SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549


                                FORM 10-Q


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

            FOR THE QUARTERLY PERIOD ENDED June 30, 2001 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                                 No. 35-1773567
(State or other jurisdiction  (I.R.S. Employer Identification No.)
of incorporation or organization)

10689 North Pennsylvania, Indianapolis, Indiana          46280
  (Address of principal executive offices)            (Zip Code)

                          (317) 574-6200
      (Registrant's telephone number, including area code)

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 [  ]

As of July 31, 2001, the Registrant had 7,545,156 shares of Common
Stock outstanding.







                 STANDARD MANAGEMENT CORPORATION

                             INDEX
                                                   Page Number

Part I.  FINANCIAL INFORMATION:

Item 1.  Financial Statements

         Consolidated Balance Sheets --
         June 30, 2001 (Unaudited) and
         December 31, 2000 (Audited)                        3

         Consolidated Statements of Income --
         For the Three and Six Months Ended June 30,
         2001 and 2000 (Unaudited)	                         4

         Consolidated Statements of Shareholders' Equity --
         For the Six Months Ended June 30, 2001 and 2000
         (Unaudited)                                        5

         Consolidated Statements of Cash Flows --
         For the Six Months Ended June 30, 2001 and 2000
         (Unaudited)                                        6

         Notes to Consolidated Financial Statements
         (Unaudited)                                       7 - 8

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations               9 - 17

Item 3.  Quantitative and Qualitative Disclosures
         about Market Risk                                  18

Item 4.  Submission of Matters to a Vote of Securities
         Holders                                            18

Part II. OTHER INFORMATION:

Item 6.  Exhibits and Reports on Form 8-K                   19

SIGNATURES                                                  19





                  PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

           STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS
                      (Dollars in Thousands)

                                             June 30  December 31
                                               2001       2000
                                           (Unaudited)  (Audited)
                 ASSETS
Investments:
   Securities available for sale:
     Fixed maturity securities, at fair value
        (amortized cost:  $799,527 in 2001 and
         $742,597 in 2000)              $   780,455   $  718,912
     Equity securities, at fair value
        (cost: $538 in 2001 and 2000)           597          362
     Mortgage loans on real estate            4,929        4,778
     Policy loans                            13,191       14,280
     Real estate                             12,377        8,847
     Other invested assets                      776          776
     Short-term investments                  31,773       12,489
       Total investments                    844,098      760,444
Cash                                          6,094        1,840
Accrued investment income                    13,391       12,298
Amounts due and recoverable from reinsurers  41,716       43,158
Deferred policy acquisition costs           103,544       91,855
Present value of future profits              24,490       26,343
Goodwill                                      5,296        5,430
Other assets                                  9,245        8,650
Assets held in separate accounts            447,818      520,439
        Total assets                    $ 1,495,692   $1,470,457

             LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Insurance policy liabilities         $   928,494   $  837,345
   Accounts payable and accrued expenses      7,847        7,347
   Notes payable                             28,300       31,500
   Deferred federal income taxes              6,757        4,397
   Liabilities related to separate accounts 447,818      520,439
        Total liabilities                 1,419,216    1,401,028

Series  A convertible redeemable preferred stock,
 par value $100 per share; Authorized 130,000;
 65,300 issued and outstanding
 in 2001 and 2000                             6,530         6,530

Shareholders' Equity:
   Preferred stock, no par value:
    Authorized 870,000 shares;
    none issued and outstanding                  --            --
   Common stock and additional paid in capital, no par value:
    Authorized 20,000,000 shares; issued 9,038,134
    in 2001 and 2000                         63,112        63,019
   Treasury stock, at cost, 1,492,978 shares
    in 2001 and 2000                         (7,589)       (7,589)
   Accumulated other comprehensive loss      (8,736)      (12,008)
   Retained earnings                         23,159        19,477
      Total shareholders' equity             69,946        62,899

Total liabilities and shareholders'
   equity                               $ 1,495,692   $ 1,470,457

 See accompanying notes to consolidated financial statements.





           STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

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

                         Three Months Ended      Six Months Ended
                              June 30               June 30
                        2001          2000      2001       2000

Revenues:
   Premium income     $   2,439  $   2,838  $   5,209  $   5,302
   Net investment income 14,194     12,376     27,908     24,371
   Call option losses      (560)    (2,252)    (3,137)    (2,360)
   Net realized
     investment losses     (127)    (1,819)       (55)    (2,155)
   Policy income          2,066      2,105      3,975      4,012
   Separate account fees  2,754      1,253      4,254      2,480
   Fee and other income   1,776      1,472      3,460      2,810
      Total revenues     22,542     15,973     41,614     34,460

Benefits and expenses:
   Benefits and claims    1,642     3,826       3,722      7,167
   Interest credited to
     interest-sensitive
     annuities and other
     financial products   7,175     4,836      12,976     11,169
   Amortization           4,238     2,010       6,133      4,220
   Commission expenses    2,612       734       4,389      1,207
   Other operating
      expenses            3,813     2,650       7,927      6,040
   Interest expense and
      financing costs       743       824       1,559      1,687
      Total benefits and
      expenses           20,223    14,880      36,706     31,490

Income before federal
  income taxes and
  preferred stock
  dividends               2,319     1,093       4,908      2,970
Federal income tax expense  384        85         973        597

Net income                1,935     1,008      3,935       2,373
Preferred stock dividends  (127)     (127)      (253)       (253)
Earnings available to
  common shareholders  $  1,808   $   881  $   3,682   $   2,120

Earnings per share - basic:

   Net income         $     .25   $   .13  $    .52   $     .30
   Preferred stock
     dividend              (.01)     (.02)     (.03)       (.03)
   Earnings available
     to common
     shareholders     $     .24   $   .11  $    .49   $     .27

Earnings per share - diluted:

   Net income         $     .23   $   .13  $    .47   $    .30
   Preferred stock
    dividends                --      (.02)       --       (.03)
   Earnings available
    to common
    shareholders      $     .23   $   .11  $    .47   $    .27

  See accompanying notes to consolidated financial statements.





          STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                (Unaudited, Dollars in Thousands)

                         Common
                        stock and          Accumulated
                       additional             other
                        paid-in  Treasury  comprehensive  Retained
               Total    capital    stock      income      earnings

Balance at
January 1,
 2000        $ 53,360 $ 62,152  $ (6,802)  $ (16,706)  $  14,716

Comprehensive income:
 Net income     2,373                                      2,373
 Other
  comprehensive income:
  Change in unrealized
   loss on securities,
   net tax benefits
   of $501     (1,024)                        (1,024)
  Change in foreign currency
   translation   (945)                          (945)
  Other comprehensive
   income      (1,969)

  Comprehensive
   income         404

   Issuance of common stock
    warrants      286      286
   Preferred
    stock
    dividends    (253)                                      (253)
Balance at
 June 30,
 2000        $ 53,797 $ 62,438  $ (6,802)  $ (18,675)  $  16,836

Balance at
 January 1,
 2001        $ 62,899 $ 63,019  $ (7,589)  $ (12,008)  $  19,477

Comprehensive income:
 Net income     3,935                                      3,935
 Other comprehensive income:
 Change in unrealized gain on
  securities, net tax
  of $1,117    2,168                          2,168
 Change in foreign currency
  translation  1,104                          1,104
 Other comprehensive
  income       3,272

 Comprehensive
  income       7,207

 Issuance of common
  stock
  warrants        93       93

 Preferred stock
  dividends     (253)                                      (253)
Balance at
  June 30,
  2001        $69,946 $ 63,112  $ (7,589)  $  (8,736)  $  23,159

   See accompanying notes to consolidated financial statements.




          STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                   (Unaudited, Dollars in Thousands)



                                               Six Months Ended
                                                   June 30
                                             2001         2000

Operating Activities

Net income                                  $   3,935   $  2,373
Adjustments to reconcile net income to net
 cash provided by operating activities:
   Amortization of deferred acquisition
   costs                                        4,811      2,632
   Deferral of acquisition costs              (17,564)   (17,586)
   Deferred federal income taxes                1,530       (211)
   Depreciation and amortization                1,732      1,940
   Insurance policy liabilities                 7,279     10,083
   Net realized investment gains                   55      2,155
   Accrued investment income                   (1,093)      (209)
   Other                                         (183)       473
      Net cash provided by operating activities   502      1,650

Investing Activities
Fixed maturity securities available for sale:
   Purchases                                 (258,811)   (79,462)
   Sales                                      195,319     33,566
   Maturities, calls and redemptions            7,011      9,853
Short-term investments, net                   (19,283)    (9,723)
Other investments, net                         (3,986)    (3,073)
      Net cash used by investing activities   (79,750)   (48,839)

Financing Activities

Repayments on notes payable                    (3,200)    (2,900)
Premiums received on interest-sensitive annuities and
   other financial products credited to policyholder
   account balances, net of premiums ceded    136,733     91,846
Return of policyholder account balances on
   interest-sensitive annuities and other
   financial products                         (49,871)   (43,496)
Issuance of common stock and warrants              93        286
Dividends on preferred stock                     (253)      (253)
   Net cash provided by financing activities   83,502     45,483

Net increase (decrease) in cash                 4,254     (1,706)

Cash at beginning of period                     1,840      3,659
Cash at end of period                       $   6,094  $   1,953


   See accompanying notes to consolidated financial statements.




