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Erie Family Life Insurance Company

July 18, 2005

Mr. Jim Rosenberg

Senior Assistant Chief Accountant

Division of Corporation Finance

United States Securities and Exchange Commission

Washington, D.C. 20549

    Re:

    Erie Family Life Insurance Company

    Form 10-K for the Year Ended December 31, 2004

    Form 10-Q for the Quarter Ended March 31, 2005

    File No. 002-39458

Dear Mr. Rosenberg:

Erie Family Life Insurance Company (“the Company”) hereby submits this additional correspondence in
response to the Securities and Exchange Commission’s (“the Commission”) letter dated May 6, 2005.
Our proposed amendments to the Company’s Form 10-K for December 31, 2004 and Form 10-Q for March
31, 2005, are also included in the text of the letter below, as appropriate. The numbered
paragraphs of this letter correspond to the numbered paragraphs in the staff’s letter dated May 6,
2005. The Company intends to file these amendments on Forms 10-K and 10-Q not later than July 28,
2005.

The Company acknowledges that:

     q

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

     q

    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

     q

    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

    Item 1

    After further consideration of the staff’s comment, the Company proposes the following
amendment to the Management's Discussion and Analysis (MD&A) of the Form 10-K for the fiscal year ended December 31, 2004:

    Critical Accounting Estimates

    Investment valuation

    Add:

1

    See Note 3 to the Company’s financial statements for a discussion on recently
released Emerging Issues Task Force guidance related to other-than-temporary
impairments.

    Item 2

    Additional disclosure to be included in the MD&A of Form 10-K/A related to all Critical
Accounting Estimates:

    Investment valuation

    Add:

At December 31, 2004, the Company’s internally-valued securities amounted to
1.1% of its total invested assets. The Company holds no equity securities. Changes
in fair values of the fixed maturity and preferred stock investments are recorded in
other comprehensive income as unrealized gains or losses. See also Notes 3 and 4 to
the Company’s financial statements where unrealized gains and losses and information
on impairments are discussed more fully.

    Insurance liabilities

    Background Information:

    The Company’s estimates of liabilities are produced under two distinct models, one
for traditional life insurance products estimated under Financial Accounting
Standard No. 60 (FAS 60) and another for interest sensitive products estimated under
Financial Accounting Standard No. 97 (FAS 97). Under these standards, the Company
necessarily makes judgments about expected future outcomes concerning a number of
actuarial assumptions, all of which would impact the estimate. Unlike many types of
estimates, the assumptions underlying life insurance liabilities are interrelated.
It would be extremely complicated to conduct sensitivity analysis around any one of
the key assumptions and the analysis would not be representative of a reasonably
possible outcome since the assumptions are interrelated. For example, changes in
lapse rates would cause a re-estimation of mortality assumptions since the lapsing
policies could change the composition of covered lives. Changes in assumptions
concerning interest rates could also cause a change in assumptions concerning
persistency patterns and unit expenses.

    For these reasons, the Company believes computation and disclosure of single
assumption sensitivity is not meaningful to financial statement users. However, the
Company believes, after consideration of the staff’s comments, that expanded
discussion of the nature of the insurance liability estimates is warranted and
proposes the following additional disclosure in its amended Form 10-K filing for the
year ended December 31, 2004:

    Add:

Long term actuarial assumptions are required in order to estimate reserves
for policy liabilities and deferred acquisition costs (DAC) in the financial

2

    statements of the Company. These actuarial assumptions for mortality rates,
lapse rates, administrative expenses, and investment returns must be made
for many years into the future and vary by product type and policy duration
as well as the age, sex, and underwriting class of the insured or annuitant.
These assumptions are determined after studying past results and trends
along with making judgments about future events. There are risks that
reported amounts could require adjustment because actual results may differ
from these expected assumptions depending on the accounting model used. For
example, under the FAS 97 model, if mortality experience or policy lapses
were higher than expected in the current period, current income would be
lower than projected and DAC amortization would be reduced due to lower than
expected profit for the period. Over the long term, if the trend of
higher mortality and lapse rates was considered permanent, the estimated
future profits would be revised downward and DAC amortization would be
accelerated. Under the FAS 60 model, if higher mortality or lapse
rates were assumed current income would be reduced because of
increased DAC amortization. Over
the long term, loss recognition may arise if the adverse trends were
considered permanent and all product profit margins were exhausted. The
accounting model for traditional whole life and term products is based on
Financial Accounting Standard (FAS) 60, Accounting and Reporting by
Insurance Enterprises, and the accounting model for universal life products
and deferred annuities is based on FAS 97, Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and for Realized
Gains and Losses from the Sale of Investments.

