##### Table of Contents






FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



|x |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|- |  | ----------------------------------------------------------------------------------------
|  |  | (NO FEE REQUIRED)                                                                       
| 
|  |  | For the fiscal year ended December 31, 2002                                             
| 
|  |  | OR                                                                                      
| 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|  |  | [NO FEE REQUIRED]                                                                       
| 
|  |  | For the transition period from ________ to                                              

Commission File Number 2-39458

ERIE FAMILY LIFE INSURANCE
COMPANY

---

(Exact name of Company as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Pennsylvania                                                   |  | 25-1186315                          
|                                                               |  |                                     
|(State or other jurisdiction
of incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                              
|100 Erie Insurance Place, Erie, Pennsylvania                   |  | 16530                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip code)                          

Companys telephone number,
including area code (814) 870-2000

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

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.40 par value

---

(Title of class)


Indicate by check mark whether the Company (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 Company 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 Company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 10-K.  o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

Yes ___     No  x

Indicate the number of shares outstanding of each of the Companys classes of
common stock, as of the latest practicable date: 9,450,000 shares of Common
Stock outstanding on February 28, 2003.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Companys Annual Report to shareholders for the fiscal year
ended December 31, 2002 (the Annual Report) are incorporated by reference
into Parts II and III of this Form 10-K Report.





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TABLE OF CONTENTS



|                             |                                                                                                         |  |  |  |  |  |  | 
|---------------------------- | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|FORM 10-K                   
|                             | PART I                                                                                                 
|                             | ITEM 2. PROPERTIES                                                                                     
|                             | ITEM 3. LEGAL PROCEEDINGS                                                                              
|                             | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                            
|PART II                     
|                             | ITEM 5. MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED SHAREHOLDER MATTERS                       
|                             | ITEM 6. SELECTED FINANCIAL DATA                                                                        
|                             | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS          
|                             | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                    
|                             | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                    
|                             | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE           
|PART III                    
|                             | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                            
|                             | ITEM 11. EXECUTIVE COMPENSATION                                                                        
|                             | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|                             | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                
|                             | ITEM 14. CONTROLS AND PROCEDURES                                                                       
|                             | ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                               
|SIGNATURES                  
|CERTIFICATIONS              
|CERTIFICATIONS              
|INDEPENDENT AUDITORS REPORT
|EXHIBIT INDEX               
|Exhibit 10.27               
|Exhibit 10.28               
|Exhibit 10.29               
|Exhibit 10.30               
|Exhibit 10.31               
|Exhibit 10.32               
|Exhibit 10.33               
|Exhibit 13                  
|Exhibit 16                  
|Exhibit 99.2                
|Exhibit 99.3                



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##### Table of Contents



INDEX

|                        |  |                                                                                                |  |   
|----------------------- |  | ---------------------------------------------------------------------------------------------- |  | --
|ITEM NUMBER AND CAPTION |  | PAGE                                                                                          
|                       
|                        |  | Part I                                                                                         |  |   
|                        |  |                                                                                                |  |   
|Item 1.                 |  | Business                                                                                       |  | 3 
|                        |  |                                                                                                |  |   
|Item 2.                 |  | Properties                                                                                     |  | 7 
|                        |  |                                                                                                |  |   
|Item 3.                 |  | Legal Proceedings                                                                              |  | 7 
|                        |  |                                                                                                |  |   
|Item 4.                 |  | Submission of Matters to a Vote of Security Holders                                            |  | 7 
|                        |  |                                                                                                |  |   
|                        |  | Part II                                                                                        |  |   
|                        |  |                                                                                                |  |   
|Item 5.                 |  | Market for the Registrants Common Stock and Related
Shareholder Matters                       |  | 8 
|                        |  |                                                                                                |  |   
|Item 6.                 |  | Selected Financial Data                                                                        |  | 8 
|                        |  |                                                                                                |  |   
|Item 7.                 |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations          |  | 8 
|                        |  |                                                                                                |  |   
|Item 7a.                |  | Quantitative and Qualitative Disclosures About Market Risk                                     |  | 8 
|                        |  |                                                                                                |  |   
|Item 8.                 |  | Financial Statements and Supplementary Data                                                    |  | 8 
|                        |  |                                                                                                |  |   
|Item 9.                 |  | Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure           |  | 9 
|                        |  |                                                                                                |  |   
|                        |  | Part III                                                                                       |  |   
|                        |  |                                                                                                |  |   
|Item 10.                |  | Directors and Executive Officers of the Registrant                                             |  | 10
|                        |  |                                                                                                |  |   
|Item 11.                |  | Executive Compensation                                                                         |  | 14
|                        |  |                                                                                                |  |   
|Item 12.                |  | Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters |  | 22
|                        |  |                                                                                                |  |   
|Item 13.                |  | Certain Relationships and Related Transactions                                                 |  | 24
|                        |  |                                                                                                |  |   
|Item 14.                |  | Controls and Procedures                                                                        |  | 24
|                        |  |                                                                                                |  |   
|Item 15.                |  | Exhibits, Financial Statement Schedules and Reports
on Form 8-K                                |  | 25

2



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##### Table of Contents






PART I

ITEM 1.  BUSINESS



| |  | Erie Family Life Insurance Company (hereinafter referred to as the
Company or Erie Family Life) is incorporated in the Commonwealth of
Pennsylvania and is primarily engaged in the business of underwriting and
selling nonparticipating individual and group life insurance policies,
including universal life, annuity and disability income products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The Company is owned 21.6% by the Erie Indemnity Company (EIC), 53.5% by
the Erie Insurance Exchange (Exchange) and the remaining 24.9% by public
shareholders, who are predominantly directors, agents and employees of EIC.
EIC is a Pennsylvania business corporation formed in 1925 to be the
attorney-in-fact for the Exchange, a Pennsylvania-domiciled reciprocal
insurance exchange. EIC, as attorney-in-fact, has a fiduciary duty to act
in this capacity on behalf of the policyholders of the Exchange in addition
to a fiduciary duty to its own shareholders. EIC operates predominantly as
a provider of sales, underwriting and policy issuance services to the
Exchange. EIC also is engaged in the property/casualty insurance business
through its wholly owned subsidiaries, Erie Insurance Company, Erie
Insurance Company of New York and Erie Insurance Property & Casualty
Company and through a subsidiary of the Exchange, Flagship City Insurance
Company. The Company, EIC, the Exchange and its subsidiary and affiliates
operate collectively under the name Erie Insurance Group.

Products



| |  | The Companys portfolio of life insurance includes permanent life,
endowment and term policies, including whole life, mortgage and decreasing
term, group, and universal life insurance. In terms of face value, new
life business issued in 2002, 2001 and 2000 had a ratio of 11:1, 8:1 and
8:1, respectively, of term insurance to whole life insurance coverage.
Contributing to the increase in this ratio has been the introduction of
three new term life insurance products since late 1999. The ERIE Flagship
TermSM, introduced in late 1999, was designed for sale of face amounts of
$300,000 and above. In late 2001, the Company rolled out its two newest
products  ERIE Target TermSM and ERIE Flagship
Term2SM. The ERIE Target
Term product has a minimum face amount of $100,000 and offers rate
guarantees for 10 years on all plans. The ERIE Flagship Term2, now Erie
Family Lifes most comprehensive term insurance plan for individuals
desiring substantial coverage, offers a minimum face amount of $100,000 and
replaced the ERIE Flagship Term product for new policy sales after October
1, 2001.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Life insurance premiums and annuity deposits have been the primary sources
of cash inflows for the Company. Net life insurance premiums by class, as a
percentage of total sales, are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|                                                              |  |                                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|------------------------------------------------------------- |  | ------------------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                                              |  | For the year ended December 31,
|                                                              |  |                                
|Class                                                         |  | 2002                            |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                                              |  |                                 |       |      |  |      |       |      |  |     
|Ordinary Life (including Term,
Whole Life and Universal Life) |  |                                 | 94.0  | %    |  |      | 94.0  | %    |  |      | 94.2  | % |  |  | 93.7  | % |  |  | 93.4  | %
|Group Life and Other                                          |  |                                 | 6.0   |      |  |      | 6.0   |      |  |      | 5.8   |   |  |  | 6.3   |   |  |  | 6.6   |  
|                                                              |  |                                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|                                                              |  |                                 | 100.0 | %    |  |      | 100.0 | %    |  |      | 100.0 | % |  |  | 100.0 | % |  |  | 100.0 | %



| |  | Certain elements of revenue and expense reflect the requirements of
Financial Accounting Standard (FAS) 97. FAS 97 prescribes a uniform method
by which life insurance companies record certain long-term contracts,
specifically annuities, universal life, and other interest-sensitive
products. This method involves separating the premium income into the
premium portion (shown in revenue) which represents insurance protection
purchased, and the deposit portion, which represents funds to be held at
interest for future uses. Under this
standard, the deposit portion of the premium received is accounted for
using methods applicable to comparable interest bearing obligations of
other types of financial institutions.
Annuity product offerings compete with other available investment products
including, but not limited to, common and preferred stocks, bonds, mutual
funds and other instruments. The Companys ability to attract
policyholders depends in large part on the relative attractiveness of its
products compared to other investment alternatives available. Factors such
as the interest rate environment and the performance of the stock market
influence this ability.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3



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##### Table of Contents





| |  | The Erie Insurance Group affiliated property and casualty insurance
companies periodically purchase annuities from the Company in connection
with the structured settlement of claims. Considerations recorded as
annuity deposits in the Companys Statements of Financial Position from
structured settlement annuities sold to affiliated property/casualty
companies totaled $18,563,579, $12,878,769 and $16,167,642 in 2002, 2001,
and 2000, respectively. Also included in the annuity deposits are annuity
contracts purchased by the Erie Insurance Group Retirement Plan for
Employees. These annuity contracts totaled $148,705 in 2002, $4,513,441 in
2001 and $5,626,892 in 2000. Due to the current interest rate environment,
the Erie Insurance Group Retirement Plan for employees reduced the
annuities purchased from the Company in 2002.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Deposits by class are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|                        |  |                                 |         |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 
|----------------------- |  | ------------------------------- | ------- | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                        |  | For the year ended December 31,
|                        |  |                                
|                        |  | (in thousands)                 
|Class                   |  | 2002                            |         | 2001 |  | 2000 |        | 1999 |  | 1998
|                        |  |                                 |         |      |  |      |        |      |  |     
|Universal Life Deposits |  | $                               | 12,176  |      |  | $    | 12,238 |      |  | $    | 11,198 |  |  | $ | 11,792 |  |  | $ | 10,692 | 
|Annuity Deposits        |  |                                 | 175,509 |      |  |      | 69,754 |      |  |      | 51,060 |  |  |   | 67,115 |  |  |   | 56,728 | 
|                        |  |                                 |         |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 
|                        |  | $                               | 187,685 |      |  | $    | 81,992 |      |  | $    | 62,258 |  |  | $ | 78,907 |  |  | $ | 67,420 | 
|                        |  |                                 |         |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 



| |  | The Company reinsures a portion of its business under a number of different
reinsurance agreements. The purpose of this reinsurance is to enable the
Company to write a policy in an amount larger than the Company is willing
to assume for itself. The Company currently reinsures with other insurance
companies the portion of the insurance coverage above desired retentions.
The retention limit on an acceptable risk is generally $300,000 per life
for individual coverage. For its disability income product, the Company
has a 50% coinsurance agreement with a nonaffiliated reinsurer. The
Company has a 50% coinsurance agreement, with a maximum retention of
$300,000, with nonaffiliated reinsurers for its ERIE Flagship
TermSM and
ERIE Flagship Term2SM products. For its Erie Target
TermSM product, the
Company has a 90% coinsurance agreement, with a maximum retention of
$300,000, with nonaffiliated reinsurers.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Life insurance in force totaled $23.2 billion, $18.9 billion and $16.5
billion at December 31, 2002, 2001 and 2000, respectively. As of December
31, 2002, 2001 and 2000, $7.0 billion, $4.1 billion and $2.6 billion,
respectively, of life insurance in force was ceded to other companies. The
Companys most significant reinsurance business is with Business Mens
Assurance Company of America (BMA), which reinsures a portion of the
Companys life and accident and health business. At December 31, 2002,
2001 and 2000, the amount of in force life insurance ceded to BMA totaled
approximately $4.2 billion, $2.7 billion and $1.3 billion, respectively.                                                                                                                                                                                                                                                                     

Marketing



| |  | The Company markets its products through independent agents in eleven
jurisdictions. The 2002 statutory direct premiums and annuity
considerations for those jurisdictions is made up of: Pennsylvania (62.5%),
Virginia (9.6%), Maryland (6.0%), Ohio (5.6%) and North Carolina (5.0%).
West Virginia, Indiana, Tennessee, Illinois, Wisconsin and the District of
Columbia together accounted for 9.2% of direct premiums and annuity
considerations. The policies sold are evaluated by the Companys
Underwriting Department which accepts or declines applicants for insurance.
Premium on policies which are accepted may be standard or rated, depending
on the nature of the risk.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Competition



| |  | The Company operates in a highly competitive industry which consists of
numerous stock and mutual life insurance companies. A large number of
established insurance companies compete in states in which the Company
transacts business and many of these companies offer more diversified lines
of insurance coverage and have substantially greater financial resources
than does the Company. Competition is based primarily on price, product
features, availability of insurance products and the financial strength of
the Company.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4



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##### Table of Contents





| |  | Congress is considering legislation that would create an optional federal
charter for insurers. The Insurance Industry Modernization Act would
establish an Office of National Insurers within the Treasury Department.
The office would have the power to charter, license and regulate national
insurers and its director would be required to establish a Division of
Consumer Affairs within the office. The proposed legislation would repeal
the McCarran-Ferguson Act, except for the sharing of historical loss data
and activities associated with participation in mandatory residual market
and workers compensation mechanisms.                                                                                                                                                                                                                          
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Federal chartering has the potential to create an uneven playing field for
insurers. Federally chartered companies could be subject to different
regulatory requirements than state chartered insurers in the areas of
market conduct oversight, solvency regulation, guaranty fund participation
and premium tax burdens. If this occurs, federally chartered insurers may
obtain a competitive advantage over state licensed carriers. The federal
proposal also raises the specter of a matrix of regulation and costly
duplicative, or conflicting, federal and state requirements. The repeal of
the McCarran-Ferguson Act and its partial exemption for the insurance
industry from federal antitrust laws would make it extremely difficult for
insurers to compile and share loss data, develop standard policy forms and
manuals and predict future loss costs.

