<PAGE>

                                    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 June 30, 1999

                                       or

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

         ______________________________  to  __________________________

Commission file number 0-13972

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

       PENNSYLVANIA                                  23-1664166
       ------------                                  ----------
(State or other jurisdiction of                    (IRS 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 August 10, 1999 was 7,808,589.


<PAGE>


PART I   FINANCIAL INFORMATION

ITEM 1.  Financial Statements

The registrant's 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 8 of this report, respectively.
These financial  statements represent the consolidation of the operations of the
registrant, and its subsidiaries,  Penn Treaty Network America Insurance Company
("PTNA"),  American Network  Insurance Company  ("ANIC"),  American  Independent
Network Insurance Company of New York ("AINIC") (collectively,  "the Insurers"),
United Insurance Group Agency,  Inc.  ("UIG") and Senior  Financial  Consultants
(collectively,   "the  Agencies"),  which  are  underwriters  and  marketers  of
long-term care insurance products. PTNA is also an underwriter of life insurance
products.


                                       2
<PAGE>
<TABLE>

                       PENN TREATY AMERICAN CORPORATION
                                AND SUBSIDIARIES
                           Condensed Balance Sheets
                            (amounts in thousands)
<CAPTION>
                                                                                     June 30,          December 31,
                                                                                       1999               1998
                                                                                       ----               ----
                                                                                   (unaudited)
                                    ASSETS
<S>                                                                                  <C>                <C>
Investments:
  Bonds, available for sale at market (cost of $335,356 and $310,993, respectively)  $ 330,696          $ 321,448
  Equity securities at market value (cost of $17,034 and $15,090, respectively)         17,505             17,334
  Policy loans                                                                             129                107
                                                                                     ---------          ---------
Total investments                                                                      348,330            338,889
Cash and cash equivalents                                                               45,382             38,402
Property and equipment, at cost, less accumulated depreciation of
  $3,337 and $3,033, respectively                                                        7,922              9,635
Unamortized deferred policy acquisition costs                                          180,843            157,385
Receivables from agents, less allowance for
  uncollectable amounts of $166 and $166, respectively                                   1,612              1,804
Accrued investment income                                                                5,178              4,889
Federal income tax recoverable                                                             409              1,741
Cost in excess of fair value of net assets acquired, less
  accumulated amortization of $1,525 and $1,029, respectively                           22,853              6,349
Present value of future profits acquired                                                 2,974              3,181
Receivable from reinsurers                                                              13,121             12,288
Other assets                                                                             6,678              5,989
                                                                                     ---------          ---------
    Total assets                                                                     $ 635,302          $ 580,552
                                                                                     ---------          ---------
                                                                                     ---------          ---------
                                  LIABILITIES
Policy reserves:
  Accident and health                                                                $ 227,639          $ 190,036
  Life                                                                                  10,040              9,434
Policy and contract claims                                                             116,257            105,667
Accounts payable and other liabilities                                                  12,277              8,639
Long-term debt                                                                          83,694             76,550
Deferred income taxes                                                                   28,992             32,556
                                                                                     ---------          ---------
    Total liabilities                                                                  478,899            422,882
                                                                                     ---------          ---------
Commitments and contingencies
                             SHAREHOLDERS' EQUITY
Preferred stock, par value $1.00; 5,000 shares authorized, none outstanding                -                  -
Common stock, par value $.10; 10,000
  shares authorized, 8,191 and 8,189 shares issued                                         819                819
Additional paid-in capital                                                              53,574             53,516
Net unrealized appreciation (depreciation) of securities                                (2,765)             8,381
Retained earnings                                                                      106,481             96,660
                                                                                     ---------          ---------
                                                                                       158,109            159,376
Less 606 common shares held in treasury, at cost                                        (1,706)            (1,706)
                                                                                     ---------          ---------
                                                                                       156,403            157,670
                                                                                     ---------          ---------
    Total liabilities and shareholders' equity                                       $ 635,302          $ 580,552
                                                                                     ---------          ---------
                                                                                     ---------          ---------

          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 June 30,   Six Months Ended June 30,
                                                                     ---------------------------   -------------------------
                                                                           1999        1998           1999        1998
                                                                           ----        ----           ----        ----
<S>                                                                      <C>         <C>            <C>         <C>
 Revenue:
   Accident and health premiums                                          $ 71,212    $ 53,749       $137,378    $104,662
   Life premiums                                                              930         854          1,823       1,721
                                                                         --------    --------       --------    --------
                                                                           72,142      54,603        139,201     106,383

   Net investment income                                                    5,571       4,950         10,754       9,576
   Net realized capital gains                                               3,227          76          3,843       6,791
   Other income                                                             1,657          89          3,097         164
                                                                         --------    --------       --------    --------
                                                                           82,597      59,718         56,895     122,914
 Benefits and expenses:
   Benefits to policyholders                                               49,305      38,093         94,709      72,376
   Commissions                                                             23,872      19,666         45,480      37,030
   Net policy acquisition costs  deferred                                 (12,388)    (12,034)       (23,458)    (20,309)
   General and administrative expense                                       9,805       6,120         19,647      12,075
   Loss due to impairment of property and equipment                         2,799         -            2,799         -
   Interest expense                                                         1,383       1,200          2,578       2,413
                                                                         --------    --------       --------    --------
                                                                           74,776      53,045        141,755     103,585
                                                                         --------    --------       --------    --------

