content: UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
  
                                    FORM 10-Q
  
  
      [  X  ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
  
                  For the Quarterly Period Ended March 31, 2000
  
     [      ]  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: 2-17039
  
  
                     NATIONAL WESTERN LIFE INSURANCE COMPANY
              (Exact name of Registrant as specified in its charter)
  
  
            COLORADO                                    84-0467208
     (State of Incorporation)            (I.R.S. Employer Identification Number)
  
  
        850 EAST ANDERSON LANE
       AUSTIN, TEXAS 78752-1602                           (512) 836-1010
  (Address of Principal Executive Offices)              (Telephone Number)
  
  
  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 May 10, 2000, the number of shares of Registrant's common stock
  outstanding was:  Class A -3,300,755 and Class B - 200,000.
  
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                                      INDEX
  
  
  
  Part I.  Financial Information:                                        Page
  
  Item 1.  Financial Statements
  
  Condensed Consolidated Balance Sheets
  March 31, 2000 (Unaudited) and December 31, 1999
  
  Condensed Consolidated Statements of Earnings
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Comprehensive Income
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Stockholders' Equity
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Cash Flows
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  Notes to Condensed Consolidated Financial Statements (Unaudited)
  
  Item 2.  Management's Discussion and Analysis of
  Financial Condition and Results of Operations
  
  Item 3.  Quantitative and Qualitative Disclosures About Market Risk
  
  Part II.  Other Information:
  
  Item 6.  Exhibits and Reports on Form 8-K
  
  Signatures
  
  Exhibit 11 - Computation of Earnings per Share
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  
  
  
                          PART I.  FINANCIAL INFORMATION
  
                          ITEM 1.  FINANCIAL STATEMENTS
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
  
  
  <TABLE>
  <CAPTION>
  
                                                      (Unaudited)
                                                     March 31,   December 31,
            ASSETS                                      2000         1999
  
  <S>                                               <C>             <C>
  
  Cash and investments:
      Securities held to maturity,
      at amortized cost                             $  2,150,109    2,151,924
      Securities available for sale,
      at fair value                                      743,190      717,948
      Mortgage loans, net of allowances
      for possible losses ($4,104 and $4,104)            197,559      183,902
      Policy loans                                       116,455      117,309
      Index options                                       32,282       32,820
      Other long-term investments                         47,636       32,766
      Cash and short-term investments                      2,886       14,010
  
  
  Total cash and investments                           3,290,117    3,250,679
  
  Deferred policy acquisition costs                      381,645      369,665
  Accrued investment income                               46,543       47,756
  Other assets                                            18,999       14,728
  
                                                    $  3,737,304    3,682,828
  
  </FN>
  
  Note:  The balance sheet at December 31, 1999, has been taken from the audited
  financial statements at that date.
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands except share amounts)
  
  <TABLE>
  <CAPTION>
  
                                                     (Unaudited)
                                                      March 31,     December 31,
      LIABILITIES AND STOCKHOLDERS' EQUITY               2000           1999
  
  <S>                                               <C>             <C>
  
  LIABILITIES:
  
  Future policy benefits:
      Traditional life and annuity products         $    162,548      165,020
      Universal life and investment
      annuity contracts                                3,014,158    2,983,060
  Other policyholder liabilities                          24,237       24,103
  Federal income taxes payable:
      Current                                              5,579        4,763
      Deferred                                               728        4,659
  Short-term borrowings                                   12,000         -
  Other liabilities                                       39,412       25,701
  
  Total liabilities                                    3,258,662    3,207,306
  
  
  COMMITMENTS AND CONTINGENCIES (Note 3)
  
  STOCKHOLDERS' EQUITY:
  
  Common stock:
      Class A - $1 par value; 7,500,000
      shares authorized; 3,300,728 shares
      issued and outstanding in 2000 and 1999              3,301        3,301
      Class B - $1 par value; 200,000
      shares authorized, issued,
      and outstanding in 2000 and 1999                       200          200
  Additional paid-in capital                              25,028       25,028
  Accumulated other comprehensive loss                   (12,779)      (3,566)
  Retained earnings                                      462,892      450,559
  
  Total stockholders' equity                             478,642      475,522
  
                                                    $  3,737,304    3,682,828
  
  <FN>
  
  Note:  The balance sheet at December 31, 1999, has been taken from the audited
  financial statements at that date.
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN
  </TABLE>
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                     (In thousands except per share amounts)
  
  
  <TABLE>
  <CAPTION>
  
                                                         2000         1999
  
  <S>                                               <C>                <C>
  
  Premiums and other revenue:
      Life and annuity premiums                     $      2,372        2,411
      Universal life and investment
      annuity contract revenues                           20,903       21,532
      Net investment income                               57,740       57,852
      Other income                                           115          150
      Realized gains (losses) on investments                (580)       4,805
  
  Total premiums and other revenue                        80,550       86,750
  
  Benefits and expenses:
      Life and other policy benefits                      10,092        8,688
      Decrease in liabilities for
      future policy benefits                              (2,482)        (241)
      Amortization of deferred policy
      acquisition costs                                   10,885        9,571
      Universal life and investment
      annuity contract interest                           36,651       40,611
      Other operating expenses                             6,717        6,701
  
  
  Total benefits and expenses                             61,863       65,330
  
  Earnings before Federal income taxes                    18,687       21,420
  
  
  Provision for Federal income taxes:
      Current                                              5,325        5,460
      Deferred                                             1,029        1,857
  
  Total Federal income taxes                               6,354        7,317
  
  Net earnings                                      $     12,333       14,103
  
  
  Basic Earnings Per Share:
      Net earnings                                  $       3.52         4.03
  
  Diluted Earnings Per Share:
      Net earnings                                  $       3.51         3.99
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
                                                         2000         1999
  
  <S>                                               <C>                <C>
  
  Net earnings                                      $     12,333       14,103
  
  Other comprehensive income (loss),
  net of effects of deferred
  policy acquisition costs and taxes:
      Unrealized losses on securities:
          Unrealized holding losses
          arising during period                           (1,476)      (4,886)
          Less: reclassification
          adjustment for gains
          included in net earnings                          -          (1,671)
          Amortization of net unrealized gains
          related to transferred securities                  (69)         (85)
          Unrealized losses on securities
          transferred during period
          from held to maturity to
          available for sale                              (8,021)        -
  
          Net unrealized losses on securities             (9,566)      (6,642)
  
      Foreign currency translation adjustments               353           (9)
  
  Other comprehensive loss                                (9,213)      (6,651)
  
  Comprehensive income                              $      3,120        7,452
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
                                                         2000         1999
  
  <S>                                               <C>               <C>
  
  Common stock:
      Balance at beginning of year                  $      3,501        3,498
      Shares exercised under stock option plan              -               1
  
  Balance at end of period                                 3,501        3,499
  
  Additional paid-in capital:
      Balance at beginning of year                        25,028       24,899
      Shares exercised under stock option plan              -              31
  
  Balance at end of period                                25,028       24,930
  
  Accumulated other comprehensive income (loss):
       Unrealized gains (losses) on securities:
          Balance at beginning of year                    (6,412)      16,000
          Change in unrealized losses during period       (9,566)      (6,642)
  
          Balance at end of period                       (15,978)       9,358
  
      Foreign currency translation adjustments:
          Balance at beginning of year                     2,846        2,634
          Change in translation adjustments
          during period                                      353           (9)
  
          Balance at end of period                         3,199        2,625
  
  Accumulated other comprehensive income
  (loss) at end of period                                (12,779)      11,983
  
  Retained earnings:
      Balance at beginning of year                       450,559      391,334
      Net earnings                                        12,333       14,103
  
  Balance at end of  period                              462,892      405,437
  
  Total stockholders' equity                        $    478,642      445,849
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
                                                         2000         1999
  
  <S>                                               <C>               <C>
  
  Cash flows from operating activities:
      Net earnings                                  $     12,333       14,103
      Adjustments to reconcile net
      earnings to net cash
      from operating activities:
      Universal life and investment
      annuity contract interest                           36,651       40,611
      Surrender charges and other policy revenues         (9,838)     (11,066)
      Realized (gains) losses on investments                 580       (4,805)
      Accrual and amortization of
      investment income                                   (1,012)      (1,207)
      Depreciation and amortization                          259          265
      Decrease (increase) in insurance
      receivables and other assets                        (4,145)       4,925
      Decrease in accrued investment income                1,213          336
      Increase in deferred policy
      acquisition costs                                   (5,294)      (5,884)
      Decrease in liability for
      future policy benefits                              (2,482)        (241)
      Increase (decrease) in other
      policyholder liabilities                               134         (473)
      Increase in Federal income taxes payable             2,395        2,516
      Increase (decrease) in other liabilities            13,711       (9,563)
  
      Other                                                1,827       (1,073)
  
  Net cash provided by operating activities               46,332       28,444
  
  Cash flows from investing activities:
      Proceeds from sales of:
         Securities held to maturity                        -            -
         Securities available for sale                      -          24,446
         Other investments                                 5,972        5,585
      Proceeds from maturities and redemptions of:
         Securities held to maturity                       8,034       24,763
         Securities available for sale                    17,590       17,181
      Purchases of:
         Securities held to maturity                     (55,481)     (78,744)
         Securities available for sale                   (13,971)     (53,699)
         Other investments                               (22,420)     (10,370)
      Principal payments on mortgage loans                 2,077       13,584
      Cost of mortgage loans acquired                    (15,681)      (8,282)
      Decrease in policy loans                               854        3,155
      Decrease in assets of
      discontinued operations                               -              48
      Decrease in liabilities of
      discontinued operations                               -             (48)
      Other                                                 (868)         (50)
  
  Net cash used in investing activities                  (73,894)     (62,431)
  
  <FN>
  
  (Continued on next page)
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
                                                         2000         1999
  
  <S>                                               <C>               <C>
  
  Cash flows from financing activities:
      Deposits to account balances
      for universal life
      and investment annuity contracts              $     98,255      109,827
      Return of account balances on
      universal life and investment
      annuity contracts                                  (93,817)     (93,688)
      Increase in short-term borrowings                   12,000         -
      Issuance of common stock under
      stock option plan                                     -              32
  
  Net cash provided by financing activities               16,438       16,171
  
  Net decrease in cash and short-term investments        (11,124)     (17,816)
  Cash and short-term investments
  at beginning of year                                    14,010       24,508
  
  Cash and short-term investments
  at end of period                                  $      2,886        6,692
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
  
  
  (1)  BASIS OF PRESENTATION
  
  The accompanying condensed consolidated financial statements include the
  accounts of National Western Life Insurance Company  and its  wholly-owned
  subsidiaries  (the  Company),  The  Westcap  Corporation  (Westcap),  NWL
  Investments, Inc., NWL Properties, Inc., NWL 806 Main, Inc., NWL Services,
  Inc., and NWL Financial, Inc.  The Westcap Corporation ceased brokerage
  operations during 1995 and filed for reorganization under Chapter 11 of the
  U.S. Bankruptcy Code in 1996.  The bankruptcy reorganization was completed in
  January, 1999 and National Western retained 100% continuing ownership of the
  reorganized subsidiary.  As a result, The Westcap Corporation is reflected as
  discontinued operations in the accompanying financial statements for portions
  of 1999 and prior years.  Westcap is currently operating as a real estate
  management company.  All significant intercorporate transactions and accounts
  have been eliminated in consolidation.
  
  In the opinion of  the Company, the accompanying consolidated financial
  statements contain all adjustments necessary to present fairly the financial
  position of the Company as of March 31, 2000,  and  the  results of its
  operations and its cash flows for the three months  ended March 31, 2000 and
  1999.  The results of operations for the three  months ended March 31, 2000
  and 1999 are not necessarily indicative of the results to be expected  for the
  full year.
  
  
  (2) STOCKHOLDERS' EQUITY
  
  (A) Changes in Common Stock Shares Outstanding
  
  Details of changes in shares of common stock outstanding are provided below:
  
  <TABLE>
  <CAPTION>
  
                                                    Three Months Ended March 31,
                                                           2000        1999
                                                           (In thousands)
  
  <S>                                                      <C>          <C>
  
  Common stock shares outstanding:
     Shares outstanding at beginning of year               3,501        3,498
     Shares exercised under stock option plan               -               1
  
  Shares outstanding at end of period                      3,501        3,499
  
  </TABLE>
  
  (B)  Dividends
  
  The Company paid no cash dividends on common stock during the three months
  ended March 31, 2000 and 1999.
  
  
  (3)  DISCONTINUED BROKERAGE OPERATIONS
  
  The Chapter 11 bankruptcy reorganization of the Company's wholly owned
  subsidiary,  The Westcap Corporation, was completed in the first quarter of
  1999.  Pursuant to the reorganization plan, National Western retained 100%
  continuing ownership of the reorganized Westcap and the subsidiary is now
  operating as a real estate management company.  No losses were reported for
  discontinued brokerage operations in the first quarter of 1999 as the entire
  $14,125,000 settlement payment was accrued and reported as a loss in the third
  quarter of 1998.  Any additional losses will depend on the results of The City
  Colleges lawsuit filed against National Western on March 28, 1994, for alleged
  federal or state securities law "control person" violations relating to
  Westcap, and which is pending in the United States District Court, Western
  District of Texas.  National Western believes it has reasonable and adequate
  defenses to this suit and, accordingly, no amounts have been accrued in
  National Western's financial statements for potential losses relating to such
  suit.
  
  
  (4) SEGMENT AND OTHER OPERATING INFORMATION
  
  The Company's reportable operating segments include domestic life insurance,
  international life insurance, and annuities. These segments are organized
  based on product types and geographic marketing areas.  A summary of segment
  information for the quarters ended March 31, 2000 and 1999 is provided below.
  
  <TABLE>
  <CAPTION>
  
  Selected Segment Information:
                      Domestic International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others     Totals
                                           (In thousands)
  
  <S>                <C>            <C>       <C>           <C>      <C>
  
  March 31, 2000:
  Selected Balance
  Sheet Items:
  Deferred policy
   acquisition
   costs             $  74,832      74,016     232,797       -        381,645
  Total segment
   assets              407,613     376,372   2,887,321     46,999   3,718,305
  Future policy
   benefits            321,785     292,380   2,562,541       -      3,176,706
  Other
   policyholder
   liabilities          12,629       6,061       5,547       -         24,237
  
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues          $   5,930      10,686       6,659       -         23,275
  Net investment
   income                6,472       5,650      45,096        522      57,740
  Other income             -            27          88       -            115
      Total
      revenues          12,402      16,363      51,843        522      81,130
  Policy benefits        3,893       3,650          67       -          7,610
  Amortization of
   deferred
   policy
   acquisition
   costs                 1,626       3,157       6,102       -         10,885
  Universal life
   and investment
   annuity contract
   interest              2,222       3,930      30,499       -         36,651
  Other operating
   expenses              2,086       1,994       2,637       -          6,717
  Federal income
   taxes                   876       1,236       4,267        178       6,557
      Total
      expenses          10,703      13,967      43,572        178      68,420
  Segment
   earnings          $   1,699       2,396       8,271        344      12,710
  
  </TABLE>
  
  <TABLE>
  <CAPTION>
  
  Selected Segment Information:
                       Domestic International
                         Life        Life                   All
                       Insurance  Insurance   Annuities   Others     Totals
                                           (In thousands)
  
  <S>                 <C>           <C>       <C>          <C>      <C>
  
  March 31, 1999:
  Selected Balance
  Sheet Items:
  Deferred policy
   acquisition
   costs              $  69,200      71,210     188,255      -        328,665
  Total segment
   assets               408,548     372,867   2,730,023    32,634   3,544,072
  Future policy
   benefits             322,094     286,277   2,416,454      -      3,024,825
  Other policyholder
   liabilities           12,974       6,039       4,469      -         23,482
  
  Condensed Income
   Statements:
  Premiums and
   contract
   revenues           $   5,791      10,228       7,924      -         23,943
  Net investment
   income                 6,331       5,443      45,896       182      57,852
  Other income               16          12         122      -            150
      Total revenues     12,138      15,683      53,942       182      81,945
  Policy benefits         3,544       4,702         201         -       8,447
  Amortization of
   deferred policy
   acquisition costs        932       3,279       5,360      -          9,571
  Universal life
   and investment
   annuity contract
   interest               2,449       3,433      34,729      -         40,611
  Other operating
   expenses               2,062       2,135       2,504      -          6,701
  Federal income
   taxes                  1,069         724       3,781        61       5,635
      Total expenses     10,056      14,273      46,575        61      70,965
  Segment
  earnings            $   2,082       1,410       7,367       121      10,980
  
  </TABLE>
  
  Reconciliations of segment information to the Company's consolidated financial
  statements are provided below:
  
  <TABLE>
  <CAPTION>
  
                                                   Three Months Ended March 31,
                                                        2000          1999
                                                          (In thousands)
  
