UNITED STATES
		 	   SECURITIES AND EXCHANGE COMMISSION
			        WASHINGTON, DC 20549

					   FORM 10-K


  X  	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

            For the fiscal year ended DECEMBER 31, 2000 or

    	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

                   Commission file number 0-20882

				Standard Management Corporation
		(Exact name of registrant as specified in its charter)

			Indiana		            35-1773567
	(State or other jurisdiction of 	(I.R.S. employer
	incorporation or organization)	identification no.)

	9100 Keystone Crossing,
	Indianapolis, Indiana 46240		    (317) 574-6200
	(Address of principal executive offices)	(Telephone)

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, No Par Value

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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's
knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10K. [  ]

The aggregate market value of the voting stock held by non-
affiliates of the Registrant, based upon the closing sale price
of the Common Stock on March 15, 2001 as reported on The NASDAQ
Stock Market, was approximately $20.0 million. Shares of Common
Stock held by each executive officer and director and by each
person who owns 5% or more of the outstanding Common Stock have
been excluded in that such persons may be deemed to be
affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.

As of March 15, 2001 Registrant had outstanding 7,545,156 shares
of Common Stock.

Documents Incorporated by Reference:
Portions of the Registrant's definitive Proxy Statement for the
Annual Meeting of Stockholders are incorporated by reference
into
Part III of this Form 10-K.

PART I


As used in this report, unless the context otherwise clearly
requires, "SMC", or the "Company" refers to Standard Management
Corporation and its consolidated subsidiaries and "Standard
Management" refers to Standard Management Corporation on an
unconsolidated basis. All financial information contained in
this
report is presented in accordance with generally accepted
accounting principles ("GAAP") unless otherwise specified.

Item 1.	BUSINESS OF SMC

SMC is an international financial services holding company
that directly and through its subsidiaries develops, markets and
administers domestic asset accumulation and international unit-
linked assurance products.  During 1999 and 2000, SMC has
focused on organic growth.  In years prior to 1999, a primary
component
of
SMC's growth related to the acquisition of selected insurance
companies and blocks of in force life insurance and annuity
businesses. Through its insurance subsidiaries, the Company's
operating strategy is to develop profitable products, enhance
marketing distribution channels and consolidate and streamline
management and administrative functions of acquired companies.

Operating Segments

The Company conducts and manages its business through the
following operating segments reflecting the geographical
locations
of principal insurance subsidiaries:

Domestic Operations includes the following insurance
subsidiaries at December 31, 2000:

 Standard Life Insurance Company of Indiana ("Standard Life"),
SMC's principal insurance subsidiary, was organized in 1934
as an Indiana domiciled life insurer. It is licensed to write
new business or service existing business in the District of
Columbia and all states except New York and New Jersey.
Standard Life offers flexible premium deferred annuities
("FPDA's"), equity-indexed annuities, single premium immediate
annuities ("SPIA's"), and traditional and universal life
insurance products.  Standard Life also generates cash flow
and income from closed blocks of in force life insurance and
annuities. Standard Life has a rating of B+ (Very Good,
Secure) by the rating agency A.M. Best Company, Inc. ("A.M.
Best").

 Dixie National Life Insurance Company ("Dixie Life"), a 99.4%
owned subsidiary of Standard Life, was organized in 1965 as
a Mississippi domiciled life insurer.  Dixie Life is licensed
in 22 states and administers life insurance products,
primarily  "burial expense" policies.  Effective January 1,
1999, the Company ceased selling new business through Dixie
Life. Dixie Life has a rating of "B" ("Adequate") by A.M.
Best.

 Savers Marketing Corporation ("Savers Marketing") is the prior
marketing distributor of Savers Life Insurance Company
("Savers Life").  Refer to "Acquisition Strategy and Recent
Acquisitions".  Savers Marketing markets Standard Life's
products through financial institutions and independent
agents.  Savers Marketing also receives administrative,
marketing and commission fees for services provided to
unaffiliated companies.

International Operations include the following holding company
and its two wholly owned insurance subsidiaries at December 31,
2000:

 Standard Management International S.A., a wholly owned
subsidiary of SMC, is a holding company organized under
Luxembourg law with its registered office in Luxembourg.  At
December 31, 2000, Standard Management International, S.A. and
its subsidiaries ("SMI") had policies in force in over 80
countries. The majority of its business is unit-linked
assurance products with a range of policyholder directed
investment choices coupled with a small death benefit, sold
through its subsidiaries.

 Premier Life (Luxembourg) S.A. ("Premier Life (Luxembourg)")
primarily offers unit-linked products throughout the European
Union.

 Premier Life (Bermuda) Ltd. ("Premier Life (Bermuda)")
primarily offers unit-linked products in markets throughout
the world.


The following table sets forth information related to the
Company's
insurance subsidiaries as of December 31, 2000 (in millions):

				    Statutory	  Adjusted   Capital to
			 	      Assets      Capital   Asset Ratio
Domestic
Standard Life	  	     $  762.5     $ 58.1 	      7.6%
Dixie Life		         35.7        4.2   	     11.8%

International
Premier Life (Bermuda)	   410.3        3.8 	       .9%
Premier Life (Luxembourg)   137.7        6.5    	      4.7%


Marketing

Domestic Marketing

General: The Company's agency force, of approximately 4,000
independent general agents, was organized to provide a lower
cost
alternative to the traditional captive agency force.   These
agents distribute a full line of life insurance and annuity
products issued by Standard Life. The Company selectively
recruits
new agents from those formerly associated with companies
acquired
by SMC.

SMC believes that both agents and policy owners value the
service provided by SMC. The Company i) assists agents in
submitting and processing policy applications, ii) assists with
licensing applications, iii) provides marketing support for its
agents, and iv) introduces agents to lead services.

Standard Life offers a full portfolio of life insurance and
annuity products selected on the basis of their competitive
position, company profitability and likely consumer acceptance.
Such portfolio includes FPDA's, equity-indexed annuities, and
whole and universal life insurance products.

Each general agent operates his own agency and is responsible
for all expenses of the agency.  The general agents are
compensated directly by Standard Life, who performs all policy
issuance, underwriting and accounting functions. Standard Life
is
not dependent on any one agent or agency for any substantial
amount of its business.  No single agent accounted for more than
5% of Standard Life's annual sales in 2000, and the top twenty
individual agents accounted for approximately 37% of Standard
Life's volume in 2000.  At December 31, 2000, approximately 66%
of
Standard Life's independent agents were located in Indiana,
California, Florida, Ohio, Hawaii and North Carolina with the
balance distributed across the country.  Standard Life is
attempting to increase the number and geographic diversity of
its
agents.

Standard Life does not have exclusive agency agreements with
its agents.  Therefore, SMC's management believes most of these
agents sell similar products for other insurance companies.
This
could result in a sales decline if Standard Life's products were
to become relatively less competitive. Standard Life's 2000 FPDA
and equity-indexed annuity sales increased partially due to an
aggressive marketing campaign targeted to high volume sales
agents
and marketing companies.  Also contributing to the increase in
premiums was the continued development of Standard Life's
distribution system through an aggressive program aimed at
retention of key producers and expanded geographical
concentration.

Savers Marketing distributes life and annuity products through
financial institutions and independent general agents.  Savers
Marketing has approximately 2,000 active brokers and is not
dependent on any one broker or agency for any substantial amount
of its business. Each broker operates independently and is
responsible for all of his or her expenses.  Savers Marketing
employs three Regional Managers, who are responsible for
personally initiating and maintaining direct communications with
brokers and are responsible for the recruitment and training of
all new brokers.

Savers Marketing also entered into a three-year marketing and
administrative contract ("the Administrative Contract") with
QualChoice of North Carolina ("QualChoice") effective October 1,
1998 whereby Savers Marketing is the distribution system for the
small group product offered by QualChoice.  QualChoice is an HMO
in a twenty-county area in the northwestern part of North
Carolina
offering HMO insurance coverage.  Savers Marketing is
compensated
for this effort with a marketing fee, administrative fee and
commission reimbursement for the use of its brokers.

International Marketing

 SMI has designed and launched new single and regular premium
products in recent years. It is also in discussions with a
number
of distribution companies to form alliances to produce tailored
products for their markets. Premier Life (Luxembourg) writes
business within the European Union and Premier Life (Bermuda)
writes international business throughout the world. The primary
market for SMI's products is considered to be medium to high net
worth individuals who typically have in excess of $100,000 to
invest in a single premium policy and medium to high earners who
have in excess of $3,000 per annum to invest in a regular
premium
savings product. The above individuals come from a combination
of
expatriates, residents of European Union countries and from
other
targeted areas. The expatriate and European insurance markets
are
well established and highly competitive with a large number of
domestic and international groups operating in, or going into,
the
same markets as SMI.

SMI's products are distributed through independent agents and
stock brokers who have established connections with targeted
individuals. SMI is striving to develop into an entrepreneurial-
intermediary oriented organization committed to building long
term
relationships with high quality distributors, thereby creating a
niche position.  SMI places the same emphasis as SMC's United
States ("U.S.") insurance companies on a high level of service
to
intermediaries and policyholders while striving to achieve low
overhead costs. No single agent or broker accounted for more
than
12% of SMI's annual sales for 2000, and the top ten agents
and/or
brokers accounted for approximately 47.6% of annual sales for
2000.

Currently Marketed Products

SMC primarily markets unit-linked policies, FPDA's, equity-
indexed annuities, SPIA's, traditional life, universal and
interest-sensitive life insurance policies.  The following table
sets forth the amounts and percentages of net premiums received
by
SMC from currently marketed products for the years ended
December
31, 2000, 1999 and 1998, respectively (in thousands).


							Year Ended December 31,

				     2000	 		1999     		 1998
				 Amount	 %	 Amount    %  	 Amount    %
Currently marketed
  products:
 Unit-linked
  products 		$170,514	47.2 $ 55,192 	25.1	$ 42,536  32.5
 FPDA's		       94,699	26.2   98,678	44.9   60,086  45.8
 Equity-indexed
  Annuities	       73,122	20.2	  59,348  27.0	  16,858  12.9
 SPIA's		       21,506	 5.9	   3,162	 1.4	   2,545   1.9
 Universal and
  interest-sensitive
  life		          963	  .3	   2,302	 1.0    5,816   4.4
 Traditional life	     734	  .2	   1,029	  .6	   3,282   2.5
			     $361,538 100.0	$219,711 100.0 $131,123 100.0

The increase in deposits from unit-linked products in 2000 is
primarily due to i) strengthening of SMI's distribution system
by
engaging more, highly productive agents, ii) concentrated
marketing efforts in certain European countries, primarily
Sweden,
Belgium and Italy, and iii) favorable demand, in general, for
investment based products.

Annuity sales increased in 2000 primarily due to the
introduction of new products and an increase in the agency base
achieved through the recruitment of high volume agents.  Also
attributable to the annuity sales increase were larger managing
general agencies and continued expansion of geographical
marketing
efforts.

The individual annuity business is a growing segment of the
savings and retirement industry, which increased in sales from
$49 billion in 1989 to more than $115 billion in 1999. The
individual annuity market, which is one of SMC's primary
targets,
comprises virtually all of its domestic sales and 52% of its
total sales. As the 76 million baby boomers born from 1946
through
1964 grow older, demand for insurance products is expected to
grow. SMC believes that those seeking adequate retirement
incomes
will become less dependent on Social Security and their
employers'
retirement programs and more dependent upon their own financial
resources. Annuities currently enjoy an advantage over certain
other saving mechanisms because the annuity buyer receives a
tax-
deferred accrual of interest on the investment during the
accumulation period.

SMC's gross domestic sale percentages by U.S. geographical
region are summarized as follows:

State				2000		1999		1998

Indiana	 		 	 19%		 15%		 17%
California			 15		 11		  5
Ohio				  	  9		 14		 15
Florida			  	  9		  8		  8
North Carolina		  	  6		  8		 10
Hawaii			  	  6		  5		  7
Wisconsin			  	  4		  2		  2
Michigan			  	  4		  1		  2
All other states (1)	 28		 36		 34
Total			     100%		100%		100%
(1)	No other state had gross sales greater than 4% in 2000.

Domestic Products

FPDA's provide for an initial deposit by the owner and
optional additional deposits, the time and amount of which are
at
the discretion of the owner. Standard Life credits the account
of
the owner with earnings at interest rates that are revised
periodically until the maturity date. This accumulated value is
tax deferred. Revisions to interest rates on FPDA's are
restricted
by an initial crediting rate guaranteed for a specific period of
time, usually one year, and a minimum crediting rate guaranteed
for the term of the FPDA, which is typically 3%. At maturity,
the
owner can elect a lump sum cash payment of the accumulated value
or one of the various payout options available. Standard Life's
FPDA's also typically provide for penalty-free partial
withdrawals
of up to 10% annually of the accumulation value after the owner
has held the FPDA for more than 12 months. In addition, the
owner
may surrender the FPDA at any time before the maturity date and
receive the accumulated value, less any surrender charge then in
effect for that contract. To protect holders of FPDA's from a
sharp reduction in the credited interest rate after a FPDA is
issued, Standard Life permits the FPDA holder of certain
annuities
to surrender the annuity during a specified period without
incurring a surrender charge if the renewal-crediting rate is
below a stated level. This stated level of interest is referred
to
as the "bail-out rate" and is typically below the original
crediting rate, but above the minimum guaranteed crediting rate.

As of January 1, 2001, the crediting rates available on
Standard Life's currently marketed FPDA's ranged from 5.75% to
12.5%, with most new issues having an interest rate with a one-
year guarantee period. A series of annuity products introduced
in
2000 have their interest rate guaranteed for an initial period
of
5-10 years. After the initial period, the crediting rate may be
changed periodically, subject to a minimum guaranteed rate of
3.0%. As of January 1, 2001, interest crediting rates after the
initial guarantee period ranged from 4% to 5.5%. The surrender
charge is initially 7% to 15% of the contract value depending on
the product and decreases over the applicable surrender charge
period of five to thirteen years. As of January 1, 2001, the
bail-
out rate for Standard Life's FPDA's was 4.5%; certain currently
marketed products carry a bail out rate for the first two to
five
years after issuance. As of December 31, 2000, Standard Life had
6,352 currently marketed FPDA contracts in force.

Equity-indexed Annuities.  In response to consumers' desire
for alternative investment products with returns linked to
common
stocks, Standard Life introduced a line of equity-indexed
annuity
products in May 1998.  These products accounted for $73.1
million
of the total premiums collected in 2000.  The annuity's contract
value is equal to the premium paid increased for returns based
upon a percentage (the "participation rate") of the change in
the
Standard & Poor's 500 Index ("S&P's 500 Index") and/or the Dow
Jones Industrial Average Index  ("DJIA") during each year of its
term, subject to a minimum guaranteed value.  The Company has
the
discretionary ability to annually change the participation rate
(which currently is 70% plus a first-year "bonus"). The minimum
guaranteed values are equal to between 75% and 85% of first year
premiums and between 87.5% and 90% of renewal premiums collected
for equity-indexed annuities, plus interest credited at an
annual
rate of 3%.  The annuities provide for penalty-free withdrawals
of
up to 10% in each year after the first year of the annuity's
term.
Other withdrawals from the product are subject to a surrender
charge.  The Company purchases S&P's 500 Index or DJIA Index
Call
Options to hedge potential increases to policyholder benefits
resulting from increases in the Index to which the product's
return is linked.  As of December 31, 2000, Standard Life had
4,015 currently marketed equity-indexed contracts.

SPIA's.  Standard Life offers two SPIA's whereby an annuitant
purchases an immediate annuity with a one-time premium deposit
at
the time of issuance. Standard Life begins a payout stream
shortly
after the time of issuance consisting of principal plus
accumulated interest credited to the annuity. A new SPIA product
was introduced in the first quarter of 2000, which resulted in a
500% increase in sales over 1999 for this line of business. As
of
December 31, 2000, Standard Life had 475 currently marketed SPIA
contracts in force. Payout is guaranteed until the termination
of
the contract.

Universal Life.  Flexible premium universal life ("FPUL")
policies provide for periodic deposits, interest credits to
account values and charges to the account values for mortality
and
administrative costs. As of January 1, 2001, the current
interest
rate on new sales of FPUL's was 5% to 6% with a guaranteed
interest rate of 4%.  As of December 31, 2000, Standard Life had
645 currently marketed FPUL policies in force.

Traditional Life.  Standard Life offers several types of
non-participating traditional life policies, whole life policies
with face amounts up to $50,000. Traditional life insurance
products involve fixed premium payments made over time, with the
stated death benefit paid in full upon the death of the insured.
The whole life policy combines the death benefit with a forced
savings plan. Premiums remain level over the life of the policy,
with the policyholder prefunding during the early years of
coverage when risk of death is low. Over time, whole life
policies
begin to accrue a cash value, which can be made available to the
policyholder net of taxes and withdrawal penalties.  The term
policy provides benefits only as long as premiums are paid.  As
of
December 31, 2000, Standard Life had 3,635 currently marketed
traditional life policies in force.



International Products

Unit-linked Products.  SMI currently writes unit-linked life
products, which are similar to U.S. produced variable life
products. Separate account assets and liabilities are maintained
primarily for the exclusive benefit of universal life contracts
and investment contracts of which the majority represents unit-
linked business, where benefits on surrender and maturity are
not
guaranteed. They generally represent funds held in accounts to
meet specific investment objectives of policyholders who bear
the
investment risk. Products include i) single premium unit-linked,
publicly traded investments and ii) annual premium unit-linked,
publicly traded investments and personal portfolio investments
which can be used to place personal assets including private
stock
and investments with limited markets.  Investment income and
investment gains and losses within the separate accounts accrue
directly to the policyholders. The fees received by SMI for
administrative and contract holder maintenance services
performed
for these separate accounts are included in SMC's statement of
operations.

In the past SMI also sold investment contracts, universal life
policies, and to a lesser extent, traditional life policies. The
investment contracts are mainly short-term single premium
endowments or temporary annuities under which fixed benefits are
paid to the policyholder. The terms of these contracts are such
that SMI has relatively small morbidity or mortality risk. The
universal life contracts are mainly regular premium and single
premium endowment. The benefits payable to the policyholders are
directly linked to the investment performance of the underlying
assets.

Former Products ("Closed Blocks")

SMC also generates cash flow and income from its closed blocks
of in force life insurance and annuities. Closed blocks consist
of
in force life insurance and annuities that are not currently
being
marketed by SMC. The closed block designation does not have
legal
or regulatory significance and there are no restrictions on
their
assets or future profits.  The premiums received on the closed
blocks are primarily from the ordinary and universal life
business. Closed block premiums typically decline over extended
periods of time as a result of policy lapses, surrenders and
expiries.

Annuities.  SMC's closed blocks of deferred annuities consist
primarily of FPDA's and a small amount of single premium
deferred
annuities ("SPDA's"), which, unlike FPDA's, do not provide for
additional deposits.  As of January 1, 2001, these deferred
annuities had crediting rates ranging from 3.0% to 5.25% and
guaranteed minimum crediting rates ranging from 3.0% to 5.0%.
The
crediting rate may be changed periodically. The contract owner
is
permitted to withdraw all or part of the accumulation value.
SMC's
closed blocks of annuities include payout annuities. Payout
annuities consist of those annuities in which benefits are being
paid out over a specified time period. Payout annuities cannot
be
terminated by surrender or withdrawal. SMC's crediting rates on
payout annuities range from 3.0% to 7.0% and cannot be changed.
At December 31, 2000, SMC had 13,374 annuity contracts in force
for closed blocks.

Traditional Life.  The traditional life policies included in
SMC's closed blocks are composed primarily of fixed premium,
cash
value whole life products. In addition, they include annually
renewable term policies as well as five, ten and fifteen year
level premium term policies.  At December 31, 2000, SMC had
39,317
traditional life policies in force for closed blocks.

Universal Life.  Certain closed blocks include universal life
business. For this business, SMC credits deposits and interest
to
account values and charges the account values for mortality and
administrative costs.  At December 31, 2000, SMC had 11,936
universal life policies in force for the closed block of
business.

Refer to "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" for a discussion
on
product profitability.

Operations

SMC emphasizes a high level of service to agents and
policyholders and strives to achieve low overhead costs. SMC's
principal administrative departments are its financial,
policyholder services and management information services
("MIS")
departments. The financial department provides accounting,
budgeting, tax, investment, financial reporting and actuarial
services and establishes cost control systems for SMC. The
policyholder services department reviews policy applications,
issues and administers policies and authorizes disbursements
related to claims and surrenders. The MIS department oversees
and
administers SMC's information processing systems.

SMC's administrative departments in the United States ("U.S.")
use a common integrated system that permits efficiency and cost
control.  SMC's MIS system services approximately 75,000 active
policies at December 31, 2000 and is continually being improved
to
provide for growth from potential acquisitions and sales.

SMI's administrative and MIS departments in Luxembourg are an
autonomous unit from the systems in the U.S.  In 2000, SMI
integrated an operating system consistent with that used for
Domestic operations, in an effort to enhance efficiency and
effectiveness.   Additional system enhancements are in process
and
are expected to be completed in 2001.


Underwriting

Premiums charged on insurance products are based in part on
assumptions about the incidence and timing of insurance claims.
SMC has adopted and follows underwriting procedures for
traditional life and universal life insurance policies. To
implement these procedures, SMC employs a professional
underwriting staff. All underwriting decisions are made in SMC's
home office. To the extent that an applicant does not meet SMC's
underwriting standards for issuance of a policy at the standard
risk classifications, SMC may rate or decline the application.
Underwriting with respect to annuities is minimal.

Traditional underwriting procedures are not applied to
policies acquired in blocks. In these cases, SMC reviews the
mortality experience for recent years and compares actual
experience to that assumed in the actuarial projections for the
acquired policies.

Investments

Investment activities are an integral part of SMC's business
as the investment income of SMC's insurance subsidiaries is an
important part of its total revenues. Profitability is
significantly affected by spreads between interest earned on
invested assets and rates credited on insurance liabilities.
Substantially all credited rates on FPDA's may be changed at
least
annually. For the year ended December 31, 2000, the weighted
average net yield of SMC's investment portfolio was 7.28% and
the
weighted average interest rate credited on SMC's interest-
sensitive liability portfolio, excluding liabilities related to
separate accounts and equity indexed annuities, was
approximately
4.90% per annum for an average interest spread of 238 basis
points
at December 31, 2000, compared to 226 basis points at December
31,
1999. The increase in the average interest spread includes lower
crediting rates on new and existing FPDA business in order to
meet
targeted pricing spreads.  Increases or decreases in interest
rates could increase or decrease the average interest rate
spread
between investment yields and interest rates credited on
insurance
liabilities, which in turn could have a beneficial or adverse
effect on the future profitability of SMC. Sales of fixed
maturity
securities that result in investment gains may also tend to
decrease future average interest rate spreads. State insurance
laws and regulations prescribe the types of permitted
investments
and limit their concentration in certain classes of investments.

SMC balances the duration of its invested assets with the
expected duration of benefit payments arising from insurance
liabilities. The "duration" of a security is a measure of a
security's price sensitivity to changes in market interest
rates.
The option adjusted duration of fixed maturity securities and
short-term investments for its U.S. insurance subsidiaries was
4.4
and 5.3 at December 31, 2000 and 1999, respectively.

SMC's investment strategy is guided by strategic objectives
established by the Investment Committee of the Board of
Directors.
SMC's major investment objectives are to: i) ensure adequate
safety of investments and protect and enhance capital, ii)
maximize after-tax return on investments, iii) match the
anticipated duration of investments with the anticipated
duration
of policy liabilities, and iv) provide sufficient liquidity to
meet cash requirements with minimum sacrifice of investment
yield.
Consistent with its strategy, SMC invests primarily in
securities
of the U.S. government and its agencies, investment grade
utilities and corporate debt securities and collateralized
mortgage obligations ("CMOs").  When opportunities arise, below
investment grade securities may be purchased; however,
protection
against default risk is a primary consideration. SMC has
determined it will not invest more than 7% of its bond portfolio
in below investment grade securities.

The National Association of Insurance Commissioners ("NAIC")
assigns quality ratings and uniform book values to securities
called "NAIC Designations" which are used by insurers when
preparing their annual statements. The NAIC assigns ratings to
publicly traded and privately-placed securities. The ratings
assigned range from Class 1 to Class 6, with a rating in  Class
1
being of the highest quality.  The following table sets forth
the
quality of SMC's fixed maturity securities as of December 31,
2000, classified in accordance with the ratings assigned by the
NAIC:

							  Percent of Fixed
NAIC Rating 					Maturity Securities

1					  	           57
2								 37
Investment Grade				      94
3-4								  5
5-6		   						  1
	Total fixed maturity securities    100%


Effective December 1, 2000 Zurich Scudder Investments (formerly
known as Scudder
Kemper Investments, Inc.)began managing SMC's domestic fixed
maturity
securities, subject to the direction of SMC's Investment
Committee. Prior to
December 1, 2000 SMC's domestic invested assets were managed by
Conseco
Capital Management, Inc.

Approximately 27% of SMC's fixed maturity securities at
December 31, 2000 are comprised of mortgage-backed securities
that
include CMOs and mortgage-backed pass-through securities.
Approximately 4% of the book value of mortgage-backed securities
in SMC's portfolio is backed by the full faith and credit of the
U.S. government as to the full amount of both principal and
interest and 70% are backed by an agency of the U.S. government
(although not by the full faith and credit of the U.S.
government). SMC closely monitors the market value of all
investments within its mortgage-backed portfolio.

The following table summarizes SMC's mortgage-backed
securities at December 31, 2000 (in thousands):



								   	  Estimated   Avg.
					    % of		  % of Avg. Life   Term
			  Amoritized Fixed	Fair  Fixed    of     to Final
                    Cost	   Matur- Value Matur- Invest-  Maturity
                            ities	      ities	ment
                                              (In Years)(In Years)
Agency CMOs:
Planned and target
 amortization
 classes  	         $ 32,395  4.4% $ 32,240   4.6%  5.2   21.5
Sequential and
 support classes	       6,118  0.8%    5,950   0.8%  4.8   23.6
	Total		      38,513  5.2%   38,190   5.4%  5.1   21.8

Non-agency CMOs:

 Sequential classes        3,311  0.5%    3,069   0.4%  4.7	  11.8
 Other		           28,191  3.8%   28,493   4.0%  6.3	  23.8

Total CMOs		      70,015  9.5%   69,752   9.8%  5.6   22.2
Non agency CMBS	      17,960  2.4%   16,683   2.3%  4.4	  17.9
Agency mortgage-backed
 pass-through
 securities		     114,915 15.6%  115,955  16.3%  6.5   24.5
	Total mortgage-
	backed
	securities         $202,890 27.5% $202,390  28.4%  6.0	  23.1

The market values for SMC's mortgage-backed securities were
determined from broker-dealer markets, internally developed
methods and nationally recognized statistical rating
organizations.

Certain mortgage-backed securities are subject to significant
prepayment risk, since, in periods of declining interest rates,
mortgages may be repaid more rapidly than scheduled as
individuals
refinance higher rate mortgages to take advantage of the lower
current rates. As a result, holders of mortgage-backed
securities
may receive large prepayments on their investment, which cannot
be
reinvested at an interest rate comparable to the rate on the
prepaying mortgages. SMC has addressed this risk of prepayment
risk by investing 18% of its mortgage-backed investment
portfolio
in planned and target amortization classes. These investments
are
designed to amortize in a more predictable manner by shifting
the
primary risk of prepayment of the underlying collateral to
investors in other tranches ("support classes"). Mortgage-backed
pass-through securities, "sequential" and support class CMOs,
which comprised the remaining 82% of the book value of SMC's
mortgage-backed securities at December 31, 2000, are more
sensitive to this prepayment risk.