 Income before federal income taxes                                         7,821       6,673         15,140      19,329
 Provision for federal income taxes                                         2,581       2,182          4,996       6,467
                                                                         --------    --------       --------    --------
     Net income                                                             5,240       4,491         10,144      12,862
                                                                         --------    --------       --------    --------

  Other comprehensive income:
     Unrealized holding gain (loss) arising during period                  (5,692)      1,286        (13,045)      2,983
     Income (tax) benefit from unrealized holdings                          1,936        (437)         4,435      (1,014)
     Reclassification adjustment for (gain) loss included in net income    (3,227)        (76)        (3,843)     (6,791)
     Income (tax) benefit from reclassification adjustment                  1,097          26          1,307       2,309
                                                                         --------    --------       --------    --------
     Comprehensive income                                                $   (646)   $  5,290       $ (1,002)   $ 10,349
                                                                         --------    --------       --------    --------
                                                                         --------    --------       --------    --------


Basic earnings per share                                                 $   0.69    $   0.59       $   1.34    $   1.70
Diluted earnings per share                                               $   0.59    $   0.51       $   1.14    $   1.39


 Weighted average number of shares outstanding                              7,585       7,573            7,584     7,573
 Weighted average number of shares outstanding (diluted)                   10,382      10,427           10,369    10,423

          See accompanying notes to consolidated financial statements.

</TABLE>

                                       4
<PAGE>
<TABLE>

                        PENN TREATY AMERICAN CORPORATION
                                AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                        for the Six Months Ended June 30,
                                   (unaudited)
                             (amounts in thousands)
<CAPTION>
                                                                1999          1998
                                                                ----          ----
<S>                                                           <C>           <C>
Net cash flow from operating activities:
  Net income                                                  $ 10,144      $ 12,862
  Adjustments to reconcile net income to cash
    provided by operations:
    Amortization of intangible assets                              882           365
    Policy acquisition costs, net                              (23,458)      (20,309)
    Deferred income taxes                                        2,178         6,881
    Depreciation expense                                           304           186
    Compensation expense for agent options                          27           -
    Net realized capital gains                                  (3,843)       (6,791)
    Realized loss on disposal of property and equipment          2,799           -
  Increase (decrease) due to change in:
    Receivables from agents                                        754           (66)
    Receivable from reinsurers                                    (833)       (2,067)
    Policy and contract claims                                  10,590        10,699
    Policy reserves                                             38,209        26,378
    Accounts payable and other liabilities                       2,349         1,091
    Federal income taxes recoverable                             1,385        (1,542)
    Accrued investment income                                     (289)         (210)
    Other, net                                                  (1,459)           25
                                                              ---------     --------
      Cash provided by operations                               39,739        27,502
Cash flow from (used in) investing activities:
  Net cash purchase of subsidiary                               (9,194)          -
  Proceeds from sales of bonds                                  34,525        10,828
  Proceeds from sales of equity securities                      16,412        22,045
  Maturities of investments                                      2,897         5,792
  Purchase of bonds                                            (61,226)      (27,794)
  Purchase of equity securities                                (15,093)       (3,169)
  Acquisition of property and equipment                         (1,088)         (440)
                                                              ---------     --------
      Cash provided by (used in) investing                     (32,767)        7,262
Cash flow from (used in) financing activities:
  Proceeds from exercise of stock options                           31            77
  Repayments of long-term debt                                     (23)         (231)
                                                              --------      --------
      Cash used in financing                                         8          (154)
                                                              --------      --------
Increase (decrease) in cash and cash equivalents                 6,980        34,610
Cash balances:
  Beginning of period                                           38,402        11,241
                                                              --------      --------
  End of period                                               $ 45,382      $ 45,851
                                                              --------      --------
                                                              --------      --------

  Acquisition of subsidiary with note payable                 $  7,167      $    -
                                                              --------      --------
                                                              --------      --------

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

                                       5
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(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, 1998 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.

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 June 30,
1999,  shareholders'  equity was decreased by $2,765 due to unrealized losses of
$4,189 in the  investment  portfolio.  As of December  31,  1998,  shareholders'
equity  was  increased  by $8,381  due to  unrealized  gains of  $12,699  in the
investment portfolio.

         The amortized cost and estimated market value of investments  available
for sale as of June 30, 1999 and December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                June 30, 1999                     December 31, 1998
                                                -------------                     -----------------
                                           Amortized      Estimated           Amortized     Estimated
                                             Cost        Market Value           Cost       Market Value
                                             ----        ------------           ----       ------------
   <S>                                     <C>            <C>                 <C>            <C>
   U.S. Treasury securities
     and obligations of US
     Government authorities
     and agencies                          $ 123,060      $ 124,509           $ 124,664      $ 132,031

   Obligations of states and
     political sub-divisions                   2,655          2,676               2,660          2,864

   Mortgage backed securities                 18,955         18,399              10,368         10,407

   Debt securities issued by
     foreign governments                      11,014         10,884               2,974          3,109

   Corporate securities                      179,672        174,228             170,327        173,037

   Equities                                   17,034         17,505              15,090         17,334

   Policy Loans                                  129            129                 107            107
                                           ---------      ---------           ---------      ---------

   Total Investments                       $ 352,519      $ 348,330           $ 326,190      $ 338,889
                                           ---------      ---------           ---------      ---------
                                           ---------      ---------           ---------      ---------

