Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS
Erie Family Life Insurance Company (hereinafter referred to as "The Company", the "Registrant" or "Erie Family Life") was incorporated in the state of Pennsylvania on May 23, 1967 and commenced business on September 1, 1967. The Company is primarily engaged in the business of underwriting and selling non-participating individual and group life insurance policies, including universal life. Erie also sells individual and group annuities.
Products
The Company's portfolio of life insurance includes the usual forms of permanent life, endowment and term policies, including whole life, family income, mortgage and decreasing term, group insurance, and universal life. In terms of face value, new life business issued in 1994 had a ratio of 3:1 of term insurance to whole life coverage.
Life insurance premiums and annuity deposits have been the primary sources of cash inflows for the Company.
Classes of Life Insurance Percentage of Total Sales
For the year ended December 31,
Class 1994 1993 1992 1991 1990
Ordinary Life (including Total and Permanent Disability and Additional Accidental Death) 92.1% 92.3% 91.9% 92.1% 91.9% Group 7.9 7.7 8.1 7.9 8.1 100.0% 100.0% 100.0% 100.0% 100.0%
Certain elements of revenue and expense reflect the requirements of Financial Accounting Standard (FAS) 97. FAS 97 prescribes a uniform method by which life insurance companies record certain long-term contracts, specifically annuities, universal life, and other interest sensitive products. This method involves separating the premium income into the "premium" portion (shown in the sales figures) which represents insurance protection purchased, and the "deposit" portion, which represents funds to be held at interest for future uses. Under this standard, the latter portion of the premium income is accounted for using methods applicable to comparable "interest bearing obligations" of other types of financial institutions.
ITEM 1. BUSINESS (Cont.)
Structured Settlement annuities sold to affiliate companies represent $11,431,965 in annuity deposits in 1994, $7,516,908 in 1993 and $9,307,063 in 1992. Also included in the annuity deposits are annuity contracts purchased by the Erie Insurance Group Retirement Plan for Employees. These annuity contracts purchased totaled $8,880,714 in 1994 and $2,648,425 in 1992.
Classes of Deposits Total Deposits
For the year ended December 31,
The Registrant reinsures with other insurance companies the portion of the insurance coverage above acceptable retentions. Beginning October 1, 1989, the retention limit on an acceptable risk was increased to $225,000 on each individual life written. Prior to 1989, the limit was $125,000.
The Company reinsures under a number of different reinsurance agreements. The primary purpose of reinsurance is to enable the Company to write a policy in an amount larger than the risk it is willing to assume for itself. The secondary purposes are to receive commissions on the reinsurance ceded and in some instances to participate in the profits of the reinsured business by way of an "experience rating refund".
Marketing
The Company markets its products through independent agents throughout Pennsylvania, Maryland, Virginia, West Virginia, Ohio, Indiana, Tennessee, North Carolina and the District of Columbia. The policies sold are evaluated by the Company's Underwriting Department which selects or declines applicants for insurance. Premium on policies which are accepted may be standard or rated, depending on the nature of the risk.
ITEM 1. BUSINESS (Cont.)
Competition
The Company operates in a highly competitive field which consists of many stock and mutual insurance companies. A large number of established insurance companies compete in states in which the Company transacts business and many of these companies offer more diversified lines of insurance coverage and have substantially greater financial resources than does the Company. Competition is based primarily on price and availability of insurance products, while considering the financial strength of the Company.
Insurance Regulation
The Company is subject to supervision and regulation by the insurance departments of the states in which it does business. Although the extent of the regulation varies from state to state, generally the supervisory agencies are vested with broad administrative powers relating to the granting and revocation of licenses to transact business, regulation of trade practices, licensing of agents, approval of policy forms, deposits of security for the benefits of policy owners and investments and maintenance of specified reserves and capital, all designed primarily for the protection of policy owners. In accordance with the rules of the National Association of Insurance Commissioners, the Company has been examined every four years by one or more of the state supervisory agencies. The latest such examination of the Company was conducted by the Pennsylvania and Ohio Insurance Departments and covered the four years ended December 31, 1990.
The Commonwealth of Pennsylvania has adopted the minimum risk-based capital requirements on domestic insurance companies that were developed by the National Association of Insurance Commissioners (NAIC). The formulas for determining the amount of risk-based capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. These formulas determine a ratio of the company's regulatory total adjusted capital to its authorized control level risk-based capital, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. The levels and ratios are as follows.
