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<TITLE>INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES</TITLE>
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<FONT FACE="Courier"><P>					</FONT><FONT FACE="Arial"
SIZE=3>							</P>
<B><P>                                               </P>
<P ALIGN="CENTER">FORM 10-Q</P>
<P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</P>
<P ALIGN="CENTER">WASHINGTON, D.C. 20549</P>

<P ALIGN="CENTER">QUARTERLY REPORT UNDER SECTION 13 OR 15(d)</P>
<P ALIGN="CENTER">OF THE SECURITIES EXCHANGE ACT OF 1934</P>
</B>
<P ALIGN="CENTER">For the Quarterly Period Ended:  <B><U>MARCH 31, 2000</P>
</B></U><P ALIGN="CENTER">Commission File Number: <B><U>0-10306</P>
</B></U>
<P> </P>
<B><P ALIGN="CENTER">INDEPENDENCE HOLDING COMPANY</P>
</B><P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</P>
<P ALIGN="CENTER"></P></FONT>
<TABLE CELLSPACING=0  CELLPADDING=0 WIDTH=638>
<TR><TD WIDTH="50%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Delaware</B></U></FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">58-1407235</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(State of Incorporation)</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(I.R.S. Employer Identification
No.)</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial" SIZE=3>
<P> </P>
<P> </P>
<P> </P>
<B><P>96 CUMMINGS POINT ROAD, STAMFORD, CONNECTICUT
06902</P>
</B><P>(Address of principal executive offices)
(Zip Code)</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Registrant's telephone number, including area code:
<B>(203)358-8000</P>
</B><U>
</U><B><P ALIGN="CENTER">NOT APPLICABLE</P>
</B><P ALIGN="CENTER">Former  name, former address and former fiscal year, if
changed since last report.</P>

<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY">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 <U>X</U>.  No<U>.</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<B><P ALIGN="CENTER">7,180,100 SHARES OF COMMON STOCK, $1.00 PAR VALUE</P>
</B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Common stock outstanding as of May 10, 2000</P>

<B><P ALIGN="CENTER">INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">INDEX</P>
<P ALIGN="CENTER"></P>
<U><P> </P>
<P> </P>
<P>PART I - FINANCIAL INFORMATION</U>  				        	
<U>PAGE NO.</P>
</U>
</B><P> Consolidated Balance Sheets -</P>
<P>  March 31, 2000 (unaudited) and December 31, 1999............
3</P>

<P> Consolidated Statements of Operations -</P>
<P>  Three Months Ended March 31, 2000 and 1999 (unaudited.)........
4       </P>

<P> Consolidated Statements of Cash Flows -</P>
<P>  Three Months Ended March 31, 2000 and 1999(unaudited)........
5</P>

<P> Notes to Consolidated Financial Statements (unaudited)...........         6
- 9  </P>

<P> Management's Discussion and Analysis of Results of Operations and</P>
<P>  Financial Condition...........................       10 - 13</P>
<B>
<U><P>PART II - OTHER INFORMATION</P>
</B></U>
<P> Item 6 - Exhibits and Reports on Form 8-K................             14</P>