   Net unrealized gain (loss)                 (4,189)                            12,699
                                           ---------                          ---------

                                           $ 348,330                          $ 338,889
                                           ---------                          ---------
                                           ---------                          ---------
</TABLE>

                                       6
<PAGE>

2.       New Accounting Principles:

         Statement  of  Position  97-3,   "Accounting  by  Insurance  and  Other
Enterprises  for  Insurance-Related  Assessments"  (SOP  97-3) was issued by the
American Institute of Certified Public Accountants in December 1997 and provides
guidance for determining when an insurance or other enterprise  should recognize
a liability  for  guaranty-fund  assessments  and  guidance  for  measuring  the
liability.  The statement is effective for 1999 financial  statements with early
adoption  permitted.  The Company has adopted SOP 97-3, and  established a gross
liability  of $1,066  for  future  assessments  and a gross  asset of $1,046 for
premium tax offsets related to those assessments for  the period ended  June 30,
1999.

         In June 1998, the FASB 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 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.  While  the  Company  is  presently
evaluating  the  impact of SFAS No.  133,  the  adoption  of SFAS No. 133 is not
expected  to have a material  impact on the  Company's  financial  condition  or
results of operations.

         Statement  of  Position 98-1  "Accounting for  the  Costs  of  Computer
Software Developed or Obtained  for  Internal  Use" (SOP 98-1) was issued by the
American Institute of Certified Public  Accountants in  March 1998  and provides
guidance on accounting for the costs of computer software developed  or obtained
for internal use. The statement is effective for 1999 financial statements.  The
adoption of SOP 98-1 has not had a material impact on  the  Company's  financial
condition or results of operations.


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 Company has not estimated the effect of
the Codification guidance upon its financial condition or results of operations.

4.       Acquisition of Business:

         Effective  January 1, 1999,  the  Company acquired  all of  the  common
stock of United  Insurance Group  Agency,  Inc.,  a Michigan based consortium of
long-term care  insurance agencies, for  the amount of $18,192, of  which $8,078
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.  The acquisition is accounted for as a purchase, for  which the  Company
recognized goodwill of  $17,000  that is  being  amortized  over  25 years.  The
Company expects that the proforma effect of consolidating  the financial results
of UIG prior to 1999 would be  immaterial  to the  Company's financial condition
or results of operations.

                                       7
<PAGE>

5.       Reconciliation of Earnings Per Share:

         The  following  describes  the  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.  Basic earnings per
share excludes  dilution and is computed by dividing income  available to common
shareholders 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.


<TABLE>
<CAPTION>
                                                  Three Months Ended June 30,     Six Months Ended June 30,
                                                  ---------------------------     -------------------------
                                                      1999          1998             1999          1998
                                                      ----          ----             ----          ----
<S>                                                 <C>           <C>              <C>           <C>
Net income                                          $ 5,240       $ 4,491          $10,144       $12,862
Weighted average common shares outstanding            7,585         7,573            7,584         7,573
Basic earnings per share                            $  0.69       $  0.59          $  1.34       $  1.70
                                                    -------       -------          -------       -------
                                                    -------       -------          -------       -------

Net income                                          $ 5,240       $ 4,491          $10,144       $12,862
Adjustments net of tax:
     Interest expense on convertible debt               783           786            1,565         1,554
     Amortization of debt offering costs                 61            61              122           121
                                                    -------       -------          -------       -------
Diluted net income                                  $ 6,084       $ 5,338          $11,831       $14,537
                                                    -------       -------          -------       -------
                                                    -------       -------          -------       -------

Weighted average common shares outstanding            7,585         7,573            7,584         7,573
Common stock equivalents due to dilutive
     effect of stock options                            169           226              157           222
Shares converted from convertible debt                2,628         2,628            2,628         2,628
                                                    -------       -------          -------       -------
Total outstanding shares for diluted earnings
     per share computation                           10,382        10,427           10,369        10,423
Diluted earnings per share                          $  0.59       $  0.51          $  1.14       $  1.39
                                                    -------       -------          -------       -------
                                                    -------       -------          -------       -------
</TABLE>

6.       Impairment of Property and Equipment:

         During the second quarter,  1999, the Company determined to discontinue
its planned  implementation of its LifePro computer system. To date, the Company
had  capitalized  $2,799 of  expenditures  related  to this  project,  including
licensing costs and  fees  paid to  outside parties for  system  development and
implementation. As the system was not yet placed in service, none of these costs
had previously been  depreciated  on  the Company's  Consolidated Statements  of
Operations and Comprehensive Income.  Upon  determining  not to  utilize   these
fixed  assets,  their value became fully impaired and the Company recognized the
entire amount as current period expense.


                                       8
<PAGE>

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

THREE MONTHS ENDED JUNE 30, 1999 AND 1998:
(amounts in thousands, except per share data)

         Premiums.  First year  premiums  earned in the three month period ended
June 30, 1999 (the "1999 quarter"),  including long-term care, disability,  life
and Medicare supplement,  increased 15.1% to $24,080, compared to $20,913 in the
same period in 1998 (the "1998  quarter").  First year  long-term  care premiums
earned in the 1999 quarter  increased  18.1% to $23,589,  compared to $19,966 in
the 1998 quarter. The Company attributes its growth to continued improvements in
product  offerings,  which  competitively  meet the  needs of the long term care
marketplace.  In addition,  the Company  actively  recruits and trains agents to
sell its products.  Management  believes that the general public has become more
educated regarding the benefits of long-term care insurance,  which has added to
its growth.

