SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549




                                    FORM 10-Q

                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934



For the Quarterly Period Ended June 30, 2000
Commission File Number 2-39310


                        INTERCONTINENTAL LIFE CORPORATION
             (Exact Name of Registrant as specified in its charter)



       Texas                              22-1890938
(State of Incorporation)  (I.R.S. Employer Identification Number)


6500 River Place Blvd.   Building I
Austin, Texas                                                    78730
(Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code (512) 404-5000

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

                                                  YES  X    NO

Number of common shares outstanding ($.22 Par Value) at end of period:
 8,214,444.



                                                       - 1 -
<PAGE>

               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES

                                      INDEX

                                                             Page No.

Part I - Financial Information

Item 1. Financial Statements

Consolidated Balance Sheets
     June 30, 2000 and December 31, 1999...................................... 3

Consolidated Statements of Income
     For the three and six month periods ended
     June 30, 2000 and June 30, 1999...........................................5

Consolidated Statements of Cash Flows
     For the three and six month periods ended
     June 30, 2000 and June 30, 1999...........................................7

Notes to Consolidated Financial Statements................................... 11

Item 2. Management's Discussion and Analysis of
     Financial Conditions and Results of Operations...........................13

Item 3. Quantitative and Qualitative Disclosures
     About Market Risk........................................................18

Part II

Other Information.............................................................20

Signature Page................................................................22

                                      - 2 -
<PAGE>

               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                            June 30,            December 31,
                                               (in thousands of dollars)
                                              2000                       1999


<S>                                             <C>                       <C>

ASSETS                                    (Unaudited)

Investments:
Fixed maturities, at
      amortized cost (market value
        approximates $1,619 and $2,056)            1,645      $            2,088
Fixed maturities available for sale,
       at market value (amortized cost
       $451,676 and $411,532)                    443,441                 404,217
Equity securities, at market value
       (cost approximates $338)                    1,578                   1,943
Policy loans                                      49,265                  50,882
Mortgage loans                                     6,735                   6,844
Invested real estate and other
 invested assets                                  36,114                  21,145
Short-term investments                           127,314                 191,695
       Total investments                         666,092                 678,814
Cash and cash equivalents                         10,297                   3,358
Notes receivable from affiliates                  38,423                  41,497
Accrued investment income                          8,133                   7,529
Agent advances and other receivables              18,735                  24,230
Reinsurance receivables                           21,404                  18,769
Property and equipment, net                        4,442                   4,416
Deferred policy acquisition costs                 37,532                  35,598
Present value of future profits of
 acquired businesses                              37,826                  39,831
Other assets                                      10,792                   9,304
Separate account assets                          456,169                 457,853
       Total Assets                      $     1,309,845        $      1,321,199
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                      - 3 -
<PAGE>


               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS, Continued

                                              June 30,          December 31,
                                                (in thousands of dollars)
<TABLE>
<CAPTION>


                                               2000                     1999
    LIABILITIES AND SHAREHOLDERS' EQUITY   (Unaudited)
<S>                                            <C>                       <C>

Liabilities:
Policy liabilities and contractholder
 deposit funds:
Future policy benefits                 $         131,668        $        130,092

Contractholder deposit funds                     516,774                 533,869

Unearned premiums                                  1,959                   1,977

Other policy claims and benefits payable          10,420                   9,893
                                                 660,821                 675,831
Other policyholders' funds                         2,988                   3,012

Deferred federal income taxes                     21,462                  21,741

Other liabilities                                 21,245                  14,635

Separate account liabilities                     451,996                 454,289

    Total Liabilities                          1,158,512               1,169,508

Commitments and Contingencies

Redeemable preferred stock:

Class A Preferred, $1 par value,
    5,000,000 shares authorized, issued            5,000                   5,000

Class B Preferred, $1 par value,
    15,000,000 shares authorized, issued          15,000                  15,000
                                                  20,000                  20,000
Redeemable preferred stock held in treasury      (20,000)                (20,000)
                                                       0                       0

Shareholders' Equity:

Common Stock, $.22 par value,
  15,000,000 shares
    authorized; 10,855,478 and
    10,855,478 shares issued,
    8,214,444 and 8,827,941
    shares outstanding in 2000
    and 1999, respectively                         2,388                   2,388

Additional paid-in capital                         4,526                   4,526

Accumulated other
 comprehensive income                             (4,546)                 (3,712)

Retained earnings                                158,286                 151,932
                                                 160,654                 155,134
Common treasury stock, at cost,
 2,641,034 and 2,027,537 in 2000
 and 1999,  respectively                          (9,321)                 (3,443)

