SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q


(Mark One)

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

     For the quarterly period from April 1, 1999 to June 30, 1999 or

( )  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Ace of 1934

     For the transition period from __________to__________


                         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

                                     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

                                    6,304,953
       Number of shares of common stock outstanding as of August 10, 1999


                                       1
<PAGE>



                         PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                   UNICO AMERICAN CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                             June 30              December 31
                                                                                               1999                   1998
                                                                                               ----                   ----
                                                           ASSETS
                                                           ------
Investments
   Available for sale:
<S>                                                                                        <C>                    <C>
      Fixed maturities, at market value (amortized cost:  June 30,
         1999  $97,727,132;  December 31, 1998  $96,358,812)                                $97,802,573            $99,472,720

      Equity securities at market (cost: June 30, 1999
         $164,170;  December 31, 1998  $503,503)                                               118,500                481,500
   Short-term investments, at cost                                                           7,447,939              6,573,862
                                                                                           -----------            -----------
      Total Investments                                                                    105,369,012            106,528,082
Cash                                                                                            99,006                277,544
Accrued investment income                                                                    2,006,990              2,022,197
Premiums and notes receivable, net                                                           5,925,318              5,922,716
Reinsurance recoverable:
   Paid losses and loss adjustment expenses                                                    150,154                146,205

   Unpaid losses and loss adjustment expenses                                                2,344,516              1,139,713
Prepaid reinsurance premiums                                                                    26,740                 19,452
Deferred policy acquisition costs                                                            4,537,635              4,665,772
Property and equipment (net of accumulated depreciation)                                       175,910                205,369
Deferred income taxes                                                                          843,704                208,976

Other assets                                                                                   359,162                581,617
                                                                                           -----------            -----------
     Total Assets                                                                         $121,838,147           $121,717,643
                                                                                           ===========            ===========

                                            LIABILITIES AND STOCKHOLDERS' EQUITY
                                            ------------------------------------
LIABILITIES
-----------
Unpaid losses and loss adjustment expenses                                                 $39,409,888            $41,513,945
Unearned premiums                                                                           17,680,242             18,136,895
Advance premium and premium deposits                                                         2,486,461              2,329,356
Accrued expenses and other liabilities                                                       6,402,784              5,418,459
Income taxes payable                                                                                 -                150,906
Dividends payable                                                                            1,576,238                      -
                                                                                            ----------             ----------
    Total Liabilities                                                                      $67,555,613            $67,549,561
                                                                                            ----------             ----------

STOCKHOLDERS'  EQUITY
---------------------
Common stock,  no par - authorized  10,000,000  shares;  issued and  outstanding
   shares 6,304,953 at June 30, 1999, and 6,223,424 at
   at December 31, 1998                                                                      $3,098,389            $2,895,702
Accumulated other comprehensive income                                                           19,649             1,998,536
Retained earnings                                                                            51,164,496            49,273,844
                                                                                             ----------            ----------
  Total Stockholders' Equity                                                                $54,282,534           $54,168,082
                                                                                             ----------            ----------

  Total Liabilities and Stockholders' Equity                                               $121,838,147          $121,717,643
                                                                                            ===========           ===========

</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                        Six Months Ended
                                                                         June 30                                  June 30
                                                                         -------                                  -------
                                                                  1999              1998                   1999             1998
                                                                  ----              ----                   ----             ----

REVENUES
--------
Insurance Company Revenues
<S>                                                           <C>               <C>                  <C>                <C>
     Premium earned                                           $8,741,566        $10,415,497          $17,649,890        $20,970,307
     Premium ceded                                             1,799,361          1,600,108            3,216,157          2,771,136
                                                               ---------       ------------            ---------        -----------
          Net premium earned                                   6,942,205          8,815,389           14,433,733         18,199,171
     Net investment income                                     1,401,370          1,350,677            2,817,780          2,660,462
     Net realized investment gains                                59,785             16,230               59,160             16,230
     Other income                                                    372                105                  372              1,063
                                                               ---------         ----------           ----------         ----------
          Total Insurance Company Revenues                     8,403,732         10,182,401           17,311,045         20,876,926