Ratio of Total Adjusted Capital to Authorized Control Level Risk-Based Regulatory Event Capital (Less Than or Equal to)
Company action level 2 (or 2.5 with negative trends) Regulatory action level 1.5 Authorized control level 1 Mandatory control level .7
Erie Family Life has regulatory total adjusted capital of $56 million and $51 million at December 31, 1994, and 1993, respectively, and a ratio of total adjusted capital to authorized control level risk-based capital of 5.8 and 5.7 at December 31, 1994, and 1993, respectively. These levels far exceed the minimum risk-based capital requirements.
At the Annual Meeting of Stockholders held on May 26, 1994, the Stockholders approved a proposal to redomesticate the Company to Indiana from its current domiciliary state of Pennsylvania. The redomestication approved by the Stockholders is subject to regulatory approval by the states of Pennsylvania and Indiana. The Company is still awaiting regulatory approval from the state of Indiana.
The purpose for the redomestication was to eliminate the requirement for the payment by the Company of retaliatory premium taxes on nonqualified annuities because of the imposition of a 2% annuity tax in Pennsylania.
ITEM 1. BUSINESS (Cont.)
Life Reserves
In accordance with generally accepted accounting principles (GAAP), the Company is required to establish and maintain as liabilities, actuarial reserves to meet its obligations on life insurance policies and annuities. These reserves are amounts which, with additions from premiums to be received on outstanding policies and with interest on such reserves compounded annually at certain assumed rates, are calculated to be sufficient to meet policy obligations at death or maturity in accordance with the mortality tables employed when the policies are issued.
The interest factors used in the computation of insurance reserves are:
Basis of Assumption
Years of Policy Issue Type Interest Mortality Withdrawal
1967-1975 All Life 4% graded to 3 1/2% 1955-60 Basic Modified Select Plus Ultimate Linton B
1976-1980 All Life 6% graded to 4% 1955-60 Basic Linton B Select Plus Ultimate
1981-1988 Permanent 7 1/4% graded to 6% 85% of 1965-70 150% of Life Select and Ultimate Linton A
1981-1988 Other 7 1/4% graded to 6% 85% or 90% of Pricing Life 1965-70 Select and Assumptions Ultimate
1988-1994 All Life 7% graded to 6% Multiple of 1965-70 Pricing and Annual Select and Ultimate Assumptions Renewable Term
1987-1994 Universal 7 1/2% graded to 6% 85% or 90% of Pricing Life 1965-70 Select and Assumptions Ultimate
Investments
In accordance with standard insurance practice, the Registrant invests its funds principally in corporate bonds and preferred and common stocks. In 1994, the Company's real estate held for investment purposes constituted 0.4% of the Company's total assets while mortgage loans accounted for 1.4% and Other Invested Assets accounted for 0.4%. The Registrant owns no real property and no tangible personal property used in the operation of its business except office supplies and forms. The real estate owned by the Company is leased to an affiliate, Erie Indemnity Company (EIC), for rentals of $423,120 per year through December 31, 1995. Also, on January 12, 1989, the Company made a first mortgage loan to EIC in the amount of $2,500,000. The proceeds of the loan were used to purchase and construct a branch office facility. The mortgage note was paid in full on June 3, 1994. In addition, the Company makes policy loans to its policyholders, and at December 31, 1994, such policy loans constituted 0.6% of the Registrant's total assets. Annual increases in the number and
ITEM 1. BUSINESS (Cont.)
dollar amount of policy loans, generally, will vary with changes in short term rates of interest. When short term rates are high, policy loans are also expected to increase.
Subject to certain laws that prescribe the nature, quality and percentage of the various types of investments which may be made by insurance companies, the Company manages its investments to meet diversification, yield and liquidity objectives.
Employees
Services of seventy-seven full-time employees are provided through an affiliate, Erie Indemnity Company. All employees are salaried and nine are officers. These employee expenses along with other operating expenses are paid by the Erie Indemnity Company and reimbursed on a monthly basis. None of the employees are covered by collective bargaining agreements and the Erie Indemnity Company believes its employee relations are satisfactory.
Other Data
The Company's Lapse Rate for 1994 was 8.4%.
Reinsurance Profitability - Not Applicable.
New Types of Insurance - Not Applicable.
