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, 1996

                                       OR

 [ ]  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 registrant as specified in its charter)

           Pennsylvania                                      25-1186315
(State or other jurisdiction                              (I.R.S. Employer
 of incorporation or organization)                       Identification No.)


100 Erie Insurance Place, Erie, Pennsylvania                     16530
(Address of principal executive offices)                      (Zip code)

Registrant'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
                         (Tile of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

              Yes    X                            No

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

Indicate the number of shares outstanding of each of the Registrant's classes of
common stock,  as of the latest  practicable  date:  9,450,000  shares of Common
Stock outstanding on February 28, 1997.

                      DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the  Registrant's  Annual Report to shareholders for the fiscal year
ended December 31, 1996 (the "Annual Report") are incorporated by reference into
Parts II and IV of this Form 10-K Report.

                                      1

<PAGE>



                                                            INDEX


ITEM NUMBER AND CAPTION                                     PAGE

Item 1.    Business                                           3

Item 2.    Properties                                         8

Item 3.    Legal Proceedings                                  8

Item 4.    Submission of Matters to a
           Vote of Security Holders                           8

Item 5.    Market for Registrant's Common Stock
           and Related Stockholder Matters                    8

Item 6.    Selected Financial Data                            9

Item 7.    Management's Discussion and Analysis
           of Financial Condition and Results
           of Operations                                      9

Item 8.    Financial Statements and Supplementary Data        9

Item 9.    Changes In and Disagreements With
           Accountants on Accounting and Financial
           Disclosure                                         9

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                  19

Item 13.   Certain Relationships and Related
           Transactions                                      21

Item 14.   Exhibits, Financial Statement Schedules
           and Reports on Form 8-K                           22

                                      2

<PAGE>



                                                           PART I


ITEM 1.  BUSINESS

       Erie  Family  Life  Insurance  Company  (hereinafter  referred to as "The
       Company", the "Registrant" or "Erie Family Life") was incorporated in the
       Commonwealth of  Pennsylvania  on May 23, 1967 and commenced  business on
       September 1, 1967.  The Company is  primarily  engaged in the business of
       underwriting  and  selling  non-participating  individual  and group life
       insurance policies, including universal life. Erie Family Life also sells
       individual and group annuities.  Erie Family Life is owned 21.6 % by Erie
       Indemnity  Company and 52.2% by Erie  Insurance  Exchange.  The remaining
       stock is held by the public,  predominantly  agents and  employees of the
       Erie Insurance Group.

       Erie Indemnity Company is a Pennsylvania  business  corporation formed in
       1925  to  be  the   attorney-in-fact   for  Erie  Insurance  Exchange,  a
       Pennsylvania-domiciled  reciprocal insurance exchange. The Erie Indemnity
       Company's  principal  business  activity  consists of  management  of the
       Exchange.   The  Erie   Indemnity   Company   also  is   engaged  in  the
       property/casualty   insurance   business   through   its   wholly   owned
       subsidiaries, Erie Insurance Company (Erie Insurance Co.), Erie Insurance
       Company  of New York  (Erie NY) and Erie  Insurance  Property  & Casualty
       Company (Erie P&C) and through its  management of Flagship City Insurance
       Company (Flagship), a subsidiary of the Erie Insurance Exchange. Together
       with the Erie  Insurance  Exchange,  the Erie  Indemnity  Company and its
       subsidiaries  and  affiliates,   including  Erie  Family  Life,   operate
       collectively under the name "Erie Insurance Group."

Products

       The  Company's  portfolio of life  insurance  includes the usual forms of
       permanent life, endowment and term policies, including whole life, family
       income,   mortgage  and  decreasing  term,   group,  and  universal  life
       insurance. In terms of face value, new life business issued in 1996 had a
       ratio of 4:1 of term insurance to whole life insurance coverage.

       Life  insurance  premiums  and  annuity  deposits  have been the  primary
       sources of cash inflows for the Company.


                                                  Classes of Life Insurance
                                                  Percentage of Total Sales


                                            For the year ended December 31,
<TABLE>
<CAPTION>


       Class                                         1996          1995         1994          1993          1992
       -----                                         ----          ----         ----          ----          ----
       <S>                                           <C>           <C>          <C>           <C>           <C>

       Ordinary Life (including Total
       and Permanent Disability and
       Additional Accidental Death)                   93.3%         91.8%         92.1%        92.3%         91.9%
       Group                                             6.7         8.2           7.9          7.7           8.1
                                                     -------       -----        ------        -----         -----
                                                      100.0%       100.0%        100.0%       100.0%        100.0%
</TABLE>

       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

                                      3

<PAGE>



       contracts,  specifically  annuities,  universal  life, and other interest
       sensitive  products.  This method involves  separating the premium income
       into the "premium"  portion (shown in the sales figures) 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  income is accounted for
       using methods applicable to comparable  "interest bearing obligations" of
       other types of financial institutions.

       Structured  settlement annuities sold to affiliate companies  represented
       $13,504,953  in  annuity  deposits  in  1996,  $22,018,313  in  1995  and
       $11,431,965  in 1994.  Also included in the annuity  deposits are annuity
       contracts  purchased  by the Erie  Insurance  Group  Retirement  Plan for
       Employees.  These annuity contracts purchased totaled $4,894,042 in 1996,
       $6,024,125 in 1995 and $8,880,714 in 1994.

       Classes of Deposits
          Total Deposits

                                         For the year ended December 31,
<TABLE>
<CAPTION>

       Class                                       1996            1995           1994             1993            1992
       -----                                       ----            ----           ----             ----            ----
       <S>                                      <C>             <C>            <C>              <C>             <C>

       Universal Life Deposit                   $   9,465,576   $   8,490,667  $     7,482,156  $    6,130,390  $    5,543,162
       Annuity Deposit                             58,250,822      66,051,230       62,048,541      50,550,323      53,526,178
                                                -------------   -------------  ---------------  --------------  --------------
                                                $  67,716,398   $  74,541,897  $    69,530,697  $   56,680,713  $   59,069,340
</TABLE>

       The Registrant  reinsures with other  insurance  companies the portion of
       the insurance coverage above acceptable retentions.  Beginning January 1,
       1995, the retention limit on an acceptable risk was increased to $300,000
       on each individual life written.  Prior to January 1, 1995, the limit was
       $225,000.

       The Company reinsures under a number of different reinsurance agreements.
       The primary purpose of this reinsurance is to enable the Company to write
       a policy in an amount  larger  than the risk it is  willing to assume for
       itself.  The  secondary  purposes  are  to  receive  commissions  on  the
       reinsurance  ceded and in some instances to participate in the profits of
       the reinsured business by way of an "experience rating refund."