Renewal  premiums  earned by the Company in the 1999 quarter  increased 42.7% to
$48,062,  compared  to  $33,690  in the 1998  quarter.  Renewal  long-term  care
premiums  earned in the 1999  quarter  increased  46.5% to $45,136,  compared to
$30,805 in the 1998 quarter. This increase reflects renewals of a larger base of
in-force  policies.  The Company  believes  that this  increase also reflects an
increase in persistency (renewals as a percentage of total prior year business).

         Net Investment  Income. Net investment income earned by the Company for
the 1999 quarter  increased  12.5% to $5,571,  from $4,950 for the 1998 quarter.
Management  attributes  this  growth  to  more  invested  assets as a  result of
higher established reserves.

         Net  Realized  Capital  Gains.  During the 1999  quarter,  the  Company
realized  $3,227 in  capital  gains,  primarily  from the sale of certain of its
equity  securities  investments.  Capital  gains include  the  sale  of  certain
securities in the Company's convertible equities  portfolio, which are generally
purchased with the intent of sale upon  conversion to common stock.  In the 1998
quarter, the Company recognized $76 from capital gains.

         Other Income.  The Company  recorded  $1,657 in other income during the
1999 quarter,  up from $89 in the 1998  quarter.

         Benefits to Policyholders.  Total benefits to policyholders in the 1999
quarter  increased  29.4% to $49,305  compared  to $38,093 in the 1998  quarter.
During  the 1999  quarter,  the  Company  paid  $22,053  in  claims  or 30.6% of
premiums.  The Company's loss ratio,  or benefits to premiums,  was 68.3% in the
1999 quarter, compared to 69.8% in the 1998 quarter.

The Company  uses  independent  care  managers  to monitor  claims and to ensure
proper  utilization of  policyholder  benefits in its home health care coverage.
The expenses  related to care management  included in benefits to  policyholders
were  approximately $529 or .7% and $375 or .7% of premiums in the 1999 and 1998
quarters, respectively.

         Commissions.  Commissions to agents  increased  21.4% to $23,872 in the
1999  quarter,  compared  to  $19,666  in the 1998  quarter.

                                       9
<PAGE>

First year  commissions  on accident  and health  business  in the 1999  quarter
increased   15.1%  to  $16,343,   compared  to  $14,196  in  the  1998  quarter,
corresponding  to the increase in first year accident and health  premiums.  The
ratio of first year accident and health  commissions  to first year accident and
health premiums was 69.0% in the 1999 quarter and 69.3% in the 1998 quarter.

Renewal  commissions  on  accident  and  health  business  in the  1999  quarter
increased  43.1% to $7,077,  compared to $4,944 in the 1998 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
15.3% in the 1999 quarter and 15.7% in the 1998 quarter.  This ratio  fluctuates
in  relation to the age of the  policies  in force and the rates of  commissions
paid to the agents.

         Net  Policy  Acquisition  Costs  Deferred.   The  net  deferred  policy
acquisition  costs in the 1999  quarter  increased  2.9% to $12,388  compared to
$12,034  in the  1998  quarter.  This  deferral  is net of  amortization,  which
decreases or increases as the Company's  actual  persistency  is higher or lower
than the persistency assumed for reserving purposes.

Deferred  costs are typically all costs deemed to 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 renewal  commission  rates,  and
variable general and administrative expenses related to policy underwriting.

         General  and  Administrative   Expenses.   General  and  administrative
expenses in the 1999 quarter  increased  60.2% to $9,805,  compared to $6,120 in
the 1998  quarter.  The 1999  quarter  includes  UIG  expense of  $1,955,  which
includes $160 goodwill amortization.  While the  remaining  Company  expense  is
above 1998 quarter levels due to variable expense growth consistent with premium
growth,  it is  unchanged  from the first  quarter of 1999. Management  believes
that staff  additions,  systems  upgrades  and  additional product  filings made
in 1998, which are reflected in the 1999 results  will not  be repeated in 1999,
as represented  by lower quarterly expense growth.

The Company has also undertaken  various expense  savings  initiatives,  such as
remote  office  consolidation  and  the  outsourcing  of  printing,  supply  and
licensing functions, which it expects to reduce future expense growth.

         Loss Due to  Impairment  of  Property  and  Equipment.  During the 1999
quarter, the Company determined to discontinue its planned implementation of its
LifePro  computer  system.  To date,  the  Company  had  capitalized  $2,799  of
expenditures related to this project, including licensing costs and fees paid to
outside parties for system development and implementation. As the system was not
yet placed in service, none of these costs had  previously  been  depreciated on
the Company's  Consolidated Statements of Operations  and Comprehensive  Income.
Upon  determining  not to utilize  these fixed assets,  their value became fully
impaired and the Company recognized the entire amount as current period expense.

         In  conjunction  with its decision to  discontinue  its  implementation
project,  the Company filed suit against the software  manufacturer  and several
consultants,  alleging  misrepresentations  by all accused parties regarding the
system's capabilities and ability to meet the Company's expectations.

         Provision for Federal  Income Taxes.  The provision for federal  income
taxes recorded by the Company for the 1999 quarter increased to $2,581, compared
to $2,182 for the 1998 quarter.   The effective tax rates of 33.0% and  32.7% in
the 1999 and 1998 quarters, respectively, are below the normal federal corporate

                                       10
<PAGE>

rate as a result  of small  life  deductions  and  dividend  received deductions
attributable to equity investments, which are partially offset by non-deductible
goodwill amortization.

