SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                  FORM 10-Q


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

           FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999 or

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


Commission file number: 0-20882

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


           Indiana                                 No. 35-1773567
(State or other jurisdiction            (I.R.S. Employer Identification No.)
of incorporation or organization)

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

                            (317) 574-6200
         (Registrant's telephone number, including area code)

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  May  3,  1999,  the  Registrant had 7,556,070 shares of  Common  Stock
outstanding.

<PAGE>
                        STANDARD MANAGEMENT CORPORATION

                                     INDEX

                                                                        PAGE
NUMBER

Part I.    FINANCIAL INFORMATION:

Item 1.    Financial Statements

           Consolidated Balance Sheets --
           March 31, 1999 (Unaudited) and December 31, 1998 (Audited)         3

           Consolidated Statements of Income --
           For the Three Months Ended March 31, 1999 and 1998 (Unaudited)     4

           Consolidated Statements of Shareholders' Equity --
           For the Three Months Ended March 31, 1999 and 1998 (Unaudited)     5

           Consolidated Statements of Cash Flows --
           For the Three Months Ended March 31, 1999 and 1998 (Unaudited)     6

           Notes to Consolidated Financial Statements (Unaudited)         7 - 8

Item 2.    Management's Discussion and Analysis of Financial Condition 
           and Results of Operations                                     9 - 19

Item 3.    Quantitative and Qualitative Disclosures About Market Risk        19

Part II.   OTHER INFORMATION:

Item 6.    Exhibits and Reports on Form 8-K                                  20

           SIGNATURES                                                        21
<PAGE>
                        PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                            (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                             MARCH 31                   DECEMBER 31
<S>                                                                                          <C>                          <C>   
                                                                                               1999                         1998
                                                                                            (UNAUDITED)                   (AUDITED)
                                   ASSETS
Investments:
    Securities available for sale:
          Fixed maturity securities, at fair value (amortized cost: $560,280 in 1999
            and $547,115 in 1998)                                                            $553,157                     $551,312
          Equity securities, at fair value (cost: $1,270 in 1999 and $1,498 in 1998)            1,298                        1,316
   Mortgage loans on real estate                                                                9,504                        8,578
   Policy loans                                                                                14,855                       15,019
   Real estate                                                                                  3,441                        3,435
   Other invested assets                                                                          943                          837
   Short-term investments                                                                      22,163                       11,626
            Total investments                                                                 605,361                      592,123
Cash                                                                                            6,578                       13,591
Accrued investment income                                                                       9,089                        9,563
Amounts due and recoverable from reinsurers                                                    77,484                       76,897
Costs of policies produced                                                                     41,862                       32,946
Costs of policies purchased                                                                    29,271                       28,793
Goodwill                                                                                        5,824                        5,886
Other assets                                                                                    5,310                        6,105
Assets held in separate accounts                                                              222,256                      190,246
            Total assets                                                                   $1,003,035                     $956,150

                LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Insurance policy liabilities                                                              $661,658                     $638,435
   Accounts payable and accrued expenses                                                        7,812                       12,277
   Notes payable                                                                               35,000                       35,000
   Deferred federal income taxes                                                                6,283                        7,620
   Liabilities related to separate accounts                                                   222,256                      190,246
            Total liabilities                                                                 933,009                      883,578
Series  A convertible redeemable preferred stock, par value $100 per share;
   authorized 130,000; 65,300 issued and outstanding in 1998 and 1999                           6,530                        6,530
Shareholders' Equity:
   Preferred stock, no par value:
          authorized 870,000 shares; none issued and outstanding                                   --                           --
   Common stock and additional paid in capital, no par value:
          authorized 20,000,000 shares; issued 8,802,313 in 1999 and 8,802,313 in              61,110                       60,586
          1998
   Treasury stock, at cost, 1,243,143 shares in 1999 and 1,160,859 shares in 1998             (6,750)                      (6,220)
   Accumulated other comprehensive income:
          Unrealized gain (loss) on securities available for sale, net taxes (benefits) of:   (2,204)                        1,660
            1999 - $(1,135) 1998 - $765
          Unrealized gain on other investments, net taxes of: 1999 - $86  1998 - $12              166                           23
          Foreign currency translation adjustment, net taxes of: 1999 - $20  1998 -                38                            4
          $2
   Retained earnings                                                                           11,136                        9,989
            Total shareholders' equity                                                         63,496                       66,042
Total liabilities and shareholders' equity                                                 $1,003,035                     $956,150
</TABLE>

                 See accompanying notes to consolidated financial statements.
<PAGE>
               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

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


<TABLE>
<CAPTION>
                                                                                    THREE MONTHS ENDED
<S>                                                                          <C>                         <C>               
                                                                                         MARCH 31
                                                                             1999                        1998
Revenues:
                Life premiums                                                $3,064                      $1,980
                Net investment income                                        10,476                      7,386
                Net realized investment gains                                17                          21
                Policy income                                                1,629                       1,358
                Negative goodwill amortization                               --                          347
                Fees from separate accounts                                  478                         292
                Other income                                                 1,277                       291
                    Total revenues                                           16,941                      11,675
Benefits and expenses:
                Life benefits and claims                                     3,244                       1,610
                Interest credited on interest-sensitive annuities and
                   other financial products                                  5,836                       4,219
                Amortization                                                 1,501                       1,011
                Other operating expenses                                     3,862                       3,032
                Interest expense and financing costs                         882                         657
                   Total benefits and expenses                               15,325                      10,529
Income before federal income taxes and preferred stock dividends             1,616                       1,146
Federal income tax expense                                                   319                         398