<P ALIGN="JUSTIFY"> Signatures................................
15										</P>
<B><P ALIGN="JUSTIFY">INDEPENDENCE HOLDING COMPANY AND
SUBSIDIARIES</P></B></FONT>
<TABLE CELLSPACING=1 CELLPADDING=0 WIDTH=625>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">CONSOLIDATED BALANCE
SHEETS</B></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">MARCH 31,</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">DECEMBER 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(UNAUDITED)</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">ASSETS:</B></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Cash and cash
equivalents</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,239,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,689,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Investments:</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Short-term investments</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">8,959,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">9,668,000</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Securities purchased under
agreements</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">to resell </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">14,762,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">14,952,000</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Fixed maturities </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">350,223,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">339,646,000</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Equity securities </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">16,042,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">15,613,000</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other investments </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">65,415,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">61,373,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Total investments</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">455,401,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">441,252,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Due from brokers</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">559,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">416,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Deferred acquisition costs
</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">31,547,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">32,537,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Due and unpaid premiums</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">19,303,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">14,645,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Due from reinsurers</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">138,394,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">134,764,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Notes and other
receivables</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">30,784,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">37,548,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other assets </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">10,749,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">10,500,000</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">693,976,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">678,351,000</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">LIABILITIES AND STOCKHOLDERS'
EQUITY:</B></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">LIABILITIES:</B></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Future insurance policy benefits
</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">291,905,000</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">289,689,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unearned premiums</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">21,131,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">21,557,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Funds on deposit</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">181,375,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">185,936,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Policy claims </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,869,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,062,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other policyholders'
funds</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,017,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,014,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" ROWSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Financial instruments sold, but not
</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">yet purchased </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,046,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">-</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Due to brokers</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">15,252,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">9,593,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Due to reinsurers</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">24,368,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">16,012,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Accounts payable, accruals and
other</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">liabilities</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">19,985,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">20,424,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Income taxes </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,645,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,513,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Long-term debt </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">15,000,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">15,000,000</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">TOTAL
LIABILITIES</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">586,593,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">574,800,000</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">STOCKHOLDERS' EQUITY:
</B></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Preferred stock (none
issued)</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">-</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">-</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Common stock, 7,180,100 shares
issued</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">and outstanding, net of
2,481,519</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">shares in treasury</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,180,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,180,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Paid-in-capital</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">81,026,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">81,026,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Accumulated other comprehensive
loss:</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unrealized loss on investments,
net</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(9,554,000)</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(11,028,000)</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Retained earnings</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">28,731,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">26,373,000</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">TOTAL STOCKHOLDERS'
EQUITY</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">107,383,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">103,551,000</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">TOTAL LIABILITIES
AND</B></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" COLSPAN=6 HEIGHT=13><P></P></TD>
<TD WIDTH="44%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">STOCKHOLDERS'
EQUITY</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">693,976,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"> $</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">678,351,000</FONT></TD>
</TR>
</TABLE>

<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">See Accompanying Notes to Consolidated Financial
Statements.</P>
<P ALIGN="JUSTIFY">INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES</P>
<P ALIGN="JUSTIFY">CONSOLIDATED STATEMENTS OF OPERATIONS</P>
<P ALIGN="JUSTIFY">(UNAUDITED)</P></B></FONT>
<TABLE CELLSPACING=1 CELLPADDING=0 WIDTH=619>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">THREE MONTHS ENDED MARCH
31,</B></FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">REVENUES</B></FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Premiums earned </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">22,063,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">20,210,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net investment income </FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">9,540,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,642,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net realized and unrealized
(losses) gains</FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(1,145,000)</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">432,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other (expense) income</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(62,000)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,210,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">30,396,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">28,494,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">EXPENSES:</B></FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Insurance benefits, claims and
reserves</FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">16,333,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">14,606,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amortization of deferred
acquisition costs </FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,228,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,257,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Selling, general and
administrative</FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P> Expenses</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">8,833,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">8,886,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Interest expense on long-term
debt</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">301,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">26,695,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">24,752,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Operating income before income
taxes</FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,701,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,742,000</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Income tax expense </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,343,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,299,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">NET INCOME</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,358,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,443,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">BASIC INCOME PER COMMON
SHARE</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">.33</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">.33</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">WEIGHTED AVERAGE COMMON
SHARES</FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">OUTSTANDING</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,180,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,361,000</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">DILUTED INCOME PER COMMON
SHARE</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">.33</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">.33</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">WEIGHTED AVERAGE DILUTIVE
SHARES</FONT></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">OUTSTANDING</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,250,000</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,488,000</FONT></TD>
</TR>
</TABLE>