  <S>                                             <C>                  <C>
  
  Premiums and Other Revenue:
  Premiums and contract revenues                  $      23,275        23,943
  Net investment income                                  57,740        57,852
  Other income                                              115           150
  Realized gains (losses) on investments                   (580)        4,805
  
  Total consolidated premiums and other revenue   $      80,550        86,750
  
  </TABLE>
  
  <TABLE>
  <CAPTION>
                                                   Three Months Ended March 31,
                                                        2000          1999
                                                          (In thousands)
  
  <S>                                             <C>                   <C>
  
  Federal Income Taxes:
  Total segment Federal income taxes              $       6,557         5,635
  Taxes (benefits) on realized
  gains (losses) on investments                            (203)        1,682
  
  Total consolidated Federal income taxes         $       6,354         7,317
  
  </TABLE>
  
  <TABLE>
  <CAPTION>
  
                                                  Three Months Ended March 31,
                                                        2000          1999
                                                          (In thousands)
  
  <S>                                             <C>                  <C>
  
  Net Earnings:
  Total segment earnings                          $      12,710        10,980
  Realized gains (losses) on investments,
     net of taxes                                          (377)        3,123
  
  Total consolidated net earnings                 $      12,333        14,103
  
  </TABLE>
  
  <TABLE>
  <CAPTION>
  
                                                            March 31,
                                                        2000          1999
                                                          (In thousands)
  
  <S>                                             <C>               <C>
  
  Assets:
  Total segment assets                            $   3,718,305     3,544,072
  Other unallocated assets                               18,999        15,613
  
  Total consolidated assets                       $   3,737,304     3,559,685
  
  </TABLE>
  
  
  
                   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
  
  GENERAL
  
  National Western Life Insurance Company is a life insurance company, chartered
  in the State of Colorado in 1956, and doing business in forty-three states and
  the District of Columbia. It also accepts applications from and issues
  policies to residents of various Central and South American, Caribbean, and
  Pacific Rim countries.  A distribution of the Company's direct premium
  revenues and deposits by domestic and international markets is provided below:
  
  <TABLE>
  <CAPTION>
  
                                                 Three Months Ended March 31,
                                                     2000          1999
  
  <S>                                                <C>           <C>
  
  United States domestic market:
       Investment annuities                           79.3%         82.5%
       Life insurance                                  6.4           5.7
  
  Total domestic market                               85.7          88.2
  
  International market:
       Investment annuities                            2.2           1.1
       Life insurance                                 12.1          10.7
  
  Total international market                          14.3          11.8
  
  Total direct premiums collected                    100.0%        100.0%
  
  </TABLE>
  
  Insurance Operations - Domestic
  
  The Company's domestic operations concentrate marketing efforts on federal
  employees, seniors, and specific employee groups in private industry, as well
  as individual sales.  The products marketed are annuities, universal life
  insurance, and traditional life insurance, which includes both term and whole
  life products.  The majority of products sold are the Company's annuities,
  which include single and flexible premium deferred annuities, single premium
  immediate annuities, and equity-indexed annuities.  Most of these annuities
  can be sold as tax qualified or nonqualified products.
  
  National Western markets and distributes its domestic products primarily
  through independent marketing organizations (IMOs).   These IMOs assist the
  Company  in  recruiting,  contracting,  and  managing  agents.    The  Company
  currently has over 80 IMOs contracted for sales of life and annuity products.
  
  Insurance Operations - International
  
  The Company's international operations focus marketing efforts on foreign
  nationals in upper socioeconomic classes with substantial financial resources.
  Insurance  sales  are  from  countries  in  Central  and  South  America,  the
  Caribbean, and the Pacific Rim.  Marketing to numerous countries in these
  different regions provides diversification that helps to minimize large
  fluctuations in sales that can occur due to various economic, political, and
  competitive pressures that may occur from one country to another.  Products
  sold in the international market are almost entirely universal life and
  traditional life insurance products.  However, certain annuity and investment
  contracts are also available in this market.
  
  International sales production is from broker-agents, many of whom have been
  selling National Western products for 20 or more years.  The Company continues
  to expand its sales networks in specifically targeted South American and
  Pacific Rim countries which have higher growth potential than other countries.
  
  There are inherent risks of conducting international business that are not
  present within the domestic market.  The risks involved with international
  business are reduced substantially by the Company in several ways.  As
  previously described, the Company focuses its marketing efforts on a specific
  niche group, which is foreign nationals in upper socioeconomic classes who
  have substantial financial resources.  This targeted customer base coupled
  with National Western's conservative, yet competitive, underwriting practices
  have historically resulted in claims experience similar to that in the United
  States.  The Company also minimizes exposure to foreign currency risks, as
  almost all foreign policies require payment of premiums and claims in United
  States dollars.  Finally, the Company's experience in the international market
  and its strong broker-agent relationships, which in many cases exceed 20
  years, help minimize risks and problems when selling products to foreign
  nationals.
  
  
  INVESTMENTS IN DEBT AND EQUITY SECURITIES
  
  Investment Philosophy
  
  The Company's investment philosophy is to maintain a diversified portfolio of
  investment grade debt and equity securities that provide adequate liquidity to
  meet policyholder obligations and other cash needs.  The prevailing strategy
  within this philosophy is the intent to hold investments in debt securities to
  maturity. However, the Company manages its portfolio, which entails monitoring
  and reacting to all components which affect changes in the price, value, or
  credit rating of investments in debt and equity securities.
  
  Investments in debt and equity securities are classified and reported as
  either securities held to maturity or securities available for sale.  The
  Company does not maintain a portfolio of trading securities.  The reporting
  category chosen for the Company's securities investments depends on various
  factors including the type and quality of the particular security and how it
  will be incorporated into the Company's overall asset/liability management
  strategy.  At March 31, 2000, approximately 26.3% of the Company's total debt
  and equity securities, based on fair values, were classified as securities
  available for sale.  These holdings provide flexibility to the Company to
  react to market opportunities and conditions and to practice active management
  within the portfolio to provide adequate liquidity to meet policyholder
  obligations and other cash needs.
  
  Securities the Company purchases with the intent to hold to maturity are
  classified as securities held to maturity. Because the Company has strong cash
  flows and matches expected maturities of assets and liabilities, the Company
  has the ability to hold the securities, as it would be unlikely that forced
  sales of securities would be required prior to maturity to cover payments of
  liabilities. As a result, securities held to maturity are carried at amortized
  cost less declines in value that are other than temporary. However, certain
  situations may change the Company's intent to hold a particular security to
  maturity, the most notable of which is a deterioration in the issuer's
  creditworthiness. Accordingly, a security may be sold to avoid a further
  decline in realizable value when there has been a significant change in the
  credit risk of the issuer.
  
  Securities that are not classified as held to maturity are reported as
  securities available for sale. These securities may be sold if market or other
  measurement factors change unexpectedly after the securities were acquired.
  For example, opportunities arise that allow the Company to improve the
  performance and credit quality of the investment portfolio by replacing an
  existing security with an alternative security while still maintaining an
  appropriate  matching  of  expected  maturities  of  assets  and  liabilities.
  Examples of such improvements are as follows: improving the yield earned on
  invested assets, improving the credit quality, changing the duration of the
  portfolio, and selling securities in advance of anticipated calls or other
  prepayments. Securities available for sale are reported in the Company's
  financial statements at fair value. Any unrealized gains or losses resulting
  from changes in the fair value of the securities are reflected in accumulated
  other comprehensive income.
  
  As an integral part of its investment philosophy, the Company performs an
  ongoing process of monitoring the creditworthiness of issuers within the
  investment portfolio.  Review procedures are also performed on securities that
  have had significant declines in fair value. The Company's objective in these
  circumstances is to determine if the decline in fair value is due to changing
  market expectations regarding inflation and general interest rates or other
  factors.  Additionally, the Company closely monitors financial, economic, and
  interest rate conditions to manage prepayment and extension risks in its
  mortgage-backed securities portfolio.
  
  The Company's overall conservative investment philosophy is reflected in the
  allocation of its investments which is detailed below as of March 31, 2000 and
  December 31, 1999.  The Company emphasizes investment grade debt securities,
  with smaller holdings in mortgage loans and real estate.
  
  <TABLE>
  <CAPTION>
  
                                            Percent of Investments
                                         March 31,       December 31,
                                            2000             1999
  
  <S>                                       <C>              <C>
  
  Debt securities                            87.4%            87.8%
  Mortgage loans                              6.0              5.7
  Policy loans                                3.5              3.6
  Index options                               1.0              1.0
  Equity securities                           0.5              0.5
  Real estate                                 0.6              0.4
  Other                                       1.0              1.0
  
  Totals                                    100.0%           100.0%
  
  </TABLE>
  
  Portfolio Analysis
  
  The Company maintains a diversified debt securities portfolio which consists
  of various types of fixed income securities including primarily corporate,
  mortgage-backed   securities,   and   public   utilities.   Investments   in
  mortgage-backed  securities  include  primarily  U.S.  government  agency
  pass-through securities and collateralized mortgage obligations (CMOs).
  
  An important aspect of the Company's investment philosophy is managing the
  credit quality of its investments in debt securities.  Thorough credit
  analysis  is  performed  on  existing  and  potential  corporate  investments
  including examination of a company's credit and industry outlook, financial
  strength, effectiveness of management, and event risks.  In the past few
  years, credit analysis has become one of the most critical activities of the
  Company's portfolio management.
  
  National Western continues to follow its conservative investment philosophy by
  minimizing its holdings of  below investment grade debt securities, as these
  securities generally have greater default risk than higher rated corporate
  debt. These issuers usually are more sensitive to adverse industry or economic
  conditions than are investment grade issuers. The Company's holdings of below
  investment grade debt securities, which are lower than industry averages, are
  summarized below.
  
  <TABLE>
  <CAPTION>
  
                                           Below Investment
                                        Grade Debt Securities
                                                                      % of
                           Amortized     Carrying      Market      Invested
                             Cost         Value        Value        Assets
                                  (In thousands except percentages)
  
  <S>                   <C>                <C>          <C>             <C>
  
  March 31, 2000        $    110,312       87,810       79,174          2.7%
  
  December 31, 1999     $     73,607       70,900       63,864          2.2%
  
  December 31, 1998     $     46,453       44,974       45,317          1.4%
  
  </TABLE>
  
  Although National Western purchases only investment grade debt securities, a
  growing number of companies have become more leveraged due to an environment
  of heightened acquisition activity and large share repurchase programs.
  Therefore, continued monitoring of credit quality after the purchase of a
  company's debt securities is crucial in order for National Western to maintain
  a high quality portfolio with a low percentage of below investment grade debt
  securities.  While the Company's holdings of below investment grade debt
  securities remain low, these holdings have increased from $44,974,000 at
  December 31, 1998, to $87,810,000 at March 31, 2000.  This increase is due to
  downgrades of investment grade debt securities as opposed to purchases of such
  holdings.  Historically, the Company's strong credit risk management and
  commitment to quality has resulted in minimal defaults in the debt securities
  portfolio.  At March 31, 2000 and  December 31, 1999, no securities were in
  default and on nonaccrual status.
  
  During the third and fourth quarters of 1999, the Company recorded permanent
  impairment writedowns totaling $4,403,000 related to two separate securities.
  The writedowns were reflected as realized losses.  One of these securities was
  classified as available for sale and the other as held to maturity.  The
  Company subsequently transferred the held to maturity security to securities
  available for sale during the first quarter of 2000.  Three additional debt
  securities experienced significant credit deterioration during the first
  quarter of 2000.  As a result of the significant deterioration of the issuing
  companies' creditworthiness, National Western also transferred these three
  securities from held to maturity to available for sale.  The Company is
  closely monitoring these securities as well as its other below investment
  grade holdings.  While additional losses are not anticipated based on the
  current  status  and  condition  of  these  securities,  continued  credit
  deterioration of some securities is possible, which may result in further
  writedowns. Amortized cost, net of writedowns, of the four transferred
  securities totaled $49,528,000 and unrealized losses resulting from recording
  the securities at fair value, before effects of taxes and deferred policy
  acquisitions costs, totaled $20,376,000.  The unrealized losses were recorded
  as a component of accumulated other comprehensive loss in the accompanying
  financial statements.
  
  Although there is loss exposure related to its below investment grade debt
  securities, the Company is firmly committed to minimizing credit risks and
  maintaining a high quality portfolio.  This commitment is reflected in the
  high average credit rating of the Company's portfolio.  In the table below,
  investments in debt securities are classified according to credit ratings by
  Standard  and  Poor's  (S&P),  a  nationally  recognized  statistical  rating
  organization (NRSRO).  If securities were not rated by S&P, the equivalent
  rating of another NRSRO or the National Association of Insurance Commissioners
  was used.
  
  <TABLE>
  <CAPTION>
  
                                          March 31,      December 31,
                                            2000            1999
  
  <S>                                       <C>             <C>
  
  AAA and U.S. government                    29.0%           28.7%
  AA                                          7.3             8.8
  A                                          34.5            34.1
  BBB                                        26.2            25.9
  BB and other below
  investment grade                            3.0             2.5
  
                                            100.0%          100.0%
  
  </TABLE>
  
  Another important part of the Company's investment philosophy is managing the
  cash flow stability of the portfolio.  Because expected maturities of
  securities  may  differ  from  contractual  maturities  due  to  prepayments,
  extensions, and calls, the Company takes steps to manage and minimize these
  risks.  The Company continues to reduce its exposure to prepayment and
  extension risks by lowering its holdings of mortgage-backed securities.  This
  strategy began in 1994 when mortgage-backed securities totaled 47.6% of the
  entire portfolio, but now total only 20.9% at March 31, 2000.  The majority of
  this reduction has been achieved by shifting investments into corporate
  securities and public utilities, as these holdings have increased from 47.0%
  at December 31, 1994 to 68.9% at March 31, 2000.  Also, most of these
  additions have been noncallable corporates, which help reduce prepayment and
  call risks.
  
  As indicated above, the Company's holdings of mortgage-backed securities are
  also subject to prepayment risk, as well as extension risk.  Both of these
  risks are addressed by specific portfolio management strategies.  The Company
  has substantially reduced both prepayment and extension risks by investing
  primarily in collateralized mortgage obligations, which have more predictable
  cash flow patterns than pass-through  securities.  These securities, known as
  planned amortization class I (PAC I) CMOs, are designed to amortize in a more
  predictable manner than other CMO classes or pass-throughs.  Using this
  strategy, the Company can more effectively manage and reduce prepayment and
  extension risks, thereby helping to maintain the appropriate matching of the
  Company's assets and liabilities.
  
  As of March 31, 2000, CMOs represent approximately 98% of the Company's
  mortgage-backed securities. The CMOs in the Company's portfolio have been
  modeled and subjected to detailed, comprehensive analysis by the Company's
  investment staff.  The overall structure of the CMO as well as the individual
  tranche being considered for purchase have been evaluated to ensure that the
  security fits appropriately within the Company's investment philosophy and
  asset/liability management parameters.  The Company's investment mix between
  mortgage-backed securities and other fixed income securities helps effectively
  balance prepayment, extension, and credit risks.
  
  At March 31, 2000, the Company's debt and equity securities were classified as
  follows:
  
  <TABLE>
  <CAPTION>
  
                                                                  Unrealized
                                         Fair        Amortized       Gains
                                        Value          Cost         (Losses)
                                                  (In thousands)
  
  <S>                              <C>               <C>            <C>
  
  Securities held to maturity:
      Debt securities              $   2,081,639     2,150,109       (68,470)
  Securities available
  for sale:
      Debt securities                    727,213       775,291       (48,078)
      Equity securities                   15,977        12,755         3,222
  
  Totals                           $   2,824,829     2,938,155      (113,326)
  
  </TABLE>
  
  As detailed above, debt securities classified as held to maturity comprise the
  majority of the Company's securities portfolio, while equity securities are a
  small component of the portfolio.  Unrealized losses totaling $113,326,000 on
  the securities portfolio at March 31, 2000, are a reflection of market
  conditions at quarter-end.  The fair values, or market values, of fixed income
  debt  securities  generally  correlate  to  external  market  interest  rate
  conditions.  Because the interest rates are fixed on almost all of the
  Company's debt securities, market values typically increase when market
  interest  rates  decline,  and  decrease  when  market  interest  rates  rise.
  However, market values may fluctuate for other reasons, such as changing
  economic conditions or increasing event-risk concerns.  An analysis of
  unrealized gains and losses on the Company's securities portfolio for the
  quarter ended March 31, 2000, is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                                   Change in
                                                                   Unrealized
                                     Unrealized Gains (Losses)       Gains
                                          At            At          (Losses)
                                      March 31,    December 31,   During 1st
                                         2000          1999      Quarter 2000
                                                  (In thousands)
  
  <S>                              <C>                 <C>           <C>
  
  Securities held to maturity:
      Debt securities              $     (68,470)      (67,430)       (1,040)
  Securities available
  for sale:
      Debt securities                    (48,078)      (26,905)      (21,173)
      Equity securities                    3,222         3,245           (23)
  
  Totals                           $    (113,326)      (91,090)      (22,236)
  
  </TABLE>
  
  Unrealized losses at March 31, 2000, increased 24% from year-end 1999 even
  though market interest rates of the ten year U.S. Treasury bond actually
  decreased approximately 44 basis points during the quarter.  With market
  interest rates declining, it would be expected that market values of debt
  securities would increase.  However, market values actually decreased because
  of the substantial widening of the yield premium for corporate bonds over
  comparable Treasury securities.   Approximately 69% of National Western's bond
  portfolio consists of corporate bonds, including public utilities.  The
  increase of the yield premium has primarily been event-risk driven as
  companies  increase  their  leverage  through  stock  buyback  programs  and
  acquisitions.  Because the majority of the Company's debt securities are
  classified as held to maturity, which are recorded at amortized cost, changes
  in market values have relatively small effects on the Company's financial
  statements.  Also, the Company has the intent and ability to hold these
  securities to maturity, and it is unlikely that sales of such securities would
  be required which would realize market gains or losses.
  
