Network  Insurance  Senior  Health  Division  (NISHD),  a
Florida  brokerage  insurance  agency.  The acquisition was effective January 1,
2000, for cash of $6,000.  The  acquisition is accounted for as a purchase,  for
which the Company  recorded  $6,000 of goodwill,  to be amortized over 20 years.
The proforma  effect of  consolidating  the financial  results of NISHD prior to
2000 would be  immaterial  to the  Company's  financial  condition or results of
operations.


                                       7
<PAGE>



5.   Reconciliation of Earnings Per Share:

     A reconciliation of the numerator and denominator of the basic earnings per
share  computation to the numerator and denominator of the diluted  earnings per
share  computation  follows.  Basic earnings per share excludes  dilution and is
computed  by  dividing   income   available  to  common   stockholders   by  the
weighted-average  number of common shares  outstanding  for the period.  Diluted
earnings per share reflect the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into common
stock.


                                                  Three Months Ended March 31,
                                                  ----------------------------
                                                     2000             1999
                                                     ----             ----
Net income                                         $ 5,491          $ 4,904
Weighted average common shares outstanding           7,277            7,583
Basic earnings per share                           $  0.75          $  0.65
                                                   =======          =======

Net income                                         $ 5,491          $ 4,904
Adjustments net of tax:
     Interest expense on convertible debt              770              783
     Amortization of debt offering costs                60               61
                                                   -------          -------
Diluted net income                                 $ 6,321          $ 5,748
                                                   =======          =======

Weighted average common shares outstanding           7,277            7,583
Common stock equivalents due to dilutive
     effect of stock options                            43              144
Shares converted from convertible debt               2,628            2,628
                                                   -------          -------
Total outstanding shares for diluted earnings
     per share computation                           9,948           10,355
Diluted earnings per share                         $  0.64          $  0.56
                                                   =======          =======


                                       8
<PAGE>

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

Overview

         Our principal  products are individual,  defined  benefit  accident and
health  insurance  policies that consist of nursing home care, home health care,
Medicare  supplement  and  long-term  disability  insurance.   Our  underwriting
practices  rely upon the base of  experience,  which we have  developed  over 28
years of  providing  nursing  home  care  insurance,  as well as upon  available
industry  and  actuarial  information.  As  the  home  health  care  market  has
developed,  we have  encouraged  the purchase of both nursing home care and home
health care coverage,  and have introduced new life insurance  products as well,
thus  providing  policyholders  with enhanced  protection  while  broadening our
policy base.

         Our  insurance  subsidiaries  are  subject  to the  insurance  laws and
regulations of each state in which they are licensed to write  insurance.  These
laws and regulations govern matters such as payment of dividends,  settlement of
claims and loss ratios.  State  regulatory  authorities  must  approve  premiums
charged for insurance  products.  In addition,  our insurance  subsidiaries  are
required to  establish  and  maintain  reserves  with  respect to  reported  and
incurred but not reported  losses,  as well as estimated future benefits payable
under our insurance  policies.  These reserves  must, at a minimum,  comply with
mandated standards.

         Our results of operations are affected  significantly  by the following
factors:

Level of  required  reserves  for  policies  in-force.  The  amount of  reserves
relating  to  reported  and   unreported   claims   incurred  is  determined  by
periodically evaluating historical claims experience and statistical information
with respect to the probable  number and nature of such claims.  Claim  reserves
reflect  actual  experience  through  the most  recent  time  period  and policy
reserves reflect  expectations of claims related to a block of business over its
entire life. We compare actual experience with estimates and adjust our reserves
on the basis of such  comparisons.  Revisions to reserves  are  reflected in our
current results of operations through benefits to policyholder's expense.

         We also maintain  reserves for policies that are not currently in claim
based upon actuarial  expectations  that a policy may go on claim in the future.
These  reserves  are  calculated  based on factors that  include  estimates  for
mortality,   morbidity,  interest  rates  and  persistency.   Factor  components
generally  include  assumptions that are consistent with both our experience and
industry practices.

Policy premium levels. We attempt to set premium levels to ensure profitability,
subject to the constraints of competitive market conditions and state regulatory
approvals.  Premium levels are reviewed on new product  filings,  as well as for
rate increases as claims experience warrants.

