<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 for the fiscal year ended December 31, 2000.

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 for the transition period from
                                                         ----------------------
     to                          .
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                              QUOTESMITH.COM, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             DELAWARE                                          96-3299423
    State or other jurisdiction                               (IRS Employer
 of incorporation or organization)                       Identification Number)

                        8205 SOUTH CASS AVENUE, SUITE 102
                             DARIEN, ILLINOIS 60561
                                 (630) 515-0170

                   (Address, including zip code, and telephone
                  number, including area code, of Registrant's
                          principal executive offices)

        Securities registered pursuant to Section 12(b) of the Act: None

          Securities registered pursuant to Section 12(g) of the Act:

                               Title of Each Class
                          Common Stock, $.003 par value
                         Preferred Stock Purchase Rights

   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. [x]Yes [] No

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

   Aggregate market value of the Registrant's voting stock held by
non-affiliates on March 9, 2001 based on the closing price of said stock on the
Nasdaq National Market on such date was, $4,611,599.

   As of March 9, 2001, 5,517,795 shares of the Registrant's Common Stock, $.003
par value of the Registrant were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE


   Portions of the Registrant's definitive proxy statement for the annual
meeting of stockholders to be held on May 24, 2001, to be filed pursuant to
Regulation 14(A) are incorporated by reference into Part III of this Form 10-K.
<PAGE>   2
                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

          We believe that Quotesmith.com is the most comprehensive
Internet-based insurance service available. The Quotesmith.com service enables
consumers and business owners to obtain instant quotes from over 300 insurance
companies, and we guarantee the accuracy of every quote. Combining the reach and
efficiency of the Internet with our proprietary database and industry expertise
developed over the past 17 years, we provide a complete "quote to policy
delivery" insurance solution.

          We have created a model that addresses the challenges faced by
traditional insurance distribution methods in a manner that offers significant
benefits to both consumers and insurance companies. The Quotesmith.com model
allows consumers to:

         -        efficiently search for, analyze and compare insurance
                  products;

         -        quickly request and obtain insurance quotes; and

         -        easily select and purchase insurance from the insurance
                  company of their choice.

INDUSTRY BACKGROUND

          The Traditional Insurance Market in the United States

          The insurance market in the United States represents over $1 trillion
in annual paid premiums. Insurance products are widely held by households and
businesses. The United States insurance market is broadly divided into two
categories: life and health insurance and property and casualty insurance. Over
4,500 insurance companies distribute their products through a network of agents
and brokers or sell directly to consumers. There are approximately one million
individuals licensed as agents and brokers to sell insurance in the United
States. A variety of distribution systems have evolved, including "captive"
one-company agents and independent agents and brokers that typically represent
only two to five insurance companies.

          Challenges to Purchasing and Delivering Insurance

          There are numerous challenges to the informed purchase and delivery of
insurance products. Some of these challenges are due to the specialized nature
of insurance products and other challenges result from the way in which
insurance has been traditionally distributed.

          These challenges include:

         -        Fragmented delivery. Insurance products are available from
                  captive agents, independent agents and direct distribution
                  channels as well as new entrants, including banks and other
                  financial institutions. Because of this fragmentation, there
                  has been no single source of policy coverage and pricing
                  information from which a consumer can obtain unbiased and
                  complete information.

         -        Quantity and variation of products. Insurance policies vary by
                  type of insurance product, underwriting guidelines, insurance
                  company, jurisdiction and the particular characteristics and
                  preferences of the consumer. This creates a complex pricing
                  structure that is not readily understandable or comparable
                  without the use of technology.

         -        Information-intensive underwriting process. The underwriting
                  process requires consumers to submit, and insurance companies
                  to collect, large amounts of individualized and personal
                  information. This process is difficult and time consuming and,
                  if not accurately completed, will delay the approval of a
                  policy.

         -        Negative consumer perception. Consumers often believe that
                  they paid too much for their insurance and were not properly
                  informed by insurance agents. Face-to-face contact with an
                  insurance agent may convey the sense of a high-pressure sales
                  environment with a lack of unbiased information.

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         -        Misalignment of interests between insurance agents and
                  consumers. Commission-based insurance agents represent only a
                  limited number of insurance companies. Accordingly, they are
                  compensated to promote and sell a limited range of products,
                  which is in direct conflict with the consumer's need to obtain
                  insurance at the lowest price.

         -        Inconvenient and time-consuming purchase. Researching policy
                  coverage, contacting competing insurance companies, collecting
                  information and obtaining insurance quotes require large
                  blocks of time usually during regular working hours. Consumers
                  are often unable to shop for insurance on their own time and
                  from the convenience of their own home.

          Distribution of insurance through traditional agent and broker sales
forces is expensive and inefficient for insurance companies. Traditional agency
distribution methods have high fixed costs associated with establishing and
maintaining numerous branch and local offices, high commission structures,
recurring training costs and high agent turnover. In addition, insurance
companies often do not target all segments of the population because of the
inability to profitably serve these segments through traditional distribution
channels.

          Emergence of the Internet and Electronic Commerce

          The Internet has emerged as a global medium for communication,
information and commerce. The Internet possesses a number of unique
characteristics that differentiate it from traditional media and other methods
of commerce, including:

         -        companies can reach and serve a large and global group of
                  consumers electronically from a central location;

         -        companies can provide personalized, low-cost and real time
                  consumer interaction;

         -        users communicate or access information without geographic or
                  temporal limitations;

         -        users enjoy greater convenience and privacy and face less
                  sales pressure; and

         -        users have an enormous diversity of easily accessible content
                  and commerce offerings.

          As a result of these unique characteristics and the Internet's growing
adoption rate, businesses have an enormous opportunity to conduct commerce over
the Internet. The Internet gives companies the opportunity to develop one-to-one
relationships with consumers worldwide without having to make the significant
investments to build and manage a local market presence or develop the printing
and mailing capabilities associated with traditional direct marketing
activities.

          Emergence of the Electronic Service Category

          A new category of Internet-based electronic service providers has
emerged that offers a focused range of services with special emphasis on
providing relevant content, information and transaction capabilities. Recent
examples include companies operating as online providers of mortgages, online
securities brokers and automobile referral services. These consumer-focused,
one-stop, information-based destinations provide enhanced, high margin services
by acting as independent intermediaries that facilitate interaction and
transaction flow between buyers and sellers. Consumers benefit because they are
able to obtain value-added information services and transaction capabilities on
their own time schedule. Sellers benefit because they are able to deliver
targeted offerings more effectively to consumers.

          Online Insurance Opportunity

          The growing acceptance of the Internet and electronic commerce
presents a significant opportunity for the insurance industry by allowing
consumers to more efficiently and effectively research and transact with
insurance companies. The fragmentation of the insurance industry and the
significant price and product variation has led consumers to seek alternative
means of purchase and insurance companies to seek alternative means of
distribution. According to a recent research report, Internet-influenced sales
of insurance are expected to grow from $2.0 billion in 2000 to $11.0 billion in
2003. We believe that


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the vast information sharing and communications power of the Internet will
significantly improve the insurance industry for both consumers and insurance
companies.

          Characteristics of the insurance product that make it particularly
well suited for delivery over the Internet include:

         -        insurance is an information-based product that needs no
                  physical shipment or warehousing of merchandise;

         -        through a single medium consumer can access information and
                  compare a wide variety of insurance companies' products;

         -        effective two-way communication flow via the Internet allows
                  insurance companies to interact with consumers and rapidly
                  collect underwriting information;

         -        enhanced convenience, privacy and control over the process of
                  researching and purchasing insurance without the pressure of a
                  commissioned agent; and

         -        ability of insurance companies to target and serve segments of
                  the market which previously were unprofitable through
                  traditional distribution channels by reducing the need for
                  large sales staff and costly local offices.

          Many companies are trying to address this significant online insurance
opportunity. Some companies have created "lead referral" Web sites for the
purpose of capturing consumer name and address information to be forwarded, as a
prospective sales lead, to a specified insurance company or its traditional
sales force. Many of these Web sites are paid up front referral fees, are
aligned with a limited number of insurance companies and often do not reveal
many of the lowest priced insurance policies. Consumers are often still forced
to complete their purchase through a commissioned salesperson. Additionally,
these companies typically do not offer any personalized customer service or
insurance fulfillment capabilities and, therefore, do not offer a complete quote
to policy delivery insurance solution.

          Existing insurance companies and their agents and brokers have created
Web sites to sell their insurance products online as an alternative to their
traditional sales activities. Some companies have created Web sites with the
primary purpose of creating an insurance sale online for a single insurance
company or group of insurance companies with little or no comparative overview
of prices. These companies perpetuate the fragmentation in the industry by not
offering a comprehensive database of pricing and coverage information.

          As a result of the shortcomings inherent in the online lead referral
and single company approaches, we believe there exists a significant market
opportunity for the emergence of a large-scale, comprehensive and unbiased
Internet-based insurance service. Self-directed consumers will be attracted to
the broadest selection of insurance companies and a compelling value proposition
based upon price, time and transaction fulfillment.

THE QUOTESMITH.COM SOLUTION

          We believe that Quotesmith.com is the most comprehensive
Internet-based insurance service available. The Quotesmith.com service enables
consumers and business owners to obtain instant quotes from over 300 insurance
companies, and we guarantee the accuracy of every quote. Combining the reach and
efficiency of the Internet with our proprietary database and industry expertise
developed over the past 17 years, we provide a complete "quote to policy
delivery" insurance solution without the involvement of any commissioned
salespeople.

          We have created a model that addresses the challenges faced by
traditional insurance distribution methods in a manner that offers significant
benefits to both consumers and insurance companies. The Quotesmith.com model
allows consumers to:

         -        efficiently search for, analyze and compare insurance
                  products;

         -        quickly request and obtain insurance quotes; and

         -        easily select and purchase insurance from the insurance
                  company of their choice.

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          The Quotesmith.com solution provides the following principal
advantages to both consumers and insurance companies:

          Comprehensive Source of Insurance Information and Products. On a
single Web site, we provide insurance quotes from over 300 insurance companies
across several types of insurance including individual term life, private
passenger automobile, dental, individual and family medical, long-term care,
disability, Medicare supplement, small group medical, "no exam" whole life,
workers compensation and annuities. We believe we offer consumers access to the
largest, most complete repository of comparative information on insurance
products, insurance pricing and insurance providers. We empower consumers with
relevant current pricing knowledge, coverage information and independent rating
information so consumers can make informed buying decisions.

          Guaranteed-Accurate Instant Quotes. Over the past 17 years, we have
developed what we believe to be the most complete, regularly updated database
used to determine insurance quotes. The ability to obtain instant quotes on the
Internet is the first priority for consumers purchasing insurance online,
according to a recent survey by an independent research group. We obtain and
regularly update all of our pricing, underwriting and policy coverage
information contained in our databases directly from the insurance company to
ensure accuracy. We offer consumers a unique $500 cash reward guarantee that we
provide an accurate quote. In addition, we also offer a $500 cash reward
guarantee that we provide the lowest price quote available with respect to term
life policies. These Quotesmith.com guarantees are unmatched by any competitor.

          Consumer in Control. We put consumers in control of their insurance
purchase decisions by giving them the ability to efficiently search, analyze and
compare prices of insurance products from multiple insurance companies in
complete privacy, on their own time and free from the pressure to buy associated
with traditional salespeople. Consumers choose from what we believe is the
largest selection of insurance companies using their own preferences regarding
price and insurance company rating. Consumers are able to purchase insurance
directly through us without ever speaking to a commissioned salesperson.

          Convenience. Consumers who use Quotesmith.com no longer need to
contact different insurance companies or salespeople, one by one, in order to
gather information to make educated decisions. Unlike traditional agents who
only recommend and promote a limited number of insurance companies' policies, we
provide real time access to a large database of over 300 insurance companies'
products. Our comparison service presents users with a comprehensive listing of
insurance quotes, ranked by price. We believe that this large array of available
insurance providers in a single destination saves consumers time and effort in
searching for and obtaining the most suitable coverage.

          Quote to Policy Delivery Support. Consumers purchase insurance
directly through us. Unlike insurance lead referral services, at Quotesmith.com,
we do not abandon the consumer once the insurance company has been selected, but
continue to provide value-added support and service throughout the insurance
purchase process. We facilitate this process by:

         -        providing a licensed agent's explanation of various pricing,
                  coverage and independent rating information when asked;

         -        providing access to our licensed agents for matters which
                  require their attention;

         -        offering instant downloadable applications;

         -        assisting consumers in completing insurance applications; and

         -        arranging and monitoring the collection of outside
                  underwriting information including paramedical examinations,
                  laboratory reports and medical records.

          Focus on Customer Service. Customer service is both our foundation and
a strategic priority. We provide a high level of customer service throughout the
application process and aim to eliminate consumer dissatisfaction and
frustration. Our non-commissioned customer service staff has an average of
approximately 10 years of experience in the insurance industry.

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          We implement our customer service objectives by:

         -        requiring all new employees to attend "Quotesmith University,"
                  a two-week training course that teaches all of the service
                  tasks we perform for our customers;

         -        monitoring call centers to ensure prompt and consistent
                  responses to phone, mail and e-mail inquiries;

         -        providing regular application status reports and web access to
                  our customers on a consistent basis through policy delivery;
                  and

         -        offering a 30-day cancellation option on all paid term life
                  policies.

          Fully Licensed National Insurance Agency. Unlike traditional insurance
agents who are often only licensed in one or a limited number of states, our
company or one of our employees is licensed to offer life and health insurance
throughout the United States. This allows us to process and offer insurance
policies to consumers nationwide. Over a 17-year period, we have established
vital information-contributor relationships with over 300 insurance companies,
of which we are currently appointed as an authorized agent by approximately 165
insurance companies. We typically seek and receive formal agency appointment
from an insurance company after we receive a purchase request for that company's
product from a prospective customer.

          User Friendly System. At our Web site, www.quotesmith.com, consumers
can access our Internet-based services and initiate purchase requests 24 hours a
day, 7 days a week. Our easy to use Web site is designed for fast viewing, rapid
downloading and general compatibility with most commonly used browsers.

OUR STRATEGY

          Our strategy is to be the leading Internet-based service for all
insurance needs of individuals and small businesses. The key elements of our
strategy include:

          Continue to Build the Quotesmith.com Brand. We intend to pursue a
marketing strategy designed to promote our Quotesmith.com brand and consumer
awareness of the benefits of buying insurance through us.

          Offer Additional Insurance Products. We will continue to expand into
additional types of insurance. We expect to leverage our brand, proprietary
database and operational infrastructure to expand the breadth of insurance
products we offer to our customers. While historically our primary product has
been term life insurance, we now offer long-term care, dental, individual and
family medical, Medicare supplement, small group medical, "no-exam" whole life
insurance, workers compensation, and fixed annuities. Additionally, we currently
offer access to private passenger automobile insurance quotes through a
click-through arrangement with Progressive. The Company intends to enter the
auto insurance brokerage business. This auto insurance plan will be implemented
on a state-by-state basis beginning in 2001. Quotesmith.com will continue to
provide a click-through to Progressive for quote requests in states not covered
by the Company. We plan to expand these offerings and add additional life and
health insurance and property and casualty insurance products. We plan to market
these products to both new customers and to our existing customer base.

          Expand Number of Participating Insurance Companies. We intend to
increase the number of participating insurance companies in our service. A
significant factor in our success has been our ability to demonstrate to an
increasing number of leading insurance companies that we can generate
incremental revenues for them within their existing pricing structures. We plan
to extend this ability to broaden our relationships with major insurance
companies based on reputation, quality and national presence in order to expand
our insurance product offerings.

          Leverage Customer Base. We have expanded our insurance product
offerings and believe there is significant opportunity to leverage our existing
customer base and provide new products to them without significant customer
acquisition costs. We plan to tailor our marketing efforts based on consumer
profiles contained in our database of existing customers.

          Strengthen and Pursue Strategic Relationships and Agreements. We
believe that strategic joint ventures and licensing arrangements are attractive
methods of expansion, as they will enable us to combine our expertise in
Internet-based insurance


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offerings with other brand names, complementary services or technology. We plan
to pursue additional relationships and agreements in the future. In addition, we
may seek to acquire complementary technologies or businesses.

