UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                  FORM 10-Q/A


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

                 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996

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

        For the transition period from                to

                        Commission File Number: 0-20882

                        STANDARD MANAGEMENT CORPORATION
            (Exact name of Registrant as specified in its charter)


            Indiana                                       No. 35-1773567
      (State of incorporation)                      (I.R.S. employer
identification no.)

                            9100 Keystone Crossing
                          Indianapolis, Indiana 46240
                   (Address of principal executive offices)

                                (317) 574-6200
                              (Telephone number)

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 [*]  No [  ]


As  of  July  31, 1996, the Registrant had 4,526,522  shares  of  Common  Stock
outstanding.



<PAGE>
                        STANDARD MANAGEMENT CORPORATION
                                     INDEX



PART I.  FINANCIAL INFORMATION:
  PAGE

Item 1.  Financial Statements

      Consolidated Balance Sheets -
      June 30, 1996 (Unaudited) and December 31, 1995
     3

      Consolidated Statements of Operations -
      For the Three Months and Six Months Ended June 30, 1996 and 1995
(Unaudited)
     5

      Consolidated Statements of Shareholders' Equity
      For the Six Months Ended June 30, 1996 and 1995 (Unaudited)
     6

      Consolidated Statements of Cash Flows -
      For the Six Months Ended June 30, 1996 and 1995 (Unaudited)
     7

      Notes to Consolidated Financial Statements (Unaudited)
     8

Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations
    11

PART II.  OTHER INFORMATION:

Item 4.  Submission of Matters to a Vote of Security Holders
    21

Item 6.  Exhibits and Reports on Form 8-K
    22

Signatures
    23

Exhibit 11 - Statement re: Computation of Per Share Earnings -
    24
      For the Three and Six Months Ended June 30, 1996 and 1995 (Unaudited)


<PAGE>
                     PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                        STANDARD MANAGEMENT CORPORATION

                          CONSOLIDATED BALANCE SHEETS
                            (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                       June 30,                 December 31,
<S>                                                                           <C>                        <C>
                                                                                   1996                         1995
                                                                                      (Unaudited)                 (Audited)
                             ASSETS
Investments:
  Securities available for sale:
     Fixed maturity securities, at fair value
        (amortized cost: $236,465 in 1996 and $225,584 in 1995)               $231,377                   $232,092
     Equity securities, at fair value (cost: $55 in 1996 and $52 in 1995)     64                         52
  Mortgage loans on real estate, at unpaid principal balances                 3,049                      2,963
  Policy loans, at unpaid principal balances                                  7,225                      8,509
  Real estate, at depreciated cost                                            550                        556
  Other invested assets                                                       1,014                      1,367
  Short-term investments, at cost, which approximates fair value              9,294                      35,058
        Total investments                                                     252,573                    280,597
Cash                                                                          3,876                      5,762
Amounts due and recoverable from reinsurers                                   64,714                     33,419
Deferred policy acquisition costs                                             16,225                     10,054
Present value of future profits, less accumulated amortization of
  $2,615 in 1996 and $2,803 in 1995                                           15,330                     15,246
Excess of acquisition cost over net assets acquired, less
  accumulated amortization of $259 in 1996 and $393 in 1995                   2,307                      3,175
Other assets                                                                  12,400                     8,640
Assets held in separate accounts                                              125,432                    122,705
        Total assets                                                          $492,857                   $479,598
</TABLE>


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



<PAGE>
                        STANDARD MANAGEMENT CORPORATION

                    CONSOLIDATED BALANCE SHEETS (CONTINUED)
               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                          JUNE 30,                December 31,
                                                                    1996                                      1995
<S>                                                            <C>                                         <C>
                                                                    (UNAUDITED)                       (Audited)
LIABILITIES, REDEEMABLE SECURITIES AND SHAREHOLDERS' EQUITY
Liabilities:
  Future policy benefits:
     Interest-sensitive annuities and other financial products $230,548                                    $212,500
     Traditional life insurance                                81,215                                       82,762
        Total future policy benefits                           311,763                                     295,262
  Policy claims and other policyholders' benefits and funds    2,438                                         2,572
                                                               314,201                                     297,834
  Accounts payable and accrued expenses                        4,613                                         4,880
  Class action litigation and settlement liability             -                                             3,000
  Obligations under capital lease                              867                                           1,084
  Notes payable                                                5,682                                         3,107
  Deferred federal income taxes                                9                                             2,583
  Excess of net assets acquired over acquisition cost, less
     accumulated amortization of $3,145 in 1996 and
     $2,451 in 1995                                            3,469                                         4,163
  Liabilities related to separate accounts                     125,432                                     122,705
        Total liabilities                                      454,273                                     439,356
Class S Cumulative Convertible Redeemable Preferred Stock,
  par value $10 per share:
     Authorized 300,000 shares; issued and outstanding 230,279
     shares, redemption value of $10 per share plus
     accumulated and unpaid dividends
                                                               2,403                                              -
Shareholders' equity:
  Preferred stock, no par value:
     Authorized 700,000 shares; none issued and outstanding    -                                                  -
  Common stock, no par value:
     Authorized 20,000,000 shares; issued 5,752,499 shares
        in 1996 and 5,459,573 shares in 1995                   40,758                                       39,808
  Treasury stock, at cost, 974,104 shares in 1996 and
     502,025 shares in 1995 (deduction)                        (4,723)                                     (2,621)
  Unrealized gain (loss) on securities available for sale      (2,013)                                       2,582
  Foreign currency translation adjustment                      937                                           1,159
  Retained earnings (deficit)                                  1,222                                         (686)
        Total shareholders' equity                             36,181                                       40,242
        Total liabilities, redeemable securities
           and shareholders' equity                            $492,857                                    $479,598
</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


<PAGE>
                        STANDARD MANAGEMENT CORPORATION

                     CONSOLIDATED STATEMENTS OF OPERATIONS
          (UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                        Three Months Ended                 Six Months Ended
                                                                             June 30,                          June 30,
                                                                1996               1995              1996               1995
Revenues:
<S>                                                           <C>               <C>               <C>              <C>
  Premium income                                              $5,630            $946              $7,129           $2,340
  Net investment income                                       4,731             4,500             9,391            9,179
  Net realized investment gains                               218               279               456              334
  Gain on disposal of subsidiaries                            -                 -                 886              -
  Policy charges                                              690               505               1,214            1,104
  Amortization of excess of net assets acquired over          347               347               694              694
acquisition cost
  Management fees and similar income from separate accounts   452               222               836              488
  Other income                                                597               111               915              149
     Total revenues                                           12,665            6,910             21,521           14,288
Benefits and expenses:
  Benefits and claims                                         6,396             950               7,223            2,761
  Interest credited on interest-sensitive annuities and other
     financial products                                       2,358             2,564             5,004            5,127
  Salaries and wages                                          1,255             1,165             2,463            2,205
  Amortization                                                712               565               1,159            921
  Other operating expenses                                    1,795             1,619             3,910            2,940
  Interest expense and financing costs                        154               36                277              53
  Class action litigation and settlement costs (credit)       -                 (314)             -                (314)
     Total benefits and expenses                              12,670            6,585             20,036           13,693
Income (loss) before federal income taxes, extraordinary gain
on early
  redemption of redeemable preferred stock and preferred      (5)               325               1,485            595
  stock dividends
Federal income tax expense (credit)                           57                77                (1,118)          61
Income (loss) before extraordinary gain on early redemption
  of redeemable preferred stock and preferred stock dividends (62)              248               2,603            534
Extraordinary gain on early redemption of redeemable
preferred stock,                                              166               -                 267              -
  net of $- federal income tax
NET INCOME                                                    104               248               2,870            534
Preferred stock dividends                                     66                -                 112              -
Earnings available to common shareholders                     $38               $248              $2,758           $534
Earnings per share:
  Income before extraordinary gain on early redemption of
     redeemable preferred stock and preferred stock dividends $(.01)            $.05              $.50             $.10
  Extraordinary gain on early redemption of redeemable
     preferred stock                                          .03               -                 .05              -
   NET INCOME                                                 .02               .05               .55              .10
   Preferred stock dividends                                  .01               -                 .01              -
  Earnings available to common shareholders                   $.01              $.05              $.54             $.10
Weighted average number of shares outstanding:
   Common shares                                              4,760,656         5,276,428         4,866,850        5,281,983
  Common equivalent shares                                    126,815           83,695            612,358          41,454
                                                              4,887,471         5,360,123         5,479,208        5,323,437
</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



<PAGE>
                        STANDARD MANAGEMENT CORPORATION

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
          (UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                                 Six Months Ended June 30,
                                                                   Amounts                                       Shares
                                                      1996              1995                         1996             1995
<S>                                                 <C>              <C>                          <C>              <C>
Common stock:
   Balance, beginning of period                     $39,808          $39,695                      5,459,573        5,457,906
      Issuance of common stock                      100              -                            20,000           -
      5% common stock dividend                      850              -                            272,926          -
   Balance, end of period                           40,758           39,695                       5,752,499        5,457,906

