SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

               Quarterly Report Under Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934

         For the quarterly period from January 1, 2000 to March 31, 2000

                           Commission File No. 0-3978

                           UNICO AMERICAN CORPORATION

             (Exact name of registrant as specified in its charter)

            Nevada                                               95-2583928
(State or other jurisdiction of                               (I.R.S. Employee
 incorporation or organization)                              Identification No.)

          23251 Mulholland Drive,  Woodland Hills, California      91364
              (Address of Principal Executive Offices)           (Zip Code)

                                 (818) 591-9800
                          Registrant's telephone number

           Securities registered pursuant to Section 12(b) of the Act:
                                      None
                              (Title of each class)

          Securities registered pursuant to section 12(g) of the Act:
                           Common Stock, No Par Value
                                (Title of Class)

                                    No Change
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X No

                                    6,304,965
         Number of shares of common stock outstanding as of May 12, 2000



                                       1
<PAGE>

                         PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
-----------------------------

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                  March 31         December 31
                                                                                    2000              1999
                                                                                    ----              ----
<S>                                                                             <C>                <C>
ASSETS
------
Investments
   Available for sale:
      Fixed maturities, at market value (amortized cost:  March 31,
        2000  $98,199,836; December 31, 1999  $99,142,275)                       $96,345,929       $ 97,594,134

      Equity securities at market (cost: March 31, 2000
         $164,170; December 31, 1999  $164,170)                                       55,500             66,000
   Short-term investments, at cost                                                 5,691,832          5,968,173
                                                                                 -----------        -----------
      Total Investments                                                          102,093,261        103,628,307
Cash                                                                                 232,962            105,439
Accrued investment income                                                          1,633,599          2,060,471
Premiums and notes receivable, net                                                 5,809,661          5,496,890
Reinsurance recoverable:
   Paid losses and loss adjustment expenses                                          467,596             19,850
   Unpaid losses and loss adjustment expenses                                      5,613,313          3,964,324
Prepaid reinsurance premiums                                                          29,682             32,438
Deferred policy acquisition costs                                                  4,403,214          4,338,217
Property and equipment (net of accumulated depreciation)                             139,557            148,667
Deferred income taxes                                                              1,593,642          1,541,242
Other assets                                                                         503,065            642,911
                                                                                 -----------        -----------
     Total Assets                                                               $122,519,552       $121,978,756
                                                                                 ===========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Unpaid losses and loss adjustment expenses                                       $42,180,237        $41,592,489
Unearned premiums                                                                 16,737,805         16,583,143
Advance premium and premium deposits                                               2,563,717          2,571,190
Accrued expenses and other liabilities                                             5,770,723          6,391,137
Dividends payable                                                                    945,745                  -
                                                                                  ----------         ----------
    Total Liabilities                                                            $68,198,227        $67,137,959
                                                                                  ----------         ----------

STOCKHOLDERS' EQUITY

Common stock,  no par - authorized  10,000,000  shares;  issued and  outstanding
   shares 6,304,965 at March 31, 2000, and 6,304,953 at December 31, 1999         $3,098,389         $3,098,389
Accumulated other comprehensive loss                                              (1,295,301)        (1,086,565)
Retained earnings                                                                 52,518,237         52,828,973
                                                                                  ----------         ----------
  Total Stockholders' Equity                                                     $54,321,325        $54,840,797
                                                                                  ----------         ----------

  Total Liabilities and Stockholders' Equity                                    $122,519,552       $121,978,756
                                                                                 ===========        ===========

</TABLE>


            See notes to unaudited consolidated financial statements.



                                       2
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                   Three Months Ended March 31
                                                                                   ---------------------------
                                                                                     2000               1999
                                                                                     ----               ----
<S>                                                                               <C>                <C>
REVENUES
--------
Insurance Company Revenues
     Premium earned                                                               $8,116,552         $8,908,324
     Premium ceded                                                                 1,339,506          1,416,796
                                                                                   ---------          ---------
          Net premium earned                                                       6,777,046          7,491,528
     Net investment income                                                         1,431,490          1,416,410
     Net realized investment (losses)                                                      -               (625)
     Other income                                                                      5,035                  -
                                                                                   ---------          ---------
          Total Insurance Company Revenues                                         8,213,571          8,907,313