          Continue to Focus on Customer Service. At Quotesmith.com, we provide
insurance products and services for consumers from initial evaluation through
policy delivery. In order to provide the highest level of service throughout the
insurance buying process, we will monitor feedback from consumers and add new
features designed to increase customer usage and loyalty.

THE QUOTESMITH.COM BUSINESS MODEL

          We have created a model that enables consumers to shop for and
purchase insurance in a manner that we believe is simpler, faster and more
convenient than traditional methods. We provide a complete "quote to policy
delivery" insurance solution using our technology and non-commissioned customer
service staff. Our model:

         -        allows consumers to specify the desired coverage and range of
                  substitutability among insurance companies and policy
                  features--for example, consumers may want to purchase
                  insurance from a company rated "A" or better by A.M. Best;

         -        allows consumers to choose the premium range they are prepared
                  to pay for the policy they want;

         -        allows consumers to purchase insurance without the involvement
                  of a commissioned salesperson;

         -        allows us to monitor and care for applicants through the
                  underwriting process and policy delivery stage;

         -        allows us to guarantee the initially quoted premium subject to
                  the accuracy of the information provided by consumers as
                  compared against each insurance company's published
                  underwriting guidelines; and

         -        allows insurance companies to offer additional policies within
                  their existing pricing structures.

          Our customer service representatives are motivated to provide
value-added service and assistance and not to generate insurance purchase
requests. We employ a team approach. If a customer wishes to initiate an
insurance application request or obtain information concerning an application
already in process, each and every customer service representative is able to
provide assistance.

          Our process at Quotesmith.com is comprised of four primary stages.

          Initial Information Evaluation. Consumers visit our user-friendly Web
site and access our comprehensive database of insurance policy price rates,
underwriting guidelines, policy coverage and exclusion information,
claims-paying ability ratings of over 300 insurance companies. To help consumers
understand the underwriting process, our Web site provides information and
helpful tips on how the underwriting process works.

          Search, Retrieval and Comparison. Consumers can quickly obtain a
customized cost comparison report in a single search by completing a brief and
confidential questionnaire at the start of the online session. Each anonymous
consumer inquiry triggers a proprietary cost search and comparison algorithm
that sorts through a database of thousands of insurance options that is updated
daily. The search result, delivered in seconds, is a comprehensive comparison of
insurance policies ranked by the lowest price that matches the consumer's
criteria. Consumers can then click to view:

         -        specific coverage details about the policy;

         -        exclusions and guarantees (including policy acceptance
                  guidelines); and

         -        latest claims-paying ability ratings from five independent
                  rating services.

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          Application Processing. If a consumer desires to purchase a policy,
the consumer selects an insurance company and policy, and downloads an
application for that policy while online. We accept requests for applications
from consumers throughout the United States, 24 hours a day, 7 days a week. We
also provide toll-free support during business hours. We offer instant
downloadable applications to accelerate the underwriting process for a majority
of the insurance companies within our term life offerings and have expanded into
other product lines. After the consumer receives the application, we provide
help in completing and proofreading the application, which the consumer returns
to us to begin the underwriting process.

          Within two business days of receiving a completed application, we call
to thank the consumer and review the application. After this telephone
discussion, we submit the application to the insurance company for underwriting
on behalf of the consumer.

          Underwriting. During the underwriting process, we regularly track the
progress of the consumer's outstanding items. We also assist the insurance
company by arranging for a paramedical examination and facilitate the collection
of the driver, medical and credit records. We receive weekly status reports from
the insurance company regarding the application and regularly communicate this
information to the consumer. We review all policies for accuracy prior to
delivery to the consumer.

          If an insurance company declines to issue the policy or issues a
counter offer at a higher premium, we send a letter to the consumer stating the
reasons that the policy is not being issued as applied for. In this instance, we
also assist the consumer in finding suitable alternative coverage wherever
possible and whenever asked.

          Once a policy has been issued and been paid for by the consumer, we
receive a commission from the insurance company. We do not charge consumers for
using our Quotesmith.com technology and do not currently sell banner advertising
at our Web site.

INSURANCE PRODUCTS

          Quotesmith.com historically offered quote and policy-related
information regarding term life insurance. We recently began offering instant
quotes and related information on additional insurance products for both
individuals and small businesses. Our current product offerings include:

         -        Individual term life. This is life insurance coverage that has
                  no cash value and continues for a fixed period of time such as
                  15, 20 or 25 years. We have been offering instant quotes and
                  delivering term life policies since 1993.

         -        Private passenger automobile. This provides collision and
                  liability insurance to individuals for private cars and
                  vehicles. We currently provide access to instant quotes using
                  a click-through arrangement with Progressive. The Company
                  intends to enter the auto insurance brokerage business on a
                  state-by-state basis beginning in 2001.

         -        Dental. This is generally an add-on product to medical
                  insurance. In second quarter 1999, we began offering instant
                  quotes from a wide variety of traditional and managed-care
                  dental plans for individuals, families and small businesses
                  that employ up to 100 people.

         -        Individual and family medical. This is also known as
                  comprehensive major medical insurance. We offer instant
                  quotes, delivered policies and track traditional plans, PPOs,
                  HMOs and Blue Cross and Blue Shield plans.

         -        Medicare supplement. This provides health insurance for people
                  ages 65 and older to fill in coverage not provided by
                  Medicare. We offer instant quotes and deliver supplemental
                  health policies.

         -        Small group medical. We define small group medical insurance
                  as those comprehensive medical plans that are offered to firms
                  that employ up to 100 people. We began offering instant quotes
                  from, and tracking traditional plans of, PPOs, HMOs and Blue
                  Cross and Blue Shield plans in second quarter 1999.

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         -        "No-exam" whole life. This provides insurance for persons with
                  adverse health histories who want life insurance coverage
                  without a paramedical examination. We offer instant quotes and
                  deliver whole life policies.

         -        Single premium fixed annuity. We offer instant quotes and
                  deliver fixed and variable annuity products using a
                  click-through arrangement with AnnuityScout.com.

         -        Workers' compensation. This provides insurance for employee
                  job-related injuries or disease.

         -        Long-Term Care. This line of insurance provides coverage to
                  individuals for costs related to a long physical illness, a
                  disability, or a cognitive impairment.

         -        Disability Insurance. This program provides $1 million
                  catastrophic accidental disability insurance, via a joint
                  venture with Health Extras.

          The following table shows information with respect to the principal
product types currently available through our services. We obtained the
information regarding United States 1999 annual premiums from A.M. Best.

<TABLE>
<CAPTION>
                                                                                                 QUOTESMITH.COM SERVICE
                                                                                                 AS OF JANUARY 26, 2001
                                                                                                 ----------------------
                                                               UNITED STATES                                  NUMBER OF QUOTED
TYPE OF INSURANCE PRODUCT                                  1999 ANNUAL PREMIUMS           STATES COVERED     INSURANCE COMPANIES
-------------------------                                  --------------------           --------------     -------------------
<S>                                                        <C>                            <C>                <C>
Individual term life...................................       $     8 billion               50 and D.C.            113
Private passenger automobile...........................           122 billion               48 and D.C.              5
Dental.................................................           2.3 billion               50 and D.C.             38
Individual and family medical..........................           100 billion               49 and D.C.            113
Long-term medical care.................................           745 million               50                      16
Short term individual medical (1)......................                    --               45                      11
Supplemental health....................................           7.4 billion               50 and D.C.             76
Small group medical....................................           525 billion               20                      32
Commercial property....................................           1.5 billion               47                      18
Commercial general liability...........................           1.3 billion               47                      18
Commercial automobile..................................           1.2 billion               47                      18
Workers' Compensation..................................             4 billion               47                      18
"No exam" whole life...................................                    --               50 and D.C.             41
Fixed annuities........................................            37 billion               50 and D.C.             83
</TABLE>

(1)      1999 annual premiums included in the annual premiums for individuals
         and family medical insurance.

TECHNOLOGY

          Proprietary Insurance Information Databases. We maintain a proprietary
database of premium rates and policy coverage information from over 300
insurance companies. At Quotesmith.com, we do not rely upon state insurance
departments or any other regulatory agencies to obtain any insurance pricing
information. Instead, we obtain and regularly update all of the pricing,
underwriting and policy coverage information contained in our databases directly
from each quoted insurance company. We obtain claims-paying ability ratings from
A.M. Best, Duff & Phelps Credit Rating Co., Moody's, Standard & Poor's, and
Weiss Ratings, Inc. and hold licenses to re-distribute the copyrighted rating of
each company. Our dedicated staff of full-time market reporters regularly
contacts the insurance companies quoted on our service and monitors and updates
our databases as market conditions warrant. Each business day we make several
thousand changes to our database.

          Technology Systems. Our systems for processing quotes, purchase
requests, application progress tracking, customer notification and revenue
recognition are highly automated and integrated. Customer service
representatives equipped with online computer terminals can access a customer's
account information from our database on demand. Our core technology systems use
a combination of our own proprietary technologies and commercially available,
licensed technologies from Silicon


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Graphics, Netscape Communications, Santa Cruz Operation (SCO) and others. We
have internally developed and enhanced our proprietary programs over a period of
17 years utilizing scalable tools and platforms to allow us to rapidly expand
our network and computing capacity.

          An internal programming and system administration staff supports our
technology. In addition to supporting the systems, our staff continually
enhances our software and hardware and develops new systems and services to
better service our customers and business objectives.

          Server Hosting and Backup. Our Web site system hardware is hosted at
AboveNet Communications in San Jose, California and Vienna, Virginia. We are
currently building-out a third data site in Chicago Illinois, hosted at Level 3
Communications, Inc. These grade "A" telecommunications data centers provide
redundant communications lines to the Internet backbone, emergency power backup,
and security, as well as 24-hour monitoring and engineering support. In
addition, we have implemented load balancing systems and our own redundant
servers to provide for fault tolerance. These redundancies permit us to perform
scheduled maintenance without taking our Web site offline. Finally, tape backups
are performed nightly to prevent a loss of data.

MARKETING

          At Quotesmith.com, we attract new consumers and communicate the
availability of new products and services primarily through direct response
marketing methods. We have established ourselves as a leading Internet-based
insurance brand through an offline marketing campaign consisting primarily of
magazine advertisements, radio and direct mail. We employ in-house volume media
buying and other strategies to minimize the expenses of broad-based advertising.
Using our proprietary information processing systems and consumer database as
well as other resources, we employ statistical analyses to measure the
effectiveness and efficiency of our marketing efforts.

          We intend to aggressively pursue a marketing strategy designed to
promote our Quotesmith.com brand and consumer awareness of the benefits of
buying insurance through us. We intend to target households and small
businesses.

          Our marketing strategy is to promote our brand and attract
self-directed consumers to our Web site. Our marketing initiatives include:

         -        utilizing direct response print advertisements placed
                  primarily in financially oriented magazines and special
                  interest magazines;

         -        advertising via radio and direct mail; and

         -        entering into strategic relationships with other financial
                  services and general purpose Web sites to increase our access
                  to online consumers.

MATERIAL STRATEGIC RELATIONSHIPS AND AGREEMENTS

          At Quotesmith.com, we selectively pursue strategic relationships and
agreements to expand our access to online consumers, to build our brand name
recognition and to expand our products and services.

          The Progressive Corporation. In September 1998, we entered into an
agreement with Progressive, the nation's fourth largest private passenger
automobile insurance company, to provide a click-through to their private
passenger automobile insurance service. As a result of this agreement, visitors
from our Web site may click into Progressive's Web site to obtain instant
automobile insurance quotes from State Farm, Allstate, Progressive and other
automobile insurance companies. Progressive compensates us for this traffic
based upon the number of completed quotes.

            The Company intends to enter the auto insurance brokerage business
during 2001. The rollout of the auto insurance brokerage will be conducted on a
state-by-state basis. Quotesmith.com will continue to provide a click-through to
Progressive for quote requests in states not covered by the Company.

                                       9
<PAGE>   11
COMPETITION

          We compete with online and traditional providers of insurance
products. The market for selling insurance products over the Internet is new,
rapidly evolving and intensely competitive. Current and new competitors may be
able to launch new sites at a relatively low cost. There are a number of
companies that either sell insurance online, or provide lead referral services
online, such as InsWeb Corporation.

          We believe that Quotesmith.com is the most comprehensive
Internet-based insurance service because we provide consumers complete quote to
policy delivery insurance services and instant quotes from over 300 insurance
companies. Our Internet-based, lead-referral competitors generally capture
consumer name and address information to be forwarded, as a prospective sales
lead, to a specified insurance company, without personalized customer service or
fulfillment capabilities. Other Internet-based competitors have created Web
sites as alternatives to their traditional sales activities and offer products
from a single insurance company or a relatively small group of insurance
companies with little or no comparative overview of prices. While we believe
that our complete quote to policy delivery service offers a more comprehensive
Internet-based insurance service solution than these competitors, we nonetheless
expect to face intense competition from these other types of insurance services.

          We also face competition from the traditional distributors of
insurance such as captive agents, independent brokers and agents and direct
distributors of insurance. Insurance companies and distributors of insurance
products are increasingly competing with banks, securities firms and mutual fund
companies that sell insurance or alternative products to similar consumers.
Traditionally, regulation separated the activity in the financial services
industry and protected insurance companies' markets from competition. However,
recent regulatory changes have begun to permit these financial institutions to
also sell insurance.

          We potentially face competition from unanticipated alternatives to our
insurance service from a number of large Internet companies and services that
have expertise in developing online commerce and in facilitating Internet
traffic, including America Online, Microsoft and Yahoo!. These potential
competitors could choose to compete with us directly or indirectly through
affiliations with other electronic commerce companies, including direct
competitors. Other large companies with strong brand recognition, technical
expertise and experience in Internet commerce could also seek to compete with
us. Competition from these and other sources could harm our business, results of
operations and financial condition.

          We believe that the principal competitive factors in our markets are
price, brand recognition, Web site accessibility, ability to fulfill customer
purchase requests, customer service, reliability of delivery, ease of use, and
technical expertise and capabilities. Many of our current and potential
competitors, including Internet directories and search engines and traditional
insurance agents and brokers, have longer operating histories, larger consumer
bases, greater brand recognition and significantly greater financial, marketing,
technical and other resources than us. Several of these competitors may be able
to secure products and services on more favorable terms than we can obtain. In
addition, many of these competitors may be able to devote significantly greater
resources than us for developing Web sites and systems, marketing and
promotional campaigns, attracting traffic to their Web sites and attracting and
retaining key employees.

          Increased competition may result in reduced operating margins, loss of
market share and damage to our brand. We cannot assure you that we will be able
to compete successfully against current and future competitors or that
competition will not harm our business, results of operations and financial
condition.

REGULATION

          The insurance industry and the marketers of insurance products are
subject to extensive regulation by state governments and by the District of
Columbia. This regulation extends to the operations of insurance companies,
insurance agents and to our service.


                                       10
<PAGE>   12
          Our products are sold throughout the United States through licenses
held by our company and/or one of our employees as is required by each state's
insurance department. In general, state insurance laws establish supervisory
agencies with broad administrative and supervisory powers to:

         -        grant and revoke licenses to transact business;

         -        impose continuing education requirements;

         -        regulate trade practices;

         -        require statutory financial statements of the insurance
                  companies;

         -        approve individuals and entities to which commissions can be
                  paid;

         -        monitor the activity of our non-licensed customer service
                  representatives;

         -        regulate methods of transacting business and advertising; and

         -        approve policy forms, and regulate premium rates for some
                  forms of insurance.

          Moreover, existing state insurance regulations require that a firm, or
individual within that firm, must be licensed in order to quote an insurance
premium. State insurance regulatory authorities regularly make inquiries, hold
investigations and administer market conduct examinations with respect to
compliance with applicable insurance laws and regulations by insurance companies
and their agents. In recent years, a number of insurance agents and the life
insurance companies they represent, have been the subject of regulatory
proceedings and litigation relating to alleged improper life insurance pricing
and sales practices. Some of these agents and insurance companies have incurred
or paid substantial amounts in connection with the resolution of these matters.
We do not currently sell the types of life insurance -- primarily cash value
life insurance policies such as universal life -- which are the subject of these
actions.