         Comprehensive Income. During the 1999 quarter, the Company's investment
portfolio generated unrealized losses of $8,919 due to increased market interest
rates, compared to 1998 quarter unrealized gains of $1,210. After accounting for
deferred  taxes from these gains,  shareholders'  equity  decreased by $646 from
comprehensive  losses during the 1999 quarter,  compared to comprehensive income
of $5,290 in the 1998 quarter.


SIX MONTHS ENDED JUNE 30, 1999 AND 1998:
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

         Premiums. First year premiums earned in the six month period ended June
30, 1999 (the "1999 period"),  including  long-term care,  disability,  life and
Medicare supplement, increased 18.4% to $45,782, compared to $38,669 in the same
period in 1998 (the "1998 period"). First year long-term care premiums earned in
the 1999  period  increased  22.1% to  $44,739,  compared to $36,648 in the 1998
period.  The Company attributes  its growth to continued improvements in product
offerings, which competitively meet the needs of the long term care marketplace,
and expansion into new states, such as New Jersey,  Connecticut and New York. In
addition, the Company has been actively recruiting and training  agents to  sell
its products.

Renewal  premiums  earned by the Company in the 1999 period  increased  38.0% to
$93,419, compared to $67,715 in the 1998 period. Renewal long-term care premiums
earned in the 1999 period increased 40.6% to $87,055, compared to $61,925 in the
1998  period.  This  increase  reflects  renewals  of a larger  base of in-force
policies.  The Company  believes that this increase also reflects an increase in
persistency (renewals as a percentage of total prior year business).

         Net Investment  Income. Net investment income earned by the Company for
the 1999 period increased 12.3% to $10,754, from $9,576 for the 1998 period. The
Company  has  focused  its  short-term  investment  strategy  upon fixed  income
securities in order to increase net investment income.

         Net  Realized  Capital  Gains.  During  the 1999  period,  the  Company
realized $3,843 in capital gains,  generated  primarily from the sale of certain
of its equity  securities  portfolio and from the management of its  convertible
securities  portfolio,  which are  generally  sold at or near  conversion of the
security to its  underlying  common stock.  During the 1998 period,  the Company
recognized  $6,791 in  capital  gains,  primarily  due to the sale of its equity
securities portfolio, which it reestablished throughout 1998 and during the 1999
period.

         Other Income.  The Company  recorded $3,097 of other income in the 1999
period,  compared to $164 in the 1998 period. The recognition of $2,932 from UIG
as  commission  income was  responsible  for the majority of the increase in the
1999 period.

         Benefits to Policyholders. Total benefits to policyholders in the  1999
period increased 30.9% to $94,709 compared to $72,376 in  the 1998  period.

The Company's  loss ratio (the ratio of benefits to  policyholders  to premiums)
was 68.0% in both the 1999 and 1998 periods.  Management  believes that the loss
ratio has remained unchanged due to new premiums,  which generally require lower
reserves as  a  percentage of  premium, collection of premium rate increases and
lower paid claims as a percentage of premium.

                                       11
<PAGE>

The Company uses  independent care managers to monitor and control claims in its
home  health care  coverage.  The  amounts  due to care  management  included in
benefits  to  policyholders  were $979 or .7% and $675 or .6% of premiums in the
1999 and 1998 periods, respectively.

         Commissions.  Commissions to agents  increased  22.8% to $45,480 in the
1999 period compared to $37,030 in the 1998 period.

First year  commissions  on  accident  and health  business  in the 1999  period
increased   18.7%  to  $30,789,   compared  to  $25,937  in  the  1998   period,
corresponding  to the increase in first year accident and health premiums and to
the issuance of younger age  policies,  which  typically pay a higher first year
commission  rate.  The ratio of first year  accident and health  commissions  to
first year  accident and health  premiums was 68.4% in the 1999 period and 68.6%
in the 1998 period.

Renewal commissions on accident and health business in the 1999 period increased
38.7% to $13,756,  compared to $9,920 in the 1998  period,  consistent  with the
increase in renewal premiums  discussed above. The ratio of renewal accident and
health commissions to renewal accident and health premiums was 15.4% in the 1999
period and 15.6% in the 1998 period.

         Net Policy Acquisition Costs Deferred.  Net deferred policy acquisition
costs in the 1999 period  increased 15.5% to $23,458  compared to $20,309 in the
1998 period, consistent with the growth of the Company's business. This deferral
is net of  amortization,  which  decreases or increases as the Company's  actual
persistency  is higher  or lower  than the  persistency  assumed  for  reserving
purposes.   Generally,   the  deferral  of  policy  acquisition  costs  remained
consistent with the growth of premiums.

         General  and  Administrative   Expenses.   General  and  administrative
expenses in the 1999 period  increased 62.7% to $19,647,  compared to $12,075 in
the 1998 period. The 1999 period includes UIG expense of $3,865,  including $340
goodwill  amortization.  While the remaining  Company expense has grown over the
1998 period with overall premium growth,  Management  believes that current cost
savings  initiatives,  such as remote office  consolidation  and  outsourcing of
certain administrative functions, will reduce this growth in the future. Expense
levels  during  1999 have  remained flat  following  various  1998  second  half
increases, which included  management  additions,  the  New York Stock  Exchange
listing and Y2K remediation.