<U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER"></P>

</U><B><P ALIGN="CENTER">See Accompanying Notes to Consolidated Financial
Statements.</P>
<P>INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES</P>
<P ALIGN="JUSTIFY">CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)</P></B></FONT>
<TABLE CELLSPACING=1 CELLPADDING=0 WIDTH=625>
<TR><TD WIDTH="58%" VALIGN="TOP" COLSPAN=8 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">THREE MONTHS ENDED MARCH
31,</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</P>
<P ALIGN="CENTER"></B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=19 HEIGHT=16><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=19 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">CASH FLOWS FROM OPERATING
ACTIVITIES:</B></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net income</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,358,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,443,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Adjustments to reconcile net income
to net cash</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P>provided (used) by operating
activities:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">             </FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amortization of deferred policy
acquisition</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">costs</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,228,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,257,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Realized losses (gains) on sales
of</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">investments </FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">75,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(591,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unrealized losses on trading
securities</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,070,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">159,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Depreciation </FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">157,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">161,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Deferred tax (benefit)
expense</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(232,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">467,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(187,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(231,000)</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Changes in assets and
liabilities:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net sales of trading
securities</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">255,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">356,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Increase in insurance
liabilities</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(2,692,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">9,989,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Additions to deferred acquisition
costs</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(444,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(1,209,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Change in net amounts due from and
to</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">reinsurers</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,726,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(7,692,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Change in income tax
liability</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(658,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(230,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Change in due and unpaid
premiums</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(4,658,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(4,380,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(2,860,000)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(1,292,000)</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" COLSPAN=6 HEIGHT=16><P></P></TD>
<TD WIDTH="49%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" COLSPAN=6 HEIGHT=16><P></P></TD>
<TD WIDTH="49%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net cash used by operating
activities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(1,862,000)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(793,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=7 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="76%" VALIGN="TOP" COLSPAN=12 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">CASH FLOWS FROM INVESTING
ACTIVITIES:</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Change in net amount due from and
to brokers</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,517,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">716,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Sales and maturities of short-term
investments</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">34,362,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">30,970,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P>Purchases of short-term investments</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(33,606,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(25,933,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P>Net sales (purchases) of resale
agreements</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">190,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(8,414,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Sales of fixed
maturities</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">63,700,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">14,311,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Purchases of fixed
maturities</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(71,950,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(15,474,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Sales of equity
securities</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">21,274,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">13,684,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P>Purchases of equity securities </FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(21,499,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(12,380,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Proceeds on sale of other
investments</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,236,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,534,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Additional investments in other
investments, net </FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="52%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">of distributions</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(6,234,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(4,677,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Cash received from
coinsurance/assumption</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">     reinsurance
transactions</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,112,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net change in notes
receivable</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">8,311,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P></FONT>               -</TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">736,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(2,033,000)</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" COLSPAN=9 HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net cash provided (used) by
investing activities</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,037,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(2,584,000)</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" COLSPAN=9 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">CASH FLOWS FROM FINANCING
ACTIVITIES:</B></FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exercise of common stock options
</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Payments of investment-type
insurance </FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="52%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">contracts</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(268,000)</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(268,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Repurchase of common
stock</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(376,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Dividends paid</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(357,000)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(368,000)</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" COLSPAN=9 HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net cash provided (used) by
financing activities</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(625,000)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(1,007,000)</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="52%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Increase (decrease) in cash and
cash</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="52%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">equivalents</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">550,000</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(4,384,000)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Cash and cash equivalents,
beginning of year</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,689,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,889,000</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Cash and cash equivalents, end of
period</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,239,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P>$</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,505,000</FONT></TD>
</TR>
</TABLE>

<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">See Accompanying Notes to Consolidated Financial
Statements.</P>
<P ALIGN="JUSTIFY">INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES</P>
<P ALIGN="JUSTIFY">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)</P>
<U><P ALIGN="JUSTIFY">													</U>
</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">NOTE 1.	SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">     		(A)	BUSINESS AND ORGANIZATION</P>
</B><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">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".</P>
<P ALIGN="JUSTIFY">Geneve Corporation, a diversified financial holding company,
and its affiliated entities hold approximately 57% of IHC's outstanding common
stock.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY"> 	   	<B>(B)	PRINCIPLES OF CONSOLIDATION AND
PREPARATION OF</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">       	FINANCIAL STATEMENTS</P>
</B><P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">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 ended March 31, 2000 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, 1999. Certain amounts in the prior
year's consolidated financial statements and notes thereto have been restated to
conform to the 2000 presentation.</P>
<P ALIGN="JUSTIFY">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.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P></DIR>
</DIR>