          In addition, licensing laws applicable to insurance marketing
activities and the receipt of commissions vary by jurisdiction and are subject
to interpretation as to the application of these requirements to specific
activities or transactions. Our company and/or one of our employees is currently
licensed to sell insurance in every state. We do not permit any of our other
personnel who have contact with customers to act as insurance agents. We monitor
the regulatory compliance of our sales, marketing and advertising practices and
the related activities of our employees. We also provide continuing education
and training to our staff in an effort to ensure compliance with applicable
insurance laws and regulations. However, we cannot assure you that a state
insurance department will not make a determination that one or more of these
activities constitute the solicitation of insurance and that personnel must be
licensed. Such a determination could harm our business.

          While no regulatory actions are pending against us, we can give you no
assurance that we would be deemed to be in compliance with all applicable
insurance licensing requirements of each jurisdiction in which we operate. Nor
can we assure you that we do not need to obtain any additional licenses.

          The federal government does not directly regulate the marketing of
most insurance products. However, some products, such as variable life
insurance, must be registered under federal securities laws and therefore the
entities selling these products must be registered with the NASD. We do not
currently sell any federally regulated insurance products. If we elect to sell
these federally regulated products in the future, we would be required to
qualify for and obtain the required licenses and registrations. We cannot assure
you that we will be able to obtain these licenses.

          Further, we are subject to various federal laws and regulations
affecting matters such as pensions, age and sex discrimination, financial
services, securities and taxation. Recently, the Office of the Comptroller of
the Currency has issued a number of rulings that have expanded the ability of
banks to sell some insurance products. Congress recently passed legislation that
provides for national licensing of insurance agents and brokers. The legislation
provides an impetus for states to enact either uniform laws and regulations
governing licensing of individuals and entities authorized to sell and solicit
the purchase of


                                       11
<PAGE>   13
insurance, as well as reciprocity laws and regulations governing the licensing
of non resident individuals. This legislation and other future federal or state
legislation could result in increased regulation of our business.

          The future regulation of insurance sales via the Internet as a part of
the new and rapidly growing electronic commerce business sector is unclear. We
believe that we are currently in compliance with all of these regulations.
However, if additional state or federal regulations are adopted, they may have
an adverse impact on us.

EMPLOYEES

          As of December 31, 2000, we had 136 employees. We have never had a
work stoppage. Our employees are not represented by a collective bargaining
unit. We consider our relations with our employees to be good. Our future
success will depend, in part, on our ability to continue to attract, integrate,
retain and motivate highly qualified technical and managerial personnel, for
whom competition is intense.


ITEM 2.  PROPERTIES

          Our executive, administrative and operating offices are located in
approximately 24,000 square feet of leased office space in Darien, Illinois
under a lease that expires on December 31, 2003. We anticipate that we may
require additional space within the next 12 months to accommodate our
anticipated growth and that suitable office space will be available on
commercially reasonable terms.


ITEM 3.  LEGAL PROCEEDINGS

          From time to time we have been, and expect to continue to be, subject
to legal proceedings and claims in the ordinary course of business. Legal
proceedings and claims may include claims of alleged infringement of third party
intellectual property rights and notices from state regulators that we may have
violated state regulations. These claims, even if without merit, could result in
the significant expenditure of our financial and managerial resources. We are
not aware of any legal proceedings or claims that we believe will, individually
or in the aggregate, harm our business, financial condition or results of
operations.


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

          None.


ITEM 4(A).  EXECUTIVE OFFICERS OF THE REGISTRANT

          The following table sets forth information regarding our executive
officers and certain other key employees.

<TABLE>
<CAPTION>
NAME                                                     AGE     POSITION
----                                                     ---     --------
<S>                                                      <C>    <C>
Robert S.  Bland....................................      47    Chairman of the Board, President and Chief Executive Officer
William V.  Thoms ..................................      48    Executive Vice President
David I.  Vickers...................................      39    Senior Vice President, Chief Financial Officer and  Secretary
Burke A.  Christensen...............................      55    Vice President of Operations and General Counsel
Willard L.  Hemsworth II............................      56    Senior Vice President of Marketing
Hao Chang...........................................      41    Senior Vice President, Chief Information Officer
Jay Angoff..........................................      50    Vice President of Strategic Planning
Richard C.  Claahsen................................      36    Vice President of Regulatory Affairs
Ronald A.  Wozniak..................................      47    Vice President of Information Technology
</TABLE>


                                       12
<PAGE>   14
         Robert S. Bland has served as our chairman of the board, president and
chief executive officer since he founded Quotesmith.com in 1984. From 1979 to
1984, Mr. Bland was president and sole stockholder of Security Funding
Corporation, an insurance agency. In March 1984, Mr. Bland sold Security Funding
Corporation in order to raise capital to found our company. Mr. Bland holds a
B.S. in marketing from the University of Colorado.

         William V. Thoms has served as our executive vice president since 1994.
From 1988 to 1993, Mr. Thoms was responsible for our operations and customer
service departments. Mr. Thoms is a founding stockholder of Quotesmith.com.
Prior to joining us, Mr. Thoms was a sales manager for Western Dressing, Inc., a
privately held salad dressing manufacturing company, from 1972 to 1987.

         David I. Vickers has served a senior vice president, chief financial
officer, secretary and chief accountant since January 2000. From 1997 to 1999
Mr. Vickers served as senior vice president and chief financial officer of
Amerin Corporation, a publicly held financial guarantor, which provided private
mortgage insurance to leading mortgage originators. From 1992 to 1997, Vickers
was senior vice president and chief financial officer of Pioneer Financial
Services, Inc., a publicly held life and health insurance company, which had
assets of approximately $2 billion and annual revenues of $1 billion. From 1983
to 1992, Vickers was employed in the insurance division at Ernst & Young LLP,
where he held a number of senior management positions. Mr. Vickers is a
certified public accountant and earned a bachelor's degree in accounting from
Indiana University. He also holds Chartered Life Underwriter (CLU) and Fellow
Life Management Institute (FLMI) designations.

         Burke A. Christensen has served as our vice president of operations and
general counsel since January 1999. From 1997 to 1998, Mr. Christensen was
engaged in the private practice of insurance law with Bell, Boyd & Lloyd, a
Chicago-based law firm. From 1995 to 1997, Mr. Christensen was the vice
president and chief operating officer of A.W. Ormiston & Co. Insurance agency.
From 1984 to 1995, Mr. Christensen was vice president and general counsel of the
American Society of Chartered Life Underwriters, Bryn Mawr, Pennsylvania. Mr.
Christensen was awarded the Chartered Life Underwriter designation in 1987. He
holds a B.S. in history from Utah State University and a J.D. from the
University of Utah College of Law.

         Willard L. Hemsworth II has served as our senior vice president of
marketing since November 1999. Mr. Hemsworth has served as a senior vice
president at D'Arcy Masius Benton & Bowles, Inc. for 15 years. Prior to that he
served at Chicago based EURO RSCG Tatham as group media director. Mr. Hemsworth
also spent five years at A.C. Nielsen as director of Nielsen television index
special analysis team. Hemsworth holds an MBA in Marketing Management from
Loyola University of Chicago, a Bachelor of Science degree in Advertising
Communications from the University of Illinois.

         Hao Chang has served as a senior vice president and our Chief
Information Officer since February of 2001. Dr. Chang was -most recently manager
of information technology at First Penn-Pacific Life Insurance Company. Dr.
Chang holds a Ph.D. in Geographic Information Systems (Environmental Science)
from Oklahoma State University and a B.S. Degree in Environmental Engineering
from Beijing University of Forestry. He also studied Management Information
Systems in the University of Washington MBA program.

         Jay Angoff has served as our vice president of strategic planning since
January 2000. From January 1999 to December 1999, Mr. Angoff was appointed
director of the U.S. Health Care Financing Administration's private health
insurance group, where he oversaw federal enforcement of recently enacted
legislation governing the portability of health insurance coverage. Prior to
that, Mr. Angoff served as the insurance commissioner of the State of Missouri,
having been appointed by Governor Mel Carnahan in 1993. From 1991 to 1993, Mr.
Angoff served as special assistant for health insurance policy to the Governor
of New Jersey. Prior to that, he was deputy commissioner of the New Jersey
insurance department. Mr. Angoff is a 1973 graduate of Oberlin College
(Philosophy) in Ohio and a 1978 graduate of Vanderbilt Law School (J.D.).

         Richard C. Claahsen has served as our vice president of regulatory
affairs since May 1999. From June 1997 to May 1999, Mr. Claahsen served as our
director of regulatory affairs. From October 1996 to June 1997, he was a special
agent with Northwestern Mutual Life Insurance Company. From 1993 to 1996, Mr.
Claahsen was a litigation paralegal at Templeton & Associates of Chicago,
Illinois. In 1999, Mr. Claahsen received his Chartered Life Underwriter
designation from The American


                                       13
<PAGE>   15
College of Bryn Mawr, Pennsylvania. Mr. Claahsen holds a B.A. and an M.A. in
philosophy from the Catholic University of America and a J.D. from ITT Chicago
Kent College of Law.

         Ronald A. Wozniak has served as our vice president of information
technology since December 1997. Mr. Wozniak joined us in November 1996 as a
programmer and analyst. From March 1994 to November 1996, Mr. Wozniak was a
senior financial systems analyst at Loyola University Medical Center in Maywood,
Illinois. From September 1993 to February 1994, he was employed as a programmer
and analyst at Data Control and Research, Ltd. Mr. Wozniak holds a B.S. in
management from Northern Illinois University.


                                     PART II

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

         Common share and per share information in this annual report have been
 retroactively adjusted to reflect a one-for-three reverse stock split that
 became effective on March 7, 2001.

         Initial Public Offering. The effective date of our first registration
statement, filed on Form S-1 under the Securities Act of 1933 (No. 333-79355)
for our initial public offering, was August 3, 1999. A total of 1,903,030 shares
of common stock were sold at a price of $33.00 per share to an underwriting
syndicate led by Hambrecht & Quist, Paine Webber Incorporated, ABN AMRO
Rothschild and Charles Schwab & Co., Inc. The underwriters exercised their over
allotment on August 31, 1999. The initial public offering and exercise of the
over allotment option resulted in gross proceeds $62.8 million of which $4.2
million was applied toward the underwriting discount. Expenses related to the
offering totaled approximately $1.1 million. Net proceeds to Quotesmith.com from
the offering were approximately $57.5 million. We did not pay any of the net
proceeds of the offering, directly or indirectly, to any director or officer of
Quotesmith.com, or to any persons owning ten percent or more of our common
stock, or any of our affiliates.

         Use of Proceeds. As of December 31, 2000, our balance sheet reflected
approximately $24.0 million in investments and $4.3 million in cash and
equivalents principally as a result of the remaining proceeds received from the
initial public offering.

         Market Information. Our common stock began trading on the Nasdaq
National Market under the symbol "QUOT" on August 3, 1999, the date of the
Company's initial public offering. Prior to our IPO, no established public
trading market for our common equity existed. As of March 9, 2001 the
approximate number of record holders of the Registrant's Common Stock was 2,360.
The last sale price of our common stock on March 9, 2001 was $1 15/16. The
following table sets forth, for the period indicated, the high and low last sale
price (as adjusted for a one-for-three reverse stock split effective March 7,
2001) of our common stock as reported on the Nasdaq National Market.

<TABLE>
<CAPTION>
                                                                HIGH                                   LOW
                                                                ----                                   ---
<S>                                                         <C>                                   <C>
2000:
     First Quarter........................................  $   36                                $   12 3/4
     Second Quarter.......................................      14 5/8                                 6 3/32
     Third Quarter........................................       8 1/4                                 5 7/16
     Fourth Quarter.......................................       6                                     1 31/32


1999:
     Third Quarter........................................      38 1/4                                21 3/16
     Fourth Quarter.......................................      36 3/8                                20 5/8
</TABLE>

         Dividends: We have never paid any cash dividends on our capital stock.
We currently intend to retain our capital to finance the growth and development
of our business and do not anticipate paying cash dividends for the foreseeable
future.

                                       14
<PAGE>   16
ITEM 6.  SELECTED FINANCIAL DATA.

         The historical statement of operations data and balance sheet data in
the table below are derived from our financial statements. This data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and with the financial statements, related
notes, and other financial information. The historical results presented below
are not necessarily indicative of the results to be expected for any future
period.

<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                                             -----------------------
                                                              2000        1999        1998        1997      1996
                                                              ----        ----        ----        ----      ----
                                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                        <C>         <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
 Revenue..........................................         $ 15,236    $   8,408   $   5,576   $   4,262   $  3,812
 Expenses:
   Selling and marketing(1).......................           24,201       14,397       1,791       2,152      1,109
   Operations.....................................            7,445        5,481       2,690       1,794      1,551
   General and administrative.....................            4,432        3,570       1,293         952        786
                                                           --------    ---------   ---------   ---------   --------
     Total expenses...............................           36,078       23,448       5,774       4,898      3,446

 Operating income (loss)..........................          (20,842)     (15,040)       (198)       (636)       366
 Interest income (expense), net...................            2,220        1,220           2         (41)       (14)
 Deferred income taxes (credit)...................               --           --          --        (210)       129
                                                           --------    ---------   ---------   ---------   --------
 Net income (loss)................................         $(18,622)   $ (13,820)  $    (196)  $    (467)  $    223
                                                           ========    =========   =========   =========   ========
 Basic and diluted net
     income (loss) per share (2)..................         $  (2.93)   $   (2.64)  $   (0.05)  $   (0.12)  $   0.06
                                                           ========    =========   =========   =========   ========

 Weighted average common
     shares and equivalents
     outstanding, basic and diluted (2)...........            6,366        5,237       4,086       3,985      4,051
</TABLE>


<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                                                                 -------------
                                                              2000        1999         1998        1997        1996
                                                              ----        ----         ----        ----        ----
                                                                                 (IN THOUSANDS)
<S>                                                        <C>           <C>          <C>         <C>          <C>
BALANCE SHEET DATA:
Cash  ...........................................          $  4,269      $ 8,990      $  518      $    4       $  1
Working capital (deficit)........................            27,443       48,308         749        (121)       334
Total assets.....................................            32,643       55,178       1,806         830        869
Long-term liabilities............................               128           --          --         233        146
Total liabilities................................             2,976        5,982         817       1,063        636
Total stockholders' equity
 (deficiency in assets)..........................            29,667       49,196         989        (233)       233
</TABLE>


<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                                                           ------------------------
                                                              2000        1999        1998        1997      1996
                                                              ----        ----        ----        ----      ----
SELECTED OPERATING STATISTICS:
<S>                                                       <C>          <C>           <C>         <C>        <C>
Completed quotes
    Term life.....................................        2,105,000    1,496,000     784,000     592,000    354,000
    Health and other..............................        1,993,000      963,000      47,000          --         --
                                                          ---------   ----------   ---------   ---------   --------
       Total completed quotes ....................        4,098,000    2,459,000     831,000     592,000    354,000
Policies sold
    Term life.....................................           33,491       17,039      10,920       8,755      6,649
    Health and other..............................            4,029          747          --          --         --
                                                          ---------   ----------   ---------   ---------   --------
       Total policies sold .......................           37,520       17,786      10,920       8,755      6,649
</TABLE>


                                       15
<PAGE>   17
(1)      Since January 1, 1997, our direct response advertising costs no longer
         qualify for deferral and are expensed as incurred. If direct response
         advertising costs had not been deferred and amortized for any year,
         selling and marketing expenses would have been $1.2 million in 1996 and
         $1.7 million in 1997.

(2)      Basic and diluted net income (loss) per share and basic and diluted
         weighted average common shares and equivalents outstanding have been
         retroactively adjusted to reflect a one-for-three reverse stock split
         that became effective March 7, 2001.


SELECTED QUARTERLY OPERATING RESULTS

          The following tables set forth unaudited statements of operations data
for 2000 and 1999. The information for each of these quarters has been prepared
on substantially the same basis as the audited financial statements included
elsewhere in this Form 10-K, and, in our opinion, include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results of operations for these periods. Historical results
are not necessarily indicative of the results to be expected in the future, and
results of interim periods are not necessarily indicative of results for the
entire year.