  Changes in fair values of securities due to changes in market interest rates
  is an example of market risk.  Market risk is the risk of change in market
  values of financial instruments due to changes in interest rates, currency
  exchange rates, commodity prices, or equity prices.  The most significant
  market risk exposure for National Western is interest rate risk. The Company
  manages interest rate risk through on-going cash flow testing required for
  insurance regulatory purposes. Computer models are used to perform cash flow
  testing under various commonly used stress test interest rate scenarios to
  determine if existing assets would be sufficient to meet projected liability
  outflows.  Management strives to closely match the durations of its assets and
  liabilities.   Sensitivity analysis allows the Company to measure the
  potential gain or loss in fair value of its interest-sensitive instruments and
  to seek to protect its economic value and achieve a predictable spread between
  what is earned on invested assets and what is paid on liabilities.  The
  Company seeks to minimize the impact of interest risk through surrender
  charges that are imposed to discourage policy surrenders.  Interest rate
  changes can be anticipated and risk may be limited due to management actions
  regarding asset and liability instruments.  However, potential changes in the
  values of financial instruments indicated by hypothetical interest changes
  will likely be different from actual changes experienced, and the differences
  may be material.
  
  Market risk-sensitive assets of the Company include debt securities, equity
  securities which are almost entirely preferred stocks, mortgage loans, policy
  loans, and index options.  The Company does not maintain a securities trading
  portfolio.  Market risk-sensitive liabilities include policy liabilities for
  deferred  and  immediate  investment  annuity  contracts  and  supplemental
  contracts.  Sensitivity analysis expresses the potential gain or loss in fair
  value, over a selected time period, from one or more selected hypothetical
  changes in interest rates which are reasonably possible in the near term.  The
  Company performed detailed sensitivity analysis at December 31, 1999, for its
  interest rate-sensitive assets.  Based on the recent change in market
  conditions in the first quarter of 2000, the changes in market values of the
  Company's debt securities fell somewhat outside the expected range of results
  of this analysis.  The deviation from the expected results was due to the
  volatility in the corporate bond market as previously described above.
  
  In addition to the securities described above, the Company invests in index
  options which are derivative financial instruments used to hedge the equity
  return component of the Company's equity-indexed annuities.  The values of
  these options are primarily impacted by equity price risk, as the options'
  fair values are dependent on the performance of the S&P 500 Composite Stock
  Price Index.  However, increases or decreases in investment returns from these
  options are substantially offset by corresponding increases or decreases in
  amounts paid to equity-indexed annuity policyholders, subject to minimum
  guaranteed policy interest rates.
  
  The Company's market risk liabilities, which include policy liabilities for
  investment annuity and supplemental contracts, are managed for interest rate
  risk through cash flow testing as previously described.  As part of this cash
  flow testing, the Company has analyzed the potential impact on net earnings of
  both a 100 basis point increase and decrease in the U.S. Treasury yield curve
  as of December 31, 1999.  A 100 basis point interest rate decline would
  decrease net earnings for 2000 by approximately $300,000, based on the
  Company's projections.  A 100 basis point increase in interest rates would
  increase net earnings by approximately $200,000, based on the Company's
  projections.  These estimated impacts to earnings are net of tax effects
  determined at a tax rate of 35% and are also net of the estimated effects of
  deferred policy acquisition costs.
  
  The Company has modeled these scenarios, as a change in market interest rates
  could pose potential risks to the current profitability levels of this
  business.  These movements in interest rates are also reasonably possible
  near-term scenarios given the current interest rate environment.  The risks
  from such changes are primarily due to changes in interest rate spreads, which
  are the differences between investment income earned and credited interest
  paid to policyholders.  Also, the changes in interest rates can effect the
  level of surrenders and timing of cash flows related to policy liabilities.
  
  The above-described scenarios produce estimated changes in cash flows as well
  as cash flow reinvestment projections.  Estimated cash flows in the Company's
  model assume cash flow reinvestments which are representative of the Company's
  current  investment  strategy.    Calls  and  prepayments  include  scheduled
  maturities and those expected to occur which would benefit the security
  issuers.  Assumed policy surrenders consider differences and relationships
  between credited interest rates and market interest rates as well as surrender
  charges on individual policies.  The impact to earnings also includes the
  expected effects on amortization of deferred policy acquisition costs.  The
  model considers only investment annuity and supplemental contracts in-force at
  December 31, 1999, and does not consider new product sales or the possible
  impact of interest rate changes on sales.
  
  
  MORTGAGE LOANS AND REAL ESTATE
  
  Investment Philosophy
  
  In general, the Company seeks loans on high quality, income producing
  properties such as shopping centers, freestanding retail stores, office
  buildings, industrial and sales or service facilities, selected apartment
  buildings, motels, and health care facilities.  The location of these loans is
  typically  in  growth  areas  that  offer  a  potential  for  property  value
  appreciation.  These growth areas are found primarily in major metropolitan
  areas, but occasionally in selected smaller communities.
  
  The Company seeks to minimize the credit and default risk in its mortgage loan
  portfolio  through  strict  underwriting  guidelines  and  diversification  of
  underlying property types and geographic locations.   In addition to being
  secured by the property, mortgage loans with leases on the underlying property
  are often guaranteed by the lessee, in which case the Company approves the
  loan based on the credit strength of the lessee.  This approach has resulted
  in higher quality mortgage loans with fewer defaults.
  
  The Company's direct investments in real estate are not a significant portion
  of its total investment portfolio.  Many of these investments were acquired
  through mortgage loan foreclosures.  However, the Company also participates in
  several real estate joint ventures and limited partnerships.  The joint
  ventures  and  partnerships  invest  primarily  in  income-producing  retail
  properties.    These  investments  have  typically  enhanced  the  Company's
  investment portfolio returns.
  
  Portfolio Analysis
  
  The Company held net investments in mortgage loans totaling $197,559,000 and
  $183,902,000, or 6.0% and 5.7% of total invested assets, at March 31, 2000,
  and December 31, 1999, respectively. The loans are real estate mortgages,
  substantially  all  of  which  are  related  to  commercial  properties  and
  developments and have fixed interest rates.
  
  The diversification of the mortgage loan portfolio by geographic regions of
  the United States and by property type as of March 31, 2000, and December 31,
  1999, was as follows:
  
  <TABLE>
  <CAPTION>
  
                                           March 31,      December 31,
                                              2000            1999
  
  <S>                                       <C>             <C>
  
  Geographic Region:
  West South Central                         55.7%           58.8%
  Mountain                                   23.9            20.5
  Pacific                                    10.1            11.0
  South Atlantic                              4.7             5.1
  East South Central                          3.9             4.2
  Other                                       1.7             0.4
  
  Totals                                    100.0%          100.0%
  
  </TABLE>
  
  <TABLE>
  <CAPTION>
  
                                          March 31,      December 31,
                                             2000            1999
  
  <S>                                       <C>             <C>
  
  Property Type:
  Retail                                     58.1%           56.1%
  Office                                     25.3            27.4
  Hotel/Motel                                 6.7             7.2
  Land/Lots                                   3.8             2.5
  Nursing Homes                               2.1             2.4
  Apartment                                   1.5             1.6
  Other                                       2.5             2.8
  
  Totals                                    100.0%          100.0%
  
  </TABLE>
  
  As of March 31, 2000, the allowance for possible losses on mortgage loans was
  $4,104,000.  No additions were made to the allowance in the first quarter of
  2000.  Although management believes that the current balance is adequate,
  future additions to the allowance may be necessary based on changes in
  economic conditions, particularly in the West South Central region which
  includes Texas, Louisiana, Oklahoma, and Arkansas, as this area contains the
  highest concentrations of the Company's mortgage loans.
  
  The Company currently places all loans past due three months or more on
  nonaccrual status, thus recognizing no interest income on the loans.  The
  Company had mortgage loan principal balances on nonaccrual status totaling
  $3,047,000  and  $3,014,000  at  March  31,  2000  and  December  31,  1999,
  respectively.  Also, the Company will at times restructure mortgage loans
  under certain conditions which may involve changes in interest rates, payment
  terms, or other modifications.  For the three months ended March 31, 2000, the
  reductions in interest income due to nonaccrual and restructured mortgage
  loans were approximately $79,000.  For the three months ended March 31, 1999,
  the reductions in interest income due to nonaccrual and restructured mortgage
  loans were not significant.
  
  The Company owns real estate that was acquired through foreclosure and through
  direct investment totaling $19,386,000 and $11,388,000 at March 31, 2000, and
  December 31, 1999, respectively.  This small concentration of properties
  represents less than one percent of the Company's entire investment portfolio.
  The real estate holdings consist primarily of income-producing properties
  which are being operated by the Company.  The Company recognized operating
  income on these properties of approximately $187,000 and $283,000 for the
  three months ended March 31, 2000 and 1999.  Also during the first quarter of
  1999, the Company sold a real estate property resulting in a realized gain on
  investments totaling $1,419,000.
  
  The Company monitors the conditions and market values of these properties on a
  regular basis.  No significant realized losses were recognized due to declines
  in values of properties for the three months ended March 31, 2000 and 1999,
  respectively.  The Company makes repairs and capital improvements to keep the
  properties in good condition and will continue this maintenance as needed.
  
  During the first quarter of 2000, the Company acquired a nursing home facility
  through an affiliated limited partnership.  The acquisition, which totaled
  approximately $6.6 million, was made by a newly formed limited partnership,
  the partners of which are downstream subsidiaries of National Western.  This
  investment resulted in an increase in real estate owned from December 31,
  1999, as reflected above.  The nursing home facility, which is expected to
  open in the second quarter of 2000, will also be operated by an affiliated
  limited partnership and the financial operating results will be consolidated
  with those of the Company.  Daily operations and management of the nursing
  home will be performed by an experienced management company through a
  contract with the limited partnership.  Initial first year start up expenses
  could generate minimum operating losses of approximately $400,000, before
  taxes.
  
  
  RESULTS OF OPERATIONS
  
  Consolidated Operations
  
  Summary of Consolidated Operating Results
  
  A summary of operating results for the three months ended March 31, 2000 and
  1999 is provided below:
  
  <TABLE>
  <CAPTION>
  
                                                 Three Months Ended March 31,
                                                      2000           1999
                                            (In thousands except per share data)
  
  <S>                                          <C>                   <C>
  
  Revenues:
  Revenues, excluding realized
  gains (losses) on investments                $       81,130        81,945
  Realized gains (losses) on investments                 (580)        4,805
  
  Total revenues                               $       80,550        86,750
  
  Earnings:
  Earnings from operations                     $       12,710        10,980
  Net realized gains (losses) on investments             (377)        3,123
  
  Net earnings                                 $       12,333        14,103
  
  Basic Earnings Per Share:
  Earnings from operations                     $         3.63          3.14
  Net realized gains (losses) on investments            (0.11)         0.89
  
  Net earnings                                 $         3.52          4.03
  
  Diluted Earnings Per Share:
  Earnings from operations                     $         3.61          3.11
  Net realized gains (losses) on investments            (0.10)         0.88
  
  Net earnings                                 $         3.51          3.99
  
  </TABLE>
  
  Consolidated  Operating  Results:  Earnings  from  operations,  excluding  net
  realized gains and losses on investments, totaled $12,710,000 for the quarter
  ended March 31, 2000, compared to $10,980,000 for the first quarter of 1999.
  The higher earnings in 2000 are primarily related to the growth in the
  Company's interest sensitive blocks of business.  Additionally, while life
  insurance benefit claims were significantly higher in the first quarter of
  2000, this increase was largely offset by reductions in traditional policy
  liabilities.    The  Company  is  also  benefitting  from  lower  agent  bonus
  commissions as a result of a litigation settlement in 1999, which terminated
  future bonus commissions on certain annuities in-force.
  
  Revenues, excluding realized gains and losses on investments, were relatively
  consistent totaling $81,130,000 and $81,945,000 for the quarters ended March
  31, 2000 and 1999, respectively.  Increases in universal life cost of
  insurance revenues were offset by lower policy surrender charge revenues and
  lower income related to index options, which are used to hedge the Company's
  equity-indexed annuity products.
  
  The Company recorded realized losses on investments, net of taxes, totaling
  $377,000 for the quarter ended March 31, 2000, compared to gains of $3,123,000
  for the first quarter of 1999.  The first quarter 2000 losses were primarily
  related to investments in debt securities.  The 1999 gains were primarily from
  sales and calls of investments in debt securities totaling $1,687,000, net of
  taxes.  Also included in 1999 was a net gain totaling $922,000 from the sale
  of investment real estate owned by one of the Company's subsidiaries, NWL 806
  Main, Inc.
  
  As previously reported, the bankruptcy reorganization of the Company's wholly
  owned subsidiary,  The Westcap Corporation, was completed in the first quarter
  of 1999.  Pursuant to the reorganization plan, National Western retained 100%
  continuing ownership of the reorganized Westcap and the subsidiary is now
  operating as a real estate management company.  No losses were reported for
  discontinued brokerage operations in the first quarter of 1999 as the entire
  $14,125,000 settlement payment was accrued and reported as a loss in the third
  quarter of 1998.
  
  Net Investment Income:  Net investment income decreased slightly from the
  first quarter of 1999, totaling $57,740,000 and $57,852,000 for the quarter
  ended March 31, 2000 and 1999, respectively.   While investment income from
  debt securities continues to increase with corresponding increases in invested
  assets, the essentially flat total investment income growth is primarily due
  to index options.  Declines in fair values of index options used to hedge the
  equity return component of the Company's equity-indexed annuity products
  resulted in lower investment income for the first quarter of 2000. The index
  options, which act as hedges to match closely the returns on the S&P 500
  Index, are reported at fair value in the accompanying financial statements.
  The changes in the values of the index options and the credited interest on
  policyholder liabilities for equity-indexed annuities are both reflected in
  the statement of earnings.  The reduction to investment income from index
  options for the quarter ended March 31, 2000, totaling $1,725,000 is composed
  of a $1,978,000 decline in fair value of options, offset partially by
  $253,000 of actual income realized as a result of option expirations.
  Comparative income from index options totaled $1,575,000 for the
  quarter  ended  March  31,  1999.    This  significant  decline  is  directly
  attributable to the decline in the S&P 500 Index over the same period.  While
  net investment income was lower due to these options, this reduction was
  partially offset by lower annuity contract interest expense as the credited
  return on the Company's equity-indexed annuities are also based on the same
  S&P 500 Index.
  
  The decrease in investment income was tempered somewhat by reduced investment
  expenses.  Investment expenses were lower in 2000 compared to 1999 primarily
  due to the implementation of a new cost allocation study in the first quarter
  of 2000.  Accordingly, the lower investment expenses were offset by a
  corresponding higher allocation of costs to other operating expenses in the
  accompanying financial statements.  A detail of net investment income is
  provided below:
  
  <TABLE>
  <CAPTION>
  
                                     Three Months Ended March 31,
                                           2000           1999
                                             (In thousands)
  
  <S>                                <C>                  <C>
  
  Investment income:
      Debt securities                $      52,661        50,379
      Mortgage loans                         4,281         4,248
      Policy loans                           2,027         2,111
      Index options                         (1,725)        1,575
      Other investment income                1,170           832
  
  Total investment income                   58,414        59,145
  Investment expenses                          674         1,293
  
  Net investment income              $      57,740        57,852
  
  </TABLE>
  
  Realized Gains and Losses on Investments: The Company recorded realized losses
  of $580,000 and realized gains of $4,805,000 in the first quarters of 2000 and
  1999, respectively.  As previously described, the 2000 losses were primarily
  related to investments in debt securities.  The 1999 gains were primarily from
  sales and calls of investments in debt securities totaling $2,595,000 and a
  gain of $1,419,000 from the sale of investment real estate.
  