         Loss Due to  Impairment  of  Property  and  Equipment.  During the 1999
quarter, the Company determined to discontinue its planned implementation of its
LifePro  computer  system.  To date,  the  Company  had  capitalized  $2,799  of
expenditures related to this project, including licensing costs and fees paid to
outside parties for system development and implementation. As the system was not
yet placed in service, none of these costs had  previously  been  depreciated on
the Company's Consolidated Statements of Operations  and  Comprehensive  Income.
Upon  determining  not to utilize  these fixed assets,  their value became fully
impaired and the Company recognized the entire amount as current period expense.

         Provision for Federal  Income Taxes.  The provision for federal  income
taxes  recorded by the Company  for the 1999 period  decreased  22.7% to $4,996,
compared to $6,467 for  the 1998 period.  The effective  tax  rates of 33.0% and
33.5% in the 1999 and 1998 periods, respectively, are below  the normal  federal
corporate rate as a result of credits from  the  small  life  insurance  company
deduction  as  well as  the  Company's investments in  tax-exempt  bonds or from
dividends  received which are partially exempt from taxation.

                                       12
<PAGE>

         Comprehensive  Income. During the 1999 period, the Company's investment
portfolio  generated  unrealized  losses  of  $16,888  due to  increased  market
interest  rates,  compared to 1998  period  unrealized  losses of $3,808.  After
accounting for deferred taxes from these gains,  shareholders'  equity decreased
by  $1,002  from  comprehensive  losses  during  the 1999  period,  compared  to
comprehensive income of $10,349 in the 1998 period.


YEAR 2000 Readiness Disclosure

As many computer  systems and other  equipment with embedded chips or processors
use only two  digits to  represent  the year,  they may be unable to  accurately
process  certain  data  before,  during  or after  the year  2000.  As a result,
business and governmental  entities are at risk for possible  miscalculations or
systems  failures  causing  disruptions  in their business  operations.  This is
commonly  known as the Year 2000 ("Y2K")  issue.  The Y2K issue can arise at any
point in the Company's supply, billing, processing, sales or financial chains.

The Company and each of its  subsidiaries  are in the process of  implementing a
Y2K  readiness  program with the  objective  of having all of their  significant
operations  functioning properly with respect to Y2K before January 1, 2000. The
first  component  of the Y2K project was to identify  all systems and  hardware,
which would be impacted by the Y2K issue.  This  portion of the project has been
completed for the Company and for all of its subsidiaries.

The second  component  of the Y2K project  involves the actual  remediation  and
replacement of various  systems and hardware,  which will be affected by the Y2K
issue.  The Company and its insurance  subsidiaries  are using both internal and
external  resources to complete  this  process.  Each system has been assigned a
priority for Y2K completion, beginning with the most critical projects.

Prior to the second quarter,  1999, the Company intended to replace its existing
computer system with a new system that was vendor-certified as Y2K compliant. In
the event the new system was unable to be implemented  prior to January 1, 2000,
or could not  process Y2K  functions  upon  installation,  the  Company employed
internal  and  external  programmers  to ensure Y2K  compliance  of its  current
operating system as a contingency.  This  contingency  development was completed
prior to January 1999, and to date has passed all substantial testing.

During the second  quarter,  1999,  the Company  determined to  discontinue  its
planned  implementation of its new system, finding that the system was unable to
fully  perform  its  expected  operations.  The Company  determined  to continue
operations  utilizing  its current  system,  which is currently  processing  all
long-term  care  operations  and is  believed to be fully Y2K  compliant.  Final
testing on all aspects of the current system will be performed during the fourth
quarter, 1999.

As part of the Y2K project,  significant service providers,  vendors, suppliers,
and  customers  that are  believed to be critical to business  operations  after
January 1,  2000,  have been  identified  and steps are being  undertaken  in an
attempt to reasonably ascertain their level of readiness through questionnaires,
interviews, on-site visits and other available means.

The Company cannot guarantee that final testing will be successful. In the event
that one or all of these  system  tests  are  unsuccessful,  the  Company  could
experience  interruptions in its business operations,  which are critical to its
ongoing profitability and sustainability. However, the Company believes that its
final systems  testing will be successful,  and does not anticipate any failures

                                       13
<PAGE>

or unnecessary delays in its critical functions as a result of the Y2K issue. In
the event final testing fails, the Company believes that critical  functions can
be performed manually until program enhancements can be made.

Since January 1999,  the Company has been testing its system using Y2K dates and
has not  experienced any  difficulties  or problems.  Any policy written with an
annual collection of premium has been successfully processed since January 1999,
with no interruption of services.

The Company believes  that in  addition to  its  computer-related systems, other
operations may be affected due to embedded Y2K problems.  These operations could
include, among others, telephone, electrical and security systems.  The Company
has relied  upon vendor  certification for  all such systems.  In  the  event of
failure, the Company  has identified  secondary vendors  for all major services.
The Company also  believes that a temporary  disruption of any of these services
woul  have  no  material effect  upon its  financial  condition  or  results  of
operations.

The  Company  has spent  approximately  $350,000  to date  related to  modifying
existing  systems to become Y2K compliant,  and  anticipates  the expenditure of
approximately  $50,000  more  before the end of the fourth  quarter,  1999.  The
Company  estimates that this amount  represents  approximately  15% of its total
information  technology budget. The Company expects the impact of Y2K to have no
material impact upon its financial condition or results of operations.