Total Shareholders' Equity                       151,333                 151,691

Total Liabilities and
 Shareholders' Equity                   $      1,309,845         $     1,321,199
 </TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                      - 4 -
<PAGE>


               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
              (in thousands of dollars, except for per share data)
                                   (unaudited)
                                                    Three Months Ended June 30,
<TABLE>
<CAPTION>
                                                    2000                  1999
   Revenues:
<S>                                                 <C>                     <C>

 Premium                             $             2,306      $            2,610

 Net investment income                            12,310                  12,960

 Earned insurance charges                          9,536                  10,085

 Other                                             1,118                   1,038
                                                  25,270                  26,693
Benefits and expenses:
Policyholder benefits and expenses                 7,084                   8,572

 Interest expense on contract holders
     deposit funds                                 7,435                   8,195

 Amortization of present value of future
     profits of acquired businesses                1,038                     968

 Amortization of deferred policy
     acquisition costs                               509                     631

 Operating expenses                                4,269                   4,165
                                                  20,335                  22,531
Income from operations                             4,935                   4,162

Provision for federal income taxes                 1,812                   1,535

Net income                                $        3,123        $          2,627

Net income per share:

Basic:
       Weighted average common stock
       outstanding                                 8,233                   8,785

Basic earnings per share                $           0.38        $           0.30

Diluted:
Common stock and common
 stock equivalents                                 8,251                   8,802

Diluted earnings per share              $           0.38        $           0.30
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      - 5 -
<PAGE>

               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
              (in thousands of dollars, except for per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                   Six Months Ended June 30,
                                                                                                                        June 30,
                                                    2000                  1999

Revenues:
<S>                                                  <C>                    <C>

 Premium                           $               4,584   $               5,158

Net investment income                             24,514                  25,875
 Earned insurance charges                         19,685                  20,147
  Other                                            1,887                   1,783
                                                  50,670                  52,963
Benefits and expenses:
 Policyholder benefits and expenses               14,437                  16,594

 Interest expense on contract holders
     deposit funds                                14,594                  16,075

 Amortization of present value of future
     profits of acquired businesses                2,004                   1,888

 Amortization of deferred policy
     acquisition costs                             1,203                   1,215

 Operating expenses                                8,399                   8,354
                                                  40,637                  44,126
Income from operations                            10,033                   8,837

Provision for federal income taxes                 3,679                   3,249

Net income                          $              6,354   $               5,588

Net income per share:

Basic:   Weighted average common stock
         outstanding                               8,526                   8,785

Basic earnings per share                            0.75   $                0.64

Diluted:

Common stock and common
 stock equivalents                                 8,533                   8,803

Diluted earnings per share          $               0.74    $               0.64
 .
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      - 6 -
<PAGE>


               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                     Three Months Ended June 30,

                                                      2000                 1999
CASH FLOWS FROM OPERATING
ACTIVITIES
<S>                                                  <C>                    <C>

Net Income                               $         3,123        $          2,627
Adjustments to reconcile net income to
       net cash (used in)
       operating activities:

Amortization of present value of future
      profits of acquired businesses               1,038                     968

Amortization of deferred policy
     acquisition costs                               509                     631

Net gain on sale of investments                         0                   (222)

Depreciation                                          77                     118

Changes in assets and liabilities:
Decrease in accrued investment income                199                     408
Increase in agent advances and
     other  receivables                              (18)                 (4,928)

Policy acquisition costs deferred                 (1,624)                 (1,485)
Decrease in policy liabilities and
   contractholder deposit funds                   (7,477)                 (5,871)

Decrease in other policyholders' funds               (37)                    (22)
Increase in other liabilities                      3,931                   2,070
Decrease in deferred federal income taxes         (1,347)                 (3,180)

(Increase) decrease in other assets                 (688)                    246

Other, net                                           393                   4,788

Net cash used in operating activities    $        (1,921)         $       (3,852)

</TABLE>









              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      - 7 -
<PAGE>


               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                 Three Months Ended June 30,

                                                 2000                     1999
CASH FLOWS FROM INVESTING
ACTIVITIES
<S>                                                 <C>                    <C>


Investments purchased                    $       (43,190)      $         (16,232)
Proceeds from sales and
 maturities of investments                        11,036                  20,603
Net change in short-term investments              37,114                    (963)
Purchases and retirements of equipment               (90)                   (168)
Decrease in notes receivable from affiliates       1,537                   1,537
Net cash provided by investing activities          6,407                   4,777