Insurance Liabilities



| |  | The Company establishes and maintains actuarial reserves to meet its
obligations on life insurance, disability income, and annuity policies.
These reserves are amounts which, with additions from premiums to be
received on outstanding policies and with interest on such reserves
compounded annually at certain assumed rates, are calculated to be
sufficient to meet policy obligations at death, disability or maturity in
accordance with the mortality and morbidity assumptions employed when the
policies are issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Reserves for life insurance and income-paying annuity future policy
benefits have been computed primarily by the net level premium method with
assumptions as to anticipated mortality, withdrawals, lapses and investment
yields. Disability income reserves are calculated as two-year preliminary
term mid-terminal reserves plus unearned premium reserves. Deferred
annuity future policy benefit liabilities have been established at
accumulated values without reduction for surrender charges. Reserves for
universal life and deposit contracts are based on the contract account
balance, if future benefit payments in excess of the account balance are
not guaranteed, or the present value of future benefit payments when such
payments are guaranteed. Variations are inherent in such calculations due
to the estimates and assumptions necessary in the calculations. Interest
rate assumptions for non-interest sensitive life insurance range from 3.5%
to 4.0% on policies issued in 1980 and prior years and 6.0% to 7.25% on
policies issued in 1981 and subsequent years. Mortality and withdrawal
assumptions are based on tables typically used in the industry, modified to
reflect actual experience where appropriate.
|
| |  | Universal life and annuity deposits are credited with varying interest
rates determined at the discretion of the Company subject to certain
minimums. During 2002, interest rates credited ranged from 5.25% to 6.75%
on universal life deposits and 4.00% to 6.00% on annuity deposits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Government Regulation



| |  | The Company is subject to the corporate governance standards set forth in
the recently enacted Sarbanes-Oxley Act of 2002 and other recent changes to
the federal securities laws, as well as any rules or regulations that may
be promulgated by the Securities and Exchange Commission or the Nasdaq
Stock MarketSM. Compliance with these standards, rules and regulations, as
well as with accelerated filing requirements that have recently been
enacted, impose additional administrative costs and burdens on the Company.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The Sarbanes-Oxley Act of 2002 (Act) was designed to better protect
investors by improving the accuracy and reliability of public company
disclosures. Some requirements of the Act were effective immediately while
others are scheduled to become effective throughout 2003. Management has
initiated the appropriate process both within the Company and with the
Board of Directors to ensure timely compliance with the requirements. New
requirements introduced by the Act are projected to become effective in
2003.      

5



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##### Table of Contents





| |  | The Company is also subject to supervision and regulation by the insurance
departments of the states in which it does business. Although the extent
of the regulation varies from state to state, generally the supervisory
agencies are vested with broad regulatory powers relating to the granting
and revocation of licenses to transact business, regulation of trade
practices, licensing of agents, approval of policy forms, deposits of
securities as for the benefits of policy owners, and investments and
maintenance of specified reserves and capital, all designed primarily for
the protection of policy owners. In accordance with the rules of the
National Association of Insurance Commissioners (NAIC), the Company is
examined periodically by one or more of the state supervisory agencies. The
last completed examination of the Company was conducted by the Pennsylvania
Insurance Department and covered the five years ended December 31, 2000.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The Commonwealth of Pennsylvania follows the statutory accounting practices
minimum risk-based capital requirements on domestic insurance companies that were developed by the
NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of
which requires specified corrective action. The formulas for determining
the amount of risk-based capital specify various weighing factors that are
applied to financial balances or various levels of activity based on the
perceived degree of risk. These formulas determine a ratio of the
companys regulatory total adjusted capital to its authorized control level
risk-based capital, as defined by the NAIC.                                                                                                                                                                                                                                                                 
|
| |  | The NAIC levels and ratios are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|                         |  |                                    
|------------------------ |  | -----------------------------------
|                         |  | Ratio of Total Adjusted Capital to 
|NAIC Required            |  | Authorized Control Level Risk-Based
|Regulatory Event         |  | Capital (Less Than or Equal to)    
|                         |  |                                    
|Company action level     |  | 2 (or 2.5 with negative trends)    
|Regulatory action level  |  | 1.5                                
|Authorized control level |  | 1                                  
|Mandatory control level  |  | ..7                                



| |  | Erie Family Life has regulatory total adjusted capital of almost $94.6
million and a ratio of total adjusted capital to authorized control level
risk-based capital of more than 5:1 at December 31, 2002. The Companys
ratios significantly exceed the minimum NAIC risk-based capital
requirements.                                                                                                                                                                                                                                                                                                                    
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The NAIC adopted the Codification of Statutory Accounting Practices
(Codification), effective January 1, 2001, as the NAIC-supported basis of
accounting. The Codification was approved with a provision allowing for
prescribed or permitted accounting practices to be determined by each
states insurance commissioner. Accordingly, such discretion will continue
to allow prescribed or permitted accounting practices that may differ from
state to state. The Company follows complete NAIC statutory accounting
practices, with no permitted or prescribed deviations from the Pennsylvania
Insurance Department.

Employees



| |  | Services of 145 full-time employees are provided through EIC. Five of the
employees are officers. Employee expenses along with other operating
expenses are paid by EIC and reimbursed by the Company on a monthly basis.
None of the employees are covered by collective bargaining agreements and
the Company believes its employee relations are good.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995: Certain forward-looking statements contained herein involve risks and
uncertainties. These statements include certain discussions relating to
underwriting, premium and investment income volume, business strategies,
profitability and business relationships and the Companys other business
activities during 2002 and beyond. In some cases, you can identify forward-looking statements by terms such as may, will, should, could,
would, expect, plan, intend, anticipate, believe, estimate,
project, predict, potential and similar expressions. These
forward-looking statements reflect the Companys current views about future
events, are based on assumptions and are subject to known and unknown risks and
uncertainties that may cause results to differ materially from those
anticipated in those statements. Many of the factors that will determine
future events or achievements are beyond our ability to control or predict.

6



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##### Table of Contents






ITEM 2.  PROPERTIES

The Company owns real property for investment purposes as provided in Schedule
I Summary of Investments other than Investments in Related Parties. This
investment property, located in Allentown, Pennsylvania, is leased to EIC and a
nonaffiliated business. Rental income for 2002 was $396,000. The executive
and administrative offices of the Company are located in the headquarters
office of Erie Insurance Group in Erie, Pennsylvania. The Company pays other
members of the Erie Insurance Group an amount determined by an agreement for
office space and for the use of facilities, equipment and services.




ITEM 3.  LEGAL PROCEEDINGS

The Company is not involved in any material pending legal proceedings other
than ordinary routine litigation incidental to its business.




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

There were no matters submitted for a vote to shareholders during the fourth
quarter of 2002.

7



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##### Table of Contents






PART II




ITEM 5.  MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED SHAREHOLDER MATTERS

The information set forth in the Market for the Registrants Common Stock and
Related Shareholder Matters section of the Companys 2002 Annual Report with
respect to dividends declared to shareholders, is incorporated herein by
reference.

The Companys common stock is traded on the OTC Bulletin Board (OTCBB) under
the symbol ERIF.

The following sets forth the range of high and low closing prices of the
Companys stock by quarter:

|               |  |      |    |      |  |     |    |      |  |  |    |     |  |  |    |    
|-------------- |  | ---- | -- | ---- |  | --- | -- | ---- |  |  | -- | --- |  |  | -- | ---
|               |  | 2002 |    | 2001
|               |  |      |    |     
|               |  | Low  |    | High |  | Low |    | High
|               |  |      |    |      |  |     |    |     
|First Quarter  |  |      | 20 |      |  |     | 21 | 3/4  |  |  | 16 |     |  |  | 17 | 1/2
|Second Quarter |  |      | 20 | 1/4  |  |     | 22 | 5/8  |  |  | 16 | 3/4 |  |  | 18 | 3/4
|Third Quarter  |  |      | 21 | 1/4  |  |     | 22 | 1/8  |  |  | 17 | 4/5 |  |  | 21 |    
|Fourth Quarter |  |      | 21 | 1/5  |  |     | 22 | 1/2  |  |  | 19 |     |  |  | 21 | 3/4

The amount of dividends the Company can pay to its shareholders without the
prior approval of the Pennsylvania Insurance Commissioner is limited by statute
to the greater of: (a) 10 percent of its statutory surplus as regards
policyholders as shown on its last annual statement on file with the
commissioner, or (b) the net income as reported for the period covered by such
annual statement, but shall not include pro rata distribution of any class of
the insurers own securities. Accordingly, the maximum dividend payout which
may be made in 2003 without prior Pennsylvania Commissioner approval is
$8,953,893. This limitation could restrict the amount of dividends the Company
can declare in 2003.




ITEM 6.  SELECTED FINANCIAL DATA

The information set forth in the Selected Financial Data section of the
Companys 2002 Annual Report is incorporated herein by reference.




ITEM 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information set forth in the Managements Discussion and Analysis of
Financial Condition and Results of Operations section of the Companys 2002
Annual Report is incorporated herein by reference.




ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information set forth in the Managements Discussion and Analysis of
Financial Condition and Results of Operations section of the Companys 2002
Annual Report is incorporated herein by reference.




ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The 2002 Financial Statements and the Companys Independent Auditors Report
set forth in the Report of Management section of the Companys 2002 Annual
Report are incorporated herein by reference, as is the unaudited information
set forth in the Notes to the Financial Statements under the caption Quarterly
Results of Operations (Unaudited).

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ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On September 10, 2002, the Erie Family Life Insurance Companys Audit Committee
selected Ernst & Young, LLP to be the Companys independent accountants to
audit the Companys 2003 Financial Statements. On March 28,
2003, Ernst & Young, LLP will be engaged as the Companys independent
auditors. On March 27, 2003, Malin, Bergquist & Company, LLP was
dismissed as the Companys independent auditors.

The Audit Committee of the Company annually considers the selection of the
Companys independent auditors. In previous years, the Audit Committee would
recommend the appointment of the independent auditors to the Companys Board of
Directors for shareholder ratification. At its meeting of September 9, 2002,
the Companys Board of Directors amended the Bylaws of the Company consistent
with the provisions of the Sarbanes-Oxley Act of 2002, to give the Audit
Committee sole authority to engage the Companys independent auditors.

Malin, Bergquist & Company, LLPs reports on the Companys financial statements
for the past two fiscal years did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles. During the two most recent fiscal years
and any subsequent interim period preceding the date of this Form 10-K, (i)
there were no disagreements with Malin, Bergquist & Company, LLP on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Malin, Bergquist & Company, LLP, would have caused Malin,
Bergquist & Company, LLP to make a reference to the subject matter of the
disagreement in connection with its report in the financial statements for such
years, and (ii) there were no reportable events as defined in Item 304 of
Regulation S-K.

The Company has provided Malin, Bergquist & Company, LLP with a copy of the
disclosure in this Item 9 and has requested that Malin, Bergquist & Company,
LLP furnish the Company with a letter to update the letter previously provided
pursuant to Item 304(a)(3) of Regulation S-K, which was included as Exhibit 16
to the Companys Form 8-K dated September 13, 2002. The updated letter is
included as Exhibit 16 to this Form 10-K.

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PART III




ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors are elected to one year terms at the Companys annual meeting of
Shareholders. Following are the Companys officers and directors:

|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                             |  | Present Principal Position with Erie                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Name and Age                                 |  | Family Life and Other Material Positions                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|as of 12/31/02                               |  | Held During the Last Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Samuel P. Black, III 1,3,4
          60      |  | Director since 1997.  President, Treasurer and Secretary, Samuel P.
Black & Associates, Inc., insurance agency; Director-the Company,
Erie Insurance Company, Flagship City Insurance Company, Erie Insurance
Property & Casualty Company and Erie Indemnity Company,
Attorney-in-Fact for Erie Insurance Exchange.                                                                                                                                                                       
|                                            
|J. Ralph Borneman, Jr. 3,4
          64      |  | Director since 1992.  President and Chief Executive Officer,
Body-Borneman Associates, Inc., insurance agency.  President, Body-Borneman, Ltd.
and Body-Borneman, Inc., insurance agencies.  Director-the Company,
Erie Insurance Company, Erie Indemnity Company, Attorney-in-Fact for
Erie Insurance Exchange, Erie Insurance Company of New York and
National Penn Bancshares.                                                                                                         
|                                            
|John J. Brinling, Jr.
          55           |  | Executive Vice President of the Company since December 1990.  Division
Officer 1984 - Present.  Director-Erie Insurance Company of New York.                                                                                                                                                                                                                                                                                                                                              
|                                            
|Patricia Garrison-Corbin 2,4,5C
          55 |  | Director since 2000.  President, P.G. Corbin & Company 1986 - Present.
Director-the Company, Erie Insurance Company and Erie Indemnity
Company, Attorney-in-Fact for Erie Insurance Exchange.                                                                                                                                                                                                                                                                                             
|                                            
|Philip A. Garcia
          46                |  | Executive Vice President and Chief Financial Officer of the Company,
Erie Insurance Company, Erie Indemnity Company, Attorney-in-Fact
for Erie Insurance Exchange, Flagship City Insurance Company, Erie
Insurance Property & Casualty Company and Erie Insurance Company of New
York since October 1997.  Senior Vice President and Controller 1993 
1997.  Director-Flagship City Insurance Company, Erie Insurance
Property & Casualty Company and Erie Insurance Company of New York.