  Life and Other Policy Benefits:  These expenses in 2000 and 1999 were
  $10.1 million and $8.7 million, respectively.  The significant increase is due
  to  higher  life  insurance  benefit  claims.    Mortality  claims  experience
  fluctuates from period to period, and such deviations are not uncommon in the
  life insurance industry.  However, the Company utilizes reinsurance to help
  minimize its exposure to adverse mortality experience.  The Company's general
  policy is to reinsure amounts in excess of $200,000 on the life of any one
  individual.  Most of the increase in life insurance benefit claims in the
  first quarter of 2000 was related to traditional policies which was largely
  offset by reductions in traditional policy liabilities.  As reflected in the
  accompanying financial statements, the decrease in liabilities for future
  policy benefits totaled $2,482,000 and $241,000 for the quarters ended March
  31, 2000 and 1999, respectively.  A comparative detail of life and other
  policy benefits is provided below:
  
  <TABLE>
  <CAPTION>
  
                                           Three Months Ended March 31,
                                                2000           1999
                                                   (In thousands)
  
  <S>                                     <C>                   <C>
  
  Life insurance benefit claims           $       6,596         5,524
  Surrenders of traditional products              2,984         2,460
  Other policy benefits                             512           704
  
  Totals                                  $      10,092         8,688
  
  </TABLE>
  
  Universal Life and Investment Annuity Contract Interest:  The Company closely
  monitors its credited interest rates, taking into consideration such factors
  as profitability goals, policyholder benefits, product marketability, and
  economic market conditions.  Rates are established or adjusted after careful
  consideration and evaluation of these factors against established objectives.
  As market interest rates fluctuate, the Company's credited interest rates are
  often adjusted accordingly, while also taking into consideration other factors
  as described above.  Contract interest totaled $36.7 million and $40.6 million
  for the quarters ended March 31, 2000 and 1999, respectively. This decline is
  primarily related to the Company's equity-indexed annuities.  Because the S&P
  500 Index declined significantly during the first quarter of 2000, the related
  contract   interest   of   the   equity-indexed   annuities   also   declined.
  Correspondingly, the income from index options used to hedge these annuities
  also declined, substantially offsetting the lower contract interest.
  
  Other Operating Expenses: Other operating expenses totaled $6,717,000 and
  $6,701,000 for the quarters ended March 31, 2000 and 1999, respectively.
  While these total expenses are consistent between quarters, as previously
  described, the Company implemented a new cost allocation study in the first
  quarter of 2000.  This resulted in lower investment expenses and corresponding
  higher other operating expenses.  The amount of this reallocation totaled
  approximately  $650,000.    However,  the  higher  cost  allocation  to  other
  operating expenses was substantially offset by lower agent commissions.  The
  Company is benefitting from lower agent bonus commissions as a result of a
  litigation settlement in 1999, which terminated future bonus commissions on
  certain annuities in-force.
  
  Federal Income Taxes:  Federal income taxes include no unusual items as
  effective tax rates for the quarters ended March 31, 2000 and 1999 were 34.0%
  and 34.2%, respectively.
  
  Segment Operations
  
  Summary of Segment Earnings
  
  A summary of segment earnings for the quarters ended March 31, 2000 and 1999
  is provided below.  The segment earnings exclude realized gains and losses on
  investments, net of taxes.
  
  <TABLE>
  <CAPTION>
  
                        Domestic  International
                          Life        Life                    All
                        Insurance   Insurance   Annuities   Others    Totals
                                           (In thousands)
  
  <S>                <C>               <C>         <C>         <C>    <C>
  
  Segment
  earnings:
  
    March 31, 2000   $    1,699        2,396       8,271       344    12,710
  
    March 31, 1999   $    2,082        1,410       7,367       121    10,980
  
  </TABLE>
  
  Domestic Life Insurance Operations
  
  The Company's domestic life insurance operations concentrate marketing efforts
  on federal employees, seniors, and specific employee groups in private
  industry, as well as individual sales.  The products marketed are universal
  life insurance and traditional life insurance, which includes both term and
  whole life products.  National Western markets and distributes its domestic
  products primarily through independent agents and brokers and independent
  marketing  organizations  (IMOs).    The  IMOs  also  assist  the  Company  in
  recruiting,  contracting,  and  supervising  agents  as  well  as  providing
  additional financial resources for product marketing.  Geographically, the
  domestic life insurance operations market products in most of the United
  States, which encompasses 43 states and the District of Columbia.  The states
  in which the Company does not conduct business are primarily in the northeast
  and include Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey,
  New York, and Vermont.
  
  Earnings for the domestic life insurance operating segment were $1,699,000 and
  $2,082,000 for the three months ended March 31, 2000 and 1999, respectively.
  The decrease in earnings in 2000 is primarily due to higher amortization of
  deferred policy acquisition costs and modest increases in policy benefits.
  These increases were partially offset by higher premiums and contract revenues
  and net investment income during the first quarter of 2000.
  
  A comparative analysis of results of operations for the Company's domestic
  life insurance segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                    Three Months Ended March 31,
                                                         2000          1999
                                                           (In thousands)
  
  <S>                                             <C>                  <C>
  
  Domestic Life Insurance Operations:
  Premiums and other revenue:
      Premiums and contract revenues              $       5,930         5,791
      Net investment income                               6,472         6,331
      Other income                                         -               16
  
  Total premiums and other revenue                       12,402        12,138
  
  Benefits and expenses:
      Policy benefits                                     3,893         3,544
      Amortization of deferred policy
      acquisition costs                                   1,626           932
  
      Universal life insurance
      contract interest                                   2,222         2,449
      Other operating expenses                            2,086         2,062
  
  Total benefits and expenses                             9,827         8,987
  
  Segment earnings before Federal income taxes            2,575         3,151
  
  Federal income taxes                                      876         1,069
  
  Segment earnings                                $       1,699         2,082
  
  </TABLE>
  
  Revenues from domestic life insurance operations include life insurance
  premiums on traditional type products and revenues from universal life
  insurance.  The Company's current marketing efforts focus more on universal
  life insurance, and, as a result, revenues from these products continue to
  increase over traditional products.  Revenues from traditional products are
  simply premiums collected, while revenues from universal life insurance
  consist of policy charges for the cost of insurance, policy administration
  fees, and surrender charges assessed during the period.  A comparative detail
  of premiums and contract revenues is provided below:
  
  <TABLE>
  <CAPTION>
  
                                        Three Months Ended March  31,
                                               2000        1999
                                                 (In thousands)
  
  <S>                                       <C>             <C>
  
  Universal life insurance:
      Cost of insurance                     $    3,023      2,837
      Surrender charges                            482        406
      Policy fees and other revenues               443        308
  Traditional life insurance premiums            1,982      2,240
  
  Totals                                    $    5,930      5,791
  
  </TABLE>
  
  Actual universal life insurance deposits collected for the quarters ended
  March 31, 2000 and 1999 are detailed below.  Deposits collected on these
  nontraditional products are not reflected as revenues in the Company's
  statements  of  earnings,  as  they  are  recorded  directly  to  policyholder
  liabilities upon receipt, in accordance with generally accepted accounting
  principles.
  
  
  <TABLE>
  <CAPTION>
  
                                           Three Months Ended March 31,
                                                2000           1999
                                                  (In thousands)
  
  <S>                                     <C>                    <C>
  
  Universal life insurance:
      First year and single premiums      $        1,610         1,105
      Renewal premiums                             3,668         3,769
  
  Totals                                  $        5,278         4,874
  
  </TABLE>
  
  Policy benefits were higher in the first quarter of 2000 totaling $3,893,000
  compared to $3,544,000 for the comparable 1999 period.  The increase was due
  to significantly higher life insurance benefit claims, which was largely
  offset by reductions in traditional policy liabilities.  Mortality claims
  experience fluctuates from period to period, and such deviations are not
  uncommon in the life insurance industry.
  
  Universal life insurance contract interest decreased to $2,222,000 in 2000
  compared to $2,449,000 in 1999.  This is consistent with the relative stable
  to declining size of this block of business.
  
  Amortization of deferred policy acquisition costs increased from $932,000 in
  1999 to $1,626,000 in 2000.  These expenses represent the amortization of the
  costs of acquiring or producing new business, which consists primarily of
  agents' commissions.  The majority of such costs are amortized in direct
  relation to the anticipated future gross profits of the applicable blocks of
  business.  Amortization is also impacted by the level of policy surrenders,
  lapses, and benefit claims.  The significant increase in amortization for the
  first quarter of 2000 is partially due to high lapses in a small block of
  universal life policies.
  
  International Life Insurance Operations
  
  The Company's international life insurance operations focus marketing efforts
  on foreign nationals in upper socioeconomic classes with substantial financial
  resources.  Insurance sales are primarily on insureds from countries in
  Central and South America, the Caribbean, and the Pacific Rim.  Marketing to
  numerous countries in these different regions provides diversification that
  helps to minimize large fluctuations in sales that can occur due to various
  economic, political, and competitive pressures that may occur from one country
  to another.  Historically, the top three countries in insurance sales have
  often been Argentina, Chile, and Peru.  Products sold in the international
  market include both universal life and traditional life insurance products.
  The Company minimizes exposure to foreign currency risks, as almost all
  foreign policies require payment of premiums and claims in United States
  dollars.  Sales production from the international market is from independent
  broker-agents, many of whom have been selling National Western products for 20
  or more years.
  
  Earnings  for  the  international  life  insurance  operating  segment  were
  $2,396,000 and $1,410,000 for the quarters ended March 31, 2000 and 1999,
  respectively.  Earnings in 2000 were higher primarily due to increases in
  universal life insurance revenues and lower policy benefits.  The higher
  earnings were also somewhat enhanced by slightly higher net investment income.
  
  A  comparative  analysis  of  results  of  operations  for  the  Company's
  international life insurance segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                 Three Months Ended March 31,
                                                      2000           1999
                                                         (In thousands)
  
  <S>                                           <C>                    <C>
  
  International Life Insurance Operations:
  Premiums and other revenue:
      Premiums and contract revenues            $       10,686         10,228
      Net investment income                              5,650          5,443
      Other income                                          27             12
  
  Total premiums and other revenue                      16,363         15,683
  
  Benefits and expenses:
      Policy benefits                                    3,650          4,702
      Amortization of deferred policy
      acquisition costs                                  3,157          3,279
      Universal life insurance
      contract interest                                  3,930          3,433
      Other operating expenses                           1,994          2,135
  
  Total benefits and expenses                           12,731         13,549
  
  Segment earnings before
  Federal income taxes                                   3,632          2,134
  
  Federal income taxes                                   1,236            724
  
  Segment earnings                              $        2,396          1,410
  
  </TABLE>
  
  As with domestic operations, revenues from the international life insurance
  segment include both premiums on traditional type products and revenues from
  universal life insurance.  The international operations' marketing efforts are
  also focused more on universal life insurance, and, as a result, revenues from
  these products continue to increase over traditional products.  Cost of
  insurance revenues continue to increase as the international block of business
  grows, while traditional life insurance premiums were also higher during the
  first quarter of 2000.  These increases were minimally affected by small
  decreases in surrender charges and policy fees and other revenues.  A
  comparative detail of premiums and contract revenues is provided below:
  
  <TABLE>
  <CAPTION>
  
                                             Three Months Ended March 31,
                                                  2000           1999
                                                    (In thousands)
  
  <S>                                       <C>                   <C>
  
  Universal life insurance:
      Cost of insurance                     $        7,616         7,221
      Surrender charges                              1,891         1,956
      Policy fees and other revenues                   803           898
  Traditional life insurance premiums                  376           153
  
  Totals                                    $       10,686        10,228
  
  </TABLE>
  
  Actual universal life insurance deposits collected for the quarters ended
  March 31, 2000 and 1999 are detailed below.  Deposits collected on these
  nontraditional products are not reflected as revenues in the Company's
  statements  of  earnings,  as  they  are  recorded  directly  to  policyholder
  liabilities upon receipt, in accordance with generally accepted accounting
  principles.
  
  <TABLE>
  <CAPTION>
  
                                                 Three Months Ended March 31,
                                                     2000           1999
                                                        (In thousands)
  
  <S>                                          <C>                    <C>
  
  Universal life insurance:
      First year and single premiums           $        3,123          2,569
      Renewal premiums                                  8,343          8,486
  
  Totals                                       $       11,466         11,055
  
  </TABLE>
  
  Policy benefits were significantly lower in 2000 totaling $3,650,000 compared
  to $4,702,000 in 1999. The decrease in expenses was due to lower life
  insurance benefit claims.
  
  Universal life insurance contract interest increased from $3,433,000 in 1999
  to $3,930,000 in 2000.  The increase in contract interest is consistent with
  growth in the universal life insurance business.
  
  Annuity Operations
  
  The Company's annuity operations are almost exclusively in the United States.
  Like the Company's domestic life insurance operations, annuities are marketed
  in 43 states and the District of Columbia using independent agents, brokers,
  and  independent  marketing  organizations  (IMOs).    For  most  of  these
  organizations, annuity sales are much more significant than life insurance
  sales and are the primary focus of their business operations.  Although some
  of the Company's annuities are available in the international market, current
  sales are insignificant to total annuity sales.
  
  Annuities sold include single and flexible premium deferred annuities, single
  premium immediate annuities, and equity-indexed annuities.  These products can
  be tax qualified or nonqualified annuities.  In recent years the majority of
  annuities sold have been nonqualified deferred annuities.  The Company also
  continues to collect additional premiums on existing two-tier annuities, as a
  large portion of the two-tier block of business is flexible premium annuities
  on which renewal premiums continue to be collected.  However, the Company has
  not sold two-tier annuities since 1992.
  
  Earnings for the annuity operating segment were $8,271,000 and $7,367,000 for
  the quarters ended March 31, 2000 and 1999, respectively.  Earnings for 2000
  were up from 1999 primarily due to increased investment income over annuity
  contract interest.  Reducing this increase in earnings are lower premiums and
  contract revenues and higher amortization of deferred policy acquisition
  costs.
  
  A comparative analysis of results of operations for the Company's annuity
  segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                 Three Months Ended March 31,
                                                       2000           1999
                                                         (In thousands)
  
  <S>                                           <C>                    <C>
  
  Annuity Operations:
  Premiums and other revenue:
      Premiums and contract revenues            $        6,659          7,924
      Net investment income                             45,096         45,896
      Other income                                          88            122
  
  Total premiums and other revenue                      51,843         53,942
  
  Benefits and expenses:
      Policy benefits                                       67            201
      Amortization of deferred policy
      acquisiton costs                                   6,102          5,360
      Annuity contract interest                         30,499         34,729
      Other operating expenses                           2,637          2,504
  
  Total benefits and expenses                           39,305         42,794
  
  Segment earnings before
  Federal income taxes                                  12,538         11,148
  
  Federal income taxes                                   4,267          3,781
  
  Segment earnings                              $        8,271          7,367
  
  </TABLE>
  
  Revenues from annuity operations include primarily surrender charges and
  recognition of deferred revenues relating to immediate or payout annuities.
  Annuitizations result in transfers of policies from deferred to immediate or
  payout status.  The deferred revenues related to these annuities are amortized
  into income during the payout period.  Surrender charge revenues were down
  19.4% in 2000 compared to 1999 primarily due to reductions in surrender
  charges from two-tier annuities. Although total annuity policy surrenders were
  actually only down 2.2% from 1999 to 2000, the mix of surrender types was
  significantly  different.    While  single-tier  annuity  policy  surrenders
  increased 24% in 2000, two-tier annuity policy surrenders, which typically
  have much higher surrender charges, declined over 32%.  This decline in
  surrenders and related income from two-tier annuities is not unexpected and
  could continue, since this is a closed block of business.  The Company has not
  sold two-tier annuities since 1992.  A comparative detail of the components of
  premiums and annuity contract revenues is provided below.
  
  <TABLE>
  <CAPTION>
  
                                                 Three Months Ended March 31,
                                                      2000           1999
                                                        (In thousands)
  
  <S>                                           <C>                    <C>
  
  Surrender charges:
     Two-tier annuities                         $        3,052         4,643
     Single-tier annuities                               2,167         1,829
  
  Total surrender charges                                5,219         6,472
  Payout annuity and other revenues                      1,426         1,434
  Traditional annuity premiums                              14            18
  
  Totals                                        $        6,659         7,924
  
  </TABLE>
  
  Actual annuity deposits collected for the quarters ended March 31, 2000 and
  1999 are detailed below.  Deposits collected on these nontraditional products
  are not reflected as revenues in the Company's statements of earnings, as they
  are recorded directly to policyholder liabilities upon receipt, in accordance
  with generally accepted accounting principles.
  
  <TABLE>
  <CAPTION>
  
                                                 Three Months Ended March 31,
                                                      2000           1999
                                                        (In thousands)
  
  <S>                                           <C>                  <C>
  
  Deferred annuities:
      Equity-indexed                            $       34,239        45,630
      Other                                             51,357        51,818
  
  Total deferred annuities                              85,596        97,448
  Immediate annuities                                    7,725         7,624
  
  Totals                                        $       93,321       105,072
  
  </TABLE>
  
  Although total annuity deposits for the quarter ended March 31, 2000, were
  lower than the comparable 1999 period, the decline is primarily attributable
  to equity-indexed annuities.  Sales of the Company's other deferred annuity
  products and immediate annuities were virtually the same for the first
  quarters of 2000 and 1999.
  