CASH FLOWS FROM FINANCING ACTIVITIES
(Purchase) issuance of treasury stock               (719)                     33
Net cash (used in) provided by
 financing activities                               (719)                     33
Net increase in cash and cash equivalents          3,767                     958
Cash and cash equivalents, beginning
 of period                                         6,530                   8,730
Cash and cash equivalents,
  end of period                         $         10,297         $         9,688


</TABLE>


















              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                                       - 8 -
<PAGE>


               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
                                 (unaudited)
<TABLE>
<CAPTION>

                                                  Six Months Ended June 30,

                                                    2000                   1999
CASH FLOWS FROM OPERATING
ACTIVITIES
<S>                                                <C>                   <C>

Net Income                              $          6,354         $         5,588
Adjustments to reconcile net income to
       net cash used in
 operating activities:

Amortization of present value of future
      profits of acquired businesses               2,004                   1,888
Amortization of deferred policy
     acquisition costs                             1,203                   1,215
Net gain on sale of investments                        0                    (222)
Depreciation                                         136                     227
Changes in assets and liabilities:
(Increase) decrease in accrued
 investment income                                  (604)                     82
Decrease (increase) in agent
  advances and other  receivables                  2,860                  (7,048)
Policy acquisition costs deferred                 (3,137)                 (2,845)
Decrease in policy liabilities and
      contractholder deposit funds               (15,153)                (11,111)
(Decrease) increase in other policyholders'
 funds                                               (24)                     25
Increase in other liabilities                      6,610                   4,363
Decrease in deferred federal income taxes           (279)                 (4,059)
Increase in other assets                          (1,488)                 (1,950)
Other, net                                          (415)                  3,709
Net cash used in operating activities     $       (1,933)        $       (10,138)

</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      - 9 -

<PAGE>

               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                  Six Months Ended June 30,

                                                  2000                   1999
CASH FLOWS FROM INVESTING
ACTIVITIES
<S>                                                 <C>                    <C>

Investments purchased                    $       (75,963)        $       (27,482)

Proceeds from sales and maturities
 of investments                                   23,420                  53,658
Net change in short-term investments              64,381                 (21,396)
Purchases and retirements of equipment              (162)                   (327)
Decrease in notes receivable
 from affiliates                                   3,074                   3,074

Net cash provided by investing activities         14,750                   7,527

CASH FLOWS FROM FINANCING ACTIVITIES
(Purchase) Issuance of treasury stock             (5,878)                     33
Issuance of common stock                               0                      60

Net cash (used in) provided by
 financing activities                             (5,878)                     93

Net increase (decrease) in cash
 and cash equivalents                              6,939                  (2,518)
Cash and cash equivalents,
 beginning of year                                 3,358                  12,206

Cash and cash equivalents,
 end of period                            $       10,297         $         9,688
</TABLE>
















              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                     - 10 -
<PAGE>


               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)


The financial statements included herein reflect all adjustments which are,
in the opinion of management, necessary to present a fair statement of the
interim results. The statements have been prepared to conform to the
requirements of Form 10-Q and do not necessarily include all disclosures
required by generally accepted accounting principles (GAAP). The reader should
refer to Form 10-K for the year ended December 31, 1999 previously filed with
the Securities and Exchange Commission for financial statements prepared in
accordance with GAAP.

Comprehensive Income

The following is a reconciliation of total accumulated other comprehensive
income (loss) from December 31, 1999 to June 30, 2000 (in thousands):
<TABLE>
<CAPTION>

                                               Net unrealized         Net                  Total
                                               gain on                appreciation         accumulated
                                               investments            (depreciation)       other
                                               in fixed               of equity            comprehensive
                                               maturities             securities           income (loss)
                                               available for
                                               sale
<S>                                                  <C>                    <C>                  <C>
Balance at December 31, 1999                     $ (4,755)              $  1,043             $ (3,712)
Current period change                                (598)                  (237)                (835)
Balance at June 30, 2000                        $  (5,353)             $     806             $ (4,547)

</TABLE>








                                     - 11 -

<PAGE>

               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

New Accounting Pronouncements

In June 1998, the FASB issued FAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which establishes accounting and reporting
standards for derivative instruments,including certain derivative instruments
embedded in other contracts, (collectively referred to as derivatives) and for
hedging activities.  FAS 133 is applicable to financial statements for all
fiscal quarters of fiscal years beginning after June 15, 2000, as amended by
FAS No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No.133."

As the Company does not have significant investments in derivative financial
instruments, the adoption of FAS No. 133 is not anticipated to have a material
impact on the Company's results of operations, liquidity or financial position.




