================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)
[x]QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to

Commission file number 1-10890

HORACE MANN EDUCATORS CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 37-0911756
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1 Horace Mann Plaza, Springfield, Illinois 62715-0001
(Address of principal executive offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: 217-789-2500

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
--- ---
As of April 30, 1999, 41,151,844 shares of Common Stock, par value $0.001
per share, were outstanding, net of 18,128,896 shares of treasury stock.

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HORACE MANN EDUCATORS CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 1999

INDEX

Page
----

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets as of
March 31, 1999 and December 31, 1998..........................1

Consolidated Statements of Operations for the
Three Months Ended March 31, 1999 and 1998....................2

Consolidated Statements of Changes in Shareholders'
Equity for the Three Months Ended March 31, 1999 and 1998.....3

Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1999 and 1998....................4

Notes to Consolidated Financial Statements......................5

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................10

Item 3. Quantitative and Qualitative Disclosures
about Market Risk.........................................21

PART II - OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders.........21

Item 6. Exhibits and Reports on Form 8-K............................21

SIGNATURES....................................................................22

HORACE MANN EDUCATORS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

March 31, December 31,
1999 1998
---------- ----------

ASSETS

Investments
Fixed maturities, available for sale, at market (amortized
cost, 1999, $2,569,029; 1998, $2,552,537)................. $2,627,613 $2,651,379
Short-term and other investments............................. 95,809 102,049
Short-term investments, loaned securities collateral......... 127,964 87,392
---------- ----------
Total investments..................................... 2,851,386 2,840,820
Cash............................................................ 15,918 12,044
Accrued investment income and premiums receivable............... 96,235 102,661
Value of acquired insurance in force and goodwill............... 99,348 101,055
Deferred policy acquisition costs............................... 113,340 101,658
Other assets.................................................... 118,679 114,503
Variable annuity assets......................................... 1,107,739 1,122,739
---------- ----------
Total assets.......................................... $4,402,645 $4,395,480
========== ==========

LIABILITIES, REDEEMABLE SECURITIES AND SHAREHOLDERS' EQUITY

Policy liabilities
Fixed annuity contract liabilities........................... $1,238,429 $1,239,234
Interest-sensitive life contract liabilities................. 411,361 402,490
Unpaid claims and claim expenses............................. 307,122 307,387
Future policy benefits....................................... 178,152 179,693
Unearned premiums............................................ 178,209 179,194
---------- ----------
Total policy liabilities.............................. 2,313,273 2,307,998
Other policyholder funds........................................ 127,712 124,820
Other liabilities............................................... 233,951 197,292
Short-term debt................................................. 51,000 50,000
Long-term debt.................................................. 99,647 99,637
Variable annuity liabilities.................................... 1,103,806 1,118,890
---------- ----------
Total liabilities..................................... 3,929,389 3,898,637
---------- ----------

Warrants, subject to redemption................................. 220 220
---------- ----------

Preferred stock................................................. - -
Common stock.................................................... 59 59
Additional paid-in capital...................................... 336,546 336,686
Retained earnings............................................... 433,469 420,274
Accumulated other comprehensive income (net
unrealized gains on fixed maturities and equity securities).. 34,981 57,327
Treasury stock, at cost......................................... (332,019) (317,723)
---------- ----------
Total shareholders' equity............................ 473,036 496,623
---------- ----------
Total liabilities, redeemable
securities, and shareholders' equity.............. $4,402,645 $4,395,480
========== ==========

See accompanying notes to consolidated financial statements.

HORACE MANN EDUCATORS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)

Three Months Ended
March 31,
---------------------
1999 1998
-------- --------

Insurance premiums written and contract deposits....... $198,065 $196,954
======== ========

Revenues
Insurance premiums and contract charges earned...... $146,244 $141,207
Net investment income............................... 46,924 48,520
Realized investment gains (losses).................. (3,137) 6,371
-------- --------
Total revenues............................... 190,031 196,098
-------- --------

Benefits, losses and expenses
Benefits, claims and settlement expenses............ 101,260 97,430
Interest credited................................... 23,133 24,129
Policy acquisition expenses amortized............... 10,729 11,446
Operating expenses.................................. 25,736 27,225
Amortization of intangible assets................... 1,707 1,836
Interest expense.................................... 2,454 2,360
-------- --------
Total benefits, losses and expenses.......... 165,019 164,426
-------- --------

Income before income taxes............................ 25,012 31,672
Income tax expense..................................... 7,961 9,213
-------- --------
Net income............................................. $ 17,051 $ 22,459
======== ========

Net income per share
Basic............................................... $ 0.41 $ 0.51
======== ========
Diluted............................................. $ 0.40 $ 0.50
======== ========

Weighted average number of shares
and equivalent shares (in thousands)
Basic............................................. 41,806 44,176
Diluted........................................... 42,319 44,961

See accompanying notes to consolidated financial statements.

HORACE MANN EDUCATORS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollars in thousands, except per share data)

Three Months Ended
March 31,
----------------------
1999 1998
---------- ----------

Common stock
Beginning balance.......................................... $ 59 $ 59
Options exercised, 1999, 5,050 shares;
1998, 77,532 shares...................................... - -
--------- ---------
Ending balance............................................. 59 59
--------- ---------

Additional paid-in capital
Beginning balance.......................................... 336,686 340,564
Options exercised.......................................... 97 1,414
Catastrophe-linked equity put option premium............... (237) (1,475)
--------- ---------
Ending balance............................................. 336,546 340,503
--------- ---------

Retained earnings
Beginning balance.......................................... 420,274 349,274
Net income................................................. 17,051 22,459
Cash dividends, 1999, $0.0925 per share;
1998, $0.08 per share.................................... (3,856) (3,536)
--------- ---------
Ending balance............................................. 433,469 368,197
--------- ---------

Accumulated other comprehensive income (net unrealized
gains (losses) on fixed maturities and equity securities)
Beginning balance........................................ 57,327 62,167
Increase (decrease) for the period....................... (22,346) (6,553)
--------- ---------
Ending balance........................................... 34,981 55,614
--------- ---------

Treasury stock, at cost
Beginning balance, 1999, 17,183,596 shares;
1998, 14,896,796 shares.................................. (317,723) (246,092)
Purchase of 589,700 shares in 1999;
297,000 shares in 1998 (See note 4)...................... (14,296) (10,199)
--------- ---------
Ending balance, 1999, 17,773,296 shares;
1998, 15,193,796 shares.................................. (332,019) (256,291)
--------- ---------

Shareholders' equity at end of period....................... $ 473,036 $ 508,082
========= =========

Comprehensive income
Net income................................................. $ 17,051 $ 22,459
Other comprehensive income................................. (22,346) (6,553)
--------- ---------
Total.................................................... $ (5,295) $ 15,906
========= =========

See accompanying notes to consolidated financial statements.

