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 July 1, 1999 to September 30, 1999 or

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

      For the transition period from__________to__________


                           Commission File 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


                                    6,304,965
       Number of shares of common stock outstanding as of November 8, 1999






                                       1
<PAGE>



                                              PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

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

                                                                                          September 30           December 31
                                                                                               1999                  1998
                                                                                               ----                  ----
                                                           ASSETS
                                                           ------
Investments
   Available for sale:
<S>                                                                                      <C>                    <C>
      Fixed maturities, at market value (amortized cost: September 30,
         1999, $99,311,652;  December 31, 1998, $96,358,812)                              $98,854,061            $99,472,720

      Equity securities at market (cost: September 30, 1999,
         $164,170;  December 31, 1998, $503,503)                                               85,500                481,500
   Short-term investments, at cost                                                          4,714,151              6,573,862
                                                                                          -----------            -----------
      Total Investments                                                                   103,653,712            106,528,082
Cash                                                                                          184,321                277,544
Accrued investment income                                                                   1,885,124              2,022,197
Premiums and notes receivable, net                                                          5,997,772              5,922,716
Reinsurance recoverable:
   Paid losses and loss adjustment expenses                                                   211,108                146,205

   Unpaid losses and loss adjustment expenses                                               2,502,152              1,139,713
Prepaid reinsurance premiums                                                                   32,716                 19,452
Deferred policy acquisition costs                                                           4,493,256              4,665,772
Property and equipment (net of accumulated depreciation)                                      167,133                205,369
Deferred income taxes                                                                       1,051,241                208,976

Other assets                                                                                  399,964                581,617
                                                                                          -----------            -----------
     Total Assets                                                                        $120,578,499           $121,717,643
                                                                                          ===========            ===========

                                            LIABILITIES AND STOCKHOLDERS' EQUITY
                                            ------------------------------------
LIABILITIES
-----------
Unpaid losses and loss adjustment expenses                                                $38,973,507            $41,513,945
Unearned premiums                                                                          17,346,798             18,136,895
Advance premium and premium deposits                                                        2,450,626              2,329,356
Accrued expenses and other liabilities                                                      6,840,974              5,418,459
Income taxes payable                                                                                -                150,906
                                                                                           ----------             ----------
    Total Liabilities                                                                     $65,611,905            $67,549,561
                                                                                           ----------             ----------

STOCKHOLDERS'  EQUITY
---------------------
Common stock,  no par - authorized  10,000,000  shares;  issued and  outstanding
   shares 6,304,953 at September 30, 1999, and
   6,223,424 at December 31, 1998                                                           $3,098,389            $2,895,702
Accumulated other comprehensive income (loss)                                                 (353,933)            1,998,536
Retained earnings                                                                           52,222,138            49,273,844
                                                                                            ----------            ----------
  Total Stockholders' Equity                                                               $54,966,594           $54,168,082
                                                                                            ----------            ----------

  Total Liabilities and Stockholders' Equity                                              $120,578,499          $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                      Nine Months Ended
                                                                      September 30                           September 30
                                                                      ------------                           ------------
                                                                 1999             1998                  1999               1998
                                                                 ----             ----                  ----               ----

REVENUES
--------
Insurance Company Revenues
<S>                                                          <C>               <C>                 <C>                 <C>
     Premium earned                                          $8,606,924        $10,048,497         $26,256,814         $31,018,804
     Premium ceded                                            2,265,845          1,537,040           5,482,002           4,308,176
                                                              ---------         ----------          ----------          ----------
          Net premium earned                                  6,341,079          8,511,457          20,774,812          26,710,628
     Net investment income                                    1,439,237          1,385,234           4,257,017           4,045,696
     Net realized investment gains                                5,633            124,939              64,793             141,169
     Other income                                                   256                 75                 628               1,138
                                                              ---------         ----------          ----------          ----------
          Total Insurance Company Revenues                    7,786,205         10,021,705          25,097,250          30,898,631

Other Revenues from Insurance Operations
     Gross commissions and fees                               1,462,969          1,456,945           4,235,672           4,242,324
     Investment income                                           63,434             63,173             202,644             166,786
     Finance charges and late fees earned                       229,492            261,475             690,359             779,393
     Other income                                                 1,528                875              10,167               6,004
                                                              ---------         ----------          ----------          ----------
          Total Revenues                                      9,543,628         11,804,173          30,236,092          36,093,138
                                                              ---------         ----------          ----------          ----------