Net income                                                                   1,297                       748
Preferred stock dividends                                                    (127)                       --
Earnings available to common shareholders                                    $1,170                      $748

Earnings per share - basic:
                Net income                                                   $.17                        $.14
                 Preferred stock dividends                                   (.02)                       --
                Earnings available to common shareholders                    .15                         $.14

Earnings per share - diluted:
                Net income                                                   $.16                        $.13
                Preferred stock dividends                                    (.01)                       --
                Earnings available to common shareholders                    $.15                        $.13
</TABLE>

                 See accompanying notes to consolidated financial statements.
<PAGE>
               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                       (UNAUDITED, DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>


                                                                    Common
                                                                   stock and                           Accumulated
                                                                  additional                              other
                                                                    paid-in          Treasury         comprehensive       Retained
                                                Total               capital            stock             income           earnings
<S>                                             <C>               <C>               <C>              <C>                 <C>
Balance at January 1, 1998                      $43,313           $40,646           $(4,572)         $1,698              $5,541

Comprehensive income:
  Net income                                    748                                                                      748
  Other comprehensive income:
          Change in unrealized gain (loss) on
          securities, net taxes (benefits)      (54)                                                 (54)
             of $(29)
          Change in foreign currency,
            net taxes (benefits) of $(163)      (117)                                                (117)
            Other comprehensive income          (171)
              Comprehensive income              577
   Issuance of common stock for Savers Life     14,937            14,937
          acquisition
   Issuance of common stock warrants            30                30
   Issuance of common stock in connection with
          exercise of stock warrants            28                28
   Treasury stock acquired                      (28)                                (28)
   Conversion of preferred stock into common    4                 4
          stock
   Reissuance of treasury stock in connection
          with exercise of stock options        5                                   5
Balance at March 31, 1998                       $58,866           $55,645           $(4,595)         $1,527              $6,289

Balance at January 1, 1999                      $66,042           $60,586           $(6,220)         $1,687              9,989

Comprehensive income:
   Net income                                   1,297                                                                    1,297
   Other comprehensive income:
          Change in unrealized gain (loss) on
          securities, net taxes (benefits) of
          $(1,917)                              (3,721)                                              (3,721)
          Change in foreign currency, net taxes
          of $18                                34                                                   34
            Other comprehensive income          (3,687)

              Comprehensive income              (2,390)

   Issuance of common stock warrants            524               524
   Treasury stock acquired                      (530)                               (530)
   Reissuance of treasury stock in connection
     with exercise of stock options             (23)                                                                     (23)
      Preferred stock dividends                 (127)                                                                    (127)
Balance at March 31, 1999                       $63,496           $61,110           $(6,750)         $(2,000)            $11,136
</TABLE>

                 See accompanying notes to consolidated financial statements.

<PAGE>
               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (UNAUDITED, DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                                       Three Months Ended
<S>                                                                                      <C>                                  <C>
                                                                                                            March 31
                                                                                           1999                               1998
OPERATING ACTIVITIES
Net income                                                                               $1,297                               $748
Adjustments to reconcile net income to net cash provided by
 operating activities:
   Amortization of deferred policy acquisition costs                                        862                                586
   Policy acquisition costs deferred                                                    (5,857)                            (2,069)
   Deferred federal income taxes                                                            490                                467
   Depreciation and amortization                                                          1,202                                252
   Insurance policy liabilities                                                           2,776                              1,977
   Net realized investment gains                                                           (17)                               (21)
   Accrued investment income                                                                473                                451
   Other                                                                                    109                            (1,648)
          Net cash provided by operating activities                                       1,335                                743

INVESTING ACTIVITIES
Fixed maturity securities available for sale:
   Purchases                                                                           (65,760)                           (61,724)
   Sales                                                                                 48,777                             43,737
   Maturities, calls and redemptions                                                      3,588                              7,548
Short-term investments, net                                                            (10,537)                             10,142
Other investments, net                                                                  (1,029)                              (664)
Purchase of Savers Life Insurance Company, less cash acquired of $518                        --                           (16,538)
          Net cash used by investing activities                                        (24,961)                           (17,499)

FINANCING ACTIVITIES
Issuance of common stock, net                                                                --                             14,937
Borrowings, net of debt issuance costs of $86 in 1998                                        --                              3,914
Repayments on long term debt and obligations under capital lease                          (341)                              (153)
Premiums received on interest-sensitive annuities and other financial
  products credited to policyholder account balances, net of premiums ceded              35,034                             14,222
Return of policyholder account balances on interest-sensitive annuities
  and other financial products, net of premiums ceded                                  (18,074)                            (9,419)
Reissuance of treasury stock in connection with exercise of stock options                   524                                 57
  and warrants
Purchase of common stock for treasury                                                     (530)                               (28)
          Net cash provided by financing activities                                      16,613                             23,530
Net increase (decrease) in cash                                                         (6,319)                              6,774
Cash at beginning of period                                                              13,591                              4,165
Cash at end of period                                                                    $6,578                            $10,939
</TABLE>

                 See accompanying notes to consolidated financial statements.
<PAGE>

               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


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.
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  management's opinion, the information contained  in  this
report reflects all adjustments,  of  a  normal  recurring nature, necessary to
fairly  present  the  results of operations for the interim  periods.   Certain
amounts from prior periods  have  been  reclassified  to  conform  to  the 1999
presentation.   These  reclassifications  have no effect on previously reported
shareholders' equity or net income during the periods presented.

      The nature of the insurance business  of  Standard Management Corporation
and its consolidated subsidiaries (the "Company"  or "SMC") 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.   If future experience
differs  materially  from  these  estimates  and  assumptions,  the   Company's
financial statements could be affected.