Other Revenues from Insurance Operations
     Gross commissions and fees                                1,380,282          1,316,134            2,772,703          2,785,379
     Investment income                                            74,361             54,520              139,210            103,613
     Finance charges and late fees earned                        227,977            254,765              460,867            517,918
     Other income                                                  5,515              3,601                8,639              5,129
                                                              ----------         ----------           ----------         ----------
          Total Revenues                                      10,091,867         11,811,421           20,692,464         24,288,965
                                                              ----------         ----------           ----------         ----------

EXPENSES
--------
Losses and loss adjustment expenses                            4,098,349          4,394,980            7,478,151          9,194,681
Policy acquisition costs                                       2,056,422          2,396,532            4,273,913          5,025,638
Salaries and employee benefits                                 1,022,049            992,116            2,137,871          2,041,737
Commissions to agents/brokers                                    322,645            235,611              640,647            480,538
Other operating expenses                                         619,024            501,145            1,278,876          1,129,871
                                                               ---------          ---------           ----------         ----------
     Total Expenses                                            8,118,489          8,520,384           15,809,458         17,872,465
                                                               ---------          ---------           ----------         ----------

     Income Before Taxes                                       1,973,378          3,291,037            4,883,006          6,416,500
Income Tax Provision                                             538,250          1,106,927            1,416,116          2,068,680
                                                               ---------          ---------            ---------          ---------
     Net Income                                               $1,435,128         $2,184,110           $3,466,890         $4,347,820
                                                               =========          =========            =========          =========



PER SHARE DATA
Basic Shares Outstanding                                       6,238,243          6,179,592           6,231,184          6,167,441
Basic Earnings Per Share                                           $0.23              $0.35               $0.56              $0.70
Diluted Shares Outstanding                                     6,355,999          6,440,927           6,354,889          6,432,800
Diluted Earnings Per Share                                         $0.23              $0.34               $0.55              $0.68

</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                    Six Months Ended
                                                                         June 30                               June 30
                                                                         -------                               -------
                                                                 1999               1998                1999              1998
                                                                 ----               ----                ----              ----

<S>                                                           <C>                <C>                 <C>                <C>
Net income                                                    $1,435,128         $2,184,110          $3,466,890         $4,347,820
Other changes in comprehensive income
   net of tax:
     Unrealized gains (losses) on securities
        classified as available-for-sale arising
        during the period                                       (967,094)           150,256          (1,958,790)            74,019
     Less: reclassification adjustment for
        gains (losses) included in net income                   (106,432)            10,712             (20,097)            10,712
                                                                 -------          ---------           ---------          ---------
            Comprehensive Income                                $361,602         $2,345,078          $1,488,003         $4,432,551
                                                                 =======          =========           =========          =========


</TABLE>


            See notes to unaudited consolidated financial statements


                                       4
<PAGE>


                   UNICO AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                        FOR THE SIX MONTHS ENDED JUNE 30,

                                                                                            1999                 1998
                                                                                            ----                 ----
<S>                                                                                     <C>                  <C>
Cash Flows from Operating Activities:
   Net Income                                                                           $3,466,890           $4,347,820
   Adjustments to reconcile net income to net cash from operations
      Depreciation and amortization                                                         37,524               49,396
      Bond amortization, net                                                               366,442              324,269
      Net realized (gain) on sale of securities                                            (59,160)             (16,230)
   Changes in assets and liabilities
      Premium, notes and investment income receivable                                       12,605            1,230,779
      Reinsurance recoverable                                                           (1,208,752)            (554,729)
      Prepaid reinsurance premiums                                                          (7,288)             923,374
      Deferred policy acquisitions costs                                                   128,137             (192,580)
      Other assets                                                                         222,454              315,144
      Reserve for unpaid losses and loss adjustment expenses                            (2,104,057)             665,448
      Unearned premium reserve                                                            (456,653)          (1,417,053)
      Funds held as security and advanced premiums                                         157,105              (70,724)
      Accrued expenses and other liabilities                                             1,001,561            1,511,008
      Income taxes current/deferred                                                        280,379              570,933
                                                                                         ---------            ---------
          Net Cash Provided from Operations                                              1,837,187            7,686,855
                                                                                         ---------            ---------