Separate Accounts

Separate account assets and liabilities are maintained
primarily for universal life contracts of which the majority
represents unit-linked business where benefits on surrender and
maturity are not guaranteed. They generally represent funds held
in accounts to meet specific investment objectives of
policyholders who bear the investment risk. Investment income
and
investment gains and losses accrue directly to such
policyholders.

Reserves

In accordance with applicable insurance laws, SMC's insurance
subsidiaries have established and carry as liabilities in their
statutory financial statements, actuarially determined reserves
to
satisfy their respective annuity contract and life insurance
policy obligations. Reserves, together with premiums to be
received on outstanding policies and interest thereon at certain
assumed rates, are calculated to be sufficient to satisfy policy
and contract obligations. The actuarial factors used in
determining such reserves are based on statutorily prescribed
mortality tables and interest rates.

The reserves in the consolidated financial statements in this
report are calculated based on GAAP and differ from those
specified by the laws of the various states and recorded in the
statutory financial statements of SMC's insurance subsidiaries.
These differences arise from the use of different mortality
tables
and interest rate assumptions, the introduction of lapse
assumptions into the reserve calculation and the use of the net
level premium reserve method on all insurance business. See Note
1
to the Company's consolidated financial statements for reserve
assumptions under GAAP.

To determine policy benefit reserves for its life insurance
and annuity products, SMC performs periodic studies to compare
current experience for mortality, interest and lapse rates with
projected experience used in calculating the reserves.
Differences
are reflected currently in earnings for each period. SMC
historically has not experienced significant adverse deviations
from its assumptions.

Reinsurance

Consistent with the general practice of the life insurance
industry, SMC has reinsured portions of the coverage provided by
its insurance products with other insurance companies under
agreements of indemnity reinsurance.  SMC's policy risk
retention
limit on the life of any one individual does not exceed
$150,000.

Indemnity reinsurance agreements are intended to limit a life
insurer's maximum loss on a particular risk or to obtain a
greater
diversification of risk. Indemnity reinsurance does not
discharge
the primary liability of the original insurer to the insured,
but
it is the practice of insurers for statutory accounting purposes
(subject to certain limitations of state insurance statutes) to
account for risks which have been reinsured with other approved
companies, to the extent of the reinsurance, as though they are
not risks for which the original insurer is liable. However,
under
Statement of Financial Accounting Standards No. 113 ("SFAS
113"),
"Accounting and Reporting for Reinsurance of Short-Duration and
Long-Duration Contracts" these amounts are added back to policy
reserves and recorded as amounts due from reinsurers.

Reinsurance ceded on life insurance policies to unaffiliated
companies by SMC in 2000, 1999 and 1998, excluding financial
reinsurance agreements,  represented 45.3%, 40.3% and 46.8%,
respectively, of gross combined individual life insurance in
force
at the end of such years.  Reinsurance assumed in the normal
course from unaffiliated companies by SMC in 2000, 1999 and 1998
represented 8.71%, 9.15%, and 9.42%, respectively, of net
combined
individual life insurance in force.

The following is reinsurance ceded information for in force
life insurance policies at December 31, 2000 (in thousands):

							      % of Total
Insurance Company		Face Value of	Reinsurance
	Reinsurance
				     Life Policies    Ceded
	Recoverable

Lincoln National Life
Insurance Company		$ 184,483		  15.21%		$  1,374

Employers Reinsurance
Corporation	    		  119,815		   9.88%	    	     341

Business Men's Assurance
Company of America	       114,824		   9.47%            413

Reinsured life insurance in force at December 31, 2000 is
ceded to insurers rated "A" ("Excellent") or better by A.M.
Best.
SMC historically has not experienced any material losses in
collection of reinsurance receivables.

 SMC's largest annuity reinsurer at December 31, 2000, SCOR
Life U.S. Insurance Company ("SCOR Life"), formerly known as
Winterthur Life Re Insurance Company, represented $22.7 million,
or 55.5% of total reinsurance recoverable and is rated "A+"
("Superior") by A.M. Best. SCOR Life limits dividends and other
transfers by Standard Life to SMC or affiliated companies if
adjusted surplus is less than 5.5% of admitted assets or $41.9
million at December 31, 2000.  SMC no longer cedes its annuity
business.

Savers Life issued and marketed Medicare supplement policies
in 1998 including the time period from March 12, 1998, the
acquisition date of Savers Life, through July 1, 1998, when the
Medicare supplement business was sold. In connection with the
sale
of the Medicare supplement business, Savers Life received an
initial statutory ceding allowance of $4.2 million, which was
offset by a reserve reduction of $1.6 million and write off of
present value of future profits of $2.6 million and resulted in
no
gain or loss for GAAP.  Under the terms of the reinsurance
agreement, Standard Life administered the Medicare supplement
business through October 1, 1999 in exchange for administrative
fee income. The consummation of this transaction resulted in the
Company exiting from the Medicare supplement business it
acquired
with the Savers Life acquisition.


Acquisition Strategy and Recent Acquisitions

A principal component of SMC's strategy is to grow through the
acquisition of life insurance companies and blocks of in force
life insurance and annuities. SMC regularly investigates
acquisition opportunities in the life insurance industry that
complement or are otherwise strategically consistent with its
existing business. Any decision to acquire a block of business
or
an insurance company will depend on a favorable evaluation of
various factors. SMC believes that availability of blocks of
business in the marketplace will continue in response to ongoing
industry consolidation, risk-based capital requirements and
other
regulatory and rating agency concerns. In addition, SMC plans to
market annuity and life insurance products directly, as it has
done in the past. SMC currently has no plans or commitments to
acquire any specific insurance business or other material
assets.

SMC has the information systems and administrative
capabilities necessary to add additional blocks of business
without a proportional increase in operating expenses. In
addition, SMC has developed management techniques for reducing
or
eliminating the expenses of the companies it acquires through
the
consolidation of their operations with those of SMC.  Such
techniques include reduction or elimination of overhead,
including
the acquired company's management, staff and home office,
elimination of marketing expenses and, where appropriate, the
substitution of Standard Life's distribution network for the
acquired company's current distribution system, and the
conversion
of the acquired company's data processing operations to SMC's
system.

SMC typically acquires companies or blocks of business through
the purchase or exchange of shares.  This method is also used
for
assumption reinsurance transactions.  SMC's future acquisitions
may be subject to certain regulatory approvals, policyholder
consents and stockholder approval.

The following is a list of SMC's most recent acquisitions and
the terms under which they were purchased (in millions):



							Purchase Price
							       Acquisition
Company			SMC Stock	 	 Cash      Costs
	Total

Savers Life		  $ 14.9		$ 2.2	    $ 1.5	    $ 18.6

Midwestern Life
Insurance Company of
Ohio ("Midwestern
Life")			     4.6      	  8.9            .6	      14.1



The acquisitions of Savers Life and Midwestern Life were
accounted for using the purchase method of accounting and
accordingly, SMC's consolidated financial statements include the
results of operations of the acquired companies from the
effective
dates of their respective acquisitions. Savers Life and
Midwestern
Life were merged into Standard Life effective December 31, 1998.
As a result of these mergers, Standard Life remained as the
surviving entity.  Under purchase accounting, SMC allocated the
total purchase price of the assets and liabilities acquired,
based
on a determination of their fair values and recorded the excess
of
acquisition cost over net assets acquired as goodwill, which is
being amortized on a straight-line basis over 20 - 30 years.

Competition

The life insurance industry is highly competitive and consists
of a large number of both stock and mutual insurance companies,
many of which have substantially greater financial resources,
broader and more diversified product lines and larger staffs
than
those possessed by SMC. There are approximately 2,000 life
insurance companies in the United States, which may offer
insurance products similar to those marketed by SMC. Competition
within the life insurance industry occurs on the basis of, among
other things, i) product features such as price and interest
rates, ii) perceived financial stability of the insurer, iii)
policyholder service, iv) name recognition, and v) ratings
assigned by insurance rating organizations. Additionally, when
SMC
bids on companies it wishes to acquire, it typically is in
competition with other entities.

SMC must also compete with other insurers to attract and
retain the allegiance of agents. SMC believes it has been
successful in attracting and retaining agents because it has
been
able to offer competitive products, competitive commission
structures, internet based agent services, prompt policy
issuance
and responsive policyholder service. Because most annuity
business
written by life companies is through agents, management believes
that competition centers more on the strength of the agent
relationship rather than on the identity of the insurer.

Competition also is encountered from the expanding number of
banks, securities brokerage firms and other financial
intermediaries which are marketing insurance products and which
offer competing products such as savings accounts and
securities.
The Company began distributing annuities through financial
institutions as a result of the acquisition of Savers Marketing
in
March 1998.  The recent passage, by Congress, of the Gramm-
Leach-
Bliley Financial Services Modernization Act  ("GLB Act") has
expanded competitive opportunities for non-insurance financial
services companies.  The full effects of the GLB Act on our
competition cannot be predicted with certainty at this time.
The unit-linked life insurance market in Europe is highly
competitive and consists of many companies domiciled in the
United
Kingdom and its offshore centers, as well as many companies in
Luxembourg and Ireland, which sell products similar to those of
SMI.  SMI is able to develop its share of a competitive market
by
developing strong relationships with investment advisors,
brokers,
accountants and tax attorneys.

Financial institutions, school districts, marketing companies,
agents who market insurance products and policyholders use the
ratings of an insurer as one factor in determining which
insurer's
annuity to market or purchase. Standard Life and Dixie Life have
a rating of "B+" and "B", respectively, by A.M. Best.  A rating
of
"B+" is assigned by A.M. Best to companies that, in their
opinion,
have achieved very good overall performance when compared to the
standards established by A.M. Best, and have a good ability to
meet their obligations to policyholders over a long period of
time.  A rating of  "B" is assigned by A.M. Best to companies
that, in their opinion, have achieved good overall performance
when compared to the standards established by A.M. Best.
According
to A.M. Best, these companies generally have an adequate ability
to meet their obligations to policyholders, but their financial
strength is vulnerable to unfavorable changes in underwriting or
economic conditions. In evaluating a company's financial and
operating performance, A.M. Best reviews the company's
profitability, leverage and liquidity as well as the company's
book of business, the adequacy and soundness of its reinsurance,
the quality and estimated market value of its assets, the
adequacy
of its reserves and the experience and competence of its
management. A.M. Best's ratings are based upon factors relevant
to
policyholders, agents, insurance brokers and intermediaries and
are not directed to the protection of investors. Generally,
rating
agencies base their ratings on information furnished to them by
the issuer and on their own investigations, studies and
assumptions by the rating agencies.
There is no assurance that any particular rating will continue
for
any given period of time or that it will not be changed or
withdrawn entirely if, in the judgment of the rating agency,
circumstances so warrant. Although a higher rating by A.M. Best
or
another insurance rating organization could have a favorable
effect on Standard Life's business, management believes that it
is
able to compete on the basis of their competitive crediting
rates,
asset quality, strong relations with its independent agents and
the quality of service to its policyholders.

Federal Income Taxation

The life insurance and annuity products marketed and issued
by Standard Life generally provide the policyholder with an
income
tax advantage, as compared to other saving investments such as
certificates of deposit and bonds, in that income taxation on
the
increase in value of the product is deferred until receipt by
the
policyholder. With other savings investments, the increase in
value is taxed as earned. Life insurance benefits that accrue
prior to the death of the policyholder, and annuity benefits,
are
generally not taxable until paid, and life insurance death
benefits are generally exempt from income tax. The tax advantage
for life insurance and annuity products is provided in the
Internal Revenue Code ("IRC"), and is generally followed in all
states and other U.S. taxing jurisdictions. Accordingly, it is
subject to change by Congress and the legislatures of the
respective taxing jurisdictions.

SMC and its U.S. non-insurance subsidiaries file a
consolidated return for federal income tax purposes and, as of
December 31, 2000, have net operating loss carryforwards of
approximately $6.3 million, which expire from 2007 to 2018.

In addition, Standard Life and Dixie Life file a consolidated
return for federal income tax purposes and at December 31, 2000,
have a net operating loss carryforward of approximately $2.2
million, which expires in 2010, 2012 and 2019.   These
carryforwards will be available to reduce taxable income in the
Standard Life consolidated return.

SMI is a Luxembourg 1929 holding company, and has a
preferential tax status.  SMI is completely exempt from
corporate
income tax, municipal business tax and net capital tax, but is
subject to "taxe d'abonnement", levied annually at a rate of
0.2%
of the paid up capital.  Premier Life (Bermuda) is exempt from
income tax until March 2016 pursuant to a decree from the
Minister
of Finance. Premier Life (Luxembourg) is subject to Luxembourg
income taxation (statutory corporate rate of 37.45%) and a
capital
tax of approximately 0.5% of its net equity. At December 31,
2000,
Premier Life (Luxembourg) had accumulated corporate income tax
loss carryforwards of approximately $.4 million, all of which
may
be carried forward indefinitely. To the extent that such income
is
taxable under U.S. law, it will be included in SMC's
consolidated
return.

Effective January 1, 2000, Standard Management entered into
a tax sharing agreement with Savers Marketing and SMI that
allocates the consolidated federal income tax liability.  In
2000,
Savers Marketing and SMI paid Standard Management  $.1 million
and
$.9 million, respectively, in accordance with this agreement.

Inflation

The primary direct effect of inflation on SMC is the increase
in operating expenses. A large portion of SMC's operating
expenses
consists of salaries, which are subject to wage increases at
least
partly affected by the rate of inflation.

The rate of inflation also has an indirect effect on SMC. To
the extent that the government's economic policy to control the
level of inflation results in changes in interest rates, SMC's
new
sales of insurance products and investment income are affected.
Changes in the level of interest rates also have an effect on
interest spreads, as investment earnings are reinvested.



Foreign Operations and Currency Risk

SMI policyholders invest in assets denominated in a broad
range of currencies. Policyholders effectively bear the currency
risk, if any, as these investments are matched by policyholder
separate account liabilities. Therefore, their investment and
currency risk is limited to premiums they have paid.
Policyholders
are not permitted to invest directly in options, futures and
derivatives.

SMI could be exposed to currency fluctuations if currencies
within the conventional investment portfolio or certain
actuarial
reserves are mismatched. The assets and liabilities of this
portfolio and the reserves are continually matched by the
company
and at regular intervals by an independent actuary. In addition,
Premier Life's (Luxembourg) stockholder's equity is denominated
in
Luxembourg francs. Premier Life (Luxembourg) does not hedge its
translation risk because its stockholder's equity will remain in
Luxembourg francs for the foreseeable future and no significant
realized foreign exchange gains or losses are anticipated. At
December 31, 2000, there is a $2.4 million unrealized loss from
foreign currency translation.

Due to the nature of unit-linked products issued by SMI, which
represent virtually all of the SMI portfolio, the investment
risk
rests with the policyholder. Investment risk for SMI exists
where
investment decisions are made with respect to the remaining
traditional business and for the assets backing certain
actuarial
and regulatory reserves. The investments underlying these
liabilities mostly represent short term investments and fixed
maturity securities which are normally bought and/or disposed of
only on the advice of independent consulting actuaries who
perform
an annual exercise comparing anticipated cash flows on the
insurance portfolio with the cash flows from the fixed maturity
securities. Any resulting material foreign currency mismatches
are
then covered by buying and/or selling the securities as
appropriate.

Regulatory Factors

SMC's insurance subsidiaries are subject to significant
regulation by the insurance regulatory authorities in the
jurisdictions in which they are domiciled and the insurance
regulatory bodies in the other jurisdictions in which they are
licensed to sell insurance. The purpose of such regulation is
primarily to ensure the financial stability of insurance
companies
and to provide safeguards for policyholders rather than to
protect
the interest of stockholders. The insurance laws of various
jurisdictions establish regulatory agencies with broad
administrative powers relating to i) the licensing of insurers
and
their agents, ii) the regulation of trade practices, iii)
management agreements, iv) the types of permitted investments
and
maximum concentration, v) deposits of securities, vi) the form
and
content of financial statements, vii) premiums charged by
insurance companies, viii) sales literature and insurance
policies,  ix) accounting practices and the maintenance of
specified reserves, and x) capital and surplus.  SMC's insurance
subsidiaries are required to file detailed periodic financial
reports with supervisory agencies in certain jurisdictions.

Most states have also enacted legislation regulating insurance
holding company activities including acquisitions, extraordinary
dividends, terms of surplus debentures, terms of affiliate
transactions and other related matters. The insurance holding
company laws and regulations vary by state, but generally
require
an insurance holding company and its insurance company
subsidiaries licensed to do business in the state to register
and
file certain reports with the regulatory authorities, including
information concerning capital structure, ownership, financial
condition, certain intercompany transactions and general
business
operations. State holding company laws also require prior notice
or regulatory agency approval of certain material intercompany
transfers of assets within the holding company structure.
Recently a number of state regulators have considered or have
enacted legislation proposing that change, and in many cases
increase, the authority of state agencies to regulate insurance
companies and holding companies.  For additional information on
state laws regulating insurance company subsidiaries, refer to
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" and
Note
13 to the Company's consolidated financial statements.

Under Indiana insurance law, Standard Life may not enter into
certain transactions, including management agreements and
service
contracts, with members of its insurance holding company system,
including Standard Management, unless Standard Life has notified
the Indiana Department of Insurance ("IDOI") of its intention to
enter into these transactions and the IDOI has not disapproved
of
them within the period specified by Indiana law. Among other
things, these transactions are subject to the requirement that
their terms and charges or fees for services performed be fair
and
reasonable.

The Indiana insurance laws and regulations require that the
statutory surplus of Standard Life following any dividend or
distribution be reasonable in relation to its outstanding
liabilities and adequate to its financial needs. The IDOI may
bring an action to enjoin or rescind the payment of a dividend
or
distribution by Standard Life that would cause its statutory
surplus to be unreasonable or inadequate under this requirement.

Most states, including Indiana, require administrative
approval of the acquisition of 10% or more of the outstanding
shares of an insurance company incorporated in the state or the
acquisition of 10% or more of the outstanding shares of an
insurance holding company whose insurance subsidiary is
incorporated in the state. The request for approval must be
accompanied by detailed information concerning the acquiring
parties and the plan of acquisition. The acquisition of 10% of
these shares is generally deemed to be the acquisition of
"control" for the purpose of the holding company statutes.
However, in many states the insurance authorities may find that
"control" in fact does or does not exist in circumstances in
which
a person owns or controls either a lesser or a greater amount of
securities.

In some instances state regulatory authorities require
deposits of assets for the protection of either policyholders in
those states or for all policyholders. At December 31, 2000,
securities of $8.4 million or approximately 1% of the book value
of SMC's U.S. insurance subsidiaries' invested assets were on
deposit with various state treasurers or custodians. These
deposits must consist of securities that comply with the
standards
that the particular state has established. SMI's account assets
plus $6.6 million were held by a custodian bank approved by the
Luxembourg regulatory authorities to comply with local insurance
laws at December 31, 2000.

In recent years, the NAIC and state insurance regulators have
reexamined existing laws and regulations and their application
to
insurance companies. This reexamination has focused on i)
insurance company investment and solvency issues, ii) risk-based
capital guidelines, iii) assumption reinsurance, iv)
interpretations of existing laws, v) the development of new
laws,
vi) the interpretation of nonstatutory guidelines, vii) the
standardization of statutory accounting rules and viii) the
circumstances under which dividends may be paid. The NAIC has
encouraged states to adopt model NAIC laws on specific topics
such
as holding company regulations and the definition of
extraordinary
dividends. It is not possible to predict the future impact of
changing state regulation on the operations of SMC.

The NAIC, as well as Indiana and Mississippi, have each
adopted Risk-Based Capital ("RBC") requirements for life and
health insurance companies to evaluate the adequacy of statutory
capital and surplus in relation to investment and insurance
risks.
State insurance regulators use the RBC requirements as
regulatory
tools only, which aid in the identification of insurance
companies
that could potentially lack sufficient capital.  Regulatory
compliance is determined by a ratio (the "RBC Ratio") of the
company's regulatory total adjusted capital to its authorized
control level RBC.  The two components of the RBC Ratio are
defined by the NAIC.  The RBC ratios that require corrective
action as follows:


Level				RBC Ratio			Corrective Action

Company Action		     1.5 - 2		Company is required to
								submit a plan to improve
								its RBC Ratio

Regulatory Action		1 - 1.5		Regulators will order
								corrective actions

Authorized Control	     0.7 - 1		Regulators are authorized
								to take control of the
								company

Mandatory Control		less than 0.7	Regulators must take over
								the company

At December 31, 2000, the RBC Ratios of Standard Life and
Dixie Life were both at least two and a half times greater than
the levels at which company action is required.  If these RBC
Ratios should decline in the future, those subsidiaries might be
subject to increased regulatory supervision and decreased
ability
to pay dividends, management fees and surplus debenture interest
to Standard Management.

On the basis of annual statutory statements filed with state
regulators, the NAIC calculates twelve financial ratios to
assist
state regulators in monitoring the financial condition of
insurance companies.  A "usual range" of results for each ratio
is
used as a benchmark.  In the past, variances in certain ratios
of
our insurance subsidiaries have resulted in inquiries from
insurance departments to which we have responded.  Such
inquiries
did not lead to any restrictions affecting the Company's
operations.

SMC attempts to manage its assets and liabilities so that
income and principal payments received from investments are
adequate to meet the cash flow requirements of its policyholder
liabilities. The cash flows of SMC's liabilities are affected by
actual maturities, surrender experience and credited interest
rates. SMC periodically performs cash flow studies under various
interest rate scenarios to evaluate the adequacy of expected
cash
flows from its assets to meet the expected cash requirements of
its liabilities. SMC utilizes these studies to determine if it
is
necessary to lengthen or shorten the average life and duration
of
its investment portfolio. Because of the significant
uncertainties
involved in the estimation of asset and liability cash flows,
there can be no assurance that SMC will be able to effectively
manage the relationship between its asset and liability cash
flows.

The statutory filings of SMC's insurance subsidiaries require
classifications of investments and the establishment of an Asset
Valuation Reserve ("AVR"), designed to stabilize a company's
statutory surplus against fluctuations in the market value of
stocks and bonds, according to regulations prescribed by the
NAIC.
The AVR consists of two main components: a "default component"
to
provide for future credit-related losses on fixed income
investments and an "equity component" to provide for losses on
all
types of equity investments, including real estate. The NAIC
requires an additional reserve, called the Investment
Maintenance
Reserve ("IMR"), which consists of the portion of realized
capital
gains and losses from the sale of fixed income securities
attributable to changes in interest rates. The IMR is required
to
be amortized against earnings on a basis reflecting the
remaining
period to maturity of the fixed income securities sold. These
regulations affect the ability of SMC's insurance subsidiaries
to
reflect future investment gains and losses in current period
statutory earnings and surplus.

The amounts related to AVR and IMR for the insurance
subsidiaries at December 31, 2000 are summarized as follows (in
thousands):
					          Maximum
				  AVR		  AVR		  IMR

Standard Life		$2,536	      $7,909	     $11,636
Dixie Life		   232	         432	         160

The annual addition to the AVR for 2000 is 20% of the maximum
reserve over the accumulated balance. If the calculated reserve
with current year additions exceeds the maximum reserve amount,
the reserve is reduced to the maximum amount. For the year ended
December 31, 2000, SMC's U.S. subsidiaries each made the
required
contribution to the AVR.

Most jurisdictions require insurance companies to participate
in guaranty funds designed to cover claims against insolvent
insurers. Insurers authorized to transact business in these
jurisdictions are generally subject to assessments based on
annual
direct premiums written in that jurisdiction to pay such claims,
if any. These assessments may be deferred or forgiven under most
guaranty laws if they would threaten an insurer's financial
strength and, in certain instances, may be offset against future
state premium taxes. The incurrence and amount of such
assessments
have increased in recent years and may increase further in
future
years.  The likelihood and amount of all future assessments
cannot
be reasonably estimated and are beyond the control of SMC.

As part of their routine regulatory oversight process,
approximately once every three to five years, state insurance
departments conduct periodic detailed examinations
("Examinations") of the books, records and accounts of insurance
companies domiciled in their states. Standard Life had an
Examination during 1996 for the five-year period ended December
31, 1995 and Dixie Life had an examination during 1998 for the
three-year period ended December 31, 1997. The final examination
reports issued by the Indiana and Mississippi Departments of
Insurance did not raise significant issues.

The federal government does not directly regulate the
insurance business.  However, federal legislation and
administrative policies in several areas, including pension
regulation, age and sex discrimination, financial services
regulation and federal taxation, do affect the insurance
business.
 In addition, legislation has been introduced from time to time
in
recent years, which, if enacted, could result in the federal
government assuming a more direct role in the regulation of the
insurance industry.  The recently passed GLB Act has left the
currently existing regime of state insurance regulation largely
intact; however, more comprehensive federal legislation in this
area is still being actively considered by Congress.

Employees

As of March 15, 2001, SMC had 149 employees which were
comprised of the following: Standard Life - 89 employees, Savers
Marketing - 24 employees, SMI - 24 employees (15 of whom are
covered by a collective bargaining agreement), and Standard
Management - 12 employees.  SMC believes that its future success
will depend, in part, on its ability to continue to attract and
retain highly-skilled technical, marketing, support and
management
personnel. Management believes that it has excellent relations
with its employees.

Item 2.  Properties

Domestic Operations.  SMC leases approximately 31,000 square
feet in an office building located at 9100 Keystone Crossing,
Indianapolis, Indiana, under the terms of a lease, which expires
on June 1, 2001. SMC entered into a lease on March 31, 1997, for
approximately 16,000 square feet in a warehouse located at 2525
North Shadeland, Indianapolis, Indiana which expires on
September 30, 2001.

SMC is in the process of constructing a new domestic home
office of 58,000 square feet at 10689 North Pennsylvania Avenue,
Indianapolis, Indiana which is projected to be completed in May
2001.

Savers Marketing leases approximately 6,000 square feet in an
office building located at 8064 North Point Boulevard, Winston-
Salem, North Carolina, under the terms of a lease, which expires
on September 30, 2001.

International Operations.  SMI entered into a lease on
November 17, 1997 for approximately 4,500 square feet in an
office
building located at 13A, rue de Bitbourg, L-1273 Luxembourg,
Grand
Duchy of Luxembourg which expires on November 16, 2003.