      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1 -- Basis of Presentation

   The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles ("GAAP") for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial
statements.  The results of operations for the interim periods
shown in this report are not necessarily indicative of the results
that may be expected for the fiscal year.  This is particularly
true in the life insurance industry, where paid life insurance
claims or mortality results in interim periods can vary
substantially from such results over a longer period.  In our
opinion, the information contained in this report reflects all
adjustments, of a normal recurring nature, necessary to fairly
present the results of operations for the interim periods.
Certain amounts from prior periods have been reclassified to
conform to the 2001 presentation.  These reclassifications have no
effect on previously reported shareholders' equity or net income
during the periods presented.  We generally measure our financial
performance by comparing operating income (net income before net
realized investment gains and losses, net of related costs) which
is not considered a GAAP measure of performance.

   The nature of the insurance business of Standard Management
Corporation and its consolidated subsidiaries ("Standard
Management") requires us to make estimates and assumptions that
affect the amounts reported in the consolidated financial
statements and accompanying notes.  For example, Standard
Management uses significant estimates and assumptions in
calculating deferred policy acquisition costs, present value of
future profits, goodwill, future policy benefits and deferred
federal income taxes.  If future experience differs materially
from these estimates and assumptions, our financial statements
could be affected.

   In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("FASB No. 133").  FASB No. 133 requires
companies to record derivatives on the balance sheet as assets and
or liabilities measured at fair value.  We adopted FASB No.133 on
January 1, 2001. The adoption of FASB No. 133 resulted in an
immaterial impact to net income, however, its application
increased the volatility of certain income and expense items.
Also refer to "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Item 2.

     In June 2001, the FASB issued Statement No. 142, "Goodwill
and Other Intangible Assets", effective for fiscal years beginning
after December 15, 2001.  Under the new rules, goodwill will no
longer be amortized but will be subject to annual impairment tests
in accordance with the Statement.  The Company will perform the
first of the required impairment tests of goodwill and indefinite
lived intangible assets as of January 1, 2002.

   For further information, refer to the consolidated financial
statements and related footnotes included in our Annual Report on
Form 10-K, as amended, for the year ended December 31, 2000.


Note 2 -- Notes Payable

   Notes payable of the Company are as follows (in thousands):

                             Interest     June 30     December 31
                                Rate         2001          2000

   Borrowings under revolving
    credit agreements          7.27% (1)   $17,300      $20,500
   Senior subordinated
    convertible notes         10.00%        11,000       11,000
                                           $28,300      $31,500
(1) Current weighted average rate at June 30, 2001.

   We made a scheduled principal payment of $3.2 million on the
borrowings under revolving credit agreements in March 2001. The
next scheduled payment of $4.3 million is due in March 2002.


Note 3 -- Net Unrealized Gain (Loss) on Securities Available for
Sale

   The balance sheet caption "Accumulated other comprehensive
loss" in shareholders' equity includes unrealized loss on
securities available for sale which is summarized as follows (in
thousands):

                                        June 30       December 31
                                         2001             2000
Fair value of securities available
 for sale                             $  781,052       $  719,274
Amortized cost of securities available
 for sale                                800,065          743,135
  Gross unrealized loss on securities
  available for sale                     (19,013)         (23,861)
Adjustments for:
  Deferred policy acquisition costs        4,787            5,852
  Present value of future profits          2,725            3,389
  Deferred federal income tax liability    4,029            4,977
    Net unrealized loss on securities
    available for sale                $   (7,472)      $   (9,643)

Note 4-- Earnings Per Share

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

                         Three Months Ended      Six Months Ended
                              June 30                June 30
                         2001          2000      2001        2000
Income:
Net income         $ 1,935       $ 1,008    $ 3,935       $ 2,373
Preferred stock
  dividends           (127)         (127)      (253)         (253)
Income available to common
 shareholders for basic
 earnings per share  1,808           881      3,682         2,120

Effect of dilutive securities:
   Preferred stock
   dividends           127           --         253            --