Deferred  acquisition  costs.  In  connection  with  the  sale of our  insurance
policies,  we defer and amortize a portion of the policy  acquisition costs over
the  related  premium  paying  periods of the life of the  policy.  These  costs
include all expenses that are directly  related to and vary with the acquisition
of the  policy,  including  commissions,  underwriting  and other  policy  issue
expenses. The amortization of deferred acquisition costs is determined using the
same projected actuarial assumptions used in computing policy reserves. Deferred
acquisition  costs can be  affected  by  unanticipated  termination  of policies
because, upon such unanticipated  termination,  we are required to expense fully
the deferred acquisition costs associated with the terminated policy.

                                       9
<PAGE>

The number of years a policy has been in effect.  Claims costs tend to be higher
on policies  that have been  in-force for a longer period of time. As the policy
ages,  it is more  likely  that the insured  will need  services  covered by the
policy.  However,  the longer the policy is in effect,  the more premium we will
receive.

Investment  income.  Our investment  portfolio  consists primarily of high-grade
fixed  income  securities.  Income  generated  from this  portfolio  is  largely
dependent upon prevailing  levels of interest rates. Due to the longevity of our
investment  portfolio duration  (approximately 5.0 years),  investment  interest
income does not immediately  reflect changes in market interest rates.  However,
we are  susceptible  to  changes in market  rates when cash flows from  maturing
investments  are  reinvested at prevailing  market rates.  As of March 31, 2000,
approximately  5.3% of our invested  assets were committed to high quality large
capitalization common stocks and preferred stocks of smaller corporations.

Lapsation and  persistency.  Factors that affect our results of  operations  are
lapsation  and  persistency,  both of which  relate to the renewal of  insurance
policies,  and  first  year  compared  to  renewal  premiums.  Lapsation  is the
termination of a policy by nonrenewal and,  pursuant to our policy, is automatic
if and when premiums become more than 31 days overdue;  however, policies may be
reinstated, if approved, within six months after the policy lapses.  Persistency
represents  the percentage of premiums  renewed,  which we calculate by dividing
the total annual  premiums at the end of each year (less first year business for
that  year) by the  total  annual  premiums  in-force  for the prior  year.  For
purposes of this  calculation,  a decrease in total annual premiums  in-force at
the end of any year  would be a result of  non-renewal  of  policies,  including
those policies that have terminated by reason of death,  lapse due to nonpayment
of  premiums,  and/or  conversion  to other  policies  offered by us. First year
premiums  are premiums  covering  the first twelve  months a policy is in-force.
Renewal premiums are premiums covering all subsequent periods.

         Policies renew or lapse for a variety of reasons,  due both to internal
and external  causes.  We believe  that our efforts to address any  policyholder
concerns or  questions in an expedient  fashion  help to ensure  ongoing  policy
renewal. We also believe that we enjoy a favorable  policyholder  reputation for
providing  desirable  policy  benefits,   minimal  premium  rate  increases  and
efficient claims processing.  We work closely with our licensed agents, who play
an integral role in policy conservation and policyholder communication.

         External  factors  also  contribute  to policy  renewal  or  lapsation.
Economic cycles can influence a  policyholder's  ability to continue the payment
of insurance  premiums when due. New government/  legislative  initiatives  have
raised public  awareness of the  escalating  costs of long-term  care,  which we
believe boosts new sales and promotes renewal payments.  Recent initiatives also
include tax relief for certain long-term care insurance coverage, which promotes
new and renewal payments.

         Lapsation and  persistency  can positively and adversely  impact future
earnings.  Improved persistency  generally results in higher renewal premium and
reduced  amortization of deferred  acquisition costs than anticipated.  However,
higher persistency may lead to increased claims in future periods. Additionally,
increased  lapsation  can  result in  reduced  premium  collection,  accelerated
deferred  acquisition  cost  amortization  and  anti-selection  of  higher-risk,
remaining policyholders.


                                       10
<PAGE>

Three Months Ended March 31, 2000 and 1999
(amounts in  thousands, except per share data)

Premiums. Total premium revenue earned in the three month period ended March 31,
2000  ("the 2000  quarter"),  including  long-term  care,  disability,  life and
Medicare supplement, increased 28.3% to $86,038, compared to $67,059 in the same
period in 1999 ("the 1999 quarter").