LIQUIDITY AND CAPITAL RESOURCES:

The Company's consolidated liquidity requirements have historically been created
and met from the operations of its insurance subsidiaries. The Company's primary
sources of cash are premiums and  investment  income.  The Company has provided,
and may continue to provide,  cash through public offerings of its 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 commissioner. 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.  The Company has not and does not intend to pay shareholder  dividends
in the near  future  due to these  requirements,  choosing  to retain  statutory
surplus to support continued premium growth.

The Company's cash flows in the 1999 period were  attributable  to cash provided
by operations, cash used in investing, and cash used in financing. The Company's
cash increased by $6,980 in the 1999 period primarily due to the sale of $16,412
of its equity  securities  portfolio and cash from  operations  of $39,739.  The
major  provider of cash from  operations  was premiums used to fund additions to
reserves  of  $48,799  in the  1999  period.  The  primary  uses  of  cash  were
commissions  deferred as additions to policy  acquisition costs of $23,458,  the
purchase of bonds of $61,226 and  net cash of $9,194 paid for the acquisition of
UIG.

The Company's cash flows in the 1998 period were  attributable  to cash provided
by  operations,  cash used in investing,  and cash  provided by  financing.  The
Company's cash increased by $34,610 in the 1998 period primarily due to the sale
of  $22,045 of its  equity  securities  portfolio  and cash from  operations  of
$27,502.  The major  provider of cash from  operations was premiums used to fund

                                       14
<PAGE>

additions to reserves of approximately  $37,077 in the 1998 period.  The primary
uses of cash were  additions  to policy  acquisition  costs of  $20,309  and the
purchase of bonds of $27,794.

The Company invests in securities and other investments authorized by applicable
state laws and regulations and follows an investment policy designed to maximize
yield to the extent  consistent with liquidity  requirements and preservation of
assets.  The market value of the Company's bond portfolio  represented  98.6% of
its cost at June 30,  1999,  compared to 103.4% at  December  31,  1998,  with a
current  unrealized  loss of $4,660 at June 30, 1999,  compared to an unrealized
gain of $10,455 at December 31, 1998. Its equity  portfolio,  which consisted of
preferred and common stock at June 30, 1999,  exceeded cost by $471, compared to
$2,244 on December 31, 1998.

As of June 30,  1999,  shareholders'  equity  was  decreased  by  $2,765  due to
unrealized  losses  in  the  investment  portfolio.  As of  December  31,  1998,
shareholders'  equity was  increased  by $8,381 due to  unrealized  gains in the
investment portfolio.

The Company's debt currently consists primarily of a mortgage note in the amount
of $1,777 and $74,750 in  convertible  subordinated  debt and a note  payable of
$7,167 for the purchase of UIG. The convertible  debt,  issued in November 1996,
is convertible 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  September  2003.  Although  the note carries a variable
interest  rate,  the Company has 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. The note payable,
although  carrying a zero percent  coupon,  is  discounted at six percent and is
payable in installments over three years.

The Company  consists of the  Insurers,  the Agencies and a  non-insurer  parent
company, Penn Treaty American Corporation ("the Parent"). The Parent directly or
indirectly controls 100% of the voting stock of the subsidiary 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 the Company's  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  to meet its  obligations  for the
foreseeable future.

The  Company's  continued  growth is dependent  upon its ability to (1) continue
marketing efforts to expand its historical  markets,  (2) continue to expand its
network  of agents  and  effectively  market its  products  in states  where its
insurance  subsidiaries  are currently  licensed 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 the Company's  insurance  subsidiaries,
can be met for the foreseeable future by funds generated from the Company's debt
issuance, its public offering in 1995 and from operations.

In the event (1) the Company fails to maintain minimum loss ratios calculated in
accordance  with  statutory  guidelines,  (2) the  Company  fails to meet  other
requirements  mandated and enforced by regulatory  authorities,  (3) the Company
has adverse  claims  experience  in the future,  (4) the Company  cannot  obtain
additional  financing to support future growth,  or (5) the economy continues to

                                       15
<PAGE>

effect  the  buying  powers  of  senior  citizens,   the  Company's  results  of
operations, liquidity and capital resources could be adversely affected.

Some of the  information  presented in this filing  constitutes  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995.  Although  the  Company  believes  that  its  expectations  are  based  on
reasonable  assumptions  within the bounds of its  knowledge of its business and
operations,  there can be no  assurance  that  actual  results of the  Company's
operations will not differ materially from its expectations.  Factors that could
cause actual  results to differ from  expectations  include,  among others,  the
adequacy of the Company's  loss reserves,  the Company's  ability to qualify new
insurance  products  for sale in the  states  in which  it is  licensed  and the
acceptance of such  products,  the Company's  ability to comply with  government
regulations,  the ability of senior citizens to purchase the Company's  products
in light of the  increasing  costs of health care and the  Company's  ability to
expand its network of productive independent agents.


NEW ACCOUNTING PRINCIPLES:

Statement of Position 97-3,  "Accounting by Insurance and Other  Enterprises for
Insurance-Related  Assessments" (SOP 97-3) was issued by the American  Institute
of Certified  Public  Accountants  in December  1997 and  provides  guidance for
determining when an insurance or other  enterprise  should recognize a liability
for  guaranty-fund  assessments  and guidance for measuring the  liability.  The
statement  is  effective  for 1999  financial  statements  with  early  adoption
permitted.  The Company has adopted SOP 97-3, and  established a gross liability
of $1,066 for future  assessments  and a gross  asset of $1,046 for  premium tax
offsets related to those assessments during the 1999 quarter.