Item 3.  Legal Proceedings

An officer and director of SMC resigned effective April 15,
1997.  On June 19, 1997, this former officer commenced an action
in the Superior Court of Marion County, Indiana against SMC
claiming that his employment agreement contained a provision
that
would entitle him to receive certain benefits following a
termination of his employment with SMC under certain
circumstances.  This former officer has asserted to SMC that he
is entitled to a lump sum termination payment of $1.7 million
and
liquidated damages not exceeding $3.3 million by virtue of his
voluntarily leaving SMC's employment.  SMC disputes those
claims.
SMC filed its Answer and Counterclaim on September 11, 1997.
SMC's investigation since the action was filed revealed a basis
for the termination of employment of the former officer for
cause
relative to after-acquired evidence. On October 14, 1997, the
Board of Directors of SMC terminated the former officer for
cause
effective March 15, 1997.  Such termination was argued by SMC as
a
complete defense to all claims asserted by the former officer.
On
January 12, 2001, the trial court ruled on motions for summary
judgment filed by both SMC and the former officer.  The court
ruled that the officer was entitled to a severance benefit in
the
amount of $.4 million plus interest thereon calculated as of
July
15, 1997.  The court dismissed all of the former officer's other
claims, including his request for additional damages up to $3.3
million.  On February 12, 2001, the former officer filed a
notice
of appeal of the trial court's ruling as to the dismissal of all
additional damages, and the former officer is in the process of
perfecting the appeal.  Currently, SMC plans to cross-appeal the
$.4 million in damages awarded, as well as aggressively pursue
its
counterclaim which is still pending in the trial court.
Management believes that the conclusion of such litigation will
not have a material adverse effect on SMC's consolidated
financial
conditions.

In addition, SMC is involved in various legal proceedings in
the normal course of business.  In most cases, these proceedings
involve claims under insurance policies or other contracts of
SMC.
 The outcomes of these legal proceedings are not expected to
have
a material adverse effect on the consolidated financial
position,
liquidity, or future results of operations of SMC based on SMC's
current understanding of the relevant facts and law.


Item 4.  Submission of Matters to a Vote of Securities Holders

At the Company's Annual Meeting of Stockholders held on June
7, 2000, the following individuals were elected to the Board of
Directors:


						Shares For		Shares
Withheld
Stephen M. Coons			4,955,677				294,558
Martial R. Knieser	      	4,947,863				302,372
P.B. (Pete) Pheffer		     4,945,863				304,372

A total of 5,250,235 shares were present in person or by proxy
at the Annual Meeting of Stockholders.

Executive Officers

	The following sets forth information concerning each of
SMC's executive officers:

Ronald D. Hunter, 49, Chairman of the Board, Chief Executive
Officer and President of SMC
 Chairman of the Board and Chief Executive Officer of Standard
  Life since 1987
 Held management and sales positions with:
 Conseco, Inc from 1981 to 1986
 Aetna Life & Casualty Company from 1978 to 1981
 United Home Life Insurance Company from 1975 to 1977
 Prudential Life Insurance Company from 1972 to 1975

Raymond J. Ohlson, 50, Executive Vice President, Chief Marketing
Officer and Director of SMC
 President of Standard Life since 1993
 President and Director of Standard Marketing since 1991
 Earned CLU designation in 1980
 Life member of the Million Dollar Round Table

P.B. (Pete) Pheffer, CPA, 50, Executive Vice President, Chief
Financial Officer and Director of SMC
 Senior Vice President -- Chief Financial Officer and
 Treasurer of Jackson National Life Insurance Company from 1994
to
  1996
 Senior Vice President -- Chief Financial Officer of Kemper Life
  Insurance
 Companies from 1992 to 1994
 Received MBA from the University of Chicago in 1988

Stephen M. Coons, 60, Executive Vice President, General Counsel,
Secretary and Director of SMC
 Counsel to the law firm of Coons, Maddox & Koeller from 1993 to
  1995
 Partner with the law firm of Coons & Saint prior to 1993
 Indiana Securities Commissioner from 1978 to 1983
 Practicing law for 30 years

Edward T. Stahl, 54, Executive Vice President, Chief
Administrative Officer and Director of SMC
 Secretary of Standard Life since 1993
 President and Chief Operations Officer of Standard Life from
1988
  to 1993
 Director of Standard Life since 1987
 Served in various capacities in the insurance industry since
1966
  and is a member of several insurance associations


PART II

Item 5.	Market for SMC Common Stock and Related Stockholder
Matters

SMC Common Stock trades on NASDAQ under the symbol "SMAN". The
following table sets forth, for the periods indicated, the range
of the high and low sales prices of SMC Common Stock as reported
by NASDAQ.  SMC has never paid cash dividends on its Common
Stock.
At the close of business on March 15, 2001 there were
approximately 3,000 holders of record of the outstanding shares
of
SMC Common Stock. Although SMC Common Stock is traded on NASDAQ,
no assurance can be given as to the future price of or the
markets
for the stock.

                                                     SMC
                                        	    Common Stock
                                   		High			 Low
1999
Quarter ended March 31, 1999				7.125		5.375
Quarter ended June 30, 1999				6.563		5.250
Quarter ended September 30, 1999			6.938		4.656
Quarter ended December 31, 1999			6.219		4.250

2000
Quarter ended March 31, 2000				5.250		4.188
Quarter ended June 30, 2000				4.813		3.063
Quarter ended September 30, 2000			4.000		2.750
Quarter ended December 31, 2000			4.000		2.938


Item 6.	SMC Selected Historical Financial Data (a)
(Dollars in Thousands, Except Per Share Amounts and Shares
Outstanding)

The following historical financial data of SMC was derived
from its audited consolidated financial statements.  This
historical financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the SMC Consolidated Financial
Statements and related Notes.



                                 Year Ended December 31
                      2000	  1999	 1998       1997   1996
STATEMENT OF
OPERATIONS DATA:

Premium income		$15,470	$13,090  $14,479(f) $7,100 10,468(e)
Investment activity
  Net investment
   Income            43,173    44,821   34,221    29,197   20,871
  Net realized
   investment gains
   (losses)	      (4,492)       78      353       396    1,302
Total revenues		 76,063	 72,963   63,275    46,855   40,205
Interest expense and
 financing costs	  3,417     3,385    2,955     2,381      805
Total benefits and
 expenses			 69,659	 65,565   56,964    43,593 36,670(e)
Income before income
 taxes and
 extraordinary gain
 (loss)		  	  6,404	  7,398    6,311     3,262    3,535
Operating income (b)  7,333	  5,221    4,448     2,384    1,174
Net income		  5,267	  5,272    4,681	 2,645    4,767


PER SHARE DATA:
Operating income (b)    .95	    .69	   .65       .49      .24
Operating income,
 assuming dilution (b)  .89	    .65	   .58       .43	  .21
Net income	         .68       .69      .68       .54      .98
Net income, assuming
 dilution			    .66       .65      .62	   .48      .91
Weighted average
 common shares
 outstanding,
 assuming
 dilution        9,183,949 9,553,731 9,363,763 5,591,217 5,549,057
Book value per
 common share		$  8.34	$  6.85   $ 8.64    $ 8.88   $ 7.95
Book value per common
 share excluding
 unrealized gain (loss)
 on securities
 available for sale	$  9.61	$  8.89   $ 8.43    $ 8.44   $ 8.09
Common shares
 outstanding	  7,545,156 7,785,156 7,641,454 4,876,490 5,024,270
COVERAGE RATIO:

Ratio of earnings
 to total fixed
 charges (c)           2.9X      3.2X     3.1X      2.4X     5.4X

BALANCE SHEET DATA (at
year end):
Invested assets    $760,444  $648,503 $592,123  $398,782 $370,138
Assets held in
 separate accounts  520,439   319,973  190,246   148,064  128,546
Total assets	   1,470,457 1,150,977  956,150   668,992  628,413
Long-term debt,
 notes payable
 and capital
 lease obligations	 31,500    34,500   35,000    26,141   20,697
Preferred stock	  6,530     6,530    6,530        --    1,757
Shareholders' equity 62,899    53,360   66,042    43,313   39,919
Shareholders' equity,
 excluding unrealized
 gain (loss) on
 securities available
 for sale		      72,542    69,219   64,382    41,142   40,665
Ratio of debt to total
 capitalization (d)	     28%       31%      33%       39%      33%

Notes to SMC Selected Historical Financial Data
(Dollars in Thousands, Except Per Share Amounts)


(a)	Comparison of consolidated financial information is
significantly affected by the acquisitions of Dixie Life on
October 2, 1995, Shelby Life on November 8, 1996, Savers Life
on March 12, 1998, Midwestern Life on October 30, 1998 and the
disposal of First International on March 18, 1996. Refer to
the notes to the consolidated financial statements in this
report for a description of business combinations.

(b)	Operating income represents income before extraordinary
gains
(losses), excluding net realized investment gains (losses)
(less income taxes (benefits) and amortization relating to
such gains (losses)), and gain on disposal of subsidiary.

(c)	Represents income from continuing operations (including
realized investment gains and (losses)) before income
taxes, and extraordinary items plus fixed charges.  Fixed charges
represent total interest expense.

(d)	Total capitalization is the sum of SMC's debt (long-term
debt, notes payable and capital lease obligations), and
redeemable
preferred stock and shareholders' equity (excluding unrealized
gains and losses.)

(e)	Includes recapture of premiums ceded and an increase in
benefits due to an increase in reserves of $4.2 million due
to the termination and recapture of a reinsurance agreement
with National Mutual Life Insurance Company.

(f)	Includes Medicare supplement premiums of $6.0 million
related
to the Savers Life acquisition.  This business was sold
effective July 1, 1998.


Item 7.	Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following discussion highlights the principal factors
affecting the results of operations and the significant changes
in
balance sheet items of SMC on a consolidated basis for the
periods
listed, as well as liquidity and capital resources. This
discussion should be read in conjunction with the accompanying
Consolidated Financial Statements, related Notes and selected
historical financial data.

Forward-looking Statements

All statements, trend analyses, and other information
contained in this Annual Report on Form 10-K or any document
incorporated by reference herein relative to markets for the
Company's products and trends in the Company's operations or
financial results, as well as other statements including words
such as "anticipate", "believe", "plan", "estimate", "expect",
"intend" and other similar expressions, constitute forward-
looking
statements under the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to known and
unknown risks, uncertainties and other factors, which may cause
actual results to be materially different from those
contemplated
by the forward-looking statements.  Such factors include, but
are
not limited to:

 General economic conditions and other factors, including
prevailing interest rate levels, and stock market
performance, which may affect the ability of the Company
to sell its products, the market value of the Company's
investments and the lapse rate and profitability of the
Company's policies.

 The Company's ability to achieve anticipated levels of
operational efficiencies at recently acquired companies,
as well as through other cost-saving initiatives.

 Customer response to new products, distribution channels
and marketing initiatives.

 Mortality, morbidity and other factors which may affect the
profitability of the Company's insurance products.

 Changes in the federal income tax laws and regulation which
may affect the relative tax advantages of some of the
Company's products.

 Increasing competition in the sale of the Company's
products.

 Regulatory changes or actions, including those relating to
regulation of financial services affecting bank sales and
underwriting of insurance products, regulation of the sale,
underwriting and pricing of insurance products.

 The availability and terms of future acquisitions.

 The risk factors or uncertainties listed from time to time
in any document incorporated by reference herein.

General

Product Profitability.  Margins on life insurance and annuity
products are affected by interest rate fluctuations. Rising
interest rates would result in a decline in the market value of
assets. However, as there are positive cash flows from renewal
premiums, investment income and maturities of existing assets,
the
need for early disposition of investment assets to meet
operating
cash flow requirements would be unlikely. Rising interest rates
would also result in available cash flows from maturities being
invested at higher interest rates, which would help support a
gradual increase in new business and renewal interest rates on
interest-sensitive products. A sharp, sudden rise in the
interest
rate environment without a concurrent increase in crediting
rates
could result in higher surrenders, particularly for annuities.
The
effect of such surrenders would be to reduce earnings over the
long term. Earnings in the period of the surrender could
increase
or decrease depending on whether surrender charges were
applicable
and whether such charges differed from the write-off of related
deferred acquisition costs or present value of future profits.

When interest rates fall, SMC generally attempts to adjust the
credited interest rates subject to competitive pressures.
Although
SMC believes that such strategies will continue to permit it to
achieve a positive spread, a significant decline in the yield on
SMC's investments could adversely affect the results of
operations
and financial condition of SMC.

The long-term profitability of insurance products depends on
the accuracy of the actuarial assumptions that underlie the
pricing of such products. Actuarial calculations for such
insurance products, and the ultimate profitability of such
products, are based on four major factors: i) persistency, ii)
mortality, iii) return on cash invested by the insurer during
the
life of the policy, and iv) expenses of acquiring and
administering the policies.

The average expected remaining life of Standard Life's
traditional life and annuity business in force at December 31,
2000 was 6.9 years. This calculation was determined based upon
SMC's actuarial models and assumptions as to expected
persistency
and mortality. Persistency is the extent to which insurance
policies sold are maintained by the insured. The persistency of
life insurance and annuity products is a critical element of
their
profitability. However, a surrender charge often applies in the
early contract years and declines to zero over time.

Policyholders sometimes do not pay premiums, thus causing
their policies to lapse. For the years 2000, 1999 and 1998
Standard Life experienced total policy lapses of 6.4%, 6.2% and
6.1% of total policies in force at December 31 of each year,
respectively. The American Council of Life Insurance 2000 Fact
Book reported industry life insurance voluntary termination
rates
in 1999 of 14.3% for policies in force less than two years, 4.3%
for policies in force for two years or more and 5.8% for all
policies in force.

Present Value of Future Profits.  In accordance with industry
practice, when SMC purchases additional insurance business, it
assigns a portion of the purchase price, called the present
value
of future profits, to the right to receive future cash flows
arising from existing insurance policies. This asset is recorded
when the business is purchased at the value of projected future
cash flows on existing policies, less a discount to present
value.
As future cash flows emerge, they are treated as a recovery of
this asset. Therefore, if cash flows emerging from the purchased
or recaptured business during a period exactly equal the
projections, they are offset by that period's amortization of
the
cost of the policies purchased. In that event, the only income
statement effect from the purchased business is the realization
of
the discount that was initially deducted from the asset to
reflect
its present value. Changes in the future annual amortization of
this asset are not expected to have a significant effect on the
results of operations, because the amount of amortization is
expected to be equal to the profits emerging from the purchased
policies, net of interest on the unrecovered present value of
future profits balance. This asset is amortized over the
expected
life of the related policies purchased. Present value of future
profits is increased for the estimated effect of realizing
unrealized investment losses and decreased for the estimated
effect of realizing unrealized investment gains.

In selecting the interest rate to calculate the discounted
present value of the projected future profits, SMC uses the risk
rate of return it needs to earn in order to invest in the
business
being acquired or recaptured.

In determining this required risk rate of return, SMC
considers the following factors:

 The magnitude of the risks associated with each of the
actuarial assumptions used in determining expected future cash
flows (as described above).

 The cost of the capital required to fund the acquisition or
recapture.

 The likelihood of changes in projected future cash flows that
might occur if there are changes in insurance regulations and
tax laws.

 The acquired company's compatibility with other SMC activities
that may favorably affect future cash flows.

 The complexity of the acquired company or recaptured business.

 Recent prices (i.e., discount rates used in determining
valuations) paid by others to acquire or recapture similar
blocks of business.

The discount rate selected may affect subsequent earnings in
those instances where the purchase price of the policies exceeds
the value of net assets acquired (including the value of future
profits discounted at the selected interest rate). Selection of
a
lower (or higher) discount rate will increase (or decrease) the
portion of the purchase price assigned to the present value of
future cash flows and will result in an offsetting decrease (or
increase) in the amount of the purchase price assigned to
goodwill.
The effect on subsequent earnings caused by this variation in
purchase price allocation will depend on the characteristics of
the policies purchased. Use of a lower rate may result in an
increase in reported earnings in the early years after an
acquisition followed by a decrease in earnings in later years.

The percentage of future expected net amortization of the
beginning balance of the present value of future profits before
the effect of net unrealized gains and losses, based on the
present value of future profits at December 31, 2000 and current
assumptions as to future events on all policies in force, are
expected to be between 8% and 10% in each of the years 2001
through
2005.

SMC used discount rates of 13% and 15% to calculate the
present value of future profits of the Savers Life and
Midwestern
Life acquisitions, respectively.  Each is being amortized over
20 years based on the mix of their respective annuity and life
business.

For more information related to Present Value of Future
Profits refer to Note 4 to the Consolidated Financial
Statements.

Deferred Acquisition Costs.  Insurance products generate two
types of profit streams: i) from the excess of investment income
earned over that credited to the policyholder and ii) from the
excess of premiums received over costs incurred for policy
issuance, administration and mortality. Costs incurred in
issuing
new policies are deferred and recorded as deferred acquisition
costs ("DAC"), which are amortized using present value
techniques
so that profits are realized in proportion to premium revenue
for
certain products and estimated gross profits for certain other
products. Profits from all of these elements are recognized over
the lives of the policies; no profits are recorded at the time
the
policies are issued.


Amortization of DAC related to operations was $9.7 million,
$4.6 million, and $3.3 million for the years ended December 31,
2000, 1999 and 1998, respectively. The increase in current year
amortization expense resulted primarily from increased
amortization of DAC as gross profits from business sold in
recent
years began to emerge. DAC is generally amortized over the
expected lives of the policies, a period of approximately 20
years.  Interest is being accumulated at the projected crediting
rate on the policies. DAC is increased for the estimated effect
of
realizing unrealized investment losses and decreased for the
estimated effect of realizing unrealized investment gains. The
offset to these amounts is recorded directly to shareholders'
equity, net of taxes. Future expected amortization of DAC for
the
next five years before the effect of net realized and unrealized
gains and losses, based on DAC at December 31, 2000 and current
assumptions, is as follows (in thousands):

                        2001	  2002	  2003	  2004      2005

Gross amortization    $13,793	$13,387	$12,123	$10,736	$9,451
Interest accumulation   5,854	  4,765	  3,870	  3,180    2,612
Net amortization      $ 7,939 $ 8,622	$ 8,253	$ 7,556	$6,839

The amounts included in the foregoing table do not include any
amortization of DAC resulting from the sale of new products
after
December 31, 2000. Any changes in future annual amortization of
this asset are not expected to have a significant effect on
results of operations because the amount of amortization is
expected to be proportionate to the profits from the produced
policies, net of interest on DAC.

Variances Between Actual and Expected Profits.  Actual
experience on purchased and produced insurance may vary from
projections due to differences in renewal premiums collected,
investment spreads, mortality costs, persistency, administrative
costs and other factors. Variances from original projections,
whether positive or negative, are included in net income as they
occur. To the extent that these variances indicate that future
experience will differ from the estimated profits reflected in
the
capitalization and amortization of the cost of policies
purchased
or the cost of policies produced, current and future
amortization
rates may be adjusted.

Accounting for Annuities and Universal and Interest-Sensitive
Life Products.  The Company primarily accounts for its annuity,
universal and interest-sensitive life policy deposits in
accordance with Statement of Financial Accounting Standards No.
97
("SFAS No. 97"), "Accounting and Reporting by Insurance
Enterprises for Certain Long-Duration Contracts and for Realized
Gains and Losses on the Sale of Investments."  Under SFAS No.
97,
a benefit reserve is established at the time of policy issuance
in
an amount equal to the deposits received. Thereafter, the
benefit
reserve is adjusted for any additional deposits, interest
credited
and partial or complete withdrawals. Revenues for annuities and
universal and interest-sensitive life policies, other than
certain
non-interest sensitive annuities, consist of policy charges for
surrenders and partial withdrawals, mortality and
administration,
and investment income earned. These revenues do not include the
annuity, universal and interest-sensitive life policy deposits.
Expenses related to these products include interest credited to
policyowner account balances, operating costs for policy
administration, amortization of DAC and mortality costs in
excess
of account balances.

Costs relating to the acquisition of new business, primarily
commissions paid to agents, which vary with and are directly
related to the production of new business, are deferred to the
extent that such costs are recoverable from future profit
margins.
At the time of issuance, the acquisition expenses, approximately
13% of initial annuity premium deposits and 55% of premiums from
universal and interest-sensitive life products for SMC, are
capitalized as DAC. In accordance with SFAS No. 97, DAC with
interest is amortized over the lives of the policies in a
constant
relationship to the present value of estimated future gross
profits.

Accounting for Unit-linked Products.  Separate account assets
and liabilities are maintained primarily for contracts of which
the majority represents unit-linked products where benefits on
surrender and maturity are not guaranteed. They generally
represent funds held in accounts to meet specific investment
objectives of policyholders who bear the investment risk.
Investment income and investment gains and losses accrue
directly
to these policyholders. SMC earns income from the investment
management fee it charges on these unit-linked contracts, which
ranges from .8% to 1.2% of the value of the underlying separate
accounts.


Results of operations by segment for the three years ended
December 31, 2000:

The following tables and narratives summarize the results of our
operations by business segment:

                                     2000        1999		1998
(Dollars in thousands)
Operating income before income taxes:

  Domestic operations		   $   5,440    $   6,054  $  3,700
  International operations	       3,128        1,266     2,258

  Consolidated operating income
   before income taxes 			  8,568        7,320     5,958
  Applicable income taxes related to
   operating income			       1,594        2,099     1,510

    Consolidated operating income
     after taxes				  6,974        5,221     4,448

  Consolidated realized investment
   gains (losses) before income
   taxes    				      (2,164)          78       353

Applicable income taxes (benefits)
 related to realized investment
 gains (losses)	                  (457)          27       120

    Consolidated realized
     investment gains (losses)
     after taxes (benefits)	      (1,707)          51       233

    Net income		             $   5,267    $   5,272   $ 4,681

Consolidated Results and Analysis

				SMC's 2000 operating earnings were $7.3
million, or 89 cents per diluted share, up 40% and 37%,
respectively, compared to 1999.
 Operating earnings increased as a result of i) increased net
spread revenue due to higher weighted average insurance
liabilities from growth in sales in recent periods and ii)
increased fees from separate accounts due to higher weighted
average separate account liabilities for the period. In
addition,
operating earnings were favorably impacted by the utilization of
net operating loss carryforwards. These increases were somewhat
offset by i) unfavorable mortality and ii) increased DAC
amortization due to gross profit realization.

SMC's 1999 operating earnings were $5.2 million, or 65 cents per
diluted share, up 17% and 12%, respectively, compared to 1998.
Operating earnings increased as a result of i) increased net
spread revenue due to increases in weighted average insurance
liabilities caused by increased sales in recent periods and the
acquisition of Savers Life and Midwestern Life, ii) economies of
scale achieved through the acquisitions of Savers Life and
Midwestern Life, and iii) increased fees from separate accounts
due to increases in weighted average separate account
liabilities
for the period.  These increases were somewhat offset by i) the
completion  of negative goodwill amortization, a nonrecurring
item, which contributed $1.4 million or 15 cents per diluted
share
in the 1998 period, ii) unfavorable mortality, and iii)
increased
amortization due to profit realization.

Domestic operations:
                                        2000	   1999	  1998
(Dollars in thousands)

Premiums and deposits collected:
  Traditional life	                 $   15,429 $   12,990 $ 8,392
  Medicare supplement	                    --         --   5,992
  Subtotal - traditional and
   Medicare supplement premiums          15,429     12,990  14,384
  FPDA's	                               94,699     98,678  58,072
  Equity-indexed annuities	           73,122     59,348  16,858
  SPIA's and other deposits	           27,802      5,872   3,537
  Universal and interest-sensitive
   life					              866      1,778   3,391

  Subtotal - interest-sensitive and
    other financial products 	          196,489    165,676  81,858

     Total premiums and
      deposits collected	            $  211,918 $  178,666 $96,242

Premium income 			       $   15,429 $   12,990 $14,384
Policy income				            8,204      6,826   6,529

     Total policy related income	      23,633     19,816  20,913

Net investment income			      42,675     44,376  33,721
Fee and other income	                 5,980      4,207   3,068

     Total revenues (a)	                72,288     68,399  57,702

Benefits and claims 	                20,045     14,516  13,310
Interest credited to interest
 sensitive annuities and other
 financial products			           21,080     25,728  19,775
Amortization			                 9,703      6,313   4,755
Other operating expenses	                12,603     12,403  13,207
Interest expense and financing
 costs				                 3,417      3,385   2,955

      Total benefits and expenses	      66,848     62,345  54,002

      Operating income before
       income taxes	                      5,440      6,054   3,700

Net realized investment gains
 (losses), net of related
 amortization	                          (2,164)        78     353

      Income before income taxes     $    3,276 $    6,132 $ 4,053

(a) total revenues exclude net realized investment gains
(losses).

Number of annuity contracts in
 force					           24,216     24,322  20,121
Interest-sensitive annuity and
 other financial products
 reserves, net of reinsurance
 ceded			                 $  695,475 $ 595,388 $506,749
Number of life policies in force	      55,533    61,573   66,412
Life insurance in force, net of
 reinsurance ceded	              $1,042,566 $1,367,533 $1,403,164

General:  This segment consists of revenues earned and expenses
incurred from U.S. operations which includes deposits and/or
income from annuity products (primarily FPDA's), equity-indexed
products, SPIA's, universal life products and traditional life
products. This segment has been significantly impacted by the
acquisitions of Savers Life, effective March 12, 1998, and
Midwestern Life, effective October 30, 1998.  The profitability
for this segment is primarily a function of its investment
spread
earned (i.e. the excess of investment earnings over interest
credited on annuity and universal life deposits), persistency of
the in force business, mortality experience and management of
operating expenses.

Premium deposits consist of FPDA's, equity-indexed annuities,
SPIA's, interest-sensitive annuities and other financial
products
that do not incorporate significant mortality features.  For
GAAP
these premium deposits are not shown as premium income in the
income statement.  Furthermore, a change in premium deposits in
a
single period does not directly cause operating income to
change,
although continued increases or decreases in premiums may affect
the growth rate of total assets on which investment spreads are
earned.

 Premium deposits for 2000, received from the sale of  FPDA's,
equity-indexed annuities, interest sensitive annuities and
other financial products, increased $30.8 million or 19%, to
$196.5 million.  The increase relates to i) a continued
increase in the agency base achieved through the recruitment
of high volume agents and larger managing general agencies,
ii) the introduction of a SPIA product that contributed $18.3
million of deposits for the period, and iii) continued momentum
of our equity-indexed products which contributed an additional
$13.8 million for the period.

 Premium deposits for 1999, received from the sale of  FPDA's,
Equity-indexed annuities, interest sensitive annuities and
other financial products, increased $83.8 million or 102%, to
$165.7 million.  The increase relates to i) an increase in the
agency base achieved through the recruitment of high volume
agents and larger managing general agencies, ii) expansion of
geographical concentration, iii) the full year impact of an
equity-indexed product introduced in 1998, which contributed
$46.6 million of deposits for the period, and iv) the
introduction of three equity-indexed annuity products in 1999,
which contributed $12.7 million of deposits for the period.

Premium income consists of premiums earned from i) traditional
life products, ii) annuity business that incorporates
significant
mortality features, and iii) Medicare supplement premiums for
the
1998 period.

 Life premiums were up $2.4 million or 19% in 2000, to $15.4
million, which is primarily the result of $2.4 million of
traditional life premiums and other deposits that incorporate
mortality features.

 Life premiums were up $4.6 million or 55% in 1999, to $13.0
million. The increase was primarily the result of renewal
premiums from Midwestern Life's traditional life block of $3.5
million and first year premiums of existing traditional life
products of $.8 million.

 Health premiums for 1998 include $6.0 million of Medicare
supplement premiums that were earned from March 12, 1998, the
acquisition date of Savers Life, through July 1, 1998, the
effective sale date of the Medicare supplement block of
business.

Policy income represents i) mortality charges and administrative
fees earned on universal life products, and ii) surrender
charges
earned as a result of terminated universal life and annuity
policies.