EXPENSES
--------
Losses and loss adjustment expenses                           3,972,201          4,372,848          11,450,352          13,567,529
Policy acquisition costs                                      2,062,228          2,286,373           6,336,141           7,312,011
Salaries and employee benefits                                1,097,561          1,046,831           3,235,432           3,088,568
Commissions to agents/brokers                                   327,904            275,964             968,551             756,502
Other operating expenses                                        610,538            645,148           1,889,414           1,775,019
                                                              ---------          ---------          ----------          ----------
     Total Expenses                                           8,070,432          8,627,164          23,879,890          26,499,629
                                                              ---------          ---------          ----------          ----------

     Income Before Taxes                                      1,473,196          3,177,009           6,356,202           9,593,509
Income Tax Provision                                            415,554            997,213           1,831,670           3,065,893
                                                              ---------          ---------           ---------           ---------
     Net Income                                              $1,057,642         $2,179,796          $4,524,532          $6,527,616
                                                              =========          =========           =========           =========



PER SHARE DATA
Basic Shares Outstanding                                      6,304,953          6,220,753           6,255,774           6,185,212
Basic Earnings Per Share                                          $0.17              $0.35               $0.72               $1.06
Diluted Shares Outstanding                                    6,367,661          6,421,286           6,359,146           6,428,962
Diluted Earnings Per Share                                        $0.17              $0.34               $0.71               $1.02




</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                   Nine Months Ended
                                                                      September 30                         September 30
                                                                      ------------                         ------------
                                                                1999                1998              1999               1998
                                                                ----                ----              ----               ----
<S>                                                          <C>               <C>                <C>                 <C>
Net income                                                   $1,057,642         $2,179,796         $4,524,532         $6,527,616
Other changes in comprehensive income
   net of tax:
     Unrealized gains (losses) on securities
        classified as available-for-sale arising
        during the period                                      (373,582)         1,185,511         (2,332,372)         1,280,954
     Less: reclassification adjustment for
        gains included in net income                                -              (51,980)           (20,097)           (62,692)
                                                                -------          ---------          ---------          ---------

            Comprehensive Income                               $684,060         $3,313,327         $2,172,063         $7,745,878
                                                                =======          =========          =========          =========


</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 NINE MONTHS ENDED SEPTEMBER 30,

                                                                                           1999                1998
                                                                                           ----                ----
<S>                                                                                     <C>                 <C>
Cash Flows from Operating Activities:
   Net Income                                                                           $4,524,532          $6,527,616
   Adjustments to reconcile net income to net cash from operations
      Depreciation and amortization                                                         66,048              73,120
      Bond amortization, net                                                               524,756             495,668
      Net realized (gain) on sale of securities                                            (64,793)           (141,169)
   Changes in assets and liabilities
      Premium, notes and investment income receivable                                       62,017             908,487
      Reinsurance recoverable                                                           (1,427,342)           (125,955)
      Prepaid reinsurance premiums                                                         (13,264)            930,190
      Deferred policy acquisitions costs                                                   172,516              22,511
      Other assets                                                                         181,653             351,218
      Reserve for unpaid losses and loss adjustment expenses                            (2,540,438)            283,530
      Unearned premium reserve                                                            (790,097)         (2,430,237)
      Funds held as security and advanced premiums                                         121,270             183,608
      Accrued expenses and other liabilities                                             1,439,749           2,111,299
      Income taxes current/deferred                                                        265,292             399,807
                                                                                         ---------           ---------
          Net Cash Provided from Operations                                              2,521,899           9,589,693
                                                                                         ---------           ---------

Investing Activities
     Purchase of fixed maturity investments                                            (11,342,604)        (17,457,379)
     Proceeds from maturity of fixed maturity investments                                7,839,250           7,794,600
     Proceeds from sale of fixed maturity investments                                            -           1,041,250
     Purchase of equity securities - cost                                               (3,758,378)         (3,128,440)
     Proceeds from sale of equity securities                                             4,162,504           1,523,994
     Net increase in short-term investments                                              1,885,470           1,413,644
     Additions to property and equipment                                                   (27,812)            (55,422)
                                                                                         ---------           ---------
          Net Cash (Used) by Investing Activities                                       (1,241,570)         (8,867,753)
                                                                                         ---------           ---------