1 Member of Executive Committee2  Member of Audit Committee3  Member of Executive Compensation and Development Committee4  Member of Nominating Committee5  Member of Investment CommitteeC Committee Chairman

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|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                    |  | Present Principal Position with Erie                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Name and Age                        |  | Family Life and Other Material Positions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|as of 12/31/02                      |  | Held During the Last Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Susan Hirt Hagen 1,*
          67   |  | Director since 1980.  Retired - Managing Partner, Hagen, Herr & Peppin,
Group Relations Consultants; Director-the Company, Erie Insurance
Company and Erie Indemnity Company, Attorney-in-Fact for Erie Insurance
Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                   
|F. William Hirt 1C,*
          77   |  | Director since 1967.  Chairman of the Board of the Company, Erie Insurance
Company, Erie Indemnity Company, Attorney-in-Fact for Erie
Insurance Exchange, Erie Insurance Property & Casualty Company and
Flagship City Insurance Company since September 1993; Chairman of the
Board of Erie Insurance Company of New York since April 1994.  Chairman
of the Executive Committee of the Company and the Erie Indemnity
Company, Attorney-in-Fact for Erie Insurance Exchange since November
1990; Interim President and Chief Executive Officer of the Company,
Erie Indemnity Company, Attorney-in-Fact for Erie Insurance Exchange,
Erie Insurance Company, Erie Insurance Property & Casualty Company,
Flagship City Insurance Company and Erie Insurance Company of New York
from January 1, 1996 to February 12, 1996; Chairman of the Board, Chief
Executive Officer and Chairman of the Executive Committee of the
Company, Erie Indemnity Company, Attorney-in-Fact for Erie Insurance
Exchange and Erie Insurance Company for more than five years prior
thereto; Director-the Company, Erie Insurance Company, Flagship City
Insurance Company, Erie Indemnity Company, Attorney-in-Fact for Erie
Insurance Exchange, Erie Insurance Property & Casualty Company and Erie
Insurance Company of New York.
|                                   
|Samuel P. Katz 2,3
          53     |  | Director since 2000.  Chief Executive Officer, Greater Philadelphia First,
July 2000  January 2003; Managing Partner, Wynnefield Capital
Advisors, Inc., 1997  Present; President, Entersport Capital Advisors
Inc., 1997 - Present; Partner, Stafford Capital Partners, L.P. 1994 -
1997; Co - CEO, Public Financial Management, Inc. 1980 - 1994;
Director- the Company, Erie Insurance Company and Erie Indemnity
Company, Attorney-in-Fact for Erie Insurance Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                   
|Claude C. Lilly, III 2
          56 |  | Director since 2000.  Dean, Belk College of Business Administration,
University of North Carolina at Charlotte 1997  Present;
Professor, Florida State University, 1978  1997. Director-the Company,
Erie Insurance Company and Erie Indemnity Company, Attorney-in-Fact for
Erie Insurance Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

1  Member of Executive Committee2  Member of Audit Committee3  Member of Executive Compensation and Development Committee*  F. William Hirt is the brother of Susan Hirt HagenC Committee Chairman

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|                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                   |  | Present Principal Position with Erie                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Name and Age                       |  | Family Life and Other Material Positions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|as of 12/31/02                     |  | Held During the Last Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Jeffrey A. Ludrof 1,5
          43 |  | Director since July 23, 2002; President and Chief Executive Officer of the
Company, Erie Insurance Company, Erie Indemnity Company,
Attorney-in-Fact for Erie Insurance Exchange, Flagship City Insurance
Company, Erie Insurance Property & Casualty Company and Erie Insurance
Company of New York since May 8, 2002; Executive Vice President of the
Erie Insurance Company, Erie Indemnity Company, Attorney-in-Fact for
Erie Insurance Exchange, Flagship City Insurance Company, Erie
Insurance Property & Casualty Company and Erie Insurance Company of New
York 1994  May 8, 2002. Senior Vice President 1994 - 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                  
|Henry N. Nassau 1,5
          48   |  | Director since 2000.  Managing Director and Chief Operating Officer,
Internet Capital Group 1999  Present; Partner, Dechert, Price &
Rhoads 1987  1999; Director- the Company, Erie Insurance Company and
Erie Indemnity Company, Attorney-in-Fact for Erie Insurance Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                  
|Timothy G. NeCastro
          42   |  | Senior Vice President and Controller of the Company, Erie Insurance
Company, Erie Indemnity Company, Attorney-in-Fact for Erie
Insurance Exchange, Flagship City Insurance Company, Erie Insurance
Property & Casualty Company and Erie Insurance Company of New York
since 1997. Department Manager - Internal Audit 1996 - 1997.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                  
|John M. Petersen 1,4C
          74 |  | Director since 1980.  Retired; President and Chief Executive Officer of the
Company, Erie Indemnity Company, Attorney-in-Fact for Erie
Insurance Exchange, Erie Insurance Company, Flagship City Insurance
Company and Erie Insurance Property & Casualty Company 1993 - 1995 and
Erie Insurance Company of New York 1994 - 1995; President, Treasurer
and Chief Financial Officer of the Erie Indemnity Company,
Attorney-in-Fact for the Erie Insurance Exchange, Erie Insurance
Company and Erie Family Life Insurance Company 1990 - 1993, and of
Flagship City Insurance Company and Erie Insurance Property & Casualty
Company since 1992 and 1993, respectively, to September 1993;
President, Treasurer and Chief Financial Officer of the Company and
Executive Vice President, Treasurer and Chief Financial Officer of the
Erie Indemnity Company, Attorney-in-Fact for the Erie Insurance
Exchange and Erie Insurance Company for more than five years prior
thereto; Director-the Company, Erie Insurance Company, Flagship City
Insurance Company, Erie Indemnity Company, Attorney-in-Fact for Erie
Insurance Exchange, Erie Insurance Property & Casualty Company, Erie
Insurance Company of New York, and Spectrum Control.

1  Member of Executive Committee4  Member of Nominating Committee5  Member of Investment CommitteeC Committee Chairman

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|                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                         |  | Present Principal Position with Erie                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Name and Age                             |  | Family Life and Other Material Positions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|as of 12/31/02                           |  | Held During the Last Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Jan R. Van Gorder 5
          55         |  | Director since 1990.  Senior Executive Vice President, Secretary and
General Counsel of the Company, Erie Indemnity Company,
Attorney-in-Fact for Erie Insurance Exchange, and Erie Insurance
Company since 1990 and of Flagship City Insurance Company and Erie
Insurance Property & Casualty Company since 1992 and 1993, respectively
and of Erie Insurance Company of New York since 1994.  Acting President
and Chief Executive Officer of the Company, Erie Indemnity Company,
Attorney-in-fact for Erie Insurance Exchange, Erie Insurance Company,
Flagship City Insurance Company, Erie Insurance Property and Casualty
Company and Erie Insurance Company of New York from January 19, 2002 
May 8, 2002. Senior Vice President, Secretary and General Counsel of
the Company, Erie Insurance Company and Erie Indemnity Company,
Attorney-in-Fact for Erie Insurance Exchange for more than five years
prior thereto; Director-the Company, Erie Insurance Company, Flagship
City Insurance Company, Erie Insurance Property & Casualty Company,
Erie Insurance Company of New York and Erie Indemnity Company,
Attorney-in-Fact for Erie Insurance Exchange.
|                                        
|Douglas F. Ziegler
          52          |  | Senior Vice President, Treasurer and Chief Investment Officer of the
Company since 1993.  Senior Vice President, Treasurer and Chief
Investment Officer of the Erie Insurance Company, Erie Indemnity
Company, Attorney-in-Fact for Erie Insurance Exchange, Flagship City
Insurance Company and Erie Insurance Property & Casualty Company and
Erie Insurance Company of New York.  Director-Erie Insurance Company of
New York.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                        
|Robert C. Wilburn 2C,3C,4,5
          59 |  | Director since 1999.  President and Chief Executive Officer, the Gettysburg
National Battlefield Museum Foundation since 2000; Distinguished
Service Professor, Carnegie Mellon University since 1999; Retired
President and Chief Executive Officer, Colonial Williamsburg Foundation
1992  1999; Director  the Company, Erie Insurance Company and Erie
Indemnity Company, Attorney-in-Fact for Erie Insurance Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

2  Member of Audit Committee3  Member of Executive Compensation and Development Committee4  Member of Nominating Committee5  Member of Investment CommitteeC Committee Chairman

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ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The Company is a member of an insurance holding company system pursuant to
Pennsylvania law under which insurance companies are required to have
nominating, audit and executive compensation committees composed solely of
directors who are not officers, employees or controlling shareholders of the
Company or any entity controlling the Company. Insurance companies can
satisfy this requirement if the insurance company is controlled by an insurer
or a publicly held corporation that has committees that comply with this
requirement. Erie Indemnity Company (EIC), holder of 21.6% of the Companys
stock directly and 53.5% of the Companys stock as attorney-in-fact for the
Exchange, has committees which meet these requirements.

The following table sets forth the compensation during each of the three fiscal
years ended December 31, 2002, 2001, and 2000, awarded to, earned by or paid to
the Chief Executive Officer and the four other most highly compensated
executive officers during 2002 for services rendered in all capacities to the
Company, EIC, the Exchange and their subsidiaries and affiliates. The
executive and senior officers of the Company also participate in certain
pension and deferred compensation plans of EIC. All amounts presented in the
Executive Compensation section, herein, are total payments received and earned
for all entities of the Erie Insurance Group, a portion of which is borne by
Erie Family Life based on allocation of the respective work efforts of the
executive officer. All amounts exhibited are before individual income taxes.

|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|---------------------- |  | ------------------- | ---- | ------ |  | ----- | ------- | ------------ |  | ------ | ------- | ------------ |  | ------------ | ------ | ----- |  | ---------- | ------- | --------- |  | - | ------- | --- |  | - | ---------- | ---
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  | Long-Term  |         |           |  |  
|                       |  | Annual Compensation |      |        |  |       |         |              |  |        |         | Compensation |  |              |        |      
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |      
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  | Restricted |         |           |  |   |         |     |  |  
|Name and               |  |                     |      |        |  |       |         |              |  |        |         |              |  | Other Annual |        | Stock |  | LTIP       |         | All Other
|Principal Position     |  | Year                |      | Salary |  | Bonus |         | Compensation |  | Awards |         | Payments     |  | Compensation
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |             
|                       |  |                     |      |        |  |       |         |              |  | (1)    |         | (2)          |  | (3)          |        | (4)   |  | (5)       
|                       |  |                     |      |        |  |       |         |              |  |        |         |              | 
|Stephen A. Milne (6)   |  |                     | 2002 |        |  | $     | 78,470  |              |  | $      | 154,391 |              |  | $            | 5,733  |       |  | $          | 0       |           |  | $ | 984,479 | (8) |  | $ | 17,265,749 | (6)
|President and Chief    |  |                     | 2001 |        |  |       | 741,103 |              |  |        | 592,204 |              |  |              | 14,247 |       |  |            | 411,881 |           |  |   | 308,160 |     |  |   | 79,555     |    
|Executive Officer      |  |                     | 2000 |        |  |       | 677,606 |              |  |        | 627,417 |              |  |              | 5,913  |       |  |            | 162,971 |           |  |   | 73,476  |     |  |   | 74,145     |    
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|Jeffrey A. Ludrof (7)  |  |                     | 2002 |        |  | $     | 521,544 |              |  | $      | 560,106 |              |  | $            | 4,380  |       |  | $          | 85,284  |           |  | $ | 102,927 | (8) |  | $ | 38,588     |    
|President and Chief    |  |                     | 2001 |        |  |       | 309,463 |              |  |        | 202,971 |              |  |              | 2,534  |       |  |            | 65,125  |           |  |   | 63,042  |     |  |   | 19,023     |    
|Executive Officer      |  |                     | 2000 |        |  |       | 273,985 |              |  |        | 203,145 |              |  |              | 1,362  |       |  |            | 48,173  |           |  |   | 21,715  |     |  |   | 18,265     |    
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|Jan R. Van Gorder      |  |                     | 2002 |        |  | $     | 476,675 |              |  | $      | 311,255 |              |  | $            | 9,587  |       |  | $          | 120,927 |           |  | $ | 177,740 | (8) |  | $ | 36,135     |    
|Senior Executive       |  |                     | 2001 |        |  |       | 384,211 |              |  |        | 250,193 |              |  |              | 6,020  |       |  |            | 122,591 |           |  |   | 122,692 |     |  |   | 32,564     |    
|Vice President,        |  |                     | 2000 |        |  |       | 359,167 |              |  |        | 268,681 |              |  |              | 4,120  |       |  |            | 97,002  |           |  |   | 43,726  |     |  |   | 28,046     |    
|Secretary & General    |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|Counsel                |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|Philip A. Garcia       |  |                     | 2002 |        |  | $     | 314,057 |              |  | $      | 231,741 |              |  | $            | 5,350  |       |  | $          | 86,625  |           |  | $ | 107,146 | (8) |  | $ | 12,563     |    
|Executive Vice         |  |                     | 2001 |        |  |       | 280,457 |              |  |        | 184,102 |              |  |              | 3,397  |       |  |            | 76,441  |           |  |   | 66,777  |     |  |   | 18,148     |    
|President & Chief      |  |                     | 2000 |        |  |       | 262,177 |              |  |        | 198,593 |              |  |              | 1,813  |       |  |            | 45,222  |           |  |   | 20,398  |     |  |   | 14,809     |    
|Financial Officer      |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|John J. Brinling Jr.   |  |                     | 2002 |        |  | $     | 281,836 |              |  | $      | 180,928 |              |  | $            | 5,983  |       |  | $          | 85,610  |           |  | $ | 121,103 | (8) |  | $ | 31,252     |    
|Executive Vice         |  |                     | 2001 |        |  |       | 260,408 |              |  |        | 147,452 |              |  |              | 2,688  |       |  |            | 81,830  |           |  |   | 82,350  |     |  |   | 30,040     |    
|President              |  |                     | 2000 |        |  |       | 248,530 |              |  |        | 160,129 |              |  |              | 2,246  |       |  |            | 64,807  |           |  |   | 30,780  |     |  |   | 29,375     |    
|                       |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    
|Douglas F. Ziegler     |  |                     | 2002 |        |  | $     | 258,848 |              |  | $      | 170,621 |              |  | $            | 4,386  |       |  | $          | 45,833  |           |  | $ | 84,960  | (8) |  | $ | 10,354     |    
|Senior Vice President, |  |                     | 2001 |        |  |       | 229,471 |              |  |        | 95,767  |              |  |              | 3,658  |       |  |            | 69,474  |           |  |   | 64,986  |     |  |   | 9,179      |    
|Treasurer & Chief      |  |                     | 2000 |        |  |       | 214,081 |              |  |        | 107,430 |              |  |              | 2,244  |       |  |            | 47,785  |           |  |   | 21,554  |     |  |   | 6,403      |    
|Investment Officer     |  |                     |      |        |  |       |         |              |  |        |         |              |  |              |        |       |  |            |         |           |  |   |         |     |  |   |            |    