HORACE MANN EDUCATORS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

Three Months Ended
March 31,
----------------------
1999 1998
---------- ----------

Cash flows from operating activities
Premiums collected............................. $ 157,177 $ 156,335
Policyholder benefits paid..................... (113,493) (114,314)
Policy acquisition and other
operating expenses paid...................... (44,609) (40,515)
Federal income taxes paid...................... (1,500) (800)
Investment income collected.................... 48,893 53,754
Interest expense paid.......................... (4,067) (3,319)
Other.......................................... (697) 1,541
--------- ---------
Net cash provided by operating activities.. 41,704 52,682
--------- ---------

Cash flows used in investing activities
Fixed maturities
Purchases.................................... (232,468) (330,130)
Sales........................................ 145,494 198,927
Maturities................................... 71,526 105,117
Net cash received from
short-term and other investments............. 6,357 15,109
--------- ---------
Net cash used in investing activities...... (9,091) (10,977)
--------- ---------

Cash flows used in financing activities
Purchase of treasury stock..................... (14,296) (10,199)
Dividends paid to shareholders................. (3,856) (3,536)
Principal borrowings on Bank Credit Facility... 1,000 -
Exercise of stock options...................... 97 1,414
Catastrophe-linked equity put option premium... (237) (1,475)
Annuity contracts, variable and fixed
Deposits..................................... 51,260 54,343
Maturities and withdrawals................... (51,555) (45,109)
Net transfer to variable annuity assets...... (11,443) (27,207)
Net increase (decrease) in
life policy account balances................. 291 (102)
--------- ---------
Net cash used in financing activities...... (28,739) (31,871)
--------- ---------

Net increase in cash............................ 3,874 9,834

Cash at beginning of period..................... 12,044 353
--------- ---------

Cash at end of period........................... $ 15,918 $ 10,187
========= =========

See accompanying notes to consolidated financial statements.

HORACE MANN EDUCATORS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999 and 1998
(Dollars in thousands)

Note 1 - Basis of Presentation

The accompanying unaudited consolidated financial statements of Horace Mann
Educators Corporation (the "Company") have been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The Company believes that these financial statements
contain all adjustments (consisting of normal recurring accruals) necessary to
present fairly the Company's consolidated financial position as of March 31,
1999 and December 31, 1998 and the consolidated results of operations, changes
in shareholders' equity and cash flows for the three months ended March 31, 1999
and 1998.

It is suggested that these financial statements be read in conjunction with
the financial statements and the related notes included in the Company's
December 31, 1998 Form 10-K.

The results of operations for the three months ended March 31, 1999 are not
necessarily indicative of the results to be expected for the full year.

Note 2 - Debt

Indebtedness outstanding was as follows:

March 31, December 31,
1999 1998
--------- ------------

Short-term debt:
$65,000 Bank Credit Facility, commitment to
December 31, 2001. (IBOR + 0.325%,
5.3% as of March 31, 1999)................. $ 51,000 $ 50,000
Long-term debt:
6 5/8% Senior Notes, due January 15, 2006.
Face amount less unaccrued discount
of $353 and $363 (6.7% imputed rate)....... 99,647 99,637
-------- --------
Total.................................... $150,647 $149,637
======== ========

Note 3 - Investments

The following table presents the composition and value of the Company's
fixed maturity securities portfolio by rating category. The Company has
classified the entire fixed maturity securities portfolio as available for sale,
which is carried at market value.

Percent of
Carrying Value March 31, 1999
------------------------ --------------------------
Rating of Fixed March 31, December 31, Carrying Amortized
Maturity Securities(1) 1999 1998 Value Cost
- ---------------------- --------- ------------ ---------- ----------

AAA............... 45.3% 44.0% $1,189,443 $1,164,083
AA................ 8.2 8.5 215,891 207,014
A................. 17.9 19.1 470,950 452,753
BBB............... 21.6 21.5 566,072 559,868
BB................ 1.9 2.0 51,097 52,632
B................. 4.2 4.1 111,074 108,798
CCC or lower...... 0.2 0.1 4,504 5,871
Not rated(2)...... 0.7 0.7 18,582 18,010
----- ----- ---------- ----------
Total........... 100.0% 100.0% $2,627,613 $2,569,029
===== ===== ========== ==========

(1) Ratings are as assigned primarily by Standard & Poor's Corporation ("S&P")
when available, with remaining ratings as assigned on an equivalent basis
by Moody's Investors Service, Inc. ("Moody's"). Ratings for publicly
traded securities are determined when the securities are acquired and are
updated monthly to reflect any changes in ratings.
(2) This category includes $11.6 million of publicly traded securities not
currently rated by S&P or Moody's and $7.0 million of private placement
securities not rated by either S&P or Moody's. The National Association of
Insurance Commissioners (the "NAIC") has rated 97.1% of these private
placements as investment grade.

The following table presents a maturity schedule of the Company's fixed
maturity securities. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.