                                     - 12 -
<PAGE>

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

For the  six-month  period  ended  June  30,  2000,  InterContinental  Life
Corporation's  ("ILCO") net income was $6,354,000  (basic earnings of $ 0.75 per
common  share and  diluted  earnings  of $0.74 per common  share) as compared to
$5,588,000  (basic  earnings and diluted  earnings of $0.64 per common share) in
the first six months of 1999.  Earnings per share are stated in accordance  with
the requirements of FAS No. 128, which  establishes two measures of earnings per
share:  basic earnings per share and diluted earnings per share.  Basic earnings
per share is computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding during the period.  Diluted
earnings per share reflect the potential dilution that would occur if securities
or other contracts to issue common stock were converted or exercised.

                              Results of Operations

For the six-month  period ended June 30, 2000, the Company's  income before
federal  income taxes was  $10,033,000 on revenues of $50,670,000 as compared to
income of  $8,837,000  on  revenues of  $52,963,000  for the first six months of
1999. The operating strategy of the Company's management  emphasizes several key
objectives:  expense  management;  marketing of  competitively  priced insurance
products  which are designed to generate an acceptable  level of  profitability;
maintenance  of a high quality  portfolio of investment  grade  securities;  and
quality customer service.

Premium income,  net of  reinsurance,  for the first six months of 2000 was
$4.6  million,  as  compared  to $5.2  million for the first six months of 1999.
Reinsurance  premiums ceded were $ 1.0 million for the first six months of 2000,
as compared to $1.5 million in the first six months of 1999.

Earned insurance  charges for the six-month period ended June 30, 2000 were
$19.7  million,  as compared to $20.1 million for the same period in 1999.  This
source of revenues is related to the universal  life  insurance and annuity book
of business of the insurance subsidiaries of the Company.

As of June 30, 2000, the market value of the fixed maturities available for
sale  segment  was $443.4  million as compared  to an  amortized  cost of $451.7
million, or an unrealized loss of $8.3 million. The decrease reflects unrealized
losses on such  investments  related to changes in interest rates  subsequent to
the purchase of such  investments.  The net of tax effect of this decrease ($5.4
million at June 30, 2000) is included in "Accumulated other  comprehensive loss"
on the  Consolidated  Balance  Sheets and has been  recorded  as a  decrease  in
shareholders'  equity.  As required  under the  provisions  of FAS No. 130,  the
determination of "Accumulated  other  comprehensive  income"  includes  separate
identification of the change in values which occurred during the current period.
For the  three-month  period ended June 30, 2000, the lapse rate with respect to
universal life insurance  policies  decreased from the lapse rate experienced in
the similar period in 1999. The rate for the 2000 period was 6.55%,  as compared
to 7.03% in the  1999  period.  The  lapse  rate  with  respect  to  traditional
(non-universal) life insurance policies decreased significantly from the levels

                                     - 13 -
<PAGE>

experienced  in the second  quarter of 1999.  The rate for the  three-month
period ended June 30, 2000 was 5.95%, as compared to 9.88% in the similar period
in 1999. The lapse rates experienced during these periods were within the ranges
anticipated by management.

                         Liquidity and Capital Resources
ILCO is a holding  company  whose  principal  assets  consist of the common
stock of Investors Life Insurance Company of North America  ("Investors-NA") and
its subsidiary - Investors Life Insurance  Company of Indiana  ("Investors-IN").
Prior to June 30, 2000,  ILCO's  primary  source of funds  consisted of payments
under two Surplus Debentures from Investors-NA.

Financial  Industries  Corporation  ("FIC")  currently  owns,  directly and
indirectly  through its  subsidiary  Family Life  Insurance  Company,  3,932,692
shares (approximately 47.9%) of ILCO's common stock..

Prior to June 30, 2000,  ILCO's principal  source of liquidity  consists of
the periodic payment of principal and interest by Investors-NA,  pursuant to the
terms of the Surplus  Debentures.  The Surplus Debentures were originally issued
by Standard Life Insurance  Company and their terms were previously  approved by
the Mississippi  Insurance  Commissioner.  In connection with the 1993 merger of
Standard Life into Investors-NA,  the obligations of the Surplus Debentures were
assumed by Investors-NA.  As of June 30, 2000, the outstanding principal balance
of the Surplus Debentures was completely paid off.

For  periods  subsequent  to June 30,  2000,  ILCO's  available  source  of
liquidity would be from dividends paid to it from its  subsidiaries.  Applicable
state insurance laws may limit the ability of such subsidiaries to pay dividends
to ILCO.  Investors-NA  is domiciled in the State of Washington.  The Washington
insurance  law  includes  the  "greater of" standard for payment of dividends to
shareholders,  but has a  requirement  that  prior  notification  of a  proposed
dividend  be given  to the  Washington  Insurance  Commissioner  and  that  cash
dividends may be paid only from earned surplus. Under the "greater of" standard,
an insurer  may pay a dividend  in an amount  equal to the greater of (i) 10% of
the policyholder  surplus or (ii) the insurer's net gain from operations for the
previous  year. As of June 30, 2000,  Investors-NA  had earned surplus of $ 55.3
million.