 During 2000 policy income increased $1.4 million or 20%, to
$8.2 million.  The increase primarily relates to $1.6 million
of surrender income received as a result of i) reducing
crediting rates on certain FPDA products and ii) general
market conditions.

 During 1999 policy income increased $.3 million or 5%, to $6.8
million.  The increase is due to i) mortality charges of a new
universal life product and ii) surrender charges on certain FPDA
products which is primarily the result of lowering credited
rates
on those products.

Net investment income includes interest earned on invested
assets
and fluctuates with changes in i) the amount of average invested
assets supporting insurance liabilities, and ii) the average
yield
earned on those invested assets.  Net investment income also
fluctuates due to equity-indexed products which are hedged with
call options to limit risk against unusually favorable returns
in
the equity market.  The market value of these options fluctuate
from period to period and are substantially compensated by
increases or decreases in the offsetting liability.  Refer to
"Interest credited to interest sensitive annuities and other
financial products" in Item 7.

 During 2000, net investment income decreased $1.7 million or
4%, to $42.7 million.  Average invested assets, at book value,
increased by $96.2 million or 15% due to the growth in
insurance liabilities from premium sales of recent periods.
Net investment income was negatively impacted by $7.6 million
due to the change in the market value of call options hedging
equity-indexed products.

 During 1999, net investment income increased $10.7 million or
32%, to $44.4 million.  Average invested assets, at book value,
increased by $166.2 million or 27% due to the growth in
insurance liabilities from premium sales of recent periods and
from the acquisitions of Savers Life and Midwestern Life.  Net
investment income was favorably impacted by $1.2 million due
to the change in the market value of call options hedging
equity-indexed products.

 The net investment yield earned on average invested assets was
7.28%, 7.15% and 7.48% for 2000, 1999 and 1998, respectively.
Investment yields fluctuate from period to period primarily
due to changes in the general interest rate environment.

Fee and other income consist of fee income related to servicing
blocks of business for unaffiliated companies, experience
refunds,
and commission income.

 During 2000 fee and other income increased $1.8 million or
42%, to $6.0 million.  This increase includes i) $1.4 million
of commission income from administrative agreements, including
the Savers Marketing administrative agreement, and ii) $.4
million of other income related to a recovery under a keyman
insurance policy.

 During 1999 fee and other income increased  $1.1 million or
37%, to $4.2 million.  This increase was due to commission
income that related to the Savers Marketing administrative
agreement and the marketing efforts associated with the
management of that business.

Benefits and claims include i) paid life insurance claims, ii)
benefits from annuity policies that incorporate significant
mortality features and, iii) changes in future policy reserves.
Throughout the Company's history, it has experienced both
periods
of higher and lower benefit claims.  Such volatility is not
uncommon in the life insurance industry and, over extended
periods
of time, periods of higher claim experience tend to offset
periods
of lower claim experience.

 Benefits and claims in 2000 increased $5.5 million or 38%, to
$20.0 million.  This increase includes i) additional reserves
needed as a result of increased traditional life premiums and
other deposits that incorporate mortality features and ii)
additional mortality benefits of $1.5 million compared to the
1999 period.

 Benefits and claims in 1999 increased $1.2 million, to $14.5
million.  This is due to $6.1 million of claims and benefits
resulting from an increase in the average in force life
business for the periods due to the acquisitions of Savers Life
and
Midwestern Life.  This was somewhat offset by the inclusion of
$4.9 million of benefits and claims in 1998 results related to
the
Medicare supplement business that was sold July, 1998.

Interest credited to interest-sensitive annuities and other
financial products represents interest credited to insurance
liabilities of the FPDA's, equity-indexed annuities, SPIA's,
interest sensitive and other financial products.  This expense
fluctuates with changes in i) average interest-sensitive
insurance
liabilities and ii) the average credited rate on those
liabilities. Also refer to "Net investment income" in Item 7.

 In 2000, interest credited decreased $4.6 million or 18%, to
$21.1 million.  This decrease consists of a $7.6 million
decline in the market value of liabilities supporting equity-
indexed products.  This decrease was offset by increased
interest credited due to larger average interest sensitive
liabilities of $100.1 million or 17% for the period, including
a $61.4 million increase from equity-indexed products.

 In 1999, interest credited increased $6.0 million or 30%, to
$25.7 million.  This increase was due to larger average
interest-sensitive insurance liabilities of approximately
$124.9 million or 33% for the period, which includes increases
of i) $44.1 million from the acquisitions of  Savers Life and
Midwestern Life, and ii) $40.2 million from equity indexed
products.  The remaining increase primarily relates to FPDA
products.  These increases were somewhat offset by a decrease
in the average credited rate for the period.

 The weighted average credited rate was 4.90%, 4.89% and 5.25
% in 2000, 1999 and 1998, respectively.

Amortization includes i) amortization related to the present
value
of polices purchased from acquired insurance business, ii)
amortization of deferred acquisition costs related to
capitalized
costs of insurance business sold, and iii) amortization of
goodwill and organizational costs.

 Amortization in 2000 increased $3.4 million or 54%, to $9.7
million.  This increase relates to i) additional amortization
of deferred acquisition costs, ii) increased business in
force, and iii) the recognition of additional profits for the
period. Additional profits were recognized from i) the
realization of profits from increased sales of annuity
products in recent periods and ii) the realization of profits
from surrender income of deferred annuities.

 Amortization in 1999 increased $1.6 million or 33%, to $6.3
million.  This increase relates to additional amortization of
deferred acquisition costs, due to increased business in
force, and the recognition of additional profits for the
period. Additional profits were recognized from i) the
realization of profits from increased sales of annuity
products in recent periods, and ii) the realization of profits
from the purchased insurance business of  Savers Life and
Midwestern Life.

Other operating expenses consist of general operating expenses,
including salaries, and commission expenses, net of deferrable
amounts.

 In 2000 other operating expenses increased $.2 million or 2%,
to $12.6 million.

 In 1999 other operating expenses declined $.8 million or 6%,
to $12.4 million.  The majority of this decrease relates to
efficiencies achieved through the assimilation of the former
insurance operations of Savers Life, Savers Marketing and
Midwestern Life including the elimination of certain Medicare
supplement expenses in connection with the sale of that
business.


Interest expense and financing costs represent interest expense
incurred and the amortization of related debt issuance costs.

 In 2000 interest expense and financing costs remained at $3.4
million.  Average borrowings for the period declined $2.7
million, however, they were offset by an increased interest
rate for the period.

      In 1999 interest expense and financing costs increased
$.4 million or 15%, to $3.4 million primarily due to increased
average borrowings for the period of approximately $5.3
million and an increase in the average interest rate for the
period on the revolving line of credit.

Net realized investment gains (losses), net of related
amortization fluctuate from period to period and generally arise
when securities are sold in response to changes in the
investment
environment which provide opportunities to maximize return on
the
investment portfolio without adversely affecting the quality and
overall yield.  Realized investment gains (losses) can affect
the
timing of the amortization of deferred acquisition costs and the
amortization of the present value of future profits.

Net realized investment losses, net of related costs and
amortization, for 2000 were $2.2 million, which is reduced by
$2.3 million of deferred acquisition cost amortization.
Approximately 68% of the gross losses for 2000 are related to
fixed maturity securities that have a decline in fair value
that is considered other than temporary.  These securities are
considered to be in substantive default (i.e. default as to
interest and principal).  The Company maintains a high quality
investment portfolio with 94% of its fixed maturity securities
being classified as investment grade securities.

In 1999, net realized investment gains were $.1 million.

International operations:

                                      2000	  1999	  1998
  (Dollars in thousands)

Premiums and deposits collected:
  Traditional life			      $     41   $    100 $     95
  Separate account deposits	       170,514     55,192   42,536

    Total premiums and deposits
      collected				 $170,555   $ 55,292 $ 42,631

Premium income		                $     41   $    100 $     95
Net investment income	                498        445      500
Separate account fees			    7,728      3,941    2,884
Amortization of negative goodwill	       --         --    1,388
Other income				            --	        --      353

    Total revenues	                   8,267      4,486    5,220

Benefits and claims			            35       (140)     (40)
Amortization			              2,061      1,158      658
Other operating expenses	              3,043      2,202    2,344

    Total benefits and expenses	    5,139      3,220    2,962

    Income before income taxes	 $  3,128	  $  1,266 $  2,258

Separate account contracts (1)	    4,989      3,380    3,070

Separate account liabilities (1)	 $520,439	  $319,973 $190,246

(1) Primarily unit-linked products

General: International operations include revenues earned and
expenses incurred from abroad, primarily Europe, and include
fees
collected on deposits from unit-linked products.  The
profitability for this segment primarily depends on the amount
of
separate account assets under management, the management fee
charged on those assets and management of operating expenses.

Net investment income represents income earned on corporate
assets
such as cash, short-term investments and fixed securities.

Net investment income was $.5 million and $.4 million in 2000
and 1999, respectively, on average invested assets of $11.7
million and $11.0 million, respectively.

The net yield was 4.24%, 4.06% and 4.74% for 2000, 1999 and
1998, respectively.

Fees from separate accounts fluctuate in relationship to total
separate account assets and the fees earned on such assets.

During 2000, fees from separate accounts increased $3.8
million or 96%, to $7.7 million.  This increase is primarily
due to an increase in the average value of assets held in
separate accounts of 82% for the period.  Actual separate
account assets increased $200.5 million or 63%, to $520.4
million.   Net deposits from SMI's sales of unit-linked
products increased $115.3 million or 209%, to $170.5 million
for the period.  The increase in deposits is primarily due to
i)  strengthening of SMI's distribution system by engaging
more, highly productive agents, ii) concentrated marketing
efforts in certain European countries, primarily Sweden,
Belgium and Italy, and iii) favorable demand, in general, for
investment based products.

During 1999, fees from separate accounts increased $1.1
million or 37%, to $3.9 million.  This increase is primarily
due to an increase in the average value of assets held in
separate accounts of 36% for the period.  Actual separate
account assets increased $129.7 million or 68%, to $320.0
million.   Net deposits from SMI's sales of unit-linked
products increased $12.6 million or 30%, to $55.2 million for
the period.   This increase is due to expanded marketing
efforts, which have generated additional sales in Sweden and
Belgium for the period.

Amortization of negative goodwill, which is the amortization of
the excess cost of assets acquired over the purchase price paid
for SMI in December 1993 of $6.9 million, has been amortized
over
5 years at $1.4 million per year and was fully amortized at
December 31, 1998.

Amortization includes the amortization of deferred acquisition
costs, such as sales commissions and other costs, directly
related
to selling new business.

 Amortization increased $.9 million in 2000 to $2.1 million
and increased $.5 million in 1999 to $1.2 million.  These
increases are due to amortizing deferred acquisition costs
associated with increased sales of recent periods.

Other operating expenses consist of recurring general operating
expenses and commission expenses, net of deferred amounts.

 Other operating expenses increased $.8 million or 38% in 2000,
to $3.0 million primarily due to costs associated with
international business growth.  The number of separate account
contracts administered increased 48% to 4,989 in 2000 and 10% to
3,380 in 1999.

 Other operating expenses declined $.1 million or 6% in 1999 to
$2.2 million.

Foreign currency translation comparisons between 2000, 1999 and
1998 are impacted by the strengthening and weakening of the
U.S. dollar relative to foreign currencies, primarily the
Luxembourg franc.  The impact of these translations has not been
quantified on individual income statement components.


Liquidity and Capital Resources

Liquidity of Standard Management (Parent Company)

Standard Management is a financial services holding company
whose liquidity requirements are met through payments received
from its subsidiaries.  These payments include i) surplus
debenture interest, ii) dividends, iii) management fees and iv)
rental income, which are subject to restrictions under
applicable
insurance laws and are used to pay operating expenses and meet
debt service obligations.  These internal sources of liquidity
have been supplemented in the past by external sources such as
revolving credit agreements and long-term debt and equity
financing in the capital markets.

General:  On a consolidated GAAP basis SMC reported net cash
provided by operations of $.9 million and $2.9 million for 2000
and 1999, respectively. Although deposits received on SMC's
interest-sensitive annuities and other financial products are
not
included in cash flow from operations under GAAP, these funds
are
available for use by SMC. Cash provided by operations plus net
deposits received, less net account balances returned to
policyholders on interest sensitive annuities and other
financial
products, resulted in positive cash flow of $108.2 million and
$92.6 million for 2000 and 1999, respectively. Cash generated on
a consolidated basis is available to Standard Management only to
the extent that it is generated at the Standard Management level
or is available through dividends, interest, management fees or
other payments from subsidiaries.

SMC instituted a program to repurchase its common stock in
order to increase the market value of the stock.  At December
31,
2000, Standard Management is authorized to repurchase 724,790
additional shares of SMC Common Stock under this program.

At March 15, 2001, Standard Management had "parent company
only" cash and short-term investments of  $.4 million. These
funds
are available to Standard Management for general corporate
purposes. Standard Management's "parent company only" operating
expenses (not including interest expense) were $4.5 million and
$4.7 million for 2000 and 1999, respectively.

In 1998, the Company issued convertible redeemable preferred
stock with a stated value of $6.5 million.  Proceeds were used
to
reduce the borrowings from the Amended Credit Agreement.
Holders
are entitled to receive annual dividends of $7.75 per share.
Refer to Notes 7 and 10, respectively,  to the consolidated
financial statements for additional information.

Standard Management is in the process of constructing a new
domestic home office which is projected to be completed in May
2001.  The transition to this new facility is not expected to be
material to the liquidity and capital resources of the Company.

Standard Management anticipates the available cash from its
existing working capital, plus anticipated 2001 dividends,
management fees, rental income and interest payments on its
surplus debentures receivable will be more than adequate to meet
its anticipated "parent company only" cash requirements for
2001.

Surplus Debenture and Notes Payable Interest:

The following are characteristics of the Amended Credit
Agreement at December 31, 2000:

 $20.5 million outstanding balance

 Weighted average interest rate of 9.86%

 Principal payments:  $3.2 million due March 2001, $4.3 million
 due annually thereafter through March 2005

 Subject to restrictions and financial and other covenants

 Interest payments required in 2001 based on December 31, 2000
 balances will be $1.8 million

The following are characteristics of the Subordinated Debt
Agreement at December 31, 2000:

 $11.0 million outstanding balance

 Interest rate is greater of i) 10% per annum or ii) six month
 London Inter-Bank Offered Rate ("LIBOR") plus 1.5%

 Due October 2007

 Interest payments required in 2001 based on December 31, 2000
 balances will be $1.1 million

Refer to Note 5 to the consolidated financial statements for
additional information.


Standard Management loaned $27.0 million to Standard Life
pursuant to Unsecured Surplus Debenture Agreements ("surplus
debenture") which requires Standard Life to make quarterly
interest payments to Standard Management at a variable corporate
base rate plus 2% per annum, and annual principal payments of
$1.0
million per year beginning in 2007 and concluding in 2033.  The
interest and principal payments are subject to quarterly
approval
by the IDOI, depending upon satisfaction of certain financial
tests relating to levels of Standard Life's capital and surplus
and general approval of the Commissioner of the IDOI. Standard
Management currently anticipates these quarterly approvals will
be
granted.  Assuming the approvals are granted and the December
31,
2000 interest rate of 11.50% continues, Standard Management will
receive interest income of $3.1 million from the surplus
debenture
in 2001.

Dividends paid from Standard Life to Standard Management are
limited by laws applicable to insurance companies.  As an
Indiana
domiciled insurance company, Standard Life may pay a dividend or
distribution from its surplus profits, without the prior
approval
of the Commissioner of the IDOI, if the dividend or
distribution,
together with all other dividends and distributions paid within
the preceding twelve months, does not exceed the greater of i)
net gain from operations or ii) 10% of surplus, in each case as
shown in its preceding annual statutory financial statements.
In
2001, Standard Life can pay dividends of approximately $4.4
million without regulatory approval.

Management Fees.  Pursuant to a management services agreement,
Standard Life paid Standard Management $3.6 million during 2000
and $3.4 million during 1999 for certain management services
related to the production of business, investment of assets and
evaluation of acquisitions.  Prior to its merger into Standard
Life, Savers Life paid Standard Management $.8 million during
1998
for certain management services pursuant to a management
services
agreement.  In addition, Dixie Life paid Standard Life $1.2
million and $.9 million in 2000 and 1999, respectively, for
certain management services provided.  Both of these agreements
provide that they may be modified or terminated by the Indiana
and
Mississippi Departments of Insurance in the event of financial
hardship of Standard Life or Dixie Life.

Pursuant to the management services agreement, Premier Life
(Luxembourg) paid Standard Management $.3 million during 2000
and
$.2 million during 1999 for certain management, technical
support
and administrative services. The agreement provides that it may
be
modified or terminated by either Standard Management or Premier
Life (Luxembourg).

Equipment Rental Fees.  In 2000 and 1999, Standard Management
charged subsidiaries $1.1 million and $1.0 million,
respectively,
for the use of equipment owned by Standard Management.

Liquidity of Insurance Operations

U.S. Insurance Operations.  The principal liquidity
requirements of Standard Life are its contractual obligations to
policyholders, dividend, rent, management fee and surplus
debenture interest payments to Standard Management and other
operating expenses. The primary source of funding for these
obligations has been cash flow from premium income, net
investment
income, investment sales and maturities and sales of FPDA's and
equity-indexed products. These sources of liquidity for Standard
Life significantly exceed scheduled uses. Liquidity is also
affected by unscheduled benefit payments including death
benefits
and policy withdrawals and surrenders. The amount of withdrawals
and surrenders is affected by a variety of factors such as
renewal
interest crediting rates, interest rates for competing products,
general economic conditions, Standard Life's A.M. Best ratings
(currently rated "B+") and events in the industry that affect
policyholders' confidence.

The policies and annuities issued by Standard Life contain
provisions that allow policyholders to withdraw or surrender
their
policies under defined circumstances. These policies and
annuities
generally contain provisions, which apply penalties or otherwise
restrict the ability of policyholders to make such withdrawals
or
surrenders. Standard Life closely monitors the surrender and
policy loan activity of its insurance products and manages the
composition of its investment portfolios, including liquidity,
to
ensure it has sufficient cash resources in light of such
activity.

Changes in interest rates may affect the incidence of policy
surrenders and other withdrawals. In addition to the potential
effect on liquidity, unanticipated withdrawals in a changing
interest rate environment could adversely affect earnings if SMC
were required to sell investments at reduced values to meet
liquidity demands. SMC manages the asset and liability
portfolios
in order to minimize the adverse earnings effect of changing
market interest rates. SMC seeks assets that have duration
characteristics similar to the liabilities that they support.
SMC
also prepares cash flow projections and performs cash flow tests
under various market interest rate scenarios to assist in
evaluating liquidity needs and adequacy. SMC's U.S. insurance
subsidiaries currently expect available liquidity sources and
future cash flows to be adequate to meet the demand for funds.

Statutory surplus is computed according to rules prescribed
by the NAIC, as modified by the IDOI, or the state in which the
insurance subsidiaries do business. Statutory accounting rules
are
different from GAAP and are intended to reflect a more
conservative perspective. With respect to new business,
statutory
accounting practices require that: i) acquisition costs
(primarily commissions and policy issue costs) and ii) reserves
for future guaranteed principal payments and interest in excess
of
statutory rates, be expensed in the year the new business is
written. These items cause a reduction in statutory surplus
("surplus strain") in the year written for many insurance
products. SMC designs its products to minimize such first-year
losses, but certain products continue to cause a statutory loss
in
the year written. For each product, SMC controls the amount of
net
new premiums written to manage the effect of such surplus
strain.
SMC's long-term growth goals contemplate continued growth in its
insurance businesses. To achieve these growth goals, SMC's U.S.
insurance subsidiaries will need to increase statutory surplus.
Additional statutory surplus may be secured through various
sources such as internally generated statutory earnings,
infusions
by Standard Management with funds generated through debt or
equity
offerings or mergers with other life insurance companies. If
additional capital is not available from one or more of these
sources, SMC believes that it could reduce surplus strain
through
the use of reinsurance or through reduced writing of new
business.

Management believes that the operational cash flow of Standard
Life will be sufficient to meet its anticipated needs for 2001.
 As of December 31, 2000, Standard Life had statutory capital
and
surplus for regulatory purposes of $43.9 million compared to
$43.7
million at December 31, 1999.  As the life insurance and annuity
business produced by Standard Life increases, Standard Life
expects to continue to satisfy statutory capital and surplus
requirements through statutory profits and through additional
capital contributions by Standard Management. Net cash flow from
operations on a statutory basis of Standard Life, after payment
of
benefits and operating expenses, was $95.4 million and $91.4
million for 2000 and 1999, respectively. If the need arises for
cash, which is not readily available, additional liquidity could
be obtained from the sale of invested assets.

International Operations.  SMI dividends are limited to its
accumulated earnings without regulatory approval. SMI and
Premier
Life (Luxembourg) were not permitted to pay dividends in 2000
and
1999 due to accumulated losses. Premier Life (Bermuda) paid a
dividend of $.3 million in 2000 and $.8 million in 1999 to SMI
and
no dividends in 1998.  SMC does not anticipate dividends from
SMI
in 2001.


Factors That May Affect Future Results
SMC is subject to a number of factors affecting its business,
including intense competition in the industry and the ability to
attract and retain agents and employees.  If SMC is unable to
respond appropriately to any of these factors, business and
financial results could suffer.

	SMC's operating results are affected by many factors,
including, competition, lapse rates, interest rates, maintenance
of insurance ratings, governmental regulation and general
business conditions, many of which are outside its control.

	SMC operates in a highly competitive environment and is in
direct competition with a large number of insurance companies,
many of which offer a greater number of products through a
greater number of agents and have greater resources.  In
addition, SMC may be subject, from time to time, to new
competition resulting from additional private insurance carriers
introducing products similar to those offered by SMC.  Moreover,
as a result of recent federal legislation, commercial banks,
insurance companies, and investment banks may now combine,
provided certain requirements are satisfied, and SMC expects to
encounter increased competition from these providers of
financial
services.  This competitive environment could result in lower
premiums, loss of sales and reduced profitability.

	SMC's management believes that the ability to compete is
dependent upon, among other things, the ability to retain and
attract independent general agents to market products and the
ability to develop competitive products that also are
profitable.
Although management believes that good relationships with our
independent general agents exist, competition for those agents
among insurance companies is intense.  SMC's independent general
agents typically represent other insurance companies and may
sell
products that compete with our products.  See "Business of SMC-
Competition."

	SMC's success also depends upon the continued contributions
of key officers and employees.  Should one or more of these
individuals leave or otherwise become unavailable to us for any
reason, business and results of operations could be materially
adversely affected.  See "Business of SMC-Employees."

	SMC's success depends on the performance of others.   SMC's
results may be affected by the performance of others because of
entering into various arrangements involving other parties.  For
instance, many products are sold through independent
distribution
channels and arise from arrangements with unrelated marketing
organizations.  As with all financial services companies, the
ability to conduct business is dependent upon consumer
confidence
in the industry and its products.  Actions of competitors, and
financial difficulties of other companies in the industry, could
undermine consumer confidence and adversely affect business
results.

	Financial results could suffer if our A.M. Best ratings are
downgraded.   Insurers compete with other insurance companies,
financial intermediaries and other institutions on the basis of
a
number of factors, including the ratings assigned by A.M. Best.
Standard Life and Dixie Life have a rating of "B+" and "B,"
respectively, by A.M. Best.  A rating of "B+" is assigned by
A.M.
Best to companies that, in their opinion, have achieved very
good
overall performance when compared to the standards established
by
A.M. Best, and have a good ability to meet their obligations to
policyholders over a long period of time.  A rating of "B" is
assigned by A.M. Best to companies that, in their opinion, have
achieved good overall performance when compared to the standards
established by A.M. Best.  According to A.M. Best, these
companies generally have an adequate ability to meet their
obligations to policyholders, but their financial strength is
vulnerable to unfavorable changes in underwriting or economic
conditions.  In evaluating a company's financial and operating
performance, A.M. Best reviews the company's profitability,
leverage and liquidity as well as the company's book of
business,
the adequacy and soundness of its reinsurance, the quality and
estimated market value of its assets, the adequacy of its
reserves, and the experience and competence of its management.
A.M. Best reviews its ratings of insurance companies from time
to
time.  If the A.M. Best ratings were downgraded, sales of
annuity
products and life insurance policies could be significantly
impacted and the financial condition and results of operations
could be materially adversely affected.  See "Business of SMC-
Competition."

	A tax law change could adversely affect SMC's ability to
compete with non-insurance products.   Under the United States
Internal Revenue Code, income tax payable by policyholders on
investment earnings is deferred during the accumulation period
of
certain life insurance and annuity products.  This favorable tax
treatment may give certain products a competitive advantage over
other non-insurance products.  To the extent that the Internal
Revenue Code is revised to reduce the tax-deferred status of
life
insurance and annuity products, or to increase the tax-deferred
status of competing products, all life insurance companies,
including SMC, would be adversely affected with respect to their
ability to sell these products, and, depending on grandfathering
provisions, the surrenders of existing annuity contracts and
life
insurance policies.  In addition, life insurance products are
often used to fund estate tax obligations.  If the estate tax
were eliminated or significantly reduced, the demand for certain
life insurance products could be adversely affected.  SMC cannot
predict what tax initiatives may be enacted which could have an
adverse affect on its business.

	Interest-rate fluctuations could negatively affect spread
income.   Significant changes in interest rates expose insurance
companies to the risk of not earning anticipated spreads between
the interest rate earned on investments and the credited
interest
rates paid on outstanding policies.  Both rising and declining
interest rates can negatively affect spread income.  Although
SMC
develops and maintains asset/liability management programs and
procedures designed to preserve spread income in rising or
falling interest rate environments, changes in interest rates
could adversely affect these spreads.

	Financial results could suffer if the value of investments
decreases due to factors beyond SMC's control.   SMC's invested
assets are subject to customary risks of credit defaults and
changes in market values.  The value of the Company's investment
portfolio
depends in part on the financial condition of the companies in
which it has made investments.  Factors that my affect the
overall market value of invested assets include interest rate
levels, financial market performance, and general economic
conditions, as well as particular circumstances affecting the
businesses of individual companies.

SMC's reinsurance program is subject to the financial failure of
the reinsurer and to market conditions which affect the amount
and cost of reinsurance.  If a large number of SMC's reinsurers
fail or market conditions make it more difficult to reinsure
profitably, SMC financial results could suffer.   SMC is able to
assume insurance risks beyond the level which capital and
surplus
would support by transferring substantial portions of risks to
other, larger insurers through reinsurance contracts.  These
reinsurance arrangements, which are the usual practice in the
insurance industry, leave exposure to credit risk which exists
because reinsurance does not fully relieve SMC of liability to
insureds for the portion of the risks ceded to reinsurers.
Although SMC places reinsurance with reinsurers it believes to
be
financially stable, a reinsurer's subsequent insolvency or
inability to make payments under the terms of a reinsurance
treaty could have a materially adverse effect on SMC's financial
condition.

Policy claims fluctuate from year to year, and future benefit
payments may exceed reserves, which may cause financial results
to suffer.	  Financial results may fluctuate from year to
year due
to fluctuations in policy claims received by subsidiaries.
Reserves are established for claims and future policy benefits
based on accepted actuarial practices.  By care in underwriting
new policies and sharing risk with reinsurance companies, SMC
has
attempted to limit the risk that actual payments for death and
other benefits will exceed its reserves.  The reserves are,
however, only actuarial estimates and it is possible that SMC's
claims experience could be worse than anticipated, so that
reserves may prove to be insufficient.  If this were to happen,
it could result in a decline in operating earnings.