Marketing

       The Company markets its products through  independent  agents  throughout
       Pennsylvania,   Maryland,   Virginia,   West  Virginia,   Ohio,  Indiana,
       Tennessee, North Carolina and the District of Columbia. The policies sold
       are evaluated by the Company's  Underwriting  Department which selects or
       declines applicants for insurance. Premium on policies which are accepted
       may be standard or rated, depending on the nature of the risk.

                                      4

<PAGE>



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.

Insurance Regulation

       The Company is 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  administrative  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  security  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,  the Company is examined
       periodically by one or more of the state supervisory agencies. The latest
       such  examination  of the Company was conducted by the  Pennsylvania  and
       Ohio Insurance  Departments and covered the four years ended December 31,
       1995.

       The  Commonwealth  of  Pennsylvania  has adopted  the minimum  risk-based
       capital  requirements on domestic insurance companies that were developed
       by the  National  Association  of  Insurance  Commissioners  (NAIC).  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.
       Companies below specific  trigger points or ratios are classified  within
       certain levels,  each of which requires specified  corrective action. 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 $84 million and
       $76 million at December 31, 1996, and 1995, respectively,  and a ratio of
       total adjusted capital to authorized  control level risk-based capital of
       7.1 at both  December  31,  1996  and  1995.  The  Company's  ratios
       significantly exceed the minimum NAIC risk-based capital requirements.

                                      5

<PAGE>



Life Reserves

       In accordance with generally accepted  accounting  principles (GAAP), the
       Company is required to establish and maintain as  liabilities,  actuarial
       reserves  to  meet  its  obligations  on  life  insurance   policies  and
       annuities. 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 or maturity in accordance
       with the mortality tables employed when the policies are issued.

The interest factors used in the computation of material reserves are:

                                                     Basis of Assumption
<TABLE>
<CAPTION>

  Years of            Policy
    Issue              Type                    Interest                    Mortality                 Withdrawal
<S>                  <C>                <C>                            <C>                           <C>

1967 - 1975          All Life           4% graded to 3 1/2%            1955-60 Basic                 Modified
                                                                       Select Plus Ultimate          Linton B

1976 - 1980          All Life           6% graded to 4%                1955-60 Basic                 Linton B
                                                                       Select Plus Ultimate

1981 - 1988          Permanent          7 1/4% graded to 6%            85% of 1965-70                150% of
                     Life                                              Select and Ultimate           Linton A

1981 - 1988          Other              7 1/4% graded to 6%            85% or 90% of                 Pricing
                     Life                                              1965-70 Select and            Assumptions
                                                                       Ultimate

1988 - 1996          All Life           7% graded to 6%                Multiple of 1965-70           Pricing
                     and Annual                                        Select and Ultimate           Assumptions
                     Renewable
                     Term

1987 - 1996          Universal          7 1/2% graded to 6%            85% or 90% of                 Pricing
                     Life                                              1965-70 Select and            Assumptions
                                                                       Ultimate
</TABLE>

Investments

       In accordance with standard  insurance  practice,  the Registrant invests
       its funds principally in corporate bonds and preferred and common stocks.
       In  1996,  the  Company's  real  estate  held  for  investment   purposes
       constituted  0.2% of the  Company's  total  assets while  mortgage  loans
       accounted for 1.2% and other invested assets accounted for 0.9%. The real
       estate  owned by the Company is leased to an  affiliate,  Erie  Indemnity
       Company  (Indemnity),  for rentals of $423,120 per year through  December
       31,  2000.   In  addition,   the  Company   makes  policy  loans  to  its
       Policyholders,  and at December 31, 1996,  such policy loans  constituted
       0.6% of the Registrant's total assets. Annual increases in the number and
       dollar  amount of policy  loans,  generally,  will vary with  changes  in
       short-term  rates of interest.  When  short-term  rates are high,  policy
       loans are also expected to increase.

                                      6

<PAGE>



       Subject to certain laws that prescribe the nature, quality and percentage
       of the  various  types  of  investments  which  may be made by  insurance
       companies,  the Company manages its investments to meet  diversification,
       yield and liquidity objectives.

Employees

       Services of  seventy-nine  full-time  Employees  are provided  through an
       affiliate, Erie Indemnity Company. All employees are salaried and ten are
       officers. These Employee expenses along with other operating expenses are
       paid by the Erie  Indemnity  Company and  reimbursed on a monthly  basis.
       None of the Employees are covered by collective bargaining agreements and
       the Company believes its Employee relations are good.

Other Data

                    The Company's Lapse Rate for 1996 was 8.2%.

                    Reinsurance Profitability - Not Applicable.

                    New Types of Insurance - Not Applicable.

                    Total  Insurance  In Force  for the last  five  years Net of
                    Reinsurance was:

                                1996 - $9,646,962,000
                                1995 - $8,370,940,000
                                1994 - $7,481,537,000
                                1993 - $6,428,223,000
                                1992 - $5,545,197,000

                                      7

<PAGE>



ITEM 2.  PROPERTIES

The Registrant owns no real property and no tangible  personal  property used in
the operation of its business except office  supplies and forms.  The Registrant
does, however,  own real property for investment purposes as outlined under ITEM
1 - INVESTMENTS.  The executive and administrative offices of the Registrant are
located  in  the   headquarters   office  of  Erie  Insurance   Group  in  Erie,
Pennsylvania.  The  Registrant  pays  other  members  of  the  group  an  amount
determined  by an arm's  length  agreement  for office  space and for the use of
facilities, equipment and services.


ITEM 3.  LEGAL PROCEEDINGS

The Registrant 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 1996.


ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

       Currently there is no market on which the  Registrant's  stock is traded.
       The Company had 1,146 recordholders of Common Stock at December 31, 1996.

Date Dividends Declared      Date Dividends Paid       Dividends per Share*

   March 2, 1995                April 1, 1995                 .113
   April 25, 1995               July 3, 1995                  .113
   June 22, 1995                October 2, 1995               .113
   September 21, 1995           January 2, 1996               .113
   February 29, 1996            April 1, 1996                 .125
   May 1, 1996                  July 1, 1996                  .125
   June 17, 1996                October 1, 1996               .125
   September 17, 1996           January 2, 1997               .125

*Adjusted  to reflect a  three-for-one  stock split which was  effective  May 2,
1996.