Other Revenues from Insurance Operations
     Gross commissions and fees                                                    1,414,352          1,392,421
     Investment income                                                                92,667             64,849
     Finance charges and late fees earned                                            207,134            232,890
     Other income                                                                      1,562              3,124
                                                                                   ---------         ----------
          Total Revenues                                                           9,929,286         10,600,597
                                                                                   ---------         ----------

EXPENSES
--------
Losses and loss adjustment expenses                                                4,950,539          3,379,802
Policy acquisition costs                                                           2,103,351          2,217,491
Salaries and employee benefits                                                     1,081,561          1,115,822
Commissions to agents/brokers                                                        333,128            318,002
Other operating expenses                                                             632,392            659,852
                                                                                   ---------          ---------
          Total Expenses                                                           9,100,971          7,690,969
                                                                                   ---------          ---------

Income Before Taxes                                                                  828,315          2,909,628

Income Tax Provision                                                                 193,306            877,866
                                                                                     -------          ---------
          Net Income                                                                $635,009         $2,031,762
                                                                                     =======          =========



PER SHARE DATA
--------------
Basic Shares Outstanding                                                           6,304,965          6,224,125
Basic Earnings Per Share                                                               $0.10              $0.33

Diluted Shares Outstanding                                                         6,348,793          6,353,779
Diluted Earnings Per Share                                                             $0.10              $0.32

</TABLE>


            See notes to unaudited consolidated financial statements



                                       3
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                        STATEMENT OF COMPREHENSIVE INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                   Three Months Ended March 31
                                                                                   ---------------------------
                                                                                      2000               1999
                                                                                      ----               ----
<S>                                                                                 <C>              <C>
Net income                                                                          $635,009         $2,031,762
Other changes in comprehensive income net of tax:
   Unrealized  (losses) on securities classified as available-for-sale
      arising during the period                                                     (208,736)          (991,696)
   Less: reclassification adjustment for gains included in net income                      -             86,335
                                                                                     -------          ---------
          Comprehensive Income                                                      $426,273         $1,126,401
                                                                                     =======          =========

</TABLE>



            See notes to unaudited consolidated financial statements



                                       4
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                       FOR THE THREE MONTHS ENDED MARCH 31


<TABLE>
<CAPTION>
                                                                                      2000              1999
                                                                                      ----              ----
<S>                                                                               <C>                <C>
Cash Flows from Operating Activities
   Net income                                                                       $635,009         $2,031,762
   Adjustments to reconcile net income to net cash from operations
      Depreciation and amortization                                                   15,647             18,696
      Bond amortization, net                                                         150,779            188,439
      Net realized loss on sale of securities                                              -                625
   Changes in assets and liabilities
      Premium, notes and investment income receivable                                114,101            (38,983)
      Reinsurance recoverable                                                     (2,096,735)        (1,232,353)
      Prepaid reinsurance premiums                                                     2,756              2,063
      Deferred policy acquisitions costs                                             (64,997)            62,110
      Other assets                                                                   139,846             10,904
      Reserve for unpaid losses and loss adjustment expenses                         587,748            (58,296)
      Unearned premium reserve                                                       154,662           (182,429)
      Advance premium and premium deposits                                            (7,473)           155,104
      Accrued expenses and other liabilities                                        (620,414)           741,279
      Income taxes current/deferred                                                   55,130            691,980
                                                                                     -------          ---------
          Net Cash Provided (Used) from Operations                                  (933,941)         2,390,901
                                                                                     -------          ---------

Investing Activities
     Purchase of fixed maturity investments                                       (1,954,140)        (4,021,750)
     Proceeds from maturity of fixed maturity investments                          2,735,600          1,510,000
     Purchase of equity securities - cost                                                  -         (3,176,206)
     Proceeds from sale of equity securities                                               -          2,896,835
     Net increase in short-term investments                                          286,541            471,801
     Additions to property and equipment                                              (6,537)            (3,139)
                                                                                   ---------          ---------
          Net Cash Provided (Used) by Investing Activities                         1,061,464         (2,322,459)
                                                                                   ---------          ---------

Financing Activities
     Proceeds from issuance of common stock                                                -                 24
                                                                                                             --
          Net Cash Provided by Financing Activities                                        -                 24
                                                                                                             --

Net Increase in Cash                                                                 127,523             68,466
Cash at beginning of period                                                          105,439            277,544
                                                                                     -------            -------
          Cash at End of Period                                                     $232,962           $346,010
                                                                                     =======            =======

Supplemental Cash Flow Information Cash paid during the period for:

          Interest                                                                       $ -             $1,338
          Income taxes                                                                   $25           $175,000


</TABLE>




            See notes to unaudited consolidated financial statements



                                       5
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
Nature of Business
------------------
Unico American Corporation ("Unico") is an insurance holding company.  Unico and
its  subsidiaries  (the  "Company"),  all of which are  wholly  owned,  provides
primarily in California,  property,  casualty,  health and life  insurance,  and
related premium financing.