Treasury stock (at cost):
   Balance, beginning of period                     (2,621)          (2,221)                      (502,025)        (418,425)
      Treasury stock acquired                       (2,104)          (255)                        (426,026)        (53,900)
      5% common stock dividend                      -                -                            (46,402)         -
      Reissuance of treasury stock in connection
with                                                2                -                            349              -
         exercise of stock options
   Balance, end of period                           (4,723)          (2,476)                      (974,104)        (472,325)

Unrealized gain (loss) on securities:
   Balance, beginning of period                     2,582            (13,411)
      Change in unrealized gain (loss) on
         securities available for sale, net         (4,595)          13,280
   Balance, end of period                           (2,013)          (131)

Foreign currency translation adjustments:
   Balance, beginning of period                     1,159            546
      Translation adjustments for the period        (222)            909
   Balance, end of period                           937              1,455

Retained earnings (deficit):
   Balance, beginning of period                     (686)            (1,999)
      Net income                                    2,870            534
       5% common stock dividend, plus cash in lieu
of    fractional shares                             (850)            -
      Preferred stock dividend                      (112)            -
   Balance, end of period                           1,222            (1,465)

Total shareholders' equity and common shares        $36,181          $37,078              4,778,395        4,985,581
outstanding
</TABLE>


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


<PAGE>
                        STANDARD MANAGEMENT CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (UNAUDITED, DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                                JUNE 30,
<S>                                                                         <C>                       <C>
                                                                           1996                    1995
OPERATING ACTIVITIES
Net income                                                                  $2,870                    $534
Adjustments to reconcile net income
   to net cash provided (used) by operating activities:
     Amortization of deferred policy acquisition costs                          575                     510
     Policy acquisition costs deferred                                      (2,506)                   (617)
     Class action litigation and settlement liability                            -                    (633)
     Deferred income taxes                                                    (244)                     435
     Depreciation and amortization                                              200                      14
     Change in future policy benefits                                           658                   1,936
     Net increase (decrease) in policy claims and
          other policyholders' benefits and funds                             (405)                   (300)
     Net realized investment gains                                            (456)                   (334)
     Decrease (increase) in accrued investment income                         (535)                      57
     Extraordinary gain on early redemption of redeemable
                      preferred stock                                         (267)                      -
     Other                                                                    1,744                   3,723
          NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                    1,634                   5,325
FINANCING ACTIVITIES
Borrowings                                                                   2,600                    200
Repayments on borrowings and capital lease obligation                        (239)                    (721)
Premiums received on interest-sensitive annuities
     and other financial products credited to
     policyholder account balances, net of premiums ceded                    18,796                   7,017
Return of policyholder account balances on
     interest-sensitive annuities and other
     financial products, net of premiums ceded                              (9,403)                 (8,952)
Redemption of redeemable preferred stock                                      (442)                      -
Proceeds from common and treasury stock sales                                   102                      -
Purchase of common stock for treasury                                       (2,104)                   (255)
          NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                    9,310                 (2,711)
INVESTING ACTIVITIES
Fixed maturity securities available for sale:
     Purc  hases                                                            (107,403)               (100,591)
     Sales                                                                   77,578                 103,030
     Maturities                                                               3,562                   1,223
Short-term investments, net                                                   5,423                 (7,380)
Other investments, net                                                      (3,218)                     500
Proceeds from sale of property and equipment under
     capital lease                                                               -                    1,396
Proceeds from sale of First International Life Insurance
     Company, less cash transferred to seller of $265                        11,228                      -
          NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES                  (12,830)                 (1,822)
Net increase (decrease) in cash                                             (1,886)                     792
Cash at beginning of period                                                   5,762                   1,604
Cash at end of period                                                       $3,876                   $2,396
</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


<PAGE>
                        STANDARD MANAGEMENT CORPORATION

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          (UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


NOTE 1 - BASIS OF PRESENTATION

      The accompanying  unaudited  consolidated  financial statements have been
prepared in accordance with generally accepted accounting  principles  ("GAAP")
for  interim  financial information and with the instructions to Form 10-Q  and
Article 10 of Regulation  S-X.   Accordingly,  they  do  not include all of the
information  and footnotes required by GAAP for complete financial  statements.
Such principles  were applied on a basis consistent with those reflected in the
Standard Management Corporation ("SMC") Annual Report on Form 10-K for the year
ended December 31,  1995.  However, certain reclassifications have been made in
the 1995 financial statements to conform with the 1996 presentation.

      The results of  operations  for  the interim periods shown in this report
are not necessarily indicative of the results  that  may  be  expected  for the
fiscal  year.   This is particularly true in the life insurance industry, where
mortality results  in  interim periods can vary substantially from such results
over  a  longer period.     In  the  opinion  of  management,  the  information
contained  herein  reflects  all  adjustments  necessary to make the results of
operations for the interim periods a fair statement  of  such  operations.  All
such adjustments are of a normal recurring nature.

      The  nature of the insurance business of Standard Management  Corporation
and its consolidated  subsidiaries ("SMC" or "the Company") requires management
to make estimates and assumptions  that  affect  the  amounts  reported  in the
consolidated  financial  statements  and  accompanying notes.  For example, the
Company  uses  significant estimates and assumptions  in  calculating  deferred
policy acquisition  costs,  present  value  of future profits, goodwill, future
policy  benefits  and  deferred  federal  income  taxes.   Such  estimates  and
assumption could change in the future as more information  becomes known, which
could impact the amounts reported and disclosed herein.

      The consolidated financial statements as of and for the  three months and
six months ended June 30, 1996 include the assets and liabilities  and  results
of  operations of Dixie National Life Insurance Company ("Dixie National Life")
which was acquired on October 2, 1995.

      For  further  information, refer to the consolidated financial statements
and footnotes thereto included in the Annual Report on Form 10-K of SMC for the
year ended December 31, 1995.

NOTE 2 - COMMON STOCK

      SMC declared a  5%  stock  dividend  on  shares  of  its common stock for
shareholders of record on May 17, 1996 which was distributed to shareholders on
June 21, 1996.  All applicable number of shares and per share  amounts included
in  the consolidated financial statements have been retroactively  adjusted  to
reflect this stock dividend for all periods presented.

NOTE 3 - NOTES PAYABLE

      SMC  has  outstanding borrowings at June 30, 1996 pursuant to a Revolving
Line of Credit Agreement  with  a  bank (the "Credit Agreement") which provides
for it to borrow up to $6,000 in the  form  of  a  five-year reducing revolving
loan arrangement, which may be extended to seven years at the discretion of the
bank.  At June 30, 1996, the total principal balance  borrowed under the Credit
Agreement was $5,600.  SMC had borrowed an additional $2,600 since December 31,
1995  to  repurchase  its  Common  Stock  and  Class  S Cumulative  Convertible
Redeemable  Preferred  Stock  ("Class  S  Preferred  Stock")  and  for  general
corporate purposes.  Borrowings under this Credit Agreement  may  be  used  for
contributions  to surplus of insurance subsidiaries, acquisition financing, and
repurchases of Class  S  Preferred  Stock and Common Stock of SMC.  Interest on
the borrowings under the Credit Agreement  is determined, at the option of SMC,
to be: (I) a fluctuating rate of interest to  the corporate base rate announced
by the bank from time to time plus 1% per annum,  or  (ii) a rate at LIBOR plus
3.25%.   The  debt  is  also  subject  to  certain restrictions  and  covenants
considered ordinary for this type of borrowing.   They  include,  among others,
minimum  consolidated  equity,  positive  net  income, and minimum consolidated
statutory  surplus  for  SMC's  insurance subsidiaries.   Additional  covenants
include limitations on acquisitions,  additional indebtedness, investments, and
mergers, consolidations and sales of assets.   As  of June 30, 1996, SMC was in
compliance with all restrictions and covenants in the Credit Agreement.


                        STANDARD MANAGEMENT CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)


NOTE 4 - REDEEMABLE PREFERRED STOCK

      In  connection with the class action lawsuit settlement  in  March  1995,
300,000 shares  designated  as  Class  S  Preferred Stock, $10.00 per share par
value, were issued February 8, 1996.  The Class S Preferred Stock is redeemable
in February 2003, has an 11% annual cumulative  dividend  payable  in  February
2003,  and  is  convertible  into  SMC  common  stock  at $7.62 per share until
February 1998 and $10.00 per share thereafter, subject to  adjustment  under  a
formula intended to protect against dilution.

      SMC  may voluntarily redeem the Class S Preferred Stock prior to February
2003 at par  value plus accumulated and unpaid dividends.  As of June 30, 1996,
SMC has repurchased and retired 69,721 shares of Class S Preferred Stock on the
open market at  a  cost  of  $442  primarily  paid through borrowings under the
Credit Agreement.  These repurchases resulted in an extraordinary gain on early
redemption of redeemable preferred stock of $166 and $267 for the three and six
month periods ended June 30, 1996, respectively.