         First year long-term care premiums earned in the 2000 quarter increased
16.6% to $24,671,  compared to $21,150 in the 1999  quarter.  We  attribute  our
growth to continued improvements in product offerings,  which competitively meet
the needs of the long-term care  marketplace,  and growth from recent  expansion
into new states, such as New Jersey,  Connecticut and New York. In addition,  we
introduced  our group plan in the 2000  quarter,  which  offers  long-term  care
insurance to group members on a guaranteed acceptance basis. This plan generated
approximately $1,650 of additional premium in the 2000 quarter.

         Renewal premiums earned in the 2000 quarter increased 33.7% to $60,659,
compared to $45,357 in the 1999 quarter.  Renewal long-term care premiums earned
in the 2000 quarter increased 36.3% to $57,155,  compared to $41,919 in the 1999
quarter.  This increase reflects renewals of a larger base of in-force policies,
as well as a continued increase in policyholder persistency.

Net  Investment  Income.  Net  investment  income  earned  for the 2000  quarter
increased  18.9%  to  $6,161,  from  $5,183  for the  1999  quarter.  Management
attributes this growth to more invested assets as a result of higher established
reserves. Investment income is reduced, however, by our use of invested cash for
the acquisition of NISHD on January 1, 2000.

Net Realized Capital Gains. During the 2000 quarter, we recognized capital gains
of  $2,155,  compared  to gains of $616 in the 1999  quarter.  The gains in both
periods  were  recorded  as  a  result  of  our  normal  investment   management
operations.

Other Income.  We recorded  $2,138 in other income  during the 2000 quarter,  up
from $1,440 in the 1999 quarter.  The increase is attributable to an increase of
commissions  earned by United  Insurance  Group on sales of  insurance  products
underwritten  by  unaffiliated  insurers and to income  generated from corporate
owned life insurance policies.

Benefits to  Policyholders.  Total benefits to policyholders in the 2000 quarter
increased  32.0% to $59,911,  compared to $45,404 in the 1999 quarter.  Our loss
ratio,  or  policyholder  benefits to premiums,  was 69.6% in the 2000  quarter,
compared  to 67.7% in the 1999  quarter.  This ratio is  expected to grow as the
percentage  of new business  premium to total  premium  decreases.  As discussed
under  "Premiums,"  new premium in the 2000 quarter grew less as a percentage of
the total portfolio than in prior periods, causing the loss ratio to increase.

         Claims  experience  can differ  from our  expectations  due to numerous
factors,  including mortality rates, duration of care and type of care utilized.
When we experience deviation from our estimates,  we typically seek premium rate
increases that are sufficient to offset future deviation. We have been generally
successful in the past in obtaining  state  insurance  department  approvals for
these increases when deemed to be actuarially sound.

Commissions.  Commissions to  agents  increased  17.0% to $25,286  in  the  2000
quarter, compared to $21,608 in the 1999 quarter.

                                       11
<PAGE>

         First year  commissions  on  accident  and health  business in the 2000
quarter increased 11.2% to $16,061, compared to $14,446 in the 1999 quarter, due
to the increase in first year  accident and health  premiums and to the issuance
of policies to younger  applicants,  for which we  typically  pay a higher first
year  commission  rate.  Commission  growth is lower than  premium  growth as no
commission was paid for our new group policies. The ratio of first year accident
and health  commissions to first year accident and health  premiums was 64.8% in
the 2000 quarter and 67.8% in the 1999 quarter.

         Renewal commissions on accident and health business in the 2000 quarter
increased  38.1% to $9,221,  compared to $6,679 in the 1999 quarter,  consistent
with the  increase in renewal  premiums  discussed  above.  The ratio of renewal
accident and health  commissions  to renewal  accident  and health  premiums was
15.7% in the 2000 quarter and 15.5% in the 1999 quarter.

         Commission  expense  during the 2000 quarter was reduced by the netting
of $869 from United Insurance Group and NISHD override commissions paid to those
companies by  affiliated  insurers.  During the 1999 quarter,  commissions  were
reduced by $550.