  While sales were lower in 2000, equity-indexed annuities are a major portion
  of the Company's total annuity production.  The Company's equity-indexed
  annuities are flexible premium deferred annuities which combine the features
  associated with traditional fixed annuities, with the option to have interest
  rates that are linked in part to an equity index, the S&P 500 Index.  These
  annuities are long-term contracts designed as planning vehicles for retirement
  security.    These  annuities  are  attractive  to  customers,  as  they  have
  guaranteed  minimum  interest  rates,  coupled  with  the  potential  for
  significantly higher returns based on an equity index component.  Also,
  because the Company does not offer variable products or mutual funds, these
  products provide a key equity-based alternative to the Company's existing
  fixed annuity products.  In conjunction with the sale of these annuities, the
  Company uses an investment hedging program to offset the potential higher
  returns that could be paid on these products.  Specifically, the Company
  purchases index options from highly rated banks and brokerage firms.  These
  index options act as hedges to match closely the returns based on the S&P 500
  Index which may be paid to policyholders.
  
  Sales of equity-indexed annuities declined during the year ended December 31,
  1999, primarily due to volatility in the stock market.  This volatility
  affects both the immediate demand for these annuities and the pricing of these
  products.  Increased product costs from stock market volatility, particularly
  costs of index options used to hedge the equity return component of these
  annuities, can reduce potential credited interest to policyholders.  The lower
  production level has continued in the first quarter of 2000, which is
  consistent with volatility in the stock market, although first quarter 2000
  sales were higher than the fourth quarter of 1999.
  
  Net investment income for the first quarters of 2000 and 1999 totaled
  $45,096,000 and $45,896,000, respectively.  As previously described in Summary
  of Consolidated Operating Results, the decrease in net investment income is
  due to lower income from index options.  Declines in fair values of index
  options used to hedge the equity return component of the Company's equity-
  indexed annuity products resulted in lower investment income for the first
  quarter of 2000.  The decline is directly attributable to the decline in the
  S&P 500 Index over the same period.
  
  Annuity contract interest was $30.5 million in 2000 compared to $34.7 million
  in 1999.  The decrease is due to lower interest credited on equity-indexed
  annuities due to the decline in the S&P 500 Index.  Contract interest on
  equity-indexed annuities totaled $1,874,000 and $4,726,000 for the quarters
  ended March 31, 2000 and 1999, respectively. While 2000 contract interest is
  lower due to equity-indexed annuities, net investment income from index
  options for 2000 was also $3,300,000 lower than the comparable 1999 first
  quarter.  Although index options are used as hedges, differences between
  income from index options and contract interest credited to policyholders will
  occur for several reasons, some of which may only be timing differences
  between the recognition of income and expenses.  One reason is that the costs
  of the index options are essentially amortized against net investment income
  as the options are marked to fair value each reporting period.  The costs of
  options are covered by additional income earned on debt securities purchased
  with equity-indexed annuity premiums. Other differences are due to asset fees
  charged against policyholder contract interest, surrenders and death benefits
  on annuities within the annual hedging period, and inherent differences
  between index option fair values and policy liability reserving treatments
  related to minimum guaranteed interest rates.
  
  Amortization of deferred policy acquisition costs represents the amortization
  of the costs of acquiring or producing new business, primarily agents'
  commissions, the majority of which are amortized in direct relation to the
  anticipated future gross profits of the applicable blocks of business.
  Amortization is also impacted by the level and type of policy surrenders.
  Amortization for 2000 and 1999 was $6,102,000 and $5,360,000, respectively.
  
  Other operating expenses totaled $2,637,000 for the first quarter of 2000
  compared to $2,504,000 for the comparable 1999 period.  As previously
  described  in  Summary  of  Consolidated  Operating  Results,  the  Company
  implemented a new cost allocation study in the first quarter of 2000.  This
  resulted in lower investment expenses and corresponding higher other operating
  expenses.  However, the higher cost allocation to other operating expenses was
  substantially offset by lower agent commissions.  The Company is benefitting
  from lower agent bonus commissions as a result of a litigation settlement in
  1999, which terminated future bonus commissions on certain annuities in-force.
  
  Other Operations
  
  National Western's primary business encompasses its domestic and international
  life insurance operations and its annuity operations.  However, National
  Western also has small real estate and other investment operations through the
  following wholly owned subsidiaries: NWL Investments, Inc., NWL Properties,
  Inc., NWL 806 Main, Inc., NWL Services, Inc., and NWL Financial, Inc.  Also,
  during January, 1999, the Company's wholly owned subsidiary, The Westcap
  Corporation, completed its Chapter 11 bankruptcy reorganization.  With the
  reorganization complete, National Western transferred its investment real
  estate  holdings  totaling  approximately  $11,589,000  to  Westcap,  and  the
  subsidiary is now operating as a real estate management company.  Earnings for
  these other operations totaled $344,000 and $121,000 for the first quarters of
  2000 and 1999, respectively.
  
  Most of the income from the Company's subsidiaries is from a life interest in
  the Libbie Shearn Moody Trust.  This asset was owned by National Western Life
  Insurance Company prior to 1997 but was transferred to NWL Services, Inc., in
  1997.  Dividend distributions from the Trust are declared semi-annually in
  June and December each year.  Because the asset is a life interest, these
  distributions are only accrued in the Company's financial statements when
  declared.  Semi-annual distributions in recent years typically exceed $1.7
  million.
  
  
  LIQUIDITY AND CAPITAL RESOURCES
  
  Liquidity
  
  The liquidity requirements of the Company are met primarily by funds provided
  from  operations.  Premium  deposits  and  revenues,  investment  income,  and
  investment maturities are the primary sources of funds, while investment
  purchases and policy benefits are the primary uses of funds.  Primary sources
  of liquidity to meet cash needs are the Company's securities available for
  sale portfolio, net cash provided by operations, and a bank line of credit.
  The Company's investments consist primarily of marketable debt securities that
  could be readily converted to cash for liquidity needs.  The Company may also
  borrow up to $60 million on its bank line of credit for short-term cash needs.
  
  A primary liquidity concern for the Company's life insurance operations is the
  risk of early policyholder withdrawals.  Consequently, the Company closely
  evaluates and manages the risk of early surrenders or withdrawals.  The
  Company includes provisions within annuity and universal life insurance
  policies, such as surrender charges, that help limit early withdrawals.  The
  Company also prepares cash flow projections and performs cash flow tests under
  various market interest rate scenarios to assist in evaluating liquidity needs
  and adequacy.  The Company currently expects available liquidity sources and
  future cash flows to be adequate to meet the demand for funds.
  
  In the past, cash flows from the Company's insurance operations have been more
  than adequate to meet current needs.  Cash flows from operating activities
  were $46.3 million and $28.4 million for the three months ended March 31, 2000
  and  1999,  respectively.    Net  cash  flows  from  the  Company's  financing
  activities, which includes universal life and investment annuity deposit
  product operations, totaled $16.4 million and $16.1 million in the first
  quarters of 2000 and 1999, respectively.  While annuity production declined in
  2000 due to lower equity-indexed annuity sales, surrenders remained relatively
  stable.  Cash flows from financing activities also include $12.0 million from
  utilization of the Company's line of credit short-term borrowing facility.
  The  borrowings  were  used  for  cash  management  purposes  related  to  the
  settlement of routine investment transactions.
  
  The  Company  also  has  significant  cash  flows  from  both  scheduled  and
  unscheduled investment security maturities, redemptions, and prepayments.
  These cash flows totaled $25.6 million and $41.9 million for the quarters
  ended March 31, 2000 and 1999, respectively.  The Company again expects
  significant cash flows from these sources throughout the remainder of 2000.
  
  Capital Resources
  
  The Company relies on stockholders' equity for its capital resources, as there
  has been no long-term debt outstanding in 2000 or recent years.  The Company
  does not anticipate the need for any long-term debt in the near future.  There
  are  also  no  current  or  anticipated  material  commitments  for  capital
  expenditures in 2000.
  
  Stockholders' equity totaled $478.6 million at March 31, 2000, reflecting an
  increase of $3.1 million from December 31, 1999.  The increase in capital is
  primarily from net earnings of $12.3 million, offset by an increase in net
  unrealized losses on investment securities totaling $9.6 million during the
  first quarter of 2000.  The increase in unrealized losses was due to market
  interest rate conditions and transfers of securities from held to maturity to
  available for sale.  As previously described in Investments in Debt and Equity
  Securities, the debt securities transfers were executed due to significant
  credit deterioration of the issuing companies.  Book value per share at March
  31, 2000, was $136.73.
  
  
  FORWARD-LOOKING STATEMENTS
  
  The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
  for forward-looking statements.  Certain information contained herein or in
  other written or oral statements made by or on behalf of National Western Life
  Insurance Company or its subsidiaries are or may be viewed as forward-looking.
  Although the Company has used appropriate care in developing any such
  information, forward-looking information involves risks and uncertainties that
  could significantly impact actual results.  These risks and uncertainties
  include, but are not limited to, matters described in the Company's SEC
  filings such as exposure to market risks, anticipated cash flows or operating
  performance, future capital needs, and statutory or regulatory related issues.
  However, National Western, as a matter of policy, does not make any specific
  projections as to future earnings, nor does it endorse any projections
  regarding future performance that may be made by others.  Whether or not
  actual results differ materially from forward-looking statements may depend on
  numerous foreseeable and unforeseeable events or developments.  Also, the
  Company undertakes no obligation to publicly update or revise any forward-
  looking  statements,  whether  as  a  result  of  new  information,  future
  developments, or otherwise.
  
  
                ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK
  
  
  This information is included in Item 2, Management's Discussion and Analysis
  of Financial Condition and Results of Operations, in the Investments in Debt
  and Equity Securities section.
  
  
                           PART II.  OTHER INFORMATION
  
                    ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  
  (a) Exhibits
  
  Exhibit 11 -Computation of Earnings Per Share (filed on page __ of this
               report).
  
  Exhibit 27 -Financial Data Schedule (filed electronically pursuant to
               Regulation S-K).
  
  (b) Reports on Form 8-K
  
  No reports on Form 8-K were filed during the quarter ended March 31, 2000.
  
  
                                    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.
  
  
                     NATIONAL WESTERN LIFE INSURANCE COMPANY
                                   (Registrant)
  
  
  
  
  
  Date:  May 10, 2000                  /S/ Ross R. Moody
                                       Ross R. Moody
                                       President, Chief Operating Officer,
                                       and Director
                                       (Authorized Officer)
  
  
  Date:  May 10, 2000                 /S/ Robert L. Busby, III
                                      Robert L. Busby, III
                                      Senior Vice President -
                                      Chief Administrative Officer,
                                      Chief Financial Officer and Treasurer
                                      (Principal Financial Officer)
  
  
  Date:  May 10, 2000                 /S/ Vincent L. Kasch
                                      Vincent L. Kasch
                                      Vice President - Controller
                                      and Assistant Treasurer
                                      (Principal Accounting Officer)
metadata_filer: {"company-data": {"conformed-name": "NATIONAL WESTERN LIFE INSURANCE CO", "cik": "0000070684", "assigned-sic": "6311", "irs-number": "840467208", "state-of-incorporation": "CO", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "002-17039", "film-number": "634074"}, "business-address": {"street1": "850 E ANDERSON LN", "city": "AUSTIN", "state": "TX", "zip": "78752-1602", "phone": "5128361010"}}
text: UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                    FORM 10-Q
  
      [  X  ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
  
                  For the Quarterly Period Ended March 31, 2000
  
     [      ]  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: 2-17039
  
                     NATIONAL WESTERN LIFE INSURANCE COMPANY
              (Exact name of Registrant as specified in its charter)
  
            COLORADO                                    84-0467208
     (State of Incorporation)            (I.R.S. Employer Identification Number)
  
        850 EAST ANDERSON LANE
       AUSTIN, TEXAS 78752-1602                           (512) 836-1010
  (Address of Principal Executive Offices)              (Telephone Number)
  
  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 May 10, 2000, the number of shares of Registrant's common stock
  outstanding was:  Class A -3,300,755 and Class B - 200,000.
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                                      INDEX
  
  Part I.  Financial Information:                                        Page
  
  Item 1.  Financial Statements
  
  Condensed Consolidated Balance Sheets
  March 31, 2000 (Unaudited) and December 31, 1999
  
  Condensed Consolidated Statements of Earnings
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Comprehensive Income
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Stockholders' Equity
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Cash Flows
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
  Notes to Condensed Consolidated Financial Statements (Unaudited)
  
  Item 2.  Management's Discussion and Analysis of
  Financial Condition and Results of Operations
  
  Item 3.  Quantitative and Qualitative Disclosures About Market Risk
  
  Part II.  Other Information:
  
  Item 6.  Exhibits and Reports on Form 8-K
  
  Signatures
  
  Exhibit 11 - Computation of Earnings per Share
  For the Three Months Ended March 31, 2000 and 1999 (Unaudited)
  
                          PART I.  FINANCIAL INFORMATION
  
                          ITEM 1.  FINANCIAL STATEMENTS
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
  (Unaudited)
                                                     March 31,   December 31,
            ASSETS                                      2000         1999
  Cash and investments:
      Securities held to maturity,
      at amortized cost                             $  2,150,109    2,151,924
      Securities available for sale,
      at fair value                                      743,190      717,948
      Mortgage loans, net of allowances
      for possible losses ($4,104 and $4,104)            197,559      183,902
      Policy loans                                       116,455      117,309
      Index options                                       32,282       32,820
      Other long-term investments                         47,636       32,766
      Cash and short-term investments                      2,886       14,010
  
  Total cash and investments                           3,290,117    3,250,679
  
  Deferred policy acquisition costs                      381,645      369,665
  Accrued investment income                               46,543       47,756
  Other assets                                            18,999       14,728
  
                                                    $  3,737,304    3,682,828
  
  Note:  The balance sheet at December 31, 1999, has been taken from the audited
  financial statements at that date.
  
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands except share amounts)
  (Unaudited)
                                                      March 31,     December 31,
      LIABILITIES AND STOCKHOLDERS' EQUITY               2000           1999
  LIABILITIES:
  
  Future policy benefits:
      Traditional life and annuity products         $    162,548      165,020
      Universal life and investment
      annuity contracts                                3,014,158    2,983,060
  Other policyholder liabilities                          24,237       24,103
  Federal income taxes payable:
      Current                                              5,579        4,763
      Deferred                                               728        4,659
  Short-term borrowings                                   12,000         -
  Other liabilities                                       39,412       25,701
  
  Total liabilities                                    3,258,662    3,207,306
  
  COMMITMENTS AND CONTINGENCIES (Note 3)
  
  STOCKHOLDERS' EQUITY:
  
  Common stock:
      Class A - $1 par value; 7,500,000
      shares authorized; 3,300,728 shares
      issued and outstanding in 2000 and 1999              3,301        3,301
      Class B - $1 par value; 200,000
      shares authorized, issued,
      and outstanding in 2000 and 1999                       200          200
  Additional paid-in capital                              25,028       25,028
  Accumulated other comprehensive loss                   (12,779)      (3,566)
  Retained earnings                                      462,892      450,559
  
  Total stockholders' equity                             478,642      475,522
  
                                                    $  3,737,304    3,682,828
  Note:  The balance sheet at December 31, 1999, has been taken from the audited
  financial statements at that date.
  
