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Correspondence

October 19, 2005

Ms. Ibolya Ignat

Staff Accountant

Division of Corporation Finance

United States Securities and Exchange Commission

Washington, D.C. 20549

    Re:

    Erie Family Life Insurance Company

Amended Form 10-K for fiscal year ended December 31, 2004

File No. 002-39458

Dear Ms. Ignat:

Erie Family Life hereby submits this additional correspondence in response to the staff’s letter
dated October 3, 2005.

The Company acknowledges that:

    o

    The Company is responsible for the adequacy and accuracy of the disclosure in
the filings,

    o

    Staff comments or changes to disclosure in response to staff comments in the
filings reviewed by the staff do not foreclose the Commission from taking any action with
respect to the filing, and

    o

    The Company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the United
States.

RESPONSES

Form 10-K/A for the fiscal year ended December 31, 2004

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,
page 11

Critical Accounting Estimates, page 12

1. Deferred policy acquisition costs (DAC) asset, page 14

2. Insurance Liabilities, page 13

As noted in the June 30, 2005 Form 10-Q, the Company is installing new actuarial valuation systems.
These systems will marginally improve the Company’s ability to estimate sensitivity information
related to its DAC and insurance liability estimates. As noted in the Company’s August 8, 2005
response to the staff, conducting the type of analysis requested at the current time given system
limitations would be impractical. The Company completed its implementation of the valuation system
during the 3rd quarter for

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FAS 60
products and anticipates the final implementation of its new FAS 97 valuation system during the
4th quarter of 2005. Even with the implementation of these new systems, the type of
disclosure proposed below related to hypothetical scenarios that we believe meets the staff’s request, would still
impose a substantial burden on the Company. The Company is including an additional disclosure in
its 3rd quarter Form 10-Q around recent studies performed as follows:

Company assessment of actuarial assumptions — The Company periodically assesses its recent
experience relative to the actuarial assumptions.

The Company recently completed a mortality study covering 1998-2004 for its FAS 60 life insurance
products. These results were favorable and indicated that actual claims from mortality
were approximately 14% below expected values in the aggregate. Results were comparable between
standard and select underwriting classes, which were approximately 15% and 11% below expected,
respectively. Prior to 2005, the Company completed simplified reviews
of mortality for its universal life insurance products. These
reviews, while based on a small number of claims, indicated that
claims fell within an acceptable range of expected levels. In 2006,
the Company plans to include universal life policies in a more
comprehensive mortality study, similar to that completed for
traditional life policies in 2005.

The Company recently completed a lapse study for all of its major product groupings. For FAS 60
products the study covered 1998-2004. Lapse rates were lower than expected for large face term,
but were higher than expected for ART and permanent plans.
Results varied by duration of the contract and by calendar year within the 1998-2004 period
studied. For FAS 97 products, results have been favorable, with actual rates less than expected for
most product types and policy durations.

The Company’s most recent expense study has shown that due to a combination of decreased sales,
additional one-time costs, and increases in operating expenses, unit costs have
increased substantially from 2003 to 2004. Although still within industry norms, the Company is
attempting to lower these costs and in particular, increase sales. Maintenance costs have increased
in part to increases in operating expenses that outpaced growth in policies in force.

In line with the economy, the Company’s yield on its investments decreased in 2004 and increased
slightly in 2005. Interest credited to UL and annuity policyholders have been adjusted, thereby
maintaining the Company’s investment spread on these contracts. FAS 60 prohibits a lowering of
original interest rate assumptions.

Considering the above factors in aggregate, the Company is satisfied that no loss recognition
situation exists currently, and that none is expected. The Company will make periodic adjustments
to its actuarial assumptions to reflect developing information.

The disclosure below is presented for your review and consideration for future filings. If
acceptable to the staff, the Company will consider such detail for filings during the latter half
of 2006.