---

|(1) |  | The amounts indicated in the Bonus column above represent amounts
earned by the named executives during 2002, 2001 and 2000, under EICs
Annual Incentive Plan. The purpose of the Annual Incentive Plan is to
promote the best interests of the Exchange while enhancing shareholder
value of EIC by basing a portion of selected employees compensation
on the performance of such employee and EIC. Performance measures are
established by the Executive Compensation and Development Committee based on the
attainment of individual
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14



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##### Table of Contents



|    |  | performance goals and EICs financial goals
compared to a selected peer group. The amounts indicated include
reimbursement for minor perquisites in the amounts of $4,598, $10,634,
$11,365, $8,739, $7,069 and $0 in 2002, $13,403, $8,693, $11,339,
$9,749, $8,594 and $0 in 2001 and $16,708, $9,253, $10,696, $10,274,
$14,771 and $0 in 2000 for Messrs. Milne, Ludrof, Van Gorder, Garcia,
Brinling and Ziegler, respectively. The 2002 amount for Mr. Milne
also includes compensation for unused vacation paid upon retirement in
the amount of $143,621.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Amounts indicated in the Other Annual
Compensation column include
the taxable value of group life insurance policies in excess of
$50,000 and the associated tax reimbursement for the named executive
officers. Amounts also include dividends paid on shares on behalf of EICs
Long-Term Incentive Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(3) |  | The Restricted Stock Awards column
represents Long-Term Incentive
Plan benefits expressed in dollar amounts using the closing price of
EICs Class A Common Stock as of the end of the respective year ($36.26 at December
31, 2002, $38.49 at December 31, 2001 and $29.81 at December 31, 2000)
that remain restricted at the end of the year. The number of shares
awarded for Messrs. Milne, Ludrof, Van Gorder, Garcia, Brinling and
Ziegler, respectively, were: 0, 2,352, 3,335, 2,389, 2,361 and 1,264
for 2002, 10,701, 1,692, 3,185, 1,986, 2,126 and 1,805 for 2001 and
5,467, 1,616, 3,254, 1,517, 2,174 and 1,603 for 2000. See Long-Term
Incentive Plan for a detailed description of the Plan. Long-Term
Incentive Plan dividends earned in the current year are reported in
Other Annual Compensation when paid or in All Other Compensation
when deferred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(4) |  | The LTIP Payments column represents
Long-Term Incentive Plan
benefits that became unrestricted at the end of the year. The shares
for 2000 were distributed in January 2001, the shares for 2001 were
distributed in January 2002, and the shares for 2002 were distributed
in January 2003. All of such shares were valued using the actual
share price at the time of distribution. The number of shares
distributed after withholding for income taxes for 2002 for Messrs.
Ludrof, Van Gorder, Garcia, Brinling and Ziegler were 2,830, 2,744,
1,654, 2,257 and 1,311, respectively. The number of shares distributed after
withholding for income taxes for Messrs. Milne, Ludrof, Van Gorder,
Garcia, Brinling and Ziegler were 4,539, 928, 2,180, 1,186, 685 and
1,103 for 2001, respectively and 1,507, 445, 897, 506, 346 and 535 for
2000, respectively. Messr.
Brinling deferred the distribution of 1,076 shares in 2002 (valued
using the share price as of December 31, 2002), 1,075 shares in 2001
(valued using the share price as of December 31, 2001) and 543 shares
in 2000 (valued using the share price as of December 31, 2000). In
accordance with the terms of his Retirement Performance Award, Mr.
Milnes benefits under the Long-Term Incentive Plan were calculated as
though his termination of employment was due to a disability. As a
result, all vesting periods ended on the date of Mr. Milnes
retirement, all open performance periods ended on December 31, 2002
and all phantom share units were valued based on the shortened
performance period. On February 7, 2002, Mr. Milne received a
distribution of 14,225 shares under the Long-Term Incentive Plan
after withholding for income taxes. The shares
were valued using the actual share price at the time of distribution.
Not reported in the LTIP Payments column are 30,802
shares that will be distributed to Mr. Milnes surviving spouse
in the Spring of 2003. These
shares represent the closing of all open performance periods under the
Long-Term Incentive Plan. The value of this distribution will be
based upon the average of the high and low stock price of Class A
Common Stock on the date of distribution.
|   
|(5) |  | Amounts shown in the All Other Compensation column include matching
contributions made by EIC pursuant to EICs Employee Savings Plan,
premiums paid by EIC on behalf of the named individuals on the split
dollar life insurance policies, expenses for spousal travel, and
deferred dividends and related earnings. For the year 2002,
contributions made to the Employee Savings Plan amounted to $3,139,
$20,862, $19,067, $12,563, $11,274 and $10,354 on behalf of Messrs.
Milne, Ludrof, Van Gorder, Garcia, Brinling and Ziegler, respectively.
For the year 2001, contributions made to the Employee Savings Plan
amounted to $29,644, $12,378, $15,368, $11,218, $10,416 and $9,179 on
behalf of Messrs. Milne, Ludrof, Van Gorder, Garcia, Brinling and
Ziegler, respectively. For the year 2000, contributions made to the
Employee Savings Plan amounted to $20,143, $8,214, $10,736, $7,831,
$7,456 and $6,403 on behalf of Messrs. Milne, Ludrof, Van Gorder,
Garcia, Brinling and Ziegler, respectively. Premiums paid during 2002 for
split dollar life insurance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

15



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##### Table of Contents



| |  | policies for Messrs. Milne, Ludrof,
Van Gorder, Garcia, Brinling and Ziegler, respectively, were as
follows: $36,708, $17,726, $17,068, $0, $17,436 and $0. Premiums
paid during 2001 for split dollar life insurance policies for Messrs.
Milne, Ludrof, Van Gorder, Garcia, Brinling and Ziegler, respectively,
were: $49,911, $6,645, $17,196, $6,930, $17,538 and $0. Premiums paid
during 2000 for split dollar life insurance policies for Messrs.
Milne, Ludrof, Van Gorder, Garcia, Brinling and Ziegler, respectively,
were as follows: $50,132, $6,674, $17,310, $6,978, $17,634 and $0.
The Company is entitled to recover the premiums from any proceeds paid
on such split dollar life insurance policies and has retained a
collateral interest in each policy to the extent of the premiums paid
with respect to such policies. Expenses for spousal travel were
$3,870, $3,337 and $3,377 for Messrs. Milne, Ludrof and Brinling,
respectively, in 2000. Messr. Brinling also had deferred dividends of
$2,192, $1,967 and $881 and interest on deferred dividends of $350,
$119 and $27 in 2002, 2001 and 2000, respectively.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|



|(6) |  | Mr. Milne served as President and Chief Executive
Officer from
February 1996 until his retirement on January 18, 2002.
Mr. Milne died in September 2002. Upon his retirement, Mr. Milne received the benefits
specified in his employment agreement and a Retirement Performance
Award totaling $17,225,902 which included:
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Payment in cash of an amount equal to two times the sum of
(i) Mr. Milnes 2002 base salary and (ii) the amount payable to
him under the Companys Annual Incentive Plan for 2001, in
addition to three times such sum provided under his employment
agreement.                                                                                                                                                                                      
|
| | (b) | Continuation of the Companys life insurance programs
regarding the life of Mr. Milne until his death.                                                                                                                                                                                                                                                                                                                                               
|
| | (c) | Credit for 30 years of service for
purposes of EICs Supplemental Retirement Plan for Certain Members of
the Erie Insurance Group Retirement Plan for Employees (the
SERP) benefit formula, and changes of the normal form of payment from
10-year Certain and Continuous to 100% Joint and Survivor and with
Mr. Milnes surviving spouse to receive a monthly SERP benefit
under such 100% Joint and Survivor option for the remainder of her
life.



|(7) |  | Mr. Ludrof served as President and
Chief Executive Officer since May 8, 2002.
|--- |  | -----------------------------------------------------------------------------



|(8) |  | Amounts shown in the Restricted Stock Awards column are paid in three
annual installments beginning with the year in which the award is
made. These amounts represent stock that will become unrestricted at
December 31, 2003 and December 31, 2004. Accordingly, amounts shown
in the LTIP Payments column include payments of stock from the awards
made in 2002, 2001 and 2000.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Agreements with Executive Officers

EIC has employment agreements with the following senior executive officers of
the Company: Jeffrey A. Ludrof, President and Chief Executive Officer of the
Company; Jan R. Van Gorder, Senior Executive Vice President, Secretary and
General Counsel of the Company; Philip A. Garcia, Executive Vice President and
Chief Financial Officer of the Company; John J. Brinling, Jr., Executive Vice
President of Erie Family Life; Douglas F. Ziegler, Senior Vice President,
Treasurer and Chief Investment Officer of the Company; Michael J. Krahe,
Executive Vice President of Human Development and Leadership of the Company;
Thomas B. Morgan, Executive Vice President of Insurance Operations of the
Company. The employment agreements have the following principal
terms:



|(a) |  | A four-year term for Mr. Ludrof expiring May 8, 2006 and a two-year term
for Messrs. Van Gorder, Garcia, Brinling, Ziegler, Krahe and Morgan
expiring December 15, 2004, unless an agreement is theretofore terminated
in accordance with its terms, with or without cause, or due to the
disability or death of the officer or notice of nonrenewal is given by EIC
or the executive 30 days before any anniversary date;
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | A minimum annual base salary at least equal to the executives annual
base salary at the time the agreement was executed, subject to periodic
review to reflect the executives performance and responsibilities,
competitive compensation levels and the impact of inflation;                                                                                                                                            

16



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##### Table of Contents



|(c) |  | The eligibility of the executive under EICs incentive compensation
programs and employee benefit plans;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(d) |  | The establishment of the terms and conditions upon which the executives
employment may be terminated by EIC and the compensation of the executive
in such circumstances. The agreements provide generally, among other
things, that if the employment of an executive is terminated without Cause
(as defined in the agreement) by EIC or by the executive for Good Reason
(as defined in the agreement) then the executive shall be entitled to
receive: (i) an amount equal to the sum of three times the executives
highest annual base salary during the preceding three years plus an amount
equal to three times the total of the executives highest award during the
preceding three years under EICs Annual Incentive Plan; (ii) any award or
other compensation to which the executive is entitled under EICs
Long-Term Incentive Plan; (iii) continuing participation in any employee
benefit plans for a period of three years following termination to the
extent the executive and his dependents were eligible to participate in
such programs immediately prior to the executives termination and (iv)
immediate vesting and nonforfeitability of accrued benefits under
EICs SERP.
|   
|(e) |  | Provisions relating to confidentiality and nondisclosure following an
executives termination; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(f) |  | An agreement by the executive not to compete with the Company for a
period of one year following his or her termination, unless such
termination was without Cause.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Stock Options and Stock Appreciation Rights

The Company does not have a stock option plan, nor has it ever granted any
stock option or stock appreciation right to any of the persons named in the
Summary Compensation Table.

Long-Term Incentive Plan

The Company participates in a Long-Term Incentive Plan sponsored
by EIC. This
plan is designed to enhance the growth and profitability of EIC by providing
the incentive of long-term rewards to key employees who are capable of having a
significant impact on the performance of EIC; to attract and retain employees
of outstanding competence and ability and to further align the interests of
such employees with those of the shareholders of EIC. The Plan was approved by
EICs shareholders in 1997 as a performance-based plan under the Internal Revenue
Code of 1986, as amended (the Code), and its continuation was
approved by EICs shareholders at EICs 2002 annual meeting as
required by the code. Each of the named executives has been granted awards of
phantom share units under EICs Long-Term Incentive Plan based upon a target
award calculated as a percentage of the executives base salary. The total
value of any phantom share units will be determined at the end of the
performance period based upon the growth in EICs retained earnings. Each
executive will then be entitled to receive restricted shares of Class A Common
Stock of EIC equal to the dollar value of the phantom share units at the end of
the performance period. The vesting period for the restricted shares of Class A
Common Stock issued to each executive is three years after the end of the
performance period. If an executive ceases to be an employee prior to the end
of the performance period, for reasons other than retirement, death or
disability, the executive forfeits all phantom share units awarded. If an
executive ceases to be an employee prior to the end of the vesting period for
reasons other than retirement, death or disability, the executive forfeits all
unvested restricted shares previously granted. The following table sets forth
target awards granted to each person who served as the Companys Chief Executive Officer and the four other highest paid executive
officers during 2002, all
current executive officers as a group and all employees other than the
executive officers as a group (i) for the three-year performance period 2002
through 2004; (ii) for the three-year performance period of 2001 through 2003
and (iii) for the three-year performance period of 2000 through 2002. The
amount of expenses allocated to the Company for the long-term incentive plan
amounted to $126,089, $250,036 and $182,327 for 2002, 2001 and 2000,
respectively.

