FORM 10-Q
                  SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549

              QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                OF THE SECURITIES EXCHANGE ACT OF 1934



        For the Quarterly Period Ended:  SEPTEMBER 30, 1999
                                         ------------------
                  Commission File Number: 0-10306
                                          -------

                    INDEPENDENCE HOLDING COMPANY
------------------------------------------------------------------------
         (Exact name of registrant as specified in its charter)



              DELAWARE                            58-1407235
-------------------------------      -----------------------------------
      (State of Incorporation)      (I.R.S. Employer Identification No.)


         96 CUMMINGS POINT ROAD, STAMFORD, CONNECTICUT             06902
------------------------------------------------------------------------
         (Address of principal executive offices)             (Zip Code)


    Registrant's telephone number, including area code: (203)358-8000


                           NOT APPLICABLE
------------------------------------------------------------------------
Former  name, former address and former fiscal year, if changed 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 .
                                                              -     -

          7,142,000 SHARES OF COMMON STOCK, $1.00 PAR VALUE
------------------------------------------------------------------------
            Common stock outstanding as of November 12, 1999

<PAGE>
          INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

                              INDEX



PART I - FINANCIAL INFORMATION                     PAGE NO.
------------------------------                     --------
 Consolidated Balance Sheets -
  September 30, 1999(unaudited)
  and December 31, 1998..........................    3

 Consolidated Statements of Operations -
  Three Months and Nine Months Ended
  September 30, 1999 and 1998 (unaudited)........    4

 Consolidated Statements of Cash Flows -
  Nine Months Ended September 30, 1999
  and 1998(unaudited)............................    5

 Notes to Consolidated Financial Statements
 (unaudited).....................................    6 - 12

 Management's Discussion and Analysis of Results
  of Operations and Financial Condition..........   13 - 22

PART II - OTHER INFORMATION
---------------------------
 Item 6 - Exhibits and Reports on Form 8-K........  23

 Signature........................................  24

                                2
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS        SEPTEMBER 30, DECEMBER 31,
                                       1999          1998
---------------------------------------------------------------------------
                                           (UNAUDITED)
ASSETS:
 Cash and cash equivalents.........$  5,378,000  $ 7,889,000
 Investments:
  Short-term investments...........   2,688,000   25,250,000
  Securities purchased under
   agreements to resell............  22,279,000   11,681,000
  Fixed maturities................. 241,436,000  220,030,000
  Equity securities................  24,297,000   17,004,000
  Other investments................  56,572,000   52,191,000
                                    -----------  -----------
     Total investments............. 347,272,000  326,156,000

 Deferred policy acquisition costs.  17,137,000   14,247,000
 Due from brokers..................     689,000        -
 Due and unpaid premiums...........  15,857,000   10,313,000
 Due from reinsurers............... 132,031,000  128,425,000
 Notes and other receivables.......   3,125,000    3,844,000
 Other assets......................  11,274,000    9,438,000
                                    -----------  -----------
     TOTAL ASSETS..................$532,763,000 $500,312,000
                                    ===========  ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
 LIABILITIES:
 Future policy liabilities.........$228,881,000 $217,920,000
 Unearned premiums.................  17,674,000   21,029,000
 Funds on deposit.................. 111,648,000   80,792,000
 Insurance policy claims...........   6,361,000    5,380,000
 Other policyholders' funds........   3,720,000    3,370,000
 Financial instruments sold, but
  not yet purchased................      49,000      458,000
 Due to brokers....................  16,773,000   18,933,000
 Due to reinsurers.................  18,843,000   14,320,000
 Accounts payable, accruals and
  other liabilities................  17,315,000   21,235,000
 Income taxes......................   5,640,000    7,348,000
                                    -----------  -----------
     TOTAL LIABILITIES............. 426,904,000  390,785,000
                                    -----------  -----------
STOCKHOLDERS' EQUITY:
 Preferred stock (none issued).....       -            -
 Common stock, 7,146,000 and 7,367,000
  shares issued and outstanding, net
  of 2,477,519 and 2,249,019 shares
  in treasury, respectively........   7,146,000    7,367,000
 Paid-in capital...................  80,788,000   83,191,000
 Accumulated other comprehensive
  (loss) income:
  Unrealized (losses) gains on
   investments, net................  (6,076,000)   2,643,000
 Retained earnings ................  24,001,000   16,326,000
                                    -----------   ----------
     TOTAL STOCKHOLDERS' EQUITY.... 105,859,000  109,527,000
                                    -----------  -----------
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY.........$532,763,000 $500,312,000
                                    ===========  ===========
    See Accompanying Notes to Consolidated Financial Statements.

                                3

<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)               THREE MONTHS ENDED      NINE MONTHS ENDED
                             SEPTEMBER 30,          SEPTEMBER 30,
                           1999        1998         1999        1998
------------------------------------------------------------------------
REVENUES:
 Premiums earned......$22,275,000 $19,366,000  $61,372,000 $60,264,000
 Net investment
  income..............  7,522,000   3,309,000   19,757,000  15,524,000
 Net realized and
  unrealized gains
  (losses)............    (78,000)  1,118,000       95,000   1,531,000
 Other income.........  2,090,000   2,315,000    6,406,000   5,294,000
                       ----------  ----------   ----------  ----------
                       31,809,000  26,108,000   87,630,000  82,613,000
                       ----------  ----------   ----------  ----------
EXPENSES:
 Insurance benefits,
  claims and reserves. 18,583,000  13,345,000   47,648,000  44,492,000
 Amortization of
  deferred acquisition
  costs...............  1,889,000   1,305,000    4,380,000   3,781,000
 Selling, general and
  administrative
  expenses............  7,895,000   7,742,000   24,942,000  23,675,000
                       ----------  ----------   ----------  ----------
                       28,367,000  22,392,000   76,970,000  71,948,000
                       ----------  ----------   ----------  ----------
 Operating income
  before income taxes.  3,442,000   3,716,000   10,660,000  10,665,000
 Income tax expense...    922,000   1,028,000    2,985,000   2,539,000
                       ----------  ----------   ----------  ----------
NET INCOME............$ 2,520,000 $ 2,688,000  $ 7,675,000 $ 8,126,000
                       ==========  ==========   ==========  ==========
BASIC INCOME PER
 COMMON SHARE.........$       .35 $       .36  $      1.05 $      1.09
                       ==========  ==========   ==========  ==========
WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING...  7,198,000   7,418,000    7,289,000   7,428,000
                       ==========  ==========   ==========  ==========
DILUTED INCOME PER
 COMMON SHARE.........$       .35 $       .36  $      1.04 $      1.08
                       ==========  ==========   ==========  ==========
WEIGHTED AVERAGE DILUTED
 SHARES OUTSTANDING...  7,302,000   7,539,000    7,400,000   7,557,000
                       ==========  ==========   ==========  ==========
      See Accompanying Notes to Consolidated Financial Statements.