SMC could be forced to sell illiquid investments at a loss to
cover policyholder withdrawals.  Many products allow
policyholders and contract holders to withdraw their funds under
defined circumstances.  SMC manages its liabilities and
configures its investment portfolio  to provide and maintain
sufficient liquidity to support anticipated withdrawal demands,
contract benefits and maturities.  While a significant amount of
liquid assets are owned, certain portions of assets are
relatively illiquid.  Unanticipated withdrawal or surrender
activity could, under some circumstances, compel SMC to dispose
of illiquid assets on unfavorable terms, which could have an
adverse effect.

Because a significant portion of SMC's annuity contracts are
surrenderable, any substantial increase in the level of
surrenders could negatively affect financial results.   As of
February 28, 2001, approximately 91.7% or $598.6 million of
annuity contracts in force (measured by statutory reserves) were
surrenderable.  Approximately 8.3% of those contracts or
approximately $54.5 million of annuity contracts in force
(measured by statutory reserves) are surrenderable without
charge.  Changes in prevailing interest rates, ratings or other
factors which result in or lead to significant levels of
surrenders of existing annuity contracts could have a material
adverse effect upon SMC's financial condition and results of
operations.  Surrenders result in a reduction of invested assets
that earn investment income and a reduction of policyholder
account balances that credit interest.  See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations."

A stock price decline may limit the ability to raise capital or
consummate acquisitions.   During 1999 and 2000, many financial
services companies, including SMC, experienced a decrease in the
market price of their common stock.  Although management
believes
that SMC has sufficient, internally generated cash flow to fund
its day-to-day operations, a lower stock price may limit the
ability to raise capital to fund other growth opportunities and
acquisitions.

SMC's business strategy has in the past and might in the future
include the acquisition of other businesses.  SMC may not be
able
to identify appropriate acquisition candidates or properly
integrate their businesses.   From time to time, acquisitions of
other businesses may be considered.  Competition for acquisition
candidates, which may limit the number of acquisition
opportunities, may lead to higher acquisition prices.  Also, SMC
may not be able to identify, acquire or manage additional
businesses profitably or to successfully integrate the acquired
businesses.  Businesses acquired may have liabilities that SMC
underestimated or did not discover during pre-acquisition
investigations.  Some of the liabilities of the businesses
acquired, even if not expressly assumed, may be imposed on SMC
as
the successor to the business.  Further, each acquisition
involves a number of other special risks that could cause the
acquired business to fail to meet expectations.  For example:

the acquired business may not achieve expected results;

key personnel of the acquired business may not be retained;

substantial, unanticipated costs, delays or other operational
financial problems may be incurred when the business is
integrated with SMC;

management's attention may be diverted; or

management may not be able to manage the combined entity
effectively or to make acquisitions and grow our business
internally at the same time.

	The timing, size or success of any future acquisitions
cannot be predicted, nor the ability to integrate any acquired
businesses, or their associated capital requirements.  In
addition, SMC may not be able to obtain acquisition financing
when required, or such financing may only be available on terms
and conditions that are unacceptable.  SMC's failure to address
the above issues, could cause financial results to suffer.

Mergers, Acquisitions and Consolidations.  The U.S. insurance
industry is experiencing an increasing number of mergers,
acquisitions, consolidations and sales of certain business
lines.
 These consolidations are largely the result of the following:

 the need to reduce costs of distribution and overhead;
 the need to maintain business in force;
 increased competition;
 regulatory capital requirements; and
 technology costs.

SMC expects this trend to continue.

Foreign Currency Risk.  SMI policyholders invest in assets
denominated in a wide range of currencies.  As policyholders are
not permitted to invest directly in options, futures and
derivatives, their investment and currency risk is limited to
premiums they have paid.  Although policyholders effectively
bear
the currency risk, SMI could be exposed to currency fluctuations
if currencies within the conventional investment portfolio or
certain actuarial reserves are mismatched.  In order to minimize
this risk, SMI continually matches the assets and liabilities of
the portfolio and the reserves.  In addition, Premier Life's
(Luxembourg) shareholder's equity is denominated in Luxembourg
francs.  Premier Life (Luxembourg) does not hedge currency risk
because its shareholder's equity will remain in Luxembourg
francs
for the foreseeable future, thus, no significant realized
foreign
exchange gains or losses are anticipated.  At December 31, 2000,
there was a $2.4 million unrealized loss from foreign currency
translation.

Euro Currency.  Effective January 1, 1999, eleven
participating European member union countries established fixed
conversion rates between their legal currencies and the Euro.
The
legal currencies in those countries will continue to be used as
legal tender through June 30, 2002.  Subsequent to this date,
the
legal currencies will be canceled and Euro bills and coins will
be
used for cash transactions in the participating countries.
During
this three-year dual-currency environment, conversion rates
between the legal currencies will no longer be computed directly
between one another.  Instead, a special "triangulation"
procedure
must be followed by first converting one legal currency into its
euro equivalent and then converting the Euro equivalent into the
other legal currency.  Although the Company has not initiated an
analysis plan for the Euro conversion, SMC does not expect it to
have a material impact on its operations or financial condition.

Possibility of Future Dilution of Ownership and Voting Power.
 The SMC Board of Directors has the authority to issue up to .9
million additional shares of preferred stock and 11.0 million
additional shares of common stock.  The board's authority under
SMC's charter typically does not require stockholder approval
unless it is otherwise required for a particular transaction.
Although SMC is not currently involved in any life insurance
acquisitions, the Company regularly investigates such
opportunities and could issue additional shares of SMC common or
preferred stock in connection with an acquisition.


	Uncertainties Regarding Intangible Assets.  Included in
SMC's
December 31, 2000 financial statements are certain assets that
are
primarily valued, for financial statement purposes, on the basis
of management assumptions.  These assets include items such as:

 deferred acquisition costs;
 present value of future profits;
 costs in excess of net assets acquired; and
 organization and deferred debt issuance costs.

The value of these assets reflected in the December 31, 2000
balance sheet total $124.6 million or 8.5% of SMC's assets. SMC
has established procedures to periodically review the
assumptions
used to value these assets and determine the need to make
adjustments of such values in SMC's consolidated financial
statements.  SMC has determined that the assumptions used in the
initial valuation of the assets are consistent with the current
operations of SMC as of December 31, 2000.

Regulatory Environment.  Currently, prescribed or permitted
statutory accounting principles ("SAP") may vary between states
and between companies. The NAIC has completed the process of
codifying SAP to promote standardization of methods utilized
throughout the industry. Completion of this project might result
in changes in statutory accounting practices for SMC's insurance
subsidiaries; however, it is not expected that such changes
would
materially affect SMC's insurance subsidiaries' statutory
capital
requirements. There can be no assurance that existing insurance-
related laws and regulations will not become more restrictive in
the future and, therefore, it is not possible to predict the
potential effects that any proposed or future legislation may
have on the financial condition or operations of the company.
See "Business of SMC-Regulatory Factors."


Financial Services Deregulation.  The U.S. Congress is
currently considering a number of legislative proposals intended
to reduce or eliminate restrictions on affiliations among
financial services organizations. The recently passed GLB Act
would allow banks to own or affiliate with insurers and
securities
firms. An increased presence of banks in the life insurance and
annuity businesses may increase competition in these markets.
The
Company cannot predict the impact of these proposals on the
earnings of the Company.

Item 7a.     Quantitative and Qualitative Disclosures About
Market
Risk

The Company seeks to invest available funds in a manner that
will maximize shareholder value and fund future obligations to
policyholders and debtors, subject to appropriate risk
considerations.  Many of the Company's products incorporate
surrender charges, market interest rate adjustments or other
features to encourage persistency.  Approximately 86% of the
total
insurance liabilities at December 31, 2000 had surrender
penalties
or other restrictions and approximately 4% are not subject to
surrender.

The Company also seeks to maximize the total return on its
investments through active investment management.  Accordingly,
the Company has determined that the entire portfolio of fixed
maturity securities is available to be sold in response to: i)
changes in market interest rates, ii) changes in relative values
of individual securities and asset sectors, iii) changes in
prepayment risks, iv) changes in credit quality outlook for
certain securities, v) liquidity needs, and vi) other factors.

Profitability of many of the Company's products is
significantly affected by the spreads between interest yields on
investments and rates credited on insurance liabilities.
Although
substantially all credited rates on annuity products may be
changed annually (subject to minimum guaranteed rates), changes
in
competition and other factors, including the impact of the level
of surrenders and withdrawals, may limit the ability to adjust
or
to maintain crediting rates at levels necessary to avoid
narrowing
of spreads under certain market conditions.  As of December 31,
2000, the average yield, computed on the cost basis of the
investment portfolio, was 7.28%, and the average interest rate
credited or accruing to total insurance liabilities was 4.90%,
excluding guaranteed interest bonuses for the first year of the
annuity contract.

Computer models were used to perform simulations of the cash
flows generated from the Company's existing business under
various
interest rate scenarios.  These simulations measured the
potential
gain or loss in fair value of interest rate-sensitive financial
instruments.  With such estimates, the Company seeks to closely
match the duration of assets to the duration of liabilities.
When
the estimated duration of assets and liabilities are similar,
exposure to interest rate risk is minimized because a change in
the value of assets should be largely offset by a change in the
value of liabilities.  At December 31, 2000, the option adjusted
duration of fixed maturity securities and short-term investments
were approximately 4.4, and the option adjusted duration of
insurance liabilities was approximately 3.9.

If interest rates were to increase by 10% from their December
31, 2000 levels, the Company's fixed maturity securities and
short-term investments (net of the corresponding changes in the
values of cost of policies purchased, cost of policies produced
and insurance liabilities) would decline in fair value by
approximately $17.1 million.

The calculations involved in the Company's computer simulations
incorporate numerous assumptions, require significant estimates
and assume an immediate change in interest rates without any
management of the investment portfolio in reaction to such
change.
Consequently, potential changes in the value of our financial
instruments indicated by the simulations will likely be
different
from the actual changes experienced under given interest rate
scenarios, and the differences may be material.  Because the
Company's investments and liabilities are actively managed,
actual
losses could be less than those estimated above.

Item 8.	Consolidated Financial Statements and Supplementary
Data

	The financial statements and supplementary data required
with
respect to this Item 8 are listed in Item 14(a)(1) and included
in
a separate section of this report.

Item 9.	Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

None.


 PART III

The Registrant will file a definitive proxy statement pursuant
to Regulation 14A of the Securities Exchange Act of 1934 in
connection with the Company's 2001 Annual Meeting of
Shareholders,
(the "Proxy Statement") not later than 120 days after the end of
the fiscal year covered by this report, and certain information
included therein is incorporated herein by reference.  Only
those
sections of the Proxy Statements that specifically address the
items set forth herein are incorporated by reference.  Such
incorporation does not include the Compensation Committee Report
or the Performance Graph included in the Proxy Statement.

Item 10.  Directors and Executive Officers of the Registrant

	The information concerning SMC's directors required by this
item is incorporated by reference to SMC's Proxy Statement.

	The information concerning SMC's executive officers
required
by this Item is incorporated by reference herein to the section
in
Part I, entitled "Executive Officers".

	The information regarding compliance with Section 16 of the
Securities and Exchange Act of 1934 is to be set forth in the
Proxy Statement and is hereby incorporated by reference.

Item 11.  Executive Compensation

	The information required by this Item is incorporated by
reference to SMC's Proxy Statement.

Item 12.  Security Ownership of Certain Beneficial Owners and
Management

	The information required by this Item is incorporated by
reference to SMC's Proxy Statement.

Item 13.  Certain Relationship and Related Transactions

	The information required by this Item is incorporated by
reference to SMC's Proxy Statement.



PART IV

Item 14.	Exhibits, Financial Statement Schedules and Reports on
Form 8-K

(a)(1) and (2)  The response to this portion of Item 14 is
submitted as a separate section of this report.

(a)(3)  List of Exhibits:

Exhibit
Number		Description of Document

2.1		Amended and Restated Agreement and Plan of Merger
		dated as of December 9, 1997 among SMC, SAC and
		Savers Life (incorporated by reference to SMC's
		Registration Statement on Form S-4 (Registration
		No. 333-43023)).

2.2		Stock Purchase Agreement dated as of June 4, 1998
		by and among SMC and MC Equities, Inc.
		(incorporated by reference to SMC's Form 8-K
		(Registration No. 0-20882)).

2.3		First Amendment to Stock Purchase Agreement dated
		as of July 1, 1998 by and among SMC and MC
		Equities, Inc. (incorporated by reference to SMC's
		Form 8-K (Registration No. 0-20882)).

2.4		Second Amendment to Stock Purchase Agreement dated
		as of July 23, 1998 by and among SMC and MC
		Equities, Inc. (incorporated by reference to SMC's
		Form 8-K (Registration No. 0-20882)).

2.5		Third Amendment to Stock Purchase Agreement dated
		as of October 8, 1998 by and among SMC and MC
		Equities, Inc. (incorporated by reference to SMC's
		Form 8-K (Registration No. 0-20882)).

3.1		Amended and Restated Articles of Incorporation, as
		amended (incorporated by reference to SMC's Annual
		Report on Form 10-K (File No. 0-20882) for the year
		ended December 31, 1996).

3.2		Amended and Restated Bylaws of SMC as amended
		(incorporated by reference to SMC's Registration
		Statement on Form S-1 (Registration No. 33-53370)
		as filed with the Commission on January 27, 1993
		and to Exhibit 3 of SMC's Quarterly Report on
		Form 10-Q (File No. 0-20882) for the quarter ended
		September 30, 1994).

4.1		Form of Senior Note Agreement Warrant (incorporated
		by reference to SMC's Registration Statement on
		Form S-1 (Registration No. 33-53370)).

4.2	     Amended and Restated Registration Rights Agreement
		dated as of April 15, 1997 by and between SMC and
		Fleet National Bank (incorporated by reference to
SMC's
          Annual Report on Form 10-K (File No. 0-20882)).

4.3       Form of Fleet National Bank Warrant(incorporated by
          reference to SMC's Annual Report on Form 10-K (File
No.
          0-20882)).

4.4		Form of President's Club Warrant (incorporated by
		reference to SMC's Annual Report on Form 10-K (File
		No. 0-20882)).







Exhibit
Number		Description of Document

10.1		Third Amended and Restated Employment Contract by
		and between SMC and Ronald D. Hunter, dated and
		effective, as amended, July 1, 1999 (incorporated
		by reference to SMC's Quarterly Report on Form 10-Q
		(File No. 0-20882) for the quarter ended
		September 30, 1999).

10.2		Third Amended and Restated Employment Contract by
		and between SMC and Edward T. Stahl, dated and
		effective, as amended, July 1, 1999 (incorporated
		by reference to SMC's Quarterly Report on Form 10-Q
		(File No. 0-20882) for the quarter ended
		September 30, 1999).

10.3		Third Amended and Restated Employment contract by
		and between SMC and Raymond J. Ohlson, dated and
		effective, as amended, July 1, 1999 (incorporated
		by reference to SMC's Quarterly Report on Form 10-Q
		(File No. 0-20882) for the quarter ended September
		30, 1999).

10.4		Second Amended and Restated Employment Contract by
		and between SMC and Stephen M. Coons dated and
		effective, as amended, July 1, 1999 (incorporated
		by reference to SMC's Quarterly Report on Form 10-Q
		(File No. 0-20882) for the quarter ended September
		30, 1999).

10.5		Indemnification Agreement between SMC and Stephen M.
		Coons and Coons & Saint, dated August 1, 1991
		(incorporated by reference to SMC's Registration
		Statement on Form S-1 (Registration No. 33-53370)
		as filed with the Commission on January 27, 1993).

10.6		Standard Management Corporation Amended and Restated
		1992 Stock Option Plan (incorporated by reference
		to the Company's Registration Statement on Form S-4
		(Registration No. 333-35447) as filed with the
		Commission on September 11, 1997.

10.7		Lease by and between Standard Life and WRC
		Properties, Inc., dated February 27, 1991
		(incorporated by reference to SMC's Registration
		Statement on Form S-1 (Registration No. 33-53370)
		as filed with the Commission on January 27, 1993).

10.8		Management Service Agreement between Standard Life
		and SMC dated August 1, 1992, as amended on
		January 1, 1997 and as further amended on January
		1, 1999 (incorporated by reference to SMC's Annual
          Report on Form 10-K (FileNo. 0-20882)).

10.9	     Agreement for Assumption Reinsurance between
		the National Organization Of Life and Health
		Insurance Guaranty Associations and Standard Life,
		concerning, The Midwest Life Insurance Company In
		Liquidation effective June 1, 1992 (incorporated by
		reference to SMC's Registration Statement on
		Form S-1 (Registration No. 33-53370) as filed with
		the Commission on January 27, 1993).

10.10	Reinsurance Agreement between Standard Life and
		Swiss Re Life and Health effective May 1, 1975
		(incorporated by reference to SMC's Registration
		Statement on Form S-1 (Registration No. 33-53370)
		as filed with the Commission on January 27, 1993).

10.11	Reinsurance Agreement between Firstmark
		Standard Life Insurance Company and Swiss Re Life
		and Health effective February 1, 1984 (incorporated
		by reference to SMC's Registration Statement on
		Form S-1 (Registration No. 33-53370) as filed with
		the Commission on January 27, 1993).

10.12	Reinsurance Contract between First
		International and Standard Life dated July 10, 1992
		(incorporated by reference to SMC's Registration
		Statement on Form S-1 (Registration No. 33-53370)
		as filed with the Commission on January 27, 1993).

10.13	Amended Reinsurance Agreement between Standard
		Life and Winterthur Life Re Insurance Company
		effective January 1, 1995 (incorporated by
		reference to SMC's Annual Report on Form 10-K (File
		No. 0-20882) for the year ended December 31, 1996).

10.14 	Management Service Agreement between Premier Life
		(Luxembourg) and SMC dated September 30, 1994
		(incorporated by reference to SMC's Annual Report
		on Form 10-K (File No. 0-20882) for the year ended
		December 31, 1994).





Exhibit
Number		Description of Document

10.15	Assignment of Management Contract dated
		October 2, 1995 of Management Contract dated
		January 1, 1987 between DNC and Dixie Life to
		Standard Life (incorporated by reference to SMC's
		Annual Report on Form 10-K (File No. 0-20882) for
		the year ended December 31, 1996).

10.16     Automatic Indemnity Reinsurance Agreement
		between First International and The Guardian
		Insurance & Annuity Company, Inc. dated and
		effective January 1, 1996 (incorporated by
		reference to SMC's Annual Report on Form 10-K (File
		No. 0-20882) for the year ended December 31, 1996).

10.17	Indemnity Retrocession Agreement between The
		Guardian Insurance & Annuity Company, Inc. and
		Standard Life dated and effective January 1, 1996
		(incorporated by reference to SMC's Annual Report
		on Form 10-K (File No. 0-20882) for the year ended
		December 31, 1996).

10.18	Automatic Indemnity Reinsurance Agreement
		between The Guardian Insurance & Annuity Company,
		Inc. and Standard Life dated and effective
		January 1, 1996 (incorporated by reference to SMC's
		Annual Report on Form 10-K (File No. 0-20882) for
		the year ended December 31, 1996).

10.19	Administrative Services Agreement between First
		International and Standard Life dated and effective
		March 18, 1996 (incorporated by reference to SMC's
		Annual Report on Form 10-K (File No. 0-20882) for
		the year ended December 31, 1996).

10.20	Amendment No. 1 to Amended and Restated
		Revolving Line of Credit Agreement dated as of
		March 10, 1998 between SMC and Fleet National Bank
		(incorporated by reference to SMC's Quarterly
		Report on Form 10-Q (File No. 0-20882)).

10.21	Amended and Restated Note Agreement dated as
		of March 10, 1998 between SMC and Fleet National
		Bank in the amount of $20,000,000 (incorporated by
		reference to SMC's Quarterly Report on Form 10-Q
		(File No. 0-20882)).

10.22	Amended and Restated Pledge Agreement dated as
		of March 10, 1998 between SMC and Fleet National
		Bank (incorporated by reference to SMC's Quarterly
		Report on Form 10-Q (File No. 0-20882)).


10.23	Surplus Debenture dated as of November 8, 1996
		by and between SMC and Standard Life in the amount
		of $13,000,000 (incorporated by reference to SMC's
		Quarterly Report on Form 10-Q (File No. 0-20882)
		for the quarter ended September 30, 1996).

10.24	Portfolio Indemnify Reinsurance Agreement
		between Dixie Life and Cologne Life Reinsurance
		Company dated and effective December 31, 1997
		(incorporated by reference to SMC's Annual Report
		on Form 10-K (File No. 0-20882) for the year ended
		December 31, 1996).

10.25	Coinsurance Agreement effective as of July 1,
		1997 by and between Savers Life and World Insurance
		Company (incorporated by reference to SMC's
		Registration Statement on Form S-4 (Registration
		No. 333-35447)).

10.26	Amendment I to the Guardian Indemnity
		Retrocession Agreement effective as of January 1,
		1996 by and between The Guardian Insurance and
		Annuity Company and Standard Life (incorporated by
		reference to SMC's Registration Statement on Form
		S-4 (Registration No. 333-35447)).

10.27	Promissory Note from Ronald D. Hunter to SMC
		in the amount of $775,500 executed October 28, 1997
		(incorporated by reference to SMC's Quarterly
		Report on Form 10-Q (File No. 0-20882) for the
		quarter ended September 30, 1997).

10.28	Reinsurance Agreement between Standard Life and
		Life Reassurance Corporation of America effective
		September 1, 1997 (incorporated by reference to SMC's
          Annual Report on Form 10-K (File No. 0-20882) for the
          year ended December 31, 1997.)

10.29	Reinsurance Agreement between Standard Life and
		Business Men's Assurance Company of America
		effective September 1, 1997 (incorporated by reference
          to SMC's Annual Report on Form 10-K (File No. 0-20882)
          for the year ended December 31, 1997.)




Exhibit
Number		Description of Document



10.30	Indemnity Reinsurance Agreement between
		Standard Life and the Mercantile and General Life
		Reassurance Company of America dated March 30, 1998
		and effective June 1, 1997 (incorporated by
		reference to SMC's Quarterly Report on Form 10-Q
		(File No. 0-20882) for the quarter ended June 30,
		1998).

10.31	Certificate of Designations for Series A
		Convertible Redeemable Preferred Stock
		(incorporated by reference to SMC's Quarterly
		Report on Form 10-Q (File No. 0-20882) for the
		quarter ended June 30, 1998).

10.32	Quota Share Reinsurance Agreement between
		Savers Life and the Oxford Life Insurance Company
		dated September 24, 1998 and effective July 1, 1998
		(incorporated by reference to SMC's Quarterly
		Report on Form 10-Q (File No. 0-20882) for the
		quarter ended September 30, 1998).

10.33	Addendum No. 5 to Reinsurance Agreement between
		Standard Life Insurance Company of Indiana and
		Winterthur Life Re Insurance Company dated August
		20, 1998 and effective October 1, 1998
		(incorporated by reference to SMC's Quarterly
		Report on Form 10-Q (File No. 0-20882) for the
		quarter ended September 30, 1998).

10.34	Employment Agreement between Robert B. Neal and
		Standard Management Corporation dated October 2,
		1998 and effective October 2, 1998 (incorporated by
		reference to SMC's Quarterly Report on Form 10-Q
		(File No. 0-20882) for the quarter ended September
		30, 1998).

10.35	Articles of Merger of Savers Life into Standard
		Life effective as of December 31, 1998 and approved
		by the Indiana Department of Insurance December 29,
		1998 (incorporated by reference to SMC's Annual Report
          on Form 10-K (File No. 0-20882) for the year ended
          December 31, 1998).

10.36	Plan and Agreement of Merger of Savers Life
		into Standard Life effective as of December 31,
		1998 dated October 30, 1998 (incorporated by reference
          to SMC's Annual Report on Form 10-K (File No. 0-20882)
          for the year ended December 31, 1998).


10.37	Articles of Merger of Midwestern Life into
		Standard Life effective as of December 31, 1998 and
		approved by the Indiana Department of Insurance
		December 29, 1998 (incorporated by reference to SMC's
          Annual Report on Form 10-K (File No. 0-20882) for the
          year ended December 31, 1998).



10.38	Plan and Agreement of Merger of Midwestern Life
		into Standard Life effective as of December 31,
		1998 dated October 30, 1998 (incorporated by reference
          to SMC's Annual Report on Form 10-K (File No. 0-20882)
          for the year ended December 31, 1998).


10.39	Amended and Restated note Agreement dated as
		of September 24, 1998 between SMC and Fleet
		National Bank in the amount of $26,000,000
          (incorporated by reference to SMC's Annual Report on
          Form 10-K (File No. 0-20882) for the year ended
December
          31, 1998).


10.40	Amendment No. 2 to Amended and Restated
		Revolving Line of Credit Agreement dated as of
		September 24, 1998 between SMC and Fleet National
		Bank (incorporated by reference to SMC's Annual Report
          on Form 10-K (File No. 0-20882) for the year ended
          December 31, 1998).


10.41	Amended and Restated Registration Rights
		Agreement dated as of August 19, 1998 between SMC
		and Fleet National Bank (incorporated by reference to
          SMC's Annual Report on Form 10-K (File No. 0-20882)
          for the year ended December 31, 1998).

10.42	Amended and Restated Pledge Agreement dated as
		of September 23, 1998, between SMC and Fleet
		National Bank (incorporated by reference to SMC's
          Annual Report on Form 10-K (File No. 0-20882) for the
          year ended December 31, 1998).


10.43	Warrant to purchase common stock of SMC dated
		August 19, 1998 entitling Fleet National Bank to
		purchase 20,000 shares (incorporated by reference to
          SMC's Annual Report on Form 10-K (File No. 0-20882)
for
          the year ended December 31, 1998).


10.44	Guaranty dated October 1, 1998 made by SMC in
		favor of Fleet National Bank (incorporated by
          reference to SMC's Annual Report on Form 10-K (File No.
          0-20882) for the year ended December 31, 1998).

10.45	Surplus debenture dated as of December 31, 1998
		by and between SMC and Standard Life in the amount
		of $8.0 million (incorporated by reference to SMC's
          Annual Report on Form 10-K (File No. 0-20882) for the
          year ended December 31, 1998).


10.46	Surplus debenture dated as of December 31, 1998
		by and between SMC and Standard Life in the amount
		of $6.0 million (incorporated by reference to SMC's
          Annual Report on Form 10-K (File No. 0-20882) for the
          year ended December 31, 1998).



Exhibit
Number		Description of Document


10.47	Employment Agreement between Standard
		Management Corporation and P.B. (Pete) Pheffer
		dated and effective July 1, 1999,  (incorporated by
		reference to SMC's Quarterly Report on Form 10-Q
		(File No. 0-20882) for the quarter ended September
		30, 1999).

10.48	Note Agreement dated October 31, 2000 by and
		between SMC and Zurich Capital Markets, Inc. in the
		amount of $11.0 million.  Included as an exhibit to
          this note agreement is an Investment Advisory
          Agreement dated December 1, 2000 by and between SMC and
          Scudder Kemper Investments, Inc.