17



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##### Table of Contents



LONG-TERM INCENTIVE PLAN
AWARDS IN LAST FISCAL YEAR

|                                     |                     |                   |         |                  |  |           |           |        |  |                          |     |  |  |   |           |  |  |  |    |  
|------------------------------------ | ------------------- | ----------------- | ------- | ---------------- |  | --------- | --------- | ------ |  | ------------------------ | --- |  |  | - | --------- |  |  |  | -- | -
|                                    
|Name                                 |                     | Number of Shares, |         | Performance      |  |           |           |        |  | Estimated Future Payouts
|                                     |                     | Units or Other    |         | or Other Period  |  |           |           |        |  | Under Non-Stock         
|                                     |                     | Rights (#)        |         | Until Maturation |  |           |           |        |  | Price-Based Plans       
|                                     |                     |                   |         | or Payout        |  |           |           |        |  |                         
|                                    
|                                     | Phantom Share Units |                   |         |                  |  | Threshold |           | Target |  | Maximum                 
|                                    
|Milne, S. (2)                        |                     |                   | 96,380  |                  |  |           | 2000-2002 |        |  |                          | -0- |  |  | $ | 513,600   |  |  |  | (1 | )
|                                     |                     |                   | 88,406  |                  |  |           | 2001-2003 |        |  |                          | -0- |  |  | $ | 549,552   |  |  |  | (1 | )
|                                     |                     |                   | 99,936  |                  |  |           | 2002-2004 |        |  |                          | -0- |  |  | $ | 755,634   |  |  |  | (1 | )
|                                    
|Ludrof, J.                           |                     |                   | 25,638  |                  |  |           | 2000-2002 |        |  |                          | -0- |  |  | $ | 136,620   |  |  |  | (1 | )
|                                     |                     |                   | 24,835  |                  |  |           | 2001-2003 |        |  |                          | -0- |  |  | $ | 154,381   |  |  |  | (1 | )
|                                     |                     |                   | 74,185  |                  |  |           | 2002-2004 |        |  |                          | -0- |  |  | $ | 560,906   |  |  |  | (1 | )
|                                    
|Van Gorder, J.                       |                     |                   | 35,122  |                  |  |           | 2000-2002 |        |  |                          | -0- |  |  | $ | 187,162   |  |  |  | (1 | )
|                                     |                     |                   | 32,216  |                  |  |           | 2001-2003 |        |  |                          | -0- |  |  | $ | 200,263   |  |  |  | (1 | )
|                                     |                     |                   | 30,916  |                  |  |           | 2002-2004 |        |  |                          | -0- |  |  | $ | 233,762   |  |  |  | (1 | )
|                                    
|Garcia, P.                           |                     |                   | 25,638  |                  |  |           | 2000-2002 |        |  |                          | -0- |  |  | $ | 136,620   |  |  |  | (1 | )
|                                     |                     |                   | 23,517  |                  |  |           | 2001-2003 |        |  |                          | -0- |  |  | $ | 146,183   |  |  |  | (1 | )
|                                     |                     |                   | 24,448  |                  |  |           | 2002-2004 |        |  |                          | -0- |  |  | $ | 184,855   |  |  |  | (1 | )
|                                    
|Brinling, J.                         |                     |                   | 24,863  |                  |  |           | 2000-2002 |        |  |                          | -0- |  |  | $ | 132,492   |  |  |  | (1 | )
|                                     |                     |                   | 22,167  |                  |  |           | 2001-2003 |        |  |                          | -0- |  |  | $ | 137,792   |  |  |  | (1 | )
|                                     |                     |                   | 20,874  |                  |  |           | 2002-2004 |        |  |                          | -0- |  |  | $ | 157,835   |  |  |  | (1 | )
|                                    
|Ziegler, D.                          |                     |                   | 14,121  |                  |  |           | 2000-2002 |        |  |                          | -0- |  |  | $ | 75,250    |  |  |  | (1 | )
|                                     |                     |                   | 12,953  |                  |  |           | 2001-2003 |        |  |                          | -0- |  |  | $ | 80,518    |  |  |  | (1 | )
|                                     |                     |                   | 16,532  |                  |  |           | 2002-2004 |        |  |                          | -0- |  |  | $ | 125,000   |  |  |  | (1 | )
|Executive Officer
Group              |                     |                   | 207,641 |                  |  |           | 2000-2002 |        |  |                          | -0- |  |  | $ | 1,106,494 |  |  |  | (1 | )
|                                     |                     |                   | 191,141 |                  |  |           | 2001-2003 |        |  |                          | -0- |  |  | $ | 1,188,171 |  |  |  | (1 | )
|                                     |                     |                   | 250,356 |                  |  |           | 2002-2004 |        |  |                          | -0- |  |  | $ | 1,892,992 |  |  |  | (1 | )
|Non-Executive Officer Employee Group |                     |                   | 104,019 |                  |  |           | 2000-2002 |        |  |                          | -0- |  |  | $ | 554,306   |  |  |  | (1 | )
|                                     |                     |                   | 104,355 |                  |  |           | 2001-2003 |        |  |                          | -0- |  |  | $ | 648,696   |  |  |  | (1 | )
|                                     |                     |                   | 117,129 |                  |  |           | 2002-2004 |        |  |                          | -0- |  |  | $ | 885,641   |  |  |  | (1 | )



---

|(1) |  | An executives target award is established by the Long-Term Incentive
Plan Administrator. The actual value of an executives phantom share
units at the end of a performance period may be more or less than the
executives target amount. However, the maximum value of phantom share
units earned by an executive for any performance period may not exceed
$500,000.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | See Note (4) to the Summary Compensation Table for information regarding
Mr. Milnes Long-Term Incentive Plan awards.                                                                                                                                                                                                                                                   

18



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##### Table of Contents



Pension Plan

The following table sets forth the estimated total annual benefits payable upon
retirement at age 65 under the Erie Insurance Group Retirement Plan for
Employees and the SERP (collectively, the
Retirement Plans).

PENSION PLAN TABLE

| |  |              |         |    |  |                  |         |    |  |    |         |  |  |   |         |  |  |   |         | 
| |  | ------------ | ------- | -- |  | ---------------- | ------- | -- |  | -- | ------- |  |  | - | ------- |  |  | - | ------- | 
| |  |              |         |    |  | Years of Service
| |  |              |         |    |  |                 
| |  | Remuneration |         | 15 |  | 20               |         | 25 |  | 30
| |  |              |         |    |  |                  |         |    |  |   
| |  | $            | 150,000 |    |  | $                | 45,000  |    |  | $  | 60,000  |  |  | $ | 75,000  |  |  | $ | 90,000  | 
| |  |              | 200,000 |    |  |                  | 60,000  |    |  |    | 80,000  |  |  |   | 100,000 |  |  |   | 120,000 | 
| |  |              | 250,000 |    |  |                  | 75,000  |    |  |    | 100,000 |  |  |   | 125,000 |  |  |   | 150,000 | 
| |  |              | 300,000 |    |  |                  | 90,000  |    |  |    | 120,000 |  |  |   | 150,000 |  |  |   | 180,000 | 
| |  |              | 350,000 |    |  |                  | 105,000 |    |  |    | 140,000 |  |  |   | 175,000 |  |  |   | 210,000 | 
| |  |              | 400,000 |    |  |                  | 120,000 |    |  |    | 160,000 |  |  |   | 200,000 |  |  |   | 240,000 | 
| |  |              | 450,000 |    |  |                  | 135,000 |    |  |    | 180,000 |  |  |   | 225,000 |  |  |   | 270,000 | 
| |  |              | 500,000 |    |  |                  | 150,000 |    |  |    | 200,000 |  |  |   | 250,000 |  |  |   | 300,000 | 
| |  |              | 550,000 |    |  |                  | 165,000 |    |  |    | 220,000 |  |  |   | 275,000 |  |  |   | 330,000 | 
| |  |              | 600,000 |    |  |                  | 180,000 |    |  |    | 240,000 |  |  |   | 300,000 |  |  |   | 360,000 | 
| |  |              | 650,000 |    |  |                  | 195,000 |    |  |    | 260,000 |  |  |   | 325,000 |  |  |   | 390,000 | 
| |  |              | 700,000 |    |  |                  | 210,000 |    |  |    | 280,000 |  |  |   | 350,000 |  |  |   | 420,000 | 
| |  |              | 750,000 |    |  |                  | 225,000 |    |  |    | 300,000 |  |  |   | 375,000 |  |  |   | 450,000 | 
| |  |              | 800,000 |    |  |                  | 240,000 |    |  |    | 320,000 |  |  |   | 400,000 |  |  |   | 480,000 | 

The compensation covered by the Retirement Plans is the base salary reported in
the Summary Compensation Table.

Under the Retirement Plans, credited years of service is capped at 30 years.
Credited years of service for each of the individuals named in the Summary
Compensation Table, other than Messr. Milne, is as follows: Jeffrey A. Ludrof  22 years, Jan R. Van Gorder  22
years, Philip A. Garcia  22 years, John J. Brinling, Jr.  30 years and
Douglas F. Ziegler  15 years. See Note (4) to the Summary
Compensation Table for information regarding the treatment of Mr.
Milnes pension benefits.

The benefits under the Retirement Plans are computed on the basis of
straight-life annuity amounts and a life annuity with a ten-year certain
benefit. The benefits listed in the Pension Plan Table are not subject to
deduction for Social Security or other offset amounts. The information in the
foregoing table does not reflect certain limitations imposed by the Code. The
Code prohibits the inclusion of earnings in excess of $200,000 per year
(adjusted periodically for cost of living increases) in the average earnings
used to calculate benefits. The Code also limits the maximum annual pension
(currently $160,000, but adjusted periodically for cost of living increases)
that can be paid to each eligible employee. A Supplemental Employee Retirement
Plan for senior management is in effect that provides benefits in excess of the
earnings limitations imposed by the Code similar to those provided to all other
full-time employees as if the Code limitations were not in effect. Those
benefits are incorporated into the Pension Plan Table.

Director Compensation

The annual retainer for the directors of all members of the Group, including
the Company, is $25,000, plus $1,500 for each meeting attended and $1,500 for
each committee meeting attended plus an additional $2,000 per year for each
committee chairperson. The directors are also reimbursed for their expenses
incurred in attending meetings. Officers of the Company who serve as directors
are not compensated for attendance at meetings of the Board of Directors and
its committees. EIC also has a deferred compensation plan for certain
directors of the Company. The Company receives an allocated portion of its
share of these charges. The total amount allocated to the Company in 2002 for
directors fees and other charges was $154,681. Director Petersen also is
compensated pursuant to a consulting arrangement as disclosed in Item 13.

In 2002, the EICs Board of Directors, at the
recommendation of the Executive
Compensation and Development Committee, approved a stock compensation plan for outside
directors. The purpose of this plan is to further align the interests of
directors with shareholders by providing for a portion of annual compensation
for the directors services in shares of EICs Class A
Common Stock. Each director vests in the grant 25.0% every three

19



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##### Table of Contents



months over the course of a year.
Dividends paid by EIC are reinvested into each directors account with
additional shares of Class A Common Stock. The total annual charge related to
this plan totaled $277,000 for 2002. The Companys share of this charge
totaled $55,000 in 2002.

Compensation Committee Interlocks and Insider Participation

The Executive Compensation and
Development Committee (the Compensation Committee) of the
Company presently consists of Robert C. Wilburn, Chairman, Samuel P. Black,
III, J. Ralph Borneman, Jr., and Samuel P. Katz. No member of the Compensation
Committee is a former or current officer or employee of the Company or any of
its affiliates(1). Furthermore, no executive officer of the Company serves as a
member of a compensation committee of another entity, one of whose executive
officers serves on the Compensation Committee, or as a director of the Company,
nor does any executive officer of the Company serve as a director of another
entity, one of whose executive officers serves on the Compensation Committee.



|(1.) |  | J. Ralph Borneman, Jr. is President and a principal
shareholder of Body-Borneman Associates, Inc., Body-Borneman, Inc.
and Body-Borneman, Ltd., and Samuel P. Black, III is President and a
principal shareholder of Samuel P. Black and Associates, Inc. each of
which is an independent insurance agency representing a number of
insurers, including the Company and its insurance affiliates, and which receive commissions in the ordinary
course of business from the Company and its insurance affiliates. Mr. Borneman
and Mr. Black do not qualify as outside directors for purposes of approving performance-based incentive
plans as qualified under section 162(m) of the Code.
Mr. Borneman and Mr. Black have excused themselves from voting on such
plans as members of the Compensation
Committee.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    

Report of the Executive
Compensation and Development Committee of the Company

Consistent with Section 1405(c)(4) of the Pennsylvania
Insurance Holding
Companies Act and EICs Bylaws, the Compensation Committee is charged with
the duty of recommending to the Board of Directors the compensation of the
three highest paid officers of EIC and such other officers as are determined
by the Board of Directors; recommending to the Board of Directors all forms
of bonus compensation, including incentive programs, that would be appropriate
for EIC and to undertake such other responsibilities as may be delegated to the
Compensation Committee by the Board of Directors. The Board of Directors has
authorized the Compensation Committee to consider the compensation of the four
highest paid officers, including the Chief Executive Officer. The purpose of
the Compensation Committee is to determine the level and composition of compensation
that is sufficient to attract and retain top quality executives for EIC.

The objectives of EICs executive compensation practices are to: (1) attract,
reward and retain key executive talent and (2) to motivate executive officers
to perform to the best of their abilities and to achieve short-term and long-term
corporate objectives that will contribute to the overall goal of enhancing shareholder
value and policyholder security. To that end, compensation comparisons are made to
benchmark positions at other insurers in terms of compensation levels and composition
of the total compensation mix.

Under Section 162(m) of the Code, EIC is not allowed a federal income tax deduction
for compensation, under certain circumstances, paid to certain executive officers to
the extent that such compensation exceeds $1,000,000 per officer in any fiscal year.
No officer of EIC has received compensation in excess of $1,000,000 in any fiscal year
to date with the exception of Stephen A. Milne, President and Chief Executive Officer
of EIC in 1999, 2000 and 2001, and Messrs. Milne and Jeffrey A. Ludrof, who succeeded
Mr. Milne, in 2002. The Compensation Committee may consider adopting policies with
respect to this limitation on deductibility when appropriate.

The Compensation Committee reviewed the salary ranges and base salaries of the four
highest paid executives, including each person who served as the Chief Executive Officer
of EIC, in 2002. The Compensation Committee has position descriptions for the four
highest paid executives of EIC, including the Chief Executive Officer, that define the
responsibilities and duties of each position. The position descriptions also delineate
the functional areas of accountability and the qualifications and skills required to
perform such responsibilities and duties. The Compensation Committee then reviewed the
salary ranges for the Chief Executive Officer and the other three highest paid executives,
comparing the ranges to third party data compiled for similar positions with other property
and casualty insurers. In reviewing the salary ranges for the four highest paid executives,
including the Chief Executive Officer, the Compensation Committee referenced Sibsons
Management Compensation Survey published annually by Sibson & Company, Inc., which
summarized compensation data for more than 100 insurance companies along with other
industry survey data. The Compensation Committee also reviewed data obtained from Towers
Perrin, a nationally recognized consulting firm with specific expertise in the insurance
industry regarding executive compensation. The data is reported by position, company asset
size and premium volume. The unique aspects of each position, its duties and responsibilities,
the effect on the performance of EIC, the number of employees supervised directly and other
criteria are also considered in setting the base salaries.

The level of compensation for each executive reflects his or her skills, experience
and job performance. Normally, base salary will not be less than the minimum for the
salary range established for each position. Executives with a broader range of skills,
experience and consistently high performance with EIC may receive compensation above the
midpoint for the established salary range.