                                4

<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30,                  1999          1998
------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income............................... $  7,675,000  $  8,126,000
 Adjustments to reconcile net income to
  net cash (used) provided by operating
  activities:
  Amortization of deferred policy
   acquisition costs......................    4,380,000     3,781,000
  Realized gains on sales of investments..      (76,000)   (1,815,000)
  Unrealized gains on trading securities..      (19,000)      284,000
  Equity (income) loss ...................     (263,000)       14,000
  Depreciation............................      442,000       388,000
  Deferred tax expense....................      148,000      (420,000)
  Other...................................     (760,000)     (240,000)
 Changes in assets and liabilities:
  Net (purchases) sales of trading
   securities.............................     (582,000)      857,000
  Increase in insurance liabilities.......   41,611,000    43,966,000
  Additions to deferred policy
   acquisition costs......................   (4,847,000)  (10,249,000)
  Change in net amounts due from and to
   reinsurers.............................      916,000   (10,240,000)
  Change in income tax liability..........     (313,000)      344,000
  Change in due and unpaid premiums.......   (5,544,000)   (1,327,000)
  Other...................................   (5,530,000)   (6,958,000)
                                            -----------   -----------
      Net cash provided by
       operating activities...............   37,238,000    26,511,000
                                            -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Change in net amount due from and to
  brokers.................................   (2,589,000)  (14,446,000)
 Sales and maturities of short-term
  investments.............................   68,370,000    72,749,000
 Purchases of short-term investments......  (45,733,000)  (70,767,000)
 Net (purchases) sales of resale
  agreements..............................  (10,598,000)   21,026,000
 Sales and maturities of fixed maturities.  302,337,000   141,028,000
 Purchases of fixed maturities............ (336,203,000) (169,067,000)
 Sales of equity securities...............   38,204,000    35,961,000
 Purchases of equity securities...........  (44,851,000)  (38,014,000)
 Proceeds on sales of other investments...    4,829,000     6,275,000
 Other investments, net...................   (8,945,000)   (8,035,000)
 Other....................................      240,000    (1,771,000)
                                            -----------   -----------
      Net cash used by investing
       activities.........................  (34,939,000)  (25,061,000)
                                            -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Exercise of common stock options.........       80,000        55,000
 Repurchase of common stock and warrants..   (2,704,000)     (605,000)
 Payments of investment-type insurance
  contracts...............................   (1,818,000)   (1,885,000)
 Dividends paid...........................     (368,000)     (372,000)
                                            -----------   -----------
       Net cash used by financing
        activities........................   (4,810,000)   (2,807,000)
                                            -----------   -----------
 Decrease in cash and cash equivalents....   (2,511,000)   (1,357,000)
 Cash and cash equivalents, beginning
  of year.................................    7,889,000    23,028,000
                                            -----------   -----------
Cash and cash equivalents, end of period.  $  5,378,000  $ 21,671,000
                                            ===========   ===========
      See Accompanying Notes to Consolidated Financial Statements.

                                    5

<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------------------------
NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

     (A)  BUSINESS AND ORGANIZATION

      Independence  Holding Company ("IHC") is a holding  company
engaged  principally  in the life and health  insurance  business
through  its  wholly-owned subsidiaries, Standard  Security  Life
Insurance Company of New York ("Standard Life"), Madison National
Life  Insurance Company, Inc. ("Madison Life") and First Standard
Security   Insurance   Company  ("First  Standard")   and   their
subsidiaries (collectively, the "Insurance Group").  IHC and  its
subsidiaries  (including  the Insurance Group)  are  collectively
referred to as the "Company".
     Geneve Corporation, a diversified financial holding company,
and  its  affiliated  entities hold approximately  57%  of  IHC's
outstanding common stock.

       (B)   PRINCIPLES  OF  CONSOLIDATION  AND  PREPARATION   OF
FINANCIAL STATEMENTS

      The consolidated financial statements have been prepared in
accordance with the requirements for quarterly reports on Form 10-
Q. In the opinion of management, all adjustments (consisting only
of  normal  recurring  accruals) that are necessary  for  a  fair
presentation  of the consolidated results of operations  for  the
interim  periods have been included. The consolidated results  of
operations  for the three months and nine months ended  September
30,  1999  are  not necessarily indicative of the results  to  be
anticipated  for  the  entire  year. The  consolidated  financial
statements  should be read in conjunction with  the  consolidated
financial  statements  and  the notes included  in  IHC's  Annual
Report on Form 10-K for the year ended December 31, 1998. Certain
amounts in the prior year's consolidated financial statements and
notes  thereto  have  been reclassified to conform  to  the  1999
presentation.
      The  preparation of financial statements in conformity with
generally  accepted accounting principles requires management  to
make  estimates  and  assumptions that  affect:(i)  the  reported
amounts   of  assets  and  liabilities;(ii)  the  disclosure   of
contingent  assets and liabilities at the date of  the  financial
statements;  and  (iii)  the reported  amounts  of  revenues  and
expenses during the reporting period. Actual results could differ
from those estimates.