Principles of Consolidation
---------------------------
The  accompanying   unaudited  consolidated  financial  statements  include  the
accounts of Unico American  Corporation  and its  subsidiaries.  All significant
inter-company accounts and transactions have been eliminated in consolidation.

Basis of Presentation
---------------------
The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") for interim
financial  information  and the  instructions  to Form  10-Q and  Article  10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes required by GAAP for complete financial statements.  In the opinion of
management,   all  adjustments  (consisting  of  normal  recurring  adjustments)
considered  necessary  for a fair  presentation  have been  included.  Operating
results  for the  three  months  ended  March  31,  2000,  are  not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2000.  Quarterly  financial  statements  should be read in conjunction  with the
financial  statements  and related notes in the Company's  1999 Annual Report on
Form 10-K as filed with the Securities and Exchange Commission.


NOTE 2 - INCENTIVE STOCK PLANS
------------------------------
The Company's  1985 stock option plan provided for the grant of incentive  stock
options to officers and key employees. The plan covers an aggregate of 1,500,000
shares of the Company's common stock (subject to adjustment in the case of stock
splits,  reverse stock splits,  stock  dividends,  etc.).  As of March 31, 2000,
there were 101,415 options outstanding and all are currently exercisable.  There
are no additional options available for future grant under the 1985 plan.

The Company's 1999 Omnibus Stock Plan also provides, among other things, for the
grant of  incentive  options to officers and key  employees.  The plan covers an
aggregate of 500,000 shares of the Company's common stock (subject to adjustment
in the case of stock splits, reverse stock splits, stock dividends, etc.). As of
March 31, 2000, there were 135,000 options  outstanding under this plan. None of
the 135,000 options  outstanding  under the 1999 stock option plan are currently
exercisable.


NOTE 3 - EARNINGS PER SHARE
---------------------------
The  following  table  represents  the  reconciliation  of  the  numerators  and
denominators of the Company's basic earnings per share and diluted  earnings per
share computations reported on the Consolidated Statements of Operations for the
three months ended March 31, 2000 and 1999:



                                       6
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000


                                                    Three Months Ended March 31
                                                    ---------------------------
                                                       2000             1999
                                                       ----             ----
Basic Earnings Per Share
------------------------
Net income numerator                                 $635,009        $2,031,762

Weighted average shares outstanding denominator     6,304,965         6,224,125

     Per share amount                                   $0.10             $0.33

Diluted Earnings Per Share
--------------------------
Net income numerator                                 $635,009        $2,031,762

Weighted average shares outstanding                 6,304,965         6,224,125
Effect of diluted securities                           43,828           129,654
                                                    ---------         ---------
Diluted shares outstanding denominator              6,348,793         6,353,779
                                                    ---------         ---------

     Per share amount                                   $0.10             $0.32


NOTE 4 - SEGMENT REPORTING
--------------------------
Statement of Financial Accounting Standards No. 131 (SFAS No. 131),  Disclosures
about Segments of an Enterprise and Related  Information,  became  effective for
fiscal  years  beginning  after  December  15,  1997.  SFAS No. 131  establishes
standards  for the way  information  about  operating  segments  is  reported in
financial  statements.  The Company has adopted SFAS No. 131 and has  identified
its insurance company operation, Crusader Insurance Company ("Crusader"), as its
primary  reporting   segment.   Revenues  from  this  segment  comprise  83%  of
consolidated  revenues.  The Company's remaining operations constitute a variety
of  specialty   insurance  services,   each  with  unique   characteristics  and
individually insignificant to consolidated revenues.