20



---



##### Table of Contents



Compensation for the Chief Executive Officer
consists primarily of salary, annual incentive and long-term incentive payments
and minor perquisites that amount to less than 10% of the Chief
Executive Officers salary and bonus. EICs Board of Directors approved
adoption of an annual incentive plan and a long-term incentive plan for senior
executives of EIC as recommended by the Executive Committee at its meeting of
March 11, 1997 (the Annual Incentive Plan and the LTIP,
respectively).

The purpose of the Annual Incentive Plan is to promote
the best interests of the Exchange while enhancing shareholder value of EIC and to
promote the attainment of significant business objectives for EIC, its subsidiaries
and affiliates by basing a portion of the executives compensation on the attainment
of both premium growth and underwriting profitability goals. The annual incentive
awards are paid in cash. Annual Incentive Plan target award levels, expressed as a
percentage of base salary, are established annually by the
Compensation Committee. Payments under the Annual Incentive Plan are based on a
combination of individual executive performance and EICs performance.

The LTIP was approved by EICs shareholders on April 29, 1997
and its continuation was approved by EICs shareholders in 2002 for purposes of qualifying the
plan as a performance-based plan under Section 162(m) of the Code. The LTIP is designed to
maximize returns to shareholders by linking executive compensation to the overall
profitability of EIC. Target award amounts, expressed as a percentage of base salary,
are determined by comparisons to peer companies and approved by the Compensation
Committee. The Compensation Committee believes that EIC has been competitive with
compensation levels necessary to attract, reward and retain key executive talent,
and to motivate executive officers to perform to the best of their abilities in line
with the best interests of EIC, its employees and its culture. However, current awards
to executives under the LTIP are approaching, and in some cases have reached, the maximum
annual limit under the terms of the LTIP. The Compensation Committee has determined that,
in order to remain competitive with market data for executive compensation, and to continue
to align the goals of management and the shareholders to achieve the short-term and long-term
corporate objectives of enhancing shareholder value and policyholder security, the maximum
value of phantom share units earned by a participant in any performance period should be
increased to $1,000,000. The change of the maximum value limitation to $1,000,000 is
being submitted for shareholder approval at EICs 2003 Annual Meeting.

Performance factors applicable to EIC, such as property
and casualty insurance loss ratios, investment portfolio returns and overall EIC
profitability, as well as other factors are considered in evaluating the Chief Executive
Officers performance. Such performance factors were considered in approving Mr.
Ludrofs compensation. Compensation of the next three most highly compensated individuals is
determined by the Compensation Committee and is based upon the factors and processes
enumerated, i.e., a determination of a salary range based upon market data and evaluation
of the executive with respect to the executives job description and his or her position
within the salary range.

Compensation of the next highest paid
executives (other than the Chief Executive Officer and the next three
highest paid executives) was based upon EICs established
standard compensation policies and was not determined by the
Compensation Committee.

Erie Indemnity Company Executive
Compensation and Development Committee:



| |  | Robert C. Wilburn, Chair
Samuel P. Black, III
J. Ralph Borneman, Jr.
Samuel P. Katz
March 11, 2003
| |  | --------------------------------------------------------------------------------------------------

21



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##### Table of Contents






ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

As of 2/28/03



|(a) |  | Shares beneficially owned directly or indirectly by all affiliates:
|--- |  | -------------------------------------------------------------------

|                         |  |              |           |            |  |  |      |     
|------------------------ |  | ------------ | --------- | ---------- |  |  | ---- | ----
|Name & Address           |  | Shares       |           |            |  | 
|of Beneficial            |  | Beneficially |           | Percent of
|Owner                    |  | Owned        |           | Class     
|                         |  |              |           |           
|Erie Indemnity Company   |  |              | 2,043,900 | (1)        |  |  | 21.6 | %(1)
|100 Erie Insurance Place |  | Direct       |           |            |  | 
|Erie, PA 16530           |  |              |           |            |  |  |      |     
|                        
|Erie Insurance Exchange  |  |              | 5,055,562 | (1)        |  |  | 53.5 | %(1)
|100 Erie Insurance Place |  | Direct       |           |            |  | 
|Erie, PA 16530           |  |              |           |            |  |  |      |     



---

|(1) |  | The Exchange is a reciprocal insurance exchange controlled by
its subscribers, each of whom has designated Erie Indemnity
Company (EIC) as such subscribers attorney-in-fact for certain
purposes, including EICs holding of Common Stock of the Company.
There are two H.O. Hirt Trusts, one for the benefit of F.
William Hirt and one for the benefit of Susan Hirt Hagen. Each
of the H.O. Hirt Trusts is the record owner of 1,170 shares of
Class B Common Stock, or 40.48% of the outstanding shares of
EICs Class B Common Stock. The trustees of the H.O. Hirt Trusts
are F. William Hirt, Susan Hirt Hagen and Bankers Trust Company
of New York. Mr. Hirt and Mrs. Hagen, who are brother and
sister, are each the beneficial owner of 1,170 shares of Class B
Common Stock held by the H.O. Hirt Trusts. An additional 14.19%
of the EIC voting stock is beneficially owned by Samuel P. Black,
III.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   



|(b) |  | Shares beneficially owned directly or indirectly by all Directors and Officers:
|--- |  | -------------------------------------------------------------------------------

|                                              |  |              |         |            |  |  |      |  
|--------------------------------------------- |  | ------------ | ------- | ---------- |  |  | ---- | -
|Name & Address                                |  | Shares       |         |            |  | 
|of Beneficial                                 |  | Beneficially |         | Percent of
|Owner                                         |  | Owned        |         | Class     
|                                              |  |              |         |           
|Samuel P. Black, III                          |  |              | 110,012 |            |  |  | 1.16 | %
|1091 Dutch Road
Fairview, PA 16415            |  |              |         |            |  |  |      |  
|                                             
|J. Ralph Borneman                             |  |              | 1,536   |            |  |  | .02  | %
|160 N. Funk Road
Boyertown, PA 19512          |  |              |         |            |  |  |      |  
|                                             
|Susan Hirt Hagen                              |  |              | 154,782 | (3)        |  |  | 1.64 | %
|5727 Grubb Rd
Erie, PA 16506                  |  |              |         |            |  |  |      |  
|                                             
|F. William Hirt                               |  |              | 167,034 |            |  |  | 1.77 | %
|3270 Kingston Court
Erie, PA 16506            |  |              |         |            |  |  |      |  
|                                             
|Stephen A. Milne                              |  |              | 200     |            |  |  |     |  
|100 Culbertson Drive
Lake City, PA 16423      |  |              |         |            |  |  |      |  
|                                             
|John M. Petersen                              |  |              | 92,141  | (4)        |  |  | .98  | %
|124 Voyageur Dr
Erie, PA 16505                |  |              |         |            |  |  |      |  
|                                             
|Jan R. Van Gorder                             |  |              | 75      |            |  |  |     |  
|6796 Manchester Beach Road
Fairview, PA 16415 |  |              |         |            |  |  |      |  
|                                             
|Jeffrey A. Ludrof                             |  |              | 100     |            |  |  |     |  
|5700 Stoneridge Drive
Fairview, PA 16415      |  |              |         |            |  |  |      |  

22



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##### Table of Contents





|(b) |  | Shares beneficially owned directly
or indirectly by all Directors and Officers (Continued):
|--- |  | -------------------------------------------------------------------------------------------

|                                               |  |              |         |            |  |  |       |    
|---------------------------------------------- |  | ------------ | ------- | ---------- |  |  | ----- | ---
|Name & Address                                 |  | Shares       |         |            |  | 
|of Beneficial                                  |  | Beneficially |         | Percent of
|Owner                                          |  | Owned        |         | Class     
|                                               |  |              |         |           
|Robert C. Wilburn                              |  |              | 500     |            |  |  |      |    
|P.O. Box 376
Blairsville, PA 15717             |  |              |         |            |  |  |       |    
|                                              
|John J. Brinling, Jr.                          |  |              | 1,260   |            |  |  | .01   | %  
|5691 Culpepper Drive
Erie, PA 16506            |  |              |         |            |  |  |       |    
|                                              
|Philip A. Garcia                               |  |              | 1,275   |            |  |  | .01   | %  
|786 Stockbridge Drive
Erie, PA 16505           |  |              |         |            |  |  |       |    
|                                              
|Douglas F. Ziegler                             |  |              | 570     |            |  |  |      |    
|378 Ridgeview Drive
Erie, PA 16505             |  |              |         |            |  |  |       |    
|                                              
|Officers and directors
as a group (12 persons) |  |              | 529,485 | (2)        |  |  | 5.60% | (2)



---

|
|
|
|
|
|
|



| | (c) |  | There are no contractual arrangements known to the Company which
may result in a change in control of the Company.
| | --- |  | ------------------------------------------------------------------------------------------------------------------

23



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##### Table of Contents






ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS



| |  | Directors Borneman and Black are officers and principal shareholders of
insurance agencies which receive insurance commissions in the ordinary
course of business from Erie Family Life and its affiliates in
accordance with the companies standard commission schedules and
agents contracts. Such payments made in 2002 to the agencies for
commissions written on insurance policies from the property and
casualty affiliated insurers and Erie Family Life amounted to
$4,264,962 and $476,472 for the Borneman and the Black insurance
agencies, respectively. Of these amounts, the Company paid commissions
of $171,853 and $6,423 to the Borneman and the Black insurance
agencies, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | John M. Petersen, a director and former President and Chief Executive
Officer, and previous Chief Investment Officer of the Erie Insurance
Group of Companies, who retired as an employee of the Company on
December 31, 1995, entered into a consulting arrangement with the
Company effective January 2, 1996. Under the terms of the arrangement,
the Company engaged Mr. Petersen as a consultant to furnish the
Company, the Exchange, and EIC and its pension trust, with investment
services with respect to their investments in common stocks. As
compensation for services rendered by Mr. Petersen, a fee of .15 of 1
percent, on an annualized basis, of the total fair market value of the
common stocks under management, is paid to Mr. Petersen. The Company
also pays for all necessary and reasonable expenses related to Mr.
Petersens consulting services performed under this arrangement. The
compensation paid to Mr. Petersen under this arrangement in 2002 by the
Company, the Exchange, EIC, and the pension trust was $51,875,
$3,656,546, $69,511 and $100,001, respectively. Consistent with the
terms of his consulting agreement, Mr. Petersen notified EIC in
writing that he intends to retire. Mr. Petersen has agreed to
continue to perform services under the existing consulting
arrangement until such services can be transitioned by EIC.




ITEM 14.  CONTROLS AND
PROCEDURES



| |  | Within 90 days prior to the date of filing of this report, the Company
carried out an evaluation, under the supervision and with the
participation of the Companys management, including its Chief
Executive Officer and its Chief Financial Officer, of the design and
operation of the Companys disclosure controls and procedures. Based
on this evaluation, the Companys Chief Executive Officer and Chief
Financial Officer concluded that the Companys disclosure controls and
procedures are effective for gathering, analyzing and disclosing the
information the Company is required to disclose in the reports it files
under the Securities Exchange Act of 1934, within the time periods
specified in the SECs rules and forms. There have been no significant
changes in the Companys internal controls or in other factors that
could significantly affect disclosure controls subsequent to the date
of this evaluation.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24



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##### Table of Contents






ITEM 15.  EXHIBITS,
FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K



| | (a)(1) |  | The following financial statements of the Company and the report of
independent certified public accountants are incorporated herein by
reference to pages 32 through 49 in the Companys annual report to
shareholders for the year ended December 31, 2002.
| | ------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Independent Auditors Report
Statements of Financial Position  December 31, 2002 and 2001
Statements of Operations for the years ended December 31, 2002, 2001
and 2000
Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000
Statements of Shareholders Equity for the years ended December 31, 2002, 2001 and 2000
Notes to Financial Statements



| | (2) |  | The following financial statement schedules are included herein:
| | --- |  | ----------------------------------------------------------------

|                                                                              |  |      |    | 
|----------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                              |  | Page
|                                                                              |  |     
|Independent Auditors Report on Schedules                                     |  |      | 29 | 
|Schedule I  Summary of Investments other than
Investments in Related Parties |  |      | 30 | 
|Schedule III  Supplementary Insurance Information                            |  |      | 31 | 
|Schedule IV  Reinsurance                                                     |  |      | 32 | 



| |     |  | All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and
therefore, have been omitted.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (3) |  | Exhibits:                                                                                                                                                                                                                               
|
| |     |  | See Exhibit Index on Page 33 hereof.                                                                                                                                                                                                    
|
| |     |  | All exhibits for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable, and therefore, have
been omitted.      
|
| | (b) |  | Reports on Form 8-K.                                                                                                                                                                                                                    
|
| |     |  | No reports on Form 8-K have been filed or were required to be filed
during the fourth quarter ended December 31, 2002.                                                                                                                  

25



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##### Table of Contents






SIGNATURES

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



|                     |                                                                                                       | 
|-------------------- | ----------------------------------------------------------------------------------------------------- | 
|Date: March 11, 2003 | ERIE FAMILY LIFE INSURANCE COMPANY
(Registrant)                                                      
|                    
|                     | Principal Officers                                                                                   
|                    
|                     | /s/ Jeffrey A. Ludrof
Jeffrey A. Ludrof, President and Chief Executive Officer                       
|                    
|                     | /s/ Jan R. Van Gorder
Jan R. Van Gorder, Senior Executive Vice President, Secretary & General Counsel
|                    
|                     | /s/ Philip A. Garcia
Philip A. Garcia, Executive Vice President & CFO                                
|                    
|                     | /s/ Timothy G. NeCastro
Timothy G. NeCastro, Senior Vice President & Controller                      
|                    
|                     | Board of Directors                                                                                   



|                                                     |  |                                             
|---------------------------------------------------- |  | --------------------------------------------
|Samuel P. Black, III                                 |  | /s/ Claude C. Lilly, IIIClaude C. Lilly, III
|                                                    
|                                                    
|/s/ J. Ralph Borneman, Jr.J. Ralph Borneman, Jr.     |  | /s/ Jeffrey A. LudrofJeffrey A. Ludrof      
|                                                    
|                                                    
|/s/ Patricia Garrison-CorbinPatricia Garrison-Corbin |  | /s/ Henry N. NassauHenry N. Nassau          
|                                                    
|                                                    
|/s/ Susan Hirt HagenSusan Hirt Hagen                 |  | /s/ John M. PetersenJohn M. Petersen        
|                                                    
|                                                    
|/s/ F. William HirtF. William Hirt                   |  | /s/ Jan R. Van GorderJan R. Van Gorder      
|                                                    
|                                                    
|/s/ Samuel P. KatzSamuel P. Katz                     |  | /s/ Robert C. WilburnRobert C. Wilburn      