                                6
<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------------------------
NOTE 2.  OTHER INVESTMENTS

      The  Company  had invested $20,718,000 and  $16,618,000  at
September  30,  1999 and 1998, respectively, in  Dolphin  Limited
Partnership-A ("DLP-A"), a limited partnership which  invests  in
relatively "market neutral" strategies, such as merger arbitrage,
convertible  arbitrage and distressed situations.  The  condensed
statements of operations for DLP-A for the three months and  nine
months ended September 30, 1999 and 1998 are as follows:

                     THREE MONTHS ENDED        NINE MONTHS ENDED
                     1999          1998       1999           1998
                     ------------------       -------------------
                       (IN THOUSANDS)            (IN THOUSANDS)

Revenues.............$  3,384   $  (659)     $  9,906    $  2,518
Net income (loss)....$  2,304   $  (787)     $  7,072    $  1,313

IHC's share of
 net income (loss)...$    813   $  (367)     $  2,558    $    561

NOTE 3.  INVESTMENT SECURITIES

      The  cost,  (amortized cost with respect to  certain  fixed
maturities) gross unrealized gains, gross unrealized  losses  and
fair value of investments in securities are as follows:

                                    SEPTEMBER 30, 1999
                        ----------------------------------------
                                     GROSS       GROSS
                        AMORTIZED  UNREALIZED  UNREALIZED  FAIR
                          COST       GAINS      (LOSSES)   VALUE
                        ----------------------------------------
                                     (IN THOUSANDS)
FIXED MATURITIES
 AVAILABLE-FOR-SALE:
  Corporate securities...$ 49,067  $     61  $ (1,945)  $ 47,183
  Collaterized mortgage
   obligations ("CMO's")
   and asset backed
   securities............  75,709        95    (1,197)    74,607
  U.S. Government and
   agencies obligations..  63,431        45    (2,498)    60,978
  GNMA's.................  57,729         7    (1,451)    56,285
  Obligations of states
   and political
   subdivisions..........   2,543        34      (194)     2,383
                          -------   -------   -------    -------
 Total fixed maturities..$248,479  $    242  $ (7,285)  $241,436
                          =======   =======   =======    =======
EQUITY SECURITIES
 AVAILABLE-FOR-SALE:
  Common stock...........$ 18,032  $    441  $ (1,352)  $ 17,121
  Options................     238       161       (10)       389
  Preferred stock........   6,639        62      (248)     6,453
                          -------   -------   -------    -------
                           24,909       664    (1,610)    23,963
                          -------   -------   -------    -------

                                7
<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------------------------
NOTE 3.  INVESTMENT SECURITIES (CONTINUED)

                                 SEPTEMBER 30, 1999
                        ----------------------------------------
                                     GROSS       GROSS
                        AMORTIZED  UNREALIZED  UNREALIZED  FAIR
                          COST       GAINS      (LOSSES)   VALUE
                        ----------------------------------------
                                     (IN THOUSANDS)
TRADING:
  Common stock...........     496         2      (164)       334
                          -------   -------   -------    -------
 Total equity securities.$ 25,405  $    666  $ (1,774)  $ 24,297
                          =======   =======   =======    =======
FINANCIAL INSTRUMENTS SOLD,
BUT NOT YET PURCHASED
 TRADING:
  Options................$    (72) $     28  $     (5)  $    (49)
                          =======   =======   =======    =======
                                    DECEMBER 31, 1998
                        ----------------------------------------
                                     GROSS       GROSS
                        AMORTIZED  UNREALIZED  UNREALIZED  FAIR
                          COST       GAINS      (LOSSES)   VALUE
                        ----------------------------------------
                                     (IN THOUSANDS)

FIXED MATURITIES`
 AVAILABLE-FOR-SALE:
  Corporate securities...$ 42,472  $  1,026  $   (291)  $ 43,207
  U.S. Government and
   agencies obligations..  55,133     1,533      (201)    56,465
  GNMA's................. 116,171     2,040      (147)   118,064
  Obligations of states
   and political
   subdivisions..........   2,346        69      (121)     2,294
                          -------   -------   -------    -------
 Total fixed maturities..$216,122  $  4,668  $   (760)  $220,030
                          =======   =======   =======    =======
EQUITY SECURITIES
 AVAILABLE-FOR-SALE:
  Common stock...........$ 10,513  $    956  $   (171)  $ 11,298
  Preferred stock........   4,339        76       (71)     4,344
                          -------   -------   -------    -------
                           14,852     1,032      (242)    15,642
                          -------   -------   -------    -------
TRADING:
  Common stock...........   1,448       295      (381)     1,362
                          -------   -------   -------    -------
 Total equity securities.$ 16,300  $  1,327  $   (623)  $ 17,004
                          =======   =======   =======    =======
FINANCIAL INSTRUMENTS SOLD,
BUT NOT YET PURCHASED
 TRADING:
  Common stock...........$   (386) $   -     $    (72)  $   (458)
                          =======   =======   =======    =======

                                8
<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------------------------
NOTE 3. INVESTMENT SECURITIES (CONTINUED)

      The  amortized cost and fair value of fixed  maturities  at
September  30,  1999, by contractual maturity, are  shown  below.
Expected  maturities  will  differ  from  contractual  maturities
because   borrowers  may  have  the  right  to  call  or   prepay
obligations  with  or  without  call  or  prepayment   penalties.
Excluding  extraordinary paydowns, the average life  of  mortgage
and  asset  backed securities is materially less than the  stated
maturity.

                             AMORTIZED      FAIR        % 0F
                               COST        VALUE      FAIR VALUE
                             -----------------------------------
                                      (IN THOUSANDS)

Due after one year through
 five years..................$ 31,494      $ 31,237     12.9%
Due after five years through
 ten years...................  41,400        39,872     16.5%
Due after ten years..........  42,147        39,435     16.3%
                              -------       -------    -----
                              115,041       110,544     45.7%

CMO's and asset backed
 securities..................  75,709        74,607     30.9%
GNMA's - 30 year.............  57,729        56,285     23.4%
                              -------       -------    -----
                             $248,479      $241,436    100.0%
                              =======       =======    =====
      The  average  fair  value of trading  options  and  futures
contract sold, but not yet purchased was $112,000 and $71,000 for
1999 and 1998, respectively.
      Gross  gains  of $3,868,000 and gross losses of  $3,661,000
were  realized on sales of available-for-sale securities for  the
nine months ended September 30, 1999.
      Gross  gains  of $3,148,000 and gross losses of  $1,589,000
were  realized on sales of available-for-sale securities for  the
nine months ended September 30, 1998.

NOTE 4.  INCOME PER COMMON SHARE

      Included in the diluted earnings per share calculation for-
1999  and 1998, respectively, are 104,000 and 121,000 shares  for
the  three  months ended September 30, 1999 and 1998 and  111,000
and  129,000 shares for the nine months ended September 30,  1999
and  1998 from the assumed exercise of options using the treasury
stock  method.  Net income does not change as  a  result  of  the
assumed  dilution  of  options. Warrants  to  purchase  1,939,739
shares  of common stock at $16.37 per share were not included  in
the  computation of diluted income per share because  the  strike
price  of the warrants was greater than the average market  price
of  the  common  shares during the three months and  nine  months
ended September 30, 1999 and 1998.