    Liabilities of traditional life insurance and income-paying annuity future
policy benefits are computed primarily by the net level premium method.
Deferred annuity future policy benefit liabilities are established at
accumulated values without reduction for surrender charges. Reserves for
universal life plans are based on the contract account balances.

    Deferred policy acquisition costs (DAC) asset

    Add:

The Company incurs significant costs in connection with acquiring new business,
principally commissions and policy issue and underwriting expenses. Acquisition
costs, which vary with and are primarily related to the production of new business,
are deferred as an asset and amortized over a period of time. At each balance sheet
date, the Company evaluates the value of this asset in light of historical and
expected results.

    The DAC related to traditional life insurance products is amortized in proportion to
premiums over the premium-paying period of related policies using assumptions
consistent with those used in computing policy liability reserves. Assumptions used
for a specific era of issued policies are “locked-in;” therefore, amortization in
subsequent years is not adjusted for changing assumptions. In any

3

    period where the
Company’s actual policy terminations are higher (lower) than anticipated policy
terminations, DAC amortization will be accelerated (decelerated) in that period.

    The DAC related to universal life products and deferred annuities is amortized in
relation to the actual and expected gross profits from investment, mortality and
expense margins and surrender charges of the policies over a specified period of
time. This period is 30 years for universal life and 20 years for deferred
annuities. Both historical and anticipated investment returns, including realized
gains and losses, are considered in determining the amortization of DAC. GAAP
requires that changes in expected future gross profits on the annuity and universal
life products cause the DAC amortization rate to be revised retroactively, or
“unlocked”, to the date of policy issuance. The cumulative change in DAC related
to prior periods is recognized as a component of the current period’s DAC
amortization, along with DAC amortization associated with the actual gross profits
of the current period. Lower actual gross profits in a period resulting from lower
margins on investments, mortality, and/or expenses would typically result in less
DAC amortization in that period, whereas higher actual gross profits would result in
more amortization in the period. However, if lower gross profits were expected to
continue into the future, additional amortization of the existing DAC asset may
occur. See the “Analysis of policy-related benefit and
expenses” section that
follows for a discussion on the 2004 retrospective adjustment.

    The Company periodically reviews the DAC asset to determine if it continues to be
recoverable. For traditional life products, if the benefit reserves plus
anticipated future premiums and interest earnings for a line of business are less
than the current estimate of future benefits and expenses (including any unamortized
DAC), a charge to income is recorded for additional DAC amortization or for
increased benefit reserves. For universal life and deferred annuities, if the
current present value of future expected gross profits is less than the unamortized
DAC, a charge to income is recorded for additional DAC amortization.

    Delete:

The Company incurs significant costs in connection with acquiring new business,
principally commissions and policy issue and underwriting expenses. Acquisition
costs, which vary with and are primarily related to the production of new business,
are deferred as an asset and amortized over a period of time. At each balance sheet
date, the Company evaluates the value of this asset in light of historical and
expected results.

    The DAC related to traditional life insurance products is amortized in proportion to
premiums over the premium-paying period of related policies using assumptions
consistent with those used in computing policy liability reserves. Assumptions used
for a specific issue year are “locked-in;” therefore, amortization in subsequent
years is not adjusted for changing assumptions.