NOTE 5 - NET UNREALIZED GAIN (LOSS) ON SECURITIES AVAILABLE FOR SALE

      The components of the balance sheet caption  "Unrealized  gain  (loss) on
securities  available  for  sale"  in  shareholders'  equity  are summarized as
follows:
<TABLE>
<CAPTION>
                                                                         JUNE 30,                December 31,
                                                                            1996                     1995
<S>                                                                              <C>                       <C>
Fair value of securities available for sale                                      $231,441                  $232,144
Amortized cost of securities available for sale                                    236,520                   225,695
                  Gross unrealized gain (loss) on securities                       (5,079)                     6,449
available for sale
Adjustments for:
                  Deferred policy acquisition costs                                  1,860                   (2,380)
                  Present value of future profits                                      184                     (174)
                  Deferred federal income tax recoverable                            1,020                   (1,311)
(liability)
                  Minority interest                                                      2                       (2)
                                                                 Net             $(2,013)                  $2,582
unrealized gain (loss) on securities available for sale
</TABLE>

NOTE 6 - INCOME TAXES

      The effective consolidated federal income tax expense (credit)  rate  for
SMC  and subsidiaries (the "Company") was (11)% and (75)% for the three and six
months  ended  June  30,  1996,  compared  to 24% and 10% for the three and six
months ended June 30, 1995.  The large credit for the six months ended June 30,
1996 is primarily due to tax benefits of $1,420  related  to  the sale of First
International  Life  Insurance  Company ("First International") (SEE  NOTE  7).
Also, the effective rates in 1995  are  less than the statutory rates primarily
because the amortization of excess of net assets acquired over acquisition cost
resulting  from the acquisition of Standard  Management  International  is  not
subject to United  States  income  tax.   The  Company  also  has  received the
benefits of a special deduction available to small life insurance companies and
the utilization of operating loss carryforwards in 1995.  The benefits  of  the
special deduction available to small life insurance companies will no longer be
available when consolidated assets exceed $500,000.

NOTE 7 - DISPOSAL OF SUBSIDIARIES

      On  March 18, 1996, Standard Life Insurance Company of Indiana ("Standard
Life"), a wholly-owned  subsidiary  of  SMC,  completed the sale of a duplicate
charter associated with its wholly-owned subsidiary,  First  International,  to
Guardian Insurance and Annuity Co., Inc. ("GIAC"), a subsidiary of The Guardian
Life  Insurance Company of America, New York, New York.  Standard Life received
sale proceeds  of  $10,393,  including  $1,500  for  the  charter  and licenses
associated with First International.  Standard Life realized a net pretax  gain
of  $1,042  and a tax benefit of $1,420 on this sale or $2,462 ($.45 per share)
for the six months  ended  June  30,  1996.   In addition, First International,
Standard Life and GIAC have entered into a series  of  agreements  that include
provisions  for  Standard  Life  to  continue to administer First International
policies in force at the date of sale  and  for  Standard  Life  to continue to
receive  the  profit stream from a majority of First International's  in  force
business at the date of sale.
                        STANDARD MANAGEMENT CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)


      In an unrelated matter, the Company decided in February 1996 to terminate
the reinsurance  agreement  between  Standard Reinsurance of North America Ltd.
("Standard  Reinsurance")  and  Salamandra  Joint-Stock  Insurance  Company  in
Ukraine ("Salamandra"), and not to  renew  the  Barbados  license  of  Standard
Reinsurance due to an insignificant amount of reinsurance premium volume.  This
resulted  in  the termination of Standard Reinsurance operations and the write-
off of SMC's investment  in  Standard Reinsurance and certain intangible assets
of Standard Reinsurance amounting  to  $156  for  the six months ended June 30,
1996.

      The  combined  effect  of  the  gain on sale of First  International  and
related contracts, and the Standard Reinsurance  write-offs, was an increase in
revenues  of  $886  and  a  tax benefit of $1,420, for  net  income  effect  of
approximately $2,306 or $.42 per share for the six months ended June 30, 1996.

NOTE 8 - PENDING ACQUISITION

      On  July 18, 1996, Standard  Life  signed  a  definitive  stock  purchase
agreement to  acquire  Shelby Life Insurance Company ("Shelby Life") from Delta
Life and Annuity Company ("DLAC"), a life insurance company located in Memphis,
Tennessee.  Under terms  of  the  agreement,  SMC will purchase Shelby Life for
approximately $14,250, plus acquisition costs,  including  $13,000  in cash and
250,000  shares  of  SMC  common stock.  Financing for the transaction will  be
provided by senior debt of  $10,000 and the balance in subordinated convertible
debt.

      For statutory purposes,  Shelby  had $104,283 in total assets and capital
and surplus of $10,621 at June 30, 1996,  and revenues of $7,174 and net income
of $723 for the six months ended June 30, 1996.

      The Shelby Life acquisition, which is  scheduled  to  close in the fourth
quarter of 1996, is subject to certain conditions, including the final approval
by  all  regulatory  authorities.   No  assurances  can  be  given  that   this
transaction will be consummated.



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


GENERAL

      The  following  discussion highlights the material factors affecting  the
results of operations and the significant changes in balance sheet items of the
Company on a consolidated basis for the periods listed as well as the Company's
liquidable and capital  resources.  This analysis should be read in conjunction
with the consolidated financial  statements  and notes thereto included in this
document, as well as the Company's Annual Report  on  Form  10-K  for  the year
ended December 31, 1995.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1996 AND 1995

      OPERATING   INCOME.   The  loss  from  operations  (before  net  realized
investment gains, gain on disposal of subsidiaries and reduction in accruals of
certain legal expenses)  was  $(187,000)  for  the  second  quarter of 1996, or
$(.04)  per share, compared to a loss of $(279,000) for the second  quarter  of
1995, or  $(.05)  per share.  The change resulted from international operations
producing  income  from   operations  of  $104,000  compared  to  a  loss  from
international operations of $(374,000) for the second quarter of 1996 and 1995,
respectively.   The  international  operating  gains  resulted  primarily  from
increased management fees  on  an  increasing  separate  account  base  due  to
portfolio sales in 1996 and 1995, coupled with a decrease in marketing costs in
1996  when  compared  to  the  second  quarter of 1995.  The income (loss) from
operations in the United States decreased  to  a  loss  of  $(291,000)  in 1996
compared  to  income  of  $95,000  in 1995.  The decline was attributable to an
increase in interest expense from borrowings  to  repurchase Common and Class S
Preferred Stock and additional costs to convert the  operations  and expand the
marketing effort in Dixie National Life.

      PREMIUM  INCOME.   Premium  income  is  composed  of  premiums, including
renewal premiums, received on ordinary life insurance policies.   The Company's
new  product  sales  are  composed primarily of annuity products.  Under  GAAP,
deposits from interest-sensitive annuities and other financial products are not
recorded as revenues.  GAAP  premium  income for the second quarter of 1996 was
$5,630,000, an increase of 495% or $4,686,000  from  $946,000  for  the  second
quarter of 1995.  This increase is mainly attributable to recapture of premiums
previously  ceded  of  $4,234,000  due  to  the  termination and recapture of a
reinsurance  agreement with National Mutual Life Insurance  Company  ("National
Mutual"), and  also  to  the inclusion of Dixie National Life in the results of
operations for periods after  October  2,  1995.  Dixie National Life's premium
income of $472,000 in 1996, along with an increase  in  Standard Life's premium
income of $263,000 compared to 1995, more than offsets the  decline in premiums
from the cession of a portion of First International's life insurance  business
and the regular policy lapses, surrenders and expiries in the Company's  closed
blocks of business.

      Net premiums received from the sales of interest-sensitive annuities  and
other  financial products (which are not recorded as revenues) were $14,808,000
compared  to  $3,738,000 for the second quarter of 1996 and 1995, respectively.
The increase in  net  premium received is partially due to an increase in gross
domestic premium deposits.   Gross  domestic  premium  deposits  received  from
interest-sensitive  annuities  and  financial products were $17,511,000 for the
three months ended June 30, 1996 compared  to  $9,501,000  for the three months
ended June 30, 1995.  The increase is partially due to an aggressive  marketing
campaign  implemented by Standard Life with increased crediting interest  rates
effective April  15,  1996.   Also contributing to the increase in premiums was
the continued development of the  Company's  distribution  system.   Since  the
Company's  operating  income is primarily a function of its investment spreads,
persistency of annuity  in  force business, mortality experience, and operating
expenses, a change in premium  deposits  in  a  single period does not directly
cause operating income to change, although continued  increases or decreases in
premiums may affect the growth rate of total assets on which investment spreads
are earned.

      The  Company  also decreased the quota-share portion  of  business  ceded
pursuant to a reinsurance  agreement,  under which 70% of a portion of Standard
Life's annuity business pursuant to the  terms  of the agreement produced after
December 31, 1994 was ceded, to 50% at September  1,  1995,  which  was further
decreased  to 25% effective April 1, 1996.  Premium deposits ceded pursuant  to
this reinsurance  agreement  reduced  net  premium  by $2,702,000 in the second
quarter of 1996 compared to $5,763,000 in 1995.



<PAGE>
      NET INVESTMENT INCOME.  Net investment income increased $231,000 or 5% to
$4,731,000 for the second quarter of 1996, from $4,500,000  for  the comparable
period  of  1995.   The  increase  resulted primarily from an increase  in  the
average annualized yield of the Company's  investment  portfolio  to 7.44% from
7.26% for the second quarter of 1996 and 1995, respectively.