<B><P>INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES</P>
<P ALIGN="JUSTIFY">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)</P>
<U><P ALIGN="JUSTIFY">													</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">NOTE 2.	OTHER INVESTMENTS</P>
</B><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">The Company had invested $22,415,000 and $21,227,000 at March
31, 2000 and December 31, 1999, respectively, in Dolphin Limited Partnership-A
("DLP-A"), a limited partnership which invests in relatively "market neutral"
strategies, such as merger arbitrage, convertible arbitrage and distressed
situations.  The condensed statements of operations for DLP-A for the three
months ended March 31, 2000 and 1999 are as follows:</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=1 CELLPADDING=0 WIDTH=498>
<TR><TD WIDTH="55%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(IN THOUSANDS)</B></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="18%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Revenues</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,749</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,552</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net income</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,751</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,862</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">IHC's share of net
income</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,189</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">711</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">
</P>
<P ALIGN="JUSTIFY">NOTE 3.	INCOME PER COMMON SHARE</P>
</B><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">Included in the diluted earnings per share calculation for
2000 and 1999, respectively, are 70,000 and 127,000 shares 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 1,886,293
shares of common stock at $16.37 per share were not included in the computation
of diluted earnings per share because the warrants' strike price was greater
than the average market price of the common shares during the first quarter of
2000 and 1999.</P>
<B><P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">NOTE 4.	INCOME TAXES</P>
</B><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">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.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The income tax expense for the three months ended March 31,
2000 allocated to stockholders' equity for unrealized losses on investment
securities was $23,000, representing the change in the deferred tax asset of
$85,000 at March 31, 2000 from  $108,000 at December 31, 1999.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<B><P ALIGN="JUSTIFY">NOTE 5.	SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION</P>
</B><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">Cash payments for income taxes were $2,125,000 and $592,000
for the three months ended March 31, 2000 and 1999, respectively. Cash payments
for interest were $5,000 and $3,000 for the three months ended March 31, 2000
and 1999, respectively.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P></DIR>
</DIR>

<B><P ALIGN="JUSTIFY">INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES</P>
<P ALIGN="JUSTIFY">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)</P>
<U><P ALIGN="JUSTIFY">													</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">NOTE 6.	COMPREHENSIVE INCOME</P>
</B><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">The components of comprehensive income include net income and
certain amounts previously reported directly in equity. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Comprehensive income for the three months ended March 31,
2000 and 1999 is as follows:</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=1 CELLPADDING=0 WIDTH=498>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">    2000</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(IN THOUSANDS)</B></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net income</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,358</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,443</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unrealized gains (losses), on
available-</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="52%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">for-sale securities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,474</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(2,430)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Comprehensive income</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,832</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">13</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">NOTE 7.	NEW ACCOUNTING PRONOUNCEMENTS</P>
</B><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">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 effective for financial
statements for periods beginning after June 15, 2000.  The Company is currently
evaluating the impact of SFAS No. 133 but does not expect it to have a material
impact on the Company. </P>
<B><P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">NOTE 8. 	SEGMENT REPORTING</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

</B><P ALIGN="JUSTIFY">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 ended March 31, 2000 and 1999 is as
follows:  </P></DIR>
</DIR>

<B><P ALIGN="JUSTIFY"> </P>
</B><P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES</P>
<P ALIGN="JUSTIFY">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)</P>
<U><P ALIGN="JUSTIFY">													</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">NOTE 8.	 SEGMENT REPORTING (CONTINUED)</P>
</B><P ALIGN="JUSTIFY">                                <B> </P></B></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=1 CELLPADDING=0 WIDTH=534>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"> </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </B></FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(IN THOUSANDS)</B></FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">REVENUES:</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Medical Stop-Loss</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,220</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,851</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">DBL</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,973</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,500</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Group Term Disability and Term
Life</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,070</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,059</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Credit Life and
Disability</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,140</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,085</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Managed Health Care</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,467</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">627</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Special Disability</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">73</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">16</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Acquired Blocks/Other
Business</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">9,754</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,293</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Corporate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">844</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">631</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">31,541</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">28,062</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net Realized and
Unrealized</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">(Losses) Gains</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(1,145)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">432</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">30,396</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">28,494 </FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=6 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">OPERATING INCOME:</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Medical Stop-Loss</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">$</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,197</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(695)</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">DBL</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">531</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,445</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Group Term Disability and Term
Life</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">503</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(190)</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Credit Life and
Disability</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">  (305)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">604</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Managed Health Care</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">79</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">661</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Special Disability</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">74</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">216</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Acquired Blocks/Other
Business</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,301</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,324</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Corporate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(534)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(55)</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,846</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,310</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net Realized and
Unrealized</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="48%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">(Losses) Gains</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(1,145)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">432</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,701</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="21%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,742</FONT></TD>
</TR>
</TABLE>
</P>

<FONT FACE="Arial" SIZE=3>
<P> </P>
<B><P>ITEM 7. 	<U>MANAGEMENT'S DISCUSSION AND ANALYSIS OF</U> <U>FINANCIAL
CONDITION </P><DIR>
<DIR>