Income available to common
 shareholders for diluted
 earnings per
 share             $ 1,935       $   881    $ 3,935       $ 2,120

Shares:
Weighted average shares
 outstanding for basic
 earnings per
 share           7,545,156     7,785,156   7,545,156    7,785,156

Effect of dilutive securities:

 Stock options      71,148         1,932      39,425       12,163
 Stock warrants    148,406            --      91,671          985
 Preferred stock   768,235            --     768,235           --

 Dilutive potential
  common shares    987,789         1,932     899,331       13,148

Weighted average
 shares outstanding
 for diluted
 earnings per
 share           8,532,945     7,787,088   8,444,487    7,798,304



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

General

   The following discussion highlights the material factors
affecting the results of operations and the significant changes in
balance sheet items.  Notes to the consolidated financial
statements included in this report and the notes to the
consolidated financial statements included in our  Form 10-K, as
amended, for the year ended December 31, 2000 should be read in
conjunction with both sets of consolidated financial statements.

First Six Months of 2001 Compared with the First Six Months of
2000:

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

                      Three Months Ended          Six Months Ended
                           June 30                     June 30
                       2001        2000           2001        2000
                               (Dollars in thousands)
Operating income before income taxes:

 Domestic operations  $ 1,548   $ 1,349         $ 3,355   $ 3,117
   International
    operations            899       463           1,608       908

   Consolidated operating income
    before income
    taxes               2,447     1,812           4,963     4,025
   Applicable income taxes
    related to
    operating income     (351)     (289)           (881)     (874)

   Consolidated operating income
    after taxes         2,096     1,523           4,082     3,151

   Consolidated realized
    investment
    losses before
    income taxes         (127)     (718)            (55)   (1,055)
   Applicable income
    taxes (benefits)
    related to realized
    investment losses     (34)      203             (92)     277

   Consolidated realized
    investment losses
         after taxes     (161)     (515)           (147)    (778)

   Net income         $ 1,935   $ 1,008         $ 3,935   $ 2,373

Consolidated Results and Analysis

   Our net income for the six-month period ended June 30, 2001 was
$3.9 million, or 47 cents per diluted share, which is up 66% and
57%, respectively, over the comparable 2000 period.   This
increase resulted from 1) favorable mortality experience of $4.6
million compared to $4.9 million, 2) favorable persistency of $1.2
million compared to $1.5 million 3) net realized investment losses
of $1.1 million in the 2000 period, and 4) by a lower marginal
effective tax rate due to the utilization of net operating loss
carryforwards.  Our operating income for 2001 was $4.1 million,
an increase of 30% over the comparable 2000 period.  Operating
income represents net income before net realized investment gains
and losses, net of related costs and should be reviewed in
conjunction with net income and cashflow information included
elsewhere in this report.

Domestic Operations:

                      Three Months Ended         Six Months Ended
                          June 30                     June 30
                       2001       2000           2001        2000
                                  (Dollars in thousands)

Premiums and deposits collected:
 Traditional life $  2,332   $  2,833         $  5,088  $   5,285

  Flexible premium deferred
    annuities       35,893     24,564           69,755     45,308
  Equity-indexed
    annuities       14,832     20,777           33,021     37,927
  Single premium immediate
    annuities and other
    deposits        21,941      5,380           33,631      7,979
  Universal and
    interest-
    sensitive life     158        319              326        641

  Subtotal - interest-sensitive and other
    financial
    products        72,824     51,040          136,733     91,855

  Total premiums and deposits
    collected     $ 75,156  $ 53,873          $141,821  $  97,140

Premium income    $  2,332  $  2,833          $  5,088  $   5,285
Policy income        2,067     2,105             3,975      4,012
 Total policy
 related income      4,399     4,938             9,063      9,297

Net investment
 income             14,047    12,257            27,628     24,126
Call option losses    (560)   (2,252)           (3,137)   (2,360)
Fee and other income 1,776     1,472             3,460      2,810

 Total revenues(a)  19,662    16,415            37,014     33,873

Benefits and claims  1,688     3,852             3,790      7,219
Interest credited to
   interest-sensitive annuities
   and other financial
   products         7,174      4,836            12,976     11,169
Amortization        2,944      2,774             4,969      4,607
Commission expenses 2,553        368             4,318        790
Other operating
 expenses           3,012      2,412             6,047      5,284
Interest expense
 and financing costs  743        824             1,559      1,687

Total benefits and
 expenses          18,114     15,066            33,659     30,756

Operating income
 before income
 taxes              1,548      1,349             3,355      3,117

Net realized investment
  losses, net of related
  amortization       (127)      (718)              (55)    (1,055)

Income before
 income taxes    $  1,421   $    631          $  3,300   $  2,062

(a)  Revenues exclude net realized investment losses, net of
related amortization.