Net Policy Acquisition Costs Deferred. The net deferred policy acquisition costs
in the 2000 quarter  decreased 1.6% to $10,890,  compared to $11,070 in the 1999
quarter.

         Deferred  costs are typically  all costs that are directly  related to,
and vary with, the acquisition of new premiums. These costs include the variable
portion of commissions, which are defined as the first year commission rate less
ultimate  renewal  commission  rates,  and variable  general and  administrative
expenses related to policy  underwriting.  Deferred costs are amortized over the
life of the policy based upon actuarial  assumptions,  including  persistency of
policies  in-force.  In the event a policy  lapses  prematurely  due to death or
termination  of  coverage,  the  remaining  unamortized  portion of the deferred
amount is immediately recognized as expense in the current period.

General and Administrative Expenses.  General and administrative expenses in the
2000 quarter increased 12.5% to $11,073, compared to $9,842 in the 1999 quarter.
The 2000 and 1999 quarters  include $2,154 and $1,910,  respectively  of general
and   administrative   expenses  related  to  United  Insurance  Group  expense.
Management believes that current cost savings initiatives, such as remote office
consolidation and outsourcing of certain administrative  functions,  has reduced
the level of expenses (excluding UIG and goodwill  amortization) as a percentage
of premiums,  which declined to 10.0% in the 2000 quarter,  compared to 11.4% in
the 1999 quarter.

Reserve for Claim Litigation. Subsequent to the end of the 2000 quarter, we were
notified  that a jury  awarded a  compensatory  judgement  of $24 and a punitive
award of $2,000 in favor of the plaintiff  against one of our  subsidiaries in a
disputed  claim case.  We are  vigorously  pursuing  all of our legal rights and
remedies to reverse or  substantially  reduce this award,  including  motion for
remittiter,  post trial  motions and  appeal.  In the event that our efforts are
unsuccessful  in full or in part to reduce the award,  we  established  a $1,500
litigation reserve for the potential future payment of this judgement.

Provision for Federal  Income Taxes.  Our provision for federal income taxes for
the 2000  quarter  increased  17.6% to $2,840,  compared  to $2,415 for the 1999
quarter.  The effective tax rates of 34.1% and 33.0% in the 2000 quarter and the
1999 quarter,  respectively,  are below the normal  federal  corporate rate as a
result of credits from the small life insurance  company  deduction,  as well as
our  investments  in  tax-exempt  bonds  and from  dividends  received  that are
partially  exempt from taxation,  which are partially  offset by  non-deductible
goodwill amortization.

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<PAGE>

Comprehensive   Income.  During  the  2000  quarter,  our  investment  portfolio
generated  pre-tax,  unrealized  gains of $1,959,  compared to the 1999  quarter
period  unrealized  losses of $7,353.  After  accounting for deferred taxes from
these gains,  shareholders' equity increased by $5,362 from comprehensive income
during the 2000 quarter,  compared to  comprehensive  losses of $355 in the 1999
quarter.


Liquidity and Capital Resources

         Our consolidated  liquidity requirements have historically been created
and met from the operations of our insurance  subsidiaries.  Our primary sources
of cash are premiums,  investment income and maturities of investments.  We have
provided,  and may  continue to provide,  cash through  public  offerings of our
common stock,  capital markets activities or debt instruments.  The primary uses
of cash are policy  acquisition  costs  (principally  commissions),  payments to
policyholders, investment purchases and general and administrative expenses.

         Statutory  requirements  allow  insurers  to pay  dividends  only  from
statutory earnings as approved by the state insurance  commissioners.  Statutory
earnings  are  generally  lower  than  publicly-reported  earnings  due  to  the
immediate or accelerated recognition of all costs associated with premium growth
and benefit reserves. We have not and do not intend to pay shareholder dividends
in the near  future  due to these  requirements,  choosing  to retain  statutory
surplus to support continued premium growth

         In the 2000 quarter,  our cash flows were attributable to cash provided
by  operations,  cash used in  investing  and cash used in  financing.  Our cash
decreased  $676 in the 2000 quarter  primarily due to the purchase of $46,651 in
bonds and equity securities and $6,000 cash used for the purchase of NISHD. Cash
was provided primarily from the maturity and sale of $30,243 in bonds and equity
securities.   These  sources  of  funds  were  supplemented  with  $23,253  from
operations.  The major provider of cash from operations was premium revenue used
to fund reserve additions of $27,602.