Percent Carrying
of Total Value
------------------------ ----------
March 31, December 31, March 31,
Scheduled Maturity 1999 1998 1999
- ------------------ --------- ------------ ----------

Due in 1 year or less................ 7.8% 7.0% $ 205,300
Due after 1 year through 5 years..... 25.1 25.8 659,897
Due after 5 years through 10 years... 30.7 31.8 806,861
Due after 10 years through 20 years.. 17.3 17.3 453,043
Due after 20 years................... 19.1 18.1 502,512
----- ----- ----------
Total.............................. 100.0% 100.0% $2,627,613
===== ===== ==========

The Company loans fixed income securities to third parties, primarily major
brokerage firms. As of March 31, 1999 and December 31, 1998, fixed maturities
with a fair value of $127,964 and $87,392, respectively, were loaned. The
Company separately maintains a minimum of 100% of the value of the loaned
securities as collateral for each loan. Financial Accounting Standards Board
("FASB") Statement of Financial Accounting Standards ("SFAS") No. 125,
"Accounting for

Note 3 - Investments-(Continued)

Transfers and Servicing of Financial Assets and Extinguishment of Liabilities,"
requires the securities lending collateral to be classified as investments. The
corresponding liability is included in Other Liabilities in the Company's
consolidated balance sheet.

Note 4 - Shareholders' Equity

Share Repurchase Programs

During the first three months of 1999, the Company repurchased 589,700
shares of its common stock, or 1% of the outstanding shares on December 31,
1998, at an aggregate cost of $14,296, or an average cost of $24.24 per share,
under its stock repurchase program. Since early 1997, 6,597,100 shares, or 14%
of the shares outstanding on December 31, 1996, have been repurchased at an
aggregate cost of $177,717, equal to an average cost of $26.94 per share.
Including shares repurchased in 1995, the Company has repurchased 31% of the
shares outstanding on December 31, 1994. Shares of common stock may be purchased
from time to time through open market and private purchases, as available. The
repurchase of shares was financed through cash generated from operations and,
when necessary, the Bank Credit Facility. As of March 31, 1999, $22,283 remained
authorized for future share repurchases.

Note 5 - Deferred Policy Acquisition Costs

Acquisition costs, consisting of commissions, premium taxes and other
costs, which vary with and are primarily related to the production of insurance
business, are capitalized and amortized in proportion to estimated gross profits
for interest-sensitive life and investment (annuity) contracts and over the
terms of the insurance policies for other individual life and property and
casualty contracts.

The Company periodically reviews the assumptions and estimates used in
capitalizing policy acquisition costs. In 1999, the Company began deferring
additional sales-related costs for all new life and annuity contracts to be more
consistent with common industry accounting practices. The estimated impact of
this change is an increase to net income of approximately $3,900 for 1999, of
which $975 was recognized during the first quarter of 1999.

Note 6 - Income Taxes

The Internal Revenue Service (the "IRS") regularly audits the Company's
federal income tax returns and recently completed its audit of the Company's
1994 and 1995 tax returns. As a result of this audit, certain tax benefits which
the Company realized in the past are no longer available to the Company. In
addition, in the course of the audit, the IRS has taken the position that it is
not bound by certain documented understandings contained in the Revenue Agent's
Reports (the "RARs") pertaining to the audits of the Company's 1989 through 1993
tax returns. The Company is vigorously contesting the IRS' position and believes
the IRS should honor the understandings documented in the RARs. The Company's
tax advisors, KPMG LLP, concur with the Company's interpretation of the RARs.
The outcome of this matter is uncertain. Therefore, the Company has not accrued
a liability in its financial statements with regard to this matter. The maximum
amount of additional taxes, with respect to the 1994 through 1998 tax years, if
any, that might be due as a result of the resolution of this matter would be
less than 5% of the Company's

Note 6 - Income Taxes-(Continued)

shareholders' equity as of March 31, 1999. Such additional taxes, if any, would
increase the Company's income tax expense and effective corporate tax rate only
in the year when such an assessment becomes probable and can be reasonably
estimated.

Note 7 - Reinsurance

The Company recognizes the cost of reinsurance premiums over the contract
periods for such premiums in proportion to the insurance protection provided.
Amounts recoverable from reinsurers for unpaid claims and claim settlement
expenses, including estimated amounts for unsettled claims, claims incurred but
not reported and policy benefits, are estimated in a manner consistent with the
insurance liability associated with the policy. The effect of reinsurance on
premiums written; premiums earned; and benefits, claims and settlement expenses
were as follows:

Ceded to Assumed
Gross Other from State
Amount Companies Facilities Net
-------- --------- ---------- --------
Three months ended
March 31, 1999
------------------

Premiums written....... $199,382 $6,045 $4,728 $198,065
Premiums earned........ 147,645 6,078 4,677 146,244
Benefits, claims and
settlement expenses.. 106,451 9,797 4,606 101,260

Three months ended
March 31, 1998
------------------

Premiums written....... $197,870 $5,262 $4,346 $196,954
Premiums earned........ 142,495 5,245 3,957 141,207
Benefits, claims and
settlement expenses.. 101,384 7,502 3,548 97,430

The Company maintains an excess and catastrophe treaty reinsurance program.
The Company reinsures 95% of catastrophe losses above a retention of $7.5
million per occurrence up to $80 million per occurrence in 1999. This program is
augmented by a $100 million equity put that provides an option to sell shares of
the Company's convertible preferred stock with a floating rate dividend at a
pre-negotiated price in the event losses from catastrophes exceed the
catastrophe reinsurance program coverage limit. Before tax benefits, the equity
put provides a source of capital for up to $154 million of catastrophe losses
above the reinsurance coverage limit. The fee for the equity put is charged
directly to additional paid-in capital. For liability coverages, including the
educator professional liability policy, the Company reinsures each loss above a
retention of $0.5 million up to $20 million. The Company also reinsures each
property loss above a retention of $0.5 million up to $2.5 million.