<TABLE>
<CAPTION>
                                                                   QUARTER ENDED
                                                                   -------------
                                                    MAR. 31,    JUN. 30,   SEP. 30,    DEC. 31,
                                                    --------    --------   --------    --------
2000                                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                 <C>         <C>        <C>         <C>
Revenues  ........................................  $   3,882   $ 4,913    $   3,795   $   2,646
Expenses:
 Selling and marketing............................     10,138     5,923        5,103       3,037
 Operations.......................................      2,263     1,832        1,787       1,563
 General and administrative.......................      1,226     1,308          956         942
                                                    ---------   -------    ---------   ---------
    Total expenses................................     13,627     9,063        7,846       5,542
                                                    ---------   -------    ---------   ---------
Operating loss....................................     (9,745)   (4,150)      (4,051)     (2,896)
Interest income, net..............................        620       564          545         491
                                                    ---------   -------    ---------   ---------
Net loss  ........................................  $  (9,125) $ (3,586)   $  (3,506)  $  (2,405)
                                                    =========  ========    =========   =========
Net loss per share
    basic and diluted (1).........................  $   (1.42) $  (0.56)   $   (0.55)  $   (0.39)
</TABLE>


<TABLE>
<CAPTION>
                                                                   QUARTER ENDED
                                                                   -------------
                                                    MAR. 31,    JUN. 30,   SEP. 30,    DEC. 31,
                                                    --------    --------   --------    --------
1999                                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                 <C>         <C>        <C>         <C>
Revenues  ........................................  $   1,463   $ 1,587    $   2,359   $   2,999
Expenses:
 Selling and marketing............................        681     1,451        4,639       7,626
 Operations.......................................      1,507     1,183        1,219       1,571
 General and administrative.......................        721       664          871       1,315
                                                    ---------   -------    ---------   ---------
    Total expenses................................      2,909     3,298        6,729      10,512
                                                    ---------   -------    ---------   ---------
Operating loss....................................     (1,446)  (1,711)       (4,370)     (7,513)
Interest income, net..............................         16        25          421         758
                                                    ---------   -------    ---------   ---------
Net loss  ........................................  $  (1,430)  $(1,686)   $  (3,949)  $  (6,755)
                                                    =========   =======    =========   =========
Net loss per share
    basic and diluted (1).........................  $ (0.33)    $ (0.37)   $   (0.70)  $   (1.05)
</TABLE>


(1)      Basic and diluted net loss per share have been retroactively adjusted
         to reflect a one-for-three reverse stock split that became effective
         March 7, 2001.

                                       16
<PAGE>   18
 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         Certain statements made in this Form 10-K, including the following
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," include "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. This Act provides a "safe
harbor" for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify these
statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results. All statements other than statements of historical fact we
make in this Form 10-K are forward-looking. In particular, the statements herein
regarding industry prospects, our future results of operations or financial
position and statements preceded by, followed by or that include the words
"intends," "estimates," "believes," "expects," "anticipates," "should," "could,"
or similar expressions, are forward-looking statements. Forward-looking
statements reflect our current expectations and are inherently uncertain. Our
actual results may differ significantly from our expectations. The section
entitled "Factors Affecting Future Operating Results" describes some, but not
all, of the factors that could cause these differences.

OVERVIEW

          We generate revenues from the receipt of commissions paid to us by
insurance companies based upon the policies sold to consumers through our
service. These revenues come in the form of first year, bonus and renewal
commissions that vary by company and product. We recognize the full first year
commission revenues on term life insurance after the insurance company approves
the policy and accepts the initial payment. At the time revenue is recognized,
an allowance is recorded based on historical information for estimated
commissions that will not be received due to the non-payment of installment
first year premiums. The Company recognizes commissions on all other lines of
business after we receive notice that the insurance company had received payment
of the related premium. First year commission revenues per policy can fluctuate
due to changing premiums, commission rates, and types or amount of insurance
sold. We occasionally receive bonuses based upon individual criteria set by
insurance companies. We recognize bonus revenues when we receive notification
from the insurance company of the bonus due to us. Bonus revenues are typically
higher in the fourth quarter due to the bonus system used by many life insurance
companies. Revenues for renewal commissions are recognized after we receive
notice that the insurance company has received payment for a renewal premium.
Renewal commission rates are significantly less than first year commission rates
and may not be offered by every insurance company. We also generate a portion of
our revenues from fees through our arrangement with Progressive. Our revenue
recognition accounting policy has been applied to all periods presented in
"Selected Financial and Other Data."

          The timing between when we submit a consumer's application for
insurance to the insurance company and when we generate revenues has varied over
time. The type of insurance product and the insurance company's backlog are the
primary factors that impact the length of time between submitted applications
and revenue recognition. Over the past three years, the time between application
submission and revenue recognition has averaged approximately four months. Any
changes in the amount of time between submitted application and revenue
recognition, of which a significant part is not under our control, will create
fluctuations in our operating results and could harm our business, operating
results and financial condition.

          Operations expenses are comprised of both variable and semi-variable
expenses, including wages, benefits and expenses associated with processing
insurance applications and maintaining our database and Web site. The historical
lag between the time an application is submitted to the insurance companies and
when we recognize revenues significantly impacts our operating results as most
of our variable expenses are incurred prior to application submission.

          Selling and marketing expenses consist primarily of direct advertising
costs.


                                       17
<PAGE>   19
RESULTS OF OPERATIONS

COMPARISON OF YEARS ENDED DECEMBER 31, 2000 AND 1999

Revenues

          Revenues increased 81% to $15.2 million in 2000 from $8.4 million in
1999. The growth in revenues in 2000 was due to a 111% growth in the number of
policies sold which was partially offset by a decline in the average first year
revenue per term life policy to $390 in 2000 compared to $445 in 1999. The
reduction was due a shift in business mix to insurance carriers with lower
levels of first year commissions.

Expenses

          Selling and Marketing. Selling and marketing expenses increased 68% to
$24.2 million for 2000 from $14.4 million in 1999, and decreased as a percentage
of revenues to 159% from 171%. The increase in expenses for the year was
primarily due to expansion into television advertisements and increased radio
advertising. We expect to significantly curb advertising expenditures in 2001 by
eliminating television advertising.

          Operations. Operations expenses increased 36% to $7.4 million in 2000
from $5.5 million in 1999, and decreased as a percentage of revenues to 49% from
65%. The increase in operating expenses is due to a 111% increase in policies
sold during the year. The 1999 operating expense included compensation expense
of $549,000 relating to stock options granted in 1999 as described in Note 7 to
our financial statements The operating cost per policy sold, exclusive of the
stock option charge, was $198 per policy in 2000 compared to $277 in 1999.

          General and Administrative. General and administrative expenses
increased 24% to $4.4 million in 2000 from $3.6 million in 1999 and decreased as
a percentage of revenues to 29% from 42%. This increase also reflects additional
executive personnel, increased rent due to the expansion of facilities,
franchise taxes, and increased professional fees.

Interest Income, Net

          Interest income, net was $2.2 million in 2000 compared to $1.2 million
in 1999. The components are included in Note 2 to our financial statements. The
increase in net interest income is due an increase in average invested assets in
2000.

Income Taxes (Credit)

          We had no income tax credit for 2000 and 1999 due to valuation
allowances provided against net deferred tax assets.

COMPARISON OF YEARS ENDED DECEMBER 31, 1999 AND 1998

Revenues

          Revenues increased 51% to $8.4 million in 1999 from $5.6 million in
1998. The growth in revenues in 1999 was due to a 63% growth in the number of
policies sold which was partially offset by a decline in the average first year
revenue per term life policy to $445 in 1999 compared to $488 in 1998. The
reduction was due to the general decline in term life premiums and a shift in
business mix to insurance carriers with lower levels of first year commissions.

Expenses

          Selling and Marketing. Selling and marketing expenses increased 704%
to $14.4 million for 1999 from $1.8 million in 1998, and increased as a
percentage of revenues to 171% from 32%. The increase in expenses, in total and
as a percentage of total revenues, was due to the expansion of print and radio
advertisements.

          Operations. Operations expenses increased 104% to $5.5 million in 1999
from $2.7 million in 1998, and increased as a percentage of revenues to 65% from
48%. This increase included compensation expense of $549,000 relating to stock
options


                                       18
<PAGE>   20
granted in 1999 as described in Note 7 to our financial statements. The
remaining increase in operating expenses is due to the 98% increase in
applications received. The operating cost per application received, exclusive of
the stock option charge, was $138 per policy in 1999 compared to $149 in 1998.

          General and Administrative. General and administrative expenses
increased 176% to $3.6 million in 1999 from $1.3 million in 1998 and increased
as a percentage of revenues to 42% from 23%. This increase included compensation
expense of $630,000 relating to common stock sold and stock options granted in
1999 as described in Note 7 to our financial statements. This increase also
reflected additional executive and financial personnel, increased rent due to
the expansion of facilities, franchise taxes, and increased legal and accounting
fees.

Interest Income, Net

          Interest income, net was $1.2 million in 1999 compared to $2,000 in
1998. The components are included in Note 2 to our financial statements. The
increase in net interest income is due to the investment of the proceeds from
the private sale of additional common stock in 1999 and the net proceeds of
$57.5 million received from the August 1999 initial public offering.

Income Taxes (Credit)

          We had no income tax credit for 1999 and 1998 due to valuation
allowances provided against net deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES

         We currently expect that the cash and fixed maturity investments of
$28.3 million at December 31, 2000 will be sufficient to meet our anticipated
cash requirements for at least the next 12 months. The timing and amounts of
working capital expenditures are difficult to predict, and if they vary
materially, we may require additional financing sooner than anticipated. If we
require additional equity financing, it may be dilutive to our stockholders and
the equity securities issued in a subsequent offering may have rights or
privileges senior to the holders of our common stock. If debt financing is
available, it may require restrictive covenants with respect to dividends,
raising capital and other financial and operational matters, which could impact
or restrict our operations. If we cannot obtain adequate financing on acceptable
terms, we may be required to reduce the scope of our marketing or operations,
which could harm our business, results of operations and our financial
condition.

          Our sources of funds will consist primarily from commissions and fee
revenue generated from the sale of insurance products and investment income from
our cash and fixed maturity portfolio. The principal uses of funds are marketing
and advertising expenses, operations, and general and administrative expenses.
We are expecting our advertising expense to remain relatively flat in 2001
compared to the levels of expense experienced in the fourth quarter of 2000.

          Cash used in operating activities was approximately $19.6 million,
$11.4 million and $135,000, in 2000, 1999, and 1998, as shown in the Statements
of Cash Flows. The increase in cash used in 2000 was primarily a result of
increased losses for the year.

          Cash provided by investing activities totaling $16.0 million in 2000
consisted of net proceeds from the maturity of investments totaling
approximately $17.8 million, offset by purchases of fixed assets totaling $1.8
million. Cash used in investing activities was $41.0 million and $186,000
respectively, in 1999 and 1998. The significant increase in 1999 reflects the
net purchases of fixed maturity investments resulting from the proceeds of the
August 1999 initial public offering of our company.

          Cash used in financing activities in 2000 was primarily the result of
a company stock buy back. During 2000 the Company bought back 487,000 shares at
an average cost of $2.25 per share. Cash provided by financing activities was
$60.9 million in 1999, attributable to proceeds from private sales of our common
stock of $3.4 million and net proceeds from the initial public offering of $57.5
million. Cash provided by financing activities was $835,000 in 1998, primarily
as a result of proceeds from the private sale of our common stock of $1.3
million reduced by repayment of notes of $433,000.

          On June 24, 1999, we borrowed $2.0 million from a significant
investor. The loan bore an interest rate of 12.5% per annum. This loan was
repaid at the closing of the initial public offering.

                                       19
<PAGE>   21
FACTORS THAT MAY AFFECT OUR FUTURE OPERATING RESULTS

                          RISKS RELATED TO OUR BUSINESS

IF WE DO NOT SUCCESSFULLY IMPLEMENT OUR NEW AUTO RATING ENGINE, OUR REVENUES AND
BUSINESS COULD BE HARMED

         The Company intends to enter the auto insurance brokerage business via
the launch of a comparative multi-company auto rating engine. The project has
experienced technical delays and is currently expected to be introduced in 2001.
We may experience additional difficulties that could further delay or prevent
the successful transition into the auto brokerage business which could result in
additional expenditures and the loss of revenue.

OUR INTERNET-BASED INSURANCE SERVICE HAS NOT BEEN PROFITABLE AND MAY NOT BECOME
PROFITABLE IN THE FUTURE

         Our first complete year of focusing on our Internet-based insurance
service was 1997. We incurred operating losses of approximately $198,000 in
1998, $15.0 million in 1999 and $20.8 million for the year ended December 31,
2000. Because we plan to continue to incur high levels of marketing expenses,
compared to revenue, in an attempt to increase our consumer base, we will need
to generate significantly higher revenues to achieve profitability. Even if we
achieve profitability, we may not be able to maintain profitability in the
future. In addition, as our business model evolves, we expect to introduce a
number of new products and services that may or may not be profitable for us.

IF THE TERM LIFE INSURANCE INDUSTRY DECLINES, OUR BUSINESS WILL SUFFER BECAUSE
NEARLY ALL OF OUR REVENUES ARE CURRENTLY DERIVED FROM CONSUMERS PURCHASING TERM
LIFE INSURANCE THROUGH US

         For the year ended December 31, 2000, approximately 88% of our revenue
was derived from consumers purchasing life insurance through us. Because nearly
all of our revenues are currently derived from consumers purchasing term life
insurance through us, our current financial condition is largely dependent on
the term life insurance industry and in particular consumers' demand for term
life insurance policies. If sales of term life insurance decline, whether due to
the introduction of new products, shifting consumer preferences or otherwise,
our business would be substantially harmed. In addition, in recent years, term
life insurance premiums have been declining. This decline has caused our average
commission per equivalent face amount of a policy to decrease and has
contributed to our operating losses since 1997. If term life insurance premiums
continue to decline, it may become more difficult for us to become profitable.

IF THE PURCHASE OF INSURANCE OVER THE INTERNET OR OUR SERVICE OFFERINGS DO NOT
ACHIEVE WIDESPREAD CONSUMER ACCEPTANCE, OUR BUSINESS WILL BE HARMED

         Our success will depend in large part on widespread consumer acceptance
of purchasing insurance online. The development of an online market for
insurance has only recently begun, is rapidly evolving and likely will be
characterized by an increasing number of market entrants. Therefore, there is
significant uncertainty with respect to the viability and growth potential of
this market. Our future growth, if any, will depend on the following critical
factors:

-        the growth of the Internet as a commerce medium generally, and as a
         market for consumer financial products and services specifically;

-        consumers' willingness to conduct self-directed insurance research;

-        our ability to successfully and cost-effectively market our services to
         a sufficiently large number of consumers;

-        our ability to consistently fulfill application requests on an
         efficient and timely basis; and

-        our ability to overcome a perception among many consumers that
         obtaining insurance online is risky.


                                       20
<PAGE>   22
         WE CANNOT ASSURE YOU THAT THE MARKET FOR OUR SERVICES WILL DEVELOP,
         THAT OUR SERVICES WILL BE ADOPTED OR THAT CONSUMERS WILL SIGNIFICANTLY
         INCREASE THEIR USE OF THE INTERNET FOR OBTAINING INSURANCE. IF THE
         ONLINE MARKET FOR INSURANCE FAILS TO DEVELOP OR DEVELOPS MORE SLOWLY
         THAN WE EXPECT, OR IF OUR SERVICES DO NOT ACHIEVE WIDESPREAD MARKET
         ACCEPTANCE, OUR BUSINESS WOULD BE SIGNIFICANTLY HARMED.

WE MAY GENERATE LIMITED REVENUES BECAUSE CONSUMERS CAN OBTAIN FREE QUOTES AND
OTHER INFORMATION WITHOUT PURCHASING INSURANCE THROUGH OUR WEB SITE

         We only generate revenues if a consumer purchases insurance through our
service. Consumers can access our Web site and obtain quotes and other
information free of charge without any obligation to purchase insurance through
us. Because all of the insurance policies quoted at our Web site can be
purchased through sources other than us, consumers may take the quotes and other
information that we provide to them and purchase one of our quoted policies from
the agent or broker of their choice. If consumers only use our Web site for
quote information purposes, we will not generate revenues and our business would
be significantly harmed.