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                     (In thousands except per share amounts)
  2000         1999
  Premiums and other revenue:
      Life and annuity premiums                     $      2,372        2,411
      Universal life and investment
      annuity contract revenues                           20,903       21,532
      Net investment income                               57,740       57,852
      Other income                                           115          150
      Realized gains (losses) on investments                (580)       4,805
  
  Total premiums and other revenue                        80,550       86,750
  
  Benefits and expenses:
      Life and other policy benefits                      10,092        8,688
      Decrease in liabilities for
      future policy benefits                              (2,482)        (241)
      Amortization of deferred policy
      acquisition costs                                   10,885        9,571
      Universal life and investment
      annuity contract interest                           36,651       40,611
      Other operating expenses                             6,717        6,701
  
  Total benefits and expenses                             61,863       65,330
  
  Earnings before Federal income taxes                    18,687       21,420
  
  Provision for Federal income taxes:
      Current                                              5,325        5,460
      Deferred                                             1,029        1,857
  
  Total Federal income taxes                               6,354        7,317
  
  Net earnings                                      $     12,333       14,103
  
  Basic Earnings Per Share:
      Net earnings                                  $       3.52         4.03
  
  Diluted Earnings Per Share:
      Net earnings                                  $       3.51         3.99
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Net earnings                                      $     12,333       14,103
  
  Other comprehensive income (loss),
  net of effects of deferred
  policy acquisition costs and taxes:
      Unrealized losses on securities:
          Unrealized holding losses
          arising during period                           (1,476)      (4,886)
          Less: reclassification
          adjustment for gains
          included in net earnings                          -          (1,671)
          Amortization of net unrealized gains
          related to transferred securities                  (69)         (85)
          Unrealized losses on securities
          transferred during period
          from held to maturity to
          available for sale                              (8,021)        -
  
          Net unrealized losses on securities             (9,566)      (6,642)
  
      Foreign currency translation adjustments               353           (9)
  
  Other comprehensive loss                                (9,213)      (6,651)
  
  Comprehensive income                              $      3,120        7,452
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Common stock:
      Balance at beginning of year                  $      3,501        3,498
      Shares exercised under stock option plan              -               1
  
  Balance at end of period                                 3,501        3,499
  
  Additional paid-in capital:
      Balance at beginning of year                        25,028       24,899
      Shares exercised under stock option plan              -              31
  
  Balance at end of period                                25,028       24,930
  
  Accumulated other comprehensive income (loss):
       Unrealized gains (losses) on securities:
          Balance at beginning of year                    (6,412)      16,000
          Change in unrealized losses during period       (9,566)      (6,642)
  
          Balance at end of period                       (15,978)       9,358
  
      Foreign currency translation adjustments:
          Balance at beginning of year                     2,846        2,634
          Change in translation adjustments
          during period                                      353           (9)
  
          Balance at end of period                         3,199        2,625
  
  Accumulated other comprehensive income
  (loss) at end of period                                (12,779)      11,983
  
  Retained earnings:
      Balance at beginning of year                       450,559      391,334
      Net earnings                                        12,333       14,103
  
  Balance at end of  period                              462,892      405,437
  
  Total stockholders' equity                        $    478,642      445,849
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Cash flows from operating activities:
      Net earnings                                  $     12,333       14,103
      Adjustments to reconcile net
      earnings to net cash
      from operating activities:
      Universal life and investment
      annuity contract interest                           36,651       40,611
      Surrender charges and other policy revenues         (9,838)     (11,066)
      Realized (gains) losses on investments                 580       (4,805)
      Accrual and amortization of
      investment income                                   (1,012)      (1,207)
      Depreciation and amortization                          259          265
      Decrease (increase) in insurance
      receivables and other assets                        (4,145)       4,925
      Decrease in accrued investment income                1,213          336
      Increase in deferred policy
      acquisition costs                                   (5,294)      (5,884)
      Decrease in liability for
      future policy benefits                              (2,482)        (241)
      Increase (decrease) in other
      policyholder liabilities                               134         (473)
      Increase in Federal income taxes payable             2,395        2,516
      Increase (decrease) in other liabilities            13,711       (9,563)
  
      Other                                                1,827       (1,073)
  
  Net cash provided by operating activities               46,332       28,444
  
  Cash flows from investing activities:
      Proceeds from sales of:
         Securities held to maturity                        -            -
         Securities available for sale                      -          24,446
         Other investments                                 5,972        5,585
      Proceeds from maturities and redemptions of:
         Securities held to maturity                       8,034       24,763
         Securities available for sale                    17,590       17,181
      Purchases of:
         Securities held to maturity                     (55,481)     (78,744)
         Securities available for sale                   (13,971)     (53,699)
         Other investments                               (22,420)     (10,370)
      Principal payments on mortgage loans                 2,077       13,584
      Cost of mortgage loans acquired                    (15,681)      (8,282)
      Decrease in policy loans                               854        3,155
      Decrease in assets of
      discontinued operations                               -              48
      Decrease in liabilities of
      discontinued operations                               -             (48)
      Other                                                 (868)         (50)
  
  Net cash used in investing activities                  (73,894)     (62,431)
  (Continued on next page)
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                For the Three Months Ended March 31, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Cash flows from financing activities:
      Deposits to account balances
      for universal life
      and investment annuity contracts              $     98,255      109,827
      Return of account balances on
      universal life and investment
      annuity contracts                                  (93,817)     (93,688)
      Increase in short-term borrowings                   12,000         -
      Issuance of common stock under
      stock option plan                                     -              32
  
  Net cash provided by financing activities               16,438       16,171
  
  Net decrease in cash and short-term investments        (11,124)     (17,816)
  Cash and short-term investments
  at beginning of year                                    14,010       24,508
  
  Cash and short-term investments
  at end of period                                  $      2,886        6,692
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
  
  (1)  BASIS OF PRESENTATION
  
  The accompanying condensed consolidated financial statements include the
  accounts of National Western Life Insurance Company  and its  wholly-owned
  subsidiaries  (the  Company),  The  Westcap  Corporation  (Westcap),  NWL
  Investments, Inc., NWL Properties, Inc., NWL 806 Main, Inc., NWL Services,
  Inc., and NWL Financial, Inc.  The Westcap Corporation ceased brokerage
  operations during 1995 and filed for reorganization under Chapter 11 of the
  U.S. Bankruptcy Code in 1996.  The bankruptcy reorganization was completed in
  January, 1999 and National Western retained 100% continuing ownership of the
  reorganized subsidiary.  As a result, The Westcap Corporation is reflected as
  discontinued operations in the accompanying financial statements for portions
  of 1999 and prior years.  Westcap is currently operating as a real estate
  management company.  All significant intercorporate transactions and accounts
  have been eliminated in consolidation.
  
  In the opinion of  the Company, the accompanying consolidated financial
  statements contain all adjustments necessary to present fairly the financial
  position of the Company as of March 31, 2000,  and  the  results of its
  operations and its cash flows for the three months  ended March 31, 2000 and
  1999.  The results of operations for the three  months ended March 31, 2000
  and 1999 are not necessarily indicative of the results to be expected  for the
  full year.
  
  (2) STOCKHOLDERS' EQUITY
  
  (A) Changes in Common Stock Shares Outstanding
  
  Details of changes in shares of common stock outstanding are provided below:
  Three Months Ended March 31,
                                                           2000        1999
                                                           (In thousands)
  Common stock shares outstanding:
     Shares outstanding at beginning of year               3,501        3,498
     Shares exercised under stock option plan               -               1
  
  Shares outstanding at end of period                      3,501        3,499
  (B)  Dividends
  
  The Company paid no cash dividends on common stock during the three months
  ended March 31, 2000 and 1999.
  
  (3)  DISCONTINUED BROKERAGE OPERATIONS
  
  The Chapter 11 bankruptcy reorganization of the Company's wholly owned
  subsidiary,  The Westcap Corporation, was completed in the first quarter of
  1999.  Pursuant to the reorganization plan, National Western retained 100%
  continuing ownership of the reorganized Westcap and the subsidiary is now
  operating as a real estate management company.  No losses were reported for
  discontinued brokerage operations in the first quarter of 1999 as the entire
  $14,125,000 settlement payment was accrued and reported as a loss in the third
  quarter of 1998.  Any additional losses will depend on the results of The City
  Colleges lawsuit filed against National Western on March 28, 1994, for alleged
  federal or state securities law "control person" violations relating to
  Westcap, and which is pending in the United States District Court, Western
  District of Texas.  National Western believes it has reasonable and adequate
  defenses to this suit and, accordingly, no amounts have been accrued in
  National Western's financial statements for potential losses relating to such
  suit.
  
  (4) SEGMENT AND OTHER OPERATING INFORMATION
  
  The Company's reportable operating segments include domestic life insurance,
  international life insurance, and annuities. These segments are organized
  based on product types and geographic marketing areas.  A summary of segment
  information for the quarters ended March 31, 2000 and 1999 is provided below.
  Selected Segment Information:
                      Domestic International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others     Totals
                                           (In thousands)
  March 31, 2000:
  Selected Balance
  Sheet Items:
  Deferred policy
   acquisition
   costs             $  74,832      74,016     232,797       -        381,645
  Total segment
   assets              407,613     376,372   2,887,321     46,999   3,718,305
  Future policy
   benefits            321,785     292,380   2,562,541       -      3,176,706
  Other
   policyholder
   liabilities          12,629       6,061       5,547       -         24,237
  
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues          $   5,930      10,686       6,659       -         23,275
  Net investment
   income                6,472       5,650      45,096        522      57,740
  Other income             -            27          88       -            115
      Total
      revenues          12,402      16,363      51,843        522      81,130
  Policy benefits        3,893       3,650          67       -          7,610
  Amortization of
   deferred
   policy
   acquisition
   costs                 1,626       3,157       6,102       -         10,885
  Universal life
   and investment
   annuity contract
   interest              2,222       3,930      30,499       -         36,651
  Other operating
   expenses              2,086       1,994       2,637       -          6,717
  Federal income
   taxes                   876       1,236       4,267        178       6,557
      Total
      expenses          10,703      13,967      43,572        178      68,420
  Segment
   earnings          $   1,699       2,396       8,271        344      12,710
  Selected Segment Information:
                       Domestic International
                         Life        Life                   All
                       Insurance  Insurance   Annuities   Others     Totals
                                           (In thousands)
  March 31, 1999:
  Selected Balance
  Sheet Items:
  Deferred policy
   acquisition
   costs              $  69,200      71,210     188,255      -        328,665
  Total segment
   assets               408,548     372,867   2,730,023    32,634   3,544,072
  Future policy
   benefits             322,094     286,277   2,416,454      -      3,024,825
  Other policyholder
   liabilities           12,974       6,039       4,469      -         23,482
  
  Condensed Income
   Statements:
  Premiums and
   contract
   revenues           $   5,791      10,228       7,924      -         23,943
  Net investment
   income                 6,331       5,443      45,896       182      57,852
  Other income               16          12         122      -            150
      Total revenues     12,138      15,683      53,942       182      81,945
  Policy benefits         3,544       4,702         201         -       8,447
  Amortization of
   deferred policy
   acquisition costs        932       3,279       5,360      -          9,571
  Universal life
   and investment
   annuity contract
   interest               2,449       3,433      34,729      -         40,611
  Other operating
   expenses               2,062       2,135       2,504      -          6,701
  Federal income
   taxes                  1,069         724       3,781        61       5,635
      Total expenses     10,056      14,273      46,575        61      70,965
  Segment
  earnings            $   2,082       1,410       7,367       121      10,980
  Reconciliations of segment information to the Company's consolidated financial
  statements are provided below:
  Three Months Ended March 31,
                                                        2000          1999
                                                          (In thousands)
  Premiums and Other Revenue:
  Premiums and contract revenues                  $      23,275        23,943
  Net investment income                                  57,740        57,852
  Other income                                              115           150
  Realized gains (losses) on investments                   (580)        4,805
  
  Total consolidated premiums and other revenue   $      80,550        86,750
  Three Months Ended March 31,
                                                        2000          1999
                                                          (In thousands)
  Federal Income Taxes:
  Total segment Federal income taxes              $       6,557         5,635
  Taxes (benefits) on realized
  gains (losses) on investments                            (203)        1,682
  
  Total consolidated Federal income taxes         $       6,354         7,317
  Three Months Ended March 31,
                                                        2000          1999
                                                          (In thousands)
  Net Earnings:
  Total segment earnings                          $      12,710        10,980
  Realized gains (losses) on investments,
     net of taxes                                          (377)        3,123
  
  Total consolidated net earnings                 $      12,333        14,103
  March 31,
                                                        2000          1999
                                                          (In thousands)
  Assets:
  Total segment assets                            $   3,718,305     3,544,072
  Other unallocated assets                               18,999        15,613
  
  Total consolidated assets                       $   3,737,304     3,559,685
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
  GENERAL
  
  National Western Life Insurance Company is a life insurance company, chartered
  in the State of Colorado in 1956, and doing business in forty-three states and
  the District of Columbia. It also accepts applications from and issues
  policies to residents of various Central and South American, Caribbean, and
  Pacific Rim countries.  A distribution of the Company's direct premium
  revenues and deposits by domestic and international markets is provided below:
  Three Months Ended March 31,
                                                     2000          1999
  United States domestic market:
       Investment annuities                           79.3%         82.5%
       Life insurance                                  6.4           5.7
  
  Total domestic market                               85.7          88.2
  
  International market:
       Investment annuities                            2.2           1.1
       Life insurance                                 12.1          10.7
  
  Total international market                          14.3          11.8
  
  Total direct premiums collected                    100.0%        100.0%
  Insurance Operations - Domestic
  
  The Company's domestic operations concentrate marketing efforts on federal
  employees, seniors, and specific employee groups in private industry, as well
  as individual sales.  The products marketed are annuities, universal life
  insurance, and traditional life insurance, which includes both term and whole
  life products.  The majority of products sold are the Company's annuities,
  which include single and flexible premium deferred annuities, single premium
  immediate annuities, and equity-indexed annuities.  Most of these annuities
  can be sold as tax qualified or nonqualified products.
  
  National Western markets and distributes its domestic products primarily
  through independent marketing organizations (IMOs).   These IMOs assist the
  Company  in  recruiting,  contracting,  and  managing  agents.    The  Company
  currently has over 80 IMOs contracted for sales of life and annuity products.
  
  Insurance Operations - International
  
  The Company's international operations focus marketing efforts on foreign
  nationals in upper socioeconomic classes with substantial financial resources.
  Insurance  sales  are  from  countries  in  Central  and  South  America,  the
  Caribbean, and the Pacific Rim.  Marketing to numerous countries in these
  different regions provides diversification that helps to minimize large
  fluctuations in sales that can occur due to various economic, political, and
  competitive pressures that may occur from one country to another.  Products
  sold in the international market are almost entirely universal life and
  traditional life insurance products.  However, certain annuity and investment
  contracts are also available in this market.
  
  International sales production is from broker-agents, many of whom have been
  selling National Western products for 20 or more years.  The Company continues
  to expand its sales networks in specifically targeted South American and
  Pacific Rim countries which have higher growth potential than other countries.
  
  There are inherent risks of conducting international business that are not
  present within the domestic market.  The risks involved with international
  business are reduced substantially by the Company in several ways.  As
  previously described, the Company focuses its marketing efforts on a specific
  niche group, which is foreign nationals in upper socioeconomic classes who
  have substantial financial resources.  This targeted customer base coupled
  with National Western's conservative, yet competitive, underwriting practices
  have historically resulted in claims experience similar to that in the United
  States.  The Company also minimizes exposure to foreign currency risks, as
  almost all foreign policies require payment of premiums and claims in United
  States dollars.  Finally, the Company's experience in the international market
  and its strong broker-agent relationships, which in many cases exceed 20
  years, help minimize risks and problems when selling products to foreign
  nationals.
  
  INVESTMENTS IN DEBT AND EQUITY SECURITIES
  
  Investment Philosophy
  
  The Company's investment philosophy is to maintain a diversified portfolio of
  investment grade debt and equity securities that provide adequate liquidity to
  meet policyholder obligations and other cash needs.  The prevailing strategy
  within this philosophy is the intent to hold investments in debt securities to
  maturity. However, the Company manages its portfolio, which entails monitoring
  and reacting to all components which affect changes in the price, value, or
  credit rating of investments in debt and equity securities.
  
  Investments in debt and equity securities are classified and reported as
  either securities held to maturity or securities available for sale.  The
  Company does not maintain a portfolio of trading securities.  The reporting
  category chosen for the Company's securities investments depends on various
  factors including the type and quality of the particular security and how it
  will be incorporated into the Company's overall asset/liability management
  strategy.  At March 31, 2000, approximately 26.3% of the Company's total debt
  and equity securities, based on fair values, were classified as securities
  available for sale.  These holdings provide flexibility to the Company to
  react to market opportunities and conditions and to practice active management
  within the portfolio to provide adequate liquidity to meet policyholder
  obligations and other cash needs.
  
  Securities the Company purchases with the intent to hold to maturity are
  classified as securities held to maturity. Because the Company has strong cash
  flows and matches expected maturities of assets and liabilities, the Company
  has the ability to hold the securities, as it would be unlikely that forced
  sales of securities would be required prior to maturity to cover payments of
  liabilities. As a result, securities held to maturity are carried at amortized
  cost less declines in value that are other than temporary. However, certain
  situations may change the Company's intent to hold a particular security to
  maturity, the most notable of which is a deterioration in the issuer's
  creditworthiness. Accordingly, a security may be sold to avoid a further
  decline in realizable value when there has been a significant change in the
  credit risk of the issuer.
  
  Securities that are not classified as held to maturity are reported as
  securities available for sale. These securities may be sold if market or other
  measurement factors change unexpectedly after the securities were acquired.
  For example, opportunities arise that allow the Company to improve the
  performance and credit quality of the investment portfolio by replacing an
  existing security with an alternative security while still maintaining an
  appropriate  matching  of  expected  maturities  of  assets  and  liabilities.
  Examples of such improvements are as follows: improving the yield earned on
  invested assets, improving the credit quality, changing the duration of the
  portfolio, and selling securities in advance of anticipated calls or other
  prepayments. Securities available for sale are reported in the Company's
  financial statements at fair value. Any unrealized gains or losses resulting
  from changes in the fair value of the securities are reflected in accumulated
  other comprehensive income.
  