Total Insurance In Force for the last five years Net of Reinsurance was:
1994 - $7,481,537,000 1993 - $6,428,223,000 1992 - $5,545,197,000 1991 - $4,678,254,000 1990 - $3,866,244,000
ITEM 2.



ITEM 2. PROPERTIES
The Registrant owns no real property and no tangible personal property used in the operation of its business except office supplies and forms. The Registrant does, however, own real property for investment purposes as outlined under ITEM 1 - INVESTMENTS. The executive and administrative offices of the Registrant are located in the headquarters office of Erie Insurance Group in Erie, Pennsylvania. The Registrant pays other members of the group an amount determined by an arm's length agreement for office space and for the use of facilities, equipment and services.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
The Registrant is not involved in any material pending legal proceedings other than ordinary routine litigation incidental to its business.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
There were no matters submitted for vote to stockholders during fourth quarter 1994.
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS
Currently there is no market on which the Registrant's stock is traded. The Company had 1,153 recordholders of Common Stock at December 31, 1994.
Date Dividends Declared Date Dividends Paid Dividends per Share
January 17, 1993 April 1, 1993 .275 March 31, 1993 July 1, 1993 .275 June 21, 1993 October 1, 1993 .275 September 27, 1993 January 1, 1994 .275 March 1, 1994 April 1, 1994 .30 March 1, 1994 July 1, 1994 .30 July 21, 1994 October 1, 1994 .30 September 29, 1994 January 1, 1995 .30
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The information contained in "Selected Financial Data" on Page 13 of the Company's Annual Report is incorporated herein by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION
The information set forth on pages 13 through 17 of the Company's 1994 Annual Report is incorporated herein by reference.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The 1994 Financial Statements and the report of the registrant's independent accountants on pages 18 through 25 of the Company's 1994 Annual Report are incorported herein by reference, as is the unaudited information set forth in the Notes to the Financial Statements under the caption "Unaudited Quarterly Summary of Operations" on page 25.
ITEM 9.

ITEM 9. CHANGE IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (Cont.)
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (Cont.)
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (Cont.)
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the annual compensation paid by the Company during each of the three fiscal years ended December 31, 1994 to the Chief Executive Officer of the Company and the four other most highly compensated executive officers of the Company during 1994 for services rendered in all capacities to the Company and its affiliates.
The amounts listed in the table below represent the total compensation paid to the listed executives by the Erie Insurance Group. The Erie Insurance Group includes the Company, Erie Indemnity Company and its subsidiaries and Erie Insurance Exchange and its subsidiary. The amount of total compensation allocated to the registrant is as follows: John M. Petersen - 10%, Jan R. Van Gorder - 5%, Thomas M. Sider - 10%, Stephen A. Milne - 0%, John J. Brinling, Jr. - 100%.
Annual Compensation
Name and Other Annual All Other Principal Position Year Salary Bonus Compensation Compensation(1)
John M. Petersen 1994 $725,363 $74,993 $8,100 $69,058 President & Chief 1993 427,379 94,643 5,383 10,828 Executive Officer 1992 391,914 40,893 4,866 221,480
Jan R. Van Gorder 1994 $287,682 $25,590 $1,029 $14,834 Executive Vice 1993 261,769 18,981 642 14,853 President, Secretary 1992 242,452 11,173 642 12,200 & General Counsel
Thomas M. Sider 1994 $199,289 $22,571 $941 $21,109 Executive Vice 1993 168,243 17,604 66 20,836 President & Chief Financial Officer
Stephen A. Milne 1994 $198,752 $34,943 $965 $4,433 Executive Vice President - Insurance Operations(2)
John J. Brinling, 1994 $185,605 $19,527 $877 $22,682 Jr., Executive 1993 164,530 19,712 642 22,006 Vice President of 1992 147,973 14,616 642 22,011 EFL
(1) Amounts shown include matching contributions made by the Company pursuant to the Company's Employee Savings Plans and premiums paid by the Company on behalf of the named individuals on Split Dollar Life insurance policies. For the year 1994, contributions made to the Employee Savings Plans amounted to $17,500, $6,190, $4,788, $4,433 and $4,478 on behalf of Messrs. Petersen, Van Gorder, Sider, Milne and Brinling, respectively. For the year 1993, contributions made to the Employee Savings Plans amounted to $10,828, $5,917, $4,467 and $3,748 on behalf of Messrs. Petersen, Van Gorder, Sider and Brinling, respectively. For the year 1992, contributions made to the Employee Savings Plans amounted to $4,364,
$4,364 and $3,807 on behalf of Messrs. Petersen, Van Gorder and Brinling, respectively. Premiums paid during 1994 for Split Dollar Life insurance policies for Messrs. Petersen, Van Gorder, Sider, Milne and Brinling, respectively, are as follows: $51,558, $8,644, $16,321, $0 and $18,204. Premiums paid during 1993 for Split Dollar Life insurance policies for Messrs. Petersen, Van Gorder, Sider and Brinling, respectively, are as follows: $0, $8,936, $16,369 and $18,258. Premiums paid during 1992 for Split Dollar Life insurance policies for Messrs. Petersen, Van Gorder and Brinling, are as follows: $217,116, $7,836 and $18,204. The Company is entitled to recover the premiums from any proceeds paid on such Split Dollar Life insurance policies and has retained a collateral interest in each policy to the extent of the premiums paid with respect to such policies.