      The consolidated financial statements in this report, include the  assets
and  liabilities  and  results  of  operations of Savers Life Insurance Company
("Savers  Life")  and  Midwestern  National  Life  Insurance  Company  of  Ohio
("Midwestern Life") from their acquisition  dates of March 12, 1998 and October
30, 1998, respectively.

      For further information, refer to the consolidated  financial  statements
and  related footnotes included in the Annual Report on Form 10-K for the  year
ended December 31, 1998.

NOTE 2 -- ACQUISITIONS

      The  following  are supplemental unaudited pro forma consolidated results
of  operations of the Company  as  if  the  acquisitions  of  Savers  Life  and
Midwestern Life had occurred on January 1, 1998 (in thousands, except per share
amounts).   The  following  amounts  are  based  upon  certain  assumptions and
estimates  which  the  Company  believes are reasonable and do not reflect  any
benefit from savings which might  be  achieved  from  combined operations.  The
amounts are not necessarily indicative of the results of  operations  had these
transactions occurred on January 1, 1998, or the results of future operations.


                                         Three Months Ended
                                              MARCH 31
                                                1998

         Revenues                             $20,178 
         Net income                               664 
         Earnings per share - basic              0.09
         Earnings per share - diluted            0.08


NOTE 3 -- NOTES PAYABLE

      Notes payable of the Company were as follows (in thousands):


<TABLE>
<CAPTION>
                                         Interest              March 31            December 31
                                           Rate                  1999                   1998
<S>                                           <C>              <C>                   <C>   
Borrowings under revolving credit             8.36%{ (1)}      $25,000               $25,000
  agreements
Senior subordinated convertible notes         10.00%           10,000                10,000
  due 2004
                                                               $35,000               $35,000
</TABLE>
          (1) Current weighted average rate at March 31, 1999.


NOTE 4 -- NET UNREALIZED GAIN ON SECURITIES AVAILABLE FOR SALE


      The components of the balance sheet caption "Unrealized gain on
securities available for sale" in shareholders' equity are summarized as
follows (in thousands):
<TABLE>
<CAPTION>
                                                               March 31                     December 31
                                                                 1999                           1998
<S>                                                            <C>                            <C>
Fair value of securities available for sale                    $554,455                       $552,628
Amortized cost of securities available for sale                561,550                        548,613
         Gross unrealized gain (loss) on securities available  (7,095)                        4,015
            for sale
Adjustments for:
   Deferred policy acquisition costs                           2,921                          (1,101)
   Present value of future profits                             835                            (489)
   Deferred federal income tax liability                       1,135                          (765)
         Net unrealized gain (loss) on securities available    $(2,204)                       $1,660
           for sale
</TABLE>


NOTE 5 -- EARNINGS PER SHARE


  A reconciliation of income and shares used to calculate basic and diluted
earnings per share is as follows (dollars in thousands):


<TABLE>
<CAPTION>
                                                                               Three Months Ended
<S>                                                            <C>                  <C>       <C>
                                                                                    March 31
                                                               1999                           1998
INCOME:
Net income                                                     $1,297                         $748
Preferred stock dividends                                      (127)                          --
Income available to common shareholders for basic earnings     1,170                          748
   per share
Effect of dilutive securities:
Preferred stock dividends                                      127                            --
     Interest on  subordinated convertible debt                250                            --
Income available to common shareholders for diluted earnings   $1,547                         $748
   per share

SHARES:
Weighted  average  shares  outstanding  for basic earnings     7,596,405                      5,322,065
   per share
Effect of dilutive securities:
 Stock options                                                 168,053                        269,776
 Stock warrants                                                131,827                        285,127
         Subordinated convertible debt                         1,740,038                      -
 Dilutive potential common shares                              2,039,918                      554,903
Weighted average shares outstanding for diluted earnings       9,636,323                      5,876,968
   per share
</TABLE>


      The senior subordinated convertible notes were not included in the 1998
computation of diluted earnings per share because the effect was not dilutive.


<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

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.  Changes  in  1999  and  1998  balances  in the
consolidated  financial statements are largely affected by the acquisitions  of
Savers Life and  Midwestern  Life and various financings described in the notes
to the consolidated financial  statements included in this report and the notes
to the consolidated financial statements  included in the 1998 Form 10-K.  This
discussion  should  be  read  in conjunction with  both  sets  of  consolidated
financial statements.

FIRST THREE MONTHS OF 1999 COMPARED WITH THE FIRST THREE MONTHS OF 1998:

The following tables and narratives  summarize  the  results  of  operations by
operating segment.

<TABLE>
<CAPTION>
                                                                   Three months ended
                                                                                         March 31
<S>                                                                   <C>                               <C>
                                                                       1999                             1998
                                                                                      (Dollars in thousands)
Operating income before income taxes:
   Domestic operations                                                $1,328                            $626
   International operations                                           271                               499
   Consolidated operating income before income taxes                  1,599                             1,125
   Applicable income taxes related to operating income                313                               391
            Consolidated operating income after taxes                 1,286                             734
   Consolidated realized investment gains before income taxes         17                                21
   Applicable income taxes related to realized investment gains       6                                 7
            Consolidated realized investment gains after taxes        11                                14
            Net income                                                $1,297                            $748
</TABLE>

CONSOLIDATED RESULTS AND ANALYSIS

                                  SMC's  first quarter 1999 operating  earnings
were $1.3 million, or 16 cents per diluted share, up 75% and 33%, respectively,
over first quarter 1998.  Operating earnings  increased due to i) increased net
spread revenue, ii) increased administrative fees  and policy income earned and
iii)economies of scale  achieved  through  the  acquisitions of Savers Life and
Midwestern Life. These  increases  were  somewhat  offset by  i)the elimination
of negative goodwill amortization, ii)unfavorable  mortality, iii)increased DAC
and  PVP  amortization  and  iv)  increased  interest expense.  The  percentage 
increase  in  operating  earnings  was  greater than the percentage increase in
operating earnings  per  diluted share primarily because of the 64% increase in
weighted average diluted common  shares  or  equivalents outstanding during the 
period. This increase in weighted average shares outstanding resulted primarily 
from shares issued in connection with  the  acquisitions  of  Savers  Life  and 
Midwestern Life.