                                      8

<PAGE>



ITEM 6.  SELECTED FINANCIAL DATA

The  information  contained  in  "Selected  Financial  Data"  on  Page 10 of the
Company's 1996 Annual Report is incorporated herein by reference.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATION

The  information  set forth on pages 11 through 18 of the Company's  1996 Annual
Report is incorporated herein by reference.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The 1996 Financial Statements and the Registrant's  independent auditor's report
on pages 20 through 28 of the  Company's  1996  Annual  Report are  incorporated
herein by reference,  as is the unaudited  information set forth in the Notes to
the  Financial  Statements  under the caption  "Unaudited  Quarterly  Summary of
Operations" on page 28.


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

None.

                                      9

<PAGE>



ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>

                                            Present Principal Position with Erie
Name and Age                              Family Life and Other Material Positions
as of 12/31/96                                Held During the Last Five Years
<S>                                       <C>

Peter B. Bartlett 3                       Partner, Brown Brothers Harriman & Co. Since 1974; Director, the Company,
      62                                  Kennametal, Inc., Finmar Reinsurance Corporation until March 1995 and The
                                          Swedish American Chamber of Commerce, Inc.

Samuel P. Black, Jr. 1                    Director since 1967.  Chairman of the Board, Samuel P. Black & Associates, Inc.--
       94                                 insurance agency; Director--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.                    Director since 1992.  President and Chief Executive Officer of Body-Borneman
       58                                 Associates Inc., insurance agency.  President Body-Borneman, Ltd. and Body-
                                          Borneman,  Inc.,  insurance  agencies. Director--Erie Insurance Company, Erie
                                          Indemnity  Company,   Attorney-in-Fact for  Erie  Insurance  Exchange,   Erie
                                          Insurance  Company  of  New  York  and National Penn Bankshares.

John J. Brinling, Jr.                     Executive Vice President of the Company since December 1990.  Division Officer
       49                                 1984-present.

Robert H. Dreyer                          Senior Vice President of the Company since 1990.  Chief Actuary 1983-Present.
       59

Philip A. Garcia                          Senior Vice President and Controller and Division Officer since October 1993.  Vice
       40                                 President and Manager of the Life Accounting Department of the Company prior to
                                          1993.

Patricia A. Goldman 2                     Retired; Senior Vice President for Communications, USAir, Inc. from 1988 to
       54                                 1994; Director, the Company and Crown Central Petroleum Corporation.

Susan Hirt Hagen 1,*                      Director since 1980.  Managing Partner, Hagen, Herr & Peppin, Group Relations
       61                                 Consultants since 1990; Associate, Center for Practice of Conflict Management
                                          1972-1990;   Director--Erie  Insurance Company  and Erie  Indemnity  Company,
                                          Attorney-in-Fact  for  Erie  Insurance Exchange,  since 1980; Director,  Erie
                                          Insurance Property & Casualty Company, Erie  Insurance  Company  of New York,
                                          and Flagship  City  Insurance  Company since 1995.



<FN>
1 Member of Executive Committee
2 Member of Audit Committee
3 Member of Investment Committee
* F. William Hirt is the brother of Susan Hirt Hagen and the brother-in-law of
  Thomas B. Hagen.  Susan Hirt Hagen is the wife of Thomas B. Hagen.
</FN>
</TABLE>

                                     10

<PAGE>



ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>

                                            Present Principal Position with Erie
Name and Age                              Family Life and Other Material Positions
as of 12/31/96                                Held During the Last Five Years
<S>                                       <C>    

Thomas B. Hagen*                          Director since 1980.  Former Secretary of Community and Economic Developement of the
      61                                  Commonwealth of Pennsylvania January 1995 to March 1997; Chairman, Hagen & Company,
                                          business consultants from 1994 to January 1995, Special  Consultant to the Chairman of
                                          the   Board  of  the  Erie   Indemnity Company, Attorney-in-Fact for the Erie
                                          Insurance Exchange from September 1993 to January 1995; Chairman of the Board
                                          and  Chief  Executive  Officer  of the Erie Indemnity Company,
                                          Attorney-in-Fact    for    the    Erie Insurance  Exchange,  Erie Family Life
                                          Insurance  Company and Erie  Insurance Company  from  November  1990,  and of
                                          Flagship  City  Insurance  Company and Erie  Insurance  Property  &  Casualty
                                          Company,    since   1992   and   1993, respectively,   to   September   1993;
                                          President   of  the   Erie   Indemnity Company, Attorney-in-Fact for the Erie
                                          Insurance  Exchange and Erie Insurance Company and Executive  Vice  President
                                          of Erie Family Life Insurance  Company from 1982 to November 1990;  Director,
                                          the    Erie     Indemnity     Company, Attorney-in-Fact    for    the    Erie
                                          Insurance  Exchange and Erie Insurance Company,   General  Public   Utilities
                                          Corporation   1988-1995.   Erie  Small Business Investment Company 1985-1995.

F. William Hirt 1C,*                      Chairman of the Board.  Director since 1967.  Chairman of the Board of the Erie
       71                                 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--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   Integra
                                          Financial Corporation.

Dr. Irvin H. Kochel 2                     Director since 1970.  Retired Assistant Vice President Emeritus, The
       73                                 Pennsylvania State University; Director--Erie Insurance Company and Erie
                                          Indemnity Company, Attorney-in-Fact for Erie Insurance Exchange.
<FN>
1 Member of Executive Committee
2 Member of Audit Committee
C Committee Chairman
* F. William Hirt is the brother of Susan Hirt Hagen and the brother-in-law of
  Thomas B. Hagen.  Susan Hirt Hagen is the wife of Thomas B. Hagen.
</FN>
</TABLE>

                                     11

<PAGE>



ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>


                                            Present Principal Position with Erie
Name and Age                              Family Life and Other Material Positions
as of 12/31/96                                Held During the Last Five Years
<S>                                       <C>

Edmund J. Mehl 1,2C                       Director since 1969.  Retired Chairman and Chief Executive Officer, Dispatch
       73                                 Printing, Inc.; Director--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.

Stephen A. Milne 1,3                      President, Chief Executive Officer and Director since February 12, 1996.
       48                                 President and Chief Executive Officer of the Erie Insurance Company and Erie
                                          Indemnity  Company,   Attorney-in-Fact for  Erie  Insurance   Exchange  since
                                          February 12, 1996. President and Chief Executive  Officer  of  Flagship  City
                                          Insurance   Company,   Erie  Insurance Property & Casualty  Company  and Erie
                                          Insurance  Company  of New York  since March   11,   1996;   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-February 1996.     Owner,      Bennett-Damascus
                                          Insurance  Agency March  1991-December 31, 1993; Senior Vice President-Agency
                                          Division    Erie    Insurance    Group 1988-1991.   Director--Erie  Insurance
                                          Company,   Erie   Indemnity   Company, Attorney-in-Fact  for  Erie  Insurance
                                          Exchange and Erie Insurance Company of New  York,   Flagship  City  Insurance
                                          Company and Erie Insurance  Property & Casualty Company.