Financing Activities
     Proceeds from issuance of common stock                                                202,687              48,894
     Dividends paid to shareholders                                                     (1,576,239)           (435,455)
                                                                                         ---------             -------
          Net Cash (Used)  by Financing Activities                                      (1,373,552)           (386,561)
                                                                                         ---------             -------

Net increase (decrease) in cash                                                            (93,223)            335,379
     Cash at beginning of period                                                           277,544              55,768
                                                                                           -------             -------
          Cash at End of Period                                                           $184,321            $391,147
                                                                                           =======             =======

Supplemental Cash Flow Information Cash paid during the period for:
          Interest                                                                          $1,492                $121
          Income taxes                                                                  $1,725,000          $2,505,000



</TABLE>



           See notes to unaudited consolidated financial statements.




                                       5
<PAGE>




                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 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 nine  months  ended  September  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 nine months ended
September 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 of SOP 97-3 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
September  30,  1999,  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,  which covers  500,000  shares of the
Company's  common  stock  (subject to  adjustment  in the case of stock  splits,
reverse stock splits,  stock dividends,  etc.) was approved by shareholders June
4, 1999. As of September 30, 1999, there were 135,000 options outstanding.  None
of the options outstanding are currently exercisable.




                                       6
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 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  September  30, 1999 and 1998,  and for the nine months ended
September 30, 1999 and 1998:
<TABLE>
<CAPTION>
                                                                Three Months Ended                    Nine Months Ended
                                                                   September 30                          September 30
                                                                   ------------                          ------------
                                                              1999               1998                1999             1998
                                                              ----               ----                ----             ----
Basic Earnings Per Share
------------------------
<S>                                                         <C>             <C>                  <C>             <C>
Net income numerator                                       $1,057,642       $2,179,796           $4,524,532       $6,527,616
                                                            =========        =========            =========        =========
Weighted average shares outstanding
     denominator                                            6,304,953        6,220,753            6,255,774        6,185,212
                                                            =========        =========            =========        =========
     Basic Earnings Per Share                                   $0.17            $0.35                $0.72            $1.06


Diluted Earnings Per Share
--------------------------
Net income numerator                                       $1,057,642       $2,179,796           $4,524,532       $6,527,616
                                                            =========        =========            =========        =========

Weighted average shares outstanding                         6,304,953        6,220,753            6,255,774        6,185,212
Effect of diluted securities                                   62,708          200,533              103,372          243,750
                                                            ---------        ---------            ---------        ---------
Diluted shares outstanding denominator                      6,367,661        6,421,286            6,359,146        6,428,962
                                                            =========        =========            =========        =========
     Diluted Earnings Per Share                                 $0.17            $0.34                $0.71            $1.02
</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 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.
<TABLE>
<CAPTION>
                                                               Three Months Ended                    Nine Months Ended
                                                                 September 30                          September 30
                                                                 ------------                          ------------
                                                             1999             1998                 1999             1998
                                                             ----             ----                 ----             ----
Revenues
--------
<S>                                                       <C>             <C>                  <C>              <C>
Insurance company operation                               $7,786,205      $10,021,705          $25,097,250      $30,898,631

Other insurance operations                                 4,230,042        4,478,785           12,750,287       13,732,791
Intersegment elimination (1)                              (2,472,619)      (2,696,317)          (7,611,445)      (8,538,284)
                                                           ---------        ---------            ---------        ---------
   Total other insurance operations                        1,757,423        1,782,468            5,138,842        5,194,507
                                                           ---------        ---------            ---------        ---------

     Total Revenues                                       $9,543,628      $11,804,173          $30,236,092      $36,093,138
                                                           =========       ==========           ==========       ==========

Income Before Income Taxes
--------------------------
Insurance company operation                               $1,299,567       $2,918,040           $6,029,732       $8,527,677
Other insurance operations                                   173,629          258,969              326,470        1,065,832
                                                           ---------        ---------            ---------        ---------
   Total Income Before Income Taxes                       $1,473,196       $3,177,009           $6,356,202       $9,593,509
                                                           =========        =========            =========        =========
</TABLE>

                                       7
<PAGE>

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


NOTE 4 - SEGMENT REPORTING (continued)
--------------------------------------



                                                    As of September 30
                                                    ------------------
                                               1999                   1998
                                               ----                   ----
Assets
------


Insurance company operation                $103,040,819            $103,678,448
Intersegment eliminations (2)                  (334,797)                (24,507)
                                            -----------             -----------
     Total insurance company operation      102,706,022             103,653,941


Other insurance operations                   17,872,477              16,817,492
                                             ----------              ----------

     Total Assets                          $120,578,499            $120,471,433
                                            ===========             ===========


(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 September
30, 1999,  the Company had cash and  investments of  $104,374,294  (at amortized
cost) of which $97,113,254 (93%) were cash and investments of Crusader.