Note 8 - Segment Information

The Company conducts and manages its business through four operating
segments. The three segments representing the major lines of insurance business
are: property and casualty insurance, principally personal lines automobile and
homeowners insurance; individual tax-qualified annuity products; and life
insurance. The fourth segment, Corporate and Other, includes primarily debt
service and realized investment gains and losses. Summarized financial
information for these segments is as follows:

Three Months Ended
March 31,
--------------------------
1999 1998
---------- -------------

Insurance premiums and contract charges earned
Property and casualty.......................... $ 120,986 $ 116,031
Annuity........................................ 3,974 3,594
Life........................................... 21,284 21,582
---------- ----------
Total.................................... $ 146,244 $ 141,207
========== ==========
Net investment income
Property and casualty.......................... $ 9,192 $ 9,934
Annuity........................................ 26,484 27,327
Life........................................... 11,505 11,129
Corporate and other............................ 33 404
Intersegment eliminations...................... (290) (274)
---------- ----------
Total.................................... $ 46,924 $ 48,520
========== ==========
Net income
Operating income
Property and casualty........................ $ 10,475 $ 12,539
Annuity...................................... 5,871 5,299
Life......................................... 4,827 2,646
Corporate and other,
including interest expense................. (2,083) (2,166)
---------- ----------
Total operating income................... 19,090 18,318
Realized investment gains (losses), after tax.. (2,039) 4,141
---------- ----------
Total.................................... $ 17,051 $ 22,459
========== ==========
Amortization of intangible assets
Value of acquired insurance in force
Property and casualty........................ $ 258 $ 258
Annuity...................................... 501 591
Life......................................... 543 582
---------- ----------
Subtotal................................... 1,302 1,431
Goodwill....................................... 405 405
---------- ----------
Total.................................... $ 1,707 $ 1,836
========== ==========

March 31, December 31,
1999 1998
---------- ------------
Assets
Property and casualty.......................... $ 724,051 $ 737,260
Annuity........................................ 2,730,820 2,730,092
Life........................................... 873,636 863,864
Corporate and other............................ 108,025 95,579
Intersegment eliminations...................... (33,887) (31,315)
---------- ----------
Total.................................... $4,402,645 $4,395,480
========== ==========

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in millions)

Forward-looking Information

Statements made in the following discussion that state the Company's or
management's intentions, hopes, beliefs, expectations or predictions of the
future are forward-looking statements. It is important to note that the
Company's actual results could differ materially from those projected in such
forward-looking statements due to, among other risks and uncertainties inherent
in the Company's business, the following important factors:

. Changes in the composition of the Company's assets and liabilities through
acquisitions or divestitures.

. Prevailing interest rate levels, including the impact of interest rates on
(i) unrealized gains and losses on the Company's investment portfolio and
the related after-tax effect on the Company's shareholders' equity and total
capital and (ii) the book yield of the Company's investment portfolio.

. The impact of fluctuations in the capital markets on the Company's ability
to refinance outstanding indebtedness or repurchase shares of the Company's
outstanding common stock.

. The frequency and severity of catastrophes such as hurricanes, earthquakes
and storms, and the ability of the Company to maintain a favorable
catastrophe reinsurance program.

. Future property and casualty loss experience and its impact on estimated
claims and claim adjustment expenses for losses occurring in prior years.

. The Company's ability to develop and expand its agency force and its direct
product distribution systems, as well as the Company's ability to maintain
and secure product sponsorships by local, state and national education
associations.

. The competitive impact of new entrants such as mutual funds and banks into
the tax deferred annuity products markets, and the Company's ability to
profitably expand its property and casualty business in highly competitive
environments.

. Changes in insurance regulations, including (i) those effecting the ability
of the Company's insurance subsidiaries to distribute cash to the holding
company and (ii) those impacting the Company's ability to profitably write
property and casualty insurance policies in one or more states.

. Changes in federal income tax laws and changes resulting from federal tax
audits effecting corporate tax rates or taxable income, and regulations
changing the relative tax advantages of the Company's life and annuity
products to customers.

. The Company's ability to maintain favorable claims-paying ability ratings.

. Adverse changes in policyholder mortality and morbidity rates.

Three Months Ended March 31, 1999 Compared With Three Months Ended March 31,
1998

The results for the 12 months ended March 31, 1999 represented a 16% return
on equity. Average return on equity was 17% for both the three years and five
years ended March 31, 1999. The Company invests capital in recruiting and
retaining agents, developing new products, improving customer service, expanding
its marketing efforts and upgrading technology. Beyond this, the Company has
used available capital in ways that it has believed will provide the greatest
value for shareholders; in recent years, that available capital has been
utilized in the Company's share repurchase program. During the first three
months of 1999, the Company repurchased 1% of the shares outstanding on December
31, 1998 at an aggregate cost of $14.3 million.

Insurance Premiums and Contract Charges

Insurance Premiums Written and Contract Deposits

Three Months Ended Growth Over
March 31, Prior Year
------------------ -----------------
1999 1998 Percent Amount
---- ---- ------- ------

Automobile and property
(voluntary)............... $114.4 $111.0 3.1% $ 3.4
Annuity deposits............ 51.3 54.3 -5.5% (3.0)
Life insurance.............. 27.8 27.3 1.8% 0.5
------ ------ -----
Subtotal - core lines. 193.5 192.6 0.5% 0.9
Involuntary and other
property & casualty....... 4.6 4.4 4.5% 0.2
------ ------ -----
Total................. $198.1 $197.0 0.6% $ 1.1
====== ====== =====

Insurance Premiums and Contract Charges Earned
(Excludes annuity and life contract deposits)

Three Months Ended Growth Over
March 31, Prior Year
------------------ -----------------
1999 1998 Percent Amount
------ ------ ------- ------

Automobile and property
(voluntary)................ $114.6 $110.0 4.2% $ 4.6
Annuity...................... 4.0 3.6 11.1% 0.4
Life......................... 21.3 21.6 -1.4% (0.3)
------ ------ -----
Subtotal - core lines.... 139.9 135.2 3.5% 4.7
Involuntary and other
property & casualty........ 6.3 6.0 5.0% 0.3
------ ------ -----
Total.................... $146.2 $141.2 3.5% $ 5.0
====== ====== =====

Insurance premiums written and contract deposit growth of 0.6% was less
than historical levels for the Company, with growth in the property and casualty
and life segments mostly offset by a decline in the annuity segment. 1998's
annuity deposit growth benefitted from new tax legislation that resulted in a
high volume of single premium rollover deposits on tax-qualified products. For
the first three months of 1999, single premium deposits declined significantly,
- -25.4%. Also, underlying mutual fund 1 year performance of the Company's
variable annuities was poor. Changes were implemented, the mutual fund
investment manager was replaced and

contract structural changes were made that will enable the Company's management
to make a much quicker reaction to unfavorable performance in the future.
Overall management of outside mutual fund portfolio managers has been outsourced
to Wilshire Associates. These changes were approved by the Company's mutual fund
shareholders in March 1999. The first full month of performance, April 1999,
showed significant improvement.