Investing Activities
     Purchase of fixed maturity investments                                             (8,036,900)         (14,376,864)
     Proceeds from maturity of fixed maturity investments                                6,285,500            6,774,600
     Purchase of equity securities - cost                                               (3,243,078)                   -
     Proceeds from sale of equity securities                                             3,641,571              246,690
     Net (decrease) in short-term investments                                             (857,440)            (200,749)
     Additions to property and equipment                                                    (8,065)             (51,803)
                                                                                         ---------            ---------
          Net Cash (Used) by Investing Activities                                       (2,218,412)          (7,608,126)
                                                                                         ---------            ---------

Financing Activities
     Proceeds from issuance of common stock                                                202,687               48,894
                                                                                           -------               ------
          Net Cash Provided  by Financing Activities                                       202,687               48,894
                                                                                           -------               ------

Net increase (decrease) in cash                                                           (178,538)             127,623
Cash at beginning of period                                                                277,544               55,768
                                                                                           -------             --------
          Cash at End of Period                                                            $99,006             $183,391
                                                                                            ======              =======

Supplemental Cash Flow Information Cash paid during the period for:
          Interest                                                                          $1,341                 $121
          Income taxes                                                                  $1,175,000           $1,448,336


</TABLE>


            See notes to unaudited consolidated financial statements


                                       5
<PAGE>


                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1999



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 and six months  ended June 30, 1999,  are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
1999.  Quarterly  financial  statements  should be read in conjunction  with the
financial  statements  and related notes in the Company's  1998 Annual Report on
Form 10-K as filed with the Securities and Exchange Commission.

Recently Issued Accounting Standards
------------------------------------
Statement  of  Position  98-1 (SOP 98-1),  Accounting  for the Costs of Computer
Software  Developed  or Obtained for Internal  Use, is effective  for  financial
statements  beginning  after  December 15, 1998.  SOP 98-1 requires that certain
costs of  internally  developed  software  be  capitalized.  There were no costs
incurred for software  purchase or development in the three and six months ended
June 30, 1999, which were required to be capitalized.

Statement  of  Position  97-3 (SOP  97-3),  Accounting  by  Insurance  and Other
Enterprises  for  Insurance  Related  Assessments,  is effective  for  financial
statements  beginning  after December 15, 1998. SOP 97-3 requires that liability
for insurance related  assessments be recognized when an assessment is probable,
the event  obligating  the  assessment  has occurred and the  assessment  can be
reasonably  estimated.  The  adoption  has no material  effect on the  financial
statements.


NOTE 2 - INCENTIVE STOCK OPTION PLAN
------------------------------------
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 June
30, 1999,  101,415 options were  outstanding and all are currently  exercisable.
During the quarter ended June 30, 1999, options on 91,831 shares of common stock
were exercised. There are no additional options available for future grant under
the 1985 plan.



                                       6
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1999


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 June 30, 1999 and 1998, and for the six months ended June 30,
1999 and 1998:
<TABLE>
<CAPTION>
                                                                Three Months Ended                    Six Months Ended
                                                                     June 30                               June 30
                                                                     -------                               -------
                                                               1999             1998                 1999             1998
                                                               ----             ----                 ----             ----
Basic Earnings Per Share
------------------------
<S>                                                         <C>              <C>                  <C>              <C>
Net income numerator                                        $1,435,128       $2,184,110           $3,466,890       $4,347,820
                                                             =========        =========            =========        =========
Weighted average shares outstanding
     denominator                                             6,238,243        6,179,592            6,231,184        6,167,441
                                                             =========        =========            =========        =========

     Basic Earnings Per Share                                    $0.23            $0.35                $0.56            $0.70