General: The domestic operations segment consists of revenues
earned and expenses incurred from United States operations. Our
products include flexible premium deferred annuities, equity-
indexed annuities, single premium immediate annuities, universal
life products and traditional life products.  The profitability of
this segment is primarily a function of its net spread revenue
(the difference between the investment income earned on our
investments less the interest we credit to our policyholders),
persistency of the in-force business, mortality experience and
management of operating expenses.

Premium deposits consist of our flexible premium deferred
annuities, equity-indexed annuities, single premium immediate
annuities, 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 our 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 the six-month period ending June 30, 2001
increased $44.9 million or 49%, to $136.7 million, compared to the
six-month period ending June 30, 2000.  This increase relates to
1) a continued increase in the agency base achieved through the
recruitment of high volume agents and larger managing general
agencies, 2) favorable agent retention, 3) enhanced presence in
the single premium immediate annuity market and 4) the development
of an interactive agent website.

Premium income consists of premiums earned from 1) traditional
life products and 2) annuity business that incorporates
significant mortality features.

* Premium income for the six-month period ending June 30, 2001
decreased by $.2 million or 4%, to $5.1 million compared to the
same period in 2000.  The decrease consists of a decline in
traditional life renewal premiums from our purchased blocks of
business.

Policy income represents 1) mortality charges and administrative
fees earned on universal life products and 2) surrender income
earned as a result of terminated universal life and annuity
policies.

* Policy income was unchanged at $4.0 million for the six-month
period ending June 30, 2001 compared to the six-month period
ending June 30, 2000.  This is largely due to the stability of
withdrawals by policyholders for both periods.

Net investment income includes interest earned on invested assets
and fluctuates with changes in 1) the amount of average invested
assets supporting insurance liabilities and 2) the average yield
earned on those invested assets.

* Net investment income for the six-month period ended June 30,
2001 increased by $3.5 million or 15%, to $27.6 million compared
to the same period ending June 30, 2000.  Net investment income
increased as a result of a $110.0 million or 16% increase in the
book value of the weighted average invested assets for the period.
Our premium deposits of $136.7 million are the primary factor
contributing to increased weighted invested assets for the period.

* The net investment yield earned on average invested assets was
7.17% and 7.15% for the six-month period ending June 30, 2001 and
2000, respectively.  Investment yields fluctuate from period to
period primarily due to changes in the general interest rate
environment.

*  See also "Call option losses" and "Interest credited to
interest sensitive annuities and other financial products" for
additional information regarding the impact of our equity-indexed
products.

Call option losses relate to equity-indexed products which are
hedged with call options to limit risk against unusually high
crediting rates from favorable returns in the equity market and
are substantially offset by 1) interest earned on invested assets
supporting equity-indexed products and 2) amounts credited to
policyholder account balances.  The market value of these call
options fluctuate based on the policyholder account balances of
our equity-indexed products and the returns given to these
policyholders which are linked to the performance of the Standard
& Poor's Corporation (S&P) 500 Index.

*  Call option losses for the six-month period ending June 30,
2001 increased by $.8 million to $3.1 million compared to the same
period ending June 30, 2000.  This increase was due to the impact
from changes in the market value of our call options, which are
linked to the performance of the S&P 500 Index.

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

* For the six-month period ending June 30, 2001 fee and other
income increased $.7 million or 23%, to $3.5 million compared to
the six-month period ending June 30, 2000 and includes
unaffiliated commission income from Savers Marketing.

Benefits and claims include 1) mortality experience, 2) benefits
from other policies that incorporate significant mortality
features and 3) changes in future policy reserves.  Throughout our
history, we have 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 for the six-month period ended June 30, 2001
decreased $3.4 million to $3.8 million, a decrease of 47% compared
to the same period for 2000. This decrease includes the impact
from single premium immediate annuity reserves of $3.5 million,
which are offset by a comparable increase in commission expenses.
In addition, we experienced favorable mortality of  $.3 million
compared to the period ending June 30, 2000.

*  See also "Commission expenses" for additional information
regarding the impact of our single premium immediate annuities.