<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________



DOMESTIC OPERATIONS:
<TABLE>
<CAPTION>
                                                                        Three months ended
                                                                             March 31
<S>                                                     <C>                            <C>
                                                        1999                           1998
                                                                      (Dollars in thousands)
Premiums and deposits collected:
   Traditional life                                     $3,058                         $1,952
   FPDA's                                               21,800                         12,867
   Equity-indexed annuities                             11,196                         --
   Other annuities and deposits                         1,431                          545
   Universal and interest-sensitive life                607                            810
              Subtotal - interest sensitive and         35,034                         14,222
                  financial products
            Total premiums and deposits collected       $38,092                        $16,174
   Life premiums                                        $3,058                         $1,952
   Policy income                                        1,629                          1,358
            Total policy related income                 4,687                          3,310
Net investment income                                   10,213                         7,150
Other income                                            1,269                          176
            Total revenues (a)                          16,169                         10,636
Life benefits and claims                                3,302                          1,620
Interest credited on interest sensitive annuities and
   other financial products                             5,836                          4,219
Amortization                                            1,501                          1,011
Other operating expenses                                3,320                          2,503
Interest expense and financing costs                    882                            657
            Total benefits and expenses                 14,841                         10,010
            Operating income before income taxes        1,328                          626
Net realized investment gains                           17                             21
            Income before income taxes                  $1,345                         $647
</TABLE>

(a) Revenues  exclude   net  realized  investment gains
<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

GENERAL: This segment consists of  revenues earned and  expenses  incurred from
United   States  operations  which  includes  deposits  from  annuity  products
(primarily  FPDAs),  equity  indexed  products,  universal  life  products  and
traditional  life  products.  The profitability for this segment is primarily a
function  of its investment  spread  earned  (i.e.  the  excess  of  investment
earnings over  interest  credited  on  annuity  and  universal  life deposits),
persistency  of  the  in-force  business,  mortality  experience  and operating
expenses.    Domestic   operations   include  SMC  and  its  U.S.  consolidated
subsidiaries.

PREMIUM INCOME consists of premiums earned  from  i) traditional life insurance
and ii) annuity business that incorporates significant mortality features.

<circle>Life premiums were up $1.1 million or 57% in  first  quarter  1999,  to
   $3.1  million.  Traditional life premiums increased primarily due to renewal
   premiums from the insurance blocks of Savers Life and Midwestern Life.

NET PREMIUM DEPOSITS  consist  of  FPDA's,  equity-indexed  annuities, interest
sensitive  annuities  and  other  financial  products  that do not  incorporate
significant mortality features. For GAAP these premium deposits   are not shown
as  premium  income in the income statement.  Furthermore, 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.

<circle>The first quarter 1999 net premium deposits  increased $20.8 million or
   146%,  to  $35.0 million.  The increase relates to i)  an  increase  in  the
   agency base  achieved  through  the  recruitment  of  high volume agents and
   larger  managing general agencies, ii) continued expansion  of  geographical
   concentration,  and  iii)  the  introduction of a new equity-indexed annuity
   product in May, 1998 which contributed $11.2 million of premium deposits for
   the first quarter of 1999.

NET INVESTMENT INCOME fluctuates with  changes  in  i)  the  amount  of average
invested  assets  supporting insurance liabilities and ii) the yield earned  on
invested assets.

<circle>In the first  quarter 1999 net investment income increased $3.1 million
   or 43%, to $10.2 million.   Average  invested  assets  increased  by  $175.5
   million  or  42% compared to first quarter 1998 period due to the growth  in
   insurance liabilities from the acquisitions of  Savers Life  and  Midwestern
   Life.  This  increase  was  somewhat  offset  by a decline in net investment
   yields for the period.

<circle>The net investment yields  earned on average invested assets were 6.94%
   and 7.55% for the first quarter of  1999  and  1998, respectively.

POLICY  INCOME  represents mortality charges, administrative fees and surrender
charges related to universal life and annuity policies.

<circle>Policy income increased $.3 million or 20% to $1.6 million in the first
   quarter 1999.  This increase primarily relates to surrender charges received
   as a result of lowering crediting rates on certain FPDA products.

OTHER INCOME consists of fee income related to servicing blocks of business for
other insurance companies, experience refunds, and commission income.

<circle>In the first  quarter  of  1999  other income increased $1.1 million to
   $1.3  million.  This increase primarily  relates  to  $.8  million  of  fees
   received  in  connection with a three-year service agreement entered into by
   Savers Marketing in October 1998.

<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

BENEFITS AND CLAIMS  include  i) paid life insurance, ii) benefits from annuity
policies that incorporate significant  mortality  features, and iii) changes in
future policy reserves.  Throughout the Company's history,  it  has experienced
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 claim experience tend to offset  periods  of  lower  claims  experience.
Changes in benefits and claims should be analyzed along with changes in premium
income.