Investors-IN  is  domiciled  in the State of  Indiana.  Under  the  Indiana
insurance law, a domestic  insurer may make dividend  distributions  upon proper
notice to the Department of Insurance, as long as the distribution is reasonable
in relation to adequate levels of policyholder  surplus and quality of earnings.
Under Indiana law the dividend must be paid from earned  surplus.  Extraordinary
dividend  approval would be required where a dividend exceeds the greater of 10%
of  surplus  or the  net  gain  from  operations  for  the  prior  fiscal  year.
Investors-IN  had earned  surplus of $19.0  million at June 30,  2000.  In June,
1999,  Investors-IN  paid a  dividend  in the  amount of $3  million to its sole
shareholder, Investors-NA. The amount of the dividend was less than the net gain
from  operations for the prior fiscal year;  accordingly,  no prior approval was
required  for the  payment of the  dividend.  Advance  notice of the payment was
provided to the Indiana Department of Insurance, in accordance
                                     - 14 -
<PAGE>

with the provisions of the Indiana Insurance Code.

ILCO's net cash flow used in operating  activities  was $ (1.9) million for
the six-month period ended June 30, 2000, as compared to $(10.1) million for the
first six months of 1999. The change is primarily related to a decrease in other
receivables and deferred federal income taxes.

Management  believes  that  its  cash,  cash  equivalents  and  short  term
investments are sufficient to meet the needs of its business and to satisfy debt
service.

                                   Investments

As of June  30,  2000,  the  Company's  investment  assets  totaled  $666.1
million,  as compared to $678.8 million as of December 31, 1999. Total assets as
of June 30,  2000  ($1.309  billion)  decreased  slightly  from the  level as of
December 31, 1999 ($1.321 billion).

The level of short-term investments at June 30, 2000 was $127.3 million, as
compared to $191.7 million at December 31, 1999.

Invested real estate and other invested assets increased from $21.1 million
at December  31, 1999 to $36.1  million as of June 30,  2000.  This  increase is
related to the  development of the River Place Pointe project (the "Project") by
Investors-NA.  The Project  consists of 47.995  acres of land in Austin,  Texas,
which was purchased in October, 1998 by Investors-NA,  for an aggregate purchase
price of $8.1  million.  Prior to the closing of the  transaction,  Investors-NA
obtained a Site Development  Permit for the tracts from the City of Austin.  The
Site  Development  Permit allows for the  construction of seven office buildings
totaling  600,000  square  feet,  with  associated  parking,  drives and related
improvements.  Construction on the first phase of the Project, which consists of
two office  buildings and an associated  parking  garage,  commenced  during the
first quarter of 1999 and was nearing completion as of June 30, 2000. ILCO began
moving its corporate headquarters to Building I of the Project in June, 2000 and
completed the move in July, 2000. In connection with the move, Investors-NA (the
tenant  under the lease of the  former  Austin  Centre  space),  entered  into a
termination agreement with the owner of the Austin Centre to terminate its lease
at the Austin Centre. As of June 30, 2000,  approximately 75,000 rentable square
feet was leased in Building II of the Project to two tenants, both of whom moved
into the building in July, 2000. During the second quarter of 2000, construction
began on the third  office  building of the  Project.  The third  building  will
contain  approximately  116,000  square feet.  In July,  Investors-NA  completed
negotiations to lease all of the space in Building III to a tenant. The lease is
for a seven-year term, with its commencement  date in the first quarter of 2001,
upon completion of the construction of Building III.

The fixed maturities  available for sale portion of invested assets at June
30,  2000  was  $443.4  million.  The  amortized  cost of the  fixed  maturities
available for sale segment as of June 30, 2000 was $451.7 million,  representing
a net unrealized loss of $8.3 million. This unrealized loss principally reflects
changes  in  interest  rates  from  the  date the  respective  investments  were
purchased.
                                                      - 15 -
<PAGE>

To reduce the exposure to interest rate changes,  portfolio investments are
selected so that  diversity,  maturity and  liquidity  factors  approximate  the
duration of associated policyholder liabilities.