WE MAY EXPERIENCE SIGNIFICANT FLUCTUATIONS IN OUR QUARTERLY RESULTS, WHICH MAKES
IT DIFFICULT FOR INVESTORS TO MAKE RELIABLE PERIOD-TO-PERIOD COMPARISONS AND MAY
CONTRIBUTE TO VOLATILITY IN OUR STOCK PRICE

         Our quarterly revenues and operating results have fluctuated
significantly in the past and we expect them to continue to fluctuate
significantly in the future. Causes of these fluctuations have included, among
other factors:

-        the length of time it takes for an insurance company to verify that an
         applicant meets the specified underwriting criteria -- this process can
         be lengthy, unpredictable and subject to delays over which we have
         little or no control, including underwriting backlogs of the insurance
         company and the accuracy of information provided by the applicant; we
         tend to place a significant number of policies with the most
         price-competitive insurance companies, who, due to volume, have longer
         and more unpredictable underwriting time frames;

-        changes in selling and marketing expenses, as well as other operating
         expenses;

-        volatility in bonus commissions paid to us by insurance companies which
         typically are highest in the fourth quarter;

-        volatility in renewal commission income;

-        the conversion and fulfillment rates of consumers' applications, which
         vary according to insurance product;

-        new sites, services and products by our competitors;

-        price competition by insurance companies in the sale of insurance
         policies; and

-        the level of Internet usage for insurance products and services.

         In addition, we have a very long revenue cycle. As a result,
substantial portions of our expenses, including selling and marketing expenses,
are incurred well in advance of potential revenue generation. If revenues do not
meet our expectations as a result of these selling and marketing expenses, our
results of operations will be harmed.

         Any one or more of the above-mentioned factors could harm our business
and results of operations, which makes quarterly predictions difficult and often
unreliable. As a result, we believe that quarter-to-quarter comparisons of our
operating results are not necessarily meaningful and not good indicators of our
future performance. Due to the above-mentioned and other factors, it is possible
that in one or more future quarters our operating results will fall below the
expectations of securities analysts and investors. If this happens, the trading
price of our common stock would likely decrease.

                                       21
<PAGE>   23
WE MUST FURTHER DEVELOP OUR BRAND RECOGNITION IN ORDER TO REMAIN COMPETITIVE

         There are a number of Web sites that offer services that are
competitive with the services we offer. Therefore, we believe that broader
recognition and a favorable consumer perception of the Quotesmith.com brand are
essential to our future success. Accordingly, we intend to continue to pursue an
aggressive brand-enhancement strategy consisting of our traditional print
advertising, as well as national radio and television advertising, online
marketing and promotional efforts. If these expenditures do not result in a
sufficient increase in revenues to cover these additional selling and marketing
expenses, our business, results of operations and financial condition would be
harmed.

WE MUST SUCCESSFULLY EXPAND INTO ADDITIONAL INSURANCE PRODUCTS IN ORDER TO
REMAIN COMPETITIVE

         We have recently expanded our product offering to include other types
of insurance in addition to our traditional term life product and will continue
to do so in the future. Expanding our product offering has required significant
expenditures and further expansion, if any, will require additional
expenditures. In addition, a portion of our selling and marketing expenditures
will be used to promote these new product offerings. However, to date we have
generated small amounts of revenues from our new product types. If our new
product offerings do not generate sufficient revenues to cover the related
expenditures, our business, results of operations and financial condition would
be harmed.

WE DO NOT HAVE AGENCY CONTRACTS WITH ALL OF THE INSURANCE COMPANIES WE QUOTE ON
OUR WEB SITE AND SOME INSURANCE COMPANIES MAY REFUSE TO PARTICIPATE IN OUR
DATABASE OR REFUSE TO DO BUSINESS WITH US

         While we obtain the information contained in our database directly from
over 300 insurance companies being quoted and listed at our Web site, we
currently hold agency contracts with 165 of these insurance companies. We
typically seek formal agency appointment from an insurance company after we
receive a purchase request for that insurance company's product from a consumer.
In the past a number of insurance companies quoted on our Web site have refused
to appoint us as an agent or refused to permit us to publish their quotes for
various reasons, including:

-        we do not meet with our customers on a face-to-face basis;

-        some insurance companies may have exclusive relationships with other
         agents;

-        we publicly market our service on a price-oriented basis which is not
         compatible with the insurance company's branding efforts; and

-        a formal business relationship with us might be perceived negatively by
         the insurance company's existing distribution channels.

         We do not intentionally include in our database insurance companies who
object to their inclusion. If a significant number of insurance companies object
to the inclusion of their information in our database the breadth of our
database would be limited. If consumers desire to purchase a material number of
policies from insurance companies with whom we are not appointed as an agent,
and these insurance companies refuse to enter into agency contracts with us, it
could harm our business and results of operations.

OUR STRATEGIC RELATIONSHIPS AND AGREEMENTS DO NOT CURRENTLY, AND MAY NEVER,
GENERATE A MATERIAL AMOUNT OF REVENUES FOR US

         As part of our marketing strategy, we began to enter into strategic
relationships and agreements to increase our access to online consumers.
However, to date we have derived only a minimal amount of revenues from these
arrangements. Under certain of these strategic agreements, we are obligated to
pay referral fees based upon requests for applications or quotes, each of which
do not generate revenue for us unless it results in a purchased insurance
policy. In addition, most of these strategic agreements permit either party to
terminate the agreement with short notice. As a result, we cannot assure you
that any of these relationships or agreements will be profitable or generate any
material amount of revenues in the future. If our strategic relationships and
agreements do not meet our expectations regarding revenues and earnings, our
business could be harmed.

                                       22
<PAGE>   24
IF WE DO NOT MANAGE OUR GROWTH EFFECTIVELY, OUR BUSINESS COULD BE HARMED

         We have expanded our operations significantly since May 1996 and
anticipate that further expansion may be required to realize our growth
strategy. Our operations growth has placed significant demands on our management
and other resources, which is likely to continue. To manage our future growth,
we will need to attract, hire and retain highly skilled and motivated officers,
managers and employees and improve existing systems and/or implement new systems
for:

-        transaction processing;

-        operational and financial management; and

-        training, integrating and managing our growing employee base.

         We may not be successful in managing or expanding our operations or
maintaining adequate management, financial and operating systems and controls.

IF OUR QUOTES ARE INACCURATE AND WE MUST PAY OUT CASH REWARD GUARANTEES, OUR
BUSINESS COULD BE HARMED.

         We offer consumers a $500 cash reward guarantee that we provide an
accurate quote. In 1998 we paid $8,500, for the year ended December 31, 1999 we
paid $12,000,and for the year ended December 31, 2000, we paid $11,500. If our
quotes or those of services with respect to which we have click-through
arrangements are inaccurate and we are required to pay a substantial number of
cash reward guarantees, we could be harmed.

IF WE LOSE ANY OF OUR EXECUTIVE OFFICERS OUR BUSINESS MAY SUFFER BECAUSE WE RELY
ON THEIR KNOWLEDGE OF OUR BUSINESS

         We believe that our success is significantly dependent upon the
continued employment and collective skills of our executive officers, including
Founder and Chief Executive Officer, Robert S. Bland, and Executive Vice
President, William V. Thoms. We maintain key man life insurance policies on
Messrs. Bland and Thoms and both of these officers have entered into employment
contracts with us. The loss of either of these two executives or any of our
other executive officers could harm our company.


                     RISKS RELATED TO THE INSURANCE INDUSTRY

OUR BONUS COMMISSION REVENUES ARE HIGHLY UNPREDICTABLE WHICH MAY CAUSE
FLUCTUATIONS IN OUR OPERATING RESULTS

         Our bonus commission revenues relate to the amount of premiums paid for
new insurance policies to a single insurance company. In other words, if
consumers purchase policies from a fewer number of insurance companies our bonus
commissions will be higher than if the same policies were purchased from a
larger number of insurance companies. The decision to purchase a policy from a
particular insurance company typically relates to, among other factors, price of
the policy and rating of the insurance company, both are factors over which we
have no control. Insurance companies often change their prices in the middle of
the year for competitive reasons. This may reduce the number of policies placed
with that insurance company which may then reduce our potential bonus
commissions. In addition, we have no control over the bonus commission rates
that are set by each individual insurance company. As a result of these factors,
we are unable to control the amount of bonus commission we receive in any
particular quarter or year and these amounts may fluctuate significantly.

THE INSURANCE SALES INDUSTRY IS INTENSELY COMPETITIVE, AND IF WE FAIL TO
SUCCESSFULLY COMPETE IN THIS INDUSTRY OUR MARKET SHARE AND BUSINESS WILL BE
HARMED

         The markets for the products and services offered on our site are
intensely competitive and characterized by rapidly changing technology, evolving
regulatory requirements and changing consumer demands. We compete with both
traditional insurance distribution channels, including insurance agents and
brokers, new non-traditional channels such as commercial banks and savings and
loan associations, and a growing number of direct distributors including other
online services, such as InsWeb Corporation and SelectQuote.

                                       23
<PAGE>   25
         We also potentially face competition from a number of large online
services that have expertise in developing online commerce and in facilitating a
high volume of Internet traffic for or on behalf of our competitors. For
instance, some of our competitors have relationships with major electronic
commerce companies, including InsWeb, which has relationships with Yahoo!, Snap,
Quicken and Infoseek. Other large companies with strong brand recognition,
technical expertise and experience in online commerce and direct marketing could
also seek to compete in the online insurance market.

         There can be no assurance that we will be able to successfully compete
with any of these current or potential insurance providers.


                           RISKS RELATED TO REGULATION

OUR COMPLIANCE WITH THE STRICT REGULATORY ENVIRONMENT APPLICABLE TO THE
INSURANCE INDUSTRY IS COSTLY, AND IF WE FAIL TO COMPLY WITH THE NUMEROUS LAWS
AND REGULATIONS THAT GOVERN THE INDUSTRY WE COULD BE SUBJECT TO PENALTIES

         We must comply with the complex rules and regulations of each
jurisdiction's insurance department which impose strict and burdensome
guidelines on us regarding our operations. Compliance with these rules and
regulations imposes significant costs on our business. Each jurisdiction's
insurance department typically has the power, among other things, to:

-        authorize how, by which personnel and under what circumstances an
         insurance premium can be quoted and published;

-        approve which entities can be paid commissions from insurance
         companies;

-        license insurance agents and brokers;

-        monitor the activity of our non-licensed customer service
         representatives; and

-        approve policy forms and regulate some premium rates.

         Due to the complexity, periodic modification and differing statutory
interpretations of these laws, we may not have always been and we may not always
be in compliance with all these laws. Failure to comply with these numerous laws
could result in fines, additional licensing requirements or the revocation of
our license in the particular jurisdiction. These penalties could significantly
increase our general operating expenses and harm our business. In addition, even
if the allegations in any regulatory action against us turn out to be false,
negative publicity relating to any allegations could result in a loss of
consumer confidence and significant damage to our brand. We believe that because
many consumers and insurance companies are not yet comfortable with the concept
of purchasing insurance online, the publicity relating to any such regulatory or
legal issues could harm our business.

REGULATION OF THE SALE OF INSURANCE OVER THE INTERNET AND OTHER ELECTRONIC
COMMERCE IS UNSETTLED, AND FUTURE REGULATIONS COULD FORCE US TO CHANGE THE WAY
WE DO BUSINESS OR MAKE OPERATING OUR BUSINESS MORE COSTLY

         As a company involved in the sale of insurance over the Internet, we
are subject to additional regulatory risk as insurance regulations have not been
fully modified to cover Internet transactions. Currently, many state insurance
regulators are exploring the need for specific regulation of insurance sales
over the Internet. Any new regulation could dampen the growth of the Internet as
a means of providing insurance services. Moreover, the laws governing general
commerce on the Internet remain largely unsettled, even in areas where there has
been some legislative action. It may take years to determine whether and how
existing laws such as those governing intellectual property, privacy and
taxation apply to the Internet. In addition, the growth and development of the
market for electronic commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on companies conducting
business over the Internet. Any new laws or regulations or new interpretations
of existing laws or regulations relating to the Internet could harm our
business.

                                       24
<PAGE>   26


IF WE BECOME SUBJECT TO LEGAL LIABILITY FOR THE INFORMATION WE DISTRIBUTE ON OUR
WEB SITE OR COMMUNICATE TO OUR CUSTOMERS, OUR BUSINESS COULD BE HARMED

         Our customers rely upon information we provide regarding insurance
quotes, coverage, exclusions, limitations and ratings. To the extent that the
information we provide is not accurate, we could be liable for damages from both
consumers and insurance companies. These types of claims have been brought,
sometimes successfully, against agents, online services and print publications
in the past. These types of claims could be time-consuming and expensive to
defend, divert management's attention, and could cause consumers to lose
confidence in our service. As a result, these types of claims, whether or not
successful, could harm our business, financial condition and results of
operations.

         In addition, because we are appointed as an agent for only 165 of the
over 300 insurance companies quoted on our Web site, we do not have contractual
authorization to publish information regarding the policies from insurance
companies for whom we are not appointed. Several of these insurance companies
have in the past demanded that we cease publishing their policy information and
others may do so in the future. In some cases we have published information
despite these demands. If we are required to stop publishing information
regarding some of the insurance policies that we track in our database, it could
harm us.


              RISKS RELATED TO THE INTERNET AND ELECTRONIC COMMERCE

ANY FAILURES OF, OR CAPACITY CONSTRAINTS IN, OUR SYSTEMS OR THE SYSTEMS OF THIRD
PARTIES ON WHICH WE RELY COULD REDUCE OR LIMIT VISITORS TO OUR WEB SITE AND HARM
OUR ABILITY TO GENERATE REVENUE

         We use both internally developed and third-party systems to operate our
service. If the number of users of our service increases substantially, we will
need to significantly expand and upgrade our technology, transaction processing
systems and network infrastructure. We do not know whether we will be able to
accurately project the rate or timing of any these increases, or expand and
upgrade our systems and infrastructure to accommodate these increases in a
timely manner. Our ability to facilitate transactions successfully and provide
high quality customer service also depends on the efficient and uninterrupted
operation of our computer and communications hardware systems. Our service has
experienced periodic system interruptions, and it is likely that these
interruptions will continue to occur from time to time. Additionally, our
systems and operations are vulnerable to damage or interruption from human
error, natural disasters, power loss, telecommunication failures, break-ins,
sabotage, computer viruses, acts of vandalism and similar events. We may not
carry sufficient business interruption insurance to compensate for losses that
could occur. Any system failure that causes an interruption in service or
decreases the responsiveness of the our service would impair our
revenue-generating capabilities, and could damage our reputation and our brand
name.

OUR SUCCESS DEPENDS, IN PART, ON OUR ABILITY TO PROTECT OUR PROPRIETARY
TECHNOLOGY

         We believe that our success depends, in part, on protecting our
intellectual property. Other than our trademarks, most of our intellectual
property consists of proprietary or confidential information that is not subject
to patent or similar protection. Competitors may independently develop similar
or superior products, software or business models.

         We cannot guarantee that we will be able to protect our intellectual
property. Unauthorized third parties may try to copy our products or business
model or use our confidential information to develop competing products. Legal
standards relating to the validity, enforceability and scope of protection of
proprietary rights in Internet-related businesses are uncertain and still
evolving. As a result, we cannot predict the future viability or value of our
proprietary rights and those of other companies within the industry.

WE MAY BE SUBJECT TO CLAIMS OF INFRINGEMENT THAT MAY BE COSTLY TO RESOLVE AND,
IF SUCCESSFUL, COULD HARM OUR BUSINESS

         Our business activities and products may infringe upon the proprietary
rights of others. Parties may assert valid or invalid infringement claims
against us. Any infringement claims and resulting litigation, should it occur,
could subject us to significant liability for damages and could result in
invalidation of our proprietary rights. Even if we eventually won, any resulting
litigation could be time-consuming and expensive to defend and could divert our
management's attention.


                                       25
<PAGE>   27

IF WE ARE UNABLE TO ADAPT TO THE RAPID TECHNOLOGICAL CHANGE IN OUR INDUSTRY, WE
WILL NOT REMAIN COMPETITIVE AND OUR BUSINESS WILL SUFFER.

         Our market is characterized by rapidly changing technologies, frequent
new product and service introductions and evolving industry standards. The
recent growth of the Internet and intense competition in our industry exacerbate
these market characteristics. Our future success will depend on our ability to
adapt to rapidly changing technologies by continually improving the features and
reliability of our database and service. We may experience difficulties that
could delay or prevent the successful introduction or marketing of new products
and services. In addition, new enhancements must meet the requirements of our
current and prospective customers and must achieve significant market
acceptance. We could also incur substantial costs if we need to modify our
service or infrastructures or adapt our technology to respond to these changes.