<circle>Benefits  and claims increased $1.7 million to $3.3 million due  to  an
   increased  block  of  in-force  life  insurance  business resulting from the
   acquisitions of Savers Life and Midwestern Life.

INTEREST CREDITED ON  INTEREST SENSITIVE ANNUITIES AND OTHER FINANCIAL PRODUCTS
represents  interest  credited   to  the  FPDA's,  indexed-annuities,  interest
sensitive and other financial products.

<circle>In the first quarter 1999  interest  credited increased $1.6 million or
   38%,   to  $5.8  million due to $1.4 million of  interest  credited  on  the
   insurance liabilities of Savers Life and Midwestern Life. This line was also
   impacted by credited  interest on insurance liabilities from sales in recent
   periods and somewhat offset by a decline in crediting rates.

<circle>The weighted average credited  rates  for  first  quarter 1999 and 1998
   were 4.82% and  5.56%, respectively.

AMORTIZATION includes i) amortization related to the present  value  of polices
purchased,   ii)   amortization   of   deferred  acquisitions  costs  and  iii)
amortization of goodwill and organizational costs.

<circle>First quarter 1999 amortization increased  $.5  million or 48%, to $1.5
   million.  This increase relates to  additional amortization  of  the present
   value of future profits and deferred acquisition costs for the first quarter
   of  1999  due  to  the  recognition  of  additional  profits for the period.
   Additional profits were recognized from i) the realization  of  profits from
   the  increased  sales  of  annuity  products  in recent periods and ii)  the
   realization  of profits from the purchased insurance  business  from  Savers
   Life and Midwestern Life.

OTHER OPERATING EXPENSES  consist  of  recurring general operating expenses and
commission expenses, net of deferrable amounts.

<circle>In the first quarter of 1999 other  operating  expenses  increased $ .8
   million or 33% , to $3.3 million .  The majority of this increase relates to
   normal  operating expenses in connection with managing the former  insurance
   operations of Savers Life, Savers Marketing and Midwestern Life.

INTEREST EXPENSE  AND  FINANCING COSTS represents interest expense incurred and
the amortization of related debt issuance costs.

<circle>The  first  quarter  of  1999  interest  expense  and  financing  costs
   increased $.2 million  primarily due to increased average borrowings for the
   period of approximately  $7.7  million. This increase was somewhat offset by
   a decline in the average interest rate for the period.










<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

INTERNATIONAL OPERATIONS:

<TABLE>
<CAPTION>
                                                        1999                           1998
<S>                                                     <C>                            <C>
                                                                      (Dollars in thousands)
Premiums and deposits collected:
         Traditional life                               $6                             $28
         Separate account deposits                      16,269                         7,686
               Total premiums and deposits collected    $16,275                        $7,714
Premium income                                          $6                             $28
Net investment income                                   263                            236
Separate account fees                                   478                            292
Amortization of negative goodwill                       --                             347
Other income                                            8                              115
                Total revenues                          755                            1,018
Benefits and claims                                     (58)                           (10)
Other operating expenses                                542                            529
               Total benefits and expenses              484                            519
               Operating income before income taxes     $271                           $499
</TABLE>

<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

GENERAL: This segment consists of revenues  earned  and  expenses incurred from
abroad, primarily Europe, and includes fees collected on deposits from separate
account  (unit-linked) products.  The profitability of this  segment  primarily
depends on  the  amount  of  separate  account  assets  under  management,  the
management  fee  charged on those assets and operating expenses.  International
operations include  Standard  Management  International,  S.A. and its non U.S.
consolidated subsidiaries ("SMI").

FEES FROM SEPARATE ACCOUNTS represents the net fees earned on the various unit-
linked products sold and fluctuate in relationship with account  assets and the
return earned on such assets. Fees include initiation fees on certain  products
and annual recurring fees on virtually all products.

<circle>First quarter 1999 fees from separate accounts increased $.2 million or
   64%, to $.5 million.  This is primarily due to weighted average assets  held
   in  separate  accounts  increasing  by  $49.7 million or 32% for the period.
   Actual separate account assets increased  $56.9  million  or 34.4% to $222.3
   million.  Net deposits from sales of unit-linked products by  SMI  increased
   $8.6 million or 112%, to $16.3 million.

NET INVESTMENT  INCOME  fluctuates  with  changes  in  i) the amount of average
invested assets and ii) the yield earned on invested assets.

<circle>Net  investment income was $.3 million and $.2 million  for  the  first
   quarters of  1999  and  1998,  respectively,  on  average invested assets of
   approximately $11.0 million.

<circle>The net investment yields earned on average invested  assets were 9.25%
   and 8.78% for the first quarter of 1999 and 1998, respectively.

AMORTIZATION  OF NEGATIVE GOODWILL is the excess cost of assets  acquired  over
the purchase price paid for SMI in December of 1993 of $6.9 million.

<circle>Negative goodwill was fully amortized at December 31, 1998.

OTHER INCOME consists of various refunds and other miscellaneous income.

<circle>Other  income  decreased  by  $.1 million due to the decline of various
   refunds received in the first quarter of 1998.

FOREIGN CURRENCY  TRANSLATION.   International  operations  are conducted using
foreign  currencies,  primarily the Luxembourg  franc,  which  are subsequently
converted into U.S. dollars using a conversion rate.  Although the  net  impact
of   this   translation  is  deemed  immaterial,  individual  income  statement
components from period  to  period  are  impacted  from  the strengthening  and
destrengthening of the U.S. dollar.