      NET  REALIZED INVESTMENT GAINS.  Net realized investment gains  decreased
$61,000 or 22%  to  $218,000  from  $279,000 for the second quarter of 1996 and
1995, respectively.  Net realized investment  gains  fluctuate  from  period to
period  and  arise  when  securities  are  sold  in  response to changes in the
investment environment which provide opportunities to  maximize  return  on the
investment  portfolio without adversely affecting the quality and overall yield
of the investment  portfolio.   No  significant  writedowns on investments were
recorded  in  1995  or  1996.  The pretax net unrealized  gain  (loss)  on  the
Company's securities available  for  sale  was  $(5,079,000)  at  June 30, 1996
compared  to  $6,449,000 at December 31, 1995, reflecting the general  rise  in
interest rates  during  the  quarter  which  generally caused the fair value of
fixed maturity securities to decrease.  In the absence of decreases in interest
rates the Company may be unable to realize gains on its investment portfolio at
the levels of prior years or could recognize losses  from  sales  of securities
prior to maturity.  The change in market value of the Company's fixed  maturity
securities  is  not  expected  to  have  a  significant  effect  on  results of
operations because the Company has the present intent and practice to hold most
of  its  available-for-sale  fixed  maturity  securities  to  maturity  and the
Company's asset/liability management activity is designed to monitor and adjust
for the effects of changes in market interest rates.

      POLICY  CHARGES.   Policy  charges,  which represent the amounts assessed
against  policyholder  account  balances  for the  cost  of  insurance,  policy
administration and surrenders,  increased $185,000  or  37% to $690,000 for the
second  quarter of 1996 compared to $505,000 for the second  quarter  of  1995.
The increase  in  policy  charges resulted from an increase in policy surrender
charges on flexible premium  deferred  annuities ("FPDAs") and the inclusion of
Dixie National Life in operating results  for  periods  after  October 2, 1995,
which offset the absence of policy charges from the  Company's closed blocks of
universal life business which were sold to GIAC through a reinsurance  contract
effective January 1, 1996.

      AMORTIZATION  OF  EXCESS  OF  NET  ASSETS ACQUIRED OVER ACQUISITION COST.
Amortization of excess of net assets acquired  over acquisition cost ("negative
goodwill") is recorded to amortize into earnings the negative goodwill recorded
in  connection  with  the acquisition of Standard Management  International  in
1993.  The negative goodwill  is  being amortized on a straight-line basis over
five years.  Amortization of negative  goodwill  was  $347,000  for each of the
second quarters of 1996 and 1995.

      MANAGEMENT  FEES  AND SIMILAR INCOME FROM SEPARATE ACCOUNTS.   Management
fees and similar income is  recorded  from  investment  management  fee  income
recorded  by  Standard  Management International on its separate account assets
and investment contracts.   Management  fees  and  similar income from separate
accounts increased $230,000 or 104% to $452,000 for  the second quarter of 1996
from $222,000 for the second quarter of 1995.  This increase  is  due primarily
to  an  increase  in  the  value  of  assets  held  in  separate  accounts from
$94,301,000 at December 31, 1994 to $125,432,000 at June 30, 1996 and to higher
service  fees being levied on certain transactions.  Such income fluctuates  in
relationship  to  total  separate  account assets and the return earned on such
assets.

      OTHER INCOME.  Other income primarily includes administration fee income,
reserve  adjustments  and experience rating  refunds  in  connection  with  the
agreements  with  GIAC and  override  commissions  received  from  unaffiliated
companies by Standard  Marketing  Corporation ("Standard Marketing"), a wholly-
owned subsidiary which is a wholesale distributor of life insurance and annuity
products.  Other income increased $486,000  or  438% to $597,000 for the second
quarter  of  1996  compared to $111,000 for the comparable  1995  period.   The
increase resulted primarily  from  the  administration  agreements with GIAC in
1996 and increased commissions received by Standard Marketing  from the sale of
unaffiliated products.

      BENEFITS  AND  CLAIMS.   Benefits  and claims include life insurance  and
payout  annuity benefits paid and changes in  policy  reserves.   Benefits  and
claims increased  $5,446,000  or  573%  to $6,396,000 for the second quarter of
1996 from $950,000 for the second quarter  of  1995.  The increase  in benefits
and  claims  resulted  primarily  from an increase in  reserves  of  $4,234,000
related  to  the termination and recapture  of  a  reinsurance  agreement  with
National Mutual  and the inclusion of Dixie National Life's benefits and claims
in the results of  operations in 1996.  The significant increase is also due to
higher  life insurance  benefit  claims  of  $225,000  due  to  adverse  claims
experience.   Throughout the Company's history, it has experienced both periods
of higher and lower  benefit  claims.   Such  volatility is not uncommon in the
life insurance industry and, over extended periods  of  time, periods of higher
claims experience tend to be offset by periods of lower claims experience.


      INTEREST  CREDITED  ON INTEREST-SENSITIVE ANNUITIES AND  OTHER  FINANCIAL
PRODUCTS.   Interest  credited   on  interest  sensitive  annuities  and  other
financial products was $2,358,000 for the second quarter of 1996, a decrease of
$206,000 or 8% from $2,564,000 for  the  comparable  prior  year  period.   The
decrease  resulted  primarily  from  the Company's continued ability to enhance
investment spreads due to its decrease  of credited interest rates on annuities
and  other financial products as well as a  reclassification  to  benefits  and
claims  in  the  second  quarter of 1996.  This more than offsets the growth in
account values inforce for  FPDAs.   At  June  30,  1996,  the weighted average
interest  credited  rate  for  Standard  Life's  annuities and other  financial
product liabilities was 5.26% compared to 5.45% at  June  30,  1995.  Crediting
rates  offered  on  new  business  can  be  changed at any time in response  to
competition and market interest rates.

      SALARIES AND WAGES.  Salaries and wages  were  $1,255,000  for the second
quarter  of  1996,  an  increase  of  $90,000  or  8%  from $1,165,000 for  the
comparable  prior  year period.  This fluctuation was caused  primarily  by  an
increase in the number  and  average  wages  of employees in the United States.
These  increases  offset  savings  from  the  gradual  decreases  in  staff  in
international operations.

      AMORTIZATION.   Amortization  expense  primarily   includes   charges  to
operations  for  the  amortization  of  deferred policy acquisition costs,  the
present  value  of  future  profits and the excess  of  cost  over  net  assets
acquired.  Amortization expense  increased  $147,000 or 26% to $712,000 for the
second  quarter of 1996 from $565,000 for the  second  quarter  of  1995.   The
increase in current year amortization expense resulted primarily from increased
amortization  of deferred acquisition costs as gross profits from business sold
in recent years  began  to emerge, increased surrenders and their corresponding
impact  on  the  amortization  of  deferred  acquisition  costs  and  from  the
amortization of present  value  of  future profits for the acquisition of Dixie
National Life.  These items more than  offset reduced amortization of excess of
cost over net assets acquired and present  value  of  future profits due to the
sale of First International.

      OTHER OPERATING EXPENSES.  Other operating expenses increased $176,000 or
11% to $1,795,000 for the second quarter of 1996 from $1,619,000 for the second
quarter of 1995.  The increase in other operating expenses  resulted  primarily
from the expenses of Dixie National Life included in the results for the second
quarter  of  1996,  professional  fees incurred and losses on currency exchange
related to revaluation differences  by  Standard  Management  International and
increased marketing efforts by Standard Marketing.

      INTEREST  EXPENSE  AND  FINANCING COSTS.  Interest expense and  financing
costs increased $118,000 or 328% to $154,000 in 1996 from $36,000 in 1995.  The
increase in interest expense and  financing costs during 1996 resulted from the
borrowings on the Credit Agreement  related  to  the  repurchase  of Common and
Class  S  Preferred Stock.  The borrowings under the Credit Agreement  occurred
after June 30, 1995.

      FEDERAL  INCOME  TAXES.   Federal  income tax expense was $57,000 for the
second quarter of 1996, compared to $77,000  for  the  second  quarter of 1995.
The effective rates in 1995 are less than the statutory rates primarily because
the  amortization  of  excess  of  net  assets  acquired over acquisition  cost
resulting  from  the acquisition of Standard Management  International  is  not
subject to United  States  income  tax.   The  Company  also  has  received the
benefits of a special deduction available to small life insurance companies and
the utilization of operating loss carryforwards in 1995.  The benefits  of  the
special deduction available to small life insurance companies will no longer be
available when consolidated assets exceed $500,000,000.

      CLASS  ACTION  LITIGATION  AND SETTLEMENT COSTS.  Class action litigation
and settlement costs were recorded to reflect the estimated costs of litigation
and settlement of the shareholder  class  action lawsuit, based on the terms of
the settlement agreement and assumptions as  to  the future estimated legal and
other costs to settle the lawsuit, which was settled  in  March  1995,  and  to
register  the  Class  S  Preferred  Stock  which  was  distributed to the class
participants  in  February  1996.   There were no class action  litigation  and
settlement expenses in the quarters ended  June  30,  1996  and 1995.  However,
with the signing of the Settlement Agreement with the 22 persons who previously
excluded themselves from the class and the reevaluation of the future estimated
legal  and  other  costs  to  settle  the lawsuit, SMC recorded a reduction  of
$314,000 in the second quarter of 1995  in the estimated future costs to settle
the lawsuit and register the Class S Preferred Stock.