                                9
<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------------------------
NOTE 5.  INCOME TAXES

      The  provision  for income taxes shown in the  consolidated
statements  of  operations was computed based  on  the  Company's
estimate of the effective tax rates expected to be applicable for
the  current  year,  including the expected  tax  impact  of  the
life/nonlife consolidation.

      The  income tax benefit for the nine months ended September
30,  1999 allocated to stockholders' equity for unrealized  gains
on  investment securities was $1,543,000, representing the change
in deferred tax (benefit) liability of ($77,000) at September 30,
1999 from  $1,466,000 at December 31, 1998.

       Cash  payments  for  income  taxes  were  $2,548,000   and
$2,632,000 for the nine months ended September 30, 1999 and 1998,
respectively.

NOTE 6.  COMPREHENSIVE (LOSS) INCOME

      The  Company adopted SFAS No. 130, "Reporting Comprehensive
Income,  effective  January 1, 1998.  SFAS  No.  130  establishes
standards  for the reporting and display of comprehensive  income
and  its  components.  The  components  of  comprehensive  income
include  net  income  and  certain  amounts  previously  reported
directly in equity.

      Comprehensive (loss) income for the three months  and  nine
months ended September 30, 1999 and 1998 is as follows:

                           THREE MONTHS ENDED   NINE MONTHS ENDED
                            1999        1998     1999        1998
                           ------------------   -----------------
                            (IN THOUSANDS)        (IN THOUSANDS)

Net income................$ 2,520    $ 2,688   $ 7,675    $ 8,126
Unrealized (losses)
 gains, on securities,
 net of reclassification.. (2,506)     1,939    (8,719)     2,747
                           ------     ------    ------     ------
     Comprehensive
      income (loss).......$    14    $ 4,627   $(1,044)   $10,873
                           ======     ======    ======     ======

                                10
<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------------------------
NOTE 7.  NEW ACCOUNTING PRONOUNCEMENTS

      In  June  1998,  the Financial Accounting  Standards  Board
issued  SFAS No. 133, "Accounting for Derivative Instruments  and
Hedging  Activities."  The requirements for  SFAS  No.  133  were
delayed by SFAS No. 137, "Deferral of the Effective Date of  SFAS
Statement   No.  133,"  and  are  now  effective  for   financial
statements  for periods beginning after June 15, 2000.  SFAS  No.
133  establishes  standards  for  accounting  and  reporting  for
derivative  instruments and for hedging activities.  It  requires
that  an  entity  recognize all derivatives as either  assets  or
liabilities in the balance sheet and measure those instruments at
fair  value.  The Company is currently evaluating the  impact  of
SFAS No. 133, but does not expect it to have a material impact on
the Company.

NOTE 8.  SEGMENT REPORTING

      The  Insurance Group engages principally in  the  life  and
health  insurance business. Interest expense, taxes, and  general
expenses  associated with parent company activities are  included
in  Corporate.  Information by business  segment  for  the  three
months  and nine months ended September 30, 1999 and 1998  is  as
follows:

                           THREE MONTHS ENDED   NINE MONTHS ENDED
                            1999        1998     1999        1998
                           ------------------   -----------------
                            (IN THOUSANDS)        (IN THOUSANDS)

REVENUES:
 Medical Stop-Loss.......$  6,558  $  6,925   $ 20,452  $ 20,016
 DBL.....................   4,745     5,245     15,058    16,299
 Group Term Disability
  and Term Life..........   3,325     2,453      9,676     7,264
 Credit Life and
  Disability.............   5,522     5,123     15,898    17,351
 Managed Health Care.....     673       475      1,982     1,663
 Special Disability......      81        18        124       130
 Acquired Blocks
  /Other Business........  10,127     4,416     21,977    16,793
 Corporate                    856       335      2,368     1,566
                          -------   -------    -------   -------
                           31,887    24,990     87,535    81,082
 Net Realized and
  Unrealized (Losses)
  Gains..................     (78)    1,118         95     1,531
                          -------   -------    -------   -------
                         $ 31,809  $ 26,108   $ 87,630  $ 82,613
                          =======   =======    =======   =======

                                11
<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------------------------
NOTE 8.  SEGMENT REPORTING (CONTINUED)

                           THREE MONTHS ENDED   NINE MONTHS ENDED
                            1999        1998     1999        1998
                           ------------------   -----------------
                            (IN THOUSANDS)        (IN THOUSANDS)

OPERATING INCOME:
 Medical Stop-Loss........$    (46) $   (385) $   (308) $  1,188
 DBL......................   1,051     1,224     3,255     2,130
 Group Term Disability and
  Term Life...............     278       434       313       238
 Credit Life and
  Disability..............     451       349     1,889     1,956
 Managed Health Care......     (13)      286       843       638
 Special Disability.......     181       182       372       622
 Acquired Blocks
  /Other Business.........   1,838       868     4,350     2,812
 Corporate................    (220)     (360)     (149)     (450)
                            ------    ------    ------    ------
                             3,520     2,598    10,565     9,134
 Net Realized and
  Unrealized (Losses)
  Gains...................     (78)    1,118        95     1,531
                            ------    ------    ------    ------
                          $  3,442  $  3,716  $ 10,660  $ 10,665
                            ======    ======    ======    ======
NOTE 9.  SUBSEQUENT EVENT

      Subsequent to September 30, 1999, Madison Life entered into
four  agreements to assume in excess of 100,000 life and  annuity
policies  with  net  reserves of approximately $140,000,000  from
companies  that are in liquidation. Three of the agreements  have
an   effective   date   of  June  30,  1999   (the   "Mississippi
Transactions")  and the fourth agreement is expected to  have  an
effective date of November 30, 1999 (the "Missouri Transaction").
The  Mississippi Transactions have received court  approval,  but
remain  subject  to  a  notice period and certain  other  closing
conditions.  Closing of the Missouri Transaction  is  subject  to
entry  of  a liquidation order, court approval and certain  other
conditions. All of these transactions are expected to close prior
to  December 31, 1999. Prior to closing of these transactions,  a
subsidiary  of  IHC will contribute an additional $15,000,000  of
surplus  as  paid  in capital to Madison Life. Such  contribution
will  come  from such subsidiary's existing $30,000,000  line  of
credit.