The Company continues to expand its exclusive agency force and particularly
the number of experienced agents which historically have been key indicators of
the Company's prospects for growth. In total, the Company ended the quarter with
1,098 exclusive full-time agents, growth of 6.3% compared to 1,033 agents 12
months earlier. Particularly significant was the 7.0% growth in the number of
experienced agents, reflecting the success of the Company's efforts to improve
agent recruitment, training and retention.

Voluntary automobile and homeowners premium written growth was 3.1% for the
first three months of 1999, reflecting growth in average premium per policy and
the number of both automobile and homeowners policies in force. Automobile
insurance premium increased 1.7%, or $1.5 million, compared to the first three
months of last year, and homeowners premium increased 9.2%, or $1.9 million.
Approximately one-half of the property and casualty increase in premiums
resulted from unit growth of 2.0% bringing quarter-end policies in force to
863,000. Compared to December 31, 1998, total property and casualty policies in
force increased 4,000, with the growth split equally between automobile and
homeowners insurance. The Company's average annual premium per policy for
automobile and homeowners increased approximately 2% and 4%, respectively,
compared to a year earlier. Including the impact of increased deductibles and
reduced coverage in coastal areas, the Company's average effective premium per
policy for homeowners insurance increased 7% compared to the first three months
of 1998.

Over the last 12 months based on policies in force, the property and
casualty retention rate for new and renewal policies was 88%, about 1 percentage
point less than March 31, 1998. The change in property and casualty retention
was primarily caused by greater price competition for automobile insurance.

Annuity deposits decreased 5.5% compared to the first three months of 1998.
For the first three months of 1999, annuity contributions received through
payroll deduction increased 1.4% compared to the first quarter of 1998. New
deposits to variable mutual fund annuities were equal to last year, while new
deposits to fixed annuities decreased 14.4%. Variable annuity accumulated funds
on deposit at March 31, 1999 were $1.1 billion, $21 million more than a year
ago, a 1.9% increase. Overall annuity cash value retention improved 1.7
percentage points to 93.1% for the 12 months ended March 31, 1999, and over the
last 12 months the number of annuity contracts in force grew 8.0%, or 9,000
contracts.

During the first quarter of 1998, the Company introduced new IRA annuities
in response to a change in tax legislation. While the 403(b) annuity remains a
better alternative for most educators, first quarter 1999 sales of these IRA
products generated 3.1 percentage points of growth in new annuity deposits. The
new IRA retirement options have created heightened customer interest and an
opportunity for agents to meet with both potential and existing customers.

Life premium growth was 1.8% for the first three months of 1999. This
growth included new business from term life products introduced early in 1997
and a new series of whole life products

introduced late in the third quarter of 1998 and reflects an insurance in force
lapse ratio that continues to be approximately 7%. Customer acceptance of these
new products continues to grow, as they accounted for approximately half of the
Company's new life sales in the first quarter of 1999.

Net Investment Income

Investment income of $46.9 million for the first three months of 1999
decreased 3.3%, or $1.6 million, (2.5% after tax) compared to last year due to a
decline in interest rates and a decrease in the investment portfolio. The
average pretax yield on the investment portfolio was 7.1% (4.8% after tax) for
the first three months of 1999 compared to a pretax yield of 7.3% (4.8% after
tax) last year, a decrease of 12 basis points, or 1.7%. Average investments
(excluding the securities lending collateral) decreased 0.8% over the past 12
months reflecting the utilization of capital for the share repurchase program
and customers' preference for variable as opposed to fixed annuity contracts.
Nearly all, or $1.4 million, of the investment income decrease was offset by a
decline in interest credited to fixed annuity deposits. Excluding the effect of
the use of cash in the share repurchase program, net investment income would
have been $49.6 million, a small decrease compared to the first three months of
1998.

Realized Investment Gains and Losses

Realized investment losses were $3.1 million for the three months ended
March 31, 1999 compared to gains of $6.4 million for the first quarter of 1998.
The current quarter realized investment loss resulted primarily from the sale of
two fixed income securities.

Benefits, Claims and Settlement Expenses

Three Months Ended Growth Over
March 31, Prior Year
------------------ --------------------
1999 1998 Percent Amount
------ ----- ------- ------

Property and casualty..... $ 91.6 $86.0 6.5% $ 5.6
Life...................... 9.7 11.4 -14.9% (1.7)
------ ----- -----
Total.................. $101.3 $97.4 4.0% $ 3.9
====== ===== =====

Property and casualty
statutory loss ratio:
Before catastrophes... 73.8% 71.2% 2.6%
After catastrophes.... 75.7% 74.4% 1.3%

Property and casualty claims and settlement costs reflect an increase in
non-catastrophe weather-related losses, primarily from January 1999 winter
storms, offset in part by a decline in catastrophe losses. Favorable development
of property and casualty claims occurring in prior years was $0.6 million in the
first three months of 1999, compared to $5.8 million in the same period in 1998.

The decrease in life benefits resulted from positive experience on a small
closed block of individual accident and health policies. Excluding this
adjustment, life benefits were comparable to the first three months of 1998.

Interest Credited to Policyholders

Three Months Ended Growth Over
March 31, Prior Year
------------------ -----------------
1999 1998 Percent Amount
----- ----- ------- ------

Annuity...................... $17.2 $18.6 -7.5% $(1.4)
Life......................... 5.9 5.5 7.3% 0.4
----- ----- -----
Total..................... $23.1 $24.1 -4.1% $(1.0)
===== ===== =====

Interest credited to fixed annuity contracts decreased as the fixed annuity
average annual interest rate credited decreased 0.4 percentage points to 5.2% in
the first three months of 1999, compared to a rate of 5.6% for the same period
last year. In addition, the average accumulated deposits for the three months
ended March 31, 1999 increased only slightly compared to the same period in
1998. Life insurance interest credited increased as a result of continued growth
in the interest-sensitive whole life insurance reserves.