      EXTRAORDINARY GAIN ON EARLY REDEMPTION  OF  REDEEMABLE  PREFERRED  STOCK.
Extraordinary  gains  are  recorded  on  the  early  redemption  of the Class S
Preferred  Stock for the amount the Company is able to repurchase the  Class  S
Preferred Stock  below  its  book  value plus accumulated and unpaid dividends.
The Company will continue to repurchase  these shares as long as holders of the
Class S Preferred Stock are willing to sell  at  a substantial discount to book
value.  The extraordinary gain was $166,000 for the three months ended June 30,
1996 compared to no gain for the prior comparable period.


SIX MONTHS ENDED JUNE 30, 1996 AND 1995

      OPERATING INCOME (LOSS).  The income (loss)  from  operations (before net
realized investment gains, gain on disposal of subsidiaries  and  reduction  in
accruals  of certain legal expenses) was $27,000 in 1996, compared to $(29,000)
for 1995.   The  change resulted from international operations producing income
from operations of  $335,000  compared  to  a loss of $(323,000) for the second
quarter  of  1996 and 1995, respectively.  The  international  operating  gains
resulted primarily  from  increased  management  fees on an increasing separate
account base due to portfolio sales in 1995 and 1996,  and  increased  value of
assets  under  management,  coupled  with a decrease in marketing costs in 1996
when compared to the second quarter of 1995.  The income (loss) from operations
in the United States decreased to a loss  of  $(308,000)  in  1996  compared to
income  of  $294,000  in 1995.  The decline was attributable to an increase  in
interest expense from borrowings  to  repurchase  Common  and Class S Preferred
Stock and additional costs to convert the operations and expand  the  marketing
effort in Dixie National Life.

      PREMIUM  INCOME.   GAAP premium income for the six months ended June  30,
1996 was $7,129,000, an increase  of 205% or $4,789,000 from $2,340,000 for the
six  months  ended June 30, 1995.  This  increase  is  mainly  attributable  to
recapture of premiums  ceded of $4,234,000 due to the termination and recapture
of the reinsurance agreement  with  National  Mutual and the inclusion of Dixie
National Life in the results of operations for  periods  after October 2, 1995.
Dixie National Life's premium income of $878,000 for the six  months ended June
30, 1996, along with an increase in Standard Life's premium income  of $297,000
compared to 1995, more than offsets the decline in premiums from the cession of
a  portion  of  First  International's  life insurance business and the regular
policy  lapses,  surrenders and expiries in  the  Company's  closed  blocks  of
business.

      Net premiums  received from the sales of interest-sensitive annuities and
other financial products  (which are not recorded as revenues) were $18,796,000
compared to $7,017,000 for  the  six  months  ended  June  30,  1996  and 1995,
respectively.  The increase in premium deposits is partially due to an increase
in  gross  domestic premium deposits.  Gross domestic premium deposits received
from interest-sensitive  annuities  and financial products were $23,799,000 for
the six months ended June 30, 1996 compared  to  $18,232,000 for the six months
ended June 30, 1995.  The increase is partially due  to an aggressive marketing
campaign implemented by Standard Life with increased crediting  interest  rates
effective  April  15,  1996.  Also contributing to the increase in premiums was
the continued development of the Company's distribution system.

      As previously mentioned,  the  Company  also  decreased  the  quota-share
portion of business ceded pursuant to a reinsurance agreement from 70%  to  50%
at  September  1,  1995,  which was further decreased to 25% effective April 1,
1996.  Premium deposits ceded  pursuant  to  this reinsurance agreement reduced
net premium by $5,003,000 in the six months ended  June  30,  1996  compared to
$11,215,000 in 1995.

      NET INVESTMENT INCOME.  Net investment income increased $212,000 or 2% to
$9,391,000  for  the  six  months  ended June 30, 1996 from $9,179,000 for  the
comparable period of 1995.  The increase primarily resulted from an increase in
total invested assets of approximately  5%  from  1995  to  1996,  offset  by a
decline  in average yield to 7.19% from 7.42% for the six months ended June 30,
1996 and 1995,  respectively.   The  continued  growth  in  the Company's total
invested  assets reflects increased sales of FPDAs and the inclusion  of  Dixie
National Life in the results of operations effective October 2, 1995.

      NET REALIZED  INVESTMENT  GAINS.  Net realized investment gains increased
$122,000 or 37% to $456,000 from  $334,000  for  the  six months ended June 30,
1996  and  1995,  respectively.  Net realized investment gains  fluctuate  from
period to period and  arise  when securities are sold in response to changes in
the investment environment which  provide  opportunities  to maximize return on
the  investment portfolio without adversely affecting the quality  and  overall
yield of the investment portfolio.

      GAIN  ON  DISPOSAL  OF  SUBSIDIARIES.   On  March  18,  1996, the Company
completed  the sale of a duplicate charter associated with First  International
to  GIAC.   The  Company  received  sale  proceeds  of  $10,393,000,  including
$1,500,000 for the charter and licenses associated with First International. In
addition, First  International,  Standard  Life  and  GIAC  have entered into a
series of agreements that include provisions for Standard Life  to  retain  the
economic  interest in certain First International policies and administer First
International policies in force at the date of such sale.



<PAGE>
      In an unrelated matter, the Company decided in February 1996 to terminate
the reinsurance  agreement between Standard Reinsurance and Salamandra, and not
to renew the Barbados  license  of  Standard  Reinsurance.   This resulted in a
first  quarter  1996 write-off of SMC's investment in Standard Reinsurance  and
certain intangible assets of Standard Reinsurance amounting to $156,000.

      The  combined   effect   of  the  pre-tax  gain  on  the  sale  of  First
International and related contracts,  and  the Standard Reinsurance write-offs,
was $886,000 pre-tax in the first quarter of 1996.

      POLICY CHARGES.  Policy charges increased  $110,000  or 10% to $1,214,000
for  the  six  months ended June 30, 1996 compared to $1,104,000  for  the  six
months ended June  30,  1995.   The increase in policy charges resulted from an
increase in policy surrender charges  on  FPDAs  and  the  inclusion  of  Dixie
National  Life  in  operating  results  for periods after October 2, 1995 which
offset  the  absence of policy charges from  the  Company's  closed  blocks  of
universal life  business which were sold to GIAC through a reinsurance contract
effective January 1, 1996.

      MANAGEMENT  FEES  AND  SIMILAR INCOME FROM SEPARATE ACCOUNTS.  Management
fees and similar income from separate  accounts  increased  $348,000  or 71% to
$836,000  for  the  six  months  ended  June 30, 1996 from $488,000 for the six
months ended June 30, 1995.  Such income  fluctuates  in  relationship to total
separate account assets and the return earned on such assets.

      OTHER INCOME.  Other income increased $766,000 or 514%  to  $915,000  for
the six months ended June 30, 1996 compared to $149,000 for the comparable 1995
period.   The  increase  resulted primarily from the administration fee income,
reserve  adjustments and experience  rating  refunds  in  connection  with  the
agreements  with  GIAC and increased commissions received by Standard Marketing
from the sale of unaffiliated products.

      BENEFITS AND CLAIMS.  Benefits and claims increased $4,462,000 or 162% to
$7,223,000 for the  six  months ended June 30, 1996 from $2,761,000 for the six
months ended June 30, 1995.   The increase  resulted primarily from an increase
in  reserves of $4,234,000 related  to  the  termination  and  recapture  of  a
reinsurance  agreement with National Mutual and the inclusion of Dixie National
Life's benefits  and  claims  in  the  results  of  operations  in  1996.   The
significant  increase  is  also  due to higher life insurance benefit claims of
$1,006 due to adverse claims experience.   Throughout the Company's history, it
has  experienced  both  periods  of  higher  and lower  benefit  claims.   Such
volatility is not uncommon in the life insurance  industry  and,  over extended
periods  of  time,  periods  of  higher claims experience tend to be offset  by
periods of lower claims experience.

      INTEREST CREDITED ON INTEREST  SENSITIVE  ANNUITIES  AND  OTHER FINANCIAL
PRODUCTS.   Interest  credited  on  interest  sensitive  annuities  and   other
financial  products  was  $5,004,000  for the six months ended June 30, 1996, a
decrease  of 2% from $5,127,000 for the  comparable  prior  year  period.   The
decrease resulted  primarily  from  the  Company's continued ability to enhance
investment spreads due to its decrease of  credited interest rates on annuities
and other financial products.  This more than  offsets  the  increases  in  the
growth  in  policy  reserves for FPDAs.  At June 30, 1996, the weighted average
interest credited rate  for  Standard  Life's  annuities  and  other  financial
product liabilities was 5.26% compared to 5.45% at June 30, 1995.

      SALARIES  AND  WAGES.   Salaries  and  wages  were $2,463,000 for the six
months ended June 30, 1996, an increase of $258,000 or  12% from $2,205,000 for
the comparable prior year period.  This fluctuation was caused  primarily by an
increase in the number and average wages of employees in the United  States and
an increase in incentive compensation expense for the six months ended June 30,
1996  based on operating income for the six months ended June 30, 1996.   These
increases  offset  savings from the gradual decreases in staff in international
operations.