(2) Mr. Milne became an officer of the Company on January 11, 1994. Mr. Milne had been previously employed by the Company; his last position with the Company at that time was Senior Vice President Agency Division, a position he held from 1988 to 1991.
Stock Options and Stock Appreciation Rights
The Company does not have a stock option plan, nor has it ever granted any stock option or stock appreciation right to any of the persons named in the Summary Compensation Table.
Pension Plan
The following table sets forth the estimated annual benefits payable upon retirement at age 65 under the Erie Insurance Group Retirement Plan for Employees.
PENSION PLAN TABLE
Years of Service Remuneration 15 20 25 30 35 $ 125,000 $ 37,500 $ 50,000 $ 62,500 $ 75,000 $ 75,000 150,000 45,000 60,000 75,000 90,000 90,000 175,000 52,500 70,000 87,500 105,000 105,000 200,000 60,000 80,000 100,000 120,000 120,000 225,000 67,500 90,000 112,500 135,000 135,000 250,000 75,000 100,000 125,000 150,000 150,000 300,000 90,000 120,000 150,000 180,000 180,000 400,000 120,000 160,000 200,000 240,000 240,000 450,000 135,000 180,000 225,000 270,000 270,000 500,000 150,000 200,000 250,000 300,000 300,000 550,000 165,000 220,000 275,000 330,000 330,000 600,000 180,000 240,000 300,000 360,000 360,000 650,000 195,000 260,000 325,000 390,000 390,000 700,000 210,000 280,000 350,000 420,000 420,000 750,000 225,000 300,000 375,000 450,000 450,000 800,000 240,000 320,000 400,000 480,000 480,000 850,000 255,000 340,000 425,000 510,000 510,000 900,000 270,000 360,000 450,000 540,000 540,000 950,000 285,000 380,000 475,000 570,000 570,000 1,000,000 300,000 400,000 500,000 600,000 600,000
The compensation covered by such plan is the base salary reported in the Summary Compensation Table.
Under the pension plan, credited years of service is capped at 30 years Credited years of service for each of the individuals named in the Summary Compensation Table is as follows: John M. Petersen - 30 years, Jan R. Van Gorder - 14 years, Thomas M. Sider - 24 years, Stephen A. Milne - 17 years and John J. Brinling, Jr. - 27 years.
The benefits under such plan are computed on the basis of straight-life annuity amounts and a life annuity with a ten-year certain benefit. The benefits listed in the Pension Plan Table are not subject to deduction for Social Security or other offset amounts. The information in the foregoing table does not reflect certain limitations imposed by the Internal Revenue Code of 1986, as amended (the "Code"). Beginning in 1994, the Code prohibits the inclusion of earnings in excess of $150,000 per year (adjusted periodically for cost-of-living increases) in the average earnings used to calculate benefits. The Code also limits the maximum annual pension (currently $120,000, but adjusted annually for cost-of-living increases) that can be paid to each eligible employee.
Director Compensation
In 1994, directors of the Company, other than directors who are also officers of the Company and who are not separately compensated for attendance at meetings of the Board of Directors and its committees, received an annual retainer of $13,000 for serving as such, plus $1,000 for each meeting attended and $800 for each committee meeting attended ($2,000 in the case of the chairperson of the committee). In addition, all directors are reimbursed for their expenses incurred in attending meetings. Effective January 1, 1995, the annual retainer for directors increased to $15,000, plus $1,200 for each meeting attended and $800 for each committee meeting attended (unless the committee meeting is held the same day as the Board of Directors meeting, for which committee meeting $500 will be paid) plus an additional $2,000 per year for each committee chairperson.