26



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##### Table of Contents






CERTIFICATIONS

I, Jeffrey A. Ludrof, certify that:



| | 1. |  | I have reviewed this annual report on Form 10-K of Erie Family
Life Insurance Company;                                                                                                                                                                                                                                  
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;                   
|
| | 4. |  | The registrants other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:                                                                                                  

| |    |                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
|
| | b) | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and                                                                                                  
|
| | c) | presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors:
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |    |                                                                                                                                                                                                                                                                                               
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
|
| | b) | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date:   March 27, 2003



| | /s/ Jeffrey A.
Ludrof
Jeffrey A. Ludrof, President & CEO
| | --------------------------------------------------------

27



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CERTIFICATIONS

I, Philip A. Garcia, certify that:



| | 1. |  | I have reviewed this annual report on Form 10-K of Erie Family
Life Insurance Company;                                                                                                                                                                                                                                  
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;                   
|
| | 4. |  | The registrants other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:                                                                                                  



| |    |                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and
procedures to ensure that material information relating
to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
annual report is being prepared;
|
| | b) | evaluated the effectiveness of the
registrants disclosure controls and procedures as of a
date within 90 days prior to the filing date of this
annual report (the Evaluation Date); and                                                                                                  
|
| | c) | presented in this annual report our
conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors:
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |    |                                                                                                                                                                                                                                                                                               
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design
or operation of internal controls which could adversely
affect the registrants ability to record, process,
summarize and report financial data and have identified
for the registrants auditors any material weaknesses in
internal controls; and
|
| | b) | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date:   March 27, 2003



| | /s/ Philip A.
Garcia
Philip A. Garcia, Executive Vice President & CFO
| | ---------------------------------------------------------------------

28



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INDEPENDENT AUDITORS REPORT

To The Board of Directors and
Shareholders
Erie Family Life Insurance Company

We have audited the statements of financial position of Erie Family Life
Insurance Company (Company) as of December 31, 2002 and 2001 and the related
statements of operations, shareholders equity and cash flows for each of the
three years in the period ended December 31, 2002, as contained in the 2002
annual report, incorporated by reference in the annual report on Form 10-K for
the year ended December 31, 2002. In connection with our audits of the financial
statements, we also have audited the financial statement schedules, as listed in
the accompanying index. These financial statements and financial statement
schedules are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements and financial statement
schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
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 respects, the financial position of Erie Family Life Insurance
Company as of December 31, 2002 and 2001, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 2002
in conformity with accounting principles generally accepted in the United States
of America. 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.

/s/ Malin, Bergquist &
Company, LLP
Malin, Bergquist & Company, LLP

Erie, Pennsylvania
February 7, 2003

29



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##### Table of Contents



SCHEDULE I  SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES

|                                               |                                           |      |                   |             |        |               |               |               |                 |   |               |               | 
|---------------------------------------------- | ----------------------------------------- | ---- | ----------------- | ----------- | ------ | ------------- | ------------- | ------------- | --------------- | - | ------------- | ------------- | 
|                                               |                                           |      | December 31, 2002 |             |        |               |               |               |                 |   |              
|                                               |                                           |      |                   |             |        |               |               |               |                 |   |              
|                                               |                                           |      | Cost or           |             |        |               |               |               | Amount at which
|                                               |                                           |      | Amortized         |             | Market |               | Shown in the 
|Type of Investment                             |                                           | Cost |                   | Value       |        | Balance Sheet
|                                              
|Fixed Maturities Available-for-Sale            |                                           |      |                   |             |        |               |               |               |                 |   |               |              
|U. S. Treasuries and Government Agency         |                                           | $    | 29,350,996        |             |        | $             | 30,919,826    |               |                 | $ | 30,919,826    |              
|Public Utilities                               |                                           |      | 100,717,767       |             |        |               | 104,522,445   |               |                 |   | 104,522,445   |              
|U. S. Banks, Trusts, and Insurance Companies   |                                           |      | 194,176,089       |             |        |               | 206,809,241   |               |                 |   | 206,809,241   |              
|U. S. Industrial and Miscellaneous             |                                           |      | 557,396,854       |             |        |               | 589,065,644   |               |                 |   | 589,065,644   |              
|Foreign Governments  Agency                   |                                           |      | 2,997,845         |             |        |               | 3,120,330     |               |                 |   | 3,120,330     |              
|Foreign Banks, Trusts, and Insurance Companies |                                           |      | 22,636,317        |             |        |               | 22,630,615    |               |                 |   | 22,630,615    |              
|Foreign Industrial and Miscellaneous           |                                           |      | 78,861,054        |             |        |               | 82,298,404    |               |                 |   | 82,298,404    |              
|                                              
|                                               | Total Fixed Maturities Available-for-Sale |      | $                 | 986,136,922 |        |               | $             | 1,039,366,505 |                 |   | $             | 1,039,366,505 | 
|                                              
|Equity
Securities                              |                                           |      |                   |             |        |               |               |               |                 |   |               |              
|Nonredeemable Preferred Stocks:                |                                           |      |                   |             |        |               |               |               |                 |   |               |              
|U. S. Banks, Trusts, and Insurance Companies   |                                           | $    | 7,016,025         |             |        | $             | 7,227,445     |               |                 | $ | 7,227,445     |              
|U. S. Industrial and Miscellaneous             |                                           |      | 11,871,516        |             |        |               | 12,644,342    |               |                 |   | 12,644,342    |              
|Foreign Banks, Trusts and Insurance Companies  |                                           |      | 38,991,925        |             |        |               | 40,236,789    |               |                 |   | 40,236,789    |              
|Foreign Industrial and Miscellaneous           |                                           |      | 8,192,560         |             |        |               | 8,640,430     |               |                 |   | 8,640,430     |              
|                                              
|Total
Equity Securities                        |                                           | $    | 66,072,026        |             |        | $             | 68,749,006    |               |                 | $ | 68,749,006    |              
|                                              
|Real Estate Investment Property                |                                           | $    | 1,210,015         |             |        | $             | 1,210,015     |               |                 | $ | 1,210,015     |              
|Policy Loans                                   |                                           |      | 9,516,240         |             |        |               | 9,516,240     |               |                 |   | 9,516,240     |              
|Mortgage Loans                                 |                                           |      | 7,175,335         |             |        |               | 7,175,335     |               |                 |   | 7,175,335     |              
|Limited Partnerships                           |                                           |      | 16,352,078        |             |        |               | 16,052,585    |               |                 |   | 16,052,585    |              
|                                              
|Total
Investments                              |                                           | $    | 1,086,462,616     |             |        | $             | 1,142,069,686 |               |                 | $ | 1,142,069,686 |              
|                                              

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SCHEDULE III  SUPPLEMENTARY INSURANCE INFORMATION

|                        |       |       |             |             |            |         |                 |               |        |             |         |         |                                  |          |           |           |             |          |            |            |             |   |            |            |  |   |              |            |  |   |           |           |  |   |            |            | 
|----------------------- | ----- | ----- | ----------- | ----------- | ---------- | ------- | --------------- | ------------- | ------ | ----------- | ------- | ------- | -------------------------------- | -------- | --------- | --------- | ----------- | -------- | ---------- | ---------- | ----------- | - | ---------- | ---------- |  | - | ------------ | ---------- |  | - | --------- | --------- |  | - | ---------- | ---------- | 
|                        |       |       |             |             |            |         | At December 31, |               |        |             |         |         | For the Years Ended December 31, |          |           |           |             |          |            |            |            
|                        |       |       |            
|                        |       |       | Deferred    |             | Future     |         |                 |               |        |             |         |         |                                  |          |           |           |             |          |            |            |             |   |            |            |  |   | Amortization |            |  |   |          
|                        |       |       | Policy      |             | Policy     |         |                 |               |        |             | Other   |         |                                  |          |           |           | Net         |          | Life &     |            | of Deferred |   | Other     
|                        |       |       | Acquisition |             | Benefits & |         | Unearned        |               | Policy |             | Policy  |         | Investment                       |          | Annuity   |           | Acquisition |          | Operating 
|Segment                 |       | Costs |             | Deposits    |            | Premium |                 | Claims        |        | Revenues(a) |         | Income  |                                  | Benefits |           | Costs     |             | Expenses
|                       
|2002                    |       |       |             |             |            |         |                 |               |        |             |         |         |                                  |          |           |           |             |          |            |            |             |   |            |            |  |   |              |            |  |   |           |           |  |   |            |           
|Ordinary Life Insurance |       | $     | 89,031,150  |             |            | $       | 228,032,114     |               |        | $           | 202,475 |         |                                  | $        | 2,111,470 |           |             | $        | 48,069,884 |            |             | $ | 13,110,942 |            |  | $ | 29,264,985   |            |  | $ | 6,819,986 |           |  | $ | 16,267,225 |           
|Accident & Health       |       |       | 0           |             |            |         | 148,069         |               |        |             | 0       |         |                                  |          | 0         |           |             |          | 167,643    |            |             |   | 3,411      |            |  |   | 62,029       |            |  |   | 0         |           |  |   | 86,721     |           
|Group Life & Other      |       |       | 0           |             |            |         | 2,239,094       |               |        |             | 1,555   |         |                                  |          | 251,000   |           |             |          | 2,889,182  |            |             |   | 144,162    |            |  |   | 1,851,918    |            |  |   | 0         |           |  |   | 279,070    |           
|Annuities               |       |       | 15,033,703  |             |            |         | 803,674,899     |               |        |             | 0       |         |                                  |          | 0         |           |             |          | 2,689      |            |             |   | 43,627,349 |            |  |   | 39,684,071   |            |  |   | 1,607,469 |           |  |   | 2,823,243  |           
|Corporate               |       |       | 0           |             |            |         | 0               |               |        |             | 0       |         |                                  |          | 0         |           |             |          | 0          |            |             |   | 9,400,592  |            |  |   | 0            |            |  |   | 0         |           |  |   | 0          |           
|                       
|                        | Total |       | $           | 104,064,853 |            |         | $               | 1,034,094,176 |        |             | $       | 204,030 |                                  |          | $         | 2,362,470 |             |          | $          | 51,129,398 |             |   | $          | 66,286,456 |  |   | $            | 70,863,003 |  |   | $         | 8,427,455 |  |   | $          | 19,456,259 | 
|                       
|2001                    |       |       |             |             |            |         |                 |               |        |             |         |         |                                  |          |           |           |             |          |            |            |             |   |            |            |  |   |              |            |  |   |           |           |  |   |            |           
|Ordinary Life Insurance |       | $     | 82,422,633  |             |            | $       | 205,266,500     |               |        | $           | 211,571 |         |                                  | $        | 1,728,863 |           |             | $        | 43,693,034 |            |             | $ | 13,500,140 |            |  | $ | 25,044,662   |            |  | $ | 4,617,637 |           |  | $ | 14,142,436 |           
|Accident & Health       |       |       | 0           |             |            |         | 38,875          |               |        |             | 0       |         |                                  |          | 0         |           |             |          | 35,208     |            |             |   | 1,378      |            |  |   | 20,944       |            |  |   | 0         |           |  |   | (13,130    | )         
|Group Life & Other      |       |       | 0           |             |            |         | 2,532,238       |               |        |             | 0       |         |                                  |          | 221,000   |           |             |          | 2,759,826  |            |             |   | 160,961    |            |  |   | 3,245,753    |            |  |   | 0         |           |  |   | 260,457    |           
|Annuities               |       |       | 9,592,286   |             |            |         | 636,849,508     |               |        |             | 0       |         |                                  |          | 0         |           |             |          | 2,712      |            |             |   | 42,318,132 |            |  |   | 35,209,692   |            |  |   | 1,200,425 |           |  |   | 1,597,481  |           
|Corporate               |       |       | 0           |             |            |         | 0               |               |        |             | 0       |         |                                  |          | 0         |           |             |          | 0          |            |             |   | 5,200,665  |            |  |   | 0            |            |  |   | 0         |           |  |   | 0          |           
|                       
|                        | Total |       | $           | 92,014,919  |            |         | $               | 844,687,121   |        |             | $       | 211,571 |                                  |          | $         | 1,949,863 |             |          | $          | 46,490,780 |             |   | $          | 61,181,276 |  |   | $            | 63,521,051 |  |   | $         | 5,818,062 |  |   | $          | 15,987,244 | 
|                       
|2000                    |       |       |             |             |            |         |                 |               |        |             |         |         |                                  |          |           |           |             |          |            |            |             |   |            |            |  |   |              |            |  |   |           |           |  |   |            |           
|Ordinary Life Insurance |       | $     | 76,186,624  |             |            | $       | 182,496,788     |               |        | $           | 133,629 |         |                                  | $        | 2,282,586 |           |             | $        | 41,974,521 |            |             | $ | 11,635,149 |            |  | $ | 23,356,604   |            |  | $ | 3,391,694 |           |  | $ | 11,684,234 |           
|Group Life & Other      |       |       | 0           |             |            |         | 2,125,073       |               |        |             | 0       |         |                                  |          | 191,000   |           |             |          | 2,560,180  |            |             |   | 134,268    |            |  |   | 958,087      |            |  |   | 0         |           |  |   | 255,700    |           
|Annuities               |       |       | 8,536,549   |             |            |         | 584,174,301     |               |        |             | 0       |         |                                  |          | 0         |           |             |          | 2,023      |            |             |   | 38,255,613 |            |  |   | 33,659,401   |            |  |   | 1,752,845 |           |  |   | 1,490,971  |           
|Corporate               |       |       | 0           |             |            |         | 0               |               |        |             | 0       |         |                                  |          | 0         |           |             |          | 0          |            |             |   | 9,451,007  |            |  |   | 0            |            |  |   | 0         |           |  |   | 0          |           
|                       
|                        | Total |       | $           | 84,723,173  |            |         | $               | 768,796,162   |        |             | $       | 133,629 |                                  |          | $         | 2,473,586 |             |          | $          | 44,536,724 |             |   | $          | 59,476,037 |  |   | $            | 57,974,092 |  |   | $         | 5,144,539 |  |   | $          | 13,430,905 | 
|                       

