Registration Rights Agreement

                                 Between

                     STANDARD MANAGEMENT CORPORATION

                                   and


                GREAT AMERICAN RESERVE INSURANCE COMPANY


<PAGE>





                 REGISTRATION RIGHTS AGREEMENT

   THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
November 8, 1996 by and between STANDARD MANAGEMENT CORPORATION, an
Indiana corporation (the "COMPANY"), and GREAT AMERICAN RESERVE INSURANCE
COMPANY, a Texas corporation, ("GARCO").

 WHEREAS, the Company and GARCO, entered into a Note Agreement dated as
of the date hereof pursuant to which GARCO purchased a Senior
Subordinated Convertible Note in the amount of $4,000,000 (the "NOTE");
and

 WHEREAS, the Note is convertible at the option of GARCO into shares of
common stock of the Company (the "CONVERTED STOCK"); and

 WHEREAS, it is a condition precedent to GARCO purchasing the Note
(pursuant to the Note Agreement) that this Agreement be entered into; and

      WHEREAS, certain capitalized terms used herein are used as defined
in the Note Agreement.

      NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto
agree as follows:


1.    DEMAND REGISTRATION

      1.1. REQUESTS FOR REGISTRATION.  At any time, a holder of the Note
or Converted Stock may demand registration under the Securities Act of
all or any portion of the Registrable Securities owned by such holder.
In order to accomplish such demand, a holder shall send written notice of
the demand to the Company, and such notice shall specify the number of
Registrable Securities sought to be registered.  The Company shall
proceed with any demand registration requested by a holder of the Note or
Converted Stock if the number of Registrable Securities which GARCO shall
have elected to include in such Demand Registration pursuant to this
Section 1.1 shall be at least 51% of the Converted Stock issued or
issuable upon conversion of the Note.  The minimum share amounts
specified in this Section 1.1 shall be appropriately adjusted to account
for any stock dividend, stock split, recapitalization, merger,
consolidation, reorganization or other action as a result of which
additional shares of common stock of the Company are issued on account
of, in conversion of or in exchange for shares of outstanding common
stock.

 1.2. MAXIMUM NUMBER OF DEMAND REGISTRATIONS.  In no event shall the
total number of Demand Registrations exceed two.

 1.3. PROCEDURE.  Within 10 days after receipt of a demand pursuant to
Section 1.1 hereof, the Company shall give written notice of such
requested registration to all other Persons who have registration rights
and will include in such registration, subject to the allocation
provisions below, all other Registrable Securities with respect to which
the Company has received written requests for inclusion within 20 days
after the Company's mailing of such notice, plus any securities of the
Company that the Company chooses to include on its own behalf.
 1.4. EXPENSES.  The Company will pay the Registration Expenses of any
demand registration, but the Underwriting Commissions, if such demand
registration is underwritten, will be paid by GARCO in proportion to any
Registrable Securities to be included on its behalf.

 1.5. PRIORITY ON DEMAND REGISTRATIONS.  If a demand registration is
underwritten and the managing underwriters advise the Company in writing
that in their opinion the number of Registrable Securities requested to
be included exceeds the number that can be sold in such offering, at a
price reasonably related to the fair value, the Company will allocate the
Registrable Securities to be included in such demand registration, first,
to the holders of Registrable Securities PRO RATA on the basis of the
number of Registrable Securities (collectively, the "Selling
Stockholders") for which the Company has received written requests for
inclusion, and, second, to the Company.
 1.6. SELECTION OF UNDERWRITERS.  Any demand registration may be
underwritten, at the election of the Selling Stockholders, and the
selection of investment banker(s) and manager(s) and the other decisions
regarding the underwriting arrangements for any such offering will be
made by the Selling Stockholders; PROVIDED, HOWEVER, that the selection
of investment banker(s) and manager(s) shall be subject to the consent of
the Company, such consent not to be unreasonably withheld.


2.    PIGGYBACK REGISTRATIONS
 2.1. RIGHT TO PIGGYBACK.  Whenever the Company proposes to register the
offer, sale or offer and sale of any of its securities for its own behalf
under the Securities Act (other than a demand registration), and the
registration form to be used may be used for the registrations of
Registrable Securities to be sold in the manner proposed by GARCO
("PIGGYBACK REGISTRATION""), the Company will give prompt written notice
to GARCO and will include in such Piggyback Registration, subject to the
allocation provisions below, all Registrable Securities with respect to
which the Company has received written requests for inclusion within 20
days after the Company's mailing of such notice.  The Company shall not
select a Restricted Form that would preclude registration of the
Registrable Securities that the Company has been requested to include in
such registration if the Company could use another available form of
registration statement which is not a Restricted Form and the use of
which would not give rise to added Registration Expenses.

