For the Quarterly Period Ended: JUNE 30, 2000

Commission File Number: 0-10306

(Exact name of registrant as specified in its charter)

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (203) 358-8000

Former name, former address and former fiscal year, if changed since last report.

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 _.

Common stock outstanding as of August 10, 2000

(B) PRINCIPLES OF CONSOLIDATION AND PREPARATION OF

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

Subsequent to June 30, 2000, the Company declared a 10% special stock dividend payable to shareholders of record on August 14, 2000 with a distribution date of August 28, 2000. Fractional shares will be paid in cash in lieu of stock. The X-dividend date was set at August 10, 2000. Accordingly, the number of shares of common stock outstanding and common stock options and the number of shares issuable pursuant to the Warrants will be adjusted to reflect such stock dividend, which adjustments will first be reflected in the Company's third quarter results.

Independence Holding Company, a Delaware corporation ("IHC"), is a holding company engaged principally in the life and health insurance business through its wholly-owned subsidiaries, Standard Security Life Insurance Company of New York ("Standard Life"), Madison National Life Insurance Company, Inc. ("Madison Life"), First Standard Security Insurance Company ("First Standard"), IndependenceCare LLC ("IndependenceCare") and their subsidiaries (collectively, the "Insurance Group"). IHC and its subsidiaries (including the Insurance Group) are collectively referred to as the "Company." All remaining income, principally income from parent company liquidity (cash, cash equivalents, resale agreements, marketable securities and partnership investments) and expense items associated with parent company activities, the Company's remaining real estate holdings and certain other investments of the Company, are included in Corporate.

The Company's operating income was $4.8 million, for the period ended June 30, 2000 compared to $3.5 million for the three months ended June 30, 1999. The Company had net realized and unrealized gains of $.3 million in 2000 and losses of $.3 million in 1999. Decisions to sell securities are based on cash flow needs, investment opportunities and economic and market conditions, thus creating fluctuations in gains (losses) from year to year. Excluding net realized and unrealized gains, operating income increased 18% to $4.5 million in 2000 as compared to $3.8 million in 1999 primarily due to an increase in income from acquisitions, offset by an increase in interest expense (see Note 8 of Notes to Consolidated Financial Statements). Net income was $3.5 million, or $.48 per share, diluted, for the quarter ended June 30, 2000 and $2.7 million or $.37 per share, diluted, for the quarter ended June 30, 1999.

The Insurance Group's operating income increased $2.1 million to $5.3 million in 2000 from $3.2 million in 1999. Operating income includes net realized and unrealized gains of $.3 million in 2000 compared to losses of $.3 million in 1999. Operating income excluding net realized and unrealized losses was $5.0 million in 2000 compared to $3.5 million in 1999.

Premium revenues increased $1.2 million to $20.1 million in 2000 from $18.9 million in 1999; premium revenues increased $1.2 million at Standard Life and remained constant at Madison Life. Madison Life had a $.6 million increase in long-term disability ("LTD") premiums as a result of an increase in premiums written in 2000; a $.1 million increase in group term life, a $.7 million increase in ordinary life and individual accident and health premiums due to the 1999 acquisitions and a $.5 million increase in other life and health lines of business; such increases were offset by: a $1.9 million decrease in the credit lines of business, primarily due to the runoff of acquisitions of two single premium blocks of business effective in 1997. The increase at Standard Life is comprised of: a $.3 million increase in stop-loss premiums; a $.2 million increase in the volunteer firefighters division premiums; a $.3 million increase in its provider excess line; a $.2 million increase in the closed group life assumed block purchased effective April 1, 1999 and a $.2 million increase in the special disability line.

Total net investment income increased $2.4 million primarily due to an increase in assets due to the acquisitions in 1999. The annualized return on investments of the Insurance Group in the second quarter of 2000 was 6.8% compared to 7.0% in the second quarter of 1999.

Other income increased $.2 million at Standard Life and remained constant at Madison Life.

Insurance benefits, claims and reserves increased $2.0 million, reflecting an increase of $1.3 million at Madison Life and an increase of $.7 million at Standard Life. Madison Life's increase resulted from: a $.6 million increase in interest on annuity policies due to acquisitions in 1999; a $.6 million increase in group term life reserves due to higher loss ratios, and a $.8 million increase in LTD claims due to an increase in premiums and higher loss ratios; such increases were offset by a $.6 million decrease in the credit line of business; and a $.1 million decrease in claims and reserves in other life and health lines of business. The change at Standard Life is comprised of: a $.6 million increase in DBL claims and reserves due to higher claims; a $.5 million increase in interest expense and group annuity and life reserves due to the acquisition effective April 1, 1999; a $.3 million increase in provider excess claims; and a $.1 million increase in all other lines; such increases were offset by: a $.8 million decrease in stop-loss reserves due to lower loss ratios.

Amortization of deferred acquisition costs and general and administrative expenses for the Insurance Group increased $.3 million. Madison Life's expenses decreased $.4 million and Standard Life's expenses increased $.5 million due to an increase in state insurance taxes and general expenses. IndependenceCare's expenses increased $.2 million.