Diluted Earnings Per Share
--------------------------
Net income numerator                                        $1,435,128       $2,184,110          $3,466,890        $4,347,820
                                                             =========        =========           =========         =========

Weighted average shares outstanding                          6,238,243        6,179,592           6,231,184         6,167,441
Effect of diluted securities                                   117,756          261,335             123,705           265,359
                                                             ---------        ---------           ---------         ---------
Diluted shares outstanding denominator                       6,355,999        6,440,927           6,354,889         6,432,800
                                                             =========        =========           =========         =========

     Diluted Earnings Per Share                                  $0.23            $0.34               $0.55             $0.68

</TABLE>

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  effective  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  84%  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.

<TABLE>
<CAPTION>
                                                              Three Months Ended                      Six Months Ended
                                                                    June 30                                June 30
                                                                    -------                                -------
                                                              1999             1998                 1999             1998
                                                              ----             ----                 ----             ----
Revenues
--------
<S>                                                        <C>             <C>                   <C>             <C>
Insurance company operation                                $8,403,732      $10,182,401           $17,311,045     $20,876,926

Other insurance operations                                  4,218,632        4,388,633             8,520,245       9,254,006
Intersegment elimination (1)                               (2,530,497       (2,759,613)           (5,138,826)     (5,841,967)
                                                            ---------        ----------            ----------      ----------
   Total other insurance operations                         1,688,135        1,629,020             3,381,419       3,412,039
                                                            ---------        ---------             ---------       ---------

     Total Revenues                                       $10,091,867      $11,811,421           $20,692,464     $24,288,965
                                                           ==========       ==========            ==========      ==========

Income (Loss) Before Income Taxes
---------------------------------
Insurance company operation                                $1,778,058       $2,841,095            $4,730,165      $5,609,637
Other insurance operations                                    195,320          449,942               152,841         806,863
                                                           ----------       ----------            ----------      ----------
   Total Income Before Income Taxes                        $1,973,378       $3,291,037            $4,883,006      $6,416,500
                                                            =========        =========             =========       =========
</TABLE>
                                       7
<PAGE>


                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1999


NOTE 4 - SEGMENT REPORTING (continued)
-------------------------------------
<TABLE>
<CAPTION>

                                                                Three Months Ended                      Six Months Ended
                                                                     June 30                                June 30
                                                                     -------                                -------
                                                              1999               1998               1999               1998
                                                              ----               ----               ----               ----
Assets
------
<S>                                                      <C>                <C>                 <C>               <C>
Insurance company operation                              $102,617,974       $100,844,256        $102,617,974      $100,844,256
Intersegment eliminations (2)                                (411,462)          (452,062)           (411,462)         (452,062)
                                                          -----------        -----------         -----------       -----------
     Total insurance company operation                    102,206,512        100,392,194         102,206,512       100,392,194


Other insurance operations                                 19,631,635         18,739,840          19,631,635        18,739,840
                                                           ----------         ----------          ----------        ----------

     Total Assets                                        $121,838,147       $119,132,034        $121,838,147      $119,132,034
                                                          ===========        ===========         ===========       ===========

</TABLE>

(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.




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 June 30,
1999, the Company had cash and investments of  $105,438,247  (at amortized cost)
of which $97,677,727 (93%) were investments of Crusader.

As of the quarter ended June 30, 1999, the Company had invested  $97,727,132 (at
amortized cost) or 93% 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  $97,727,132  (at
amortized cost) include  $28,573,601  (29%) of pre-refunded  state and municipal
tax exempt bonds, $8,584,553 (9%) of U.S. treasury securities, $60,368,978 (62%)
of high-quality industrial and miscellaneous bonds, and $200,000 of certificates
of deposit.  The tax exempt  interest income earned for the three and six months
ended June 30, 1999,  was $370,326 and  $778,291,  respectively.  The tax exempt
interest  income  earned for the three and six months ended June 30,  1998,  was
$419,206 and $865,953, 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.