 2.2. PIGGYBACK EXPENSES.  In all Piggyback Registrations, the Company
will pay the Registration Expenses related to the Registrable Securities
of GARCO, but the Underwriting Commissions will be paid by the Selling
Stockholders in proportion to any Registrable Securities included on
their behalf.
 2.3. PRIORITY ON PRIMARY REGISTRATIONS.  If a Piggyback Registration is
an underwritten registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration
exceeds the number that can be sold in such offering, at a price
reasonable related to fair value, the Company will allocate the
securities to be included as follows:  first, the securities the Company
proposes to sell on its own behalf; and, second, Registrable Securities
requested to be included in such registration, PRO RATA on the basis of
the number of Registrable Securities owned, among the Selling
Stockholders.

 2.4. WITHDRAWAL OR ABANDONMENT.  Nothing contained in this Section 2
shall be construed as limiting or otherwise interfering with the right of
the Company to withdraw or abandon in its sole discretion any
registration statement filed by it in connection with a Piggyback
Registration notwithstanding the inclusion therein of Registrable
Securities.



3.    HOLDBACK AGREEMENTS

 Both GARCO and the Company agree not to effect any public sale or public
distribution of equity securities of the Company of any securities
convertible into or exchangeable or exercisable for such securities
during the 7 days prior to and the 180 days after any underwritten
registration of equity securities of the Company becomes effective
(except as part of such underwritten registration or except in connection
with obligations of the Company existing on the effective date of the
registration statement relating to such underwritten offering).

4.    REGISTRATION PROCEDURES

 Whenever GARCO has requested that any Registrable Securities be
registered pursuant to Section 1 of this Agreement, the Company will, as
expeditiously as possible, or whenever GARCO has requested that any
Registrable Securities be registered pursuant to Section 2 of this
Agreement, the Company will, to the extent applicable:

 (a)  PREPARATION AND FILING OF REGISTRATION STATEMENT.  Prepare and file
with the Securities and Exchange Commission a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective (provided that before
filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish GARCO with copies of all
such documents proposed to be filed).
 (b)  PREPARATION AND FILING OF AMENDMENTS AND SUPPLEMENTS.  Prepare and
file with the Securities and Exchange Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the greater of (x) a period of not less than 120
days or (y) until the Registrable Securities included therein have been
sold.
 (c)  COPIES OF DOCUMENTS.  Furnish to GARCO such number of copies of
such registration statement, each amendment and supplement thereto and
the prospectus included in such registration statement (including each
preliminary prospectus), and such other documents as GARCO may reasonably
request in order to facilitate the disposition of the Registrable
Securities included therein owned by GARCO.
 (d)  BLUE SKY QUALIFICATIONS.  Use its best efforts to register or
quality such Registrable Securities under such other securities or blue
sky laws of such jurisdictions as GARCO or managing underwriters may
reasonably request; PROVIDED, HOWEVER, that in connection with any such
registration or qualification the Company shall not be obligated to file
a general consent to service of process, or to qualify to do business as
a foreign corporation, or otherwise subject itself to taxation in
connection with such qualification or compliance.
 (e)  NOTIFICATION OF EFFECTIVENESS; AMENDMENTS.  Notify GARCO at any
time when a prospectus relating to the Registrable Securities included
therein is required to be delivered under the Securities Act within the
period that the Company is required to keep the registration statement
effective of the happening of any event as a result of which the
prospectus included in such registration statement as theretofore amended
or supplemented contains an untrue statement of a material fact or omits
any material fact necessary to make the statements therein not
misleading, and, at the request of GARCO, the Company will prepare a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein
not misleading.
 (f)  LISTING.  Cause all such Registrable Securities to be listed or
included on securities exchanges on which similar securities issued by
the Company are then listed or included.
 (g)  TRANSFER AGENT AND REGISTRAR.  Provide a transfer agent and
registrar for all such Registrable Securities not later than the
effective date of such registration statement.
 (h)  OTHER AGREEMENTS.  Enter into such customary agreement (including
an underwriting agreement containing customary terms and conditions,
including usual and customary indemnification provisions, in form
reasonably acceptable to the Company) and take such other customary
actions as may be reasonable necessary to expedite or facilitate the
disposition of such Registrable Securities.
 (i)  LETTERS FROM INDEPENDENT ACCOUNTANTS.  Obtain a "cold comfort"
letter addressed to the Company from its independent accountants in such
form and covering such matters of the type customarily covered by "cold
comfort" letters delivered by such public accountants.
 (j)  INSPECTION OF RECORDS.  Make available for inspection by GARCO,
and, upon execution of a confidentiality agreement mutually acceptable to
all parties, by any underwriter participating in any disposition pursuant
to such registration statement and any attorney, accountant or other
agent retained by GARCO or any underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by GARCO or any underwriter, attorney,
accountant or agent in connection with such registration statement.