Compensation Committee Interlocks and Insider Participation
Pursuant to Pennsylvania Insurance Holding Company laws, the Executive Compensation Committee (the Committee) of the Company's affiliate, Erie Indemnity Company, serves as the executive compensation committee of the Company. The Committee of the Company consists of Peter B. Bartlett, Chairman, J. Ralph Borneman, Jr. and Seth E. Schofield. No member of the Committee is a former or current officer or employee of the Company or any of its affiliates. Furthermore, no executive officer of the Company serves as a member of a compensation committee of another entity one of whose executive officers serves on the Committee of the Company or as a director of the Company, nor does any executive officer of the Company serve as a director of another entity, one of whose executive officers serves on the Committee of the Company. Mr. Borneman is the President and a principal shareholder of Body-Borneman Associates, Inc., Body-Borneman, Inc. and Body-Borneman, Ltd., all of which are independent insurance agencies representing a number of insurers, including the Company and its insurance affiliates.
Report of the Executive Compensation Committee of the Company
The Committee is charged with the duty of recommending to the Board of Directors the compensation of the three highest paid officers of the Company and such other officers as are determined by the Board of Directors, recommending to the Board of Directors all forms of bonus compensation including incentive programs that would be appropriate for the Company and to undertake such other responsibilities as may be delegated to it by the Board of Directors. The Committee is composed of three directors who are not officers or employees of the Company or any of its affiliates. The purpose of the Committee is to determine the level and composition of compensation that is sufficient to attract and retain top quality executives for the Company. It is the opinion of the Committee that the senior executives of the Company should receive compensation comparable to that paid by other insurers of comparable size and financial performance.
The Committee has position descriptions for the four highest paid executives of the Company, including the chief executive officer, which define the responsibilities and duties of each position. The position descriptions also delineate the functional areas of accountability and the qualifications and skills required to perform
such responsibilities and duties. The Committee then reviews the salary ranges for the chief executive officer and the other three highest paid senior executives, comparing the ranges to third party data compiled for similar positions with other insurers. The salary range defines the minimum and maximum level of compensation for the position. In reviewing the salary ranges for the four highest paid executives, including the chief executive officer, the Committee references Sibson's Management Compensation Survey published annually by Sibson & Company, which summarizes compensation data for 119 insurance companies. The data is reported by position and by company size, as ranked by premium volume. The Committee also uses compensation data obtained from the National Association of Independent Insurers annual survey on executive compensation and gathers data on other comparable insurers. The unique aspect of each position, its duties and responsibilities, the effect on the performance of the Company, the number of employees supervised directly and other criteria are also considered in setting the salary ranges. Adjustments to the salary ranges are made as warranted by the Committee's review.
During 1994 the Committee conducted a special survey on the competitiveness of the total compensation, including base salary, annual bonus and other forms of short-term compensation, for the four highest paid executives of the Company.
Hay Management Consultants, a management consulting firm, which specializes in compensation maters, was retained to conduct a study of total cash compensation for the Company's four highest paid executive positions. In addition, Sibson & Company, a management consulting firm, also undertook a study on the competitiveness of the Company's total cash compensation for the four highest paid executive officers based upon a selected group of peer companies. The information developed by Hay Management Consultants and Sibson & Company was used for adjusting compensation levels for the four highest paid executive positions.
The level of compensation for each executive reflects his or her skills, experience and job performance. Normally, base salary will not be less than the minimum for the salary range. Executives with a broader range of skills, experience and consistently high performance with the Company may receive compensation slightly above the mid-point for the established salary range.
A promotional salary increase may also be added to the executive's compensation when the executive assumes new responsibilities or has increased accountability for results. Significant changes in duties and responsibilities may result in a higher salary range.
Compensation for the chief executive officer consists primarily of salary and bonus and minor perquisites which amount to less than 10% of the chief executive officer's salary and bonus. No long-term incentive plans (which provide incentives of performance occurring over longer periods of time) are currently utilized in determining the compensation of the chief executive officer. Stock options, stock appreciation rights and restricted stock are not currently part of the executive compensation package for any executive of the Company. The compensation for the chief executive officer is determined as previously outlined.