      AMORTIZATION.    Amortization   expense  increased  $238,000  or  26%  to
$1,159,000 for the six months ended June  30,  1996  from  $921,000 for the six
months ended June 30, 1995.  The increase in current year amortization  expense
resulted primarily from increased amortization of deferred acquisition costs as
gross  profits  from  business  sold in recent years began to emerge, increased
surrenders and their corresponding  impact  on  the  amortization  of  deferred
acquisition costs, and from the amortization of present value of future profits
for  the  acquisition  of  Dixie  National  Life.  These items more than offset
reduced amortization of excess of cost over net  assets  acquired  and  present
value of future profits due to the sale of First International.

      OTHER OPERATING EXPENSES.  Other operating expenses increased $970,000 or
33%  to  $3,910,000 for the six months ended June 30, 1996 from $2,940,000  for
the six months  ended  June 30, 1995.  The increase in other operating expenses
resulted primarily from  the  expenses  of  Dixie National Life included in the
results  for  the six months ended June 30, 1996  and  the  increased  expenses
related to potential acquisitions.

      INTEREST  EXPENSE  AND  FINANCING  COSTS.  Interest expense and financing
costs increased $224,000 or 423% to $277,000  for the six months ended June 30,
1996 from $53,000 for the six months ended June  30,  1995.   The  increase  in
interest  expense  and  financing costs during 1996 resulted primarily from the
borrowings on the Credit  Agreement.  The borrowings under the Credit Agreement
occurred after June 30, 1995.

      CLASS ACTION LITIGATION  AND  SETTLEMENT  COSTS.  Class action litigation
and settlement costs were recorded to reflect the estimated costs of litigation
and settlement of the shareholder class action lawsuit,  based  on the terms of
the settlement agreement and assumptions as to the future estimated  legal  and
other  costs  to  settle  the  lawsuit, which was settled in March 1995, and to
register  the  Class S Preferred Stock  which  was  distributed  to  the  class
participants in  February  1996.   There  were  no  class action litigation and
settlement expenses in the six months ended June 30,  1996  and 1995.  However,
with the signing of the Settlement Agreement with the 22 persons who previously
excluded themselves from the class and the reevaluation of the future estimated
legal  and  other  costs  to  settle  the lawsuit, SMC recorded a reduction  of
$314,000 in the second quarter of 1995  in the estimated future costs to settle
the lawsuit and register the Class S Preferred Stock.

      FEDERAL  INCOME  TAXES.   Federal  income   tax   expense   (credit)  was
$(1,118,000)  for  the six months ended June 30, 1996, compared to $61,000  for
the six months ended  June 30, 1995.  The large credit in 1996 is primarily due
to tax benefits of $1,420,000  related  to  the  sale  of  First International.
Also, the effective rates in 1995 are less than the statutory  rates  primarily
because the amortization of excess of net assets acquired over acquisition cost
resulting  from  the  acquisition  of Standard Management International is  not
subject  to  United States income tax.   The  Company  also  has  received  the
benefits of a special deduction available to small life insurance companies and
the utilization  of  operating loss carryforwards in 1995.  The benefits of the
special deduction available to small life insurance companies will no longer be
available when consolidated assets exceed $500,000,000.

      EXTRAORDINARY GAIN  ON  EARLY  REDEMPTION  OF REDEEMABLE PREFERRED STOCK.
Extraordinary  gains  are  recorded  on the early redemption  of  the  Class  S
Preferred Stock for the amount the Company  is  able  to repurchase the Class S
Preferred  Stock  below its book value plus accumulated and  unpaid  dividends.
The Company will continue  to repurchase these shares as long as holders of the
Class S Preferred Stock are  willing  to sell at a substantial discount to book
value.  The extraordinary gain was $267,000  for  the six months ended June 30,
1996 compared to no gain for the prior comparable period.


LIQUIDITY AND CAPITAL RESOURCES

      SMC is an insurance holding company.  The liquidity  requirements  of SMC
are  met  primarily  from management fees, equipment rental income and payments
for other charges and dividends received from SMC's subsidiaries as well as SMC
working capital.  These  are  SMC's  primary  source  of funds to pay operating
expenses  and  meet  debt service obligations.  The payment  of  dividends  and
management and other fees  by  Standard  Life to SMC is subject to restrictions
under the insurance laws of Indiana, Standard  Life's jurisdiction of domicile.
These  internal  sources of liquidity have been supplemented  in  the  past  by
external sources such  as  lines  of credit and revolving credit agreements and
long-term debt and equity financing in the capital markets.

      The  Company reported on a consolidated  GAAP  basis  net  cash  provided
(used) by operations of $1,634,000 and $5,325,000 for the six months ended June
30, 1996 and  1995,  respectively.  Although deposits received on the Company's
interest-sensitive annuities  and  other financial products are not included in
cash flow from operations under GAAP,  such  funds are available for use by the
Company.  Cash provided (used) by operations plus  net  deposits received, less
net account balances returned to policyholders on interest  sensitive annuities
and other financial products, resulted in positive cash flow of $11,027,000 and
$3,391,000 for the six months ended June 30, 1996 and 1995, respectively.  Cash
generated on a consolidated basis is available to SMC only to  the  extent that
it  is  generated  at  SMC  level  or  is  available  to SMC through dividends,
interest, management fees or other payments from subsidiaries.

      In April 1993, SMC instituted a program to repurchase  its  Common  Stock
from  time  to time.  The purpose of the stock repurchase program is to enhance
shareholder value.   The  Company  has repurchased 974,453 shares of its Common
Stock for $4,725,000 as of June 30,  1996.   The  repurchases in 1996 have been
paid through additional borrowings under the Credit  Agreement.   At  June  30,
1996,  the Company is authorized to purchase an additional 525,896 shares under
this program.



<PAGE>
      In  February  1996,  SMC  instituted a program to repurchase from time to
time up to 300,000 shares of its  Class S Preferred Stock in the open market or
privately negotiated transactions.   As  of  July 31, 1996, SMC has repurchased
and retired 142,646 shares of its Class S Preferred Stock for $954,000.

      On May 1, 1996, the Board of Directors declared a stock dividend of 5% on
shares of its common stock for shareholders of  record  on  May  17, 1996.  The
stock  dividend  was distributed on June 21, 1996, with shareholders  receiving
shares of common stock  equivalent  to  5% of common shares owned as of May 17,
1996 and cash equivalent for fractional shares.   The  number  of shares issued
pursuant to this action was 272,926, plus cash in lieu of fractional shares.

      At  July  31,  1996,  SMC  had  "parent company only" cash and short-term
investments  of $1,167,000.  These funds  are  available  to  the  Company  for
general  corporate   purposes  including  repayment  of  debt  outstanding  and
additional capital infusions  into  Standard Life.  SMC's "parent company only"
operating expenses (not including class  action litigation and settlement costs
and interest expense) were $1,604,000 and  $1,372,000  for the six months ended
June 30, 1996 and 1995, respectively.

      Pursuant  to the management services agreement with  SMC,  Standard  Life
paid SMC a monthly  fee of $150,000 during 1996 and 1995 for certain management
services related to the  production  of  business,  investment  of  assets  and
evaluation  of  acquisitions.   The  agreement  was  approved  by  the  Indiana
Department of Insurance with the stipulation that Dixie National Life would pay
an  annual  fee  of  at  least  $1,500,000  to  Standard  Life  during 1996.  A
management  service  agreement  between Standard Life and Dixie National  Life,
which currently provides for a management  fee of $154,000 per month to be paid
by  Dixie  National  Life to Standard Life, was  approved  by  the  Mississippi
Department of Insurance.   Both  of  these  agreements provide that they may be
modified or terminated by the department of insurance in the event of financial
hardship of Standard Life or Dixie National Life.

      Pursuant  to the management services agreement  with  SMC,  Premier  Life
(Luxembourg) paid  SMC  a management fee of $25,000 per quarter during 1996 and
1995  for  certain  management  and  administrative  services.   The  agreement
provides that it may  be  modified  or terminated by either SMC or Premier Life
(Luxembourg).

      At  April  1,  1995,  SMC  sold  its   property   and   equipment   to  a
leasing/financing  company  for  $1,396,000  and  subsequently  entered  into a
capital  lease  obligation whereby SMC pays a monthly rental amount of $45,000.
SMC charges a monthly equipment rental fee to its subsidiaries of $64,000.