The assets  held by ILCO's  life  insurance  subsidiaries  must comply with
applicable  state insurance laws and regulations.  In selecting  investments for
the portfolios of its life insurance subsidiaries,  the Company's emphasis is to
obtain  targeted  profit  margins,  while  minimizing  the  exposure to changing
interest   rates.   This  objective  is   implemented  by  selecting   primarily
short-to-medium term,  investment grade fixed income securities.  In making such
portfolio  selections,  the Company  generally  does not select new  investments
which are commonly referred to as "high yield" or "non- investment grade."

The portfolio  includes  investments in  mortgage-backed  securities  which
includes  collateralized  mortgage  obligations  ("CMOs") of $179.1  million and
mortgage-backed  pass-through  securities  of $46.7  million  at June 30,  2000.
Mortgage-backed  pass-through  securities,  sequential  CMOs and support  bonds,
which  comprised  approximately  55.9%  of  the  book  value  of  the  Company's
mortgage-backed  securities at June 30, 2000,  are  sensitive to prepayment  and
extension risks. The Company has reduced the risk of prepayment  associated with
this portion of the  investment  portfolio by investing in planned  amortization
class ("PAC"),  target  amortization  class ("TAC")  instruments,  and scheduled
bonds.  These  investments  are designed to amortize in a predictable  manner by
shifting the risk of prepayment of the underlying  collateral to other investors
in other tranches  ("support  classes") of the CMO. PAC and TAC  instruments and
scheduled  bonds  represented  approximately  44.1% and  sequential  and support
classes  represented  approximately  35.2%  of the book  value of the  Company's
mortgage-backed securities at June 30, 2000. In addition, the Company limits the
risk of  prepayment  of CMOs by not paying a premium  for any CMOs.  The Company
does not invest in  mortgage-backed  securities with increased  prepayment risk,
such as  interest-only  stripped  pass-through  securities  and inverse  floater
bonds. The prepayment risk that certain  mortgage-backed  securities are subject
to is prevalent in periods of declining  interest  rates,  when mortgages may be
repaid  more  rapidly  than  scheduled  as  individuals  refinance  higher  rate
mortgages to take advantage of the lower current rates. As a result,  holders of
mortgage-backed  securities may receive large  prepayments on their  investments
which cannot be  reinvested  at an interest  rate  comparable to the rate on the
prepaying  mortgages.  The Company did not make  additional  investments in CMOs
during 1999. For the year 2000, the Company's investment  objectives include the
making of selected investments in CMOs.

The   Company's   fixed   maturities   portfolio   (including    short-term
investments), as of June 30, 2000 and December 31, 1999, included a non-material
amount (0.1 % of total fixed  maturities  and short- term  investments)  of debt
securities  which, in the annual statements of the companies as filed with state
insurance  departments,  were  designated  under  the  National  Association  of
Insurance Commissioners ("NAIC") rating system as "3" (medium quality) or below.
Of these  non-investment  grade investments,  all received an NAIC rating of "5"
(lowest quality).

The consolidated  balance sheets of the Company as of June 30, 2000 include
$38.4 million of "Notes receivable from  affiliates",  represented by (i) a loan
of $22.5 million from Investors-NA to Family
                                                      - 16 -
<PAGE>

Life  Corporation  ("FLC") and a $2.5  million  loan from  Investors-CA  to
Financial  Industries   Corporation  ("FIC")  -  which  loan  is  now  owned  by
Investors-NA as a result of the merger of Investors-CA into  Investors-NA) - and
$2.0 million of additions to the $2.5 million note made in  accordance  with the
terms of such  note;  these  loans  were  granted  in  connection  with the 1991
acquisition of Family Life Insurance Company by a wholly-owned subsidiary of FIC
(ii) a loan of $30 million by  Investors-NA to Family Life  Corporation  made in
July,  1993,  in  connection  with the  prepayment  by the FIC  subsidiaries  of
indebtedness  which had been  previously  issued to Merrill Lynch as part of the
1991 acquisition and (iii) a loan of $4.5 million by Investors-NA to Family Life
Insurance  Investment  Company  ("FLIIC") made in July, 1993, in connection with
the same transaction described above.