                                12
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         ---------------------------------------------
       Independence  Holding  Company,  a  Delaware   corporation
("IHC"), is a holding company engaged principally in the life and
health  insurance business through its wholly-owned subsidiaries,
Standard  Security Life Insurance Company of New York  ("Standard
Life"),  Madison National Life Insurance Company, Inc.  ("Madison
Life")  and  First  Standard Security Insurance  Company  ("First
Standard")  and their subsidiaries (collectively, the  "Insurance
Group"). IHC and its subsidiaries (including the Insurance Group)
are  collectively  referred to as the  "Company."  All  remaining
income  (principally  income from parent company  liquidity)  and
expense   items   associated  with  parent   company   activities
(including  the  Company's remaining real  estate  holdings)  are
included in Corporate.

                      RESULTS OF OPERATIONS
                      ---------------------
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS
ENDED SEPTEMBER 30, 1998
--------------------------------------------------------------
     The Company's operating income decreased $.3 million to $3.4
million for the period ended September 30, 1999 from $3.7 million
for  the  same period in 1998.  The Company had net realized  and
unrealized  losses  of  $.1 million in 1999  and  gains  of  $1.1
million  in 1998. Decisions to sell securities are based on  cash
flow  needs,  investment opportunities and  economic  and  market
conditions,  thus  creating fluctuations in gains  (losses)  from
year  to  year.  Excluding  net  realized  and  unrealized  gains
(losses),  the  Company had operating income of $3.5  million  in
1999  as  compared to $2.6 million in 1998. Net income  was  $2.5
million,  or  $.35  per  share, diluted, for  the  quarter  ended
September  30, 1999 compared to $2.7 million, or $.36 per  share,
diluted,  for  the quarter ended September 30, 1998.  Income  tax
expense  decreased to $.9 million in 1999 from  $1.0  million  in
1998 (see Capital Resources).

Insurance Group
---------------
     The Insurance Group's operating income decreased $.5 million
to  $3.6  million  in 1999 from $4.1 million in  1998.  Operating
income includes net realized and unrealized losses of $.1 million
in  1999  compared  to gains of $1.1 million in  1998.  Operating
income  excluding  net  realized and unrealized  gains  was  $3.7
million in 1999 compared to $3.0 million in 1998.

                                13
<PAGE>
      Premium revenues increased $2.9 million to $22.3 million in
1999; premium revenues increased $1.7 million at Madison Life and
$1.2  million at Standard Life. The increase at Madison  Life  is
comprised  of:  a  $.4 million increase in  the  credit  line  of
business, primarily due to higher earned premiums from  the  core
block of credit business; a $.8 million increase in ordinary life
and   individual  accident  and  health  premiums  due   to   the
acquisition of a block of business effective May 1, 1999;  a  $.8
million  increase in long-term disability ("LTD") premiums  as  a
result  of an increase in retention on this line of business  and
an  increase  in  premiums written in 1999;  and  a  $.2  million
increase  in the group term life line of business; such increases
were  offset by: a $.2 million decrease in dental premiums and  a
$.3 million decrease in all other lines of business. The increase
at Standard Life is comprised of: an increase of $1.9 million and
$.4 million in group annuity and group life respectively, due  to
the  acquisition of a block of business effective April 1,  1999;
and  a $.3 million increase in the point of service ("POS")  line
of  business  due  to an increase in rates; such  increases  were
offset by: a $.6 decrease in stop-loss health business due to  an
overall reduction in retention; a $.5 million decrease in the DBL
line  due  to  terminations in 1998 resulting in a lower  premium
base  in 1999; and a $.3 million decrease in an assumed block  of
life and annuity business due to the runoff of this block.

     Total net investment income increased $3.3 million primarily
due  to higher returns on certain hedged equity investments,  the
increase  in assets related to acquisitions, and interest  income
on assumption reinsurance transactions that closed in the quarter
ended  September  30, 1999 with an effective date  in  the  prior
quarter.  The  annualized return on investments of the  Insurance
Group  in the third quarter of 1999 was 6.9% compared to 4.4%  in
the third quarter of 1998.

      Other income increased $.1 million due to fee income earned
by Standard Life for the stop-loss health line due to an increase
in  gross  written  premiums.  Equity  income  from  partnerships
increased $.2 million from 1998 to 1999.

      Insurance  benefits,  claims and  reserves  increased  $5.2
million,  reflecting an increase of $1.7 million at Madison  Life
and  an increase of $3.5 million at Standard Life. Madison Life's
increase  resulted from: a $.9 million increase in ordinary  life
and individual accident and health reserves and claims due to the
acquisition of a new block of business effective May 1, 1999 ($.6
million) and other existing ordinary life and individual accident
and  health  business  ($.3 million); a $.3 million  increase  in
surrenders  on ordinary life policies; a $.5 million increase  in
LTD  claims associated with the increase in premiums; and  a  $.3
million increase in claims and reserves in other life and  health
lines  of business; such increases were offset by: a $.3  million
decrease  in  interest  credited to universal  life  and  annuity
products   due  to  the  runoff  of  policies  from  prior   year
acquisitions.  The  change  at Standard  Life  is  comprised  of:

                                14
<PAGE>
increases of $2.7 million and $.3 million in net reserves of  the
purchased  block  of  group annuity and  group  life  businesses,
respectively; a $.5 million increase in stop loss health reserves
due  to  higher  loss ratios; and a $.3 million increase  in  DBL
claims and reserves; such increases were offset by: a $.3 million
decrease in an accident and health reinsurance facility.

      Amortization of deferred acquisition costs and general  and
administrative  expenses for the Insurance  Group  increased  $.6
million. Madison Life's expenses increased $.3 million due  to  a
net  increase  in  commission expense  due  to  the  increase  in
premiums.   Standard  Life's  expenses  increased   $.3   million
primarily due to start-up costs of IndependenceCare LLC.

Corporate
---------
      Operating  loss  was  $.2 million  for  the  quarter  ended
September  30,  1999 compared to a loss of $.4  million  for  the
quarter ended September 30, 1998. Investment income increased $.8
million   due   to  higher  returns  on  certain  hedged   equity
investments  in 1999. Other income decreased $.3 million  due  to
the  absence  in 1999 of the fee income earned in 1998  from  the
termination  of  the  guarantee of the  debt  of  Zimmerman  Sign
Company("Zimmerman").   Selling,   general   and   administrative
expenses increased by $.3 million due to consulting costs related
to acquisitions.