5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 The Company hereby represents and warrants to GARCO:

 5.1. DUE ORGANIZATION AND GOOD STANDING.  The Company is a corporation
duly organized and validly existing under the laws of its jurisdiction of
incorporation and is duly qualified as a foreign corporation in each
jurisdiction in which the failure to be so qualified could reasonably be
expected to have a material adverse effect on the Company.
 5.2. DUE AUTHORIZATION; BINDING EFFECT.  The execution and delivery of
this Agreement by the Company has been duly authorized by all necessary
corporate action and this Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms.
 5.3. NO VIOLATION OR DEFAULT.  The execution and delivery by the Company
of this Agreement does not, and the performance by the Company of its
obligations hereunder will not, violate any provisions of its charter or
by-laws or constitute a default under any other agreement to which the
Company is a party or by which it or its assets may be bound.

6.    REPRESENTATIONS AND WARRANTIES OF GARCO

 GARCO represents and warrants to the Company:

 6.1. DUE ORGANIZATION AND GOOD STANDING.  GARCO is a corporation duly
organized and validly existing under the laws of the state of Texas and
is duly qualified as a foreign corporation in each jurisdiction in which
the failure to be so qualified could reasonably be expected to have a
material adverse effect on GARCO.
 6.2. DUE AUTHORIZATION; BINDING EFFECT.  The execution and delivery of
this Agreement by GARCO has been duly authorized by all necessary action
and this Agreement constitutes the legal, valid and binding obligation of
GARCO enforceable against GARCO in accordance with its terms.
 6.3. NO VIOLATION.  The execution and delivery of this Agreement by
GARCO does not, and the performance by GARCO of its obligations hereunder
will not, violate any provision of the organizational documents of GARCO.
 6.4. NO DEFAULT.  The execution and delivery of this Agreement by GARCO
does not, and the performance by GARCO of its obligations hereunder will
not, violate any other agreement to which such Stockholder is a party or
by which any of its assets may be bound.

7.    INFORMATION REGARDING GARCO

 GARCO shall provide to the Company such information as may be reasonably
requested by the Company for use in the preparation and filing of any
registration statement covering Registrable Securities owned by GARCO,
and the obligation of the Company to include Registrable Securities in
any registration statement on behalf of GARCO shall be subject to GARCO's
providing such information as promptly as practicable.

8.    INDEMNIFICATION

 8.1. INDEMNIFICATION BY THE COMPANY.  The Company hereby indemnifies, to
the extent permitted by law, GARCO, its officers and directors, and each
person who controls such holder (within the meaning of the Securities
Act), against all losses, claims, damages, liabilities and expenses
arising out of or resulting from any untrue or alleged untrue statement
of material fact contained in any registration statement, prospectus or
preliminary prospectus or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading except insofar as the same
occurs in reliance upon and in conformity with any information furnished
in writing to the Company by GARCO expressly for use therein or is caused
by GARCO's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished GARCO with copies of the same.

 8.2. INDEMNIFICATION BY GARCO.  In connection with any registration
statement in which GARCO is participating, GARCO will furnish to the
Company in writing such information as is reasonably requested by the
Company for use in such registration statement or prospectus and will
indemnify, to the extent permitted by law, the Company, its directors and
officers and each person who controls the Company (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses arising out of or resulting from any untrue or alleged untrue
statement of material fact or any omission or alleged omission of a
material fact required to be stated in the registration statement or
prospectus or any amendment thereof or supplement thereto or necessary to
make the statements therein not misleading, but only to the extent that
such untrue statement or omission or such alleged untrue statement or
alleged omission occurs in reliance upon and in conformity with
information so furnished in writing by GARCO specifically for use in the
registration statement.

 8.3. PROCEDURES AS TO INDEMNIFICATION.  Any person entitled to
indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it may seek
indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonable
satisfactory to the indemnified party.  If such defense is assumed, the
indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be
unreasonably withheld).  An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless
in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.

 8.4. CONTRIBUTION. If the indemnification provided for in this Section 8
is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on
the one hand and of the indemnified party on the other in connection with
the statements or omissions that resulted in such loss, liability, claim,
damage, or expense (including legal fees or expenses) as well as any
other relevant equitable considerations.  The relative fault of the
indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.  The Company and each holder of Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this
Section 8.4 were determined by PRO RATA allocation or by any other method
of allocation which does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8, an indemnified holder
shall not be required to contribute any amount in excess of the net
proceeds received by the indemnified holder from the sale of the
Registrable Securities.  No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.