                                                    Three Months Ended March 31
                                                    ---------------------------
                                                       2000             1999
                                                       ----             ----
Revenues
--------
Insurance company operation                        $8,213,571        $8,907,313

Other insurance operations                          4,183,349         4,301,613
Intersegment elimination (1)                       (2,467,634)       (2,608,329)
                                                    ---------         ---------
   Total other insurance operations                 1,715,715         1,693,284
                                                    ---------         ---------

     Total Revenues                                $9,929,286        $10,600,597
                                                    =========         ==========

Income (Loss) Before Income Taxes
---------------------------------
Insurance company operation                          $750,517        $2,952,107
Other insurance operations                             77,798           (42,479)
                                                      -------         ---------
     Total Income Before Income Taxes                $828,315        $2,909,628
                                                      =======         =========

Assets
------
Insurance company operation                      $101,776,571      $105,239,708
Intersegment eliminations (2)                        (162,406)         (210,274)
                                                  -----------       -----------
     Total insurance company operation            101,614,165       105,029,434
Other insurance operations                         20,905,387        18,739,840
                                                  -----------       -----------
     Total Assets                                $122,519,552      $123,769,274
                                                  ===========       ===========

(1)  Intersegment  revenue  eliminations  reflect commission paid by Crusader to
     Unifax Insurance Systems, Inc., ("Unifax") a wholly owned subsidiary of the
     Company.
(2)  Intersegment  asset  eliminations  reflect  the  elimination  of   Crusader
     receivables and Unifax payables.


                                       7
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
 OF OPERATIONS
--------------

(a)  Liquidity and Capital Resources:
------------------------------------
Due to the nature of the Company's business  (insurance and insurance  services)
and whereas Company growth does not normally require  material  reinvestments of
profits into  property or equipment,  the cash flow  generated  from  operations
usually results in improved liquidity for the Company.

Crusader  generates a significant  amount of cash as a result of its holdings of
unearned  premium  reserves,  reserves  for loss  payments,  and its capital and
surplus.  Crusader's  loss and loss  adjustment  expense  payments  are the most
significant cash flow requirement of the Company. These payments are continually
monitored  and  projected to ensure that the Company has the  liquidity to cover
these payments  without the need to liquidate its  investments.  As of March 31,
2000, the Company had cash and cash  investments of  $104,288,800  (at amortized
cost) of which $95,385,768 (91%) were investments of Crusader.

As of the quarter ended March 31, 2000, the Company had invested $98,199,836 (at
amortized cost) or 94% of its invested assets in fixed maturity obligations.  In
accordance with Statement of Financial  Accounting  Standard No. 115, Accounting
for Certain  Investments in Debt and Equity Securities,  the Company is required
to classify  its  investments  in debt and equity  securities  into one of three
categories: held-to-maturity, available-for-sale or trading securities. Although
all of the  Company's  investments  are  classified as  available-for-sale,  the
Company's  investment  guidelines  place primary  emphasis on buying and holding
high-quality investments.

The Company's  investments  in fixed maturity  obligations  of  $98,199,836  (at
amortized cost) include  $26,229,224  (27%) of pre-refunded  state and municipal
tax-exempt bonds,  $10,041,191 (10%) of U.S.  treasury  securities,  $61,729,421
(63%) of  high-quality  industrial  and  miscellaneous  bonds,  and  $200,000 of
certificates  of deposit.  The tax-exempt  interest  income earned for the three
months ended March 31, 2000 and 1999 was $332,395 and $407,965, respectively.

The  balance  of  the  Company's   investments  are  in  equity  securities  and
high-quality,  short-term  investments  that include a U.S.  treasury bill, bank
money  market  accounts,   certificates  of  deposit,  commercial  paper  and  a
short-term treasury money market fund.

The  Company's  investment  policy  limits  investments  in any one  company  to
$2,000,000.  This limitation  excludes bond premiums paid in excess of par value
and  U.S.  government  or  U.S.  government  guaranteed  issues.  The  Company's
investment   guidelines  on  equity   securities  limit  investments  in  equity
securities  to  an  aggregate  maximum  of  $2,000,000.  All  of  the  Company's
investments  are  high-grade   investment  quality,   all  state  and  municipal
tax-exempt  fixed  maturity   investments  are  pre-refunded   issues,  and  all
certificates of deposits are FDIC insured.

On March 1, 2000,  the Board of Directors  declared a  fifteen-cent  ($0.15) per
share cash dividend  payable on May 19, 2000, to  shareholders  of record at the
close of business on April 28, 2000.

In April 2000, the Company  announced that its Board of Directors had authorized
the  repurchase  in the open market from time to time of up to an  aggregate  of
315,000  shares of the common  stock of the  Company.  It is  expected  that any
purchases will be funded from cash-on-hand and short-term investments.