NINE  MONTHS  ENDED SEPTEMBER 30, 1999 COMPARED  TO  NINE  MONTHS
ENDED SEPTEMBER 30, 1998
-----------------------------------------------------------------
      The  Company's operating income remained constant at  $10.7
million  for the nine months ended September 30, 1999 as compared
to  the  same  period in 1998. The Company had net  realized  and
unrealized gains of $.1 million in 1999 and $1.5 million in 1998.
Excluding  net  realized and unrealized gains,  the  Company  had
operating  income  of $10.6 million in 1999 as compared  to  $9.1
million in 1998 which approximately consisted of:  an increase in
yields  on investable assets of $2.2 million offset by a decrease
in  acquisitions of $.7 million. Net income was $7.7 million,  or
$1.04 per share, diluted, for the nine months ended September 30,
1999  compared to $8.1 million, or $1.08 per share, diluted,  for
the  nine  months  ended September 30, 1998. Income  tax  expense
increased to $3.0 million in 1999 from $2.5 million in 1998  (see
Capital Resources).

Insurance Group
---------------
     The Insurance Group had operating income of $10.7 million in
1999  compared  to  $11.1  million (including  net  realized  and
unrealized  gains  of  $1.4 million) in  1998.  Operating  income
excluding net realized and unrealized gains was $10.7 million  in
1999 compared to $9.7 million in 1998.

                                15
<PAGE>
      Premiums earned increased $1.1 million to $61.4 million  in
1999  from $60.3 million in 1998; premiums earned at Madison Life
increased  $1.1 million and Standard Life remained constant.  The
increase at Madison Life is comprised of: a $1.8 million increase
in  long-term disability premiums due to an increase in retention
on  this line of business and an increase in premiums written  in
1999;  a  $.8  million increase in ordinary life  and  individual
accident and health premiums primarily due to the acquisition  of
a  block  of  business effective May 1, 1999; and a  $.5  million
increase in group term life premiums; such increases were  offset
by:  a  $1.1  million  decrease in the credit  line  of  business
primarily  due  to  the  runoff of acquisitions;  a  $.6  million
decrease  in  dental premiums due to the runoff of this  line  of
business  and  a  $.3  million decrease in  all  other  lines  of
business.  The  increase at Standard Life is  comprised  of:   an
increase  of  $1.9 million and $.4 million in group  annuity  and
group  life, respectively, due to the acquisition of a  block  of
business  effective April 1, 1999; an increase of $.4 million  in
the provider excess line of business due to increased production;
and  a  $.3  million increase in group term life due to increased
production;  such  increases were  offset  by:   a  $1.3  million
decrease in its DBL line due to terminations in 1998 resulting in
a  lower  premium  base  in 1999; a $.7 million  decrease  in  an
accident  and  health reinsurance facility  assumed  due  to  the
runoff  of  this line; and a $1.0 million decrease  in  stop-loss
health premiums due to an overall reduction in retention in 1999.

     Total net investment income increased $2.8 million primarily
due  to  higher yields on certain hedged equity investments,  the
increase  in  assets related to acquisitions, and an increase  in
interest  income on assumption reinsurance transactions in  1999.
The  annualized return on investments of the Insurance  Group  in
the  first nine months of 1999 was 6.8% compared to 6.3%  in  the
first nine months of 1998.

      Other income increased $1.4 million.  Madison Life's income
increased  $1.0 million primarily from fee income earned  by  the
MGU acquired on December 31, 1997; such fee income was offset  by
expenses  described below in general and administrative expenses.
Fee  income at Standard Life increased $.4 million due to  higher
gross  stop loss health premiums. Equity income from partnerships
increased $.3 million from 1998 to 1999.

      Insurance  benefits,  claims and  reserves  increased  $3.2
million,  reflecting an increase of $1.0 million at Madison  Life
and  $2.2  million  at  Standard Life.  Madison  Life's  increase
resulted  from:  a  $1.1 million increase in  ordinary  life  and
individual  accident and health reserves and claims  due  to  the
acquisition  of a new block of business ($.6 million)  and  other
existing  ordinary  life  and  individual  accident  and   health
business  ($.5 million); a $.3 million increase in surrenders  on
ordinary life policies; a $.3 million increase in group term life
claims; and an increase of $1.2 million in LTD claims due to  the
increase  in premiums on this line; such increases were partially

                                16
<PAGE>
offset by: a $1.9 million decrease in the credit line of business
due to the runoff of acquisitions. The change at Standard Life is
comprised  of: a $1.8 million increase in reserves in  the  stop-
loss  health  line  due  to higher loss  ratios;  a  $.3  million
increase in provider excess reserves due to increased volume; and
increases  of $2.7 million and $.3 million in group  annuity  and
group life reserves, respectively, due to the acquisition of this
block  effective April 1, 1999; such increases were offset by:  a
$1.0  million  decrease in reserves on the  accident  and  health
reinsurance  facility  due to the runoff  of  this  line;  a  $.5
million  decrease  in  the  POS line of business  which  reflects
reinsurance recoveries for prior year losses; and a $1.4  million
decrease  in  DBL claims and reserves due to improved  experience
($.2 million) and decreased volume ($1.2 million).

      Amortization  of  deferred  policy  acquisition  costs  and
general  and  administrative expenses  for  the  Insurance  Group
increased  $1.4 million.  Madison Life's expenses increased  $1.9
million and Standard Life's expenses decreased $.5 million.   The
increase  at  Madison Life is primarily due to  $1.0  million  in
general  expenses from the MGU acquired on December 31, 1997  and
an  increase in net commission expense of $.9 million due to  the
increase  in premiums. The decrease at Standard Life is primarily
due  to;  a $.5 million reduction in premium taxes due  to  lower
rates and a reduction in premiums; and a $.4 million decrease  in
general  expenses  such decreases were partially  offset  by:  an
increase of $.4 million due to start-up costs of IndependenceCare
LLC.

Corporate
---------
      Operating  income  was  flat  for  the  nine  months  ended
September 30, 1999 compared to a loss of $.4 million for the same
period  of  1998.  Operating  income includes  net  realized  and
unrealized gains of $.1 million in 1999 and 1998. Operating  loss
excluding  net realized and unrealized gains was $.1  million  in
1999  and  $.5 million in 1998. Investment income increased  $1.0
million   due   to  higher  returns  on  certain  hedged   equity
investments.  Other  income decreased  $.3  million  due  to  the
absence  in  1999  of  fee  income generated  in  1998  from  the
termination  of  the  guarantee of debt  of  Zimmerman.  Selling,
general and administrative expenses increased $.3 million due  to
consulting costs related to acquisitions.