  As an integral part of its investment philosophy, the Company performs an
  ongoing process of monitoring the creditworthiness of issuers within the
  investment portfolio.  Review procedures are also performed on securities that
  have had significant declines in fair value. The Company's objective in these
  circumstances is to determine if the decline in fair value is due to changing
  market expectations regarding inflation and general interest rates or other
  factors.  Additionally, the Company closely monitors financial, economic, and
  interest rate conditions to manage prepayment and extension risks in its
  mortgage-backed securities portfolio.
  
  The Company's overall conservative investment philosophy is reflected in the
  allocation of its investments which is detailed below as of March 31, 2000 and
  December 31, 1999.  The Company emphasizes investment grade debt securities,
  with smaller holdings in mortgage loans and real estate.
  Percent of Investments
                                         March 31,       December 31,
                                            2000             1999
  Debt securities                            87.4%            87.8%
  Mortgage loans                              6.0              5.7
  Policy loans                                3.5              3.6
  Index options                               1.0              1.0
  Equity securities                           0.5              0.5
  Real estate                                 0.6              0.4
  Other                                       1.0              1.0
  
  Totals                                    100.0%           100.0%
  Portfolio Analysis
  
  The Company maintains a diversified debt securities portfolio which consists
  of various types of fixed income securities including primarily corporate,
  mortgage-backed   securities,   and   public   utilities.   Investments   in
  mortgage-backed  securities  include  primarily  U.S.  government  agency
  pass-through securities and collateralized mortgage obligations (CMOs).
  
  An important aspect of the Company's investment philosophy is managing the
  credit quality of its investments in debt securities.  Thorough credit
  analysis  is  performed  on  existing  and  potential  corporate  investments
  including examination of a company's credit and industry outlook, financial
  strength, effectiveness of management, and event risks.  In the past few
  years, credit analysis has become one of the most critical activities of the
  Company's portfolio management.
  
  National Western continues to follow its conservative investment philosophy by
  minimizing its holdings of  below investment grade debt securities, as these
  securities generally have greater default risk than higher rated corporate
  debt. These issuers usually are more sensitive to adverse industry or economic
  conditions than are investment grade issuers. The Company's holdings of below
  investment grade debt securities, which are lower than industry averages, are
  summarized below.
  Below Investment
                                        Grade Debt Securities
                                                                      % of
                           Amortized     Carrying      Market      Invested
                             Cost         Value        Value        Assets
                                  (In thousands except percentages)
  March 31, 2000        $    110,312       87,810       79,174          2.7%
  
  December 31, 1999     $     73,607       70,900       63,864          2.2%
  
  December 31, 1998     $     46,453       44,974       45,317          1.4%
  Although National Western purchases only investment grade debt securities, a
  growing number of companies have become more leveraged due to an environment
  of heightened acquisition activity and large share repurchase programs.
  Therefore, continued monitoring of credit quality after the purchase of a
  company's debt securities is crucial in order for National Western to maintain
  a high quality portfolio with a low percentage of below investment grade debt
  securities.  While the Company's holdings of below investment grade debt
  securities remain low, these holdings have increased from $44,974,000 at
  December 31, 1998, to $87,810,000 at March 31, 2000.  This increase is due to
  downgrades of investment grade debt securities as opposed to purchases of such
  holdings.  Historically, the Company's strong credit risk management and
  commitment to quality has resulted in minimal defaults in the debt securities
  portfolio.  At March 31, 2000 and  December 31, 1999, no securities were in
  default and on nonaccrual status.
  
  During the third and fourth quarters of 1999, the Company recorded permanent
  impairment writedowns totaling $4,403,000 related to two separate securities.
  The writedowns were reflected as realized losses.  One of these securities was
  classified as available for sale and the other as held to maturity.  The
  Company subsequently transferred the held to maturity security to securities
  available for sale during the first quarter of 2000.  Three additional debt
  securities experienced significant credit deterioration during the first
  quarter of 2000.  As a result of the significant deterioration of the issuing
  companies' creditworthiness, National Western also transferred these three
  securities from held to maturity to available for sale.  The Company is
  closely monitoring these securities as well as its other below investment
  grade holdings.  While additional losses are not anticipated based on the
  current  status  and  condition  of  these  securities,  continued  credit
  deterioration of some securities is possible, which may result in further
  writedowns. Amortized cost, net of writedowns, of the four transferred
  securities totaled $49,528,000 and unrealized losses resulting from recording
  the securities at fair value, before effects of taxes and deferred policy
  acquisitions costs, totaled $20,376,000.  The unrealized losses were recorded
  as a component of accumulated other comprehensive loss in the accompanying
  financial statements.
  
  Although there is loss exposure related to its below investment grade debt
  securities, the Company is firmly committed to minimizing credit risks and
  maintaining a high quality portfolio.  This commitment is reflected in the
  high average credit rating of the Company's portfolio.  In the table below,
  investments in debt securities are classified according to credit ratings by
  Standard  and  Poor's  (S&P),  a  nationally  recognized  statistical  rating
  organization (NRSRO).  If securities were not rated by S&P, the equivalent
  rating of another NRSRO or the National Association of Insurance Commissioners
  was used.
  March 31,      December 31,
                                            2000            1999
  AAA and U.S. government                    29.0%           28.7%
  AA                                          7.3             8.8
  A                                          34.5            34.1
  BBB                                        26.2            25.9
  BB and other below
  investment grade                            3.0             2.5
  
                                            100.0%          100.0%
  Another important part of the Company's investment philosophy is managing the
  cash flow stability of the portfolio.  Because expected maturities of
  securities  may  differ  from  contractual  maturities  due  to  prepayments,
  extensions, and calls, the Company takes steps to manage and minimize these
  risks.  The Company continues to reduce its exposure to prepayment and
  extension risks by lowering its holdings of mortgage-backed securities.  This
  strategy began in 1994 when mortgage-backed securities totaled 47.6% of the
  entire portfolio, but now total only 20.9% at March 31, 2000.  The majority of
  this reduction has been achieved by shifting investments into corporate
  securities and public utilities, as these holdings have increased from 47.0%
  at December 31, 1994 to 68.9% at March 31, 2000.  Also, most of these
  additions have been noncallable corporates, which help reduce prepayment and
  call risks.
  
  As indicated above, the Company's holdings of mortgage-backed securities are
  also subject to prepayment risk, as well as extension risk.  Both of these
  risks are addressed by specific portfolio management strategies.  The Company
  has substantially reduced both prepayment and extension risks by investing
  primarily in collateralized mortgage obligations, which have more predictable
  cash flow patterns than pass-through  securities.  These securities, known as
  planned amortization class I (PAC I) CMOs, are designed to amortize in a more
  predictable manner than other CMO classes or pass-throughs.  Using this
  strategy, the Company can more effectively manage and reduce prepayment and
  extension risks, thereby helping to maintain the appropriate matching of the
  Company's assets and liabilities.
  
  As of March 31, 2000, CMOs represent approximately 98% of the Company's
  mortgage-backed securities. The CMOs in the Company's portfolio have been
  modeled and subjected to detailed, comprehensive analysis by the Company's
  investment staff.  The overall structure of the CMO as well as the individual
  tranche being considered for purchase have been evaluated to ensure that the
  security fits appropriately within the Company's investment philosophy and
  asset/liability management parameters.  The Company's investment mix between
  mortgage-backed securities and other fixed income securities helps effectively
  balance prepayment, extension, and credit risks.
  
  At March 31, 2000, the Company's debt and equity securities were classified as
  follows:
  Unrealized
                                         Fair        Amortized       Gains
                                        Value          Cost         (Losses)
                                                  (In thousands)
  Securities held to maturity:
      Debt securities              $   2,081,639     2,150,109       (68,470)
  Securities available
  for sale:
      Debt securities                    727,213       775,291       (48,078)
      Equity securities                   15,977        12,755         3,222
  
  Totals                           $   2,824,829     2,938,155      (113,326)
  As detailed above, debt securities classified as held to maturity comprise the
  majority of the Company's securities portfolio, while equity securities are a
  small component of the portfolio.  Unrealized losses totaling $113,326,000 on
  the securities portfolio at March 31, 2000, are a reflection of market
  conditions at quarter-end.  The fair values, or market values, of fixed income
  debt  securities  generally  correlate  to  external  market  interest  rate
  conditions.  Because the interest rates are fixed on almost all of the
  Company's debt securities, market values typically increase when market
  interest  rates  decline,  and  decrease  when  market  interest  rates  rise.
  However, market values may fluctuate for other reasons, such as changing
  economic conditions or increasing event-risk concerns.  An analysis of
  unrealized gains and losses on the Company's securities portfolio for the
  quarter ended March 31, 2000, is detailed below:
  Change in
                                                                   Unrealized
                                     Unrealized Gains (Losses)       Gains
                                          At            At          (Losses)
                                      March 31,    December 31,   During 1st
                                         2000          1999      Quarter 2000
                                                  (In thousands)
  Securities held to maturity:
      Debt securities              $     (68,470)      (67,430)       (1,040)
  Securities available
  for sale:
      Debt securities                    (48,078)      (26,905)      (21,173)
      Equity securities                    3,222         3,245           (23)
  
  Totals                           $    (113,326)      (91,090)      (22,236)
  Unrealized losses at March 31, 2000, increased 24% from year-end 1999 even
  though market interest rates of the ten year U.S. Treasury bond actually
  decreased approximately 44 basis points during the quarter.  With market
  interest rates declining, it would be expected that market values of debt
  securities would increase.  However, market values actually decreased because
  of the substantial widening of the yield premium for corporate bonds over
  comparable Treasury securities.   Approximately 69% of National Western's bond
  portfolio consists of corporate bonds, including public utilities.  The
  increase of the yield premium has primarily been event-risk driven as
  companies  increase  their  leverage  through  stock  buyback  programs  and
  acquisitions.  Because the majority of the Company's debt securities are
  classified as held to maturity, which are recorded at amortized cost, changes
  in market values have relatively small effects on the Company's financial
  statements.  Also, the Company has the intent and ability to hold these
  securities to maturity, and it is unlikely that sales of such securities would
  be required which would realize market gains or losses.
  
  Changes in fair values of securities due to changes in market interest rates
  is an example of market risk.  Market risk is the risk of change in market
  values of financial instruments due to changes in interest rates, currency
  exchange rates, commodity prices, or equity prices.  The most significant
  market risk exposure for National Western is interest rate risk. The Company
  manages interest rate risk through on-going cash flow testing required for
  insurance regulatory purposes. Computer models are used to perform cash flow
  testing under various commonly used stress test interest rate scenarios to
  determine if existing assets would be sufficient to meet projected liability
  outflows.  Management strives to closely match the durations of its assets and
  liabilities.   Sensitivity analysis allows the Company to measure the
  potential gain or loss in fair value of its interest-sensitive instruments and
  to seek to protect its economic value and achieve a predictable spread between
  what is earned on invested assets and what is paid on liabilities.  The
  Company seeks to minimize the impact of interest risk through surrender
  charges that are imposed to discourage policy surrenders.  Interest rate
  changes can be anticipated and risk may be limited due to management actions
  regarding asset and liability instruments.  However, potential changes in the
  values of financial instruments indicated by hypothetical interest changes
  will likely be different from actual changes experienced, and the differences
  may be material.
  
  Market risk-sensitive assets of the Company include debt securities, equity
  securities which are almost entirely preferred stocks, mortgage loans, policy
  loans, and index options.  The Company does not maintain a securities trading
  portfolio.  Market risk-sensitive liabilities include policy liabilities for
  deferred  and  immediate  investment  annuity  contracts  and  supplemental
  contracts.  Sensitivity analysis expresses the potential gain or loss in fair
  value, over a selected time period, from one or more selected hypothetical
  changes in interest rates which are reasonably possible in the near term.  The
  Company performed detailed sensitivity analysis at December 31, 1999, for its
  interest rate-sensitive assets.  Based on the recent change in market
  conditions in the first quarter of 2000, the changes in market values of the
  Company's debt securities fell somewhat outside the expected range of results
  of this analysis.  The deviation from the expected results was due to the
  volatility in the corporate bond market as previously described above.
  
  In addition to the securities described above, the Company invests in index
  options which are derivative financial instruments used to hedge the equity
  return component of the Company's equity-indexed annuities.  The values of
  these options are primarily impacted by equity price risk, as the options'
  fair values are dependent on the performance of the S&P 500 Composite Stock
  Price Index.  However, increases or decreases in investment returns from these
  options are substantially offset by corresponding increases or decreases in
  amounts paid to equity-indexed annuity policyholders, subject to minimum
  guaranteed policy interest rates.
  
  The Company's market risk liabilities, which include policy liabilities for
  investment annuity and supplemental contracts, are managed for interest rate
  risk through cash flow testing as previously described.  As part of this cash
  flow testing, the Company has analyzed the potential impact on net earnings of
  both a 100 basis point increase and decrease in the U.S. Treasury yield curve
  as of December 31, 1999.  A 100 basis point interest rate decline would
  decrease net earnings for 2000 by approximately $300,000, based on the
  Company's projections.  A 100 basis point increase in interest rates would
  increase net earnings by approximately $200,000, based on the Company's
  projections.  These estimated impacts to earnings are net of tax effects
  determined at a tax rate of 35% and are also net of the estimated effects of
  deferred policy acquisition costs.
  
  The Company has modeled these scenarios, as a change in market interest rates
  could pose potential risks to the current profitability levels of this
  business.  These movements in interest rates are also reasonably possible
  near-term scenarios given the current interest rate environment.  The risks
  from such changes are primarily due to changes in interest rate spreads, which
  are the differences between investment income earned and credited interest
  paid to policyholders.  Also, the changes in interest rates can effect the
  level of surrenders and timing of cash flows related to policy liabilities.
  
  The above-described scenarios produce estimated changes in cash flows as well
  as cash flow reinvestment projections.  Estimated cash flows in the Company's
  model assume cash flow reinvestments which are representative of the Company's
  current  investment  strategy.    Calls  and  prepayments  include  scheduled
  maturities and those expected to occur which would benefit the security
  issuers.  Assumed policy surrenders consider differences and relationships
  between credited interest rates and market interest rates as well as surrender
  charges on individual policies.  The impact to earnings also includes the
  expected effects on amortization of deferred policy acquisition costs.  The
  model considers only investment annuity and supplemental contracts in-force at
  December 31, 1999, and does not consider new product sales or the possible
  impact of interest rate changes on sales.
  
  MORTGAGE LOANS AND REAL ESTATE
  
  Investment Philosophy
  
  In general, the Company seeks loans on high quality, income producing
  properties such as shopping centers, freestanding retail stores, office
  buildings, industrial and sales or service facilities, selected apartment
  buildings, motels, and health care facilities.  The location of these loans is
  typically  in  growth  areas  that  offer  a  potential  for  property  value
  appreciation.  These growth areas are found primarily in major metropolitan
  areas, but occasionally in selected smaller communities.
  
  The Company seeks to minimize the credit and default risk in its mortgage loan
  portfolio  through  strict  underwriting  guidelines  and  diversification  of
  underlying property types and geographic locations.   In addition to being
  secured by the property, mortgage loans with leases on the underlying property
  are often guaranteed by the lessee, in which case the Company approves the
  loan based on the credit strength of the lessee.  This approach has resulted
  in higher quality mortgage loans with fewer defaults.
  
  The Company's direct investments in real estate are not a significant portion
  of its total investment portfolio.  Many of these investments were acquired
  through mortgage loan foreclosures.  However, the Company also participates in
  several real estate joint ventures and limited partnerships.  The joint
  ventures  and  partnerships  invest  primarily  in  income-producing  retail
  properties.    These  investments  have  typically  enhanced  the  Company's
  investment portfolio returns.
  
  Portfolio Analysis
  
  The Company held net investments in mortgage loans totaling $197,559,000 and
  $183,902,000, or 6.0% and 5.7% of total invested assets, at March 31, 2000,
  and December 31, 1999, respectively. The loans are real estate mortgages,
  substantially  all  of  which  are  related  to  commercial  properties  and
  developments and have fixed interest rates.
  
  The diversification of the mortgage loan portfolio by geographic regions of
  the United States and by property type as of March 31, 2000, and December 31,
  1999, was as follows:
  March 31,      December 31,
                                              2000            1999
  Geographic Region:
  West South Central                         55.7%           58.8%
  Mountain                                   23.9            20.5
  Pacific                                    10.1            11.0
  South Atlantic                              4.7             5.1
  East South Central                          3.9             4.2
  Other                                       1.7             0.4
  
  Totals                                    100.0%          100.0%
  March 31,      December 31,
                                             2000            1999
  Property Type:
  Retail                                     58.1%           56.1%
  Office                                     25.3            27.4
  Hotel/Motel                                 6.7             7.2
  Land/Lots                                   3.8             2.5
  Nursing Homes                               2.1             2.4
  Apartment                                   1.5             1.6
  Other                                       2.5             2.8
  
  Totals                                    100.0%          100.0%
  As of March 31, 2000, the allowance for possible losses on mortgage loans was
  $4,104,000.  No additions were made to the allowance in the first quarter of
  2000.  Although management believes that the current balance is adequate,
  future additions to the allowance may be necessary based on changes in
  economic conditions, particularly in the West South Central region which
  includes Texas, Louisiana, Oklahoma, and Arkansas, as this area contains the
  highest concentrations of the Company's mortgage loans.
  