Operating income for the quarter ended June 30, 2000 decreased by $.8 million to a loss of $.5 million for the second quarter of 2000 from income of $.3 million for the second quarter of 1999. This decrease in operating income is a result of an increase in interest expense of $.3 million attributable to the borrowing of $15.0 million during the fourth quarter of 1999 and a decrease in investment income of $.5 million due to lower returns on certain equity investments.

The Company's operating income was $8.5 million, for the period ended June 30, 2000 and $7.2 million for the period ended June 30, 1999. The Company had net realized and unrealized losses of $.8 million in 2000 and gains of $.2 million in 1999. Excluding net realized and unrealized gains, operating income increased 32% to $9.3 million in 2000 as compared to $7.0 million in 1999 primarily from an increase in income from acquisitions and an increase in yields on investable assets offset by an increase in interest expense (see Note 8 of Notes to Consolidated Financial Statements). Net income was $5.8 million, or $.80 per share, diluted, for the period ended June 30, 2000 and was $5.2 million or $.69 per share, diluted, for the period ended June 30, 1999.

The Insurance Group's operating income increased $2.5 million to $9.5 million in 2000 from $7.0 million in 1999. Operating income includes net realized and unrealized losses of $.8 million in 2000 compared to gains of $.1 million in 1999. Operating income excluding net realized and unrealized losses was $10.3 million in 2000 compared to $6.9 million in 1999.

Premium revenues increased $3.1 million to $42.2 million in 2000 from $39.1 million in 1999; premium revenues increased $2.2 million at Madison Life and $.9 million at Standard Life. The increase at Madison Life is comprised of: a $1.1 million increase in LTD premiums as a result of an increase in premiums written in 2000; a $.3 million increase in group term life, and a $3.8 million increase in ordinary life and individual accident and health premiums due to the 1999 acquisitions; such increases were offset by: a $1.8 million decrease in the credit lines of business, primarily due to the runoff of acquisitions of two single premium blocks of business effective in 1997; a $.7 million decrease in dental premiums due to the runoff of this block; a $.4 million decrease in family group term life premiums and a $.1 million decrease in other life and health lines of business. The increase at Standard Life is comprised of: a $.6 million increase in its provider excess line due to increased retention; a $.5 million increase in the closed group life assumed block purchased effective April 1, 1999; a $.3 million increase in the point of service line and a $.4 million increase in all other lines; such increases are offset by: a $.4 million decrease in stop-loss premiums and a $.5 million decrease in DBL due to a rate reduction.

Total net investment income increased $6.3 million primarily due to higher yields on fixed income securities and an increase in assets due to the acquisitions in 1999. The annualized return on investments of the Insurance Group for the first six months of 2000 was 7.2% compared to 6.8% for the first six months of 1999.

Other income decreased $2.2 million due to $.5 million less fee income earned by the managing general underwriter in which Madison Life acquired a controlling interest effective December 31, 1997; and a $1.7 million decrease at Standard Life due primarily to an increase in coinsurance reserves due to the surrender by a large group of policyholders in a modified coinsurance treaty.

Insurance benefits, claims and reserves increased $3.7 million, reflecting an increase of $4.4 million at Madison Life and a decrease of $.7 million at Standard Life. Madison Life's increase resulted from: a $1.9 million increase in ordinary life and individual accident and health reserves, claims and surrenders, and $1.6 million increase in interest on annuity policies, all of such increases due to acquisitions in 1999; a $.4 increase in group term life premiums; and a $1.3 million increase in LTD claims due to the increase in premiums and an increase in loss ratios; such increases were offset by: a $.4 million decrease in the credit line of business; and a $.4 million decrease in claims and reserves in other life and health lines of business. The change at Standard Life is comprised of: a $2.6 million decrease in stop-loss reserves due to lower loss ratios; and a $1.2 million decrease in the closed block of ordinary life business due to the surrender by a large group of policyholders; such increases were offset by: a $1.2 million increase in DBL claims and reserves due to higher loss ratios; a $.8 million increase in interest expense and group annuity and life reserves due to the acquisition on April 1, 1999; a $.6 million increase in point of service claims; and a $.5 million increase in all other lines.

Amortization of deferred acquisition costs and general and administrative expenses for the Insurance Group increased $.1 million. Madison Life's expenses decreased $.3 million, Standard Life's expenses increased $.2 million and IndependenceCare's expenses increased $.2 million.

Operating income for the quarter ended June 30, 2000 decreased by $1.1 million from a gain of $.1 million in 1999 to a loss of $1.0 million. Operating income includes a realized gain of $.1 million in 1999. Excluding realized gains, operating income decreased by $1.0 million due to an increase in interest expense of $.6 million attributable to the borrowing of $15.0 million during the fourth quarter of 1999 and a decrease of $.4 million in investment income due to lower returns on certain equity investments.