21		List of Subsidiaries of SMC

23.1		Consent of Ernst & Young LLP

23.2		Consent of KPMG Audit

24		Powers of Attorney

27		Financial Data Schedule, which is submitted
		electronically pursuant to Regulation S-K to the
		Securities and Exchange Commission for information
		only and not filed.


The following is a list of each management contract or
compensatory plan or arrangement required to be filed as an
exhibit to this report.

Exhibit
Number

None

(b)  Reports on Form 8-K filed during the fourth quarter of
2000.

No reports on Form 8-K were filed with the Commission in the
fourth quarter of  2000.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date: March 29, 2001
						STANDARD MANAGEMENT CORPORATION


						Ronald D. Hunter
						Chairman, President and
						Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below on March 29, 2001 by
the following persons on behalf of the Registrant and in the
capacities indicated.



Ronald D. Hunter		Chairman, President and Chief
                         Executive Officer
                         (Principal Executive Officer)

  *
P.B. (Pete) Pheffer		Director, Executive Vice President,
					and Chief Financial Officer
					(Principal Financial Officer)

  *
Gerald R. Hochgesang	Senior Vice President - Finance
					and Treasurer
					(Principal Accounting Officer)

   *
Raymond J. Ohlson		Director

   *
Edward T. Stahl		Director

   *
Stephen M. Coons		Director

   *
Martial R. Knieser		Director

   *
Robert A. Borns		Director

   *
John J. Dillon			Director

   *
Jerry E. Francis		Director

*By: /s/		RONALD D. HUNTER
			Ronald D. Hunter
			Attorney-in-Fact



                              ANNUAL REPORT ON FORM 10-K

                      ITEM 8, ITEM 14(a)(1) AND (2),(c) AND (d)

                     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                             LIST OF FINANCIAL STATEMENTS

                                         and

                              FINANCIAL STATEMENT SCHEDULES

                                    CERTAIN EXHIBITS

                              FINANCIAL STATEMENT SCHEDULES

                               Year Ended December 31, 2000

                              STANDARD MANAGEMENT CORPORATION

                                   INDIANAPOLIS, INDIANA










STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES


Page

Audited Consolidated Financial Statements

Report of Independent Auditors					       F-2

Consolidated Balance Sheets as of December 31, 2000 and 1999
F-4

Consolidated Statements of Income for the Years Ended
December 31, 2000, 1999 and 1998						  F-5

Consolidated Statements of Shareholders' Equity for the Years
Ended December 31, 2000, 1999 and 1998					  F-6

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998						  F-8

Notes to Consolidated Financial Statements				  F-9

Financial Statement Schedules

The following consolidated financial statement schedules are
included in this report and should be read in
conjunction with the Audited Consolidated Financial Statements.

Schedule II -- Condensed Financial Information of Registrant
(Parent Company) for the Years Ended December 31, 2000, 1999
and 1998										       F-29

Schedule IV -- Reinsurance for the Years Ended December 31,
2000, 1999 and 1998								       F-32

Schedules not listed above have been omitted because they
are not applicable or are not required, or because the
required information is included in the Audited Consolidated
Financial Statements or related Notes.








Report of Independent Auditors

Shareholders and Board of Directors
Standard Management Corporation

We have audited the accompanying consolidated balance sheets
of Standard Management Corporation and subsidiaries as of
December
31, 2000 and 1999, and the related consolidated statements of
income, shareholders' equity and cash flows for each of the
three
years in the period ended December 31, 2000. Our audits also
included the financial statement schedules listed in the Index
at
Item 14(a). These financial statements and schedules are the
responsibility of the Company's management. Our responsibility
is
to express an opinion on these financial statements and
schedules
based on our audits. We did not audit the consolidated balance
sheets at September 30, 2000 and 1999 or the consolidated
statements of operations, shareholder's equity and cash flows
for
each of the three years in the period ended September 30, 2000
of
Standard Management International S.A. and subsidiaries, a
wholly
owned subsidiary group, which financial statements reflect
assets
totaling approximately 37% and 29% of the Company's consolidated
assets at December 31, 2000 and 1999 and revenues totaling
approximately 11%, 6% and 8% of consolidated revenues for each
of
the three years in the period ended December 31, 2000. Those
financial statements, which as explained in Note 1, are included
in the Company's consolidated balance sheets at December 31,
2000
and 1999, and the Company's consolidated statements of income,
shareholders' equity and cash flows for each of the three years
in
the period ended December 31, 2000, were audited by other
auditors
whose report has been furnished to us, and our opinion, insofar
as
it relates to the data included for Standard Management
International S.A., is based solely on the report of other
auditors.

We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable
assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits and the report of other auditors
provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other
auditors, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of Standard Management Corporation and subsidiaries at
December 31, 2000 and 1999, and the consolidated results of
their
operations and their cash flows for each of the three years in
the
period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedules, when
considered in relation to the basic financial statements taken
as
a whole, present fairly in all material respects the information
set forth therein.


Ernst & Young LLP




Indianapolis, Indiana
February 9, 2001





Report of Independent Auditors

Shareholders and Board of Directors
Standard Management International, S.A.

We have audited the consolidated balance sheets of Standard
Management International S.A. and its subsidiaries as at
September 30, 2000 and 1999 and the related consolidated
statements of operations, shareholder's equity and comprehensive
income, and cash flows for each of the years in the three year
period ended September 30, 2000 (none of which aforementioned
financial statements are separately presented herein). These
consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion
on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the
financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion the financial statements referred to above
present fairly, in all material aspects, the consolidated
financial position of Standard Management International S.A. and
its subsidiaries as at  September 30, 2000 and 1999, and the
consolidated results of their operations and their cash flows
for
each of the years in the three year period ended September 30,
2000 in conformity with generally accepted accounting principles
in the United States of America.



Luxembourg City, Luxembourg



January 15, 2001
KPMG Audit




           STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                   CONSOLIDATED BALANCE SHEETS
           (Dollars in Thousands, Except Per Share Amounts)

								          December 31
								      2000	    1999
	ASSETS

Investments:
  Securities available for sale:
    Fixed maturity securities, at fair
	Value (amortized cost: $742,597
     in 2000 and $646,284 in 1999)	       $  718,912     $606,907
    Equity securities, at fair value
     (cost: $538 in 2000 and $565 in
     1999)						         362          378
  Mortgage loans on real estate	            4,778        8,131
  Policy loans	                               14,280       14,033
  Real estate 	                                8,847        3,233
  Other invested assets	                        776          845
  Short-term investments	                     12,489       14,976
      Total investments	                    760,444      648,503
Cash	   							       1,840        3,659
Accrued investment income	                12,298       11,105
Amounts due and recoverable from
  reinsurers	  					      43,158       58,230
Deferred acquisition costs	   			 91,855       67,811
Present value of future profits	           26,343       30,688
Goodwill							       5,430        5,636
Other assets						       8,650        5,372
Assets held in separate accounts	          520,439      319,973
      Total assets				       $1,470,457   $1,150,977

	LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Insurance policy liabilities		  $  837,345   $  727,189
  Accounts payable and accrued expenses	       7,347        9,076
  Notes payable	 				      31,500       34,500
  Deferred federal income taxes	            4,397          349
  Liabilities related to separate accounts   520,439      319,973
      Total liabilities				   1,401,028    1,091,087

Series A convertible redeemable preferred
 stock, par value $100 per share		       6,530        6,530

Shareholders' Equity:
  Preferred stock, no par value			     --           --
  Common stock, no par value				 63,019       62,152
  Treasury stock, at cost				 (7,589)      (6,802)
  Accumulated other comprehensive
   income (loss):
    Unrealized gain (loss) on securities
     available for sale, net tax benefits
     of $4,977 in 2000 and $8,196 in 1999	 (9,643)     (15,859)
    Unrealized gain on other investments,
	net taxes of $1 in 2000 and $8 in 1999	      3           15
    Foreign currency translation adjustment	 (2,368)        (862)
  Retained earnings 				      19,477       14,716
      Total shareholders' equity	           62,899       53,360
      Total liabilities and shareholders'
	  equity					       $1,470,457   $1,150,977

	See accompanying notes to consolidated financial statements.



          STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF INCOME
         (Dollars in Thousands, Except Per Share Amounts)


								Year Ended December 31

							2000		1999		1998
Revenues:
  Premium income		             $15,470   $13,090   $14,479
  Net investment income	              43,173    44,821    34,221
  Net realized investment gains
   (losses)	                        (4,492)       78       353
  Policy income	                    8,204     6,826     6,529
  Negative goodwill amortization           --        --     1,388
Separate account fees	               7,728     3,941     2,884
  Fee and other income	               5,980     4,207     3,421
    Total revenues	                   76,063    72,963    63,275

Benefits and expenses:
  Benefits and claims	              20,080    14,376    13,270
  Interest credited to
    interest-sensitive annuities
    and other financial products       21,080    25,728    19,775
  Amortization related to
    operations	                        11,764     7,471     5,413
  Amortization related to net
    realized investment losses         (2,328)       --        --
  Other operating expenses	         15,646    14,605    15,551
  Interest expense and financing
    costs	 			               3,417     3,385    2,955
    Total benefits and expenses        69,659    65,565    56,964

Income before federal income taxes,
 extraordinary loss and preferred
 stock dividends			          6,404     7,398     6,311
Federal income tax expense	            778     2,126     1,630

Income before extraordinary loss
  and preferred stock dividends         5,626     5,272     4,681
Extraordinary loss, net tax
  benefits of $185			            359        --        --

Net income	  			          5,267     5,272     4,681
Preferred stock dividends	            506       506       180
Earnings available to common
  shareholders			             $ 4,761   $ 4,766   $ 4,501

Earnings per share - basic:
  Income before extraordinary loss
    and preferred stock dividends     $   .73   $   .69   $   .68
  Extraordinary loss			       .05	   --        --
  Net income 				            .68       .69	  .68
  Preferred stock dividends		       .06       .07       .03
  Earnings available to common
    shareholders			        $   .62   $   .62   $   .65

Earnings per common share - diluted:
  Income before extraordinary loss
    and preferred stock dividends     $   .70   $   .65   $   .62
  Extraordinary loss			       .04        --	   --
  Net income                              .66	  .65       .62
  Preferred stock dividends		       .05	  .05       .02
  Earnings available to common
    shareholders			        $   .61   $   .60   $   .60

	See accompanying notes to consolidated financial
statements.

           STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                      (Dollars in Thousands)

                                                Accumulated
                                                   other
					 Common Treasury  comprehensive Retained
			 	Total  stock  stock    income (loss) earnings

Balance at
 January 1, 1998     $43,313  $40,646  $(4,572)  $  1,698  $5,541

Comprehensive income:
  Net income	        4,681    					     4,681

Other comprehensive
  income (loss):
  Change in unrealized
   gain (loss) on
   securities, net tax
   benefits of $251	   (488)                        (488)
  Change in foreign
    currency
    translation	    477			             477
    Other comprehensive
     loss	              (11)

    Comprehensive
      income	       4,670

Issuance of common
 stock for Savers
 Life acquisition	 15,024   15,024
Issuance of common
 stock for Midwestern
 Life acquisition	  4,614    4,614
Issuance of common
 stock warrants	     64       64
Issuance of common
 stock in connection
 with exercise of
 stock warrants	    233      234                          (1)
Treasury stock
 acquired	           (1,702)  (1,702)
Conversion of
 preferred stock into
 common stock	           4        4
Reissuance of treasury
 stock in connection
 with  exercise of
 stock options	           2       54                          (52)
Preferred stock
 dividends	        (180)					           (180)
Balance at December
 31, 1998			 $66,042  $60,586  $(6,220)  $ 1,687  $ 9,989

Comprehensive income
 (loss):
  Net income	        5,272                                5,272
  Other comprehensive
   income (loss):
    Change in
     unrealized gain
     (loss) on
     securities, net
     tax benefits of
     $8,961	      (17,527)			     (17,527)
    Change in foreign
currency
translation	         (866)				  (866)
      Other
       Comprehensive
       loss	      (18,393)

       Comprehensive
        Loss 	      (13,121)

Issuance of common
 stock warrants        1,566    1,566
Treasury stock
 acquired	              (582)             (582)
Exercise of stock
 options			     (39)   	                           (39)


Preferred stock
 dividends	         (506)                                (506)
Balance at December
 31, 1999			 $53,360  $62,152  $(6,802) $(16,706) $14,716

(continued on following page)

See accompanying notes to consolidated financial statements.


         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (continued)
                    (Dollars in Thousands)

                                           Accumulated
                                              other
					 Common Treasury comprehensive   Retained
			 	Total  stock  stock   income (loss)   earnings

Balance December
 31, 1999 (carried
 forward from prior
 page)			$53,360  $62,152  $(6,802)  $(16,706) $14,716

Comprehensive income:
  Net income	       5,267 					          5,267
  Other comprehensive
   income:
    Change in
     unrealized gain
     (loss) on
     securities, net
     taxes of $3,219  6,204                        6,204
    Change in foreign
     currency
     translation	 (1,506)                      (1,506)
       Other
        comprehensive
        income	       4,698

     Comprehensive
      income	       9,965

Issuance of common
 stock warrants	    867      867
Treasury stock
 acquired	             (787)             (787)
Preferred stock
 dividends	        (506)					           (506)
Balance at December
 31, 2000			$62,899  $63,019  $(7,589)  $(12,008) $19,477

See accompanying notes to consolidated financial statements.













           STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Dollars in Thousands)




                                       Year Ended December 31

                                      2000		1999		1998
Operating Activities
Net income 				    $   5,267    $   5,272  $ 4,681
Adjustments to reconcile net
 income to net cash provided
 by operating activities:
  Amortization of deferred
   acquisition costs	             6,419        4,580    2,658
  Deferral of acquisition costs     (35,138)     (27,818) (13,542)
  Deferred federal income taxes         829        2,005      957
  Depreciation and amortization	   3,671        3,889    1,209
  Insurance policy liabilities	  16,337       14,530    6,400
  Net realized investment (gains)
   losses					        4,492          (78)    (353)
  Accrued investment income	       (1,194)      (1,541)  (1,451)
  Other				               252	      2,014     (352)
  Net cash provided by operating
   activities				          935        2,853      207

Investing Activities
Fixed maturity securities available
 for sale:
  Purchases					(290,117)    (236,969)(261,744)
Sales						 180,402	    116,511  162,503
  Maturities, calls and redemptions   7,466       19,006   32,570
Short-term investments, net	        2,487       (3,350)  44,460
Other investments, net	            (6,872)       2,270      320
Purchase of Savers Life Insurance
 Company, less cash acquired of
 $518						      --           --  (18,039)
Purchase of Midwestern National
 Life Insurance Company of Ohio,
 less cash acquired of $1,026	           --           --  (13,104)
    Net cash used by investing
     activities		 		(106,634)    (102,532) (53,034)

Financing Activities
Borrowings, net of debt issuance
costs of  $206 in 1998			  11,000          300   11,794
Repayments on notes payable	      (14,000)        (800)  (3,141)
Premiums received on interest-
 sensitive annuities and other
 financial products credited to
 policyholder account balances,
 net of premiums ceded	           196,489      165,750   81,858
Return of policyholder account
 balances on interest-sensitive
 annuities and other financial
 products	                          (89,183)     (75,981) (52,934)
Issuance of Series A redeemable
 preferred stock	                     --           --    6,389
Proceeds from common and treasury
 stock sales	                          --           --      234
Issuance of common stock and warrants   867        1,566   19,935
Purchase of common stock for treasury  (787)        (582)  (1,702)
Dividends on preferred stock	         (506)        (506)    (180)
   Net cash provided by financing
     activities				 103,880	     89,747   62,253
Net increase (decrease) in cash	  (1,819)      (9,932)   9,426
Cash at beginning of year	        3,659       13,591    4,165
Cash at end of year		         $   1,840    $   3,659  $13,591

	See accompanying notes to consolidated financial
statements.


           STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000


1.	Summary of Significant Accounting Policies

Organization

Standard Management Corporation ("Standard Management") is an
international financial services holding company, which directly
and through its subsidiaries i) acquires and manages in force
life
insurance and annuity business, ii) issues and distributes life
insurance and annuity products, and iii) offers unit-linked
assurance products through its international subsidiaries.

Standard Management's active subsidiaries at December 31, 2000
include: (i) Standard Life Insurance Company of Indiana
("Standard
Life") and its subsidiary, Dixie National Life Insurance Company
("Dixie Life"), (ii) Standard Management International, S.A. and
its subsidiaries ("SMI"), Premier Life (Luxembourg) S.A.
("Premier
Life (Luxembourg)") and Premier Life (Bermuda) Ltd. ("Premier
Life
(Bermuda)"), (iii) Standard Marketing Corporation ("Standard
Marketing") and (iv) Savers Marketing Corporation ("Savers
Marketing").

Basis of Presentation

The accompanying consolidated financial statements of Standard
Management and its subsidiaries (the "Company" or "SMC") have
been
prepared in conformity with accounting principles generally
accepted in the United States ("GAAP") and include the accounts
of
the Company since acquisition or organization.  All significant
intercompany balances and transactions have been eliminated.

The fiscal year end for SMI is September 30. To facilitate
reporting on the consolidated level, the fiscal year end for SMI
was not changed and the consolidated balance sheets and
statements
of operations for SMI at September 30, 2000 and 1999 and for
each
of the three years in the period ended September 30, 2000, are
included in the Company's consolidated balance sheets at
December
31, 2000 and 1999 and for each of the three years in the period
ended December 31, 2000.

Use of Estimates

The nature of the Company's insurance businesses requires
management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and
accompanying notes. Such estimates and assumptions could change
in
the future as more information becomes known, which could impact
the amounts disclosed in this report.

Investments

The Company classifies its fixed maturity and equity
securities as available for sale and, accordingly, such
securities
are carried at fair value. Fixed maturity securities include
bonds
and redeemable preferred stocks. Changes in fair values of
securities available for sale, after adjustment for deferred
acquisition costs, present value of future profits and deferred
income taxes, are reported as unrealized gains or losses
directly
in shareholders' equity and, accordingly, have no effect on net
income. The deferred acquisition costs and present value of
future
profits adjustments to the unrealized gains or losses represent
valuation adjustments or reinstatements of these assets that
would
have been required as a charge or credit to operations had such
unrealized amounts been realized.

The cost of fixed maturity securities is adjusted for
amortization of premiums and discounts. The amortization is
provided on a constant effective yield method over the life of
the
securities and is included in net investment income.

Mortgage-backed and other collateralized securities,
classified as fixed maturity securities in the consolidated
balance
sheets, are comprised principally of obligations backed by an
agency of the United States  ("U.S.") government (although
generally not by the full faith and credit of the U.S.
government).
The Company has reduced the risk normally associated with these
investments by primarily investing in highly rated securities
and
in those that provide more predictable prepayment patterns. The
income from these securities is recognized using a constant
effective yield based on anticipated prepayments and the
estimated
economic life of the securities. When actual prepayments differ
significantly from anticipated prepayments, the income
recognized
is adjusted currently to match that which would have been
recorded
had the effective yield been applied since the acquisition of
the
security. This adjustment is included in net investment income.

1.	Summary of Significant Accounting Policies (continued)


Mortgage loans on real estate and policy loans are carried at
unpaid principal balances and are generally collateralized. Real
estate investments, which the Company has the intent to hold for
the production of income, are carried at cost, less accumulated
depreciation. Short-term investments are carried at amortized
cost, which approximates fair value.

Net Realized Investment Gains or Losses

Net realized investment gains and losses are calculated using
the specific identification method and included in the
consolidated statements of income.  If the values of investments
decline below their amortized cost and this decline is
considered
to be other than temporary, the amortized cost of these
investments is reduced to net realizable value and the reduction
is recorded as a realized loss.

Future Policy Benefits

Liabilities for future policy benefits for deferred annuities
and universal life policies are equal to full account value that
accrues to the policyholder (cumulative premiums less certain
charges, plus interest credited) with rates ranging from 3.0% to
12.5% in 2000 and 3.0% to 12.3% in 1999.

Future policy benefits for traditional life insurance
contracts are computed using the net level premium method on the
basis of assumed investment yields, mortality and withdrawals,
which were appropriate at the time the policies were issued.
Assumed investment yields are based on interest rates ranging
from
6.2% to 7.5%. Mortality is based upon various actuarial tables,
principally the 1965-1970 or the 1975-1980 Select and Ultimate
Table. Withdrawals are based upon Company experience and vary by
issue age, type of coverage, and duration.

Recognition of Insurance Policy Revenue and Related Benefits and
Expenses

Revenue for interest-sensitive annuity contracts consists of
policy charges for surrenders and investment income earned.
Premiums received for these annuity contracts are reflected as
premium deposits and are not recorded as revenues. Expenses
related to these annuities include interest credited to
policyholder account balances. Revenue for universal life
insurance policies consists of policy charges for the cost of
insurance, policy administration charges, surrender charges and
investment income earned during the period. Expenses related to
universal life policies include interest credited to
policyholder
account balances and death benefits incurred in excess of
policyholder account balances.

Traditional life insurance and immediate annuity premiums are
recognized as premium revenue when due over the premium paying
period of the policies. Benefits are charged to expense in the
period when claims are incurred and are associated with related
premiums through changes in reserves for future policy benefits
which results in the recognition of profit over the premium
paying
period of the policies.

Reinsurance

Premiums, annuity policy charges, benefits and claims,
interest credited and amortization expense are reported net of
reinsurance ceded and are accounted for on a basis consistent
with
those used in accounting for the original policies issued and
the
terms of the reinsurance contracts.

Separate Accounts

The majority of the balance represents i) unit-linked
business, where benefits on surrender and maturity are not
guaranteed, and ii) investment contracts, which pay fixed
benefits
to the policyholder and have minimal mortality risk.  Separate
accounts generally represent funds maintained in accounts to
meet
specific investment objectives of policyholders who bear the
investment risk.  The Company records the related liabilities at
amounts equal to the underlying assets.  Investment income and
investment gains and losses accrue directly to such
policyholders.
The assets of each account are segregated and are not subject to
claims that arise out of any other business of the Company.
Deposits, net investment income and realized gains and losses on
separate accounts assets are not reflected in the consolidated
statements of income.



1.	Summary of Significant Accounting Policies (continued)


Foreign Currency Translation

The Company's foreign subsidiaries' balance sheets and
statements of operations are translated at the year end exchange
rates and average exchange rates for the year, respectively. The
resulting unrealized gain or loss adjustment from the
translation
to U.S. dollars is recorded in the foreign currency translation
adjustment as a separate component of accumulated other
comprehensive income.  Foreign exchange gains or losses relating
to policyholders' funds in separate accounts are allocated to
the
relevant separate account.

Income Taxes

Deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax rates
in
effect for the year in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period in which the change is enacted.

Standard Life and Dixie Life filed a consolidated return for
1999 and plan to file a consolidated return for 2000.  SMC and
other U.S. non-insurance subsidiaries are taxed as regular
corporations and file a consolidated return. SMC and its U.S.
non-insurance subsidiaries were eligible to consolidate with
Standard Life for income tax purposes beginning in 1996, but do
not currently plan to do so.

SMI is incorporated as a holding company in the Grand Duchy
of Luxembourg and, accordingly, is not currently subject to
taxation on income or capital gains. SMI is subject to an annual
capital tax, which is calculated on the nominal value of the
statutory shareholder's equity at an annual rate of .20%.
Premier
Life (Luxembourg) is a normal commercial taxable company and is
subject to income tax at regular corporate rates (statutory
corporate rate of 37.45%), and annual capital taxes amounting to
approximately 0.5% of its net equity. Premier Life (Bermuda) is
exempt from taxation on income until March 2016 pursuant to a
decree from the Minister of Finance in Bermuda. To the extent
that
such income is taxable under U.S. law, such income will be
included in SMC's consolidated return.

Deferred Acquisition Costs

Costs relating to the production of new business  (primarily
commissions and certain costs of marketing, policy issuance and
underwriting) are deferred and included in the deferred
acquisition cost asset to the extent that such costs are
recoverable from future related policy revenues. For interest-
sensitive annuities and other financial products, deferred
acquisition costs, with interest, are amortized over the lives
of
the policies and products in a constant relationship to the
present value of estimated future gross profits, discounted
using
the interest rate credited to the policy. Traditional life
insurance deferred acquisition costs are being amortized over
the
premium-paying period of the related policies using assumptions
consistent with those used in computing policy benefit reserves.

The Company reviews the recoverability of the carrying value
of the deferred acquisition costs each year. For interest-
sensitive annuities and other financial products, the Company
considers estimated future gross profits in determining whether
the carrying value is appropriate; for other insurance products,
the Company considers estimated future premiums. In all cases,
the
Company considers expected mortality, interest earned and
crediting rates, persistency and expenses. Amortization is
adjusted retrospectively for interest-sensitive annuities and
other financial products when estimates of future gross profits
to
be realized are revised.

Present Value of Future Profits

	Present value of future profits are recorded in connection
with acquisitions of insurance companies or a block of policies.
The initial value is based on the actuarially determined present
value of the projected future gross profits from the in-force
business acquired. In selecting the interest rate to calculate
the
discounted present value of the projected future gross profits,
the Company uses the risk rate of return believed to best
reflect
the characteristics of the purchased policies, taking into
account
the relative risks of such policies, the cost of funds to
acquire
the business and other factors. The value of in force insurance
purchased is amortized on a constant yield basis over its
estimated life from the date of acquisition in proportion to the
emergence of profits or the expected premium pattern over a
period
of approximately 20 years.

1.	Summary of Significant Accounting Policies (continued)

For acquisitions the Company made on or before November 19,
1992,
the Company amortizes the asset with interest at the same
discount
rate used to determine the present value of future profits at
the
date of purchase. For acquisitions after November 19, 1992, the
Company amortizes the asset using the interest rate credited to
The underlying policies.

Goodwill

The excess of the cost to acquire purchased companies over the
fair value of net assets acquired ("goodwill") is being
amortized
on a straight-line basis over periods that generally correspond
with the benefits expected to be derived from the acquisitions,
usually 20 to 40 years. Accumulated amortization was $1.2
million
and $.9 million at December 31, 2000 and 1999, respectively.
The
Company continually monitors the goodwill based on estimates of
future earnings. If it determines that goodwill has been
impaired,
the carrying value is reduced with a corresponding charge to
expense.

Negative Goodwill

The excess of the net assets acquired over the cost to acquire
purchased companies ("negative goodwill"), after reducing the
basis in property and equipment and other noncurrent assets to
zero, was amortized into earnings on a straight-line basis over
a
five year period. Negative goodwill was fully amortized at
December 31, 1998.

Stock Options

The Company recognizes compensation expense for its stock
option plan using the intrinsic value method of accounting.
Under
the terms of the intrinsic value method, compensation cost is
the
excess, if any, of the quoted market price of the stock at the
grant date, or other measurement date, over the amount an
employee
must pay to acquire the stock. Under the Company's stock option
plans, no expense is recognized since the exercise price equals
or
exceeds the market price at the measurement date.

Reclassifications

Certain amounts in the 1999 and 1998 consolidated financial
statements and notes have been reclassified to conform with the
2000 presentation. These reclassifications had no effect on
previously reported shareholders' equity or net income in the
periods presented.