Although  material capital  expenditures may also be funded through  borrowings,
the Company  believes that its cash and short-term  investments at year end, net
of trust restriction of $2,982,256,  statutory  deposits of $2,725,000,  and the
dividend  restriction  between  Crusader and Unico plus the cash to be generated
from operations,  should be sufficient to meet its operating requirements during
the next twelve months without the necessity of borrowing funds.

State of Washington Regulatory Proceeding
-----------------------------------------
In August 1999 the Insurance  Commissioner of the State of Washington  announced
that she would seek to impose a $307,000 fine,  seek repayment of policy service
fees to Washington policyholders including interest at the rate of 12% per annum
(estimated  to be  approximately  $780,000 plus interest to November 5, 2000, of
$360,000),  seek payment of all back premium  taxes owed on the subject  service
fees including appropriate penalties required for delinquent taxes (estimated to
be  approximately  $16,000  plus  penalties),  and  seek to  suspend  Crusader's
Certificate  of Authority to do business in the state of Washington for a period
of 120 days. The Insurance  Commissioner  alleges that a service fee of $250 per
policy,  which was  charged  by a  Washington  agent  after the  Company  became
admitted  in the state of  Washington,  is premium  and  subject to rate  filing
requirements  and  premium  taxes.  This  service  fee was first  charged by the
Washington  agent under his broker's license in 1992, when the Company began its
operation



                                       8
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
----------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------

in Washington as a non-admitted insurer. The Company believes that the nature of
the  service  fee did not change in 1995 when the  Company  became  admitted  in
Washington,  and believes  that the service fee continued to be a broker fee and
is not subject to rate filing requirements or premium taxes.

Crusader commenced pursuit of its legal remedies,  starting with a demand for an
administrative  hearing. That administrative  hearing ended on February 7, 2000.
On  May  5,  2000,  the  administrative  hearing  officer,  an  employee  of the
Washington  Commissioner's Office, rendered her decision against the Company and
ordered that all of the sanctions previously stated be imposed. The order states
that the  $307,000  fine be paid on or before  August 5, 2000;  that  refunds to
policyholders  be completed by November 5, 2000;  that all back premium taxes on
the subject  service fees be paid on or before May 5, 2001; and that  Crusader's
Certificate  of Authority to do business in the state of Washington be suspended
from May 20, 2000,  through September 17, 2000.  Premium written in the state of
Washington  in the  quarter  ended March 31,  2000,  was  $216,419.  The Company
continues to pursue its legal avenues of recourse,  the next steps being to seek
a stay of the enforcement of the  administrative  hearing officer's decision and
to seek an appeal in the superior court for the state of Washington. The Company
does not believe it has done  anything  improper  and does not believe  that the
outcome of this matter will have a materially  adverse  effect on its  financial
statements.  No  accruals  have  been  made in the  March  31,  2000,  financial
statements for the sanctions described above.

YEAR 2000
---------
Subsequent to December 31, 1999, the Company has not experienced adverse effects
as a result of Year 2000  issues  from  either  internal  or  external  sources.
However,  due to the  unusual  nature  of the  problem  and  lack of  historical
experience  with Year 2000 issues,  it is difficult to predict with certainty if
there  may be other  computer  or  infrastructure  problems  which may occur and
affect the Company and its customers or suppliers.

Due to the fact that the Company has not experienced any adverse effects of Year
2000 issues through the date of this report,  the Company does not anticipate it
will be  adversely  materially  affected by any future Year 2000 events from its
internal  operations or from others with whom the Company directly or indirectly
does business.

There are no material  commitments  for capital  expenditures  as of the date of
this report.

(b)  Results of Operations:
--------------------------
All  comparisons  made in this  discussion are comparing the quarter ended March
31, 2000, to the quarter ended March 31, 1999, unless otherwise indicated.

The  Company's  net income  for the  quarter  ended  March 31,  2000,  decreased
$1,396,753 (69%) to $635,009  compared to $2,031,762 for the quarter ended March
31, 1999. Revenues for the quarter ended March 31, 2000, decreased $671,311 (6%)
to $9,929,286, compared to $10,600,597 for the quarter ended March 31, 1999.