Policy Acquisition and Operating Expenses

Policy acquisition and operating expenses represent the Company's insurance
underwriting expenses. For the first three months of 1999, policy acquisition
and operating expenses decreased $2.3 million, or 5.9%, compared to the same
period last year, reflecting the deferral of additional acquisition costs. In
1999, the Company began deferring additional sales-related costs for all new
life and annuity contracts to be more consistent with common industry accounting
practices. This increased net acquisition costs deferred by $1.5 million for the
three months ended March 31, 1999. Future quarterly expenses are expected to
include similar amounts of additional net deferrals. Excluding the net deferral
of additional sales-related costs, policy acquisition and operating expenses for
the first three months of 1999 were $0.8 million, or 2.1%, less than the same
period last year due to a decrease in the amortization of life deferred
acquisition costs of $1.9 million to reflect current mortality estimates
resulting in higher anticipated future gross profits.

The total corporate expense ratio on a statutory accounting basis was 21.6%
for the three months ended March 31, 1999, 0.1 percentage points better than the
same period in 1998. The property and casualty expense ratio, the 15th lowest of
the 100 largest property and casualty insurance groups for 1997, improved to
19.5% for the three months ended March 31, 1999, compared to 20.0% last year.

Amortization of Intangible Assets

Amortization of intangible assets decreased by $0.1 million to $1.7 million
for the three months ended March 31, 1999, compared to $1.8 million for the same
period in 1998, as a result of a scheduled decrease in the non-cash amortization
of the value of acquired insurance in force related to the 1989 acquisition of
the Company.

Income Tax Expense

The effective income tax rate was 31.6% for the three months ended March
31, 1999, compared to 29.0% for the same period last year. Income from
investments in tax-advantaged securities reduced the effective income tax rate
3.8 and 3.5 percentage points in the three months ended March 31, 1999 and 1998,
respectively. In the first quarter of last year, non-recurring tax

benefits reduced the effective rate 5.3 percentage points and contributed $1.3
million, or $0.03 per share, to operating income for that period.

In addition, in the course of the audit, the IRS has taken the position
that it is not bound by certain documented understandings contained in the
Revenue Agent's Reports (the "RARs") pertaining to the audits of the Company's
1989 through 1993 tax returns. The Company is vigorously contesting the IRS'
position and believes the IRS should honor the understandings documented in the
RARs. The Company's tax advisors, KPMG LLP, concur with the Company's
interpretation of the RARs. The outcome of this matter is uncertain. Therefore,
the Company has not accrued a liability in the financial statements with regard
to this matter. The maximum amount of additional taxes, with respect to the 1994
through 1998 tax years, if any, that might be due as a result of the resolution
of this matter would be less than 5% of the Company's shareholders' equity as of
March 31, 1999. Such additional taxes, if any, would increase the Company's
income tax expense and effective corporate tax rate only in the year when such
an assessment becomes probable and can be reasonably estimated.

Operating Income

For the first three months of 1999, operating income (net income before the
after tax impact of realized investment gains and losses) increased 3.8% and
operating income per share on a diluted basis of $0.45 increased 9.8%. Current
year earnings and investment income were reduced compared to the first three
months of 1998 due to the utilization of capital in the Company's share
repurchase programs. Operating income by segment was as follows:

Three Months Ended Growth Over
March 31, Prior Year
------------------ -------------------
1999 1998 Percent Amount
----- ----- ------- ------

Property & casualty
Before catastrophe losses and
non-recurring tax benefits.......... $12.0 $13.7 -12.4% $(1.7)
Catastrophe losses, after tax......... 1.5 2.4 -37.5% (0.9)
Non-recurring tax benefits............ - 1.3 -100.0% (1.3)
----- ----- -----
Total including catastrophe losses.. 10.5 12.6 -16.7% (2.1)
Annuity................................. 5.9 5.3 11.3% 0.6
Life.................................... 4.9 2.7 81.5% 2.2
Corporate and other expense............. 0.6 0.7 0.1
Interest expense........................ 1.6 1.5 0.1
----- ----- -----
Total............................... $19.1 $18.4 3.8% $ 0.7
===== ===== =====
Total before catastrophe losses
and non-recurring tax benefits.... $20.6 $19.5 5.6% $ 1.1
===== ===== =====

Property and casualty
statutory combined ratio:
Before catastrophes................. 93.3% 90.9% 2.4%
After catastrophes.................. 95.2% 94.1% 1.1%

Property and casualty segment operating income was lower than the same
quarter last year due to January 1999 winter storms. Also, 1998 included a non-
recurring tax benefit. Despite the first quarter's increase in winter storm
losses, the Company's property and casualty combined ratio increased only 1.1
percentage points from the same period last year. Automobile results for the
first three months of 1999 produced a combined ratio of 89.8%, 1.6 percentage
points higher than the same period last year, reflecting the increase in
automobile winter storm-related losses. The homeowners combined ratio of 116.0%
was 0.8 percentage points better than the first three months of 1998, reflecting
the decline in catastrophe losses.

The 11.3% increase in annuity segment operating income was driven by an
8.1% growth in total margin and a 1.9% growth in variable annuity funds on
deposit. The net deferral of additional sales-related costs contributed $0.4
million to operating income for the first quarter of 1999. Total annuity segment
policy acquisition and operating expenses were unchanged compared to the first
quarter of 1998 after the net deferral of additional sales-related costs. Fees
on variable annuity business grew by 11.1% compared to the first three months of
1998 as a result of growth in the variable annuity business. Variable annuity
accumulated deposits were $1.1 billion at March 31, 1999, $21.0 million more
than 12 months earlier. Fixed annuity accumulated cash value of $1.4 billion was
equal to March 31, 1998.

The increase in life operating earnings included the $0.6 million net
deferral of additional sales-related costs. In addition, life segment earnings
reflected the impact of better mortality versus prior assumptions in the
amortization of deferred acquisition costs and positive experience on a small
closed block of individual accident and health business. Excluding these items,
life segment earnings increased 11.1% over the first quarter of 1998.