In June  1998,  the  FASB  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 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.  While  the  Company  is  presently
evaluating  the  impact of SFAS No.  133,  the  adoption  of SFAS No. 133 is not
expected  to have a material  impact on the  Company's  financial  condition  or
results of operations.

Statement  of  Position  98-1  "Accounting  for the Costs of  Computer  Software
Developed or Obtained  for  Internal  Use" (SOP 98-1) was issued by the American
Institute of Certified Public Accountants in March 1998 and provides guidance on
accounting for the costs of computer software developed or obtained for internal
use. The statement is effective for 1999 financial  statements.  The adoption of
SOP 98-1 has not had a material impact on the Company's  financial  condition or
results of operations.

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk

The Company invests in securities and other investments authorized by applicable
state laws and regulations and follows 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.  The Company's  primary market risk exposures relate to
interest  rate risk on fixed rate  domestic  medium-term  instruments  and, to a
lesser  extent,  domestic  short- and  long-term  instruments.  The  Company has

                                       16
<PAGE>

established  strategies,  asset quality  standards,  asset allocations and other
relevant  criteria for its  portfolio to manage its exposure to market risk. The
Company  currently  has only one  derivative instrument outstanding, an interest
rate swap  on its mortgage, with  the same  bank, which is  used as  a  hedge to
convert the mortgage to a fixed  interest rate.  All of the Company's  financial
instruments are held for purposes other  than trading.  The Company's  portfolio
does not contain any significant  concentrations  in single issuers (other  than
U.S. treasury and agency obligations),  industry segments or geographic regions.

Caution should be used in evaluating  overall  market risk from the  information
below,  since actual results could differ materially because the information was
developed  using  estimates  and  assumptions  as described  below,  and because
insurance   liabilities  and   reinsurance   receivables  are  excluded  in  the
hypothetical effects (insurance liabilities represent 73.9% of total liabilities
and reinsurance receivables on unpaid losses represent 2.1% of total assets).

The hypothetical effects of changes in market rates or prices on the fair values
of financial  instruments as of June 30, 1999,  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  $10,000,000  decrease  in the  net  fair  value  of  the  Company's
investment portfolio less its long-term debt or 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 June 30, 1999 would have resulted in an  approximate
$20,000,000  decrease in the net fair value.  If interest rates had decreased by
100 and 200 basis points,  there would have been an approximate  $11,000,000 and
$23,000,000 net increase,  respectively,  in the net fair value of the Company's
total investments and debt.

                                       17
<PAGE>

                            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,  the Company  filed a lawsuit in state court,
naming IBM and others,  for breach of contract  and other  claims.  The lawsuit,
filed  Monday,  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.

The Company does not believe  that the  eventual  outcome of any of the suits to
which the Insurers are currently a party will have a material  adverse effect on
the financial condition or result of operations of the Company.

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

The Company's  Annual Meeting of Shareholders  was held on May 28, 1999. At such
meeting,  the following matters were voted upon by the  shareholders,  receiving
the number of  affirmative,  negative and withheld votes, as well as abstentions
and broker non-votes, set forth below each matter.

         (1) Election of three  persons to the  Company's  Board of Directors as
Class III Directors to serve until the 2002 Annual Meeting of  Shareholders  and
until their successors are elected and have been qualified.

                                Francis R. Grebe

      5,411,307  Affirmative                        0  Negative
      ---------                               -------
              0  Withheld                     257,017  Abstentions and broker
      ---------                               -------  non-votes


                                Michael F. Grill
      5,412,707  Affirmative                        0  Negative
      ---------                               -------
              0  Withheld                     255,617  Abstentions and broker
      ---------                               -------  non-votes


                                David B. Trindle
      5,538,717  Affirmative                        0  Negative
      ---------                               -------
              0  Withheld                     129,607  Abstentions and broker
      ---------                               -------  non-votes

                                       18
<PAGE>

         (2)  Ratification  of the  selection of  PricewaterhouseCoopers  LLP as
independent public accountants for the Company and its subsidiaries for the year
ending December 31, 1998.

      5,620,763  Affirmative                    8,762  Negative
      ---------                               -------
              0   Withheld                     38,799  Abstentions and broker
      ---------                               -------  non-votes


ITEM 5.  Other Information

On May 28,  1999,  Emile  G.  Ilchuck  resigned  from  the  Company's  Board  of
Directors.  The Board voted to fill the vacancy created by such resignation with
Alexander  M.  Clark.  Mr.  Clark is 65 years old and is  Managing  Director  at
Advest,  Incorporated.  Advest has served as the Company's  investment banker on
several transactions.

ITEM 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

         Exhibit 27 -  Financial Data Schedule

(b)      Reports on Form 8-K:

         The Company filed no reports on Form 8-K during the quarter ending June
30, 1999.


                                       19
<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   August 12, 1999                  /s/  Irving Levit
       ---------------                  --------------------------------------
                                             Irving Levit
                                             Chairman of the Board, President
                                             and Chief Executive Officer

Date   August 12, 1999                  /s/  Cameron B. Waite
       ---------------                  --------------------------------------
                                             Cameron B. Waite
                                             Chief Financial Officer


                                       20