Premium earned before reinsurance  decreased $791,772 (9%) to $8,116,552 for the
quarter ended March 31, 2000, compared to $8,908,324 for the quarter ended March
31, 1999.  Intense price  competition  continues to adversely affect the premium
written and earned in nearly all states that the Company does business. Although
the Company  attempts to be competitive on price,  it believes that  maintaining
adequate  rates and a favorable  loss ratio is a better  business  strategy than
increasing  premium  writings at inadequate  rates. The Company cannot determine
how long this "soft market" condition will continue.

Premium ceded  decreased  $77,290 (5%) to $1,339,506 for the quarter ended March
31, 2000,  compared to the quarter ended March 31, 1999. Although earned premium
ceded  decreased,  the ratio of earned premium ceded to earned premium  remained
approximately 16%. Earned premium ceded consists of both premium ceded under the
Company's  current  reinsurance  contracts  and premium  ceded to the  Company's
provisionally rated reinsurance contract.  Premium ceded under the provisionally
rated  contract,  which was  canceled on a runoff basis  effective  December 31,
1997, is subject to adjustment based on the amount of losses ceded, limited by a
maximum  percentage that can be charged by the reinsurer.  The change in premium
ceded between the quarters is as follows:

 Decrease in ceded premium ceded under current reinsurance contracts    $152,704
 Increase in provisionally rated premium ceded                            75,414
                                                                          ------
       Net decrease in premium ceded                                     $77,290
                                                                          ======




                                       9
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
-------------------------

Premium written before reinsurance decreased $454,684 (5%) to $8,271,213 for the
quarter ended March 31, 2000, compared to the three months ended March 31, 1999.
The decrease in written  premium in California  accounted for $355,243  (78%) of
this decrease. Crusader's written premium by state is as follows:

                            Three Months Ended March 31
                            ---------------------------                Increase
 State                      2000                  1999                (Decrease)
 -----                      ----                  ----                ----------

California               $7,051,421            $7,406,664             $(355,243)
Arizona                     360,498               270,517                89,981
Pennsylvania                217,153               282,302               (65,149)
Washington                  216,419               263,878               (47,459)
Oregon                      149,629               220,824               (71,195)
Ohio                        116,146               120,570                (4,424)
Montana                      81,222                87,032                (5,810)
Texas                        49,065                58,846                (9,781)
Nevada                       22,573                 1,141                21,432
Kentucky                      7,087                14,123                (7,036)
                          ---------            ----------               --------
   Total                 $8,271,213            $8,725,897             $(454,684)
                          =========             =========               ========

Investment income,  excluding realized investment losses, increased $42,898 (3%)
to $1,524,157  for the quarter ended March 31, 2000,  compared to $1,481,259 for
the quarter ended March 31, 1999.  Although average fixed maturity (at amortized
value) and short-term  investments  increased less than one percent,  the mix of
the  taxable and  tax-exempt  fixed  maturity  investments  changed.  Tax exempt
securities,  which  generally  carry  a lower  yield  than  taxable  securities,
decreased to $26,229,224 (27% of fixed  maturities) at March 31, 2000,  compared
to $33,486,161 (34% of fixed maturities) as of March 31,1999.

Commission  and fee income  increased  $21,931 (2%) to $1,414,352  for the three
months ended March 31, 2000,  compared to the three months ended March 31, 1999.
This increase consisted of the following:

Health and life insurance program                                       $45,564
Other commission and fee income                                           7,046
Service fee income                                                        4,379
Daily automobile rental insurance progr                                  (4,575)
Workers' compensation program                                           (30,483)
                                                                         -------
   Net increase in commission and fee income                            $21,931
                                                                         ======

Losses and loss adjustment expenses were $4,950,539 or 73% of net premium earned
for the quarter  ended March 31,  2000,  compared  to  $3,379,802  or 45% of net
premium earned for the quarter ended March 31, 1999. This increase was primarily
due to an  increase  in  reserves  for  losses of prior  years of  approximately
$503,000 (adverse  development) in the quarter ended March 31, 2000, compared to
a reduction of  approximately  $1,482,000  in reserves for losses of prior years
(favorable  development) in the quarter ended March 31, 1999 - a total change of
$1,985,000.

Although  the  methodology  used by the  Company  in  determining  case and IBNR
reserves  during the quarter  ended March 31,  2000,  is  consistent  with prior
years, the Company is not reflecting favorable development as it did in previous
years due to uncertainty  resulting from various  settlements and/or verdicts in
excess of reserves  which  occurred  during 1999 and the quarter ended March 31,
2000.