<P>AND RESULTS OF OPERATIONS</P>
</B><P ALIGN="JUSTIFY"></P></DIR>
</DIR>

</U><P ALIGN="JUSTIFY">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 (cash, cash equivalents, resale agreements, marketable
securities and partnership investments) and expense items associated with parent
company activities, the Company's remaining real estate holdings and certain
other investments of the Company, are included in Corporate.</P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="CENTER">RESULTS OF OPERATIONS</P>

<P>THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31,
1999</P>
</B></U>
<P ALIGN="JUSTIFY">The Company's operating income was $3.7 million, for both
periods ended March 31, 2000 and 1999. The Company had net realized and
unrealized losses of $1.1 million in 2000 and gains of $.4 million in 1999.
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,
operating income increased 46% to $4.8 million in 2000 as compared to $3.3
million in 1999 which approximately consisted of: an increase in acquisitions of
$1.5 million and an increase in yields on investable assets of $.8 million
offset by an increase in interest expense of $.3 million and a decrease in other
lines of $.5 million (see Note 8 of Notes to Consolidated Financial Statements).
Net income was $2.4 million, or $.33 per share, diluted, for both quarters ended
March 31, 2000 and 1999. </P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY">Insurance Group</P>
</B></U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Insurance Group's operating income increased $.4 million
to $4.2 million in 2000 from $3.8 million in 1999. Operating income includes net
realized and unrealized losses of $1.1 million in 2000 compared to gains of $.4
million in 1999. Operating income excluding net realized and unrealized losses
was $5.3 million in 2000 compared to $3.5 million in 1999. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Premium revenues increased $1.9 million to $22.1 million in
2000 from $20.2 million in 1999; premium revenues increased $2.2 million at
Madison Life and decreased $.3 million at Standard Life. The increase at Madison
Life is comprised of: a $.5 million increase in long-term disability ("LTD")
premiums as a result of an increase in premiums written in 2000; a $.3 million
increase in group term life, and a $3.0 million increase in ordinary life and
individual accident and health premiums due to the 1999 acquisitions; such
increases were offset by: a $.9 million decrease in the credit lines of
business, primarily due to the runoff of acquisitions of two single premium
blocks of business effective in 1997; a $.4 million decrease in dental premiums
due to the runoff of this block and a $.3 million decrease in other life and
health lines of business. The decrease at Standard Life is comprised of: a $.6
million decrease in stop-loss premiums due to lower retention in 2000 and a $.5
million decrease in DBL due to higher lapses; such decreases are offset by: a
$.3 million increase in its provider excess line; a $.3 million increase in the
closed group life assumed block purchased effective April 1, 1999 and a $.2
million increase in the point of service line.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Total net investment income increased $3.8 million primarily
due to higher returns on certain equity investments, higher yields on fixed
income securities and by an increase in assets due to the acquisitions in 1999.
The annualized return on investments of the Insurance Group in the first quarter
of 2000 was 7.5% compared to 6.5% in the first quarter of 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Other income decreased $2.3 million due to $.3 million less
fee income earned by the managing general underwriter ("MGU") in which Madison
Life acquired a controlling interest effective December 31, 1997; and a $2.0
million decrease at Standard Life due to an increase in coinsurance reserves due
to the surrender by a large group of policyholders in a modified coinsurance
treaty.	</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	Insurance benefits, claims and reserves increased $1.7
million, reflecting an increase of $3.0 million at Madison Life and a decrease
of $1.3 million at Standard Life. Madison Life's increase resulted from: a $.2
million increase in the credit line of business; a $1.8 million increase in
ordinary life and individual accident and health reserves and claims, a $.3
million increase in surrenders and $1.0 million increase in interest on annuity
policies, all of such increases due to acquisitions in 1999; and a $.5 million
increase in LTD claims due to the increase in premiums; such increases were
offset by: a $.3 million decrease in dental claims due to the runoff of this
line; and a $.5 million decrease in claims and reserves in other life and health
lines of business. The change at Standard Life is comprised of: a $1.8 million
decrease in stop-loss reserves due to lower loss ratios; and a $1.4 million
decrease in the closed block of ordinary life business due to the surrender by a
large group of policyholders; such increases were offset by: a $.6 million
increase in DBL claims and reserves due to higher claims; a $.6 million increase
in  interest expense and group annuity and life reserves due to the acquisition
on April 1, 1999; a $.5 million increase in point of service claims; and a $.2
million increase in all other lines.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	Amortization of deferred acquisition costs and general
and administrative expenses for the Insurance Group increased $.1 million.
Madison Life's expenses increased $.1 million and Standard Life's and
IndependenceCare's expenses remained constant. </P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Corporate</P>
</B></U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Operating income for the quarter ended March 31, 2000
decreased by $.4 million from 1999 to a loss of $.5 million. Operating income