DEMAND FOR OUR SERVICES MAY BE REDUCED IF WE ARE UNABLE TO SAFEGUARD THE
SECURITY AND PRIVACY OF OUR CUSTOMER'S INFORMATION

         A significant barrier to electronic commerce and online communications
has been the need for secure transmission of confidential information over the
Internet. Our ability to secure the transmission of confidential information
over the Internet is essential in maintaining consumer and insurance company
confidence in our service. In addition, because we handle confidential and
sensitive information about our customers, any security breaches would damage
our reputation and could expose us to litigation and liability. We cannot
guarantee that our systems will prevent security breaches.

OUR BUSINESS ASSUMES THE CONTINUED DEPENDABILITY OF THE INTERNET INFRASTRUCTURE

         Our success will depend upon the development and maintenance of the
Internet's infrastructure to cope with its significant growth and increased
traffic. This will require a reliable network backbone with the necessary speed,
data capacity and security, and the timely development of complementary
products, such as high-speed modems, for providing reliable Internet access and
services. The Internet has experienced a variety of outages and other delays as
a result of damage to portions of its infrastructure and could face outages and
delays in the future. Outages and delays are likely to cause a loss of business
by affecting the level of Internet usage and the processing of insurance quotes
and applications requests made through our Web site. We are unlikely to make up
for this loss of business.

                   RISKS RELATED OWNERSHIP OF OUR COMMON STOCK

OUR STOCK COULD BECOME DELISTED IF WE FAIL TO MEET THE MINIMUM FINANCIAL
REQUIREMENTS FOR CONTINUED LISTING ON THE NASDAQ NATIONAL MARKET

         The Company's Common Stock must maintain a minimum bid price of $1.00
per share in order to remain eligible for continued listing on the Nasdaq
National Market. On December 13, 2000, the staff of the Nasdaq Stock Market
("Nasdaq") notified the Company that the bid price for its Common Stock had been
below $1.00 per share for a period of thirty consecutive days. The Staff later
advised the Company that it would be given a period of ninety days within which
to comply with the minimum bid price requirement in order to maintain its
listing on the Nasdaq National Market. In an attempt to remedy the stock price
deficiency, the company effected a one-for-three reverse stock split on March 7,
2001. On March 9, 2001, the last reported sale price of the Common Stock on the
Nasdaq National Market was $1 15/16 per share. There can be no assurance that
the Company will be able to maintain a bid price in excess of $1.00 per share.

         In addition to the $1.00 minimum bid price per share requirement
described above, the continued listing of the Common Stock on the Nasdaq
National Market is subject to the maintenance of the other quantitative and
qualitative requirements set forth in the Nasdaq National Market Listing
Requirements. In particular, the Nasdaq National Market Listing Requirements
require that a company currently included in the Nasdaq National Market meet
each of the following standards to maintain its continued listing:

         Nasdaq National Market Listing Considerations:

         (1) Net tangible assets of $4,000,000;


                                       26
<PAGE>   28

         (2) a public float of 750,000 shares;

         (3) a market value of public float of $5,000,000;

         (4) a minimum bid price of $1 per share;

         (5) 400 round lot shareholders;

         (6) two market makers; and

         (7) compliance with Nasdaq corporate governance rules.

         On March 13, 2001, the staff of Nasdaq notified the Company that the
market value of the public float was below the minimum $5.0 million for the last
30 consecutive trading days. The staff advised the Company that it would be
provided ninety calendar days to regain compliance, or until June 11, 2001, to
maintain its listing on the Nasdaq National Market or submit an application to
transfer to the Nasdaq Smallcap Market.

          In the event that the Company is unable to satisfy this or other
requirements for continued listing on the Nasdaq National Market, the Company
may be able to satisfy the requirements for listing on the Nasdaq SmallCap
Market on an ongoing basis. The requirements for listing on the Nasdaq SmallCap
Market are listed below:

         Nasdaq SmallCap Market Listing Considerations:

         (1) either (a) net tangible assets of $2,000,000, (b) net income in two
             of the last three years of $500,000, or (c) a market capitalization
             of $35,000,000;

         (2) a public float of 500,000 shares;

         (3) a market value of public float of $1,000,000;

         (4) a minimum bid price of $1.00 per share;

         (5) two market makers;

         (6) 300 round lot shareholders; and

         (7) compliance with Nasdaq corporate governance rules.

         The Company believes that maintaining the listing of its Common Stock
on the Nasdaq National Market is in the best interest of the Company and its
stockholders. Inclusion in the Nasdaq National Market increases liquidity and
may potentially minimize the spread between the "bid" and "asked" prices quoted
by market makers. Further, a Nasdaq National Market listing may enhance the
Company's access to capital and increase the Company's flexibility in responding
to anticipated capital requirements. The Company believes that prospective
investors will view an investment in the Company more favorably if its shares
qualify for listing on the Nasdaq National Market.

         The Company also believes that the current per share price level of the
Common Stock has reduced the effective marketability of the Company's shares of
Common Stock because of the reluctance of many leading brokerage firms to
recommend low-priced stock to their clients. Certain investors view low-priced
stock as speculative and unattractive, although certain other investors may be
attracted to low-priced stock because of the greater trading volatility
sometimes associated with such securities. In addition, a variety of brokerage
house policies and practices tend to discourage individual brokers within those
firms from dealing in low-priced stock. Such policies and practices pertain to
the payment of brokers commissions and to time-consuming procedures that
function to make the handling of low-priced stocks unattractive to brokers from
an economic standpoint.


                                       27
<PAGE>   29

         In addition, because brokerage commissions on low-priced stock
generally represent a higher percentage of the stock price than commissions on
higher-priced stock, the current share price of the Common Stock can result in
individual stockholders paying transaction costs (commissions, markups or
markdowns) that represent a higher percentage of their total share value than
would be the case if the share price were substantially higher. This factor also
may limit the willingness of institutions to purchase the Common Stock at its
current low share price.

         In addition, if the Common Stock is not listed on the Nasdaq National
Market and the trading price of the Common Stock were to fall below $1.00 per
share, trading in the Common Stock would also be subject to the requirements of
certain rules promulgated under the Exchange Act which require additional
disclosures by broker-dealers in connection with any trades involving a stock
defined as a "penny stock" (generally, a non-Nasdaq equity security that has a
market price of less than $5.00 per share, subject to certain exceptions). In
such event, the additional burdens imposed upon broker-dealers to effect
transactions in the Common Stock could further limit the market liquidity of the
Common Stock and the ability of investors to trade the Common Stock.

         As discussed, in the event that the Common Stock is delisted from the
Nasdaq National Market, the Company may not qualify for listing on the Nasdaq
SmallCap Market. In such an event, sales of the Common Stock would likely be
conducted only in the over-the-counter market or potentially in regional
exchanges. This may have a negative impact on the liquidity and price of the
Common Stock and investors may find it more difficult to purchase or dispose of,
or to obtain accurate quotations as to the market value of, the Common Stock.


OUR STOCK PRICE MAY HAVE WIDE FLUCTUATIONS, AND INTERNET-RELATED STOCKS HAVE
BEEN PARTICULARLY VOLATILE

         The market price of our common stock is highly volatile and is subject
to wide fluctuations. Recently, the stock market has experienced significant
price and volume fluctuations and the market prices of securities of technology
companies, particularly Internet-related companies, have been highly volatile.
Market fluctuations, as well as general political and economic conditions, such
as a recession or interest rate fluctuations, could adversely affect the market
price of our common stock. In addition, the market prices for stocks of
Internet-related and technology companies, particularly following an initial
public offering, frequently reach levels that bear no relationship to the
operating performance of such companies. These market prices generally are not
sustainable and are subject to wide variations. If our common stock trades to
unsustainably high levels, it likely will thereafter experience a material
decline.

         In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of their
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs, divert management's attention and
resources, and harm our financial condition and results of operations.

TWO OF OUR OFFICERS AND DIRECTORS OWN A SIGNIFICANT PORTION OF OUR STOCK AND
CONTINUE TO CONTROL OUR COMPANY AND THEIR INTERESTS MAY NOT BE THE SAME AS OUR
PUBLIC STOCKHOLDERS

         As of January 25, 2001, Robert Bland, our chairman, President and Chief
Executive Officer directly or indirectly controls 43.2% of our outstanding
common stock, and William Thoms, our Executive Vice President, directly controls
13.1% of our outstanding common stock. As a result, if Messrs. Bland and Thoms
act together, they will be able to take any of the following actions without the
approval of additional public stockholders:

-        elect our directors;

-        amend several provisions of our charter;

-        approve a merger, sale of assets or other major corporate transaction;

-        defeat any takeover attempt, even if it would be beneficial to our
         public stockholders; and

-        otherwise control the outcome of all matters submitted for a
         stockholder vote.


                                       28
<PAGE>   30

         This control could discourage others from initiating a potential
merger, takeover or another change of control transaction that could be
beneficial to our public stockholders. As a result, the market price of our
common stock could be harmed.

OUR CHARTER DOCUMENTS AND DELAWARE LAW CONTAIN PROVISIONS THAT MAY DISCOURAGE
TAKEOVER ATTEMPTS WHICH COULD PRECLUDE OUR STOCKHOLDERS FROM RECEIVING A CHANGE
OF CONTROL PREMIUM

         Our certificate of incorporation and bylaws and Delaware law contain
anti-takeover provisions that could have the effect of delaying or preventing
changes in control that a stockholder may consider favorable. The provisions in
our charter documents include the following:

-        a classified board of directors with three-year staggered terms;

-        the ability of our board of directors to issue shares of preferred
         stock and to determine the price and other terms, including preferences
         and voting rights, of those shares without stockholder approval;

-        stockholder action to be taken only at a special or regular meeting;
         and

-        advance notice procedures for nominating candidates to our board of
         directors.

         Our preferred stock purchase rights would cause substantial dilution to
any person or group who attempts to acquire a significant interest in our
company without advance approval of our board of directors. In addition, our
executive officers have employment agreements that may entitle them to
substantial payments in the event of a change of control.

         The foregoing could have the effect of delaying, deferring or
preventing a change in control of our company, discourage bids for our common
stock at a premium over the market price, or harm the market price of, and the
voting and other rights of the holders of, our common stock. We also are subject
to Delaware laws that could have similar effects. One of these laws prohibits us
from engaging in a business combination with any significant stockholder for a
period of three years from the date the person became a significant stockholder
unless specific conditions are met.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES  ABOUT MARKET RISK

         The primary objective of Quotesmith.com's investment activities is to
preserve principal while at the same time maximizing yields without
significantly increasing risk. To achieve this objective, we maintain a
portfolio of cash and equivalents and short-term investments in a variety of
securities, including both government and corporate obligations and money market
funds.

         Substantially all of our investments are subject to interest rate risk.
The Company considers all investments as available-for-sale and unrealized gains
on those investments totaled $36,420 in 2000, while unrealized losses on those
investments totaled $39,218 for 1999.

         Quotesmith.com did not hold any derivative financial instruments as of
December 31, 2000, and has never held such instruments in the past.
Additionally, all our transactions have been denoted in U.S. currency, and do
not have any risk associated with foreign currency transactions.

         Due to the short term nature of our investments, a 1% increase in
interest rates would decrease the fair value of Quotesmith.com's investments by
an immaterial amount.


                                       29
<PAGE>   31

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The consolidated financial statements are indexed in the Index to
Financial Statements, which appear on Pages F-1 through F-14 hereof, and are
incorporated in this Item by reference thereto.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURES

         There were no disagreements on accounting and financial disclosures.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The sections entitled "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" are incorporated by reference from
the proxy statement to be filed with the Securities and Exchange Commission in
connection with our 2001 annual meeting of stockholders scheduled for May 24,
2001. Information about our executive officers is set forth in Item 4(a) in Part
I of this Report.


ITEM 11.  EXECUTIVE COMPENSATION

         The section entitled "Executive Compensation," excluding the Board
Compensation Committee Report and the stock price performance graph, is
incorporated by reference from the proxy statement to be filed with the
Securities and Exchange Commission in connection with our 2001 annual meeting of
stockholders scheduled for May 24, 2001.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The section entitled "Ownership of Securities" is incorporated by
reference from the proxy statement to be filed with the Securities and Exchange
Commission in connection with our 2001 annual meeting of stockholders scheduled
for May 24, 2001.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The section entitled "Certain Transactions" is incorporated by
reference from the proxy statement to be filed with the Securities and Exchange
Commission in connection with our 2001 annual meeting of stockholders scheduled
for May 24, 2001


                                     PART IV

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

(a)  1.  Financial Statements:

     The financial statements are indexed in the Index to Financial Statements,
     which appears on Pages F-1 through F-14 hereof, and are incorporated by
     reference in this Item by reference thereto.

     2.  Financial Statement Schedules:

     No schedules are required due to the absence of conditions under which they
     are required or because the required information is provided in the
     financial statements or notes thereto.


                                       30
<PAGE>   32

     3.   Executive Compensation Plans and Arrangements.

     The following executive compensation arrangements are listed as exhibits to
this Form 10-K.

     Quotesmith.com 1997 Stock Option Plan (as amended and restated March 29,
     1999).
     Quotesmith.com 1999 Employee Stock Purchase Plan.
     Employment Agreement between the Company and Robert S. Bland.
     Employment Agreement between the Company and William V. Thoms.
     Employment Agreement between the Company and David I. Vickers.
     Employment Agreement between the Company and Burke A. Christensen.
     Form of Director Indemnification Agreement.

     See Exhibit Index (immediately following the signature page) for exhibits
filed with this report on Form 10-K.

(b)  Reports on Form 8-K:

     No reports were filed on Form 8-K for the quarter ended December 31, 2000.

(c)  Exhibits

     See Exhibits Index (immediately following the signature page).


                                       31
<PAGE>   33

                                   SIGNATURES

Pursuant to the requirements of Section 13 or15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on March 15, 2001.

                                           QUOTESMITH.COM, INC.


                                           By:  /s/ROBERT S. BLAND
                                                -------------------------------
                                           Name:  Robert S.  Bland,
                                           Title:  Chairman, President and Chief
                                           Executive Officer

                                POWER OF ATTORNEY

         Know all men by these presents that each person whose signature appears
below constitutes and appoints Robert S, Bland and William V. Thoms and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this report and to
file the same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them or their or he substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on March 13, 2001:

<TABLE>
<CAPTION>
           SIGNATURE                                                        TITLE
           ---------                                                        -----
<S>                                                 <C>
/s/ROBERT S. BLAND                                  Chairman, President and Chief Executive Officer (Principal
---------------------------                         Executive Officer)
Robert S. Bland

/s/ WILLIAM V. THOMS                                Executive Vice President and Director
---------------------------
William V. Thoms

/s/ DAVID I. VICKERS                                Senior Vice President, Chief Financial Officer and Secretary
---------------------------                         (Principal Financial and Accounting Officer)
David I. Vickers

/s/ BRUCE J. RUEBEN                                 Director
---------------------------
Bruce J. Rueben

/s/ TIMOTHY F. SHANNON                              Director
---------------------------
Timothy F. Shannon

/s/ JEREMIAH A. DENTON, JR.                         Director
---------------------------
Jeremiah A. Denton, Jr.

/s/ RICHARD F. GRETSCH                              Director
---------------------------
Richard F. Gretsch

/s/ JOHN MCCARTNEY                                  Director
---------------------------
John McCartney
</TABLE>


                                       32
<PAGE>   34

EXHIBITS

                                    FORM 10-K
                                INDEX TO EXHIBITS

Exhibit
Number          Description of Document

3.1++      Restated Certificate of Incorporation of Company.
3.2++      Amended and Restated By-Laws of the Company.
4.3++      Form of Rights Agreement.
4.3(a) ++  Certificate of Designation, Preferences and Rights.
10.1++     Quotesmith.com 1997 Stock Option Plan (as amended and restated March
           29, 1999) of Registrant
10.2++     Quotesmith.com 1999 Employee Stock Purchase Plan.
10.3++     Employment Agreement between the Company and Robert S. Bland.
10.4++     Employment Agreement between the Company and William V. Thoms.
10.5+++    Employment Agreement between the Company and David I. Vickers.
10.6++     Employment Agreement between the Company and Burke A. Christensen.
10.7++     Form of Director Indemnification Agreement.
10.8++     Lease dated as of August 1994, between the Company and LaSalle
           National Trust N.A.
10.9++     Lease Amendment Agreement dated as of November 1995, between the
           Company and LaSalle National Trust N.A.
10.10++    Lease Amendment Agreement as of September 1997, between the Company
           and LaSalle National Trust N.A.
10.11++    Lease Amendment Agreement dated as of July 1998, between the Company
           and LaSalle National Trust N.A..
10.12++    Services Agreement, dated as of September 9, 1998, by and between the
           Company and Intuit Insurance Services, Inc.
10.13++    Investor Rights Agreement, dated February 10, 1999, between the
           Company and Intuit Inc.
23.1       Consent of Ernst & Young LLP(filed herewith)
24.0       Powers of Attorney (See signature page to this report)

++   Incorporated by reference to the Company's Registration statement on Form
     S-1 (Registration no. 333-79355) filed July 30, 1999.