As of June 12, 1996, the provisions of the notes from  Investors-NA to FIC,
FLC and Family Life  Insurance  Investment  Company  ("FLIIC")  were modified as
follows:  (a) the $22.5 million note was amended to provide for twenty quarterly
principal  payments,  in the amount of $1,125,000  each, to commence on December
12, 1996; the final  quarterly  principal  payment is due on September 12, 2001;
the  interest  rate on the note  remains at 11%,  (b) the $30  million  note was
amended to provide  for forty  quarterly  principal  payments,  in the amount of
$163,540 each for the period December 12, 1996 to September 12, 2001;  beginning
with the principal payment due on December 12, 2001, the amount of the principal
payment increases to $1,336,458; the final quarterly principal payment is due on
September  12, 2006;  the interest  rate on the note remains at 9%, (c) the $4.5
million note was amended to provide for forty quarterly principal  payments,  in
the amount of $24,531 each for the period  December  12, 1996 to  September  12,
2001;  beginning with the principal payment due on December 12, 2001, the amount
of the principal  payment increases to $200,469;  the final quarterly  principal
payment is due on September  12, 2006;  the interest rate on the note remains at
9%, (d) the $2.5 million note was amended to provide that the principal  balance
of the note is to be repaid in twenty  quarterly  installments of $125,000 each,
commencing  December 12, 1996 with the final  payment due on September 12, 2001;
the rate of  interest  remains  at 12% and (e) the  Master  PIK note,  which was
issued to provide for the payment in kind of interest due under the terms of the
$2.5  million  note prior to June 12,  1996,  was  amended  to provide  that the
principal  balance of the note  ($1,977,119)  is to be paid in twenty  quarterly
principal  payments,  in the amount of $98,855.95 each, to commence December 12,
1996 with the final payment due on September 12, 2001;  the interest rate on the
note remains at 12%.

In December, 1998, FLIIC was dissolved. In connection with the dissolution,
all of the assets and  liabilities  of FLIIC became the  obligations  of FLIIC's
sole shareholder (FIC). Accordingly, the obligations under the provisions of the
$4.5 million note described above are now the obligations of FIC.

The  NAIC  continued  its  rating  of  "3" to the  "Notes  receivable  from
affiliates",  as amended.  These loans have not been  included in the  preceding
description of NAIC rating percentages.



                                                      - 17 -
<PAGE>

Management   believes   that  the  absence  of  any  material   amounts  of
"high-yield"  or  "non-investment  grade"  investments (as defined above) in the
portfolios  of its life  insurance  subsidiaries  enhances  the  ability  of the
Company to service its debt, provide security to its policyholders and to credit
relatively consistent rates of return to its policyholders.

             Cautionary Statements for Purposes of the "Safe Harbor"
       Provisions of the Private Securities Litigation Reform Act of 1995

Except for historical  factual  information set forth in this  Management's
Discussion  and  Analysis,  certain  statements  made in this report are forward
looking and contain information about financial results, economic conditions and
other risks and known uncertainties. The Company cautions the reader that actual
results could differ materially from those anticipated by the Company, depending
upon  the  eventual  outcome  of  certain  factors,  including:  (1)  heightened
competition for new business,  (2) significant changes in interest rates and (3)
adverse regulatory changes affecting the business of insurance.

                             Accounting Developments

In June,  1998,  the FASB issued FAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging Activities",  which establishes accounting and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts,  (collectively  referred to as derivatives) and for
hedging  activities.  FAS No. 133 is applicable to financial  statements for all
fiscal quarters of fiscal years beginning after June 15, 2000, as amended by FAS
No.  137,  "Accounting  for  Derivative  Instruments  and Hedging  Activities  -
Deferral of the  Effective  Date of FAS No.  133".  As the Company does not have
significant investments in derivative financial instruments, the adoption of FAS
No. 133 is not anticipated to have a material impact on the Company's results of
operations, liquidity or financial position.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk General

ILCO's  principal  assets are financial  instruments,  which are subject to
market  risks.  Market risk is the risk of loss arising from adverse  changes in
market rates and prices,  principally  interest rates on fixed rate investments.
For a discussion of the  Company's  investment  portfolio and the  management of
that portfolio to reflect the nature of the underlying insurance  obligations of
the Company's insurance subsidiaries,  please refer to the information set forth
in Item 2,  "Management's  Discussion  and Analysis of Financial  Conditions and
Results of Operations - Investments" of this report.

The  following  is a  discussion  of  the  Company's  primary  market  risk
sensitive  instruments.  It  should  be  noted  that  this  discussion  has been
developed using estimates and assumptions.  Actual results may differ materially
from those described below. Further, the following discussion does not take into
account  actions  which could be taken by  management in response to the assumed
changes in market rates. In addition,  the discussion does not take into account
other types of risks which may be involved  in the  business  operations  of the
Company,  such as the reinsurance  recoveries on reinsurance treaties with third
party insurers.

                                     - 18 -
<PAGE>

The primary market risk to the Company's  investment  portfolio is interest
rate risk. The Company does not use derivative financial instruments.