                                       8
<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------
The  Company's  investment  policy  limits  investments  in any  one  issuer  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 also
limits its  holdings of equity  securities  to no greater  than five  percent of
stockholders' equity. 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 12, 1999, the Board of Directors  declared a twenty-five  cents ($0.25)
per share cash dividend  payable on July 15, 1999, to  shareholders of record at
the close of business on July 1, 1999.

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 $3,030,640,  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  suspend  Crusader's  Certificate  of  Authority  to do
business in the State of Washington for a period of 120 days,  impose a $307,000
fine, and seek repayment of policy service fees to Washington policyholders. The
Insurance  Commissioner alleges that a service fee of $250 per policy, which was
charged  by  a  Washington   agent,  is  premium  and  subject  to  rate  filing
requirements  and  premium  taxes.  The  Company  does not  believe  it has done
anything  improper and intends to defend  vigorously  these charges and does not
believe that the outcome of this matter will have a material  adverse  effect on
its financial statements. The foregoing statement is a forward looking statement
which  involves  risks and  uncertainties  and actual  results may differ if, in
fact,  the  Insurance   Commissioner  would  prevail  on  all  requests  at  the
administrative  hearing and the  administrative  judge's decision were upheld in
the court proceedings following such a decision.

Year 2000
---------
The  Company  initiated  a review of all  computer  programs  to ensure that all
computer  systems will function  properly with respect to dates in the year 2000
and  thereafter.  The Year 2000 issue is the result of computer  programs  being
written  utilizing  two digits  rather  than four  digits to define a year.  Any
computer programs which have date sensitive  software utilizing a two digit year
would  recognize a year of "00" as 1900 rather than 2000. This could result in a
system failure or miscalculations causing disruptions of operations,  including,
among  other  things,  a  temporary  inability  to  process  transactions,  send
invoices,  or engage in similar  activities.  The Company has  assessed its Year
2000 issues and has made and tested the necessary  modifications to its computer
system.  The project to review and correct all programs was completed and tested
at December 31, 1998, prior to any anticipated  impact on its operating systems.
The cost of the project has been charged to current  operations  as incurred and
did not have a  material  effect  on the  Company's  results  of  operations  or
financial position.

Crusader  anticipates  that any claims from its  policyholders  due to Year 2000
events will not be material.  Any business  interruption  losses  resulting from
Year 2000 events,  which Crusader  policyholders may incur, would not be covered
unless such events also caused physical damage to the insured's property,  which
the Company believes is not a material exposure.

The Company does business with thousands of licensed agents and brokers and does
not  anticipate  it would be materially  adversely  affected if some of them are
temporarily  unable to  function  due to Year 2000  problems.  The  Company  has
requested and received information from its bank and reinsurers as to their Year
2000 readiness.  Based on the information received to date, the Company believes
that it will not be materially adversely affected by its bank or its reinsurers.
Due to the nature of the Company's business, it is not dependent on any specific
suppliers and, therefore, does not expect to be adversely materially affected by
them.

                                       9
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------
Due to the unusual nature of the problem and lack of historical  experience with
Year 2000 issues,  it is difficult  to predict with  certainty  what will happen
after  December 31, 1999.  As stated above,  the Company does not  anticipate it
will be  adversely  materially  affected by Year 2000  events from its  internal
operations  or from  others with whom the Company  directly or  indirectly  does
business.  However, other events such as general public infrastructure  failures
may adversely  materially  affect the Company's  ability to operate  during such
failures. The Company has no formal contingency plans for Year 2000.

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 three and six months
ended June 30, 1999,  to the three and six months  ended June 30,  1998,  unless
otherwise indicated.

The Company's net income  decreased  $748,982  (34%) to $1,435,128 for the three
months and $880,930  (20%) to $3,466,890 for the six months ended June 30, 1999,
compared to net income of $2,184,110 for the three months and $4,347,820 for the
six months ended June 30, 1998.  Total revenues  decreased  $1,719,554 (15%) for
the three  months and  $3,596,501  (15%) for the six months ended June 30, 1999,
when compared to the three and six months ended June 30, 1998.