+++  Incorporated by reference to the Company's Form 10-K filed March 28, 2000.


                                       33
<PAGE>   35

                              QUOTESMITH.COM, INC.

                          INDEX TO FINANCIAL STATEMENTS



AUDITED FINANCIAL STATEMENTS                                                PAGE

Report of Independent Auditors............................................  F-2
Balance Sheets as of December 31, 2000 and 1999...........................  F-3
Statements of Operations for the Years Ended December 31, 2000,
   1999, and 1998.........................................................  F-4
Statements of Stockholders' Equity for the Years Ended December 31,
   2000, 1999, and 1998...................................................  F-5
Statements of Cash Flows for the Years Ended December 31, 2000, 1999,
   and 1998...............................................................  F-6
Notes to Financial Statements.............................................  F-7


                                      F-1
<PAGE>   36

                         REPORT OF INDEPENDENT AUDITORS

Board of Directors
Quotesmith.com, Inc.

         We have audited the accompanying balance sheets of Quotesmith.com, Inc.
as of December 31, 2000 and 1999, and the related statements of operations,
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Quotesmith.com, Inc.
at December 31, 2000 and 1999, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States.


                                      /s/ERNST & YOUNG LLP

Chicago, Illinois
January 12, 2001, except Note 9, as to which the date is
March 7, 2001


                                      F-2
<PAGE>   37

                              QUOTESMITH.COM, INC.

                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                                DECEMBER 31,
                                                                                                ------------
                                                                                             2000                1999
                                                                                     ------------        ------------
                                     ASSETS
<S>                                                                                  <C>                 <C>
Cash and equivalents .........................................................       $  4,269,141        $  8,990,022
Fixed maturity investments -
   available for sale at fair value  (Note 3) ................................         24,027,889          40,670,825
Commissions receivable, less allowances (2000 - $239,000;
  1999 - $273,000) ...........................................................          1,540,515           1,695,380
Other assets (Note 2) ........................................................            453,071           2,933,403
                                                                                     ------------        ------------
Total current assets .........................................................         30,290,616          54,289,630
Furniture, equipment, and computer software at cost, less
   accumulated depreciation ( 2000--$873,000; 1999--$326,000) ................          2,352,147             888,516
                                                                                     ------------        ------------

Total assets .................................................................       $ 32,642,763        $ 55,178,146
                                                                                     ============        ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued
   liabilities ...............................................................       $  2,847,508        $  5,981,671
                                                                                     ------------        ------------
Total current liabilities ....................................................          2,847,508           5,981,671

Long-term capital lease obligations(Note 5) ..................................            127,950                  --
                                                                                     ------------        ------------

Total Liabilities ............................................................          2,975,458           5,981,671

Commitments and contingencies (Note 8)

Stockholders' equity (Notes 6, 7 and 9): Common stock, $.003 par value; shares
      authorized:
        2000 & 1999--60,000,000; shares issued:
        2000 -- 7,253,570; 1999 -- 7,252,727 .................................             21,761              21,758
      Additional paid-in capital .............................................         63,836,873          63,683,525
      Retained-earnings deficit ..............................................        (32,828,218)        (14,206,590)
      Treasury stock at cost: 2000 -- 1,331,667 shares;
        1999 -- 844,667 shares ...............................................         (1,360,313)           (263,000)
      Accumulated other comprehensive loss ...................................             (2,798)            (39,218)
                                                                                     ------------        ------------
Total stockholders' equity ...................................................         29,667,305          49,196,475
                                                                                     ------------        ------------
Total liabilities and stockholders'
   equity ....................................................................       $ 32,642,763        $ 55,178,146
                                                                                     ============        ============
</TABLE>


                             See accompanying notes.


                                      F-3
<PAGE>   38

                              QUOTESMITH.COM, INC.

                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                                ------------------------
                                                         2000                1999                1998
                                                 ------------        ------------        ------------
<S>                                              <C>                 <C>                 <C>
Revenues:
   Commissions and fees (Note 1) .........       $ 15,190,010        $  8,354,131        $  5,507,596
   Other .................................             46,410              54,152              68,034
                                                 ------------        ------------        ------------
Total revenues ...........................         15,236,420           8,408,283           5,575,630
Expenses:
   Selling and marketing (Note 2) ........         24,200,846          14,396,951           1,791,145
   Operations (Note 7) ...................          7,445,235           5,480,519           2,689,408
   General and administrative (Note 7) ...          4,431,730           3,570,231           1,292,481
                                                 ------------        ------------        ------------
Total expenses ...........................         36,077,811          23,447,701           5,773,034
                                                 ------------        ------------        ------------
Operating loss ...........................        (20,841,391)        (15,039,418)           (197,404)
Interest income, net (Note 2) ............          2,219,763           1,219,419               1,803
                                                 ------------        ------------        ------------
Loss before income taxes .................        (18,621,628)        (13,819,999)           (195,601)
Income tax credit (Note 4) ...............                 --                  --                  --
                                                 ------------        ------------        ------------
Net loss .................................       $(18,621,628)       $(13,819,999)       $   (195,601)
                                                 ============        ============        ============
Net loss per common
   share, basic and diluted (Note 9) .....       $      (2.93)       $      (2.64)       $      (0.05)
                                                 ============        ============        ============
Weighted average common
   shares and equivalents
   outstanding, basic and diluted (Note 9)          6,366,045           5,236,992           4,086,021
</TABLE>


                             See accompanying notes.


                                      F-4
<PAGE>   39

                              QUOTESMITH.COM, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                          COMMON STOCK

                                                  NUMBER OF                               ADDITIONAL          RETAINED-
                                                   SHARES                 PAR              PAID-IN            EARNINGS
                                                   ISSUED                VALUE             CAPITAL             DEFICIT
                                                   ------                -----             -------             -------
<S>                                           <C>                  <C>                 <C>                 <C>
1998:
   Balance at January 1 ..............           4,830,000         $     14,490        $    206,220        $   (190,990)
   Net loss ..........................                  --                   --                  --            (195,601)
   Proceeds from sale
     of common stock .................             143,697                  431           1,267,841                  --
   Effect of stock
     options granted .................                  --                   --             150,000                  --
                                              ------------         ------------        ------------        ------------
   Balance at December 31  ...........           4,973,697               14,921           1,624,061            (386,591)
1999:
   Net loss ..........................                  --                   --                  --         (13,819,999)
   Other comprehensive loss-
     unrealized loss on
       investments ...................                  --                   --                  --                  --

   Total comprehensive loss ..........
   Proceeds from sale of common stock:
       Private placement and
         employees ...................             376,000                1,128           3,382,872                  --
       Public offering ($33/share),
       less expenses of $1,110,449 ...           1,903,030                5,709          57,497,833                  --
   Employee stock compensation .......                  --                   --           1,178,759                  --
                                              ------------         ------------        ------------        ------------
   Balance at December 31  ...........           7,252,727               21,758          63,683,525         (14,206,590)
2000:
   Net loss ..........................                  --                   --                  --         (18,621,628)
   Other comprehensive gain-
     unrealized gain on
       investments ...................                  --                   --                  --                  --

   Total comprehensive loss ..........
   Purchase of treasury stock ........                  --                   --                  --                  --
   Proceeds from sale of common stock:
     -exercise of stock options ......                 843                    3               7,590                  --
   Employee stock compensation .......                  --                   --             145,758                  --
                                              ------------         ------------        ------------        ------------
   Balance at December 31  ...........           7,253,570         $     21,761        $ 63,836,873        $(32,828,218)
                                              ============         ============        ============        ============
</TABLE>

<TABLE>
<CAPTION>
                                                                                            TOTAL
                                                                   ACCUMULATED          STOCKHOLDERS'
                                                                       OTHER               EQUITY
                                                TREASURY           COMPREHENSIVE         (DEFICIENCY
                                                  STOCK                 LOSS              IN ASSETS)
                                                   -----                ----              ----------
<S>                                           <C>                  <C>                  <C>
1998:
   Balance at January 1 ..............        $   (263,000)        $         --         $   (233,280)
   Net loss ..........................                  --                   --             (195,601)
   Proceeds from sale
     of common stock .................                  --                   --            1,268,272
   Effect of stock
     options granted .................                  --                   --              150,000
                                              ------------         ------------         ------------
   Balance at December 31  ...........            (263,000)                  --              989,391
1999:
   Net loss ..........................                  --                   --          (13,819,999)
   Other comprehensive loss-
     unrealized loss on
       investments ...................                  --              (39,218)             (39,218)
                                                                                        ------------
   Total comprehensive loss ..........                                                   (13,859,217)
   Proceeds from sale of common stock:
       Private placement and
         employees ...................                  --                   --            3,384,000
       Public offering ($33/share),
       less expenses of $1,110,449 ...                  --                   --           57,503,542
   Employee stock compensation .......                  --                   --            1,178,759
                                              ------------         ------------         ------------
   Balance at December 31  ...........            (263,000)             (39,218)          49,196,475
2000:
   Net loss ..........................                  --                   --          (18,621,628)
   Other comprehensive gain-
     unrealized gain on
       investments ...................                  --               36,420               36,420
                                                                                        ------------
   Total comprehensive loss ..........                                                   (18,585,208)
   Purchase of treasury stock ........          (1,097,313)                  --           (1,097,313)
   Proceeds from sale of common stock:
     -exercise of stock options ......                  --                   --                7,593
   Employee stock compensation .......                  --                   --              145,758
                                              ------------         ------------         ------------
   Balance at December 31  ...........        $ (1,360,313)        $     (2,798)        $ 29,667,305
                                              ============         ============         ============
</TABLE>


                             See accompanying notes.


                                      F-5
<PAGE>   40

                              QUOTESMITH.COM, INC.

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                             YEARS ENDED DECEMBER 31,
                                                                             ------------------------
                                                                    2000                 1999                 1998
                                                            ------------         ------------         ------------
<S>                                                         <C>                  <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss ..........................................        $(18,621,628)        $(13,819,999)        $   (195,601)
   Adjustments to reconcile to net cash
     used by operating activities:
       Depreciation expense ........................             547,526              159,429               66,574
       Amortization ................................          (1,126,663)            (498,684)                  --
       Accounts payable and accrued liabilities ....          (3,172,722)           5,165,344              185,941
       Commissions receivable ......................             154,865             (687,718)            (316,639)
       Stock compensation ..........................             145,758            1,178,759              150,000
       Other assets ................................           2,480,332           (2,894,155)             (25,064)
                                                            ------------         ------------         ------------
   Net cash used by
     operating activities ..........................         (19,592,532)         (11,397,024)            (134,789)
                                                            ------------         ------------         ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of investments .........................         (64,853,981)         (53,596,502)                  --
   Proceeds from investment  maturities ............          82,660,000           13,385,143                   --
   Purchase of furniture, equipment
     and software ..................................          (1,815,228)            (807,339)            (185,760)
                                                            ------------         ------------         ------------
   Net cash provided (used) by investing activities           15,990,791          (41,018,698)            (185,760)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of
     common stock ..................................               7,593           60,887,542            1,268,272
   Proceeds used to purchase treasury stock ........          (1,097,313)                  --                   --
   Payment of capital lease obligation .............             (29,420)                  --                   --
   Proceeds from notes payable .....................                  --            2,000,000                   --
   Repayment of notes payable ......................                  --           (2,000,000)            (433,330)
                                                            ------------         ------------         ------------

   Net cash (used) provided by financing activities           (1,119,140)          60,887,542              834,942
                                                            ------------         ------------         ------------
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS ....          (4,720,881)           8,471,820              514,393
CASH AND EQUIVALENTS AT
   BEGINNING OF YEAR ...............................           8,990,022              518,202                3,809
                                                            ------------         ------------         ------------
CASH AND EQUIVALENTS AT
   END OF YEAR .....................................        $  4,269,141         $  8,990,022         $    518,202
                                                            ============         ============         ============
</TABLE>


                             See accompanying notes.


                                      F-6
<PAGE>   41


                              QUOTESMITH.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS


1.  DESCRIPTION OF BUSINESS

         Quotesmith.com, Inc. (the Company) has developed an Internet-based
insurance service that enables consumers and business owners to obtain instant
quotes from over 300 insurance companies without the involvement of any
commissioned salespeople. The Company's web site allows consumers to: (1) search
for, analyze and compare insurance products; (2) request and obtain insurance
quotes; and (3) select and purchase insurance coverage from the insurance
company of their choice.

         The Company incorporated and began its operations in March 1984 and
during the period from 1984 to 1994 provided an electronic quotation and policy
information service to insurance agents and brokers. Throughout this period the
Company was not engaged in the marketing of insurance to consumers. In 1994, the
Company began focusing its business strategy on marketing term life insurance to
self-directed consumers utilizing its proprietary insurance price comparison
technology. In May 1996, the Company began providing real-time quotes for term
life insurance on the Internet and began receiving online insurance application
requests from consumers.

         In the period covered in the accompanying financial statements, the
Company's primary revenue source has been commissions derived from the sale of
individual term life insurance. Applications are underwritten and commissions
are received from numerous life insurance companies. Revenues from some of these
companies have exceeded ten percent of the Company's total revenues. In 1998,
these included one company with revenues of $1.3 million. In 1999, these
included two companies with revenues of $1.9 million and $1.0 million. In 2000,
these included two companies with revenues of $2.3 million and $4.1 million. The
Company's business represents one business segment.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

         The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Such estimates and assumptions
could change, as more information becomes known, which could impact the amounts
reported and disclosed herein.

REVENUE RECOGNITION

         The Company recognizes annual first year commissions for term-life
business as revenues when the policy has been approved by the underwriter and an
initial premium payment (which may be annual, semi-annual, quarterly, or
monthly) has been made by the customer. An allowance is provided for estimated
commissions that will not be received due to the nonpayment of installment first
year premiums.

         Revenues on all other lines of business, as well as for renewal and
bonus commissions and other revenues, are recognized when the Company receives
notification that such revenues have been earned.

ADVERTISING COSTS

         Selling and marketing expenses in the accompanying financial statements
are comprised of advertising costs. The costs of producing advertising are
expensed in the first period that the advertising takes place. The costs of
communicating the advertising are expensed in the period the advertising is
communicated. As of December 31, 1999, other assets included advertising
production costs of approximately $352,000 and prepaid advertising costs of
approximately $1,874,000 relating to advertising shown in January 2000. There
was no prepaid advertising as of December 31,2000.


                                      F-7
<PAGE>   42

                              QUOTESMITH.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS

INVESTMENTS

         The Company classifies its fixed maturity investments as
available-for-sale and, accordingly, such investments are carried at fair value.
The cost of fixed maturity investments is adjusted for amortization of premiums
and discounts and for declines in value that are other than temporary. Temporary
changes in the fair values of investments are reflected directly in
stockholders' equity as accumulated other comprehensive income or loss with no
effect on net income or loss.

CASH AND EQUIVALENTS

         Money market investments are included as part of cash and equivalents.

STOCK COMPENSATION

         The Company uses the intrinsic value method to measure compensation
expense, if any, relating to stock options. Any compensation expense is
determined at the date of grant, or the date of subsequent modification to
option terms, based on any excess of the fair value of the related shares over
the exercise price, and amortized over the options' vesting periods.

FURNITURE, EQUIPMENT, AND COMPUTER SOFTWARE

         Furniture, equipment, and capitalized application development costs of
internal-use computer software are depreciated over useful lives of five to
seven years using principally an accelerated method of depreciation. Repair and
maintenance costs are charged to expense as incurred.