Recently Issued Professional Accounting Standards

	In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (the Standard).  The
Standard
requires companies to record derivatives on the new balance
sheet
as assets and or liabilities measured at fair value.  The
Company
adopted the Standard on January 1, 2001.  Adoption of the
Standard will be recorded as a cumulative effect of a change in
accounting principle and will not result in restatement of
previously issued financial statements. The adoption of the
Standard is expected to have an immaterial impact to net income.
Additionally, its application may increase the volatility of
other income and expense.

2.	Acquisitions

On March 12, 1998, SMC acquired Savers Life Insurance Company
("Savers Life").  Each of the 1.8 million shares of Savers Life
Common Stock outstanding was converted into 1.2 shares of SMC
Common Stock plus $1.50.  Each holder of Savers Life Common
Stock
could elect to receive the $1.50 per share portion of the merger
consideration in the form of additional shares of SMC Common
Stock.

 SMC issued approximately 2.2 million shares with a value of
approximately $14.9 million and paid $2.2 million in cash and
$1.5
million in acquisition costs for an aggregate purchase price of
$18.6 million to acquire Savers Life.

On October 30, 1998, SMC acquired Midwestern National Life
Insurance Company of Ohio ("Midwestern Life").  SMC issued .7
million shares of its common stock valued at $4.6 million,
increased its bank debt by $6.0 million on restructured terms,
and
paid $2.9 million in cash and $.6 million of acquisition costs
for
an aggregate purchase price of $14.1 million to acquire
Midwestern
Life.

The acquisitions of Savers Life and Midwestern Life were
accounted for using the purchase method of accounting and
accordingly, SMC's consolidated financial statements include the
results of operations of the acquired companies from the
effective
dates of their respective acquisitions.  Under purchase
accounting, SMC allocated the total purchase price of the assets
and liabilities acquired, based on a determination of their fair
values and recorded the excess of acquisition cost over net
assets
acquired as goodwill, which will be amortized on a straight line
basis over 30 years and 20 years for Savers Life and Midwestern
Life, respectively.  SMC merged Savers Life and Midwestern Life
into Standard Life effective December 31, 1998, with Standard
Life
as the surviving entity.

3.	Investments

The amortized cost, gross unrealized gains and losses and
estimated fair value of securities available for sale are as
follows (in thousands):

                                       December 31, 2000
                                        Gross     Gross
                            Amortized Unrealized Unrealized  Fair
                               Cost     Gains    Losses     Value

Securities available for
 sale:
  Fixed maturity securities:
    United States Treasury
     securities and
     obligations of United
     States government
     agencies                 $ 18,098  $  140   $     9   $18,230

    Obligations of states
     and political
     subdivisions	             2,116      59        --     2,175

    Foreign government
     securities	             3,348      17       162     3,203
    Utilities	                 26,603      75     1,093    25,585

    Corporate bonds	           484,012   3,832    25,689   462,154

    Mortgaged-backed
     securities	           202,890   1,905     2,405   202,390
    Redeemable preferred
     stock	                  5,530      --       355     5,175
      Total fixed maturity
       securities	           742,597   6,028    29,713   718,912
Equity securities	               538       4       180       362

    Total securities
     available for sale	     $743,135  $6,032   $29,893  $719,274




                                       December 31, 1999
                                        Gross     Gross
                            Amortized Unrealized Unrealized  Fair
                               Cost     Gains    Losses     Value

Securities available for
 sale:
  Fixed maturity securities:
    United States Treasury
     securities and
     obligations of United
     States
     government agencies	     $ 20,455  $    7   $   517   $19,945

    Obligations of states
     and political
     subdivisions	             3,997      50        87     3,960

    Foreign government
     securities	             3,489      50       274     3,265
    Utilities	                 29,068      --     2,284    26,784

    Corporate bonds	           479,332     308    32,658   446,982

    Mortgaged-backed
     securities	           104,413      70     3,629   100,854
    Redeemable preferred
     stock	                  5,530      --       413     5,117
      Total fixed maturity
        securities	           646,284     485    39,862   606,907

  Equity securities	               565       6       193       378

    Total securities
     available for sale	     $646,849  $  491    $40,055 $607,285


The estimated fair values for fixed maturity securities are
based on quoted market prices, where available. For fixed
maturity
securities not actively traded, fair values are estimated using
values obtained from independent pricing services, or by
discounting expected future cash flows using a current market
rate
applicable to the coupon rate, credit rating, and maturity of
the
investments.

3.	Investments (continued)

The amortized cost and estimated fair value of fixed maturity
securities at December 31, 2000 by contractual maturity are
shown
below (in thousands). Actual maturities will differ from
contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment
penalties and because most mortgage-backed securities provide
for
periodic payments throughout their lives.

                                      Amortized       Fair
                                        Cost          Value

Due in one year		              $ 13,321     $ 13,329
Due after one year through five years   143,580      141,957
Due after five years through ten years  200,824      193,120
Due after ten years	                    176,452      162,941
      Subtotal		                    534,177      511,347
Redeemable preferred stock                5,530        5,175
Mortgage-backed securities	          202,890      202,390
      Total fixed maturity securities  $742,597     $718,912

The Company maintains a highly-diversified investment
portfolio with limited concentration of financial instruments in
any given region, industry or economic characteristic. At
December
31, 2000, the Company held no investments in any entity in
excess
of 10% of shareholders' equity other than asset-backed
securities
and investments issued or guaranteed by the U.S. government or a
U.S. government agency, all of which were classified as fixed
maturity securities available for sale.

Net investment income was attributable to the following (in
thousands):


                                      Year Ended December 31
                                  2000       1999        1998

Fixed maturity securities       $48,623     $39,625     $29,852
Call option income (loss)	   (7,603)      1,209         632
Common stocks	                      --          17          46
Mortgage loans on real estate	      930         947         679
Policy loans	                     925         960         654
Real estate	                      30          33         135
Short-term investments and other    847       2,602       2,932
  Gross investment income        43,752      45,393      34,930
Less: investment expenses	      579         572         709
  Net investment income	       $43,173     $44,821     $34,221

Net realized investment gains (losses) were attributable to the
following (in thousands):

                                     Year Ended December 31
                                  2000       1999        1998

Fixed maturity securities available
for sale:
  Gross realized gains	       $ 1,545     $ 2,000     $ 2,570
  Gross realized losses	        (1,854)     (1,415)       (964)
  Other than temporary decline
   in fair value	             (3,048)        (15)     (1,110)
     Net	                       (3,357)        570         496
  Real estate	                      --           9          --
  Other losses	                  (1,135)       (501)       (143)
     Net realized investment
      gains (losses)	       $(4,492)    $    78     $   353


3.	Investments (continued)

Life insurance companies are required to maintain certain
amounts of assets with state or other regulatory authorities. At
December 31, 2000, fixed maturity securities of $7.9 million and
cash and short-term investments of $.5 million were held on
deposit by various state regulatory authorities in compliance
with
statutory regulations. Additionally, fixed maturity securities
of
$.7 million, short-term investments of $5.9 million and account
assets of SMI were held by a custodian bank approved by the
Luxembourg regulatory authorities to comply with local insurance
laws.

Comprehensive income excludes reclassification adjustments
for net realized investment gains (losses) after income taxes
(benefits) of ($2.2) million, $.4 million and $.3 million in
2000,1999 and 1998, respectively.  The income tax rate used for
comprehensive income is 34%.

4.	Deferred Acquisition Costs and Present Value of Future
Profits

The activity related to the deferred acquisition costs is
summarized as follows (in thousands):




                                        Year Ended December 31
                                      2000        1999      1998

Balance, beginning of year	       $67,811    $32,946   $21,435
  Additions	                       35,138     27,817    14,200
  Amortization 	                  (6,419)    (4,580)   (3,316)
  Adjustment relating to net
   unrealized (gain) loss on
   securities available for sale	   (4,675)    11,628       627
Balance, end of year	            $91,855    $67,811   $32,946

The activity related to the present value of future profits
is summarized as follows (in thousands):

                                        Year Ended December 31
                                      2000        1999      1998

Balance, beginning of year	       $30,688    $28,793   $20,537
  Amounts and adjustments related to
   acquisitions and disposals 	       --       (949)   10,401
  Interest accreted on unamortized
   balance	                        3,472      3,890     4,223
  Amortization	                       (6,226)    (6,517)   (6,088)


  Adjustments relating to net
   unrealized (gain) loss on
   securities available for sale	   (1,591)     5,471      (280)


Balance, end of year	            $26,343    $30,688   $28,793

The percentages of future expected net amortization of the
beginning balance of the present value of future profits, before
the effect of net unrealized gains and losses, are expected to
be
between 8% and 10% in each of the years 2001 through 2005.
Future
net amortization is based on the present value of future profits
at December 31, 2000 and current assumptions as to future events
on all policies in force.

The discount rate used to calculate the present value of
future profits reflected in the Company's consolidated balance
sheets at December 31, 2000, ranged from 7.5% to 18%. The
Company
used discount rates of 13% and 15% to calculate the present
value
of future profits of the Savers Life and Midwestern Life
acquisitions, respectively.



5.	Notes Payable

Notes payable were as follows (in thousands):

                                 Interest          December 31
                                   Rate         2000     1999
Borrowings under revolving
 credit agreements                 9.86% (1)  $20,500  $24,500
Senior subordinated notes         10.00%       11,000   10,000
                                              $31,500  $34,500

    (1)	Current weighted average rate at December 31, 2000.

Borrowings Under Revolving Credit Agreements

Standard Management has outstanding borrowings at December 31,
2000 pursuant to the Amended Credit Agreement that provides for
it
to borrow up to $26.0 million in the form of a seven-year
reducing
revolving loan arrangement. Standard Management has agreed to
pay
a non-use fee of .50% per annum on the unused portion of the
commitment. Borrowings under the Amended Credit Agreement may be
used for contributions to surplus of insurance subsidiaries,
acquisition financing and repurchases of Common Stock.  The debt
is secured by a Pledge Agreement of all of the issued and
outstanding shares of Common Stock of Standard Life and Standard
Marketing. Interest on the borrowings under the Amended Credit
Agreement is determined, at the option of SMC, to be: (i) a
fluctuating rate of interest to the corporate base rate
announced
by the bank periodically, plus 1% per annum, or (ii) a rate at
London Inter-Bank Offered Rate ("LIBOR") plus 3.25%.  The
repayment schedule includes $3.2 million due March 2001 and $4.3
million each year thereafter to March 2005.  Indebtedness
incurred
under the Amended Credit Agreement is subject to certain
restrictions and covenants including, among other things,
certain
minimum financial ratios, minimum consolidated equity
requirements
for SMC, positive net income, minimum statutory surplus
requirements for the Company's insurance subsidiaries and
certain
limitations on acquisitions, additional indebtedness,
investments,
mergers, consolidations and sales of assets.

SMI has an unused line of credit of $1.5 million, with no
borrowings in connection with this line of credit in 2000 or
1999.

Senior Subordinated Note

On October 31, 2000, the Company issued a Senior Subordinated
Note due October 31, 2007 in the principal amount of $11
million.
 The note bears interest equal to i) a fixed rate of 10% per
annum; or ii) six month LIBOR plus 150 basis points; whichever
is
higher.  Interest payments are payable in cash semi-annually on
April 30 and October 31 of each year.  The note may be prepaid
in
whole or in part at the option of SMC commencing on November 1,
2001 at a redemption price equal to 105% of the principal amount
(plus accrued interest) and declining to l00% of the principal
amount (plus accrued interest) on November 1, 2005.  The note
may
be prepaid beginning November 1, 2001 at a redemption price
equal
to l00% of the principal amount  (plus accrued interest) under
certain limited circumstances.  The note is subject to certain
restrictions and covenants substantially similar to those in the
Amended Credit Agreement.  The holder also received a warrant to
purchase 220,000 shares of the Company's common stock at a
purchase price of $4.00 per share for a period of seven years.

The proceeds of the Senior Subordinated Note were used to
repay the Senior Subordinated Convertible Notes of $10 million
at
a redemption price of 105% of the principal balance plus accrued
interest. The extraordinary loss of $.4 million, net of tax, in
2000 reflects the early extinguishment of the Senior
Subordinated
Convertible Notes.   These notes were convertible at any time at
the option of the note holders into SMC common stock at the rate
of $5.747 per share or a total of 1,740,038 shares.

Interest Paid

Cash paid for interest was $3.6 million, $3.4 million, and
$2.7 million in 2000, 1999 and 1998, respectively.



6.	Income Taxes

The components of the federal income tax expense, applicable
to pre-tax income before extraordinary loss, were as follows (in
thousands):

                              Year Ended December 31
                        2000          1999          1998

Current taxes	       $    --        $  151        $  673
Deferred taxes	           778         1,975           957
                      $   778        $2,126        $1,630

The effective tax rate on pre-tax income is lower than the
statutory corporate federal income tax rate as follows (in
thousands):




                                          Year Ended December 31
                                          2000     1999     1998

Federal income tax expense at statutory
 rates (34%)	                          $2,177   $2,515   $2,146
Operating income in SMC consolidated
 return offset by NOL carryforwards	 (1,152)    (219)     (83)
Amortization of negative goodwill	          --       --     (472)

Other items, net	                       (247)    (170)      39
  Federal income tax expense	           $  778   $2,126   $1,630
Effective tax rate                           12%      29%      26%


The Company recovered $.3 million, $.4 million and $1.7
million in federal income taxes in 2000, 1999 and 1998,
respectively, and paid federal income taxes of  $.1 million and
$.7 million in 1999 and 1998, respectively.

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities
for financial reporting purposes and the amounts used for tax
return purposes. Significant temporary differences included in
the
Company's deferred tax assets (liabilities) are as follows (in
thousands):

                                               December 31
                                            2000        1999

Deferred income tax assets:
  Future policy benefits	                   $ 18,898    $ 15,867
  Unrealized loss on securities available
   for sale	                               10,220      12,037
  Capital and net operating loss
   carryforwards	                           3,042       5,659
  Other-net	                                1,298       1,435
    Gross deferred tax assets	                33,458      34,998
  Valuation allowance for deferred tax
   assets	                                    (5,653)     (7,858)
    Deferred income tax assets, net of
     valuation allowance	                     27,805      27,140
Deferred income tax liabilities:
  Present value of future profits	           (8,956)    (10,435)
  Deferred policy acquisition costs	     (23,246)    (17,054)
    Total deferred income tax liabilities    (32,202)    (27,489)
  Net deferred income tax liabilities       $ (4,397)   $   (349)


6.	Income Taxes (continued)

	The Company is required to establish a "valuation
allowance"
for any portion of its deferred tax assets, which are unlikely
to
be realized.  The valuation allowance for deferred tax assets
includes $1.6 million at December 31, 2000 with respect to
deferred tax assets and net tax operating loss carry forwards of
acquired companies.

	As of December 31, 2000, Standard Management and its
noninsurance subsidiaries had consolidated net operating loss
carryforwards of approximately $6.3 million for tax return
purposes, which expire from 2007 through 2018.  These
carryforwards will only be available to reduce the taxable
income
of Standard Management.  At December 31, 2000, the Standard Life
consolidated return had net operating loss carryforwards of
approximately $2.2 million which expire in 2010, 2012 and 2019.
These carryforwards will only be available to reduce the taxable
income of the Standard Life consolidated return.  At December
31,
2000, Premier Life (Luxembourg) had accumulated corporate income
tax loss carryforwards of approximately $.4 million, all of
which
may be carried forward indefinitely.

7.	Shareholders' Equity

Redeemable Preferred Stock

Shareholders have authorized 1,000,000 shares of Preferred
Stock. Other terms, including preferences, voting and conversion
rights, may be established by the Board of Directors.

The Company has authorized 130,000 shares of preferred stock
as Series A convertible redeemable preferred stock ("Series A
preferred stock").  The Company issued 65,300 shares with a
stated
value of $6.5 million ($100 per share).  The following, among
other things, are characteristics of the Series A preferred
stock:

 The holders are entitled to cumulative annual dividends of
$7.75 per share (payable quarterly).

 Conversion into 11.765 shares of SMC common stock per share
of Series A preferred stock.

 Redeemable on July 1, 2003.

 Redemption by the Company may occur at 105% of stated value
beginning July 1, 1999 and decreasing 1% per year to 100% at
July 1, 2003.

 There are no voting rights attached to these shares.

Common Stock

The Company repurchased 240,000, 92,124, and 308,465 shares
of Common Stock for $.8 million, $.6 million, and $1.7 million
in
2000, 1999 and 1998, respectively under its stock repurchase
program.  At December 31, 2000, the Company was authorized to
purchase an additional 724,790 shares under this program.

The following table represents outstanding warrants to
purchase Common Stock as of December 31, 2000:





                                      Exercise    Warrants
Issue Date     Expiration Date         Price    Outstanding

November 1995   November 2002          4.5238      31,500
July 1996       July 2003              4.3750      30,000
April 1997      April 2004             5.1250      12,000
June 1998       June 2001              7.5000      25,000
August 1998     August 2005            7.1250      20,000
October 1998    October 2001           8.0000      75,000
January 1999    January 2002           6.6250      89,750
January 2000    January 2003           4.8750     166,500
October 2000    October 2003           4.0000      15,000
October 2000    October 2007           4.0000     220,000
                                                  684,750


7.	Shareholders Equity (continued)

Changes in Shares of Common Stock and Treasury Stock

The following table represents changes in the number of common
and treasury shares as of December 31:


                                  2000         1999        1998
Common Stock (Authorized  -
 20,000,000 shares):
  Balance, beginning of year    9,038,134   8,802,313   5,752,499
    Issuance of common stock           --     235,821   3,049,814
  Balance, end of year          9,038,134   9,038,134   8,802,313

Treasury Stock:
  Balance, beginning of year   (1,252,978) (1,160,854)   (876,009)
    Treasury stock acquired      (240,000)    (92,124)   (308,465)
    Reissuance of treasury stock
     in connection with exercise
     of stock options                  --          --      23,620
  Balance, end of year         (1,492,978) (1,252,978) (1,160,854)


Unrealized Gain (Loss) on Securities

The components of the balance sheet caption "Unrealized gain
(loss) on securities available for sale" in shareholders' equity
are summarized as follows (in thousands):




                                                December 31
                                            2000         1999

Fair value of securities available for sale	$719,274  $607,285
Amortized cost of securities available for
  sale	                                    743,135   646,849
  Gross unrealized gain (loss) on securities
   available for sale	                     (23,861)  (39,564)
Adjustments for:
  Deferred acquisition costs	                  5,852    10,527
  Present value of future profits	             3,389     4,982
  Deferred federal income taxes	             4,977     8,196
    Net unrealized gain (loss) on securities
     available for sale	                    $ (9,643) $(15,859)

8.	          Stock Option Plan

SMC has a non-qualified Stock Option Plan (the "Plan") under
which 2,500,000 shares of Common Stock are reserved for grants
of
stock options to employees and directors. The purchase price per
share specified in any Plan option must be at least equal to the
fair market value of common stock at the grant date. Options
generally become exercisable over a three-year period and have a
term of 10 years. The Plan is administered by the Board of
Directors and officers of SMC. The terms of the options,
including
the number of shares and the exercise price, are subject to the
sole discretion of the Board of Directors.  A total of 75,820
shares are available for future issuance for the Plan as of
December 31, 2000.

The provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation", allows companies to either expense the estimated
fair value of stock options or to continue their current
practice
and disclose the pro forma effects on net income and earnings
per
share had the fair value of the options been expensed. The
Company
has elected to continue its practice of recognizing compensation
expense for its Plan using the intrinsic value based method of
accounting and to provide the required pro forma information.
Had
compensation cost for the Plan been determined based on the fair
value at the grant date for awards under the Plan consistent
with
the provisions of SFAS No. 123, the Company's pro forma net
income
and pro forma earnings per share would have been the following
(in
thousands, except per share amounts):




8.	Stock Option Plan (continued)



                                          Year Ended December 31
                                         2000      1999      1998

Net income                              $4,328    $3,640    $3,094

Earnings per share                         .49       .41       .43

Earnings per share, assuming dilution      .49       .41       .43


The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-valuation model with the
following weighted-average assumptions:


                               2000          1999          1998

Risk-free interest rates	        6.2%         5.6%          5.6%
Volatility factors	              .57          .59           .55
Weighted average expected life    7 years      7 years     7 years


The Black-Scholes option-valuation model was developed for use
in estimating the fair value of traded options that have no
vesting restrictions and are fully transferable.  In addition,
option valuation models require the input of highly subjective
assumptions including the expected stock price volatility.
Because the Company's employee stock options have
characteristics
significantly different from those of traded options, and
because
changes in subjective assumptions can materially affect the fair
value estimate, in management's opinion, the existing models do
not provide a reliable single measure of the fair value of its
employee stock options.  Because SFAS No. 123 is effective only
for awards granted after January 1, 1995, the pro forma
disclosures provided may not be representative of the effects on
reported net income for future years.

A summary of the Company's stock option activity and related
information for the years ended December 31, 2000, 1999 and 1998
is as follows:

                          2000            1999          1998
                            Weighted-       Weighted-    Weighted-
                             Average         Average     Average
                            Exercise        Exercise     Exercise
                    Shares  Price   Shares  Price  Shares  Price

Options outstanding,
 beginning of year 2,411,882 $6.10 1,891,287 $6.15 1,916,820 $6.08

Exercised	              (525) 4.17   (19,163) 4.45   (97,988) 5.23
Granted	             7,500  4.58   633,300  6.15    79,950  6.94
Expired or forfeited (20,599) 5.98   (93,542) 7.91    (7,495) 6.75
Options outstanding,
 end of year	    2,398,258  6.09 2,411,882  6.10 1,891,287  6.15
Options exercisable,
 end of year	    2,190,658       1,973,799       1,664,153
Weighted-average
 fair value of
 options granted
 during the year   $    2.93       $    3.94       $    4.42



8.  	Stock Option Plan (continued)

Information with respect to stock options outstanding at
December 31, 2000 is as follows:

                   Options Outstanding         Options Exercisable
                         Weighted
                          Average    Weighted-           Weighted-
   Range of              Remaining    Average              Average
   Exercise    Number   Contractual  Exercise   Number    Exercise
   Prices   Outstanding Life (years)   Price   Exercisable Price

   $ 3-5      338,025        5        $ 4.43     334,025   $4.43
     5-7    1,587,850        7          6.07   1,384,250    6.06
     7-9      454,533        5          7.28     454,533    7.28
    9-11       17,850        3          9.43      17,850    9.43
            2,398,258                          2,190,658




9.	Reinsurance

The Company's insurance subsidiaries have entered into
reinsurance agreements with non-affiliated companies to limit
the
net loss arising from large risks, maintain their exposure to
loss
within capital resources, and provide additional capacity for
future growth.  The maximum amount of life insurance retained on
any one life ranges from $30,000 to $150,000.  Amounts of
standard
risk in excess of that limit are reinsured.

Reinsurance premiums ceded to other insurers were $4.8
million, $23.3 million and $17.0 million in 2000, 1999 and 1998,
respectively.  Reinsurance ceded has reduced benefits and claims
incurred by $6.3 million, $2.7 million and $10.5 million in
2000,
1999 and 1998, respectively.  A contingent liability exists to
the
extent any of the reinsuring companies are unable to meet their
obligations under the reinsurance agreements.  To minimize
exposure to significant losses from reinsurance insolvencies,
the
Company evaluates the financial condition of its reinsurers and
monitors concentrations of credit risk arising from similar
geographic regions, activities or economic characteristics of
the
reinsurers.  Based on its periodic reviews of these companies,
the
Company believes the assuming companies are able to honor all
contractual commitments under the reinsurance agreements.

At December 31, 2000 the Company's largest annuity reinsurer,
which is rated "A+" (Superior) by A.M. Best, represented $22.7
million, or 56.6% of total reinsurance recoverable.

On July 1, 1998, Savers Life's Medicare supplement business
was sold to Oxford Life Insurance Company ("Oxford Life")
through
a quota share reinsurance agreement.  Under the terms of the
reinsurance agreement, Standard Life administered the Medicare
supplement business through October 1, 1999 and received
administration fee income.  Effective December 31, 1998,
Standard
Life replaced Savers Life as a party to this reinsurance
agreement
and became responsible for the administration of the Medicare
supplement business.  Effective December 1, 1999, the assumption
of the business was effected by Oxford Life.

10.  	Related Party Transactions

On October 28, 1997, SMC made an interest-free loan to an
officer and director of SMC. The principal balance of the loan
was
$775,000 at December 31, 2000 and 1999, respectively.  Repayment
is due within 10 days of the officer's voluntary termination or
resignation as an officer of SMC.  In the event of a termination
of the officer's employment with SMC following a change in
control, the loan is deemed to be forgiven.

Certain officers and directors have purchased 31,000 shares,
or $3.1 million of the Series A preferred stock as described in
Note 7.  These shares were purchased in connection with a loan
agreement of $2.6 million, which the Company guaranteed.


11.	Commitments and Contingencies

Lease Commitments

The Company rents office and storage space under
noncancellable operating leases. The Company incurred rent
expense
for operating leases of $1.0 million, $1.1 million, and $1.0
million in 2000, 1999 and 1998, respectively. Pursuant to the
terms of a lease agreement effective June 1, 1991, Standard Life
has agreed to lease office space for a ten-year period. After
the
initial ten-year lease period, Standard Life may continue to
lease
the premises on a month-to-month basis at a rental of 125% of
the
prevailing market rate for the leased premises in effect at that
time.

Future required minimum rental payments, by year and in the
aggregate, under operating leases as of December 31, 2000, are
as
follows (in thousands):

                 2001                             $   729
                 2002		                        227
                 2003		                        196
                 2004		                        101
                 2005		                        101
                 Total minimum lease payments	$ 1,354


Employment Agreements

Certain officers are employed pursuant to executive employment
agreements that create certain liabilities in the event of the
termination of the covered executives following a change in
control of the Company. The commitment under these agreements is
approximately three times their current annual salaries.
Additionally, following termination from the Company due to a
change in control, each executive is entitled to receive a lump
sum payment equal to all unexercised stock options granted
multiplied by the highest per share fair market value during the
six month period ending on the date of termination. There were
unexercised options outstanding to these executives to buy
1,852,880 shares at December 31, 2000.

Real Estate

Real estate at December 31, 2000 includes $5.6 million for
construction in progress of the Company's new home office.


12.	         Litigation

An officer and director of SMC resigned effective April 15,
1997.
On June 19, 1997, this former officer commenced an action in the
Superior Court of Marion County, Indiana against SMC claiming
that
his employment agreement contained a provision that would
entitle
him to receive certain benefits following a termination of his
employment with SMC under certain circumstances.  This former
officer has asserted to SMC that he is entitled to a lump sum
termination payment of $1.7 million and liquidated damages not
exceeding $3.3 million by virtue of his voluntarily leaving
SMC's
employment.  SMC disputes those claims. SMC filed its Answer and
Counterclaim on September 11, 1997.  SMC's investigation since
the
action was filed revealed a basis for the termination of
employment of the former officer for cause relative to after-
acquired evidence. On October 14, 1997, the Board of Directors
of
SMC terminated the former officer for cause effective March 15,
1997.  Such termination was argued by SMC as a complete defense
to
all claims asserted by the former officer.  On January 12, 2001,
the trial court ruled on motions for summary judgment filed by
both SMC and the former officer.  The court ruled that the
officer
was entitled to a severance benefit in the amount of $.4 million
plus interest thereon calculated as of July 15, 1997.  The court
dismissed all of the former officer's other claims, including
his
request for additional damages up to $3.3 million.  On  February
12, 2001, the former officer filed a notice of appeal of the
trial
court's ruling as to the dismissal of all additional damages,
and
the former officer is in the process of perfecting the appeal.
Currently, SMC plans to cross-appeal the $.4 million in damages
awarded, as well as aggressively pursue its counterclaim which
is
still pending in the trial court.  Management believes that the
conclusion of such litigation will not have a material adverse
effect on SMC's consolidated financial conditions.