Premium earned before reinsurance  decreased  $1,673,931 (16%) to $8,741,566 for
the three months and $3,320,417  (16%) to  $17,649,890  for the six months ended
June 30,  1999,  compared to the three and six months  ended June 30,  1998.  In
1998, the Company changed its marketing strategy in the states of Washington and
Oregon by discontinuing marketing through an exclusive agent in those states and
commenced  marketing  directly  to all retail  agents and  brokers.  The Company
anticipates that the long-term results of this change will be increased revenues
with reduced  acquisition expense and less dependence on any one large producer.
In addition,  intense price competition  adversely  affected the premium written
and  earned in all  states in which 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  increased  $199,253  (12%) to $1,799,361 for the three months and
$445,021 (16%) to $3,216,157 for the six months ended June 30, 1999, compared to
the three and six months ended June 30, 1998.  Ceded  premiums  increased due to
higher than  anticipated  loss experience on the Company's  provisionally  rated
reinsurance contract. Premium ceded under this contract, which was canceled on a
run off 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 is as follows:

<TABLE>
<CAPTION>

                                                                               Three months       Six months
                                                                                  ended             ended
                                                                              June 30, 1999     June 30, 1999
                                                                              -------------     -------------
       <S>                                                                      <C>               <C>
      (Decrease) in ceded premium (excluding provisionally
        rated premium ceded)                                                    $(170,194)        $(354,899)
      Increase in provisionally  rated  premium ceded                             369,447           799,920
                                                                                  -------           -------
       Net increase in ceded premium                                             $199,253          $445,021
                                                                                  =======           =======

</TABLE>

Premium written before reinsurance decreased $772,169 (8%) to $8,467,342 for the
three months and decreased  $2,360,015  (12%) to $17,193,239  for the six months
ended June 30,  1999,  compared to the three and six months ended June 30, 1998.
The decrease in written premium in Oregon and Washington  accounted for $204,819
(27%) of this  decrease  in the three  months  and  $1,576,596  (67%) in the six
months ended June 30, 1999.


                                       10
<PAGE>

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

Crusader's written premium by state is as follows:

<TABLE>
<CAPTION>
                                  Three Months Ended June 30                            Six Months Ended June 30
                                  --------------------------                            ------------------------
                               1999            1998         Increase              1999             1998         Increase
                               ----            ----        (Decrease)             ----             ----        (Decrease)
                                                            --------                                            --------

<S>                        <C>             <C>             <C>               <C>              <C>             <C>
 California                $7,385,752      $8,158,226      $(772,474)        $14,792,416      $16,045,754     $(1,253,338)
 Arizona                      290,930         323,565        (32,635)            561,447          682,255        (120,808)
 Washington                   197,462         279,548        (82,086)            461,340        1,451,880        (990,540)
 Oregon                       168,803         291,536       (122,733)            389,627          975,683        (586,056)
 Montana                      130,659               0        130,659             217,691                0         217,691
 Pennsylvania                 128,164          62,178         65,986             410,466          144,655         265,811
 Ohio                         126,479         115,059         11,420             247,049          228,455          18,594
 Texas                         16,889               0         16,889              75,735                0          75,735
 Kentucky                      13,893           5,578          8,315              28,016            5,578          22,438
 Nevada                         8,311           3,821          4,490               9,452           18,994          (9,542)
                            ---------       ---------        -------          ----------       ----------       ----------
      Total                $8,467,342      $9,239,511      $(772,169)        $17,193,239      $19,553,254     $(2,360,015)
                            =========       =========        ========         ==========       ==========       ==========
</TABLE>

Net investment income,  excluding realized  investment gains,  increased $70,534
(5%) to $1,475,731  for the three months and $192,915 (7%) to $2,956,990 for the
six months ended June 30, 1999,  compared to investment income of $1,405,197 for
the three months and  $2,764,075  for the six months  ended June 30, 1998.  This
increase  was  primarily  due to a 9% increase (at  amortized  cost) in invested
assets.