As of the quarter ended September 30, 1999, the Company had invested $99,311,652
(at amortized cost) or 95% 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  $99,311,652  (at
amortized cost) include  $28,198,842  (28%) of pre-refunded  state and municipal
tax exempt bonds,  $10,069,595  (10%) of U.S. treasury  securities,  $60,843,215
(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
nine months ended September 30, 1999, was $345,940 and $1,124,231, respectively.
The tax  exempt  interest  income  earned  for the three and nine  months  ended
September 30, 1998, was $417,366 and $1,283,319, 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 deposit are FDIC insured.

On July 15, 1999, the Company paid the twenty-five  cents ($0.25) per share cash
dividend  that was  declared by the Board of  Directors  on March 12,  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 September 30,
1999, net of trust restriction of $2,909,934,  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 an adverse  material effect on
its financial statements.

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 nine months
ended September 30, 1999, to the three and nine months ended September 30, 1998,
unless otherwise indicated.

The Company's net income decreased  $1,122,154 (51%) to $1,057,642 for the three
months and $2,003,084  (31%) to $4,524,532  for the nine months ended  September
30,  1999,  compared  to net  income  of  $2,179,796  for the three  months  and
$6,527,616  for the  nine  months  ended  September  30,  1998.  Total  revenues
decreased  $2,260,545  (19%) for the three months and  $5,857,046  (16%) for the
nine months ended September 30, 1999, when compared to the three and nine months
ended September 30, 1998.

Premium earned before reinsurance  decreased  $1,441,573 (14%) to $8,606,924 for
the three months and $4,761,990  (15%) to $26,256,814  for the nine months ended
September  30, 1999,  compared to the three and nine months ended  September 30,
1998. In May, 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  $728,805  (47%) to $2,265,845 for the three months and
$1,173,826  (27%) to  $5,482,002  for the nine months ended  September 30, 1999,
compared to the three and nine months ended  September 30, 1998.  Ceded premiums
increased due to higher than  anticipated loss experience ceded to 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 ended        Nine months ended
                                                                             September 30, 1999       September 30, 1999
                                                                             ------------------       ------------------
     <S>                                                                        <C>                        <C>
      (Decrease) in ceded premium (excluding provisionally
          rated premium ceded)                                                   $(280,804)                $(635,703)
      Increase in provisionally  rated  premium ceded                            1,009,609                 1,809,529
                                                                                 ---------                 ---------
         Net increase in ceded premium                                            $728,805                $1,173,826
                                                                                   =======                 =========
</TABLE>

Premium written before reinsurance decreased $761,834 (8%) to $8,273,478 for the
three months and decreased  $3,121,849  (11%) to $25,466,717 for the nine months
ended September 30, 1999,  compared to the three and nine months ended September
30,  1998.  The decrease in written  premium is primarily  the result of intense
price  competition  as previously  discussed.  Written  premium in the states of
Oregon and Washington  increased $126,355 (37%) to $466,665 for the three months
and,  primarily  due  to the  change  in  marketing  strategy  discussed  above,
decreased $1,450,241 (52%) to $1,317,632 for the nine months ended September 30,
1999, when compared to the three and nine months ended September 30, 1998.