 In addition, the Company is involved in various legal
proceedings in the normal course of business. In most cases,
such
proceedings involve claims under insurance policies or other
contracts of the Company. The outcomes of these legal
proceedings
are not expected to have a material adverse effect on the
consolidated financial position, liquidity or future results of
operations of the Company based on the Company's current
understanding of the relevant facts and law.


13.        	Statutory Accounting Information of Subsidiaries

The Company's U.S. life insurance subsidiaries maintain their
records in conformity with statutory accounting practices
prescribed or permitted by state insurance regulatory
authorities.
Statutory accounting practices differ in certain respects from
GAAP.  In consolidation, adjustments have been made to conform
the
Company's domestic subsidiaries' accounts with GAAP.

The Company's U.S. life insurance subsidiaries had
consolidated statutory capital and surplus of $43.9 million and
$43.7 million at December 31, 2000 and 1999, respectively.
Consolidated net income of the Company's life insurance
subsidiaries on a statutory basis, after elimination of
subsidiaries' intercompany accounts was $1.5 million, $.9
million,
and $1.7 million for the years ended December 31, 2000, 1999 and
1998, respectively.  Minimum statutory capital and surplus
required by the Indiana Insurance Code was $.5 million as of
December 31, 2000.

State insurance regulatory authorities impose minimum
risk-based capital requirements on insurance enterprises that
were
developed by the NAIC.  The formulas for determining the amount
of
risk-based capital ("RBC") specify various weighting factors
that
are applied to financial balances or various levels of activity
based on the perceived degree of investment and insurance risks.
 Regulatory compliance is determined by a ratio (the "Ratio") of
the enterprise's regulatory total adjusted capital, as defined
by
the NAIC, to its authorized control level RBC, as defined by the
NAIC.  Enterprises below specific trigger points or ratios are
classified within certain levels, each of which requires
specified
corrective action.  At December 31, 2000, the RBC Ratios of
Standard Life and Dixie Life were both at least two times
greater
than the levels at which company action is required.

The statutory capital and surplus for Premier Life
(Luxembourg) was $6.5 million and $6.9 million at fiscal years
ended 2000 and 1999, respectively, and minimum capital and
surplus
under local insurance regulations was $2.2 million and $2.6
million at fiscal years ended 2000 and 1999, respectively.  The
statutory capital and surplus for Premier Life (Bermuda) was
$3.8
million and $2.2 million at fiscal years ended 2000 and 1999,
respectively, and minimum capital and surplus under local
insurance regulations was $.3 million at fiscal years ended 2000
and 1999.  SMI dividends are limited to its accumulated earnings
without regulatory approval. SMI and Premier Life (Luxembourg)
were not permitted to pay dividends under Luxembourg law in 2000
and 1999 due to accumulated losses.

The National Association of Insurance Commissioners ("NAIC")
has codified statutory accounting practices ("Codification") to
be
implemented January 1, 2001.  Codification will likely change,
to
some extent, prescribed statutory accounting practices and may
result in changes to the accounting practices that the Company
uses to prepare its statutory-basis financial statements.
Management believes that the impact of codification will not be
material to the Company's statutory-basis financial statements.

SMC loaned $27.0 million to Standard Life pursuant to an
Unsecured Surplus Debenture Agreement ("Surplus Debenture")
which
requires Standard Life to make quarterly interest payments to
SMC
at a variable corporate base rate plus 2% per annum, and annual
principal payments of $1.0 million per year beginning in 2007
and
concluding in 2033.  As required by state regulatory
authorities,
the balance of the surplus debenture at December 31, 2000 and
1999
of $27.0 million is classified as a part of capital and surplus
of
Standard Life.  The interest and principal payments are subject
to
quarterly approval by the IDOI depending upon satisfaction of
certain financial tests relating to levels of Standard Life's
capital and surplus and general approval of the Commissioner of
the IDOI.

SMC's ability to pay operating expenses and meet debt service
obligations is partially dependent upon the amount of dividends
received from Standard Life.  Standard Life's ability to pay
cash
dividends to SMC is, in turn, restricted by law or subject to
approval by the insurance regulatory authorities of Indiana.
Dividends are permitted based on, among other things, the level
of
the preceding year statutory surplus and net income.  In 2000,
Standard Life paid dividends of $2.0 million to SMC.  During
2001,
Standard Life can pay dividends of $4.4 million without
regulatory
approval; Standard Life must notify the Indiana regulatory
authorities of the intent to pay dividends at least ten days
prior
to payment.




14.       	Operations by Business Segment


The Company's reportable segments are as follows:

	             Domestic Operations includes revenues earned
and
expenses incurred from United States operations and includes
deposits and/or income from annuity products (primarily flexible
premium deferred annuities ("FPDA's"), equity indexed products,
universal life products and traditional life products).  The
profitability for this segment primarily depends on the
investment
spread earned (annuities and universal life), the persistency of
the in-force business, claim experience and expense management.

International Operations includes revenues earned and expenses
incurred from abroad, primarily Europe, and includes fees
collected on deposits from unit-linked products.  The
profitability for this segment primarily depends on the amount
of
separate account assets under management, the management fee
charged on those assets and expense management.

The accounting policies of the segments are the same as
described in Note 1 (Summary of Significant Accounting
Policies).
The following segment presentation contains the same operating
data and results the Company uses to evaluate the performance of
the business and provides reconciliations to consolidated totals
(in thousands):

                                      Year Ended December 31
                                   2000         1999     1998
Revenues:
  Domestic	                $   67,796  $   68,477  $ 58,055
  International                     8,267       4,486     5,220
  Consolidated Revenues	      $   76,063  $   72,963  $ 63,275
Net Investment Income:
  Domestic	                $   42,675  $   44,376  $ 33,721
  International	                  498         445       500
    Consolidated Net Investment
     Income	                $   43,173  $   44,821  $ 34,221
Interest Credited to Interest
 Sensitive Annuities and Other
 Financial Products (All
 Domestic)	                $   21,080  $   25,728  $ 19,775
Pre-tax Income:
  Domestic	                $    3,276  $    6,132  $  4,053
  International	                3,128       1,266     2,258
    Consolidated Pre-tax
     Income                    $    6,404  $    7,398  $  6,311
Assets:
  Domestic	                $  921,727  $  811,653  $750,683
  International	              548,730     339,324   205,467
    Consolidated Assets	      $1,470,457  $1,150,977  $956,150

15. 	       Derivative Financial Instruments

Standard Life offers equity-indexed annuity products that
provide a base rate of return with a higher potential return
linked to the performance of a broad-based equity index.  The
Company buys Standard & Poor's 500 Index Call Options and Dow
Jones Industrial Average Call Options (collectively known as
"the
options") in an effort to hedge potential increases to
policyholder benefits resulting from increases in the S&P 500
and
Dow Jones Indexes to which the product's return is linked. The
cost of the options is included in the pricing of the equity-
indexed annuity products. The changes in the value of the
options
are reflected in net investment income and fluctuate in relation
to changes in interest credited to policyholder account balances
for these annuities.  Premiums paid to purchase these
instruments
are deferred and amortized over their term.


15. 	       Derivative Financial Instruments (continued)

Net investment income includes ($7.6) million, $1.2 million
and $.6 million in 2000, 1999 and 1998, respectively, related to
changes in the fair value of the options.  Such investment
income
(loss) was substantially offset by amounts credited to
policyholder account balances.  The fair value of the options
was
$1.9 million, $5.3 million and $1.8 million at December 31,
2000,
1999 and 1998, respectively.  The notional amounts at December
31,
2000 and 1999 were $123.4 million and $69.2 million,
respectively.

If the counterparties of the aforementioned financial
instruments do not meet their obligations, the Company may have
to
recognize a loss.  The Company limits its exposure to such a
loss
by diversifying among several counterparties believed to be
strong
and creditworthy.  At December 31, 2000, all of the
counterparties
were rated "A" or higher by Standard & Poor's.


16.	         Fair Value of Financial Instruments

The following discussion outlines the methods and assumptions
used by the Company in estimating its fair value disclosures for
its financial instrument assets and liabilities.  Because fair
values for all balance sheet items are not required to be
disclosed pursuant to SFAS No. 107, "Disclosures about Fair
Values
of Financial Instruments", the aggregate fair value amounts
presented herein do not necessarily represent the underlying
value
of the Company; likewise, care should be exercised in deriving
conclusions about the Company's business or financial condition
based on the fair value information presented herein.

Fixed maturity securities: Fair values for fixed maturity
securities are based on quoted market prices from broker-
dealers,
where available.  For fixed maturity securities not actively
traded, fair values are estimated using values obtained from
independent pricing services, or, in the case of private
placements, are estimated by discounting the expected future
cash
flows using current market rates applicable to the coupon rate,
credit rating and maturity of the investments.

	 Equity securities: The fair values for equity securities
are
based on the quoted market prices.

Derivative securities: The fair values for derivative
securities are based on internal methods developed by our
investment advisor.

Mortgage loans and policy loans: The estimated fair values for
mortgage loans and policy loans are estimated using discounted
cash flow analyses and interest rates currently being offered
for
similar loans to borrowers with similar credit ratings.

Assets and liabilities held in separate accounts: Fair values
for the assets held in separate accounts are determined from
broker-dealers or valuations supplied by internationally
recognized
statistical rating organizations.  The separate account
liability
represents the Company's obligations to policyholders and
approximates fair value.

Insurance liabilities for investment contracts: Fair values
for the Company's liabilities under investment-type insurance
contracts are estimated using discounted cash flow calculations,
based on interest rates currently being offered for similar
contracts with maturities consistent with those remaining
contracts being valued.  The estimated fair value of the
liabilities for investment contracts was approximately equal to
its carrying value at December 31, 2000 and 1999.  This is due
to
i) credited rates on the vast majority of account balances
approximating current rates paid on similar investments and ii)
rates not generally being guaranteed beyond one year.


Insurance liabilities for non-investment contracts: Fair value
disclosures for the Company's reserves for insurance contracts
other than investment-type contracts are not required and have
not
been determined by the Company.  However, the Company closely
monitors the level of its insurance liabilities and the fair
value
of reserves under all insurance contracts are taken into
consideration in the Company's overall management of interest
rate
risk.

Notes payable: The Company believes the fair value of its
variable rate long-term debt was equal to its carrying value at
December 31, 2000 and 1999. The Company pays a variable rate of
interest on the debt, which reflects the change in market
conditions.  The fair value of the subordinated convertible debt
is based on quoted market prices for the amount of shares
convertible.

The carrying amount of all other financial instruments
approximates their fair values.

16.         Fair Value of Financial Instruments (continued)

The fair value of the Company's financial instruments is shown
below using a summarized version of the Company's assets and
liabilities at December 31, 2000 and 1999 (in thousands).  Refer
to Note 3 for additional information relating to the fair value
of
investments.



                                     December 31
                               2000                 1999
                         Fair      Carrying     Fair     Carrying
                         Value      Amount      Value     Amount
Assets:
  Investments:
    Securities available
     for sale:
      Fixed maturity
       securities	     $718,912   $718,912   $606,907   $606,907
      Equity securities	     362        362        378        378
    Mortgage loans on
     real estate	        4,931      4,778      8,392      8,131
    Policy loans	       13,591     14,280     13,357     14,033
    Other invested assets     776        776        845        845
    Short-term
     Investments           12,489     12,489     14,976     14,976
  Cash		             1,840      1,840      3,659      3,659
  Assets held in separate
   accounts	           520,439    520,439    319,973    319,973
Liabilities:
  Insurance liabilities
   for investment
   contracts              695,475    695,475    595,388    595,388
  Notes payable	       31,500     31,500     34,500     34,500
  Liabilities related to
   separate accounts	 520,439    520,439    319,973    319,973


17.	        Earnings Per Share

A reconciliation of income and shares used to calculate basic
and diluted earnings per share is as follows (dollars in
thousands):

                                 2000         1999        1998
Income:
  Net Income	            $    5,267   $    5,272  $    4,681
  Preferred stock dividends      (506)        (506)       (180)
Income available to common
   shareholders for basic
   earnings per share           4,761        4,766       4,501
  Effect of dilutive securities:
    Preferred stock dividends	     --           --         180
    Interest on subordinated
     convertible debt	         833        1,000       1,000

  Income available to common
   shareholders for diluted
   earnings per share      $    5,594   $    5,766  $    5,681

Shares:
  Weighted average shares
   outstanding for basic
   earnings per share       7,727,344    7,583,086   6,846,335
  Effect of dilutive securities:
    Stock options	            6,081      136,656     263,636
    Stock warrants	              492       93,951     211,989
    Subordinated convertible
     debt	                  1,450,032    1,740,038   1,740,038
    Series A convertible
     preferred stock	          --           --     301,765
    Dilutive potential common
     shares	             1,456,605    1,970,645   2,517,428

  Weighted average shares
   outstanding for diluted
   earnings per share	   9,183,949    9,553,731   9,363,763


18.	        Quarterly Financial Data (Unaudited) (in thousands,
except per share amounts)


Earnings per common and common equivalent share for each
quarter are computed independently of earnings per share for the
year.  Due to the transactions affecting the weighted average
number of shares outstanding in each quarter and due to the
uneven
distribution of earnings during the year, the sum of the
quarterly
earnings per share may not equal the earnings per share for the
year.


                                      2000 Quarters

                           First     Second    Third     Fourth

Total revenues	           $19,201   $17,617   $20,528   $18,717
Components of net income:
  Operating income	      $ 1,628   $ 1,523   $ 1,976   $ 2,206
  Net realized investment
   losses	                   (263)     (515)     (220)     (709)

  Income before
   extraordinary loss	   1,365     1,008     1,756     1,497
  Extraordinary loss	      --        --        --       359
  Net Income	           $ 1,365   $ 1,008   $ 1,756   $ 1,138

Net income per common
 share	                $   .18   $   .13   $   .23   $   .14
Net income per common
 share, assuming dilution $   .17   $   .13   $   .20   $   .16

                                      1999 Quarters
                           First     Second    Third     Fourth

Total revenues	           $16,941   $17,341   $16,770   $21,911
Components of net income:
  Operating income	      $ 1,275   $ 1,397   $ 1,468   $ 1,081
  Net realized investment
   gains (losses)	           22         4      (164)      189

  Net income	           $ 1,297   $ 1,401   $ 1,304   $ 1,270

Net income per common
 share	                $   .17   $   .19   $   .17   $   .17
Net income per common
 share, assuming dilution $   .16   $   .17   $   .16   $   .16

Reporting the results of insurance operations on a quarterly
basis requires the use of numerous estimates throughout the
year,
primarily in the computation of reserves, amortization of
deferred
policy acquisition costs and present value of future profits,
and
the effective rate for income taxes.  It is the Company's
practice
to review estimates at the end of each quarter and, if
necessary,
make appropriate adjustments, with the effect of such
adjustments
being reported in current operations.  Only at year-end is the
Company able to assess the accuracy of its previous quarterly
estimates.  The Company's fourth quarter results include the
effect of the difference between previous estimates and actual
year-end results.  Therefore, the results of an interim period
may
not be indicative of the results of the entire year.



Schedule II -- Condensed Financial Information of Registrant

                  STANDARD MANAGEMENT CORPORATION
                         (PARENT COMPANY)

                      CONDENSED BALANCE SHEETS
             (Dollars in Thousands, Except Per Share Amounts)


                                                  December 31
                                                2000       1999
                ASSETS
Investments:
  Investment in subsidiaries	                $ 71,728   $ 64,120
  Surplus debenture due from Standard Life      27,000     27,000
  Fixed maturity securities, at fair value
   (amortized cost: $900 in 2000 and 1999)         775        775
  Equity securities available for sale, at
   fair value (cost: $35 in 2000 and $20
   in 1999)	                                      8         35
  Real estate	                                    123        124
  Notes receivable from officers and directors	 776        845
      Total investments	                      100,410     92,899
Cash	                                              305        641
Property and equipment, less depreciation of
 $1,518 in 2000 and $1,033 in 1999               1,148      1,097
Note receivable from affiliate	              2,858      2,858
Amounts receivable from subsidiaries	         3,868      2,654
Other assets	                                      9      1,390
      Total assets	                          $108,598   $101,539

	LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
  Notes payable	                          $ 31,500   $ 34,500
  Note payable to affiliate	                   2,858      2,858
  Amounts due to subsidiaries	                   2,414      2,134
  Other liabilities	                             2,397      2,157
      Total liabilities	                       39,169     41,649

Class A convertible redeemable preferred stock,
 par value $100 per share;	                   6,530      6,530

Shareholders' Equity:
  Preferred stock, no par value                     --         --
  Common stock and additional paid-in capital,
   no par value                                 63,019     62,152
  Treasury stock, at cost                       (7,589)    (6,802)

  Accumulated other comprehensive income (loss):
    Unrealized gain (loss) on securities of
     subsidiaries	                            (9,640)   (15,844)

    Foreign currency translation adjustment of
     subsidiaries	                            (2,368)      (862)

Retained earnings 	                            19,477     14,716
      Total shareholders' equity	             62,899     53,360
      Total liabilities and shareholders'
       equity	                               $108,598   $101,539

	See accompanying notes to condensed financial statements.






    Schedule II - Condensed Financial Information of Registrant
-
    (continued)

                 STANDARD MANAGEMENT CORPORATION
                        (PARENT COMPANY)

                 CONDENSED STATEMENTS OF INCOME
                     (Dollars in Thousands)



                                       Year Ended December 31
                                         2000         1999    1998
Revenues:
  Net investment loss                  $  (31)      $  (23)  $(26)
Interest income from subsidiaries       3,209        2,837  1,709
  Net realized investment losses	      (820)        (250)  (100)

Other income	                           440          149    118
  Rental income from subsidiaries	     1,100        1,040    995
  Management fees from subsidiaries     3,850        3,575  2,850
    Total revenues	                    7,748        7,328  5,546

Expenses:
  Other operating expenses	          4,487        4,763  3,134
  Interest expense and financing costs  3,416        3,380  2,850
  Interest expense on note payable
   to affiliate	                      179          142    160
    Total expenses	                    8,082        8,285  6,144

Loss before federal income taxes,
 equity in earnings of consolidated
 subsidiaries, extraordinary loss and
 preferred stock dividends	           (334)        (957)  (598)
Federal income tax expense (benefit)   (1,145)        (417)    30

Income (loss) before equity in
 earnings of consolidated
 subsidiaries, extraordinary loss and
 preferred stock dividends	            811         (540)  (628)

Equity in earnings of consolidated
 subsidiaries	                         4,815        5,812  5,309
Income before extraordinary loss and
 preferred stock dividends	          5,626        5,272  4,681
Extraordinary loss                        359           --     --
Net income	                         5,267        5,272  4,681
Preferred stock dividends	            506          506    180
Earnings available to common
 shareholders	                        $4,761       $4,766 $4,501

	See accompanying notes to condensed financial statements.


    Schedule II - Condensed Financial Information of Registrant -
    (continued)

                   STANDARD MANAGEMENT CORPORATION
                          (PARENT COMPANY)

                 CONDENSED STATEMENTS OF CASH FLOWS
                       (Dollars in Thousands)

                                         Year Ended December 31
                                        2000      1999      1998
Operating Activities
Net income 	                          $5,267    $5,272  $4,681
Adjustments to reconcile net income to
 net cash provided (used) by operating
 activities:
  Depreciation and amortization	         650       645     536
  Equity in earnings of subsidiaries     (4,815)   (5,812) (5,309)
Accrued interest payable	                  (440)     (203)    197
  Dividends	                           2,500        --      --
  Other	                                  351       733    (608)

Net cash provided (used) by
      operating activities	            3,513       635    (503)

Investing Activities
Investments, net	                         98      (46)  (1,685)

Purchase of property and equipment,net   (1,004)    (866)    (385)

Purchase of Savers Life, less cash
 acquired of $518	                         --       --  (18,039)

Purchase of Midwestern Life, less cash
 acquired of $1,026                          --       --  (13,104)

Net cash used by investing
     activities	                       (906)    (912) (33,213)

Financing Activities
Borrowings, net of debt issuance costs
 of $206 in 1998	                     11,000      300   11,794
Repayments on notes payable	          (14,000)    (800)  (3,141)
Issuance of convertible preferred
 stock, net of issuance costs of
 $141 in 1998	                              --       --    6,389
Proceeds from common and treasury stock
 sales	                                   --       --      234
Issuance of common stock and warrants	    867    1,566   19,935
Purchase of common stock for treasury	   (304)    (582)  (1,702)

Dividends on preferred stock	             (506)    (506)    (180)
Net cash provided (used) by
     financing activities	           (2,943)     (22)  33,329
Net decrease in cash	                  (336)    (299)    (387)
Cash at beginning of year	              641      940    1,327
Cash at end of year	                     $  305   $  641  $   940


See accompanying notes to condensed financial statements.


	Schedule II--Condensed Financial Information of Registrant
     (continued)

                  STANDARD MANAGEMENT CORPORATION
                          (PARENT COMPANY)

              NOTES TO CONDENSED FINANCIAL STATEMENTS

                          December 31, 2000


1.	Basis of Presentation

For purposes of these condensed financial statements, Standard
Management Corporation ("SMC") carries its investments in
subsidiaries at cost plus equity in undistributed earnings of
subsidiaries since date of acquisition. Net income of its
subsidiaries is included in income using the equity method.
These
condensed financial statements should be read in conjunction
with
SMC's consolidated financial statements included elsewhere in
this
document.


2.	Dividends from Subsidiaries

SMC received $2.5 million of dividends from subsidiaries in
2000 and zero in 1999 and 1998, respectively.




                       Schedule IV -- Reinsurance

                     STANDARD MANAGEMENT CORPORATION

               Years Ended December 31, 2000, 1999 and 1998
                         (Dollars in Thousands)

                                                        Percentage
                             Ceded to   Assumed          of Amount
                   Gross     Other    from Other           Assumed
                   Amount   Companies  Companies Net Amount to Net


Year Ended December
 31, 2000
Life insurance in
 force	         $1,739,302 $  787,590 $ 90,854 $1,042,566 8.71%
Premiums:
  Life insurance
   and annuities   $   17,630 $    4,783 $    937 $   13,784
  Accident and
   health insurance	      128         12       --        116
    Supplementary
     contract and
     other funds
     on deposit	    1,570         --       --      1,570
      Total
       Premiums    $   19,328 $    4,795 $    937    $15,470

Year Ended December
 31, 1999
Life insurance in
 force 	         $2,079,568 $  837,155 $125,120 $1,367,533 9.15%
Premiums:
  Life insurance
   and annuities   $   16,489 $    4,908 $    904 $   12,485
  Accident and
   health insurance    18,710     18,365       --        345
  Supplementary
   contract and
   other funds on
   deposit	           260         --       --        260
     Total
      premiums	    $   35,459 $   23,273 $    904 $   13,090

Year Ended December
 31, 1998
Life insurance in
 force	         $2,388,428 $1,117,393 $132,129 $1,403,164 9.42%
Premiums:
  Life insurance
   and annuities   $   12,169 $    4,705 $    991 $    8,455
  Accident and
   health insurance	   18,333     12,341       --      5,992
  Supplementary
   contract and
   other funds on
   deposit	            32         --       --         32
     Total
      premiums	    $   30,534 $   17,046 $    991 $   14,479


                                                        EXHIBIT 21

         SUBSIDIARIES OF STANDARD MANAGEMENT CORPORATION



		                                               State
                                      Percentage of or Country in
Name of Subsidiary	                   Outstanding Which Organized

Standard Life Insurance Company of Indiana	 100%  Indiana
Dixie National Life Insurance Company	     99.4%  Mississippi
Standard Marketing Corporation	           100%  Indiana
Savers Marketing Corporation	                100%  North Carolina
Premier Marketing, Ltd.	                     100%  Bermuda
Standard Management International S.A.	      100%  Luxembourg
Premier Life (Luxembourg) S.A.                100%  Luxembourg
Premier Life (Bermuda) Limited	           100%  Bermuda
Standard Development, LLC	                100%  Indiana





                                                      EXHIBIT 23.1


              Consent of Independent Auditors


We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-92906) pertaining to the
Second Amended and Restated Stock Option Plan of Standard
Management Corporation, the Registration Statement (Form S-8 No.
333-41119) pertaining to the Amended and Restated Stock Option
Plan of Standard Management Corporation and the Registration
Statement (Form S-8 No. 333-41117) pertaining to the Standard
Management Corporation Savings Plan, of our report dated
February
9, 2001, with respect to the consolidated financial statements
and
schedules of  Standard Management Corporation and subsidiaries
included in the Annual Report (Form 10-K) for the year ended
December 31, 2000.

Ernst & Young LLP



Indianapolis, Indiana
March 27, 2001







                                                      EXHIBIT 23.2


               Consent Of Independent Auditors

We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-92906) pertaining to the
Second Amended and Restated Stock Option Plan of Standard
Management Corporation, the Registration Statement (Form S-8 No.
333-41119) pertaining to the Amended and Restated Stock Option
Plan of Standard Management Corporation and the Registration
Statement (Form S-8 No. 333-41117) pertaining to the Standard
Management Corporation Savings Plan, of our report dated
January 15, 2001, with respect to the consolidated financial
statements of Standard Management International S. A. and
subsidiaries included in the Annual Report (Form 10-K) for the
year ended December 31, 2000 of Standard Management Corporation.

KPMG Audit

Luxembourg
March 29, 2001
























                                                        EXHIBIT 24

                        POWER OF ATTORNEY


KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
persons whose signature appear immediately below, does hereby
constitute and appoint Ronald D. Hunter and Stephen M. Coons,
each
with full power to act alone, his true and lawful attorney-in-
fact
and agent, with full power of substitution and resubstitution,
for
him and in his name, place and stead, in any and all capacities,
to sign on behalf of the undersigned an Annual Report on Form
10-
K
("Form 10-K") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), granting unto said attorney-in-
fact
and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully
to all intents and purposes as the undersigned might or could do
in person, hereby ratifying and confirming all that said
attorneys-in-fact and agent, or his substitute lawfully do or
cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 29th day
of March 2001.




/s/ RONALD D. HUNTER         	/s/ P.B. (PETE) PHEFFER
    Ronald D. Hunter		    P.B. (Pete) Pheffer

/s/ GERALD R. HOCHGESANG	     /s/ RAYMOND J. OHLSON
    Gerald R. Hochgesang		    Raymond J. Ohlson

/s/ EDWARD T. STAHL           /s/ STEPHEN M. COONS
    Edward T. Stahl		         Stephen M. Coons

/s/ MARTIAL R. KNIESER        /s/ ROBERT A. BORNS
    Martial R. Knieser	         Robert A. Borns

/s/ JOHN J. DILLON            /s/ JERRY E. FRANCIS
    John J. Dillon                Jerry E. Francis