Net Income

Net Income Per Share, Diluted

Three Months Ended Growth Over
March 31, Prior Year
------------------ -------------------
1999 1998 Percent Amount
------- ----- -------- ------

Operating income...................... $ 0.45 $0.41 9.8% $ 0.04
Realized investment gains (losses).... (0.05) 0.09 (0.14)
------ ----- ------
Net income............................ $ 0.40 $0.50 -20.0% $(0.10)
====== ===== ======

Net income, which includes realized investment gains and losses, for the
first three months of 1999 decreased by 24.0% and net income per diluted share
decreased by 20.0% compared to the same period in 1998 reflecting $2.0 million
of after tax realized investment losses for the quarter, compared to $4.1
million of after tax realized investment gains in the same period last year.
The current quarter realized investment loss resulted primarily from the sale of
two fixed income securities. The Company's share repurchase program reduced net
income by $1.7 million for the first three months of 1999 but resulted in an
increase of $0.02 in earnings per share for the period due to the reduction in
the number of shares outstanding.

Liquidity and Financial Resources

Investments

The Company's investment strategy emphasizes investment grade, publicly
traded fixed income securities. At March 31, 1999, fixed income securities
represented 96.5% of investments excluding the securities lending collateral.
Of the fixed income investment portfolio, 93.0% was investment grade and 99.7%
was publicly traded. The average quality of the total fixed income portfolio
was A+ at March 31, 1999.

The duration of the investment portfolio is managed to provide cash flow to
satisfy policyholder liabilities as they become due. The average option
adjusted duration of total investments was 4.3 years at March 31, 1999 and 4.4
years at December 31, 1998. The Company has included in its annuity products
substantial surrender penalties to reduce the likelihood of unexpected increases
in policy or contract surrenders. All annuities issued since 1982 and
approximately 75% of all outstanding fixed annuity accumulated cash values are
subject in most cases to substantial early withdrawal penalties.

Cash Flow

The short-term liquidity requirements of the Company, within a 12-month
operating cycle, are for the timely payment of claims and benefits to
policyholders, operating expenses, interest payments and federal income taxes.
Cash flow in excess of these amounts has been used to fund business growth,
retire short-term debt, pay dividends to shareholders and repurchase

shares of the Company's common stock. Long-term liquidity requirements, beyond
one year, are principally for the payment of future insurance policy claims and
benefits and retirement of long-term notes.

Operating Activities

As a holding company, HMEC conducts its principal operations in the
personal lines segment of the property and casualty and life insurance
industries through its subsidiaries. HMEC's insurance subsidiaries generate cash
flow from premium and investment income, generally well in excess of their
immediate needs for policy obligations, operating expenses and other cash
requirements. Net cash provided by operating activities decreased compared to
the first three months of 1998 primarily due to a decrease in investment income
collected and an increase in expense payments, both somewhat influenced by
timing. Cash provided by operating activities primarily reflects net cash
generated by the insurance subsidiaries.

Payment of principal and interest on debt, fees related to the catastrophe-
linked equity put option, dividends to shareholders and parent company operating
expenses, as well as the share repurchase program, are dependent upon the
ability of the insurance subsidiaries to pay cash dividends or make other cash
payments to HMEC, including tax payments pursuant to tax sharing agreements.
The insurance subsidiaries are subject to various regulatory restrictions which
limit the amount of annual dividends or other distributions, including loans or
cash advances, available to HMEC without prior approval of the insurance
regulatory authorities. Dividends which may be paid by the insurance
subsidiaries to HMEC during 1999 without prior approval are approximately $67
million. Although regulatory restrictions exist, dividend availability from
subsidiaries has been, and is expected to be, more than adequate for HMEC's
capital needs.

Investing Activities

HMEC's insurance subsidiaries maintain significant investments in fixed
maturity securities to meet future contractual obligations to policyholders. In
conjunction with its management of liquidity and other asset/liability
management objectives, the Company, from time to time, will sell fixed maturity
securities prior to maturity and reinvest the proceeds in other investments with
different interest rates, maturities or credit characteristics. Accordingly,
the Company has classified the entire fixed maturity securities portfolio as
available for sale.

Financing Activities

Financing activities include primarily repurchases of the Company's common
stock, payment of dividends, the receipt and withdrawal of funds by annuity
policyholders and borrowings and repayments under the Company's debt facilities.
Fees related to the catastrophe-linked equity put which augments its reinsurance
program have been charged directly to additional paid-in capital.

For the first three months of 1999, receipts from annuity contracts were
slightly less than contract maturities and withdrawals, and net transfers to
variable annuity assets decreased compared to the same period last year. Life
policy account balances increased slightly compared to last December.

During the first three months of 1999, the Company repurchased 589,700
shares of its common stock, or 1% of the shares outstanding on December 31,
1998, at an aggregate cost of

$14.3 million, or an average cost of $24.24 per share, under its stock
repurchase program. Since early 1997, 6,597,100 shares, or 14% of the shares
outstanding on December 31, 1996, have been repurchased at an aggregate cost of
$177.7 million, equal to an average cost of $26.94 per share. Including shares
repurchased in 1995, the Company has repurchased 31% of the shares outstanding
on December 31, 1994. Shares of common stock may be purchased from time to time
through open market and private purchases, as available. The repurchase of
shares was financed through cash generated from operations and, when necessary,
the Bank Credit Facility. As of March 31, 1999, $22.3 million remained
authorized for future share repurchases.

Capital Resources

The Company has determined the amount of capital which is needed to
adequately fund and support business growth, based on risk-based capital
formulas including those developed by the NAIC. Historically, the Company's
insurance subsidiaries have generated capital in excess of such needed capital.
These excess amounts have been paid to HMEC through dividends. HMEC has then
utilized these dividends and its access to the capital markets to retire long-
term debt, repurchase shares of its common stock, increase and pay dividends to
its shareholders and for other corporate purposes. Management anticipates that
the Company's sources of capital will continue to generate capital in excess of
the needs for business growth, debt interest payments and shareholder dividends.

The total capital of the Company was $623.8 million at March 31, 1999,
including $99.6 million of long-term debt and $51.0 million of short-term debt.
Total debt represented 24.1% of capital at the end of March, within the
Company's target operating range of 20% to 25%.