                                       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 September 30                          Nine Months Ended September 30
                                  -------------------------------                          ------------------------------
                               1999            1998           Increase                 1999           1998            Increase
                               ----            ----          (Decrease)                ----           ----           (Decrease)
                                                              --------                                                --------
  <S>                       <C>            <C>               <C>                   <C>              <C>              <C>
  California               $7,139,128      $7,882,362       $(743,234)             $21,931,544      $23,928,116     $(1,996,572)
  Arizona                     230,150         293,196         (63,046)                 791,597          975,451        (183,854)
  Washington                  272,990         208,333          64,657                  734,330        1,660,213        (925,883)
  Oregon                      193,675         131,977          61,698                  583,302        1,107,660        (524,358)
  Pennsylvania                 92,189          66,872          25,317                  502,655          213,917         288,738
  Ohio                        156,710         145,995          10,715                  403,759          374,450          29,309
  Montana                     127,943          68,149          59,794                  345,634           68,149         277,485
  Texas                        16,408         133,623        (117,215)                  92,143          133,623         (41,480)
  Kentucky                     35,007          72,705         (37,698)                  63,023           75,893         (12,870)
  Nevada                        9,278          32,100         (22,822)                  18,730           51,094         (32,364)
                            ---------       ---------         -------               ----------       ----------       ---------

       Total               $8,273,478      $9,035,312       $(761,834)             $25,466,717      $28,588,566     $(3,121,849)
                            =========       =========         =======               ==========       ==========       =========
</TABLE>

Net investment income,  excluding realized  investment gains,  increased $54,264
(4%) to $1,502,671  for the three months and $247,179 (6%) to $4,459,661 for the
nine  months  ended  September  30,  1999,  compared  to  investment  income  of
$1,448,407  for the  three  months  and  $4,212,482  for the nine  months  ended
September  30,  1998.  This  increase  was  primarily  due to a 5% increase  (at
amortized cost) in bonds and short term invested assets.

Gross  commission and fee income  increased  $6,024 (0.4%) to $1,462,969 for the
three months and decreased $6,652 (0.2%) to $4,235,672 for the nine months ended
September  30, 1999,  compared to the three and nine months ended  September 30,
1998.  The  increase  for the three  months  and  decrease  for the nine  months
consisted of the following:
<TABLE>
<CAPTION>

                                                                             Three months ended        Nine months ended
                                                                             September 30, 1999       September 30, 1999
                                                                             ------------------       ------------------
    <S>                                                                           <C>                      <C>
     Health and life insurance program                                            $169,455                 $401,606

     Daily automobile rental insurance program                                     (63,399)                 (42,127)
     Commercial automobile insurance program                                           118                    4,262
     Workers' compensation program                                                 (96,482)                (195,636)
     Other commission income                                                        22,153                   22,153
     Service fee income                                                            (25,821)                (196,910)
                                                                                    ------                  -------
         Net increase (decrease) in commission and fee income                       $6,024                  $(6,652)
                                                                                     =====                    =====
</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,
an increase in the number of small business group accounts  administered  by the
Company for CIGNA,  and the  recognition  of a bonus  commission of $95,000 from
CIGNA in the quarter ended September 30, 1999.

Daily automobile  rental insurance  program  commission and fee income decreased
primarily due to the recognition of a contingent commission income of $49,430 in
the quarter ended September 30, 1998.

The  commercial  automobile  insurance  program  book of business  was sold to a
non-affiliated  third party in June 1997.  As  consideration  for the sale,  the
Company received a percentage of the commission  earned for a two year period on
policies which were in force at the time of sale. The final payment was received
and recognized in the quarter ended September 30, 1999.

Workers'  compensation  income  decreased  primarily  due  to a  change  in  the
non-affiliated  insurance  company which  underwrites the workers'  compensation
policies  sold by the Company.  This change,  which took place in October  1998,
resulted in  decreased  revenues  because the new company does not write all the
classes of business  that were written by the previous  company.  The Company is
currently  attempting  to increase the classes of business that it is authorized
to write.

                                       11
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
-------------------------
Other  commission  income  represents  commission  from  unaffiliated  insurance
companies on new programs written by Unifax.

Service fee income decreased primarily due to the related decrease in the number
of policies written by Unifax for Crusader.

Losses and loss adjustment expenses were 63% of net premium earned for the three
months and 55% for the nine months ended,  September 30, 1999 compared to 51% of
net  premium  earned  for the three  months  and 51% for the nine  months  ended
September  30,  1998.  The  increase in the ratio of losses and loss  adjustment
expenses to net earned  premium for both the three and nine month  period in the
current  year over the  prior  year was  primarily  due to the  increase  in the
provisionally rated ceded premium discussed above.