John M. Petersen 1,3                      Director since 1980.  Retired; President and Chief Executive Officer of the Erie
       68                                 Indemnity Company, Attorney-in-Fact for Erie Insurance Exchange, Erie Family
                                          Life Insurance Company, Erie Insurance Company,   Flagship   City   Insurance
                                          Company and Erie Insurance  Property & Casualty Company from 1993 to 1995 and
                                          Erie  Insurance  Company  of New  York from 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  from  November  1990,  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 Erie Family Life
                                          Insurance  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 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, Inc.
<FN>
1 Member of Executive Committee
2 Member of Audit Committee
3 Member of Investment Committee
C Committee Chairman
</FN>
</TABLE>


                                     12

<PAGE>



ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>

                                            Present Principal Position with Erie
Name and Age                              Family Life and Other Material Positions
as of 12/31/96                                Held During the Last Five Years
<S>                                       <C>
Seth E. Schofield                         Director since 1991.  Retired; Chairman of the Board and Chief Executive
       57                                 Officer, USAir, Inc. from 1992 to January 1996; President and Chief Executive
                                          Officer, USAir, Inc. from June 1991 to July   1992;   President   and   Chief
                                          Operating  Officer,  USAir,  Inc. from June 1990 to June 1991; Executive Vice
                                          President,  USAir,  Inc.  from 1989 to June 1990; Chairman of the Board and a
                                          Director,  Greater  Pittsburgh Chamber of Commerce;  Director,  USAir,  Inc.,
                                          the    Erie     Indemnity     Company, Attorney-in-Fact  for  Erie  Insurance
                                          Exchange,  Erie Insurance Company, PNC Bank,  N.A., USX  Corporation,  Calgon
                                          Carbon  Corporation,  and a member  of the Desai Capital Management  Advisory
                                          Board.

Thomas M. Sider                           Executive Vice President and Chief Financial Officer of the Company since
       47                                 October 1993.  Executive Vice President and Chief Financial Officer of the Erie
                                          Insurance Company, Erie Indemnity Company, Attorney-in-Fact for Erie
                                          Insurance Exchange, Flagship City Insurance Company, Erie Insurance Company
                                          of New York, and Erie Insurance Property & Casualty Company.  Treasurer of
                                          the E.I. Holding Corp. and E.I. Service Corp.  Director--Flagship City Insurance
                                          Company, Erie Insurance Property & Casualty Company, E.I. Holding Corp.,
                                          Erie Insurance Company of New York and E.I. Service Corp.

Jan R. Van Gorder 1                       Senior Executive Vice President, Secretary and General Counsel since 1990.
       49                                 Director since September 1990.  Senior Executive Vice President, Secretary and
                                          General  Counsel of the Erie Insurance Company,   Erie   Indemnity   Company,
                                          Attorney-in-Fact  for  Erie  Insurance Exchange  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   April   1994;    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--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.

Harry H. Weil 2,3C                        Director since April 25, 1995.  Senior Partner, Reed, Smith, Shaw & McClay,
       63                                 Attorneys, since 1980, Partner 1969 to 1980, Associate 1964 to 1969; Director--
                                          Erie        Indemnity         Company, Attorney-in-Fact  for  Erie  Insurance
                                          Exchange,   Erie  Insurance   Company, Calgon    Carbon    Corporation    and
                                          Pittsburgh Tube Company.

Douglas F. Ziegler                        Senior Vice President, Treasurer and Chief Investment Officer of the Company
       46                                 since October 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.
<FN>
1 Member of Executive Committee
2 Member of Audit Committee
3 Member of Investment Committee
C Committee Chairman
</FN>
</TABLE>

                                     13

<PAGE>



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,  holder of 21.6% of the Company's  stock  directly and
52.2% of the Company's stock as  attorney-in-fact  for Erie Insurance  Exchange,
has committees which meet these requirements.

                The  following  table  sets forth the  compensation  paid by the
Company during each of the three fiscal years ended December 31, 1994, 1995, and
1996,  to the chief  executive  officer of the  Company  and the four other most
highly  compensated  executive  officers of the Company during 1996 for services
rendered in all  capacities to the Company,  EFL, Erie  Insurance  Exchange (the
"Exchange") and their subsidiaries and affiliates.

                                         Annual Compensation

Name and                                        Other Annual      All Other
Principal Position    Year   Salary     Bonus   Compensation    Compensation (1)
--------------------------------------------------------------------------------

F. William Hirt       1996   $      0  $ 11,220   $      0         $       0
Chief Executive
Officer(2)
01/01/96-02/11/96

Stephen A. Milne     1996    $467,305  $ 39,351   $  1,014         $  26,020
Chief Executive      1995     245,611    26,623        927            39,993
Officer (3)          1994     189,512    34,943        965             4,433
02/12/96-12/31/96

Jan R. Van Gorder    1996    $312,555  $ 25,433   $  1,014         $  26,431
Executive Vice       1995     296,095    26,725      1,029            29,625
President, Secretary 1994     278,442    25,590      1,029            14,834
& General Counsel

Thomas M. Sider      1996    $267,295  $ 26,844   $  1,014         $  24,231
Executive Vice       1995     231,901    26,696        941            22,410
President & Chief    1994     190,049    22,571        941            21,109
Financial Officer

John J. Brinling,    1996    $202,126  $ 34,652   $    946         $  24,098
Jr., Executive       1995     184,104    20,853        877            28,837
Vice President of    1994     176,365    19,527        877            22,682
EFL

Alvin L. Irwin       1996    $175,868  $ 19,436   $  6,060         $ 633,680
Senior Vice          1995     171,273    17,978      6,325             3,192
President (4)        1994     167,072    16,360      3,665             3,010