includes a realized gain of $.1 million in 1999. Excluding realized gains,
operating income decreased by $.3 million due to an increase in interest expense
attributable to the borrowing of $15.0 million during the fourth quarter of
1999.  All other income and expense items remained constant.</P>
<P ALIGN="JUSTIFY"> </P>
<B><U><P ALIGN="CENTER">LIQUIDITY</P>
</B>
<B><P>Insurance Group</P>
</B></U>
<P ALIGN="JUSTIFY">	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 represent long-term and short-term obligations which are calculated
using certain assumed interest rates.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	<B>Asset Quality</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	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 80.7%
was invested in investment grade fixed income securities, resale agreements,
policy loans and cash and cash equivalents at March 31, 2000.  Also at such
date, approximately 97% 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 March 31,
2000, approximately 3% 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.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	<B>Risk Management</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	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
options to modify the duration and average life of such assets.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	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. </P>
<P ALIGN="JUSTIFY">	</P>
<P ALIGN="JUSTIFY"> The expected change in fair value of the Company's fixed
income portfolio at March 31, 2000 given a 100 to 300 basis point rise or
decline in interest rates is not materially different than the expected change
at December 31, 1999. In the Company's analysis of the asset-liability model, a
100 to 300 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 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.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">	<B>Balance Sheet</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	The increase in fixed maturities is offset by a decrease
in notes receivable as a portion of the Mississippi Guaranty Association notes
were paid-down and invested in fixed maturities. Also offsetting the increase in
fixed maturities is an increase in due to brokers due to the timing of a
securities trade that settled after March 31, 2000.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	The Company had net receivables from reinsurers of $114.0
million at March 31, 2000.  Substantially all of the business ceded to such
reinsurers is of short duration. All of such receivables are either due from
highly rated companies or are adequately secured. Accordingly, no allowance for
doubtful accounts was necessary at March 31, 2000.</P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY">Corporate</P>
</B></U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	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.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	Total corporate liquidity (cash, cash equivalents, resale
agreements and marketable securities) amounted to $14.1 million at March 31,
2000. </P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY">Capital Resources</P>
</U><P ALIGN="JUSTIFY"></P>
</B><P ALIGN="JUSTIFY">	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. It is
anticipated that future acquisitions or other expansion of operations will be
funded internally from existing capital and surplus and parent company
liquidity, including the remaining $15.0 million availability under its credit
facility. In the event additional funds are required, it is expected that they
would be borrowed or raised in the public or private capital markets to the
extent determined to be necessary or desirable. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	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. The Company experienced a decrease in unrealized losses
of $1.4 million, net of deferred tax expense and deferred policy acquisition
costs, in total stockholders' equity, reflecting unrealized losses of $9.6
million at March 31, 2000 versus $11.0 million at December 31, 1999. From time
to time, as warranted, the Company employs investment strategies to mitigate
interest rate and other market exposures.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	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.</P>
<U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<B><P ALIGN="JUSTIFY">PART II.  OTHER INFORMATION</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Item 6. 	  <U>Exhibits and Reports on Form 8-K</P>
</B></U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">		a)   	1)   Exhibit 11.  Statement re:  computation
of per share earnings.</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY"> 		2)   Exhibit 27.  Financial Data Schedule. For
submission in electronic 		filing only.</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">b)	No report on Form 8-K was filed during the quarter
ended March 31, 2000.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<B><P ALIGN="JUSTIFY">SIGNATURES</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">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.</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>
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<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
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<U><P>INDEPENDENCE HOLDING COMPANY</P><DIR>
<DIR>

</U><P>(THE REGISTRANT)</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P ALIGN="JUSTIFY">Dated:  May 12, 2000			          By:<U>/s/ Teresa A.
Herbert		  </P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P ALIGN="JUSTIFY">                                Teresa A. Herbert</P>
<P ALIGN="JUSTIFY">                                Vice President and</P>
<P ALIGN="JUSTIFY">                                Chief Financial Officer</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

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