<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY OF STANDARD MANAGEMENT (PARENT COMPANY)

   Standard Management is a life  insurance  holding  company  whose  liquidity
requirements are met through payments received  from  its  subsidiaries.  These
payments  include  i)  interest  on  surplus  debenture,  ii)  dividends,  iii)
management fees and iv) rental income, which are subject to restrictions  under
applicable  insurance laws and are used to pay operating expenses and meet debt
service  obligations.    These   internal   sources   of  liquidity  have  been
supplemented  in  the  past  by  external  sources  such as  revolving   credit
agreements and long term debt and equity financing in the capital markets.

   GENERAL:  On a consolidated GAAP basis SMC  reported  net  cash  provided by
operations  of  $1.3  million for the first quarter of 1999.  Although deposits
received on SMC'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 SMC. Cash provided  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 $18.3 million
for  the  first  quarter  of 1999.  Cash generated on a consolidated  basis  is
available to Standard Management only to the extent that it is generated at the
Standard  Management  level  or   is  available  through  dividends,  interest,
management fees or other payments from subsidiaries.

   SMC instituted a program to repurchase its common stock in order to increase
the market value of the stock.  At  March  31,  1999,  Standard  Management  is
authorized  to  repurchase  1.0  million  additional shares of SMC Common Stock
under this program.

   At April 30, 1999, Standard Management had  "parent  company  only" cash and
short-term  investments  of $.7 million. These funds are available to  Standard
Management for general corporate purposes. Standard Management's annual "parent
company only" operating expenses  (not  including  interest  expense) were $3.1
million  and  $3.4  million  for  1998  and  1997, respectively.  In  addition,
Standard  Management  has  available $1.0 million  from  its  revolving  credit
agreement.

   Standard Management anticipates the available cash from its existing working
capital, plus anticipated 1999 dividends, management fees,  rental  income  and
interest  payments  on  its  surplus  debentures  receivable  will be more than
adequate  to  meet its anticipated "parent company only" cash requirements  for
1999.

   INTEREST OF  SURPLUS  DEBENTURE.  From  the   funds   borrowed  by  Standard
Management pursuant to the revolving credit agreements ("credit agreement") and
the senior subordinated note agreement  ("debt agreement"), $27.0  million  was
loaned to Standard Life pursuant  to  unsecured  surplus  debenture  agreements
("surplus  debenture") which requires Standard  Life to make quarterly interest 
payments  to  Standard Management  at  a  variable  corporate base rate plus 2% 
per annum,  and annual principal payments of $1.0 million per year beginning in
2007 and concluding in 2033. The interest and principal payments are subject to 
quarterly approval by the  Indiana  Department  of  Insurance,  depending  upon 
satisfaction  of  certain financial tests relating to levels of Standard Life's 
capital and surplus  and general approval  of  the  Commissioner of the Indiana 
Department  of  Insurance.  Standard  Management  currently  anticipates  these 
quarterly  approvals  will be granted.   Assuming the approvals are granted and
the March 31,  1999  interest rate of 9.75% continues, Standard Management will 
receive interest income of $2.6 million from the surplus debenture in 1999.

   DIVIDENDS.  Dividends from Standard  Life to Standard Management 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  Commissioner  of  the  Indiana
Department  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.
In 1999, Standard Life can pay dividends of approximately  $4.4 million without
regulatory approval.

   MANAGEMENT FEES.  Pursuant to a management services agreement, Standard Life
paid Standard Management $.9 million in the first quarter of  1999  for certain
management services related to the production of business, investment of assets
and  evaluation  of acquisitions.   In addition, Dixie Life paid Standard  Life
$.3 million in the  first  quarter  of  1999  for  certain  management services
provided.   Both  of  these  agreements  provide that they may be  modified  or
terminated by the Indiana and Mississippi Departments of Insurance in the event
of financial hardship of Standard Life or Dixie Life.

   EQUIPMENT RENTAL FEES.  Standard Management charged subsidiaries $.3 million
during the first quarter of 1999 for the use  of  equipment  owned  by Standard
Management.

LIQUIDITY OF INSURANCE OPERATIONS

   U.S. INSURANCE OPERATIONS.  The principal liquidity requirements of Standard
Life   are  its  contractual  obligations  to  policyholders,  dividend,  rent,
management  fee and surplus debenture payments to Standard Management 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
rating  (currently  rated  "B+")  and  events  in   the  industry  that  affect
policyholders' confidence.

   The  policies  and annuities issued by Standard Life contain provisions that
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  effect  on   liquidity,
unanticipated  withdrawals  in  a  changing  interest  rate  environment  could
adversely  affect  earnings if SMC were required to sell investments at reduced
values  to  meet  liquidity  demands.  SMC  manages  the  asset  and  liability
portfolios in order  to minimize the adverse earnings effect of changing market
interest rates. SMC seeks  assets that have duration characteristics similar to
the liabilities that they support.  SMC also prepares cash flow projections and
performs cash flow tests under various market interest rate scenarios to assist
in evaluating liquidity needs and adequacy.  SMC's  U.S. insurance subsidiaries
currently  expect  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 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. With
respect  to  new  business,  statutory   accounting   practices  require  that:
(i)  acquisition  costs  (primarily  commissions and policy  issue  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 reduction in statutory surplus ("surplus strain")  in  the  year
written  for many insurance products. SMC 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, SMC controls the amount of net new premiums
written to manage the  effect  of  such  surplus strain. SMC's long-term growth
goals  contemplate continued growth in its  insurance  businesses.  To  achieve
these growth  goals,  SMC's  U.S.  insurance subsidiaries will need to increase
statutory surplus. Additional statutory  surplus may be secured through various
sources such as internally generated statutory  earnings, infusions by Standard
Management  with funds generated through debt or equity  offerings  or  mergers
with other life  insurance  companies.  If  additional capital is not available
from one or more of these sources, SMC believes  that  it  could reduce surplus
strain  through  the  use  of  reinsurance  or through reduced writing  of  new
business.