Long term actuarial assumptions are required in order to establish DAC and reserve estimates in the
financial statements of the Company. These actuarial assumptions for mortality rates, lapse rates,
administrative costs, and investment spreads must be made for many years into the future and vary
by product type, policy duration, etc. They are

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determined after studying past experience and trends as well as making judgments about future
events. Differences between actual results from these expected assumptions are accounted for based
on product type. UL and annuity products are accounted for under one accounting model (FAS 97) and
traditional whole life and term products are accounted for under a second accounting model (FAS
60). The tables below characterize how these differences are recognized in the Company’s financial
statements. The examples given are hypothetical, involve a change in one assumption only, and apply
generally by line of business. In reality, when one assumption changes other assumptions may
change. The tables do not consider multiple assumption changes.

I. UL/Fixed Annuities (FAS 97 Products) — In the computation of DAC, this accounting model
requires that during the current accounting period, previously “projected amounts” be replaced by
actual experience of the company (i.e. “trued up”). In addition, if due to current trends, the
company believes it should revise its future expectations; it should do so by “unlocking”
previously made assumptions for the remaining life of all policies. Truing up and unlocking will
cause variances in the patterns of recorded DAC amortization. The change in liability for FAS 97
products is not recorded in the Company’s statements of operations, thus, a change in actuarial
assumption will not affect FAS 97 product liabilities on the Company’s balance sheet.

    HYPOTHETICAL

    Long Term Financial

    Actuarial

    Short Term Financial Statement

    Statement

    Assumption

    Effect

    Effect

                If mortality (death
claims) is higher
than expected in
current period —
net of reinsurance

    Then, current profits are
lower than previously
projected thus reducing DAC
amortization in the current
period: for example if
mortality were 110% of
expected in the current year,
DAC would increase by $X and
death claims would increase
by $X2

    If the mortality
trend is considered
permanent, revise
future expectation,
which would lower
future profits and
accelerate DAC
amortization.

    If lapse rates are
higher than
expected (i.e.
higher surrender
values paid) in
current period

    Then, current profits are
higher than previously
projected due to higher
surrender charges partly offset by
increased DAC amortization in
the current period: for
example if lapsation were
110% of expected in the
current year, DAC would
increase by $Y and income
would increase be $Y2

    If the lapse trend
is considered
permanent, revise
future expectation,
which would
increase future
profits and
decelerate DAC
amortization.

    If administrative
expenses are higher
than expected in
current period

    Then, current profits are
lower than previously
projected and reduced DAC
amortization in the current
period: for example if
expenses were 110% of
expected in the current year,
DAC would decrease by $Z and
expenses would increase by
$Z2

    If the expense
trend is considered
permanent, revise
future expectation,
which would lower
future profits and
accelerate DAC
amortization.

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    HYPOTHETICAL

    Long Term Financial

    Actuarial

    Short Term Financial Statement

    Statement

    Assumption

    Effect

    Effect

    If earned
investment spreads
are lower than
expected in current
period

    Then, current profits are
lower than previously
projected reducing DAC
amortization in the current
period: for example if the
rate earned on investments
decreased by 10 b.p. in the
current year, DAC would
increase by $AA and revenue
would decrease by $AA2

    If the investment
spread trend is
considered
permanent, revise
future expectation,
which would lower
future profits and
accelerate DAC
amortization.

A change in the assumption opposite that presented in the table will reverse the immediate and long
term implications indicated above. Changes in assumptions under FAS 97 effects DAC only as policy
liabilities for fixed annuities and universal life under FAS 97 are recorded generally at levels
equal to policyholder account balances.

II. Traditional Life Products (FAS 60 Products) — This accounting model requires the continued use
of assumptions set at policy issue date for the entire lifetime of the policies unless a loss
recognition situation arises. There are other significant differences such as revenue recognition
between the two models that are discussed elsewhere in this statement.

    HYPOTHETICAL

    Long Term Financial

    Actuarial

    Short Term Financial Statement

    Statement

    Assumption

    Effect

    Effect

    If mortality (death
claims) is higher
than expected in
current period-net
of reinsurance

    Then, higher claims reduce
current profits. Less
significant is the write-off
of the associated DAC and
reserve. For example, if
mortality were 110% of
expected, the net pre-tax
profit impact would be an $X
reduction.