      The Credit  Agreement  provides for SMC to borrow up to $6,000,000 in the
form of a five-year reducing revolving  loan arrangement, which may be extended
to seven years at the discretion of the bank.   SMC has agreed to pay a non-use
fee of .50% per annum on the unused portion of the  commitment.   In connection
with  the Credit Agreement, SMC issued warrants to the bank to purchase  30,000
shares of SMC Common Stock.  Borrowings under this Credit Agreement may be used
for contributions  to surplus of insurance subsidiaries, acquisition financing,
and repurchases of Class  S  Preferred  and  Common  Stock of SMC.  The debt is
secured by a Pledge Agreement of all of the issued and  outstanding  shares  of
common  stock  of  Standard  Life  and  Standard  Marketing.   Interest  on the
borrowings  under the Credit Agreement is determined, at the option of SMC,  to
be: (I) a fluctuating  rate of interest to the corporate base rate announced by
the bank from time to time  plus  1%  per  annum,  or (ii) a rate at LIBOR plus
3.25%.   Given  the  Company's  current  level  of  borrowings,   no  principal
repayments  will  be  required  until  November 1997.  With the bank's consent,
principal payments may be deferred until  November  1998 or 1999.  Indebtedness
incurred  under  the  Credit Agreement is subject to certain  restrictions  and
covenants including, among  other  things,  certain  minimum  financial ratios,
minimum statutory surplus requirements for the insurance subsidiaries,  minimum
consolidated  equity  requirements  for  the Company and certain investment and
indebtedness limitations.  As of June 30,  1996,  the Company was in compliance
with all restrictions and covenants in the Credit Agreement.  At July 31, 1996,
SMC  had  borrowed  $5,600,000 under this Credit Agreement  at  interest  rates
ranging from 8.3125% to 8.7969%.

      Assuming the continuation  of  current  debt  level  ($5,600,000) and the
current interest rates (weighted average rate of 8.625%) annual debt service in
1996  would  be  approximately  $460,000  in  interest  expense on  the  Credit
Agreement.  In addition, SMC will also pay $539,000 in rental payments relating
to a capital lease obligation in 1996.

      Dividends  from Standard Life to SMC are limited by  laws  applicable  to
insurance companies.   As an Indiana domiciled insurance company, Standard Life
may pay a dividend or distribution  from its surplus profits, without the prior
approval  of  the  Indiana  Commissioner  of  Insurance,  if  the  dividend  or
distribution, together with all  other  dividends and distributions paid within
the preceding twelve months, does not exceed  the  greater of (I) net gain from
operations  or  (ii)  10% of surplus, in each case as shown  in  its  preceding
annual statutory financial  statements.   For the year ended December 31, 1995,
Standard  Life  reported statutory net gain from  operations  of  $124,000  and
statutory surplus of $10,186,000.  During 1996, Standard Life can pay dividends
of $1,019,000 without  regulatory  approval;  Standard  Life  must  notify  the
Indiana regulatory authorities of their intent to pay dividends at least thirty
days  prior  to  payment.   Regulatory approval will be required for additional
dividend payments in excess of  this  amount  by Standard Life during 1996.  On
June 20, 1996, Standard Life paid an ordinary dividend  on  $1,000,000  to  SMC
which was not disapproved by the Indiana Department of Insurance.

      SMC  anticipates  the  available  cash from its existing working capital,
plus anticipated 1996 dividends, management  fees  and  rental  income, will be
more  than  adequate  to  meet its anticipated 1996 "parent company only"  cash
requirements for 1996.

      SMC has a note receivable  of  $2,858,000  from  an  affiliate and a note
payable of $2,858,000 to a different affiliate.  This note receivable  and note
payable are eliminated in the consolidated financial statements.

      In  July  1996,  SMC announced that Standard Life signed an agreement  to
purchase  Shelby from DLAC  for  approximately  $14,250,000,  plus  acquisition
costs, including  $13,000,000  in  cash and 250,000 shares of SMC Common Stock.
Financing for the transaction will be  provided  by  senior debt of $10,000,000
and the balance in subordinated convertible debt.  The  Company anticipates its
current Credit Agreement will be combined with the new senior  debt  in  a  new
credit agreement, the terms of which are currently being negotiated.

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

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

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

      Statutory  surplus  is  computed  according  to rules prescribed  by  the
National Association of Insurance Commissioners ("NAIC"),  as  modified  by the
Indiana   Department  of  Insurance,  or  the  state  in  which  the  insurance
subsidiaries  do  business.  Statutory accounting rules are different from GAAP
and are intended to  reflect  a  more  conservative perspective.  The Company's
long-term  growth  goals  contemplate  continued   growth   in   its  insurance
businesses.  To achieve these growth goals, Standard Life will need to increase
statutory surplus.  Additional statutory surplus may be secured through various
sources  such  as  internally  generated  statutory  earnings, equity sales  or
infusions by the Company with funds generated through debt or equity offerings.
With respect to new business, statutory accounting practices  require that: (I)
acquisition  costs  and (ii) reserves for future guaranteed principal  payments
and interest in excess  of  statutory  rates,  be  expensed in the year the new
business  is written.  These items cause a statutory  loss  ("surplus  strain")
from many insurance  products in the year they are issued.  The Company designs
its products to minimize  such first-year losses, but certain products continue
to cause a statutory loss in  the  year written.  For each product, the Company
controls the amount of net new premiums  written  in order to manage the effect
of such statutory surplus strain.

      In  March 1996, Standard Life sold its subsidiary,  First  International,
and realized  an  increase  in  statutory  capital and surplus of approximately
$4,951,000  from  the  statutory  gain  on  the sale  and  related  reinsurance
transactions.

      Commencing January 1, 1995, Standard Life  began to reinsure a portion of
its annuity business.  This reinsurance agreement  has  allowed  SMC  to  write
volumes of business that it would not otherwise have been able to write due  to
regulatory  restrictions  based  on  its  ratio  of  surplus  to liabilities as
determined by regulatory authorities in the State of Florida.   By reinsuring a
portion  of  the  annuity  business,  the  liability growth is slowed,  thereby
avoiding the erosion of surplus that occurs in periods of increasing sales.  If
SMC's ratio of surplus to liabilities falls  below  4%,  the  State  of Florida
could  prohibit  SMC  from  writing  new  business in Florida.  Standard Life's
largest  annuity  reinsurer  at June 30, 1996,  Winterthur  Life  Re  Insurance
Company ("Winterthur"), is rated  "A" ("Excellent") by A.M. Best.  From January
1, 1995 to August 31, 1995 approximately  70%  of  certain  of  Standard Life's
annuity  business produced was ceded.  Standard Life decreased the  quota-share
portion of business ceded to 50% at September 1, 1995 and further reduced it to
25% effective  April 1, 1996 to reflect the reduced need for additional capital
and increase current earnings potential.  Winterthur limits dividends and other
transfers  by  Standard   Life  to  SMC  or  affiliated  companies  in  certain
circumstances.
      State insurance regulatory  authorities impose minimum risk-based capital
requirements on insurance enterprises  that  were  developed  by the NAIC.  The
formulas  for  determining  the  amount  of risk-based capital ("RBC")  specify
various weighting factors that are applied  to  financial  balances  or various
levels  of  activity  based  on  the  perceived  degree  of  risk.   Regulatory
compliance  is  determined  by  a  ratio  (the  "Ratio")  of  the  enterprise's
regulatory  total  adjusted  capital, as defined by the NAIC, to its authorized
control level RBC, as defined  by the NAIC.  Enterprises below specific trigger
points or ratios are classified  within  certain levels, each of which requires
specified corrective action.  Each of the  Company's insurance subsidiaries has
a Ratio that is at least 300% of the minimum RBC requirements; accordingly, the
subsidiaries meet the RBC requirements.

      Management believes that operational cash  flow  of Standard Life will be
sufficient  to  meet  its  anticipated needs for 1996.  As of  June  30,  1996,
Standard Life had statutory  capital  and  surplus  for  regulatory purposes of
$15,638,000  compared  to  $12,877,000  at  December  31, 1995.   As  the  life
insurance  and annuity business produced by Standard Life  increases,  Standard
Life expects  to continue to satisfy statutory capital and surplus requirements
through statutory  profits,  through  the continued reinsurance of a portion of
its new business, and through additional  capital contributions by the Company.
During 1996, SMC has not made any capital contributions  to Standard Life.  Net
cash flow from operations on a statutory basis of Standard  Life, after payment
of benefits and operating expenses, was $19,139,000 and $4,263,000  for the six
months ended June 30, 1996 and year ended December 31, 1995, respectively.   If
the  need  arises for cash which is not readily available, additional liquidity
could be obtained from the sale of invested assets.

      INTERNATIONAL  OPERATIONS.   The balance sheet of the Company at June 30,
1996,  includes  a $3,469,000 credit representing  the  excess  of  net  assets
acquired over acquisition  cost which will be amortized into future earnings on
the purchase of Standard Management International.  This amortization is a non-
cash credit to the Company statement of operations.

      Standard Management International  may  pay  dividends  from  accumulated
earnings  without  regulatory  approval.    Premier Life (Bermuda) did not  pay
dividends in 1995 and 1994.  Standard Management International and Premier Life
(Luxembourg) were not permitted  to  pay  dividends  in  1995  and  1994 due to
accumulated losses.

      Due  to  the nature of unit-linked products issued by Standard Management
International,  which   represent   over   95%   of   the  Standard  Management
International  portfolio,  the  investment  risk rests with  the  policyholder.
Investment  risk for Standard Management International  exists  where  Standard
Management  International  makes  investment  decisions  with  respect  to  the
remaining traditional business and for the assets backing certain actuarial and
regulatory reserves.   The  investments  underlying  these  liabilities  mostly
represent  fixed  maturity  securities.   These  fixed  maturity securities are
normally only bought and/or disposed of on the advice of independent consulting
actuaries who perform an annual exercise comparing anticipated  cash  flows  on
the  insurance portfolio with the cashflows from the fixed maturity securities.
Any resulting  material  mis-matches  are then covered by buying and/or selling
the securities as appropriate.