9.    CONDITION TO THE COMPANY'S OBLIGATIONS

 In connection with an underwritten offering, it shall be a condition to
the Company's obligations to include Registrable Securities on behalf of
GARCO that the underwriters agree to indemnify the Company, its directors
and officers and each person who controls the Company (within the meaning
of the Securities Act) against any losses, claims, damages, liabilities
and expenses arising out of or resulting from any untrue or alleged
untrue statement of material fact or any omission or alleged omission of
a material fact required to be stated in the registration statement or
prospectus or any amendment thereof or supplement thereto or necessary to
make the statements therein not misleading, but only to the extent that
such untrue statement or omission or such alleged untrue statement or
alleged omission is contained in information furnished in writing by such
underwriters on their own behalf specifically for use in preparing the
registration statement.


10.   FORM S-3 AND RULE 144

 10.1. AVAILABILITY OF SHORT FORM.  The Company represents and warrants
that it meets and will use its best efforts to continue to meet the
requirements which must be met by the Company in order for the
Registrable Securities to be registered in a Demand Registration on Form
S-3 under the Securities Act or any comparable or successor form or
forms; and the Company further represents and warrants that it has
registered the Common Stock and will use its best efforts to register any
other Registrable Securities and maintain the registration of any
securities registered under the Securities Exchange Act of 1934 in
accordance with the provisions of that Act.
 10.2. CONDITIONS OF RULE 144.  The Company represents and warrants that
it satisfies and will use its best efforts to continue to satisfy the
conditions set forth in Rule 144 under the Securities Act which must be
satisfied by an issuer in order for a holder of restricted securities to
sell such securities under the provisions of such rule, including the
timely filing of all reports required to be filed under the Securities
Exchange Act of 1934, as amended.

11.   DEFINITIONS

 11.1. REGISTRABLE SECURITIES.  The term "REGISTRABLE SECURITIES" means
any common stock of the Company issued or issuable upon exercise of any
convertible notes, warrant, or similar instruments and any securities
issued or to be issued with respect to such securities by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.  As to
any particular Registrable Securities, such securities will cease to be
Registrable Securities when they have been (i) effectively registered
under the Securities Act or disposed of in accordance with the
registration statement covering them or (ii) transferred pursuant to Rule
144 under the Securities Act (or any similar rule then in force).

 11.2. REGISTRATION EXPENSES.  The term "REGISTRATION EXPENSES" means all
expenses incident to the Company's performance of or compliance with this
Agreement, including without limitation all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, expenses and fees for
listing the securities to be registered on exchanges or trading system on
which similar securities issued by the Company are then listed or
included, and fees and disbursements of counsel for the Company.

 11.3. RESTRICTED FORM.  The term "RESTRICTED FORM" shall mean a form of
registration statement under the Securities Act which imposes for its use
a limitation on the maximum value or number of securities to be included
therein.

 11.4. SECURITIES ACT.  The term "SECURITIES ACT" shall mean the
Securities Act of 1933, as amended.

 11.5. UNDERWRITING COMMISSIONS.  The term "UNDERWRITING COMMISSIONS"
means all underwriting discounts or commissions relating to the sale of
securities of the Company, but excludes any expenses reimbursed to
underwriters.

12.   MISCELLANEOUS

 12.1. NOTICES.  Any notices required hereunder shall be sent by
certified or registered mail, and shall be addressed to the address of
the Company's corporate headquartered in the case of any notice to the
Company, and until changed by notice to the Company, to GARCO at 11825
North Pennsylvania Street, Carmel, Indiana 46032, Attention Lawrence W.
Inlow.

 12.2. AMENDMENTS AND WAIVERS.  The provisions of this Agreement may be
amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the Company has
obtained the written consent of GARCO.

 12.3. SUCCESSORS AND ASSIGNS.  All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and
inure to the benefit of their respective transferees and successors.  The
rights to cause the Company to register Registrable Securities pursuant
to this Agreement shall follow the Note or Converted Stock, and shall be
exercisable by holders of any Note or Converted Stock including any
transferees of the Note or Converted Stock.
 12.4. GOVERNING LAW.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law
of the State of Indiana.

 12.5. COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which shall be considered to be an original
instrument and to be effective as of the date first written above.

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
STANDARD MANAGEMENT CORPORATION


By /s/ John J. Quinn
     Name:  John J. Quinn
     Title: Executive Vice President
            and Chief Financial Officer

GREAT AMERICAN RESERVE
INSURANCE COMPANY



By /s/ Lawrence W. Inlow
     Name:  Lawrence W. Inlow
     Title: Executive Vice President