   Management believes that the operational cash  flow of Standard Life will be
sufficient  to meet its anticipated needs for 1999.   As  of  March  31,  1999,
Standard Life  had  statutory  capital  and  surplus for regulatory purposes of
$43.7 million.  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  Standard Management.  If the need  arises for cash  which is
not readily  available, additional liquidity could be obtained from the sale of
invested assets.

   Effective January 1, 1999 the Company decided to no longer sell new business
through Dixie Life.  This decision is not expected to have a material effect on
operations or financial condition of the Company.

   INTERNATIONAL OPERATIONS.  SMI  dividends  are  limited  to  its accumulated
earnings  without  regulatory  approval  and no dividends are anticipated  from
these companies in 1999.

FACTORS THAT MAY AFFECT FUTURE RESULTS

      MERGERS, ACQUISITIONS AND CONSOLIDATIONS.  The U.S. insurance industry is
experiencing an increasing number of mergers,  acquisitions, consolidations and
sales of certain business lines.  These consolidations  are  largely the result
of the following:

      <circle>the need to reduce costs of distribution and overhead;
      <circle>the need to maintain business in force;
      <circle>increased competition;
      <circle>regulatory capital requirements; and
      <circle>technology costs.

SMC expects this trend to continue.

<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

      FOREIGN CURRENCY RISK.  SMI policyholders invest in assets denominated in
a  wide  range  of  currencies.  As policyholders are not permitted  to  invest
directly in options,  futures  and  derivatives,  their investment and currency
risk is limited to premiums they have paid.  Although policyholders effectively
bear  the  currency  risk,  SMI  could be exposed to currency  fluctuations  if
currencies within the conventional  investment  portfolio  or certain actuarial
reserves  are  mismatched.   In  order  to minimize this risk, SMI  continually
matches  the assets and liabilities of the  portfolio  and  the  reserves.   In
addition,  Premier  Life  (Luxembourg)  shareholder's  equity is denominated in
Luxembourg  francs.   Premier  Life (Luxembourg) does not hedge  currency  risk
because its shareholder's equity  will  remain  in  Luxembourg  francs  for the
foreseeable  future,  thus,  no significant realized foreign exchange gains  or
losses are anticipated.  At March  31, 1999, there was an immaterial unrealized
loss from foreign currency.

      EURO  CURRENCY.  Effective January  1,  1999,  the  eleven  participating
European member  union  countries  established  fixed  conversion rates between
their legal currencies and the euro.  The legal currencies  in  those countries
will  continue to be used as legal tender through January 1, 2002.   Subsequent
to this  date,  the  legal currencies will be canceled and euro bills and coins
will be used for cash transactions in the participating countries.  During this
three  year dual-currency  environment,  conversion  rates  between  the  legal
currencies will no longer be computed directly between one another.  Instead, a
special  "triangulation"  procedure  must  be  followed by first converting one
legal currency into its euro equivalent and then converting the euro equivalent
into  the  other legal currency.  Although the Company  has  not  initiated  an
analysis plan  for  the  euro  conversion,  SMC  does  not  expect it to have a
material impact on its operations or financial condition.

      POSSIBILITY OF FUTURE DILUTION OF OWNERSHIP AND VOTING  POWER.   The  SMC
Board  of  Directors  has  the  authority  to issue up to .9 million additional
shares of preferred stock and 12.4 million additional  shares  of common stock.
The   board's   authority  under  SMC's  charter  typically  does  not  require
stockholder  approval   unless  it  is  otherwise  required  for  a  particular
transaction.  Although SMC  is  not  currently  involved  in any life insurance
acquisitions, the Company regularly investigates such opportunities  and  could
issue additional shares of SMC common or preferred stock in connection with  an
acquisition.

      UNCERTAINTIES  REGARDING  INTANGIBLE ASSETS.  Included in SMC's March 31,
1999 financial statements are certain  assets  that  are primarily valued , for
financial statement purposes, on the basis of  management  assumptions.   These
assets include items such as:
      <circle>deferred acquisition costs;
      <circle>present value of future profits;
      <circle>costs in excess of net assets acquired; and
      <circle>organization and deferred debt issuance costs.

      The  value  of these assets reflected in the March 31, 1999 balance sheet
total $77.0 million or 7.7% of SMC's assets.  SMC has established procedures to
periodically review  the  assumptions  used to value these assets and determine
the need to make adjustments of such values  in  SMC's  consolidated  financial
statements.   SMC  has  determined  that  the  assumptions  used in the initial
valuation of the assets are consistent with the current operations of SMC as of
March 31, 1999.

      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 SMC's  insurance
subsidiaries;  however, it is not expected that such changes  would  materially
affect SMC's insurance subsidiaries' statutory capital requirements.

      FINANCIAL SERVICES DEREGULATION.  The United States Congress is currently
considering a number  of  legislative proposals intended to reduce or eliminate
restrictions on affiliations  among financial services organizations. Proposals
are extant which would allow banks  to  own  or  affiliate  with  insurers  and
securities  firms.  An  increased  presence  of banks in the life insurance and
annuity  businesses  may increase competition in  these  markets.  The  Company
cannot predict the impact of these proposals on the earnings of the Company.