Performance factors applicable to the Company, such as investment portfolio returns and overall company profitability as well as other factors are considered indirectly in evaluating the chief executive officer's performance. Such performance factors were considered in approving Mr. Petersen's 1994 compensation.
Compensation of the next three most highly compensated individuals is determined by the Committee and is based upon the factors and processes enumerated, i.e., a determination of a salary range based upon market data and evaluation of the executive with respect to the executive's job description and his or her position within the salary range.
Compensation of the next highest paid named executives (other than the four highest paid executives) is based upon the Company's established standard compensation policies and is not determined by the Committee. As with the chief executive officer and the next three most highly compensated executive officers, no long-term incentive plans are maintained for these executives.
EXECUTIVE COMPENSATION COMMITTEE
Peter B. Bartlett, Chairman J. Ralph Borneman, Jr. Seth E. Schofield
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Name & Address Amount & Nature Title of of Beneficial of Beneficial Percent of Class Owner Ownership Class
12-31-94 $1.10 Erie Indemnity Company 681,300 (1) 21.6%(1) Par Value 100 Erie Insurance Place Direct Common Stock Erie, PA 16530
(b) Shares beneficially owned directly or indirectly by all Directors and Officers:
Name & Address Amount & Nature Title of of Beneficial of Beneficial Percent of Class Owner Ownership Class
12-31-94 $1.10 Erie Insurance Exchange 1,644,300 (1) 52.2%(1) Par Value 100 Erie Insurance Place Direct Common Stock Erie, PA 16530
12-31-94 $1.10 Samuel P. Black, Jr. 22,706 .72% Par Value 400 French St., Suite 100 Common Stock Erie, PA 16507
12-31-94 $1.10 J. Ralph Borneman 512 .02% Par Value Box 552 Common Stock 17 East Philadelphia Ave. Boyertown, PA 19512
12-31-94 $1.10 Susan Hirt Hagen 100 -- Par Value 5727 Grubb Rd. Common Stock Erie, PA 16506
12-31-94 $1.10 Thomas B. Hagen 51,494 1.63% Par Value 5727 Grubb Rd. Common Stock Erie, PA 16506
12-31-94 $1.10 F. William Hirt 55,678 1.77% Par Value 3270 Kingston Court S. Common Stock Erie, PA 16506
12-31-94 $1.10 Thomas H. Hubbard 23,683 .75% Par Value Box 245 Common Stock Ashtabula, OH 44004-0245
12-31-94 $1.10 Stephen E. Jones, Esq. 10,632 .34% Par Value 120 West 10th St. Common Stock Erie, PA
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (Cont.)
(b) Shares beneficially owned directly or indirectly by all Directors and Officers:
Name & Address Amount & Nature Title of of Beneficial of Beneficial Percent of Class Owner Ownership Class
12-31-94 $1.10 Dr. Irvin H. Kochel 2,723 .09% Par Value 4737 Reese Road Common Stock Erie, PA 16510
12-31-94 $1.10 Edmund J. Mehl 4,050 .13% Par Value 504 Frontier Dr. Common Stock Erie, PA 16505
12-31-94 $1.10 John M. Petersen 31,450 1.00% Par Value 124 Voyageur Dr. Common Stock Erie, PA 16505
12-31-94 $1.10 Seth E. Schofield 600 .02% Par Value 2341 South Queen St. Common Stock Arlington, VA 22202
12-31-94 $1.10 Jan R. Van Gorder 25 -- Par Value 6796 Manchester Beach Road Common Stock Fairview, PA 16415
12-31-94 $1.10 John J. Brinling, Jr. 210 .01% Par Value 1522 Sumner Drive Common Stock Erie, PA 16505
12-31-94 $1.10 Robert H. Dreyer 300 .01% Par Value 465 Hawthorne Trace Common Stock Fairview, PA 16415
12-31-94 $1.10 Philip Alan Garcia 425 .01% Par Value 786 Stockbridge Drive Common Stock Erie, PA 16505
12-31-94 $1.10 Bruno Pisano 100 -- Par Value 3119 French Street Common Stock Erie, PA 16504
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (Cont.)