                            LIQUIDITY
                            ---------
Insurance Group
---------------
      The  Insurance Group normally provides cash flow from:  (i)
operations;  (ii) the receipt of scheduled principal payments  on
its  portfolio of fixed income securities; and (iii) earnings  on
investments.  Such  cash  flow  is  used  partially  to   finance
liabilities for insurance policy benefits. These liabilities

                                17
<PAGE>
represent   long-term  and  short-term  obligations   which   are
calculated using certain assumed interest rates.

     Asset Quality

     The nature and quality of insurance company investments must
comply  with all applicable statutes and regulations  which  have
been  promulgated primarily for the protection of  policyholders.
Of   the  aggregate  carrying  value  of  the  Insurance  Group's
investment  assets, approximately 84% was invested in  investment
grade  fixed  income securities, resale agreements, policy  loans
and  cash  and cash equivalents at September 30, 1999.   Also  at
such  date,  approximately 97.5% of the Insurance  Group's  fixed
maturities  were investment grade. These investments  carry  less
risk  and,  therefore, lower interest rates than other  types  of
fixed  maturity investments. At September 30, 1999, approximately
2.5%  of  the carrying value of fixed maturities was invested  in
diversified   non-investment  grade   fixed   income   securities
(investments  in  such  securities  have  different  risks   than
investment grade securities, including greater risk of loss  upon
default,  and  thinner trading markets). Less  than  .1%  of  the
carrying value of the Company's total investments was represented
by  real  estate  and  mortgage loans. The Company  has  no  non-
performing fixed maturities.

     Risk Management

      The  Company  manages  interest rate  risk  by  seeking  to
maintain a portfolio with a duration and average life that  falls
within  the  band  of  the  duration  and  average  life  of  the
applicable  liabilities, and may utilize futures and  options  to
modify the duration and average life of such assets.

       The  Company  monitors  its  investment  portfolio  on   a
continuous basis and believes that the liquidity of the Insurance
Group  will not be adversely affected by its current investments.
This  monitoring  includes the maintenance of an  asset-liability
model  that  matches current insurance liability cash flows  with
current investment cash flows.

      In  the Company's analysis of the asset-liability model,  a
100 basis point change in interest rates on the Insurance Group's
liabilities  would  not be expected to have  a  material  adverse
effect  on  the  Company.  With respect to  its  liabilities,  if
interest rates were to increase, the risk to the Company is  that
policies  would be surrendered and assets would need to be  sold.
This  is  not  a material exposure to the Company since  a  large
portion of the Insurance Group's interest sensitive policies  are
burial  policies  that are not subject to the  typical  surrender
patterns  of other interest sensitive policies, and many  of  the
Insurance  Group's universal life and annuity policies come  from
liquidated companies which tend to exhibit lower surrender  rates
than  such policies of continuing companies. Additionally,  there
are  charges  to  help offset the benefits being surrendered.  If

                                18
<PAGE>
interest  rates were to decrease substantially, the risk  to  the
Company is that some of its investment assets would be subject to
early  redemption.  This is not a material exposure  because  the
Company  would  have additional gains in its  portfolio  to  help
offset the future reduction of investment income. With respect to
its  investments,  the  Company employs (from  time  to  time  as
warranted)  investment strategies to mitigate interest  rate  and
other market exposures.

       The  expected  pre-tax change in fair  value  (based  upon
hypothetical parallel shifts in the U.S. Treasury yield curve) of
the  Company's fixed income portfolio at September 30, 1999 given
a  100  basis  point  rise or decline in  interest  rates  is  as
follows:

                                                  Estimated
                                   Estimated      Change in
Change in Interest Rates           Fair Value     Fair Value
------------------------           ----------     ----------
                                         (in millions)

100 basis point rise               $ 229            ($12)
Base scenario                        241              -
100 basis point decline              253              12

     Balance Sheet

      The  decrease  in short-term investments is offset  by  the
increase in fixed maturities and equity securities as the Company
changed  its  mix  of  investments  during  1999.  Future  policy
liabilities  increased  due  to the acquisition  of  a  block  of
individual life and annuity insurance policies in January 1999 by
Standard Life. The increase in funds on deposit was offset by the
overall increase in investments due to the acquisition of a block
of group annuity business by Standard Life effective May 1, 1999.
The decrease in cash is offset by a decrease in accounts payable,
accruals and other liabilities.

      The  Company had net receivables from reinsurers of  $113.2
million at September 30, 1999.  Substantially all of the business
ceded  to  such  reinsurers is of short  duration.  All  of  such
receivables  are  current and are either due  from  highly  rated
companies  or  are adequately secured. Accordingly, no  allowance
for  doubtful  accounts was necessary at September 30,  1999  and
December 31, 1998.

Corporate
---------
      Corporate derives its funds principally from: (i) dividends
and  interest  income from the Insurance Group;  (ii)  management
fees  from  its  subsidiaries; and (iii) investment  income  from
Corporate  liquidity.  Regulatory constraints  historically  have
not affected the Company's consolidated liquidity, although state
insurance  laws  have provisions relating to the ability  of  the
parent company to use cash generated by the Insurance Group.

                                19
<PAGE>
      Total  corporate liquidity (cash, cash equivalents,  resale
agreements  and marketable securities) amounted to $14.2  million
at  September 30, 1999. During 1999, IHC has repurchased  229,500
shares  of  common  stock  for $2.7 million  under  a  repurchase
program initiated in 1991.

Capital Resources
-----------------
      Due  to  its  superior capital ratios, broad licensing  and
excellent  asset  quality  and credit-worthiness,  the  Insurance
Group  remains  well  positioned to  increase  or  diversify  its
current activities, and to raise additional capital in the public
or  private  markets to the extent determined to be necessary  or
desirable,  in  order to pursue acquisitions or otherwise  expand
its operations.

      It  is  anticipated that future acquisitions will be funded
internally  from existing capital and surplus and parent  company
liquidity including the $30.0 million credit facility.

       In  accordance  with  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 115, the Company may carry its  portfolio
of fixed income securities either as held to maturity (carried at
amortized  cost), as trading securities (carried at  fair  market
value)  or as available-for-sale (carried at fair market  value);
the  Company  has chosen to carry all of its debt  securities  as
available-for-sale.  As a result of rising  interest  rates,  the
Company  experienced  a  decrease in  unrealized  gains  of  $8.7
million,  net of deferred tax expense and net of deferred  policy
acquisition   costs.   Such  decrease  is   included   in   total
stockholders'  equity,  reflecting  unrealized  losses  of   $6.1
million  at  September 30, 1999 versus gains of $2.6  million  at
December  31, 1998. From time to time, as warranted, the  Company
employs investment strategies to mitigate interest rate and other
market exposures.