FACTORS THAT MAY AFFECT FUTURE RESULTS

      MERGERS, ACQUISITIONS AND CONSOLIDATIONS.   The  U.S.  insurance industry
has  experienced an increasing number of mergers, acquisitions,  consolidations
and sales  of certain business lines.  These consolidations have been driven by
a need to reduce  costs  of  distribution and overhead and maintain business in
force.  Additionally, increased  competition,  regulatory  capital requirements
and technology costs have also contributed to the level of consolidation in the
industry.   These forces are expected to continue as is the level  of  industry
consolidation.   The  Company  has  been,  and continues to be, a buyer in this
marketplace.


      FOREIGN CURRENCY RISK.  Standard Management  International  policyholders
invest  in  assets  denominated  in  a wide range of currencies.  Policyholders
effectively bear the currency risk, if any, as these investments are matched by
policyholder separate account liabilities.   Therefore,  their  investment  and
currency  risk  is  limited  to premiums they have paid.  Policyholders are not
permitted to invest directly into  options,  futures and derivatives.  Standard
Management  International  could  be  exposed  to  currency   fluctuations   if
currencies  within  the  conventional investment portfolio or certain actuarial
reserves are mismatched.   The assets and liabilities of this portfolio and the
reserves are continually matched by the company and at regular intervals by the
independent actuary.  In addition,  Premier  Life  (Luxembourg)'s shareholder's
equity is denominated in Luxembourg francs.  Premier Life (Luxembourg) does not
hedge it's translation risk, but this is currently being  reviewed  to  protect
SMC  against  currency  fluctuations.  At June 30, 1996, there is an unrealized
gain from foreign currency translation adjustment of $937,000.

      UNCERTAINTIES REGARDING  INTANGIBLE  ASSETS.   Included  in the Company's
financial statements as of June 30, 1996 are certain assets that are valued for
financial statement purposes primarily on the basis of assumptions  established
by the Company's management.  These assets include deferred acquisition  costs,
present  value  of  future  profits, costs in excess of net assets acquired and
organization and deferred debt issuance costs.  The total value of these assets
reflected  in  the  June  30,  1996   consolidated   balance  sheet  aggregated
$34,029,000,  or 7% of its assets.  The Company has established  procedures  to
periodically  review  the  assumptions  utilized  to  value  these  assets  and
determine the need  to  make  any  adjustments  in such values in the Company's
consolidated  financial  statements.   The  Company  has  determined  that  the
assumptions utilized in the initial valuation of these  assets  are  consistent
with  the  current  operations of the Company as of June 30, 1996.  In February
1996, the Company decided  to terminate the operations of Standard Reinsurance,
which resulted in the write-off of SMC's investment in Standard Reinsurance and
certain intangible assets in the second quarter of 1996 amounting to $156,000.

      REGULATORY ENVIRONMENT.   Currently,  prescribed  or  permitted statutory
accounting principles (SAP) may vary between states and between companies.  The
NAIC is in the process of codifying SAP to promote standardization  of  methods
utilized  throughout the industry.  Completion of this project might result  in
changes in  statutory  accounting practices for the Company; however, it is not
expected that such changes  would  materially  impact  the  Company's statutory
capital requirements.

      ACCOUNTING  PRONOUNCEMENTS.   Effective  January  1,  1996,  the  Company
adopted SFAS No. 123, "Accounting for Stock-Based Compensation."   SFAS No. 123
requires  expanded  disclosures  of stock-based compensation arrangements  with
employees  and  encourages, but does  not  require,  compensation  cost  to  be
measured based on  the fair value of the equity instruments awarded.  Companies
are permitted, however,  to continue to apply Accounting Principles Board (APB)
Opinion No. 25, which recognizes compensation cost based on the intrinsic value
of the equity instrument awarded.   The  Company  will  continue  to  apply APB
Opinion  No.  25  to  its  stock-based  compensation  awards  to  employees and
directors  and  will  disclose the required pro forma effect on net income  and
earnings per share in its  consolidated financial statements for the year ended
December 31, 1996.

      SAFE HARBOR PROVISIONS.   Forward-looking  statements  in  this Quarterly
Report  on Form 10-Q are made pursuant to the "safe harbor" provisions  of  the
Private Securities  Litigation Reform Act of 1995.  There are certain important
factors that could cause results to differ materially from those anticipated by
some of the statements  made  above.  Investors are cautioned that all forward-
looking statements involve risks  and  uncertainty.  In addition to the factors
discussed above, among the other factors  that  could  cause  actual results to
differ  materially  are  the  following:   economic environment, interest  rate
changes,  product development, regulatory changes,  the  results  of  financing
efforts,  acquisitions   completed   or  attempted,  the  Company's  accounting
policies, and competition.  Additional  information  concerning those and other
factors  is  contained  in  the  Company's  Securities and Exchange  Commission
filings, including but not limited to the Annual Report on Form 10-K, copies of
which are available from the Company without charge.







<PAGE>
                          PART II - OTHER INFORMATION

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

      At the Company's Annual Meeting of Stockholders  held  on  June 18, 1996,
the following individuals were elected to the Board of Directors:

                                      SHARES FOR           SHARES WITHHELD
Robert A. Borns                       3,356,947            362,340
Raymond J. Ohlson                     3,270,603            448,684
Ramesh H. Bhat                        3,092,264            627,023

The  following  proposals  were  approved  at  the Company's Annual Meeting  of
Stockholders:

                                SHARES FOR   SHARES AGAINST  SHARES ABSTAINING

Ratify the appointment of Ernst
and Young LLP as principal
independent auditors for the
year ending December 31, 1996.  3,326,403       372,359             20,525

A total of 3,719,287 shares were present in person  or  by  proxy at the Annual
Meeting of Stockholders.


<PAGE>
ITEM  6.                                             EXHIBITS  AND  REPORTS  ON
FORM 8-K.

 (a) EXHIBITS
     EXHIBIT 11      Statement regarding computation of per share earnings.

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

(b)  REPORTS ON FORM 8-K

     No reports on Form 8-K were filed during the quarter ended June 30, 1996.


<PAGE>


                                  SIGNATURES

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


Dated:  August 29, 1997

                                                STANDARD MANAGEMENT CORPORATION
                                            (Registrant)




                                        By:
                                            /s/ RONALD D. HUNTER
                                            Ronald D. Hunter
                                            Chairman  of  the  Board, President
                                            and
                                            Chief Executive Officer



                                        By:
                                            /s/ GERALD R. HOCHGESANG
                                            Gerald R. Hochgesang
                                            Senior Vice President
                                            (Principal Accounting Officer)



























<PAGE>
                                 EXHIBIT INDEX


Exhibit
NUMBER                                      DESCRIPTION OF DOCUMENT
11                      Statement regarding computation of per share earnings.
27                      Financial Data Schedule


<PAGE>
                                                                     EXHIBIT 11

                        STANDARD MANAGEMENT CORPORATION

             STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
          (UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                   Three Months Ended                    Six Months Ended
                                                                         JUNE 30,                            JUNE 30,
<S>                                                                <C>                <C>               <C>               <C>
                                                                        1996        1995{ (1)}               1996       1995{ (1)}
PRIMARY
Weighted average common shares outstanding                         4,534,080          5,276,428         4,640,688         5,281,983
5% common stock dividend                                             226,576                 -            225,377                -
Common equivalent shares related to:
   Stock warrants at average market price                            109,282             77,812            80,275            38,769
   Stock options at average market price                              17,533              5,883            10,058             2,685
   Net issuable shares for modified treasury stock method
      (after assumed buyback of 20% of outstanding stock
      options and warrants)                                                -                 -            522,810                -
WEIGHTED AVERAGE PRIMARY SHARES OUTSTANDING                        4,887,471          5,360,123         5,479,208         5,323,437
Income before extraordinary gain on early redemption of
   redeemable preferred stock and preferred stock
   dividend as reported                                                $(62)              $248            $2,603              $534
Reduction in interest expense and increase in short-term
   investment income for modified treasury stock method                   -                  -                131                -
                                                                        (62)                248             2,734               534
Extraordinary gain on early redemption of redeemable
   preferred stock                                                       166                 -                267                -
Net income (as adjusted)                                                 104                248             3,001               534
Preferred stock dividends as reported                                   (66)                 -              (112)                -
Preferred stock dividends reduction for modified stock                    -                  -                 46                -
method
Earnings available to common shareholders (as adjusted)                 $38               $248            $2,935              $534
Earnings Per Share:
    Income before extraordinary gain on early redemption
of
      redeemable preferred stock and preferred stock                  $(.01)               $.05              $.50              $.10
      dividends
   Extraordinary gain on early redemption of redeemable
      preferred stock                                                    .03                  -               .05                 -
    NET INCOME                                                           .02                .05               .55               .10
    Preferred stock dividend                                           (.01)                  -             (.01)                 -
Earnings available to common shareholders                               $.01               $.05              $.54              $.10
</TABLE>
(1)Share  amounts  have been retroactively adjusted for the effect  of  the  5%
   stock dividend distributed  on  June  21, 1996, to shareholders of record on
   May 17, 1996.