                               Interest Rate Risk

Assuming an immediate  increase of 100 basis points in interest rates,  the
net hypothetical loss in fair market value related to the financial  instruments
segment of the Company's  balance sheet is estimated to be $24.0 million at June
30, 2000 and $23.3  million at December 31, 1999.  For purposes of the foregoing
estimate,  the following  categories of the Company's  fixed income  investments
were  taken into  account:  (i) fixed  maturities,  including  fixed  maturities
available for sale, (ii) short-term  investments and (iii) notes receivable from
affiliates.  The  approximate  market value of such assets was $610.8 million at
June 30, 2000 and $639.5 million at December 31, 1999.

The fixed income investments of the Company include certain mortgage-backed
securities.  The market value of such  securities was $222.7 million at June 30,
2000 and $ 208.0 million at December 31, 1999. Assuming an immediate increase of
100 basis points in interest rates, the net hypothetical loss in the fair market
value  related  to such  mortgage-backed  securities  is  estimated  to be $12.3
million at June 30, 2000 and $12.0 million at December 31, 1999.

Fixed income  investments held in separate accounts have not been included,
since gains and losses on those assets  generally  accrue to the  policyholders.
The  hypothetical  effect of the interest rate risk on fair values was estimated
by applying a commonly  used model.  The model  projects  the impact of interest
rate changes on a range of factors, including duration and potential prepayment.

Part II.          Other Information

Item 1.  Legal Proceedings

The Company and Investors-NA are defendants in a lawsuit which was filed in
October, 1996, in Travis County, Texas. CIGNA Corporation, an unrelated Company,
is also a named  defendant in the lawsuit.  The named  plaintiffs in the suit (a
husband and wife),  allege that the universal  life  insurance  policies sold to
them by INA Life Insurance Company (a company which was merged into Investors-NA
in 1992) utilized unfair sales practices.  The named plaintiffs seek reformation
of the life insurance contracts and an unspecified amount of damages.  The named
plaintiffs  also seek a class action as to similarly  situated  individuals.  No
certification  of a class has been  granted as of the date  hereof.  The Company
believes that the suit is without  merit and intends to  vigorously  defend this
matter.

In  August,  1997,  another  individual  filed a  similar  action in Travis
County,  Texas  against the corporate  entities  identified  above.  The lawsuit
involves   the  same  type  of  policy  and  includes   allegations   which  are
substantially  identical  to the  allegations  in the  first  action.  The named
plaintiff also seeks class  certification.  The Company  believes that the court
would  consider class  certification  with respect to only one of these actions.
The  Company  also  believes  that this  action is without  merit and intends to
vigorously defend this matter.





                                     - 19 -
<PAGE>


Item 2.  Changes in Securities

                  None

Item 3.  Defaults Upon Senior Securities

                  None

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

     The  Annual  Meeting of  Shareholders  was held on May 23,  2000.  The sole
matter  voted  on at the  meeting  was the  election  of  directors.  All of the
nominees were elected as directors by the shareholders.

         The voting tabulation as to each nominee was as follows:
<TABLE>
<S>              <C>                                        <C>
<CAPTION>

                    Name                                      In Favor                   Withheld

                  Bender, Robert                              7,520,527                  91.973
                  Chacosky, Charles K.                        7,518,960                  93,540
                  Demgen, Jeffrey H.                          7,519,320                  93,180
                  Fleron, Theodore A.                         7,520,527                  91,973
                  Gilcrease, W. Lewis                         7,519,987                  92,513
                  Grace, James M.                             7,519,320                  93,180
                  Kosson, Richard                             7,520,527                  91,973
                  Mitte, Roy F.                               7,509,347                 103,153
                  Nash, Elizabeth                             7,520,527                  91,973
                  Payne, Eugene E.                            7,519,320                  93,180
                  Schmitt, Steven P.                          7,520,527                  91,973

</TABLE>

Item 5.  Other Information

                  None


                                     - 20 -
<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  Form 10-K Annual Report of Registrant  for the year ended
                  December 31, 1999 heretofore filed by Registrant with the
                  Securities  and Exchange  Commission, which is hereby
                  incorporated by reference.

         (b)      Reports on Form 8-K

                  On May 2, 2000, the Company filed a Current Report on Form
                  8-K, updating the
                  status of its purchases under the Stock Repurchase Plan.
                  The plan, which was approved by the Company's Board of
                  Directors on June 29, 1999, and amended on March 29, 2000,
                  authorizes the repurchase of up to 10% of the issued and
                  outstanding shares of the Company's common stock.

                                     - 21 -
<PAGE>

               INTERCONTINENTAL LIFE CORPORATION AND SUBSIDIARIES





                                    SIGNATURE


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


INTERCONTINENTAL LIFE CORPORATION



   /s/ James M. Grace
James M. Grace, Treasurer







Date: August 14,   2000


                                     - 22 -

<PAGE>