Interest credited to interest sensitive annuities and other
financial products represents interest credited to insurance
liabilities of the flexible premium deferred annuities, equity-
indexed annuities, single premium immediate annuities, interest
sensitive and other financial products. This expense fluctuates
with changes in 1) the average interest-sensitive insurance
liabilities, 2) the average credited rate on those liabilities, 3)
the impact of FASB No. 133, 4) interest earned on invested assets
supporting equity-indexed products and 5) the market value
fluctuations of call options.

* During the first six months of 2001, interest credited increased
$1.8 million to $13.0 million, an increase of 16% compared to the
same period for 2000. The 2001 reporting period includes increased
interest credited due to a 15% increase in average interest
sensitive liabilities of $90.2 million and a higher average
credited rate.  These increases were offset by a decline in the
market value of liabilities supporting equity-indexed products,
interest earned on invested assets supporting equity-indexed
products and a $.4 million decrease as a result of FASB No. 133.

*  The weighted average credited rates for the first six-month
period ending June 30, 2001 and 2000, were 4.99% and 4.85%,
respectively.

Amortization includes 1) amortization related to the present value
of  policies purchased from acquired insurance business, 2)
amortization of deferred acquisition costs related to capitalized
costs of our insurance business sold, 3) amortization of goodwill
and organizational costs and 4) the impact of FASB No. 133.

* Amortization for the six-month period ending June 30, 2001 was
$5.0 million, an increase of  $.4 million compared to the six-
month period ending June 30, 2000.  This increase includes
additional amortization of $.3 million as a result of FASB No.
133.

Commission expenses represent commission expenses, net of
deferrable amounts.

* During the six-month period ending June 30, 2001 commission
expenses increased $3.5 million to $4.3 million primarily due to
increased single premium immediate annuity sales in the first six
months of 2001. Benefits and claims have been offset by increased
commission expenses related to these sales.

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

* Other operating expenses for the first six months of 2001
increased  $.8 million or 14%, to $6.0 million compared to the
same period of 2000. The increase is primarily due to $.6 million
of additional premium tax expense due to a changing product mix.

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

* Interest expense and financing costs for the six-month period
ending June 30, 2001 decreased $.1 million to $1.6 million
compared to the same period for 2000.  Average borrowings declined
$3.6 million in the 2001 period. The weighted average interest
rate for the 2001 period was 9.35% compared to 9.75% for the 2000
period.

Net realized investment 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.   Realized investment 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 amortization for
the six-month period ending June 30, 2001  were $.1 million
compared to $1.1 million in the six-month period ending June 30,
2000.  The 2000 period included fixed maturity securities that had
a decline in fair value that was considered other than temporary.

International Operations:

                      Three Months Ended      Six Months Ended
                          June 30                  June 30
                     2001          2000       2001         2000
                                 (Dollars in thousands)

Premiums and deposits collected:
 Traditional life $   107    $      5       $    121    $      17
 Separate account
 deposits          25,171      65,267         53,841       92,233
  Total premiums and
  deposits
  collected      $ 25,278    $ 65,272       $ 53,962    $  92,250

Premium income   $    107    $      5       $    121    $      17
Net investment
 income               147         119            280          245
Separate account
 fees               2,754       1,253          4,254        2,480

 Total revenues     3,008       1,377          4,655        2,742

Benefits and
 claims               (46)        (26)           (68)         (52)
Amortization        1,294         336          1,164          713
Commission expenses    59          26             71           77
Other operating
 expenses             802         578          1,880        1,096

 Total benefits and
 expenses           2,109         914          3,047        1,834

 Income before
  income taxes   $    899    $    463       $  1,608    $     908


General: International operations include revenues earned and
expenses incurred from abroad, primarily Europe, and include fees
collected on deposits from unit-linked assurance products.  The
profitability of 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 and short-term investments. Standard Management
International is required to hold a certain level of cash and
short-term investments in order to comply with local insurance
laws.

* Net investment income was $.3 million and $.2 million for the
six-month periods ending June 30, 2001 and 2000, respectively.
Corporate assets averaged $13.3 million and $11.1 million for the
first six-months of  2001 and 2000, respectively.

* The net investment yields earned on average invested assets were
4.20% and 4.47% for the six months ending June 30, 2001 and 2000,
respectively.

Fees from separate accounts represents the net fees earned on the
various unit-linked products sold.  The fees fluctuate in
relationship to total separate account assets and the fees earned
on those assets.  Fees include initial set up fees on certain
products and annual recurring fees on almost all products.