Shareholders' equity was $473.0 million at March 31, 1999, including an
unrealized gain in the Company's investment portfolio of $35.0 million after
taxes and the related impact on deferred policy acquisition costs associated
with annuity and interest-sensitive life policies. The market value of the
Company's common stock and the market value per share were $962.4 million and
$23 3/16, respectively, at March 31, 1999. Book value per share was $11.40 at
March 31, 1999, $10.56 excluding investment market value adjustments.

The Company was added to the S&P MidCap 400 Index after the close of
trading on January 29, 1999. Certain mutual funds that seek to replicate this
index have added the Company's common stock to their investment portfolio.
Standard & Poor's Corporation ("S&P") indicated that the Company was selected
for this index due to its market capitalization (over $1 billion) and its
uniqueness in the financial services sector as a multiline, national insurance
company with a strong position in a niche market and solid financial
credentials.

In January 1996, the Company issued $100.0 million face amount of 6 5/8%
Senior Notes ("Senior Notes") at a discount of 0.5% which will mature on January
15, 2006. Interest on the Senior Notes is payable semi-annually. The Senior
Notes are redeemable in whole or in part, at any time at the Company's option.
The Senior Notes have an investment grade rating from Standard & Poor's
Corporation ("S&P") (A-), Duff & Phelps Credit Rating Co. ("Duff & Phelps") (A),
and Moody's Investors Service, Inc. ("Moody's") (Baa2) and are traded on the New
York Stock Exchange (HMN 6 5/8).

As of March 31, 1999 and December 31, 1998, the Company had short-term debt
of $51.0 million and $50.0 million, respectively, outstanding under the Bank
Credit Facility. The Bank Credit Facility allows unsecured borrowings of up to
$65.0 million at Interbank Offering Rates plus

0.3% to 0.5% or Bank of America National Trust and Savings Association reference
rates. The rate on the borrowings under the Bank Credit Facility was Interbank
Offering Rate plus 0.3%, or 5.3%, as of March 31, 1999. The commitment for the
Bank Credit Facility terminates on December 31, 2001.

The Company's ratio of earnings to fixed charges for the three months ended
March 31, 1999 was 11.0x compared to 14.2x for the same period in 1998, with the
decline attributable to realized investment losses recorded in the current
period compared to realized investment gains recorded in the first three months
of 1998.

Total shareholder dividends were $3.9 million for the first three months of
1999. The Company has targeted a payout ratio of 15%. In November 1998, the
Board of Directors authorized the seventh increase to the Company's quarterly
dividend since the Company's initial public offering in November 1991. The
regular quarterly dividend increased by 16% to $0.0925 per share.

The Company's catastrophe reinsurance program is augmented by a $100
million equity put. This equity put provides an option to sell shares of the
Company's convertible preferred stock with a floating rate dividend at a pre-
negotiated price in the event losses from catastrophes, individually or in the
aggregate during a calendar year, exceed $80 million, the 1999 coverage limit of
the reinsurance program.

Market Risk

Market risk is the risk that the Company will incur losses due to adverse
changes in market rates. The Company's primary market risk exposure is the risk
that the Company will incur economic losses due to adverse changes in interest
rates. This risk arises as the Company's profitability is affected by the
spreads between interest yields on investments and rates credited on insurance
liabilities.

The Company manages its market risk by matching the projected cash outflows
of assets with the projected cash outflows of liabilities. For all its assets
and liabilities, the Company seeks to maintain reasonable durations, consistent
with the maximization of income without sacrificing investment quality and
providing for liquidity and diversification. The risks associated with mutual
fund investments supporting variable annuity products are assumed by those
contractholders, not by the Company.

There have been no material changes during the first three months of 1999
in the market risks the Company is exposed to and the management of those risks,
which are described in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's 1998 Form 10-K.

Year 2000

All of the Company's mainframe computer systems critical to its business
are year 2000 compliant, including the new life processing system which the
Company implemented in April 1999. The Company has contacted its vendors
inquiring with regard to their year 2000 compliance status and plans and the
Company has received responses indicating that most major vendors believe that
they are, or would be before the end of 1999, year 2000 compliant. In the
remainder of 1999, additional testing of systems, final review of individual
personal computer

applications and contingency plans will be completed.

Because of the extent of systems conversion already completed, the Company
believes the worst-case scenario would be limited to major vendor conversions
that fail to achieve compliance by the end of 1999. The result of this worst-
case scenario would be to interrupt the Company's ability to process certain
business transactions which could have a significant effect on its business,
results of operations and financial condition. During 1999, contingency plans
are being completed to mitigate the risks of vendor failures to achieve
compliance by the end of the year.

In addition, non-system contingency plans will be developed during 1999 for
possible lapse in service from utility suppliers and other third party service
providers. These contingency plans will include efforts to minimize business
interruption through action plans which will encompass back-up processes that
utilize alternative suppliers and third party service providers, where
appropriate.

Costs for this compliance project represent the allocation of existing
internal information technology resources to address year 2000 compliance and
are not incremental costs to the Company. The total cost of the compliance
project is estimated to be $6 million, before tax benefits, and is being funded
through operating cash flows. The Company is expensing all costs associated with
these system changes and through March 31, 1999 has expensed $5.8 million before
tax benefits, including a cost of $0.4 million for the first three months of
1999.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

The information required by Item 305 of Regulation S-K is contained in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in this Form 10-Q.

PART II: OTHER INFORMATION

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

None.

Item 6: Exhibits and Reports on Form 8-K

Exhibit
No. Description
------- -----------

(a) The following items are filed as Exhibits.
(11) Statement re computation of per share earnings.
(27) Financial Data Schedule.

(b) No reports on Form 8-K were filed by the Company during the first
quarter of 1999.

SIGNATURES

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

HORACE MANN EDUCATORS CORPORATION
(Registrant)

Date May 13, 1999 /s/ Paul J. Kardos
--------------------------- -----------------------------------------
Paul J. Kardos
Chairman of the Board,
President and Chief Executive Officer

Date May 13, 1999 /s/ Larry K. Becker
--------------------------- -----------------------------------------
Larry K. Becker
Executive Vice President
and Chief Financial Officer

Date May 13, 1999 /s/ Roger W. Fisher
--------------------------- -----------------------------------------
Roger W. Fisher
Senior Vice President,
Financial Information and Control