         Our cash  decreased  $8,158 in the 1999  quarter  primarily  due to the
acquisition  of $35,634 in bonds and equity  securities.  The use of these funds
more than offset $19,000 from operations and $18,295  provided from the sale and
maturity  of bonds  and  equity  securities.  The  major  provider  of cash from
operations  was premium  revenue used to fund reserve  increases of $21,606.  We
also used $9,194 in cash to purchase United Insurance Group in the 1999 quarter.

         We invest in securities and other investments  authorized by applicable
state laws and regulations and follow an investment  policy designed to maximize
yield to the extent  consistent with liquidity  requirements and preservation of
assets.  At March 31, 2000, the market value of our bond  portfolio  represented
96.8% of our  cost,  with a  current  unrealized  loss of  $12,436.  Our  equity
portfolio  exceeded  cost by $1,537  at March 31,  2000.  Our  equity  portfolio
exceeded  cost by $1,310 at December  31, 1999 and the market  value of our bond
portfolio was below our cost by $12,013.

          As of March 31, 2000, shareholders' equity was decreased by $7,193 due
to unrealized losses of $10,899 in the investment portfolio.  As of December 31,
1999,  shareholders'  equity was decreased by $7,064 due to unrealized losses of
$10,703 in the investment portfolio.

                                       13
<PAGE>

          Our  debt  currently  consists  primarily  of a  mortgage  note in the
approximate  amount of $1,700 and $74,750 in convertible  subordinated debt. The
convertible  debt,  issued in November 1996, is convertible into common stock at
$28.44 per share until November  2003. The debt carries a fixed interest  coupon
of 6.25%, payable  semi-annually.  The mortgage note is currently amortized over
15 years, and has a balloon payment due on the remaining  outstanding balance in
December  2003.  Although the note  carries a variable  interest  rate,  we have
entered into an amortizing  swap agreement  with the same bank,  with a notional
amount equal to the  outstanding  debt,  which has the effect of converting  the
note to a fixed rate of interest of 6.85%.

         On January  1, 1999,  we  purchased  all of the common  stock of United
Insurance  Group,  a Michigan  based  consortium  of  long-term  care  insurance
agencies,  for the amount of $18,192. As part of the purchase,  we issued a note
payable  for  $8,078,  which  was  in  the  form  of  a  three-year  zero-coupon
installment  note. The installment note, after discounting for imputed interest,
was recorded as a note payable of $7,167,  with a current outstanding balance of
$5,554 at March 31, 2000. The remainder of the purchase was for cash.

         Our company  consists of the  Insurers,  the Agencies and a non-insurer
parent company,  Penn Treaty  American  Corporation  (the "Parent").  The Parent
directly  controls  100% of the voting stock of the  Insurers.  In the event the
Parent  is unable  to meet its  financial  obligations,  becomes  insolvent,  or
discontinues  operations,  the  Insurers'  financial  condition  and  results of
operations could be materially affected.

         The Parent currently has the obligation of making semi-annual  interest
payments  attributable to its convertible  debt. In that the dividend ability of
the  subsidiaries  is restricted,  the Parent must rely on its own liquidity and
cash flows to make all required interest installments.  Management believes that
the Parent holds sufficient liquid funds from its current investments,  dividend
capabilities of United  Insurance Group and NISHD and from its line of credit to
meet its obligations for the foreseeable future.

         We  believe  that  our  insurance  subsidiaries'  capital  and  surplus
presently meet or exceed the requirements in all jurisdictions in which they are
licensed.  Our  continued  growth is dependent  upon our ability to (1) continue
marketing efforts to expand our historical  markets,  (2) continue to expand our
network  of  agents  and  effectively  market  our  products  and (3) fund  such
marketing and expansion  while at the same time  maintaining  minimum  statutory
levels of capital  and  surplus  required  to support  such  growth.  Management
believes that the funds  necessary to accomplish the foregoing,  including funds
required to  maintain  adequate  levels of  statutory  surplus in our  insurance
subsidiaries,  can be met through  2000 by funds  generated  from  non-insurance
subsidiary  dividends,  current and future financial  reinsurance  transactions,
off-shore  reinsurance through Penn Treaty (Bermuda) and the availability of our
line of credit  facility.  We expect future  capital market  activities  will be
necessary  to support  our ongoing  growth,  but  continue  to seek  alternative
measures.  If alternative  measures to support our growth are  unsuccessful,  we
believe that additional capital would be required as early as 2001.