Gross  commission  and fee income  increased  $64,148 (5%) to $1,380,282 for the
three months and decreased $12,676 (0.5%) to $2,772,203 for the six months ended
June 30, 1999,  compared to the three and six months  ended June 30,  1998.  The
increase for the three  months and decrease for the six months  consisted of the
following:
<TABLE>
<CAPTION>
                                                                             Three months ended         Six months ended
                                                                                June 30, 1999             June 30, 1999
                                                                                -------------             -------------
     <S>                                                                          <C>                       <C>
     Health and life insurance program                                            $127,770                  $232,151

     Daily automobile rental insurance program                                       8,404                    21,272
     Commercial automobile insurance program                                          (599)                    4,144
     Workers' compensation program                                                 (13,063)                  (99,154)
     Service fee income                                                            (58,364)                 (171,089)
                                                                                    ------                   -------
     Net increase (decrease) in commission and fee income                          $64,148                  $(12,676)
                                                                                    ======                   ========
</TABLE>

Health and life  insurance  commission and fee income  increased  primarily as a
result of an increase in the sales of small  business  group  accounts for CIGNA
and an increase in the number of small business group accounts  administered  by
the Company for CIGNA.

The decrease in service fee income is  primarily  related to the decrease in the
number of policies written by Unifax for Crusader.

Losses and loss adjustment expenses were 59% of net premium earned for the three
months and 52% for the six months  ended June 30,  1999,  compared to 50% of net
premium  earned for the three  months and 51% for the six months  ended June 30,
1998. The increased loss ratio in the quarter ended June 30, 1999,  occurred due
to  reduced  favorable  development  of  prior  period  reserves  on  Crusader's
commercial  multiple peril line of business.  The reduced favorable  development
resulted from higher prior period losses  incurred in the quarter ended June 30,
1999, than had been experienced in the comparable 1998 period.

Policy acquisition costs consist of commissions, premium taxes, inspection fees,
and certain  other  underwriting  costs which are 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 30% of net premium earned for the three months and 30%
of net premium earned for the six months ended June 30, 1999, compared to 27% of
net premium  earned for the three  months and 28% of net premium  earned for six
months ended June 30, 1998.

                                       11
<PAGE>

ITEM 2-MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
-------------------------
Salaries and employee  benefits  increased  $29,933 (3%) to  $1,022,049  for the
three months and increased  $96,134 (5%) to $2,137,871  for the six months ended
June 30,  1999,  compared to salary and  employee  benefits of $992,116  for the
three months and $2,041,737 for the six months ended June 30, 1998.

Commissions to agents/brokers  increased $87,034 (37%) to $322,645 for the three
months and  increased  $160,109  (33%) to $640,647 for the six months ended June
30, 1999, compared to the three and six months ended June 30, 1998. The increase
is primarily due to related  increases in revenue in the health and life program
and the daily automobile rental program.

Other  operating  expenses  increased  $117,879  (24%) for the three  months and
$149,005 (13%) for the six months ended June 30, 1999, compared to the three and
six months ended June 30, 1998. This increase was primarily due to the fact that
the June 30, 1998, quarter included a $255,000 interest expense credit resulting
from a settlement  of federal  income tax issues which were under  appeal.  This
amount was offset in that quarter by insurance  department  examination  fees of
$87,477  which  consisted  primarily  of  cost  related  to  Crusader's  regular
tri-annual examination.

The effect of  inflation  on net income of the Company  during the three and six
months ended June 30, 1999, and 1998 was not significant.

Forward Looking Statements
--------------------------
Information contained in this discussion, other than historical information, are
considered  "forward  looking  statements" and may be subject to change based on
various important factors and  uncertainties.  Some, but not all, of the factors
and  uncertainties  that may cause actual results to differ  significantly  from
those expected in any forward looking  statements are disclosed in the Company's
1998 Form 10-K as filed with the  Securities and Exchange  Commission.  Further,
the statements herein concerning the effects of the Company's stated expectation
as to the long-term  results of marketing in the states of Washington and Oregon
directly to retail agents and brokers  rather than through the Company's  former
general  agent  are  forward   looking   statements   which  involve  risks  and
uncertainties  that could cause actual results to differ  materially  from these
forward looking statements. With respect to the statement concerning the effects
of the change in marketing in the states of Washington and Oregon, factors which
would  cause the  actual  results to differ  materially  include  the  Company's
ability to effectively  market to retail agents and brokers in those states, the
willingness  of the retail  agents and brokers in those states to deal  directly
with the Company,  and general  economic  conditions  and  competition  in those
states.