                                     14

<PAGE>



(1)    Amounts shown include matching contributions made by the Company pursuant
       to the Company's  Employee  Savings Plan and premiums paid by the Company
       on behalf oft the named  individuals  on the Split Dollar Plan  insurance
       policies.  For the year 1996,  contributions made to the Employee Savings
       Plans amounted to $-0-,  $11,729,  $8,869,  $8,024,  $6,026 and $4,278 on
       behalf of Messrs. Hirt, Milne,  VanGorder,  Sider,  Brinling,  and Irwin,
       respectively.  For the year 1995,  contributions  to the Employee Savings
       Plan amounted to $-0-,  $5,424,  $6, 849, $6,143,  $4,910,  and $3,192 on
       behalf of Messrs. Hirt, Milne, VanGorder, Sider, Brinling, and Irwin. For
       the year 1994,  contributions  made to the Employee Savings Plan amounted
       to $-0-. $4,433,  $6,190,  $4,788. $4,478 and $3,010 on behalf of Messrs.
       Hirt,  Milne,  VanGorder,   Sider,  Brinling,  and  Irwin,  respectively.
       Premiums  paid during 1996 for Split Dollar Life  insurance  policies for
       Messrs. Hirt, Milne, VanGorder, Sider, Brinling, and Irwin, respectively,
       are as follows:  $-0-,  $14,291,  $17,742,  $16,207,  $18,072,  and $-0-.
       Premiums  paid during 1995 for Split Dollar Life  insurance  policies for
       Messrs. Hirt, Milne, VanGorder, Sider, Brinling, and Irwin, respectively,
       are as follows:  $-0-,  $28,786,  $17,420,  $16,267,  $18,144,  and $-0-.
       Premiums  paid during 1994 for Split Dollar Life  insurance  policies for
       Messrs.  Hirt,  Milne,  VanGorder,  Sider,  Brinling,  and  Irwin  are as
       follows: $-0-, $-0-, $8,644,  $16,321,  $18,204, 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.  The total benefit accruing to Mr. Irwin under the Supplemental
       Employee  Retirement  Plan of the Company  amounted  to  $629,402  and is
       reported on the table in 1996.

(2)    Mr. Hirt served as Chief Executive Officer of the Company for the period
       January 1, 1996 thru February 11, 1996.

(3)    Mr. Milne became President and Chief Executive Officer of the Company and
       a Company Director on February 12, 1996.

(4)    Mr. Irwin retired effective December 31, 1996 after 30 years of service.

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.



                                     15

<PAGE>



Pension Plan

                The  following  table sets forth the estimated  annual  benefits
payable upon retirement at age 65 under the Erie Insurance Group Retirement Plan
for Employees.

                         PENSION PLAN TABLE

                            Years of Service
Remuneration    15         20         25          30           35
-------------------------------------------------------------------
$ 200,000     60,000     80,000    100,000     120,000      120,000
  225,000     67,500     90,000    112,500     135,000      135,000
  250,000     75,000    100,000    125,000     150,000      150,000
  300,000     90,000    120,000    150,000     180,000      180,000
  350,000    105,000    140,000    175,000     210,000      210,000
  400,000    120,000    160,000    200,000     240,000      240,000
  450,000    135,000    180,000    225,000     270,000      270,000
  500,000    150,000    200,000    250,000     300,000      300,000
  550,000    165,000    220,000    275,000     330,000      330,000
  600,000    180,000    240,000    300,000     360,000      360,000
  650,000    195,000    260,000    325,000     390,000      390,000
  700,000    210,000    280,000    350,000     420,000      420,000
  750,000    225,000    300,000    375,000     450,000      450,000

                  The  compensation  covered  by such  plan is the  base  salary
reported in the Summary Compensation Table.


                                     16

<PAGE>



                Under the pension plan, credited years of service is capped at
30 years.  Credited years of service for each of the individuals named in the
Summary Compensation Table is as follows: F. William Hirt - 30 years,
Stephen A. Milne - 19 years, Jan R. Van Gorder - 16 years, Thomas M. Sider - 26
years, John J. Brinling, Jr. - 29 years and Alvin Irwin - 30 years.

                The  benefits  under  such  plan 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 Internal
Revenue Code of 1986,  as amended  (the  "Code").  Beginning  in 1994,  the Code
prohibits  the  inclusion of earnings in excess of $150,000  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
$120,000,  but adjusted annually for cost-of-living  increases) that can be paid
to each eligible employee.  A Supplemental  Employee  Retirement Plan for senior
management  is in effect  which  provides  benefits  in  excess of the  earnings
limitations imposed by the Internal Revenue Code of 1986 as amended.

Director Compensation

                Effective  January 1, 1995, the annual retainer for directors of
all members of the Group,  including the registrant,  increased to $15,000, plus
$1,200 for each meeting  attended and $800 for each committee  meeting  attended
(unless  the  committee  meeting  is held the  same day as a Board of  Directors
meeting,  for which  committee  meeting  $500 will be paid)  plus an  additional
$2,000 per year for each committee  chairperson.  In addition, all directors are
reimbursed for their expenses  incurred in attending  meetings.  Officers of the
Company who serve as directors are not compensated  separately for attendance at
meetings of the Board of Directors and its committees. Director Petersen also is
compensated pursuant to a consulting arrangement as disclosed in Item 13.

Agreements with Executive Officers

                Upon the recommendation of the Executive  Compensation Committee
of the  Company's  Board of Directors  the Company has entered  into  employment
agreements with the following four of the Company's senior  executive  officers:
John J.  Brinling,  Jr.,  Executive  Vice  President of the Company in November,
1995;  Stephen A.  Milne,  President  and CEO of the  Company;  Thomas M. Sider,
Executive Vice President and Chief Financial Officer of the Company,  and Jan R.
Van Gorder,  Executive  Vice  President,  General  Counsel and  Secretary of the
Company. The employment agreements have the following principal terms:

                (a) A three year term  expiring  in  November , 1998  unless the
agreement is theretofore terminated in accordance with its terms with or without
cause or due to disability or death of the officer or notice of  non-renewal  is
given by the Company 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;

                (c)  The eligibility of the executive under the Company'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 the Company 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 the Company or by the executive for Good Reason
(as defined in the agreement) then the executive shall be entitled to receive an
amount  equal to the sum of: (i) three  times his  highest  annual  base  salary
during  the  preceding  three  years  plus an  amount  equal to the total of the
executive's  highest awards during the preceding three years under the Company's
bonus and other short-term  incentive  compensation  plans and (ii) any award or
other compensation to which the executive is entitled under any of the Company's
incentive  compensation  programs and employee  benefit plans as well as for the
continuing participation,  for a period of three years following termination, in
all life, medical and dental insurance programs and other benefit plans to

                                     17

<PAGE>



the extent the executive and his dependents were eligible to participate in such
programs immediately prior to his termination;

          (e)  Provisions relating to confidentiality and non-disclosure
 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  termination,  unless his  termination  was
without Cause.