|(a) |  | Net of reinsurance ceded
|--- |  | ------------------------

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SCHEDULE IV  REINSURANCE

|                                     |                     |                |                |           |            |           |               |            |            |         |   |         |   |   |                |           |            |  |      |            |      |  
|------------------------------------ | ------------------- | -------------- | -------------- | --------- | ---------- | --------- | ------------- | ---------- | ---------- | ------- | - | ------- | - | - | -------------- | --------- | ---------- |  | ---- | ---------- | ---- | -
|                                     |                     |                |                |           |            |           |               |            |            |         |   |         |   |   |                |           |            |  |      | Percentage
|                                     |                     |                |                |           |            |           |               | Ceded to   |            | Assumed |   |         |   |   |                | of Amount
|                                     |                     |                |                | Gross     |            | Other     |               | From Other |            | Net     |   | Assumed
|                                     |                     |                |                | Amount    |            | Companies |               | Companies  |            | Amount  |   | to Net 
|                                    
|December 31, 2002                    |                     |                |                |           |            |           |               |            |            |         |   |         |   |   |                |           |            |  |      |           
|Life Insurance in force              |                     | $              | 23,198,178,000 |           |            | $         | 7,043,035,000 |            |            | $       | 0 |         |   | $ | 16,155,143,000 |           |            |  | 0.00 | %         
|Premiums for the year Life Insurance |                     |                | 60,132,590     |           |            |           | 12,062,706    |            |            |         | 0 |         |   |   | 48,069,884     |           |            |  | 0.00 | %         
|                                     | Annuities           |                |                | 2,689     |            |           |               | 0          |            |         |   | 0       |   |   |                | 2,689     |            |  |      | 0.00       | %   
|                                     | Accident and Health |                |                | 401,620   |            |           |               | 233,977    |            |         |   | 0       |   |   |                | 167,643   |            |  |      | 0.00       | %   
|                                     | Group Life & Other  |                |                | 2,889,182 |            |           |               | 0          |            |         |   | 0       |   |   |                | 2,889,182 |            |  |      | 0.00       | %   
|                                    
|                                     |                     | Total Premiums |                | $         | 63,426,081 |           |               | $          | 12,296,683 |         |   | $       | 0 |   |                | $         | 51,129,398 |  |      |            | 0.00 | %
|                                    
|December 31, 2001                    |                     |                |                |           |            |           |               |            |            |         |   |         |   |   |                |           |            |  |      |           
|Life Insurance in force              |                     | $              | 18,903,134,000 |           |            | $         | 4,112,150,000 |            |            | $       | 0 |         |   | $ | 14,790,984,000 |           |            |  | 0.00 | %         
|Premiums for the year Life Insurance |                     |                | 51,644,125     |           |            |           | 7,951,091     |            |            |         | 0 |         |   |   | 43,693,034     |           |            |  | 0.00 | %         
|                                     | Annuities           |                |                | 2,712     |            |           |               | 0          |            |         |   | 0       |   |   |                | 2,712     |            |  |      | 0.00       | %   
|                                     | Accident and Health |                |                | 142,327   |            |           |               | 107,119    |            |         |   | 0       |   |   |                | 35,208    |            |  |      | 0.00       | %   
|                                     | Group Life & Other  |                |                | 2,759,826 |            |           |               | 0          |            |         |   | 0       |   |   |                | 2,759,826 |            |  |      | 0.00       | %   
|                                    
|                                     |                     | Total Premiums |                | $         | 54,548,990 |           |               | $          | 8,058,210  |         |   | $       | 0 |   |                | $         | 46,490,780 |  |      |            | 0.00 | %
|                                    
|December 31, 2000                    |                     |                |                |           |            |           |               |            |            |         |   |         |   |   |                |           |            |  |      |           
|Life Insurance in force              |                     | $              | 16,509,613,000 |           |            | $         | 2,591,318,000 |            |            | $       | 0 |         |   | $ | 13,918,295,000 |           |            |  | 0.00 | %         
|Premiums for the year Life Insurance |                     |                | 46,683,551     |           |            |           | 4,710,619     |            |            |         | 0 |         |   |   | 41,972,932     |           |            |  | 0.00 | %         
|                                     | Annuities           |                |                | 2,023     |            |           |               | 0          |            |         |   | 0       |   |   |                | 2,023     |            |  |      | 0.00       | %   
|                                     | Accident and Health |                |                | 2,335     |            |           |               | 1,735      |            |         |   | 0       |   |   |                | 600       |            |  |      | 0.00       | %   
|                                     | Group Life & Other  |                |                | 2,561,169 |            |           |               | 0          |            |         |   | 0       |   |   |                | 2,561,169 |            |  |      | 0.00       | %   
|                                    
|                                     |                     | Total Premiums |                | $         | 49,249,078 |           |               | $          | 4,712,354  |         |   | $       | 0 |   |                | $         | 44,536,724 |  |      |            | 0.00 | %
|                                    

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EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)

|          |  |                                                                                                                              |  |             
|--------- |  | ---------------------------------------------------------------------------------------------------------------------------- |  | ------------
|          |  |                                                                                                                              |  | Sequentially
|Exhibit   |  |                                                                                                                              |  | Numbered    
|Number    |  | Description of Exhibit                                                                                                       |  | Page        
|          |  |                                                                                                                              |  |             
|3.1*      |  | Amended and Restated By-laws of Registrant                                                                                   |  |             
|          |  |                                                                                                                              |  |             
|10.1**    |  | 1997 Annual Incentive Plan of Erie Indemnity Company                                                                         |  |             
|          |  |                                                                                                                              |  |             
|10.2**    |  | Erie Indemnity Company Long-Term Incentive Plan                                                                              |  |             
|          |  |                                                                                                                              |  |             
|10.3**    |  | Employment Agreement effective December 16, 1997 by and
between Erie Indemnity Company and Stephen A. Milne                  |  |             
|          |  |                                                                                                                              |  |             
|10.4**    |  | Employment Agreement effective December 16, 1997 by and
between Erie Indemnity Company and Jan R. Van Gorder                 |  |             
|          |  |                                                                                                                              |  |             
|10.5**    |  | Employment Agreement effective December 16, 1997 by and
between Erie Indemnity Company and Philip A. Garcia                  |  |             
|          |  |                                                                                                                              |  |             
|10.6**    |  | Employment Agreement effective December 16, 1997 by and
between Erie Indemnity Company and John J. Brinling, Jr.             |  |             
|          |  |                                                                                                                              |  |             
|10.7***   |  | Employment Agreement effective June 30, 1999 by and
between Erie Indemnity Company and Jeffrey A. Ludrof                     |  |             
|          |  |                                                                                                                              |  |             
|10.8***   |  | Employment Agreement effective December 15, 1999 by and
between Erie Indemnity Company and Douglas F. Ziegler                |  |             
|          |  |                                                                                                                              |  |             
|10.9***   |  | Addendum to Employment Agreement effective December 15, 1999
by and between Erie Indemnity Company and Stephen A. Milne      |  |             
|          |  |                                                                                                                              |  |             
|10.10***  |  | Addendum to Employment Agreement effective December 15, 1999
by and between Erie Indemnity Company and Jan R. Van Gorder     |  |             
|          |  |                                                                                                                              |  |             
|10.11***  |  | Addendum to Employment Agreement effective December 15, 1999
by and between Erie Indemnity Company and Philip A. Garcia      |  |             
|          |  |                                                                                                                              |  |             
|10.12***  |  | Addendum to Employment Agreement effective December 15, 1999
by and between Erie Indemnity Company and John J. Brinling, Jr. |  |             
|          |  |                                                                                                                              |  |             
|10.13***  |  | Addendum to Employment Agreement effective December 15, 1999
by and between Erie Indemnity Company and Jeffrey A. Ludrof     |  |             
|          |  |                                                                                                                              |  |             
|10.14**** |  | Addendum to Employment Agreement effective December 15, 2000
by and between Erie Indemnity Company and Stephen A. Milne      |  |             
|          |  |                                                                                                                              |  |             
|10.15**** |  | Addendum to Employment Agreement effective December 15, 2000
by and between Erie Indemnity Company and Jan R. Van Gorder     |  |             
|          |  |                                                                                                                              |  |             
|10.16**** |  | Addendum to Employment Agreement effective December 15, 2000
by and between Erie Indemnity Company and Philip A. Garcia      |  |             

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|           |  |                                                                                                                                 |  |             
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------- |  | ------------
|           |  |                                                                                                                                 |  | Sequentially
|Exhibit    |  |                                                                                                                                 |  | Numbered    
|Number     |  | Description of Exhibit                                                                                                          |  | Page        
|           |  |                                                                                                                                 |  |             
|10.17****  |  | Addendum to Employment Agreement effective December 15, 2000
by and between Erie Indemnity Company and John J. Brinling, Jr.    |  |             
|           |  |                                                                                                                                 |  |             
|10.18****  |  | Addendum to Employment Agreement effective December 15, 2000
by and between Erie Indemnity Company and Jeffrey A. Ludrof        |  |             
|           |  |                                                                                                                                 |  |             
|10.19****  |  | Addendum to Employment Agreement effective December 15, 2000
by and between Erie Indemnity Company and Douglas F. Ziegler       |  |             
|           |  |                                                                                                                                 |  |             
|10.20***** |  | Addendum to Employment Agreement effective December 12, 2001
by and between Erie Indemnity Company and Stephen A. Milne         |  |             
|           |  |                                                                                                                                 |  |             
|10.21***** |  | Addendum to Employment Agreement effective December 12, 2001
by and between Erie Indemnity Company and Jan R. Van Gorder        |  |             
|           |  |                                                                                                                                 |  |             
|10.22***** |  | Addendum to Employment Agreement effective December 12, 2001
by and between Erie Indemnity Company and Philip A. Garcia         |  |             
|           |  |                                                                                                                                 |  |             
|10.23***** |  | Addendum to Employment Agreement effective December 12, 2001
by and between Erie Indemnity Company and John J. Brinling, Jr.    |  |             
|           |  |                                                                                                                                 |  |             
|10.24***** |  | Addendum to Employment Agreement effective December 12, 2001
by and between Erie Indemnity Company and Jeffrey A. Ludrof        |  |             
|           |  |                                                                                                                                 |  |             
|10.25***** |  | Addendum to Employment Agreement effective December 12, 2001
by and between Erie Indemnity Company and Douglas F. Ziegler       |  |             
|           |  |                                                                                                                                 |  |             
|10.26***** |  | Summary of termination benefits provided Stephen A. Milne upon
voluntary termination from active employment on January 18, 2002 |  |             
|           |  |                                                                                                                                 |  |             
|10.27      |  | Employment Agreement effective May 9, 2002 by and between
Erie Indemnity Company and Jeffrey A. Ludrof                          |  | 36          
|           |  |                                                                                                                                 |  |             
|10.28      |  | Addendum to Employment Agreement effective December 12, 2002
by and between Erie Indemnity Company and Jan R. Van Gorder        |  | 52          
|           |  |                                                                                                                                 |  |             
|10.29      |  | Addendum to Employment Agreement effective December 12, 2002
by and between Erie Indemnity Company and Philip A. Garcia         |  | 53          
|           |  |                                                                                                                                 |  |             
|10.30      |  | Addendum to Employment Agreement effective December 12, 2002
by and between Erie Indemnity Company and John J. Brinling, Jr.    |  | 54          
|           |  |                                                                                                                                 |  |             
|10.31      |  | Addendum to Employment Agreement effective December 12, 2002
by and between Erie Indemnity Company and Douglas F. Ziegler       |  | 55          
|           |  |                                                                                                                                 |  |             
|10.32      |  | Employment Agreement effective December 15, 2002 by and
between Erie Indemnity Company and Michael J. Krahe                     |  | 56          
|           |  |                                                                                                                                 |  |             
|10.33      |  | Employment Agreement effective December 15, 2002 by and
between Erie Indemnity Company and Thomas B. Morgan                     |  | 72          
|           |  |                                                                                                                                 |  |             
|13         |  | 2002 Annual Report to Shareholders. Reference is made to the
Annual Report furnished to the Commission, herewith.               |  | 88          

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|         |  |                                                                                                                                                                                                             |  |             
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------
|         |  |                                                                                                                                                                                                             |  | Sequentially
|Exhibit  |  |                                                                                                                                                                                                             |  | Numbered    
|Number   |  | Description of Exhibit                                                                                                                                                                                      |  | Page        
|         |  |                                                                                                                                                                                                             |  |             
|16       |  | Letter regarding change in certifying accountant                                                                                                                                                            |  | 130         
|         |  |                                                                                                                                                                                                             |  |             
|99.1**** |  | Audit Committee Charter                                                                                                                                                                                     |  |             
|         |  |                                                                                                                                                                                                             |  |             
|99.2     |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes  Oxley Act of 2002.                                                                                   |  | 131         
|         |  |                                                                                                                                                                                                             |  |             
|99.3     |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes  Oxley Act of 2002.                                                                                   |  | 132         
|         |  |                                                                                                                                                                                                             |  |             
|*        |  | Such exhibit is incorporated by reference to the like titled exhibit in
the Registrants Form 10-K Annual Report for the year ended December 31,
1998 that was filed with the Commission on March 9, 1999.  |  |             
|         |  |                                                                                                                                                                                                             |  |             
|**       |  | Such exhibit is incorporated by reference to the like titled exhibit in
the Registrants Form 10-K Annual Report for the year ended December 31,
1997 that was filed with the Commission on March 11, 1998. |  |             
|         |  |                                                                                                                                                                                                             |  |             
|***      |  | Such exhibit is incorporated by reference to the like titled exhibit in
the Registrants Form 10-K Annual Report for the year ended December 31,
1999 that was filed with the Commission on March 28, 2000. |  |             
|         |  |                                                                                                                                                                                                             |  |             
|****     |  | Such exhibit is incorporated by reference to the like titled exhibit in
the Registrants Form 10-K Annual Report for the year ended December 31,
2000 that was filed with the Commission on March 19, 2001. |  |             
|         |  |                                                                                                                                                                                                             |  |             
|*****    |  | Such exhibit is incorporated by reference to the like titled exhibit in
the Registrants Form 10-K Annual Report for the year ended December 31,
2001 that was filed with the Commission on March 15, 2002. |  |             

35