* Fees from separate accounts in the first six months of 2001
increased $1.8 million or 72%, to $4.3 million compared to the
same period for 2000. This increase is primarily due to an
increase of 41% in the average value of assets held in separate
accounts for the 2001 period.  Actual separate account assets for
the first six months of  2001 decreased $29.4 million or 6%, to
$479.0 million.  Fees were favorably impacted by $.2 million due
to changes in the value of foreign currencies relative to the U.S.
dollar.  Excluding the impact of foreign currencies, fees
increased $1.6 million or 64%, to $4.1 million.  Separate account
deposits for the first six months of 2001 were $53.8 million
compared to $92.2 million for the comparable 2000 period
reflecting the unfavorable impact of volatile worldwide equity
markets.

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

* Amortization for the six-month period ending June 30, 2001
increased $.5 million to $1.2 million compared to the six-
month period ending June 30, 2000.  This increase is primarily
related to the unfavorable impact of  $.3 million from changes in
the value of foreign currencies relative to the U.S. dollar.

Commission expenses represent commission expenses, net of
deferrable amounts.

* Commission expenses for the six-month period ended June 30, 2001
remained at less than $.1 million.

Other operating expenses consist of general operating expenses,
including salaries, net of deferred amounts.

* Other operating expenses for the six-month period ending June
30, 2001 increased $.8 million to $1.9 million when compared to
the six month period ending June 30, 2000. This increase relates
primarily to increased 1) management fees charged by Standard
Management and 2) professional fees.

Foreign currency translation.   Comparisons between the periods
ending June 30, 2001 and June 30, 2000 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 been quantified on fees from separate accounts
and amortization.

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 1) interest on surplus
debentures, 2) dividends, 3) management fees, 4) rental income and
5) allocation of taxes through a tax sharing agreement, all of
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 basis Standard Management reported net
cash provided by operations of  $.5 million for the six month
period ending June 30, 2001.  Although deposits received on
Standard Management'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 Standard
Management.  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 cash flow of $87.4 million for the six month period
ending June 30, 2001. 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.

In 1993, Standard Management instituted a program to repurchase
its common stock.  At June 30, 2001 Standard Management can
repurchase 724,790 shares of Standard Management common stock
remaining under this program.

At July 23, 2001, Standard Management had "parent company only"
cash and short-term investments of  $.3 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 $4.8
million for 2000 and 1999, respectively.

We anticipate that available cash from our existing working
capital, plus anticipated 2001 dividends, management fees, rental
income and interest payments on our surplus debentures receivable
will be more than adequate to meet our anticipated parent company
cash requirements for 2001.

   Surplus Debenture and Notes Payable Interest:

   The following are characteristics of our amended credit
agreement at June 30, 2001:

* outstanding balance of $17.3 million;

* weighted average interest rate of 7.27%;

* principal payments: $4.3 million due annually through March
2005;

* subject to certain restrictions and financial and other
covenants;

* interest payments required in 2001 based on current balances
will be $1.5 million.

   The following are characteristics of our subordinated debt
agreement at June 30, 2001:

* outstanding balance of $11.0 million;

* interest rate is greater of 1) 10% per annum or 2) six-month
London Inter-Bank Offered Rate ("LIBOR") plus 1.5%;

* due October 2007;

* interest payments required in 2001 based on current balances
will be $1.1 million.

   Standard Management loaned $27.0 million to Standard Life
Insurance Company of Indiana ("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
Indiana Department of Insurance ("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 June 30, 2001 interest rate of
9.00% continues, Standard Management will receive interest income
of $2.5 million from the surplus debentures 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 1) net
gain from operations or 2) 10% of surplus, in each case as shown
in its preceding annual statutory financial statements.  Standard
Life paid a dividend of $1.6 million in the first quarter of 2001
and has the ability to pay an additional $2.8 million in 2001
without regulatory approval.

   Management Fees.  Pursuant to a management services agreement,
Standard Life paid Standard Management $1.8 million for the first
six months of  2001 for certain management services related to the
production of business,  investment of assets and evaluation of
acquisitions.  In addition, Dixie National Life Insurance Company
("Dixie Life") paid Standard Life $.6 million during the first six
months of  2001 for certain management services provided. Both of
these agreements provide that they may be modified or terminated
by the applicable Departments of Insurance in the event of
financial hardship of either Standard Life or Dixie Life.

   Pursuant to a management services agreement, Premier Life
(Luxembourg) paid Standard Management $.7 million during the first
six months of 2001 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.  During the first six months of 2001,
Standard Management charged subsidiaries $.6 million for the use
of equipment owned by Standard Management.