    The DAC related to universal life products and deferred annuities is amortized in

4

    relation to the expected gross profits from projected investment, mortality and
expense margins and surrender charges of the policies over a specified period of
time. This period is 30 years for universal life and 20 years for deferred
annuities. Both historical and anticipated investment returns, including realized
gains and losses, are considered in determining the amortization of DAC. GAAP
requires that changes in expected future gross profits on the annuity and universal
life products cause the DAC amortization rate be revised retroactively, or
“unlocked”, to the date of policy issuance. The cumulative change in DAC related to
prior periods is recognized as a component of the current period’s DAC amortization,
along with DAC amortization associated with the actual gross profits of the current
period. Lower actual gross profits in a period would typically result in less DAC
amortization in that period, whereas higher actual gross profits would result in
more amortization in the period. However, if lower gross profits were expected to
continue into the future, additional amortization of the existing DAC asset may
occur. See the “Analysis of policy-related benefit and expenses” section that
follows for a discussion on the 2004 retrospective adjustment.

    The Company periodically reviews the DAC asset to determine if it continues to be
recoverable from future premiums or profits. If less than the full amount of DAC is
determined to be recoverable, a portion of such costs are expensed at the time of
determination. The amount of DAC considered recoverable may be reduced in the near
term if the estimate of future gross premiums or profits were to be reduced. The
amount of DAC amortization may be revised if any of the estimates discussed above
are revised

    Proposed amendments to Note 3 – Significant Accounting Policies of Form 10-K/A
related to DAC Asset Estimates:

    Add:

In any period where the Company’s actual policy terminations are higher (lower) than
anticipated policy terminations, DAC amortization will be accelerated (decelerated)
in that period.

    The Company periodically reviews the DAC asset to determine if it continues to be
recoverable. For traditional life products, if the benefit reserves plus
anticipated future premiums and interest earnings for a line of business are less
than the current estimate of future benefits and expenses (including any unamortized
DAC), a charge to income is recorded for additional DAC amortization or for
increased benefit reserves. For universal life and deferred annuities, if the
current present value of future expected gross profits is less than the unamortized
DAC, a charge to income is recorded for additional DAC amortization.

5

    Delete:

The Company periodically reviews the DAC asset to determine if it continues to be
recoverable from future premiums or profits. If less than the full amount of DAC is
determined to be recoverable, a portion of such costs are expensed at the time of
determination. The amount of DAC considered recoverable would be reduced in the near
term if the estimate of future gross premiums or profits were to be reduced. The
amount of DAC amortization may be revised if any of the estimates discussed above
are revised.

    Proposed amendments to Note E –DAC Asset of Form 10-Q/A to conform to Annual Report
changes above:

    Add:

In accordance with Financial Accounting Standard (FAS) 60, Accounting and Reporting
by Insurance Enterprises, the DAC related to traditional life insurance products is
amortized in proportion to premium revenues over the premium-paying period of
related policies using assumptions consistent with those used in computing policy
liability reserves. Assumptions used for a specific era of issued policies are
“locked-in;” therefore, amortization in subsequent years is not adjusted for
changing assumptions. In any period where the Company’s actual policy terminations
are higher (lower) than anticipated policy terminations, DAC amortization will be
accelerated (decelerated) in that period.

    In accordance with FAS 97, Accounting and Reporting by Insurance Enterprises for
Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of
Investments, the DAC related to universal life products and deferred annuities is
amortized in relation to the actual and expected gross profits from investment,
mortality and expense margins and surrender charges of the policies over a specified
period of time. This period is 30 years for universal life and 20 years for
deferred annuities. Both historical and anticipated investment returns, including
realized gains and losses, are considered in determining the amortization of DAC.
GAAP requires that changes in expected future gross profits on the annuity and
universal life products cause the DAC amortization rate to be revised retroactively,
or “unlocked,” to the date of policy issuance. The cumulative change in DAC related
to prior periods is recognized as a component of the current period’s DAC
amortization, along with DAC amortization associated with the actual gross profits
of the current period. Lower actual gross profits in a period resulting from lower
margins on investments, mortality, and/or expenses would typically result in less
DAC amortization in that period, whereas higher actual gross profits would result in
more amortization in the period. How