ERIE FAMILY LIFE INSURANCE COMPANY
                             AUDIT COMMITTEE CHARTER
                                  June 13, 2000


I.       Introduction

         The Securities  Exchange  Commission  promulgated new rules and amended
         old rules relating to audit  committees and their function  relative to
         oversight of the  financial  reporting  process in 1999.  The rules are
         designed  to  enhance  the  audit  committee's  effectiveness,  improve
         disclosure  about the  audit  committee's  purpose  and  functions  and
         enhance the reliability of financial  statements and disclosures to the
         public.

         Audit committees play a critical role in the financial reporting system
         by overseeing and monitoring management's and the independent auditors'
         performance  of  the  financial  reporting  process.  While  the  Audit
         Committee  has  the  responsibilities  and  powers  set  forth  in this
         Charter,  it is not the duty of the Audit  Committee to plan or conduct
         audits or to determine  that the  Company's  financial  statements  are
         complete and accurate and are in  accordance  with  generally  accepted
         accounting principles. This is the responsibility of management and the
         independent  auditors.  Nor is it the duty of the  Audit  Committee  to
         conduct  investigations,  to  resolve  disagreements,  if any,  between
         management and the  independent  auditors or to assure  compliance with
         laws and regulations.

II.      Audit Committee Purpose

         The Audit  Committee  shall be  appointed  by the Board of Directors of
         Erie Family Life Insurance Company  (hereafter "the Company") to assist
         the Board in monitoring  (1) the integrity of the financial  statements
         of the  Company;  (2) the  compliance  by the  Company  with  financial
         accounting  and  legal  and  regulatory   requirements;   and  (3)  the
         independence and performance of the Company's  internal and independent
         auditors.

III.     Audit Committee Appointment, Composition, and Meeting Protocol

         The members of the Audit Committee shall be appointed by the Board, and
         shall meet  independence and experience  requirements of the applicable
         federal securities law, the Pennsylvania Insurance Holding Company Law,
         and the NASDAQ Stock Market of the National  Association  of Securities
         Dealers, Inc. (hereafter "NASDAQ" or "NASD").

         The Audit Committee shall be comprised of at least three directors, the
         exact  number to be  determined  by the  Board,  each of whom  shall be
         independent directors as required by applicable statutory  requirements
         and  each  member  of the  Audit  Committee  shall  be  free  from  any
         relationship  that  would  interfere  with the  exercise  of his or her
         independent judgment.

         All members of the Audit Committee shall be able to read and understand
         the financial statements, including the Company's balance sheet, income
         statements,  and cash flow statements, or become able to do so within a
         reasonable  period of time  after his or her  appointment  to the Audit
         Committee.  At least  one  member  of the Audit  Committee  shall  have
         current  or  past  employment  experience  in  finance  or  accounting,
         requisite  professional  certification  in  accounting,  or  any  other
         comparable  experience or background  which results in the individual's
         financial  sophistication,  including  being  or  having  been a  chief
         executive  officer,  chief financial  officer,  or other senior officer
         with financial oversight responsibilities.

         The Audit Committee Chair shall be designated by the Board.

         The Audit  Committee  shall meet at least four times  annually  or more
         frequently as necessary and appropriate.  A quorum of committee members
         shall be present at any meeting at which final action or approval is to
         be taken or made.  A quorum shall be present if a majority of committee
         members  are  present in person or by other means and in the case of an
         Audit Committee of three or four members, by the attendance,  in person
         or  otherwise,  of two or more  committee  members.  An agenda for each
         meeting  shall  be  prepared  in  advance  of each  meeting  and may be
         developed in consultation  with  management,  other committee  members,
         and/or the independent auditors.

IV.      Audit Committee Responsibilities and Duties

         The Audit  Committee  shall  have the  following  responsibilities  and
         duties:

               1. Review and  reassess  the  adequacy  of this  Charter at least
               annually  and  recommend  any  proposed  changes to the Board for
               approval.

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               2. Review the annual audited financial statements prior to filing
               or  distribution.  The review  should  include  discussions  with
               management and the independent auditors of any significant issues
               regarding accounting principles, practices and judgments.

               3. Consider the integrity of the  Company's  financial  reporting
               processes  and  controls in  consultation  with  management,  the
               independent   auditors   and  the  internal   auditors.   Discuss
               significant financial risk exposures and the steps management has
               taken to  monitor,  control,  and report  such  exposures  and to
               identify any payments or procedures  that might be deemed illegal
               or  improper.   Review  significant  findings  presented  by  the
               independent  auditors and the internal audit department  together
               with management's responses.

               4. Review and discuss any  significant  changes to the  Company's
               accounting  principles and any items required to be  communicated
               by the  independent  auditors  in  accordance  with the  American
               Institute of Certified Public  Accountants  (AICPA)  Statement of
               Accounting Standards (SAS) No. 61.

               5. Select, evaluate, and, if appropriate, replace the independent
               auditor. The independent  auditors are ultimately  accountable to
               the   Board   of   Directors   and  the   Audit   Committee,   as
               representatives of shareholders.

               6. Approve the fees and other significant compensation to be paid
               to the  independent  auditors,  including  any other  significant
               management   consulting   engagements  to  be  performed  by  the
               independent auditing firm that is outside of the audit engagement
               letter.

               7. Review and discuss with the independent  auditors annually all
               significant  relationships  they have with the Company that could
               impair the auditors'  independence,  pursuant to the  Independent
               Standards Board Statement No. 1.

               8. Review the  independent  auditors'  audit plan and  engagement
               letter to determine if it is sufficiently detailed and covers any
               significant  areas of concern the Audit  Committee may have. This
               review should include the scope,  staffing,  locations,  reliance
               upon management and internal audit and general audit approach.

               9.  Review  and  consider  the  independent   auditors'  judgment
               regarding  the  quality  and  appropriateness  of  the  Company's
               accounting principles as applied in its financial reporting.

               10.  Review with  management  the  appointment,  performance  and
               replacement of the senior internal audit executive.

               11.  Review  with the  Company's  General  Counsel on at least an
               annual basis, i.) any legal matters that could have a significant
               impact on the Company's financial statements,  ii.) the Company's
               compliance  with  applicable  laws  and  regulations,  and  iii.)
               inquiries received from regulators or governmental agencies.

               12. Prepare annually a report to shareholders,  to be included in
               the Company's annual proxy statement, as required by the SEC. The
               report should  include a statement  that the Audit  Committee has
               reviewed and  discussed  the audited  financial  statements  with
               management;  discussed with the independent auditors, the matters
               required to be  discussed  by SAS No. 61; and have  reviewed  the
               disclosure   from  the  independent   auditors   regarding  their
               independence  as  required  by the  Independent  Standards  Board
               Statement No. 1.

               13. File and attach the Audit Committee Charter as an appendix to
               the proxy statement at least once every three years.

               14. Obtain from the independent  auditor,  assurance that Section
               10A of the Securities  Exchange Act of 1934, as amended (relating
               to the disclosure of illegal acts), has not been implicated.

               15. Prepare and maintain minutes of its meetings.

               16. Periodically  report to the Board of Directors on significant
               results of its activities.

               17. Perform such other duties and activities  consistent with the
               intent and spirit of this  charter,  the  Company's  bylaws,  and
               governing   law,  as  the  Audit  mmittee   deems   necessary  or
               appropriate.


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