   Tax Sharing Agreement.  Effective January 1, 2000 Standard
Management entered into a tax sharing agreement with Savers
Marketing and Standard Management International that allocates the
consolidated federal income tax liability.  During the first six
months of 2001 Savers Marketing paid Standard Management and
Standard Management International $.5 million and $.8 million,
respectively, in accordance with this agreement.

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 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 flexible premium
deferred annuities 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, 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 rating and events in the industry that affect
policyholders' confidence. In April 2001, Standard Life received a
rating upgrade from A.M. Best to B++, or "very good" category.  As
rationale for the rating upgrade, A.M. Best noted Standard Life's
continued business growth, improved operating results during 2000
and increased fee income received from administration.

   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 our 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
Standard Management were required to sell investments at reduced
values to meet liquidity demands. Standard Management manages the
asset and liability portfolios in order to minimize the adverse
earnings effect of changing market interest rates.  Standard
Management seeks assets that have duration characteristics similar
to the liabilities that they support. Standard Management also
prepares cash flow projections and performs cash flow tests under
various market interest rate scenarios to assist in evaluating
liquidity needs and adequacy.  Our 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 National Association of Insurance Commissioners as modified by
the IDOI, or the state in which our 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: 1) acquisition costs (primarily commissions and policy issue
costs) and 2) 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 or surplus strain in the year written for many
insurance products. Standard Management 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,
Standard Management controls the amount of net new premiums
written to manage the effect of such surplus strain.  Standard
Management's long-term growth goals contemplate continued growth
in its insurance businesses. To achieve these growth goals,
Standard Management'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, Standard Management 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 June 30, 2001, Standard Life had statutory capital and
surplus for regulatory purposes of $43.7 million.  As the life
insurance and annuity business produced by Standard Life
increases, Standard Life expects 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 $86.5 million for
the six months ended June 30, 2001 and $95.4 million for 2000.  If
the need arises for cash, which is not readily available,
additional liquidity could be obtained from the sale of invested
assets.

   International Operations.  The amount of dividends that may be
paid by Standard Management International without regulatory
approval is limited to its accumulated earnings.  Standard
Management does not anticipate receiving dividends from Standard
Management International in 2001.

   Subsequent Event.  On August 9, 2001, SMAN Capital Trust I (the
"Trust"), a wholly-owned subsidiary of Standard Management,
completed a public offering of $20.7 million of its 10.25%
preferred securities.  The Trust used the proceeds of this
offering to purchase Standard Management's 10.25% junior
subordinated debentures.  Net proceeds from the sale of the
debentures of approximately $19.3 million were used to redeem all
$6.5 million of our Series A preferred stock and repay $7.3
million of our notes payable.  The remaining proceeds will be used
for general corporate purposes.  The Trust's preferred securities
are traded on the Nasdaq National Market under the symbol "SMANP".

Forward-looking Statements

  All statements, trend analyses, and other information contained
in this quarterly report on Form 10-Q or any document incorporated
by reference herein relative to markets for our products and
trends in our 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, stock market performance which
may affect the ability  to sell our products, the market value of
our  investments and the lapse rate and profitability of our
policies;

* our 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 our insurance products;

* changes in the Federal income tax laws and regulation which may
affect the relative tax advantages of some of  our  products;

* increasing competition in the sale of  our  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; and

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

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

  Our market risks and the way they are managed are summarized in
our discussion and analysis of financial condition and results of
operations as included in our Annual Report in Form 10-K, as
amended, for the year ended December 31, 2000.  There have been no
material changes in 2001 to these risks or the management of such
risks.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

  At SMC's Annual Meeting of Stockholders held on June 19, 2001
the following individuals were elected to the Board of Directors:

                                 Shares For      Shares Withheld

John J. Dillon                    5,482,041        149,687
Ronald D. Hunter                  5,341,218        290,510
Edward T. Stahl                   5,385,216        246,512


                     PART II.  OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.


(a) Exhibits

            None.


(b) Reports on Form 8-K

            No reports on Form 8-K were filed with the Commission
in the second quarter of 2001.

                           SIGNATURES

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


Dated:   August 13, 2001


                                STANDARD MANAGEMENT CORPORATION
                                          (Registrant)

                                By:  RONALD D. HUNTER
                                     Ronald D. Hunter
                                Chairman of the Board, President
                                and Chief Executive Officer
                               (Principal Executive Officer)

                                By:  GERALD R. HOCHGESANG
                                     Gerald R. Hochgesang
                                Senior Vice President and
                                Treasurer
                               (Chief Accounting Officer)