Policy acquisition costs consist of commissions, premium taxes, inspection fees,
and  certain  other  underwriting  costs,  which  are  directly  related  to the
production  of Crusader  insurance  policies.  These costs include both Crusader
expenses  and  allocated  expenses  of  other  Unico  subsidiaries.   Crusader's
reinsurers pay Crusader a ceding commission,  which is primarily a reimbursement
of the acquisition cost related to the ceded premium.  Policy acquisition costs,
net of ceding commission, are deferred and amortized as the related premiums are
earned.  These costs were 31% of net premium  earned for the quarter ended March
31, 2000, compared to 30% for the quarter ended March 31, 1999.



                                       10
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
-------------------------

Salaries and employee  benefits  decreased  $34,261 (3%) to  $1,081,561  for the
quarter ended March 31, 2000, compared to $1,115,822 for the quarter ended March
31, 1999.

Commissions to agents/brokers  increased $15,126 (5%) to $333,128 in the quarter
ended March 31, 2000, compared to the quarter ended March 31, 1999.

Other operating  expenses  decreased $27,460 (4%) during the quarter ended March
31, 2000, compared to the quarter ended March 31, 1999.

Income tax  provision  decreased  to 23% of income  before  taxes in the quarter
ended March 31, 2000,  compared to 30% in the quarter ended March 31, 1999. This
change was primarily due to tax-exempt  interest  income which  comprised 40% of
income before taxes in the quarter ended March 31, 2000,  compared to 14% in the
quarter ended March 31, 1999.

The effect of  inflation  on net income of the Company  during the three  months
ended March 31, 2000, and 1999 was not significant.

Forward looking statements
--------------------------
Certain   statements   contained   herein,   including   the  section   entitled
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"   that  are  not  historical  facts  are  forward  looking.   These
statements,  which may be identified by forward-looking words or phrases such as
"anticipate,"  "believe,"  "expect,"  "intend,"  "may,"  "should,"  and "would,"
involve  risks and  uncertainties,  many of which are beyond the  control of the
Company.  Such risks and  uncertainties  could  cause  actual  results to differ
materially  from these  forward-looking  statements.  Factors  which could cause
actual results to differ  materially  include premium rate adequacy  relating to
competition or regulation, actual versus estimated claim experience,  regulatory
changes or developments,  unforeseen calamities,  general market conditions, the
Company's  ability to  introduce  new  profitable  products,  and the  Company's
ability to expand geographically.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------
The  Company's  consolidated  balance  sheet  includes a  substantial  amount of
invested  assets whose fair values are subject to various  market risk exposures
including interest rate risk and equity price risk.

The Company's invested assets consist of the following:

                                                    March 31        December 31
                                                      2000              1999
                                                   ----------       -----------
Fixed maturity bonds (at amortized value)         $97,999,836       $98,942,275
Short-term cash investments (at cost)               5,691,832         5,968,173
Equity securities (at cost)                           164,170           164,170
Certificates of deposit (over 1 year, at cost)        200,000           200,000
                                                  -----------       -----------
     Total invested assets                       $104,055,838      $105,274,618
                                                  ===========       ===========

There have been no material changes in the composition of the Company's invested
assets or market risk exposures since the end of the preceding fiscal year end.



                                       11
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 2 - CHANGES IN SECURITIES
------------------------------
(c)   None


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
(a)   Exhibits:

      Exhibit 10.1 - Employment  Agreement between the Company and Roger Platten
                     dated November 27, 1996.

      Exhibit 10.2 - Employment  Agreement between the Company and  Cary Cheldin
                     dated November 27, 1996

      Exhibit 10.3 - Amendment to Employment Agreement between the Compamy and
                     Cary Cheldin dated January 10, 2000.

      Exhibit 27 - Financial Data Schedule


(b)   Reports on Form 8-K:
      None





                                   SIGNATURES

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

                         UNICO AMERICAN CORPORATION



Date: May 12, 2000       By: /s/  ERWIN CHELDIN
                             ------------------
                             Erwin Cheldin
                             Chairman of the Board, President and Chief
                             Executive Officer, (Principal Executive Officer)


Date: May 12, 2000       By: /s/  LESTER A. AARON
                             --------------------
                             Lester A. Aaron
                             Treasurer, Chief Financial Officer, (Principal
                             Accounting and Principal Financial Officer)




                                       12
<PAGE>