         In the event (1) we fail to maintain minimum loss ratios  calculated in
accordance  with statutory  guidelines,  (2) we fail to meet other  requirements
mandated  and enforced by  regulatory  authorities,  (3) we have adverse  claims
experience in the future,  (4) we are unable to obtain  additional  financing to
support  future growth or (5) the economy  continues to affect the buying powers
of senior citizens,  our results of operations,  liquidity and capital resources
could be adversely affected.

                                       14
<PAGE>

         Certain    information    presented   in   this   filing    constitutes
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995.  Although we believe that our  expectations  are
based upon  reasonable  assumptions  within the bounds of our  knowledge  of our
business and  operations,  there can be no assurance  that actual results of our
operations will not differ materially from our expectations. Factors which could
cause actual  results to differ from  expectations  include,  among others,  the
adequacy  of our  loss  reserves  and  our  ability  to meet  statutory  surplus
requirements  (especially in light of our recent growth),  our ability to comply
with  government  regulations,  the ability of senior  citizens to purchase  our
products  given the  increasing  costs of health  care,  our  ability  to defend
ourselves  against adverse  litigation,  the modality of premium revenue and our
ability to expand our network of productive  independent  agents. For additional
information,  please  refer  to  "Overview"  and  our  reports  filed  with  the
Securities and Exchange Commission.


New Accounting Principle

         In June 1998, the Financial  Accounting Standards Board issued SFAS No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities,"  which
establishes  accounting  and  reporting  standards for  derivative  instruments,
including   certain   derivative   instruments   embedded  in  other   contracts
(collectively referred to as "derivatives") and for hedging activities. SFAS No.
133, as amended by SFAS  No. 137 "Deferral  of the  Effective Date  of FAS 133",
which is effective for all fiscal  quarters of all  fiscal years beginning after
June 15, 2000,  requires an entity to recognize all derivatives as either assets
or  liabilities  in  the  statement  of  financial position  and  measure  those
instruments at fair value.  We are currently evaluating the  impact of  SFAS No.
133 as relates to the  embedded option value of  our  investments in convertible
bonds.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         We invest in securities and other investments  authorized by applicable
state laws and regulations and follow an investment  policy designed to maximize
yield to the extent  consistent with liquidity  requirements and preservation of
assets.

         A  significant   portion  of  assets  and   liabilities  are  financial
instruments,  which are  subject to the market  risk of  potential  losses  from
adverse  changes in market rates and prices.  Our primary  market risk exposures
relate to interest rate risk on fixed rate domestic medium-term instruments and,
to a lesser  extent,  domestic  short-term  and long-term  instruments.  We have
established  strategies,  asset quality  standards,  asset allocations and other
relevant criteria for our portfolio to manage our exposure to market risk.

         We currently have an interest rate swap on our mortgage,  with the same
bank, which is used as a hedge to convert the mortgage to a fixed interest rate.
We believe that since the  notional  amount of the swap is amortized at the same
rate as the underlying  mortgage,  and that both financial  instruments are with
the same bank, no credit or financial risk is carried with the swap.

         Our financial instruments are held for purposes other than trading. Our
portfolio  does not contain any  significant  concentrations  in single  issuers
(other  than  U.S.  treasury  and  agency  obligations),  industry  segments  or
geographic regions.

         We urge caution in evaluating  overall market risk from the information
below.  Actual  results  could differ  materially  because the  information  was
developed  using  estimates  and  assumptions  as described  below,  and because

                                       15
<PAGE>

insurance   liabilities  and   reinsurance   receivables  are  excluded  in  the
hypothetical effects (insurance liabilities represent 77.0% of total liabilities
and  reinsurance  receivables on unpaid losses  represent 2.1% of total assets).
Long-term  debt,  although  not  carried  at  fair  value,  is  included  in the
hypothetical effect calculation.