IMPACT OF YEAR 2000

      The Company updated its main operating computer systems in 1995 with Year
2000 ready systems at  a  cost of $.5 million.  Since that time the Company has
completed modifications or  conversions  of  other  portions  of  its software,
hardware  and  imbedded  chip  technology  so  that  its computer systems  will
function properly with respect to dates in the year 2000  and  thereafter.  The
Company  believes that with such modifications and conversions, the  Year  2000
issue will  not pose significant operational problems for its computer systems.
The total cost  of  the  Year  2000  project  is  $.6 million including the $.5
million previously discussed.  These costs are not  material  to  the Company's
financial statements and were funded through operating cash flows.

      The  Company  is  currently  assessing  the  risks associated with  their
external  business  relationships, including those with  agents  and  financial
institutions.  The Company  has  been  informed  by  approximately 50% of their
external  business partners that they are or will be Year  2000  ready sometime
in  1999.   The Company is still accumulating data from the remaining  business
partners, which it hopes to have concluded by mid 1999.

      The Company  also assessed what contingency plans will be needed, if any,
of its critical systems  or  those  of external business relationships that are
not Year 2000 ready after December 31,  1999.   The  Company does not currently
anticipate such a situation, but the consideration of  a  contingency plan will
continue to evolve as new information becomes available.

      The  failure  to  correct  a  Year  2000  problem  could  result   in  an
interruption,  or  failure  of,  a  number  of  normal  business  activities or
operations.   However,  management has concluded that the Year 2000 issue  will
not materially affect future  financial  results,  or  cause reported financial
information  to  be  nonindicative  of  future operating results  or  financial
condition.

FORWARD-LOOKING STATEMENTS

      All statements, trend analyses, and  other  information contained in this
quarterly report on Form 10-Q or any document incorporated  by reference herein
relative  to  markets  for  the  Company's products and trends in the Company's
operations or financial results, as  well  as  other statements including words
such as "anticipate,"  "believe,"  "plan," "estimate,"  "expect," "intend," and
other  similar  expressions,  constitute forward-looking statements  under  the
Private  Securities  Litigation reform  Act  of  1995.   These  forward-looking
statements are subject  to  known  and  unknown  risks, uncertainties and other
factors which may cause actual results to be materially  different  from  those
contemplated by the forward-looking statements.  Such factors include, but  are
not  limited  to:  (i) general economic conditions and other factors, including
prevailing interest  rate  levels,  stock  market  performance  and health care
inflation,  which  may affect the ability of the Company to sell its  products,
the  market  value  of  the  Company's  investments  and  the  lapse  rate  and
profitability of the  Company's policies; (ii) the Company's ability to achieve
anticipated levels of operational  efficiencies at recently acquired companies,
as well as through other cost-saving initiatives;(iii) customer response to new
products,  distribution  channels  and marketing  initiatives;  (iv) mortality,
morbidity, usage of health care services and other factors which may affect the
profitability of the Company's insurance  products;  (v) changes in the Federal
income tax laws and regulation which may affect the relative  tax advantages of
some of the Company's products; (vi) increasing competition in the  sale of the
Company's products;(vii)regulatory changes or actions, including those relating
to  regulation  of financial services affecting bank sales and underwriting  of
insurance products,  regulation  of  the  sale,  underwriting  and  pricing  of
insurance   products,  and  health  care  regulation  affecting  the  Company's
supplemental  health insurance  products; (viii) the availability and terms  of
future acquisitions;and (ix) the risk factors or uncertainties listed from time
to time in any document incorporated by reference herein.
<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The  Company  seeks  to  invest  available funds in a  manner  that  will
maximize shareholder value and fund future  obligations  to  policyholders  and
debtors,  subject  to  appropriate  risk considerations.  Many of the Company's
products incorporate surrender charges,  market  interest  rate  adjustments or
other features to encourage persistency.

      The  Company  also  seeks to maximize the total return on its investments
through active investment management.   Accordingly, the Company has determined
that the entire portfolio of fixed maturity  securities is available to be sold
in response to: (i) changes in market interest  rates; (ii) changes in relative
values of individual securities and asset sectors;  (iii) changes in prepayment
risks;  (iv)  changes  in  credit quality outlook for certain  securities;  (v)
liquidity needs; and (vi) other factors.

      Profitability of many of the Company's products is significantly affected
by the spreads between interest  yields  on  investments  and rates credited on
insurance liabilities.  Although substantially all credited  rates  on  annuity
products may be changed annually (subject to minimum guaranteed rates), changes
in  competition  and  other  factors,  including  the  impact  of  the level of
surrenders  and  withdrawals,  may  limit  the ability to adjust or to maintain
crediting rates at levels necessary to avoid narrowing of spreads under certain
market conditions.

      If interest rates were to increase by 10% (i.e. 7.0% to 7.7%) from  their
March 31,  1999 levels , the Company's fixed maturity securities and short-term
investments (net of the corresponding changes in the values of cost of policies
purchased,  cost of policies  produced and insurance liabilities) would decline
in fair value by approximately $3.5 million.
<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

                          PART II.  OTHER INFORMATION




ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.


(a)  EXHIBITS

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



(b)  REPORTS ON FORM 8-K

     No reports on Form 8-K were filed with the Commission in the first quarter
of 1999.
<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        __________________

                                  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:   May 12, 1999


                                             STANDARD MANAGEMENT CORPORATION
                                                      (Registrant)

                                            By:     RONALD D. HUNTER
                                            Ronald D. Hunter
                                            Chairman  of  the  Board, President
                                            and
                                            Chief Executive Officer
                                            (Principal Executive Officer)

                                            By:   GERALD R. HOCHGESANG
                                            Gerald R. Hochgesang
                                            Senior Vice President
                                            (Chief Accounting Officer)