ASSETS HELD UNDER CAPITAL LEASE

         Assets held under capital leases are recorded at the net present value
of the minimum lease payments at the inception of the lease. Amortization
expense is computed using the straight-line method over the shorter of the
estimated useful lives of the assets or the period of the related lease.

TREASURY STOCK

         The cost of reacquiring the Company's common stock is reported as a
separate component of stockholders' equity.

INCOME TAXES

         Deferred income taxes are determined based on the temporary differences
between financial reporting and tax bases of assets and liabilities and the
effect of net operating loss carryforwards, and are measured using enacted tax
rates.


                                       F-8
<PAGE>   43

                              QUOTESMITH.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS

NON-OPERATING INCOME AND EXPENSE

         Interest income, net in the accompanying statements of operations
includes the following:

<TABLE>
<CAPTION>
                                           YEARS ENDED DECEMBER 31,
                                           ------------------------
                                      2000                1999                1998
                               -----------         -----------         -----------
<S>                            <C>                 <C>                 <C>
Interest income .......        $ 2,242,835         $ 1,248,331         $    29,531
Interest expense ......            (23,072)            (28,912)            (27,728)
                               -----------         -----------         -----------
   Interest income, net        $ 2,219,763         $ 1,219,419         $     1,803
                               ===========         ===========         ===========
</TABLE>

NET LOSS PER SHARE

         Basic and diluted net loss per share reflects net loss divided by the
weighted average number of common shares outstanding. Diluted net loss per share
does not include the effect of common share equivalents because the effect would
be antidilutive.

COMPREHENSIVE INCOME OR LOSS

         Comprehensive loss includes the net loss for all years presented and,
beginning in 1999, unrealized gain or loss on investments.


3.  INVESTMENTS

         Investments are classified as available-for-sale securities and are
reported at fair value, as follows:

<TABLE>
<CAPTION>
                                                                 GROSS              GROSS
                                             AMORTIZED         UNREALIZED         UNREALIZED            FAIR
                                               COST              GAINS              LOSSES              VALUE
                                            -----------         --------          ----------           -------
<S>                                         <C>                <C>                <C>                <C>
December 31, 2000:
U.S.  Government agency bonds ......        $ 6,882,390        $     1,005        $        --        $ 6,883,395

State and municipal bonds ..........          2,500,000                 --                 --          2,500,000
Corporate bonds and commercial paper         14,648,297                 99              3,902         14,644,494
                                            -----------        -----------        -----------        -----------
    Total ..........................        $24,030,687        $     1,104        $     3,902        $24,027,889
                                            ===========        ===========        ===========        ===========
December 31, 1999:
U.S.  Government agency bonds ......        $ 1,998,537        $        --        $     3,537        $ 1,995,000

State and municipal bonds ..........         19,803,549                 65                 34         19,803,580
Corporate bonds and commercial paper         18,907,957                228             35,940         18,872,245
                                            -----------        -----------        -----------        -----------
    Total ..........................        $40,710,043        $       293        $    39,511        $40,670,825
                                            ===========        ===========        ===========        ===========
</TABLE>


         As of December 31, 2000 all investments mature within one year.


                                      F-9
<PAGE>   44

                              QUOTESMITH.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS

4.  INCOME TAXES

         A reconciliation of income taxes (credit) based on the federal tax rate
to amounts reported in the statements of operations is as follows:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                         -----------------------
                                                2000                1999                1998
                                         -----------         -----------         -----------
<S>                                      <C>                 <C>                 <C>
Pre-tax loss times federal rate .        $(6,331,400)        $(4,698,800)        $   (66,500)
  State income tax credit .......           (893,800)           (663,300)             (9,400)
  Increase in valuation allowance          7,164,200           4,920,200              56,000
  Stock compensation ............             55,600             425,500              19,400
  Other .........................              5,400              16,400                 500
                                         -----------         -----------         -----------
     Income tax credit ..........        $        --         $        --         $        --
                                         ===========         ===========         ===========
</TABLE>


         Deferred income taxes reflect the net tax effect of temporary
differences between the amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes and the effect
of net operating loss carryforwards. In 2000, the Company converted from a cash
basis to accrual basis for tax purposes.

Significant components of the Company's deferred tax assets and liabilities are
as follows:

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                   ---------------------------------
                                                           2000                 1999
                                                   ------------         ------------
<S>                                                <C>                  <C>
Deferred tax liabilities:
   Commissions receivable .................        $         --         $    658,000
   Other assets ...........................               4,000            1,144,000
                                                   ------------         ------------
Total deferred tax liabilities ............               4,000            1,802,000
Deferred tax assets:
   Net operating loss carryforwards .......          11,880,000            4,434,000
   Unamortized cash to accrual adjustment .             728,000                   --
   Accounts payable and accrued liabilities                  --            2,321,000
   Depreciation ...........................              45,000                   --
   Other ..................................             126,000               94,000
                                                   ------------         ------------
Total gross deferred tax assets ...........          12,779,000            6,849,000
Valuation allowance .......................         (12,775,000)          (5,047,000)
                                                   ------------         ------------
Net deferred tax assets ...................               4,000            1,802,000
                                                   ------------         ------------
Net deferred tax amounts ..................        $         --         $         --
                                                   ============         ============
</TABLE>

         As of December 31, 2000, the Company had net operating loss
carryforwards of approximately $30,619,000 available to offset future taxable
income, which expire $76,000 in 2001 and the remainder in 2006 to 2020. There
were no income taxes paid or recovered in 1998, 1999, or 2000.


                                      F-10
<PAGE>   45

                              QUOTESMITH.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS


5.  OBLIGATIONS UNDER CAPITAL LEASE

         Furniture, equipment and computer software at December 31, 2000
includes gross assets acquired under capital lease of $196,000. Related
amortization included in accumulated depreciation was $25,000 at December 31,
2000. Amortization of assets under capital lease is included in depreciation
expense.


         The future minimum lease payments required under the capital lease and
the present value of the net minimum lease payments as of December 31, 2000 are
as follows:

<TABLE>
<CAPTION>
         Year Ending
         December 31,                                          Amount
         ------------                                          ------
<S>                                                           <C>
           2001                                               $   57,612
           2002                                                   57,612
           2003                                                   57,612
           2004                                                   37,040
                                                              ----------
         Total minimum lease payments                            209,876
         Imputed interest                                        (43,367)
                                                              ----------
         Present value of net minimum lease payments             166,509
         Current lease obligation                                (38,559)
                                                              ----------
         Long-term lease obligations                           $ 127,950
                                                              ==========
</TABLE>

6.  STOCKHOLDERS' EQUITY

TREASURY STOCK

         In 2000 the Company's Board of Directors authorized the repurchase of
up to 1.17 million shares of the Company's common stock. As of December 31,
2000, the Company had purchased 487,000 shares of its common stock for
approximately $1.1 million.

PRIVATE PLACEMENT AND RELATED PARTY TRANSACTIONS

 In September 1998, the Company entered into a services agreement with a third
party (the Party) under which the Company would pay a fee to the Party for its
customers who purchased insurance through the Company's service. There have been
no transactions under the agreement. In February 1999, the Company sold 333,333
shares of its common stock to the parent company of the Party (the Investor) for
proceeds of $3,000,000 in a private placement. The Company also sold 90,909
shares of its common stock to the Investor for proceeds totaling $3,000,000 in
the initial public offering. In June 1999, the Company borrowed $2,000,000 from
the Investor. The Note was repaid in August 1999. In 2001, the Company
repurchased its shares from the Investor.

EMPLOYEE STOCK PURCHASE PLAN

         The Company has a plan under which employees may purchase shares of the
Company's common stock through payroll deductions of up to 10% of each
employee's compensation. Shares may be purchased at 85% of the lower of the fair
value of the common stock on the first or the last day of each six-month
offering period. The Company reserved 83,333 shares for purchase under the plan,
of which 71,820 were available at December 31, 2001.


                                      F-11
<PAGE>   46

                              QUOTESMITH.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS

PREFERRED STOCK

         In May 1999, the Company authorized 5,000,000 shares of $0.001 par
value preferred stock. No shares have been issued.

STOCKHOLDER RIGHTS PLAN

         In May 1999, the Company declared a distribution of one preferred stock
purchase right for each outstanding share of its common stock, and the Company
intends to issue those rights along with future issuances of common shares. The
rights become exercisable only if a person or group acquires or announces the
intent to acquire 15% or more of the Company's common stock. Prior to the rights
becoming exercisable, the Company may redeem the rights for $0.03 per right. If
the rights become exercisable, the Company may exchange each right for one share
of common stock providing that 50% of the Company has not been acquired. The
rights expire in 2009.

         If the rights become exercisable and they have not been exchanged,
holders of each right, other than the acquiring person or group, would be
entitled to acquire three hundredths of a share of the Company's preferred stock
at an exercise price equal to five times the initial offering price of the
Company's common stock. If issued, each preferred share would entitle the holder
to cumulative quarterly dividends of the greater of $1.00 per share or 33.3
times the common share dividends. The preferred shareholders would receive 33
votes per share and have a liquidation preference of $0.333 per share over the
common shares.

         In lieu of purchasing preferred shares, holders of each right, other
than the acquiring person or group, on payment of the exercise price, would be
entitled to acquire the number of shares of the Company's common stock or other
assets with a value of two times the exercise price. In addition, if 50% of the
Company is acquired, the holders of each right would be entitled to acquire the
number of shares of the acquiring company's common stock having a value of two
times the exercise price.


7.  STOCK OPTIONS

         The Company has established a stock option plan (the Plan) to provide
additional incentives to our employees, officers, and directors. Under the Plan,
an aggregate of 500,000 shares of common stock may be granted to participants in
the Plan.

         The Company accounts for stock option grants in accordance with
Accounting Principles Board Opinion 25, "Accounting for Stock Issued to
Employees" and related interpretations, and, accordingly, recognizes no
compensation expense for stock options granted to employees where the exercise
price is equal to or greater than the market price at the date of the grant.
SFAS 123, "Accounting for Stock Based Compensation", requires disclosure of pro
forma information regarding net income (loss) per share, using pricing models to
estimate the fair value of stock option grants. Had compensation expense for the
Company's stock option plans been determined based on the estimated fair value
at the date of grant consistent with the methodology prescribed under SFAS 123,
approximate net loss and net loss per share would have been as follows:

<TABLE>
<CAPTION>
                                                                         YEARS ENDED DECEMBER 31,
                                                                         ------------------------
                                                                     2000           1999         1998
                                                                     ----           ----         -----
                                                                  (in thousands, except per share data)
<S>                                                            <C>             <C>          <C>
         Pro forma net loss                                       $(20,468)       $ (14,445)   $  (248)
         Pro forma net loss per common share,
           basic and diluted                                      $  (3.22)       $   (2.76)   $ (0.06)
</TABLE>


                                      F-12
<PAGE>   47

                              QUOTESMITH.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS


         For purposes of the pro forma disclosures, the estimated fair values of
the option grants are amortized to expense over the options' vesting period. The
fair value of options at the date of grant was estimated using the Black-Scholes
option pricing model for grants made subsequent to the Company initial public
offering in August 1999, and the minimum value method in all prior periods, with
the following weighted-average assumptions:


<TABLE>
<CAPTION>
                                                                       YEARS ENDED DECEMBER 31,
                                                                    2000           1999         1998
                                                                    ----           ----         -----
<S>                                                                <C>             <C>          <C>
         Dividend yield...................................          0.0%            0.0%         0.0%
         Risk-free interest rate..........................          5.0%            5.5%         5.0%
         Volatility (not applicable to
           minimum-value method)..........................         95.0%           75.0%          --
         Expected life (years)............................          5.0             5.0          5.0
</TABLE>


         In 2000, 1999 and 1998, the company recorded compensation expense of
$145,758, $983,000 and $150,000 respectively relating to stock options granted
below the estimated fair value of the Company's common stock, with a
corresponding credit to additional paid-in capital. The Company recorded
compensation expense of $196,000 in 1999 related to an executive's purchase of
stock at a price below the estimated fair value.

         Transactions related to all stock options are as follows:

<TABLE>
<CAPTION>
                                                                       YEARS ENDED DECEMBER 31,
                                                       2000                     1999                            1998
                                             ----------------------- ---------------------------    ------------------
                                                           Weighted                  Weighted                  Weighted
                                                Shares      Average      Shares       Average       Shares      Average
                                                 Under     Exercise       Under      Exercise        Under     Exercise
                                                 Option      Price       Option        Price        Option       Price
                                                 ------      -----       ------        -----        ------       -----
<S>                                             <C>        <C>             <C>      <C>              <C>     <C>
Beginning Balance.........................      268,241    $ 21.33         66,668   $    11.25       25,000  $     6.00

Granted with exercise price:
    Less than stock value.................          --          --         75,000        13.80       16,667        3.00
    Equal to stock value..................      157,000      17.76         89,333        29.91       16,667        7.50
    Greater than stock value..............          --          --         75,000        26.70       25,000       21.00
                                             ----------               -----------               -----------
                                                157,000      17.76        239,333        23.85       58,334       12.00
Exercised.................................         (843)       9.00            --           --       (8,333)       6.00
Forfeited.................................      (46,402)     21.42        (37,760)       19.59       (8,333)       6.00
                                             ----------               -----------               -----------
Outstanding...............................       377,996   $ 19.86        268,241   $    21.33       66,668  $    11.25
                                             ===========              ===========               ===========
    Exercisable at end of year............      196,339                   106,406                    41,667
                                             ==========               ===========               ===========
</TABLE>

         Under the plan, 112,828 shares were available for grant as awards or
options at December 31, 2000.


                                      F-13
<PAGE>   48

                              QUOTESMITH.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS

         Information regarding options outstanding and exercisable at December
31, 2000 is summarized as follows:

<TABLE>
<CAPTION>
                                            Options Outstanding                              Options Exercisable
                           ----------------------------------------------------------------------------------------
                                           Weighted Average
                                               Remaining         Weighted                          Weighted
                                Number     Contractual Life       Average         Number      Average Exercisable
   Exercise Price             Outstanding     (in years)      Exercise Price    Exercisable          Price
   --------------             -----------     ----------      --------------    -----------          -----
<S>                         <C>             <C>               <C>             <C>              <C>
   $ 3.00 - $10.32              167,828           8.66        $      7.22          78,162      $      7.08
   $ 15.00 - $21.00              36,666           3.76              17.32          36,666            17.32
   $ 24.00 - $33.00             156,836           8.48              31.63          81,511            31.22
   $ 37.50 - $46.89              16,666           8.90              42.20              --               --
                            -----------                                       -----------
                                377,996           8.12        $     19.87         196,339      $     19.01
                            ===========                                       ============
</TABLE>

          The unexercisable options become exercisable within one to three
years. The options have terms of ten years.

          The weighted average fair value per share of options granted was as
follows:

<TABLE>
<CAPTION>
                                                                      2000                  1999                 1998
                                                                      ----                  ----                 ----
<S>                                                             <C>                    <C>                   <C>
Granted with exercise price:
   Less than stock value...............................         $       --             $    19.50            $    7.05
   Equal to stock value................................              13.05                  19.14                 0.15
   Greater than stock value............................                 --                   4.50                   --
      Total                                                     $    13.05             $    14.67            $    1.20
</TABLE>

8.  COMMITMENTS AND CONTINGENCIES

         As of December 31, 2000, the Company leases office space under an
operating lease agreement in which the Company is committed to annual rent
expense of approximately $276,000 through 2003. In addition, the Company must
pay its proportionate share of taxes and operating costs. Rent expense was
$100,000 in 1998, $203,000 in 1999 and $268,000 in 2000.

         The Company has employment agreements with certain of its executives
under which the Company would be required to pay severance of one to two years
of annual salary to terminate those agreements.

         The Company is subject to legal proceedings and claims in the ordinary
course of business. The Company is not aware of any legal proceedings or claims
that are believed to have a material effect on the Company's financial position.

9.       STOCK SPLIT

         On March 5, 2001, the Board of Directors of the Company approved a
one-for-three reverse stock split and a change of par value per share from $.001
to $.003, effective on March 7, 2001. In the accompanying financial statements
and related notes, all share and per share amounts have been retroactively
adjusted to reflect the stock split. The components of stockholders' equity were
not affected by these changes.


                                      F-14