         The  hypothetical  effects of changes in market  rates or prices on the
fair values of financial  instruments as of March 31, 2000,  excluding insurance
liabilities and reinsurance  receivables on unpaid losses because such insurance
related assets and liabilities are not carried at fair value, would have been as
follows:

         If interest  rates had increased by 100 basis points,  there would have
been an approximate $11,887,000 decrease in the net fair value of our investment
portfolio less our long-term debt and the related swap agreement.  The change in
fair values was  determined by estimating the present value of future cash flows
using models that measure the change in net present values arising from selected
hypothetical  changes in market  interest  rate.  A 200 basis point  increase in
market rates at March 31, 2000 would have resulted in an approximate $22,799,000
decrease in the net fair value.  If interest  rates had decreased by 100 and 200
basis points,  there would have been an approximate  $12,964,000 and $27,118,000
net increase,  respectively,  in the net fair value of our total investments and
debt.

         We hold certain  mortgage and asset  backed  securities  as part of our
investment portfolio.  The fair value of these instruments may react in a convex
or non-linear  fashion when  subjected to interest rate  increases or decreases.
The anticipated cash flows of these  instruments may differ from expectations in
changing  interest rate  environments,  resulting in duration drift or a varying
nature of predicted  time-weighted  present values of cash flows.  The result of
unpredicted cash flows from these investments could cause the above hypothetical
estimates to change.  However,  we believe that our minimal  invested  amount in
these  instruments  and their broadly defined  payment  parameters  sufficiently
outweigh the cost of computer  models  necessary  to  accurately  predict  their
possible  impact to our  investment  income  from the  hypothetical  effects  of
changes in market rates or prices on the fair values of financial instruments as
of March 31, 2000.


                            PART II OTHER INFORMATION

Item 1.  Legal Proceedings

         The Insurers are parties to various lawsuits  generally  arising in the
normal course of their insurance business.

         During  the second  quarter  1999,  we filed a lawsuit in state  court,
naming IBM and others,  for breach of contract  and other  claims.  The lawsuit,
filed  June  28,  1999,  in  the  Court  of  Common  Pleas  in  Lehigh   County,
Pennsylvania, names IBM, Tangent International Computer Consultants, Inc. of New
York and The Outsourcing Partnership LLC of Pennsylvania,  and seeks damages for
alleged misrepresentations concerning its LifePro computer software.

         Subsequent  to the end of the first quarter 2000, we were notified that
a jury  awarded a  compensatory  judgement  of $24,000  and a punitive  award of
$2,000,000  in favor  of the  plaintiff  against  one of our  subsidiaries  in a
disputed  claim case.  We are  vigorously  pursuing  all of our legal rights and
remedies to reverse or  substantially  reduce this award,  including  motion for
remittiter, post trial motions and appeal.

                                       16
<PAGE>

         We do not  believe  that the  eventual  outcome  of any of the suits to
which we are  currently  a party  will  have a  material  adverse  effect on our
financial condition or results of operations. However, the outcome of any single
event  could have a  material  impact  upon the  quarterly  or annual  financial
results of the period in which it occurs.

Item 2.  Changes in Securities

         Not Applicable

Item 3.  Defaults Upon Senior Securities

         Not Applicable

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

         Not Applicable

Item 5.  Other Information

         Not Applicable



                                       17
<PAGE>



Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

         Exhibit 27 - Financial Data Schedule

(b)      Reports on Form 8-K:

         Network Insurance Senior Health Division Stock Purchase.

         Notification of jury assessment of punitive damage award.






                                       18
<PAGE>


                                   SIGNATURES

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

                                   PENN TREATY AMERICAN CORPORATION
                                   --------------------------------
                                   Registrant


Date:   May 14, 2000               /s/ Irving Levit
        ------------               ----------------------------------------
                                       Irving Levit
                                       Chairman of the Board, President and
                                       Chief Executive Officer

Date:   May 14, 2000               /s/ Cameron B. Waite
        ------------               ----------------------------------------
                                       Cameron B. Waite
                                       Chief Financial Officer




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