Compensation Committee Interlocks and Insider Participation

          The Executive  Compensation Committee (the "Committee") of the Company
presently consists of Peter B. Bartlett,  Chairman, J. Ralph Borneman, Jr., Seth
E.  Schofield  and Harry H.  Weil.  No member  of the  Committee  is a former or
current   officer  or  employee  of  the  Company  or  any  of  its  affiliates.
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  Committee of the Company 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 Committee of the Company. Mr. Borneman is
the President and a principal  shareholder of Body- Borneman  Associates,  Inc.,
Body-Borneman,  Inc.  and  Body-Borneman,  Ltd.,  all of which  are  independent
insurance agencies representing a number of insurers,  including the Company and
its insurance affiliates.

Report of the Executive Compensation Committee of the Company

          The Committee is charged with the duty of recommending to the Board of
Directors the compensation of the three highest paid officers of the Company 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 the Company and to undertake such other
responsibilities as may be delegated to it by the Board of Directors.  The Board
has authorized the  Compensation  Committee to consider the  compensation of the
four highest paid officers, including the CEO. The Committee is composed of four
directors who are not officers or employees of the Company,  the Exchange or EFL
or any of their affiliates or  subsidiaries.  The purpose of the Committee is to
determine  the level and  composition  of  compensation  that is  sufficient  to
attract and retain top quality executives for the Company.

          Compensation Philosophy:  The objectives of the 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  stockholder and policyholder  value. To that end,
compensation  comparisons will be made to benchmark  positions at other insurers
in terms of compensation levels and composition of the total compensation mix.

          Under  federal tax laws,  the Company is not allowed a federal  income
tax deduction for compensation paid to certain executive  officers to the extent
that compensation  exceeds $1 million per officer in any fiscal year. No officer
of the Company has received  compensation  in excess of $1 million in any fiscal
year to date. The  Compensation  Committee may consider  adopting  policies with
respect to this limitation on deductibility when appropriate.

          The Committee reviewed the salary ranges and base salaries of the four
highest paid  executives  including  the chief  executive  officer in 1996.  The
Committee has position  descriptions for the four highest paid executives of the
Company,   including   the   chief   executive   officer,   which   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 Committee then
reviews the salary  ranges for the chief  executive  officer and the other three
highest  paid  senior  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  Committee   references   Sibson's   Management
Compensation Survey published annually by Sibson & Company, Inc., which

                                     18

<PAGE>



summarizes compensation data for more than 100 insurance companies.  The data is
reported by position and by company asset size and by premium volume. The unique
aspects of each  position,  its duties and  responsibilities,  the effect on the
performance  of the  Company,  the number of employees  supervised  directly and
other criteria are also  considered in setting the base salaries.  The Committee
also secured the services of Towers Perrin, a nationally  recognized  consulting
firm  with  specific  expertise  in the  insurance  industry,  to do a  detailed
analysis  of  competitive  compensation  levels  and  make  recommendations.  In
addition, Towers Perrin made specific recommendations to the Committee regarding
the  compensation  for Mr.  Milne as he assumed  the  responsibilities  of chief
executive officer.

          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 the Company may receive compensation above the midpoint for the established
salary range.

          A  promotional  salary  increase may also be added to the  executive's
compensation  when the executive assumes new  responsibilities  or has increased
accountability for results.  Significant changes in duties and  responsibilities
may also result in a higher salary range.

          Compensation  for the chief executive  officer  consists  primarily of
salary  and  bonus and minor  perquisites  which  amount to less than 10% of the
chief executive  officer's salary and bonus. No long-term incentive plans (which
provide  incentives for  performance  occurring over longer periods of time) are
currently  utilized  in  determining  the  compensation  of the chief  executive
officer,  although  external data  indicates  its  prevalence  among  competitor
companies. Stock options, stock appreciation rights and restricted stock are not
currently part of the executive  compensation  package for any executives of the
Company.

          Performance  factors  applicable to the Company,  such as property and
casualty insurance loss ratios,  investment  portfolio returns,  overall company
profitability,  as well as other factors are considered indirectly in evaluating
the chief executive officer's performance.

          Compensation of the next three most highly compensated  individuals is
determined  by the  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 four
highest  paid  executives)  is based  upon the  Company's  established  standard
compensation policies and is not determined by the Committee.  As with the chief
executive officer and the next three most highly compensated executive officers,
no long-term incentive plans are maintained for this executive.


                        ERIE INDEMNITY COMPANY
                        EXECUTIVE COMPENSATION COMMITTEE

                           Peter B. Bartlett, Chairman
                           J. Ralph Borneman, Jr.
                           Seth E. Schofield
                           Harry H. Weil



                                     19

<PAGE>



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of 2/28/97

(a)
    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           4,932,900(1)                    52.2%(1)
  100 Erie Insurance Place              Direct
  Erie, PA


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

    Name & Address                        Shares
      of Beneficial                    Beneficially                Percent of
          Owner                           Owned                      Class


  Peter B. Bartlett                               0                    NA
  65 Egbert Street
  Bay Head, NJ 08742

  Samuel P. Black, Jr.                       68,118                   .72%
  400 French St., Suite 100
  Erie, PA  16507

  J. Ralph Borneman                           1,536                   .02%
  Box 552
  17 East Philadelphia Ave.
  Boyertown, PA  19512

  Patricia A. Goldman                             0                    NA
  3026 1/2 Q Street, NW
  Washington, DC 20007

  Susan Hirt Hagen                              300                    --
  5727 Grubb Rd.
  Erie, PA  16506

  Thomas B. Hagen                           154,482                  1.63%
  5727 Grubb Rd.
  Erie, PA  16506

  F. William Hirt                           167,034                  1.77%
  3270 Kingston Court S.
  Erie, PA  16506


                                     20

<PAGE>



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (Cont.)