     The results of 1999 reflect a higher effective tax rate than
in  1998  due  to  the loss of tax benefits associated  with  the
utilization  of  net operating loss carryforwards  which  are  no
longer available.

Year 2000
---------
     The Year 2000 issue is the result of computer programs being
written  using two digits rather than four digits to  define  the
applicable  year.  If not corrected, computer applications  could
fail  or  create  erroneous results by or at the Year  2000.  The
Company,  together with outside vendors engaged by  the  Company,
has  made  assessments  of  the  Company's  potential  Year  2000
exposure. The Company's internal software and hardware  has  been
tested  and,  the  Company  believes that  all  mission  critical
internal  systems are Year 2000 compliant. The cost  of  updating
the Company's mission critical systems has not exceeded $100,000.

                                20
<PAGE>
      The  Company believes that its greatest Year 2000  exposure
arises  from the possibility of non-compliance by, among  others,
its  MGUs,  MGAs,  HMOs,  agents,  TPAs,  producers,  reinsurers,
securities  brokers  and  bankers.   The  Company  has  requested
information from these third parties and is continuing to monitor
their  responses and evaluate any possible impact on the Company.
All of Standard Life's medical stop-loss and group life MGUs have
represented  that  they  are or will be Year  2000  compliant  by
December  31, 1999 and Madison Life's largest MGA for group  life
and  long-term disability has indicated that it will be compliant
by  December 31, 1999. Standard Life has required that  its  MGUs
obtain Year 2000 compliance certifications from, and has supplied
the  MGUs  with  questionnaires to  be  completed  by,  TPAs  and
producers  with whom they place business. In addition,  the  U.S.
Senate Special Committee on the Year 2000 Technology Problem  has
determined that the healthcare industry continues to lag  in  its
progress  towards  Year 2000 preparedness.  In its  report  dated
September  22,  1999, the Committee cited concerns over  software
used   to   manage  patient  data  systems,  biomedical  devices,
infrastructure  operations,  and electronic  interconnections  or
interfaces.

      The Company has created a contingency plan with respect  to
the Year 2000 exposure. The contingency plan provides that in the
unlikely  event  of  failure  of any  of  the  Company's  mission
critical  internal  systems  (which  as  noted  above  have  been
successfully  tested), the Company would perform these  functions
manually until the system was corrected or replaced. With respect
to  third party vendors performing mission critical functions  on
behalf  of  the  Company, in the unanticipated event  that  these
vendors'  systems  are  not compliant, the Company  would  either
perform  these functions internally or would utilize the  systems
of  the  MGU acquired on December 31, 1997, the systems of  which
have  successfully  passed a Y2K-specific rollover  test.  A  Y2K
Event  Team has been established at the Company, and each of  its
material subsidiaries, that will provide on-site staffing for the
millennium weekend.

      The  dates  of  expected completion and the  costs  of  the
Company's Year 2000 remediation efforts are based on management's
estimates,  which  were derived utilizing assumptions  of  future
events,  including the availability of certain  resources,  third
party  remediation  plans  and other factors.  There  can  be  no
guarantee that these expectations will be achieved; if the actual
timing  and costs for the Company's Year 2000 compliance  program
differ materially from those anticipated, the Company's financial
results  and  financial condition could be  materially  affected.
Additionally,  despite  testing by  the  Company,  the  Company's
systems may contain undetected errors or defects associated  with
Year  2000  date  functions.  The inability  of  the  Company  to
correctly  identify significant Year 2000 issues for  remediation
or  to  complete  its Year 2000 remediation and  testing  efforts
prior  to  respective critical dates, as well as the  failure  of
third   parties   (with  whom  the  Company  has   an   important

                                21
<PAGE>
relationship) to identify, remediate and test their own Year 2000
issues  and  the resulting disruption which could  occur  in  the
Company's  systems, could have material adverse  effects  on  the
Company's  business,  results  of  operations,  cash  flows   and
financial condition.

Subsequent Event
----------------
      Subsequent to September 30, 1999, Madison Life entered into
four  agreements to assume in excess of 100,000 life and  annuity
policies  with net reserves of approximately $140.0 million  from
companies  that are in liquidation. Three of the agreements  have
an   effective   date   of  June  30,  1999   (the   "Mississippi
Transactions") and the fourth agreement is expected  to  have  an
effective date of November 30, 1999 (the "Missouri Transaction").
The  Mississippi Transactions have received court  approval,  but
remain  subject  to  a  notice period and certain  other  closing
conditions.  Closing of the Missouri Transaction  is  subject  to
entry  of  a liquidation order, court approval and certain  other
conditions.  All of the transactions are expected to close  prior
to  December 31, 1999. Prior to closing of these transactions,  a
subsidiary of IHC will contribute an additional $15.0 million  of
surplus  as  paid  in capital to Madison Life. Such  contribution
will  come from such subsidiary's existing $30.0 million line  of
credit. Assuming completion of these transactions, IHC will  have
assumed $180.0 million of net reserves in 1999. In addition,  the
fourth  quarter Consolidated Statement of Operations will reflect
an   increase   in  insurance  revenues,  related  expenses   and
investment income reflecting the effective date of June 30,  1999
on the Mississippi Transactions.

       Some   of  the  statements  included  within  Management's
Discussion  and Analysis may be considered to be forward  looking
statements  which are subject to certain risks and uncertainties.
Factors which could cause the actual results to differ materially
from  those suggested by such statements are described from  time
to  time  in the Company's Annual Report on Form 10-K  and  other
filings with the Securities and Exchange Commission.

                                22
<PAGE>
PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K
          --------------------------------
     a)   1)   Exhibit 11.  Statement re:  computation
               of per share earnings.

          2)   Exhibit 27.  Financial Data Schedule.

     b)   No report on Form 8-K was filed during the quarter
          ended September 30, 1999.

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<PAGE>
                            SIGNATURE

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

                             INDEPENDENCE HOLDING COMPANY
                             ----------------------------
                                   (THE REGISTRANT)



Dated: November 12, 1999     By:/s/ Teresa A. Herbert
                                 --------------------
                                Teresa A. Herbert
                                Vice President, Chief
                                Financial Officer and
                                Principal Accounting Officer

                                24