The Insurance Group normally provides cash flow from: (i) operations; (ii) the receipt of scheduled principal payments on its portfolio of fixed income securities; and (iii) earnings on investments. Such cash flow is used partially to finance liabilities for insurance policy benefits. These liabilities represent long-term and short-term obligations which are calculated using certain assumed interest rates.

Asset Quality

The nature and quality of insurance company investments must comply with all applicable statutes and regulations which have been promulgated primarily for the protection of policyholders. Of the aggregate carrying value of the Insurance Group's investment assets, approximately 81% was invested in investment grade fixed income securities, resale agreements, policy loans and cash and cash equivalents at June 30, 2000. Also at such date, approximately 97% of the Insurance Group's fixed maturities were investment grade. These investments carry less risk and, therefore, lower interest rates than other types of fixed maturity investments. At June 30, 2000, approximately 3% of the carrying value of fixed maturities was invested in diversified non-investment grade fixed income securities (investments in such securities have different risks than investment grade securities, including greater risk of loss upon default, and thinner trading markets). Less than .1% of the carrying value of the Company's total investments was represented by real estate and mortgage loans. The Company has no non-performing fixed maturities.

Risk Management

The Company manages interest rate risk by seeking to maintain a portfolio with a duration and average life that falls within the band of the duration and average life of the applicable liabilities, and may utilize options to modify the duration and average life of such assets.

The Company monitors its investment portfolio on a continuous basis and believes that the liquidity of the Insurance Group will not be adversely affected by its current investments. This monitoring includes the maintenance of an asset-liability model that matches current insurance liability cash flows with current investment cash flows.

The expected change in fair value of the Company's fixed income portfolio at June 30, 2000 given a 100 to 300 basis point rise or decline in interest rates is not materially different than the expected change at December 31, 1999. In the Company's analysis of the asset-liability model, a 100 to 300 basis point change in interest rates on the Insurance Group's liabilities would not be expected to have a material adverse effect on the Company. With respect to its liabilities, if interest rates were to increase, the risk to the Company is that policies would be surrendered and assets would need to be sold. This is not a material exposure to the Company since a large portion of the Insurance Group's interest sensitive policies are burial policies and annuity riders that are not subject to the typical surrender patterns of other interest sensitive policies, and many of the Insurance Group's universal life and annuity policies come from liquidated companies which tend to exhibit lower surrender rates than such policies of continuing companies. Additionally, there are charges to help offset the benefits being surrendered. If interest rates were to decrease substantially, the risk to the Company is that some of its investment assets would be subject to early redemption. With respect to its investments, the Company employs (from time to time as warranted) investment strategies to mitigate interest rate and other market exposures.

Balance Sheet

The increase in securities purchased under agreements to resell is offset by a decrease in notes receivable as a portion of guaranty association notes (which were received in connection with the 1999 acquisitions) were paid-down. Also offsetting the increase in total investments is an increase in due to brokers due to the timing of a securities trade that settled after June 30, 2000.

The Company had net receivables from reinsurers of $120.4 million at June 30, 2000. Substantially all of the business ceded to such reinsurers is of short duration. All of such receivables are either due from highly rated companies or are adequately secured. Accordingly, no allowance for doubtful accounts was necessary at June 30, 2000.

Corporate derives its funds principally from: (i) dividends and interest income from the Insurance Group; (ii) management fees from its subsidiaries; and (iii) investment income from Corporate liquidity. Regulatory constraints historically have not affected the Company's consolidated liquidity, although state insurance laws and statutory accounting rules have provisions relating to the ability of the parent company to use cash or income generated by the Insurance Group.

Total corporate liquidity (cash, cash equivalents, resale agreements and marketable securities) amounted to $13.1 million at June 30, 2000.

Due to its superior capital ratios, broad licensing and excellent asset quality and credit-worthiness, the Insurance Group remains well positioned to increase or diversify its current activities. It is anticipated that future acquisitions or other expansion of operations will be funded internally from existing capital and surplus and parent company liquidity, including the remaining $15.0 million availability under its credit facility. In the event additional funds are required, it is expected that they would be borrowed or raised in the public or private capital markets to the extent determined to be necessary or desirable.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, the Company may carry its portfolio of fixed income securities either as held to maturity (carried at amortized cost), as trading securities (carried at fair market value) or as available-for-sale (carried at fair market value); the Company has chosen to carry all of its debt securities as available-for-sale. The Company experienced a decrease in unrealized losses of $1.2 million, net of deferred tax expense and deferred policy acquisition costs, in total stockholders' equity, reflecting unrealized losses of $9.8 million at June 30, 2000 versus $11.0 million at December 31, 1999. From time to time, as warranted, the Company employs investment strategies to mitigate interest rate and other market exposures.

Some of the statements included within Management's Discussion and Analysis may be considered to be forward looking statements which are subject to certain risks and uncertainties. Factors which could cause the actual results to differ materially from those suggested by such statements are described from time to time in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.

a) 1) Exhibit 11. Statement re: computation of per share earnings.

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

By:/s/ Teresa A. Herbert

Teresa A. Herbert

Vice President and Chief Financial Officer

Dated: August 11, 2000