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

  Name & Address                          Shares
     of Beneficial                     Beneficially                Percent of
           Owner                         Owned                       Class

  Dr. Irvin H. Kochel                         6,249                   .07%
  4737 Reese Road
  Erie, PA  16510

  Edmund J. Mehl                             12,150                   .13%
  504 Frontier Dr.
  Erie, PA  16505

  Stephen A. Milne                                0                    NA
  100 Culbertson Drive
  Lake City, PA 16423

  John M. Petersen                           89,141                   .94%
  124 Voyageur Dr.
  Erie, PA  16505

  Seth E. Schofield                               0                    NA
  9500 South Ocean Drive #1601
  Jensen Beach, FL 34957

  Jan R. Van Gorder                              75                    --
  6796 Manchester Beach Road
  Fairview, PA  16415

  Harry H. Weil                                   0                    NA
  7 Foxwood Drive
  Pittsburgh, PA   15238

  John J. Brinling, Jr.                       1,260                   .01%
  1522 Sumner Drive
  Erie, PA  16505

  Robert H. Dreyer                              600                   .01%
  465 Hawthorne Trace
  Fairview, PA  16415

  Philip Alan Garcia                          1,275                   .01%
  786 Stockbridge Drive
  Erie, PA  16505

  Thomas M. Sider                               285                    --
  11810 Old Lake Road
  North East, PA  16428

  Douglas F. Ziegler                            270                    --
  378 Ridgeview Drive
  Erie, PA  16505

  Officers and directors
  as a group (19 persons)                   502,775(2)               5.32%(2)

                                     21

<PAGE>



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (Cont.)

     (1) Erie Insurance Exchange (the "Exchange") is a reciprocal insurance
         exchange controlled by its subscribers, each of whom has designated
         Erie Indemnity Company  as such subscriber's attorney-in-fact for
         certain purposes, including Indemnity's holding of Common Stock of the
         Company.  76.2% of the outstanding voting stock of Erie Indemnity
         Company is owned beneficially by a trust established by H. O. Hirt, 
         the father of F. William Hirt and Susan H. Hagen and the father-in-law
         of Thomas B. Hagen.  Mr. Hirt and Mrs. Hagen are beneficiaries of the
         trust and are co-trustees with Mellon Bank, N.A.  An additional 12.7%
         of the  Erie Indemnity Company voting stock is beneficially owned by
         Samuel P. Black, Jr.

     (2) Includes direct and indirect  beneficial  ownership and shares owned by
         and with spouses.


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


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Directors  Black and Borneman 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 such companies standard commission schedules and agents' contracts.

     The retired President and CEO and previous Chief Investment  Officer of the
     Erie Insurance Group of Companies,  and current director, John M. Petersen,
     entered into a consulting arrangement with Erie Indemnity Company effective
     January 2, 1996. Under the terms of the arrangement, Erie Indemnity Company
     engaged Mr. Petersen as a consultant to furnish Erie Indemnity  Company and
     its pension trust, Erie Insurance Exchange,  and Erie Family Life Insurance
     Company,  with  investment  services with respect to their  investments  in
     common stocks. The amount paid Mr. Petersen pursuant to this arrangement in
     1996 was $2,078,758.

                                     22

<PAGE>



                                                           PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)       (1) The  following  financial  statements  of the  Registrant  and the
          report of independent  certified  public  accountants are incorporated
          herein by reference to pages 20 through 28 in the Registrant's  annual
          report to shareholders for the year ended December 31, 1996.

               Independent Auditor Report
               Statements  of  Financial  Position - December  31, 1996 and 1995
               Statements of Operations  for the years ended  December 31, 1996,
               1995  and 1994  Statements  of Cash  Flows  for the  years  ended
               December  31, 1996,  1995 and 1994  Statements  of  Shareholders'
               Equity for the years ended December 31, 1996, 1995 and 1994 Notes
               to Financial Statements

      (2) The  following  financial  statement  schedules  are  included in this
report on FORM 10-K:

                                                                        Page

               Independent Auditors' Report on Schedules                 25

               Schedule I - Summary of Investments other than
               investments in related parties                            26

               Schedule V - Supplementary Insurance Information          27

               Schedule VI - Reinsurance                                 28

          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:

               Exhibit 13 - Annual Report to Shareholders

               Exhibit 27 - Financial Data Schedule

          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)       No reports on Form 8-K have been  filed or were  required  to be filed
          during the last quarter of the period covered by this report.

                                                             23

<PAGE>


                                                         SIGNATURES

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

Date:  March 11, 1997    ERIE FAMILY LIFE INSURANCE COMPANY
                                  (Registrant)


                         Principal Officers


                        /s/ F. William Hirt
              F. William Hirt, Chairman of the Board


                        /s/ Stephan A. Milne
             Stephen A. Milne, President and C.E.O.


                         /s/ Thomas M. Sider
         Thomas M. Sider, Executive Vice President & CFO


                        /s/ Philip A. Garcia
       Philip A. Garcia, Senior Vice President & Controller


                     Board of Directors


/s/ Peter B. Bartlett                               /s/ Irvin H. Kochel
 Peter B. Bartlett                                  Dr. Irvin H. Kochel

/s/ Samuel P. Black, Jr.                            /s/ Edmund J. Mehl
 Samuel P. Black, Jr.                                Edmund J. Mehl

/s/ J. Ralph Borneman                               /s/ Stephen A. Milne
 J. Ralph Borneman                                   Stephen A. Milne

/s/ Patricia A. Goldman                             /s/ John M. Petersen
 Patricia A. Goldman                                 John M. Petersen

/s/ Susan Hirt Hagen                                /s/ Seth E. Schofield
 Susan Hirt Hagen                                    Seth E. Schofield

/s/ Thomas B. Hagen                                 /s/ Jan R. Van Gorder
 Thomas B. Hagen                                      Jan R. Van Gorder

                                                    /s/ Harry H. Weil
 F. William Hirt                                      Harry H. Weil

                                      24

<PAGE>

                         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, 1996 and 1995 and the related
statements of  operations,  shareholders'  equity and cash flows for each of the
three years in the period  ended  December  31,  1996,  as contained in the 1996
annual report,  incorporated  by reference in the annual report on Form 10-K for
the year ended December 31, 1996. 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  generally   accepted  auditing
standards.  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, 1996 and 1995,  and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 1996
in  conformity  with  generally  accepted  accounting  principles.  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/ Brown Schwab Bergquist & Co.