(b) Shares beneficially owned directly or indirectly by all Directors and Officers:
Name & Address Amount & Nature Title of of Beneficial of Beneficial Percent of Class Owner Ownership Class
12-31-94 $1.10 Thomas M. Sider 90 -- Par Value 11810 Old Lake Road Common Stock North East, PA 16428
12-31-94 $1.10 Douglas F. Ziegler 90 -- Par Value 378 Ridgeview Drive Common Stock Erie, PA 16505
12-31-94 $1.10 All officers and directors Par Value as a group (18 persons) 204,868(2) 6.50%(2) Common Stock
(1) Erie Insurance Exchange (the "Exchange") is a reciprocal insurance exchange controlled by its subscribers, each of whom has designated Erie Indemnity Company ("Indemnity") as such subscriber's attorney-in-fact for certain purposes, including Indemnity's holding of Common Stock of the Company. 76% of the outstanding voting stock of Erie Indemnity Company is owned beneficially by a trust established by H. O. Hirt, the father of F. William Hirt and Susan H. Hagen and the father-in-law of Thomas B. Hagen. Mr. Hirt and Mrs. Hagen are beneficiaries of the trust and are co-trustees with Mellon Bank, N.A. An additional 13.3% of indemnity stock is beneficially owned by Samuel P. Black, Jr.
(2) Includes direct and indirect beneficial ownership and shares owned by and with spouses.
(c) There are no contractual arrangements known to the Registrant.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Directors Black and Borneman are officers and principal shareholders of insurance agencies which receive insurance commissions in the ordinary course of business from Erie Family Life and its affiliates in accordance with such companies standard commission schedules and agents contracts.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) The following financial statements of the registrant and the report of independent certified public accountants are incorporated herein by reference to pages 18 to 25 in the registrant's annual report to stockholders for the year ended December 31, 1994.
Report of Independent Certified Public Accountants Balance Sheets - December 31, 1994 and 1993 Statements of Income for the years ended December 31, 1994, 1993 and 1992 Statements of Cash Flows for the years ended December 31, 1994, 1993 and 1992 Statements of Stockholders' Equity for the years ended December 31, 1994, 1993 and 1992 Notes to Financial Statements
(2) The following financial statement schedules are included in this report on FORM 10-K:
Page
Report of Independent Certified Public Accountants on Schedules 23
Schedule I - Summary of Investments other than investments in related parties 24
Schedule III - Supplementary Insurance Information 25
Schedule IV - Reinsurance 26
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore, have been omitted.
(3) Exhibits:
Exhibit 13 - Annual Report to Stockholders
Exhibit 27 - Financial Data Schedule
All exhibits for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore, have been omitted.
(b) No reports on Form 8-K have been filed or were required to be filed during the last quarter of the period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 15(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.
Date: March 2, 1995 ERIE FAMILY LIFE INSURANCE COMPANY (registrant)
Principal Officers
/s/ F. William Hirt F. William Hirt, Chairman of the Board
/s/ John M. Petersen John M. Petersen, President and C.E.O.
/s/ Thomas M. Sider Thomas M. Sider, Executive Vice President & CFO
/s/ Philip A. Garcia Philip A. Garcia, Senior Vice President & Controller
Board of Directors
Samuel P. Black, Jr. Stephen E. Jones
/s/ J. Ralph Borneman /s/ Dr. Irvin H. Kochel J. Ralph Borneman Dr. Irvin H. Kochel
/s/ Edumnd J. Mehl Susan Hirt Hagen Edmund J. Mehl
/s/ John M. Petersen Thomas B. Hagen John M. Petersen
/s/ F. William Hirt /s/ Seth E. Schofield F.William Hirt Seth E. Schofield
/s/ Jan R. Van Gorder Thomas H. Hubbard Jan R. Van Gorder
INDEPENDENT AUDITORS' REPORT
To The Board of Directors and Stockholders Erie Family Life Insurance Company
We have audited the balance sheets of Erie Family Life Insurance Company as of December 31, 1994 and 1993 and the related statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1994, as contained in the 1994 annual report, incorporated by reference in the annual report on Form 10-K for the year ended December 31, 1994. In connection with our audits of the financial statements, we also have audited the financial statement schedules, as listed in the accompanying index. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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 Erie Family Life Insurance Company as of December 31, 1994 and 1993, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
/s/ Brown Schwab Bergquist & Co
Erie, Pennsylvania February 17, 1995
SCHEDULE I - SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION (CONTINUED)
SCHEDULE IV - REINSURANCE