    None unless this is
considered a
permanent trend and
causes a loss
recognition
situation

    If lapse rates are
higher than
expected (i.e.
higher surrender
values paid) in
current period

    Then, higher surrender
benefits reduce current
profits. The associated
reserve and DAC is also
released. For example, if
lapses were 110% of expected
in the current period, net
profits would be reduced by
$Y.

    Same (however less
DAC remains to be
amortized in the
future)

    If administrative
expenses are higher
than expected in
current period

    Then, higher expenses reduce
current profits. There is no
impact on reserves or DAC.
For example, if expenses were
110% of expected in the
current period, profits would
be reduced by $Z.

    None unless this is
considered a
permanent trend and
causes a loss
recognition
situation

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    HYPOTHETICAL

    Long Term Financial

    Actuarial

    Short Term Financial Statement

    Statement

    Assumption

    Effect

    Effect

    If earned
investment spreads
are lower than
expected in current
period

    Then, lower investment income
reduces current profits. For
example, if the rate earned
on investments decreased by
10 b.p., profits would
decrease by $AA2

    None unless this is
considered a
permanent trend and
causes a loss
recognition
situation

A change in assumption opposite that presented in the table will reverse the immediate and long
term implications indicated above, except that favorable variances would not cause a loss
recognition event.

3. Results of Operations, page 15

Revenues, page 15

New language was incorporated into the Company’s December 31, 2004 Form 10-K/A to further describe
the reason for the decline in Annuity deposits and to discuss the fact that the decline in volume
does not indicate a known trend that is reasonably likely to have a material effect on financial
condition or operating performance of the business. No such description of this type of trend is
considered warranted.

It is unclear what is requested relative to a discussion of the effect of our “process review”?
Our letter of July 18, 2005 noted that management is in the process of revising some of its
traditional life products. The disclosure of that product review is included in Form 10-Q/A for
the quarter ended March 31, 2005, on page 18 in the first paragraph under ‘Analysis of Policy
Revenue’, as indicated in the Company’s July 18th letter.

Financial Statements, page 30

4. Note 4. Investments, page 42

In its future filings, the Company will update its financial disclosure regarding its securities
lending activities to clarify the Company’s lending activities. Our future filing will include the
following language in place of the existing disclosure:

The Company participates in securities lending programs that comply with state insurance department
regulatory requirements whereby marketable securities in its investment portfolio are transferred
to independent brokers or dealers based on, among other things, their creditworthiness in exchange
for collateral initially equal to at least 102% of the value of the securities on loan and is
thereafter maintained at a minimum of 100% of the market value of the securities loaned. The market
value of the securities on loan to each borrower is monitored daily and the borrower is required to
deliver additional collateral if the market value of the collateral falls below 100% of the market
value of the securities on loan. The Company maintains full ownership rights to the securities
loaned and accordingly the loaned securities are classified as investments. Under the guidance
provided in SFAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities, the Company recognizes the collateral as an asset under “securities lending
collateral” on its balance sheet and the Company records a corresponding liability for the
obligation to return the collateral to the borrower under “securities lending collateral”.

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Regarding cash flow presentation, SFAS 140 paragraph 94 states “The transferor of securities being
‘loaned’ accounts for cash received in the same way whether the transfer is accounted for as a sale
or a secured borrowing.” The Company interprets this statement to mean, collateral received,
because of its securities lending activities, would be treated similarly to sale transactions of
investment holdings. Sale of investment holdings by the Company are accounted for as investing
activities. The intent of the Company in participating in securities lending program is an
extension of its investment activities and the economic substance of receiving and returning
securities lending collateral are viewed by the Company as investing activities and not financing
activities.

    Sincerely,

    /s/ Philip A. Garcia

    Philip A. Garcia

Executive Vice President &

Chief Financial Officer

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