Erie, Pennsylvania
February 18, 1997

                                     25

<PAGE>






SCHEDULE I - SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES
<TABLE>
<CAPTION>

                                        December 31, 1996

                                                  Cost or                            Amount at which
                                                 Amortized           Market          Shown in the
                                                   Cost               Value          Balance Sheet
             <S>                              <C>                <C>                <C>

             Type of Investment
             Fixed Maturities
                   Available-for-Sale
               Bonds and Notes
                 U. S. Treasuries             $   6,476,927      $   6,943,977      $   6,943,977
                 Foreign Governments              2,986,046          2,970,000          2,970,000
                 Political Subdivisions           4,676,466          5,003,331          5,003,331
                 Special Revenue                 24,697,215         25,021,613         25,021,613
                 Public Utilities                90,987,333         91,538,151         91,538,151
                 Industrial and Misc.           370,740,927        374,435,097        374,435,097
                 Foreign Industrial and Misc.     7,062,274          7,547,530          7,547,530
               Redeemable Preferred Stocks
                 Banks, Trusts and
                   Insurance Companies            2,000,000          2,070,000          2,070,000
                  Total Fixed Maturities
                        Available-for-Sale    $ 509,627,188      $ 515,529,699      $ 515,529,699
             Equity Securities
               Common Stocks
                 Industrial and Misc.         $   5,500,006      $   5,985,570      $   5,985,570
               Non-Redeemable Preferred Stocks
                 Public Utilities                 4,000,000          3,940,000          3,940,000
                 U. S. Banks, Trusts and
                   Insurance Companies           78,622,165         81,682,550         81,682,550
                 Foreign Banks, Trusts and
                   Insurance Companies            3,000,000          3,180,000          3,180,000
                 Industrial and Misc.            16,440,871         17,804,025         17,804,025
                 Foreign Industrial and Misc.     3,900,000          3,960,000          3,960,000
                  Total Equity Securities     $ 111,463,042      $ 116,552,145      $ 116,552,145
             Real Estate
               Investment Property            $   1,710,329      $   1,710,329      $   1,710,329
             Policy Loans                         4,381,657          4,381,657          4,381,657
             Mortgage Loans                       8,955,760          8,955,760          8,955,760
             Other Invested Assets                6,787,226          6,787,226          6,787,226
                  Total Investments           $ 642,925,202      $ 653,916,816      $ 653,916,816

</TABLE>
                                     26



<PAGE>



            SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION
<TABLE>
<CAPTION>


                                                         At December 31,
                                        Deferred       Future
                                         Policy        Policy                 Other
                                      Acquisition    Benefits &   Unearned    Policy
            Segment                      Costs        Deposits    Premium     Claims
            <S>                      <C>            <C>           <C>        <C>

            1996
            Ordinary Life Insurance  $ 50,586,096   109,754,695   119,145    1,612,105
            Group Life Insurance                0     1,135,755         0       91,000
            Annuities                   7,440,332   450,570,003         0            0
            Supplemental Contracts              0       839,258         0            0
                 Total               $ 58,026,428   562,299,711   119,145    1,703,105

            1995
            Ordinary Life Insurance  $ 43,893,056    93,756,432   104,951      823,618
            Group Life Insurance                0       984,149         0       73,408
            Annuities                   6,869,236   405,346,808         0            0
            Supplemental Contracts              0       872,745         0            0
                 Total               $ 50,762,292   500,960,134   104,951      897,026

            1994
            Ordinary Life Insurance  $ 38,740,281    79,503,597    98,700      723,638
            Group Life Insurance                0       653,979         0       73,847
            Annuities                   6,211,514   341,242,154         0            0
            Supplemental Contracts              0       767,457         0            0
                 Total               $ 44,951,795   422,167,187    98,700      797,485


</TABLE>

<PAGE>




            SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION (CONTINUED)
<TABLE>
<CAPTION>


                                                    For the Years Ended December 31,
                                                                                 Amortization
                                                        Net         Life &       of Deferred      Other
                                        Policy       Investment     Annuity      Acquisition    Operating
            Segment                   Revenues(a)      Income       Benefits        Costs        Expenses
            <S>                      <C>             <C>           <C>            <C>           <C>

            1996
            Ordinary Life Insurance  $29,038,797     13,165,970    17,434,872     2,456,879      7,078,531
            Group Life Insurance       2,073,494         75,877     1,040,741             0        483,232
            Annuities                      3,871     32,641,980    25,061,905       684,471      1,785,210
            Supplemental Contracts             0         65,142        47,430             0          4,280
                 Total               $31,116,162     45,948,969    43,584,948     3,141,350      9,351,253

            1995
            Ordinary Life Insurance  $25,764,413     11,329,270    14,372,964     1,813,419      7,541,883
            Group Life Insurance       1,854,910         59,239     1,035,599             0        360,556
            Annuities                    454,674     29,509,614    22,664,856       544,708      2,281,533
            Supplemental Contracts             0         64,689        53,930             0          4,101
                 Total               $28,073,997     40,962,812    38,127,349     2,358,127     10,188,073

            1994
            Ordinary Life Insurance  $22,931,783      9,651,029     8,430,107     1,700,028      6,882,372
            Group Life Insurance       1,717,589         46,571       837,533             0        330,111
            Annuities                    244,111     25,800,361    18,128,885       279,737      2,297,726
            Supplemental Contracts             0         68,288        36,737             0          2,813
                 Total               $24,893,483     35,566,249    27,433,262     1,979,765      9,513,022
<FN>
(a) Net of reinsurance ceded
</FN>
</TABLE>

                                     27

<PAGE>






                                             SCHEDULE VI - REINSURANCE
<TABLE>
<CAPTION>
                                                                                                             Percentage
                                                                 Ceded to        Assumed                     of Amount
                                                  Gross            Other        From Other       Net          Assumed
                                                  Amount         Companies      Companies      Amount          to Net
            <S>                             <C>                <C>              <C>         <C>                  <C>

            December 31, 1996
            Life Insurance in force         $ 10,766,917,000   1,151,610,000    31,655,000  9,646,962,000        0.33%
            Premiums for the year
              Life Insurance                      32,673,673       3,634,876             0     29,038,797        -0-
              Group                                1,994,659               0        82,706      2,077,365        3.98%
                 Total Premiums             $     34,668,332       3,634,876        82,706     31,116,162        0.27%

            December 31, 1995
            Life Insurance in force         $  9,537,687,000   1,197,855,000    31,108,000  8,370,940,000        0.37%
            Premiums for the year
              Life Insurance                      29,118,897       3,354,484             0     25,764,413        -0-
              Group                                2,205,144               0       104,440      2,309,584        4.52%
                 Total Premiums             $     31,324,041       3,354,484       104,440     28,073,997        0.37%

            December 31, 1994
            Life Insurance in force         $  8,438,925,000     987,353,000    29,965,000  7,481,537,000        0.40%
            Premiums for the year
              Life Insurance                      26,117,501       3,185,718             0     22,931,783        -0-
              Group                                1,867,982               0        93,718      1,961,700        4.78%
                 Total Premiums             $     27,985,483       3,185,718        93,718     24,893,483        0.38%

</TABLE>

                                     28

<PAGE>