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:
<TABLE>
<CAPTION>

                                                                 June 30            December 31          Increase
                                                                  1999                  1998            (Decrease)
                                                                  ----                  ----             --------
<S>                                                            <C>                  <C>                <C>
Fixed maturity bonds (at amortized value)                      $97,527,132          $96,158,812        $1,368,320
Short-term cash investments (at cost)                            7,447,939            6,573,862           874,077
Equity securities (at cost)                                        164,170              503,503          (339,333)
Certificates of deposit (over 1 year, at cost)                     200,000              200,000                 -
                                                               -----------          -----------         ---------
     Total invested assets                                    $105,339,241         $103,436,177        $1,903,064
                                                               ===========          ===========         =========
</TABLE>

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.


                                       12
<PAGE>




PART II - OTHER INFORMATION

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
--------------------------------------------------
(c)   During the quarter ended June 30, 1999, the Company issued an aggregate of
      91,831 shares of its common stock upon exercise of employee  stock options
      granted under the Unico  American  Corporation  Employee  Incentive  Stock
      Option Plan.  These shares were issued to an aggregate of three  employees
      of the Company. Of these shares, 58,497 shares were issued in exchange for
      $202,656.19  in cash and 33,334  shares were issued in exchange for 11,247
      shares of common stock and $6.81 in cash.  These shares were  acquired for
      investment  and  without  a view  to the  public  distribution  or  resale
      thereof,  and the  issuance  thereof  was  exempt  from  the  registration
      requirements  under the Securities Act of 1933, as amended,  under Section
      4(2) thereof as transactions not involving a public offering.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
--------------------------------------------------------
(a)  On June 4, 1999, the Company held its Annual Meeting of Stockholders.

(b)  Proxies for the meeting were solicited  pursuant to Regulation 14 under the
     Securities Exchange Act of 1934; there was no solicitation in opposition to
     nominees of the Board of Directors as listed in the Proxy Statement and all
     such nominees were elected.

(c)  At the meeting,  the following  persons were elected by the vote indicated)
     as  directors  to serve until the next  meeting of  shareholders  and until
     their  successors  are  duly  elected  and  qualified.  There  were  24,100
     abstentions and no broker non-votes.

Name                                For                      Against or Withheld
----                             ---------                   -------------------
Erwin Cheldin                    5,314,362                         25,236
Lester A. Aaron                  5,313,562                         25,236
Cary L. Cheldin                  5,305,708                         25,236
George C. Gilpatrick             5,305,708                         25,236
Roger H. Platten                 5,305,358                         25,236
David A. Lewis                   5,311,596                         25,236
David E. Driscoll                5,311,596                         25,236

At the meeting,  the proposal  adopting  the 1999  Omnibus  Stock Plan  covering
500,000 shares of the Company's common stock was approved.  There were 3,979,074
votes for the plan,  612,553 votes  against the plan,  18,860  abstentions,  and
734,291 broker non-votes.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits:
-------------------------------------------------------
      Exhibit 27 - Financial Data Schedule.

(b)   Reports on Form 8-K:
      None.



                                       13
<PAGE>









                                   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:   August  11, 1999  By:   /s/ERWIN CHELDIN
                                ----------------
                                Erwin Cheldin
                                Chairman of the Board, President and Chief
                                Executive Officer, (Principal Executive Officer)



Date:   August  11, 1999  By:   /s/LESTER A. AARON
                                ------------------
                                Lester A. Aaron
                                Treasurer, Chief Financial Officer, (Principal
                                Accounting and Principal Financial Officer)






                                       14