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 33% of net premium earned for the three months and 30%
of net premium earned for the nine months ended September 30, 1999,  compared to
27% of net premium earned for the three months and 27% of net premium earned for
nine  months  ended  September  30,  1998.  The  increase in the ratio of policy
acquisition costs to net earned premium for both the three and nine month period
in the current year over the prior year was primarily due to the increase in the
provisionally rated ceded premium discussed above.


Salaries and employee  benefits  increased  $50,730 (5%) to  $1,097,561  for the
three months and increased $146,864 (5%) to $3,235,432 for the nine months ended
September  30, 1999,  compared to the three and nine months ended  September 30,
1998.

Commissions to agents/brokers  increased $51,940 (19%) to $327,904 for the three
months and  increased  $212,049  (28%) to  $968,551  for the nine  months  ended
September  30, 1999,  compared to the three and nine months ended  September 30,
1998.  The increase is primarily due to  commissions  paid to agents and brokers
related to the increase in revenue from the health and life program.

Other  operating  expenses  decreased  $34,610  (5%) for the  three  months  and
increased  $114,395 (6%) for the nine months ended September 30, 1999,  compared
to the three and nine months  ended  September  30,  1998.  The decrease for the
current  quarter was primarily due the fact that the quarter ended September 30,
1998  included  $45,875 of  insurance  department  examination  fees  related to
Crusader's regular tri-annual examination.  The increase for the nine months was
primarily  due to i) the fact that the nine  months  ended  September  30,  1998
included $134,069 of insurance department examination fees related to Crusader's
regular  tri-annual  examination  and ii) the fact  that the nine  months  ended
September  30,  1998,  quarter  included  a  $240,155  interest  expense  credit
resulting  from a settlement  of federal  income tax issues which had been under
appeal

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

Forward Looking Statements
--------------------------
Information contained in this discussion,  other than historical information, is
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
expectations  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

                                       12
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS
-------------------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------
general agent and the statement  herein  concerning the possible  outcome of the
State of Washington  regulatory  proceeding 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. With respect to the State of Washington  regulatory
proceeding,  the outcome of the proceeding  involves risks and uncertainties and
actual results may differ from that  anticipated by the Company if, in fact, the
Insurance  Commissioner  prevails on all requests at the administrative  hearing
and the  administrative  judge's  decision were upheld in the court  proceedings
following such a decision.


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>

                                                              September 30       December 31             Increase
                                                                  1999               1998               (Decrease)
                                                                  ----               ----               ----------
<S>                                                            <C>                  <C>                <C>
Fixed maturity bonds (at amortized value)                      $99,111,652          $96,158,812        $2,952,840
Short-term cash investments (at cost)                            4,714,151            6,573,862        (1,859,711)
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                                    $104,189,973         $103,436,177          $753,796
                                                               ===========          ===========           =======
</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.



PART II - OTHER INFORMATION

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
--------------------------------------------------
(c)   On August 26, 1999, the Company  granted to 17 employees  incentive  stock
      options  covering  an  aggregate  of 135,000  shares of its  common  stock
      exercisable  at $9.25 per share.  These options  expire ten years from the
      date of the grant and are not  exercisable  prior to  September  1,  2000.
      Options  covering 10,000 or less shares become  exercisable at the rate of
      2,500 shares per year commencing  September 1, 2000; and options  covering
      more than 10,000 shares become exercisable at the rate of 5,000 shares per
      year  commencing  September 1, 2000.  All of these options were granted to
      employees  having  the title of manager  or  higher.  Each  person who was
      granted an option represented that he or she was acquiring the option, and
      any shares  issuable upon exercise  thereof,  for investment and without a
      view to distribution or resale in violation of the Securities Act of 1933,
      as amended. These options were granted in reliance upon the exemption from
      the  registration  requirements of the Securities Act of 1933, as amended,
      contained in Section 4(2) thereof,  as transactions not involving a public
      offering.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits:
-------------------------------------------------------
(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:   November 9, 1999        By:      /s/ ERWIN CHELDIN
                                         -----------------
                                Erwin Cheldin
                                Chairman of the Board, President and Chief
                                Executive Officer, (Principal Executive Officer)



Date:   November 9, 1999        By:      /s/ LESTER A. AARON
                                         -------------------
                                Lester A. Aaron
                                Treasurer, Chief Financial Officer, (Principal
                                Accounting and Principal Financial Officer)








                                       14