  The Company currently places all loans past due three months or more on
  nonaccrual status, thus recognizing no interest income on the loans.  The
  Company had mortgage loan principal balances on nonaccrual status totaling
  $3,047,000  and  $3,014,000  at  March  31,  2000  and  December  31,  1999,
  respectively.  Also, the Company will at times restructure mortgage loans
  under certain conditions which may involve changes in interest rates, payment
  terms, or other modifications.  For the three months ended March 31, 2000, the
  reductions in interest income due to nonaccrual and restructured mortgage
  loans were approximately $79,000.  For the three months ended March 31, 1999,
  the reductions in interest income due to nonaccrual and restructured mortgage
  loans were not significant.
  
  The Company owns real estate that was acquired through foreclosure and through
  direct investment totaling $19,386,000 and $11,388,000 at March 31, 2000, and
  December 31, 1999, respectively.  This small concentration of properties
  represents less than one percent of the Company's entire investment portfolio.
  The real estate holdings consist primarily of income-producing properties
  which are being operated by the Company.  The Company recognized operating
  income on these properties of approximately $187,000 and $283,000 for the
  three months ended March 31, 2000 and 1999.  Also during the first quarter of
  1999, the Company sold a real estate property resulting in a realized gain on
  investments totaling $1,419,000.
  
  The Company monitors the conditions and market values of these properties on a
  regular basis.  No significant realized losses were recognized due to declines
  in values of properties for the three months ended March 31, 2000 and 1999,
  respectively.  The Company makes repairs and capital improvements to keep the
  properties in good condition and will continue this maintenance as needed.
  
  During the first quarter of 2000, the Company acquired a nursing home facility
  through an affiliated limited partnership.  The acquisition, which totaled
  approximately $6.6 million, was made by a newly formed limited partnership,
  the partners of which are downstream subsidiaries of National Western.  This
  investment resulted in an increase in real estate owned from December 31,
  1999, as reflected above.  The nursing home facility, which is expected to
  open in the second quarter of 2000, will also be operated by an affiliated
  limited partnership and the financial operating results will be consolidated
  with those of the Company.  Daily operations and management of the nursing
  home will be performed by an experienced management company through a
  contract with the limited partnership.  Initial first year start up expenses
  could generate minimum operating losses of approximately $400,000, before
  taxes.
  
  RESULTS OF OPERATIONS
  
  Consolidated Operations
  
  Summary of Consolidated Operating Results
  
  A summary of operating results for the three months ended March 31, 2000 and
  1999 is provided below:
  Three Months Ended March 31,
                                                      2000           1999
                                            (In thousands except per share data)
  Revenues:
  Revenues, excluding realized
  gains (losses) on investments                $       81,130        81,945
  Realized gains (losses) on investments                 (580)        4,805
  
  Total revenues                               $       80,550        86,750
  
  Earnings:
  Earnings from operations                     $       12,710        10,980
  Net realized gains (losses) on investments             (377)        3,123
  
  Net earnings                                 $       12,333        14,103
  
  Basic Earnings Per Share:
  Earnings from operations                     $         3.63          3.14
  Net realized gains (losses) on investments            (0.11)         0.89
  
  Net earnings                                 $         3.52          4.03
  
  Diluted Earnings Per Share:
  Earnings from operations                     $         3.61          3.11
  Net realized gains (losses) on investments            (0.10)         0.88
  
  Net earnings                                 $         3.51          3.99
  Consolidated  Operating  Results:  Earnings  from  operations,  excluding  net
  realized gains and losses on investments, totaled $12,710,000 for the quarter
  ended March 31, 2000, compared to $10,980,000 for the first quarter of 1999.
  The higher earnings in 2000 are primarily related to the growth in the
  Company's interest sensitive blocks of business.  Additionally, while life
  insurance benefit claims were significantly higher in the first quarter of
  2000, this increase was largely offset by reductions in traditional policy
  liabilities.    The  Company  is  also  benefitting  from  lower  agent  bonus
  commissions as a result of a litigation settlement in 1999, which terminated
  future bonus commissions on certain annuities in-force.
  
  Revenues, excluding realized gains and losses on investments, were relatively
  consistent totaling $81,130,000 and $81,945,000 for the quarters ended March
  31, 2000 and 1999, respectively.  Increases in universal life cost of
  insurance revenues were offset by lower policy surrender charge revenues and
  lower income related to index options, which are used to hedge the Company's
  equity-indexed annuity products.
  
  The Company recorded realized losses on investments, net of taxes, totaling
  $377,000 for the quarter ended March 31, 2000, compared to gains of $3,123,000
  for the first quarter of 1999.  The first quarter 2000 losses were primarily
  related to investments in debt securities.  The 1999 gains were primarily from
  sales and calls of investments in debt securities totaling $1,687,000, net of
  taxes.  Also included in 1999 was a net gain totaling $922,000 from the sale
  of investment real estate owned by one of the Company's subsidiaries, NWL 806
  Main, Inc.
  
  As previously reported, the bankruptcy reorganization of the Company's wholly
  owned subsidiary,  The Westcap Corporation, was completed in the first quarter
  of 1999.  Pursuant to the reorganization plan, National Western retained 100%
  continuing ownership of the reorganized Westcap and the subsidiary is now
  operating as a real estate management company.  No losses were reported for
  discontinued brokerage operations in the first quarter of 1999 as the entire
  $14,125,000 settlement payment was accrued and reported as a loss in the third
  quarter of 1998.
  
  Net Investment Income:  Net investment income decreased slightly from the
  first quarter of 1999, totaling $57,740,000 and $57,852,000 for the quarter
  ended March 31, 2000 and 1999, respectively.   While investment income from
  debt securities continues to increase with corresponding increases in invested
  assets, the essentially flat total investment income growth is primarily due
  to index options.  Declines in fair values of index options used to hedge the
  equity return component of the Company's equity-indexed annuity products
  resulted in lower investment income for the first quarter of 2000. The index
  options, which act as hedges to match closely the returns on the S&P 500
  Index, are reported at fair value in the accompanying financial statements.
  The changes in the values of the index options and the credited interest on
  policyholder liabilities for equity-indexed annuities are both reflected in
  the statement of earnings.  The reduction to investment income from index
  options for the quarter ended March 31, 2000, totaling $1,725,000 is composed
  of a $1,978,000 decline in fair value of options, offset partially by
  $253,000 of actual income realized as a result of option expirations.
  Comparative income from index options totaled $1,575,000 for the
  quarter  ended  March  31,  1999.    This  significant  decline  is  directly
  attributable to the decline in the S&P 500 Index over the same period.  While
  net investment income was lower due to these options, this reduction was
  partially offset by lower annuity contract interest expense as the credited
  return on the Company's equity-indexed annuities are also based on the same
  S&P 500 Index.
  
  The decrease in investment income was tempered somewhat by reduced investment
  expenses.  Investment expenses were lower in 2000 compared to 1999 primarily
  due to the implementation of a new cost allocation study in the first quarter
  of 2000.  Accordingly, the lower investment expenses were offset by a
  corresponding higher allocation of costs to other operating expenses in the
  accompanying financial statements.  A detail of net investment income is
  provided below:
  Three Months Ended March 31,
                                           2000           1999
                                             (In thousands)
  Investment income:
      Debt securities                $      52,661        50,379
      Mortgage loans                         4,281         4,248
      Policy loans                           2,027         2,111
      Index options                         (1,725)        1,575
      Other investment income                1,170           832
  
  Total investment income                   58,414        59,145
  Investment expenses                          674         1,293
  
  Net investment income              $      57,740        57,852
  Realized Gains and Losses on Investments: The Company recorded realized losses
  of $580,000 and realized gains of $4,805,000 in the first quarters of 2000 and
  1999, respectively.  As previously described, the 2000 losses were primarily
  related to investments in debt securities.  The 1999 gains were primarily from
  sales and calls of investments in debt securities totaling $2,595,000 and a
  gain of $1,419,000 from the sale of investment real estate.
  
  Life and Other Policy Benefits:  These expenses in 2000 and 1999 were
  $10.1 million and $8.7 million, respectively.  The significant increase is due
  to  higher  life  insurance  benefit  claims.    Mortality  claims  experience
  fluctuates from period to period, and such deviations are not uncommon in the
  life insurance industry.  However, the Company utilizes reinsurance to help
  minimize its exposure to adverse mortality experience.  The Company's general
  policy is to reinsure amounts in excess of $200,000 on the life of any one
  individual.  Most of the increase in life insurance benefit claims in the
  first quarter of 2000 was related to traditional policies which was largely
  offset by reductions in traditional policy liabilities.  As reflected in the
  accompanying financial statements, the decrease in liabilities for future
  policy benefits totaled $2,482,000 and $241,000 for the quarters ended March
  31, 2000 and 1999, respectively.  A comparative detail of life and other
  policy benefits is provided below:
  Three Months Ended March 31,
                                                2000           1999
                                                   (In thousands)
  Life insurance benefit claims           $       6,596         5,524
  Surrenders of traditional products              2,984         2,460
  Other policy benefits                             512           704
  
  Totals                                  $      10,092         8,688
  Universal Life and Investment Annuity Contract Interest:  The Company closely
  monitors its credited interest rates, taking into consideration such factors
  as profitability goals, policyholder benefits, product marketability, and
  economic market conditions.  Rates are established or adjusted after careful
  consideration and evaluation of these factors against established objectives.
  As market interest rates fluctuate, the Company's credited interest rates are
  often adjusted accordingly, while also taking into consideration other factors
  as described above.  Contract interest totaled $36.7 million and $40.6 million
  for the quarters ended March 31, 2000 and 1999, respectively. This decline is
  primarily related to the Company's equity-indexed annuities.  Because the S&P
  500 Index declined significantly during the first quarter of 2000, the related
  contract   interest   of   the   equity-indexed   annuities   also   declined.
  Correspondingly, the income from index options used to hedge these annuities
  also declined, substantially offsetting the lower contract interest.
  
  Other Operating Expenses: Other operating expenses totaled $6,717,000 and
  $6,701,000 for the quarters ended March 31, 2000 and 1999, respectively.
  While these total expenses are consistent between quarters, as previously
  described, the Company implemented a new cost allocation study in the first
  quarter of 2000.  This resulted in lower investment expenses and corresponding
  higher other operating expenses.  The amount of this reallocation totaled
  approximately  $650,000.    However,  the  higher  cost  allocation  to  other
  operating expenses was substantially offset by lower agent commissions.  The
  Company is benefitting from lower agent bonus commissions as a result of a
  litigation settlement in 1999, which terminated future bonus commissions on
  certain annuities in-force.
  
  Federal Income Taxes:  Federal income taxes include no unusual items as
  effective tax rates for the quarters ended March 31, 2000 and 1999 were 34.0%
  and 34.2%, respectively.
  
  Segment Operations
  
  Summary of Segment Earnings
  
  A summary of segment earnings for the quarters ended March 31, 2000 and 1999
  is provided below.  The segment earnings exclude realized gains and losses on
  investments, net of taxes.
  Domestic  International
                          Life        Life                    All
                        Insurance   Insurance   Annuities   Others    Totals
                                           (In thousands)
  Segment
  earnings:
  
    March 31, 2000   $    1,699        2,396       8,271       344    12,710
  
    March 31, 1999   $    2,082        1,410       7,367       121    10,980
  Domestic Life Insurance Operations
  
  The Company's domestic life insurance operations concentrate marketing efforts
  on federal employees, seniors, and specific employee groups in private
  industry, as well as individual sales.  The products marketed are universal
  life insurance and traditional life insurance, which includes both term and
  whole life products.  National Western markets and distributes its domestic
  products primarily through independent agents and brokers and independent
  marketing  organizations  (IMOs).    The  IMOs  also  assist  the  Company  in
  recruiting,  contracting,  and  supervising  agents  as  well  as  providing
  additional financial resources for product marketing.  Geographically, the
  domestic life insurance operations market products in most of the United
  States, which encompasses 43 states and the District of Columbia.  The states
  in which the Company does not conduct business are primarily in the northeast
  and include Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey,
  New York, and Vermont.
  
  Earnings for the domestic life insurance operating segment were $1,699,000 and
  $2,082,000 for the three months ended March 31, 2000 and 1999, respectively.
  The decrease in earnings in 2000 is primarily due to higher amortization of
  deferred policy acquisition costs and modest increases in policy benefits.
  These increases were partially offset by higher premiums and contract revenues
  and net investment income during the first quarter of 2000.
  
  A comparative analysis of results of operations for the Company's domestic
  life insurance segment is detailed below:
  Three Months Ended March 31,
                                                         2000          1999
                                                           (In thousands)
  Domestic Life Insurance Operations:
  Premiums and other revenue:
      Premiums and contract revenues              $       5,930         5,791
      Net investment income                               6,472         6,331
      Other income                                         -               16
  
  Total premiums and other revenue                       12,402        12,138
  
  Benefits and expenses:
      Policy benefits                                     3,893         3,544
      Amortization of deferred policy
      acquisition costs                                   1,626           932
  
      Universal life insurance
      contract interest                                   2,222         2,449
      Other operating expenses                            2,086         2,062
  
  Total benefits and expenses                             9,827         8,987
  
  Segment earnings before Federal income taxes            2,575         3,151
  
  Federal income taxes                                      876         1,069
  
  Segment earnings                                $       1,699         2,082
  Revenues from domestic life insurance operations include life insurance
  premiums on traditional type products and revenues from universal life
  insurance.  The Company's current marketing efforts focus more on universal
  life insurance, and, as a result, revenues from these products continue to
  increase over traditional products.  Revenues from traditional products are
  simply premiums collected, while revenues from universal life insurance
  consist of policy charges for the cost of insurance, policy administration
  fees, and surrender charges assessed during the period.  A comparative detail
  of premiums and contract revenues is provided below:
  Three Months Ended March  31,
                                               2000        1999
                                                 (In thousands)
  Universal life insurance:
      Cost of insurance                     $    3,023      2,837
      Surrender charges                            482        406
      Policy fees and other revenues               443        308
  Traditional life insurance premiums            1,982      2,240
  
  Totals                                    $    5,930      5,791
  Actual universal life insurance deposits collected for the quarters ended
  March 31, 2000 and 1999 are detailed below.  Deposits collected on these
  nontraditional products are not reflected as revenues in the Company's
  statements  of  earnings,  as  they  are  recorded  directly  to  policyholder
  liabilities upon receipt, in accordance with generally accepted accounting
  principles.
  Three Months Ended March 31,
                                                2000           1999
                                                  (In thousands)
  Universal life insurance:
      First year and single premiums      $        1,610         1,105
      Renewal premiums                             3,668         3,769
  
  Totals                                  $        5,278         4,874
  Policy benefits were higher in the first quarter of 2000 totaling $3,893,000
  compared to $3,544,000 for the comparable 1999 period.  The increase was due
  to significantly higher life insurance benefit claims, which was largely
  offset by reductions in traditional policy liabilities.  Mortality claims
  experience fluctuates from period to period, and such deviations are not
  uncommon in the life insurance industry.
  
  Universal life insurance contract interest decreased to $2,222,000 in 2000
  compared to $2,449,000 in 1999.  This is consistent with the relative stable
  to declining size of this block of business.
  
  Amortization of deferred policy acquisition costs increased from $932,000 in
  1999 to $1,626,000 in 2000.  These expenses represent the amortization of the
  costs of acquiring or producing new business, which consists primarily of
  agents' commissions.  The majority of such costs are amortized in direct
  relation to the anticipated future gross profits of the applicable blocks of
  business.  Amortization is also impacted by the level of policy surrenders,
  lapses, and benefit claims.  The significant increase in amortization for the
  first quarter of 2000 is partially due to high lapses in a small block of
  universal life policies.
  
  International Life Insurance Operations
  
  The Company's international life insurance operations focus marketing efforts
  on foreign nationals in upper socioeconomic classes with substantial financial
  resources.  Insurance sales are primarily on insureds from countries in
  Central and South America, the Caribbean, and the Pacific Rim.  Marketing to
  numerous countries in these different regions provides diversification that
  helps to minimize large fluctuations in sales that can occur due to various
  economic, political, and competitive pressures that may occur from one country
  to another.  Historically, the top three countries in insurance sales have
  often been Argentina, Chile, and Peru.  Products sold in the international
  market include both universal life and traditional life insurance products.
  The Company minimizes exposure to foreign currency risks, as almost all
  foreign policies require payment of premiums and claims in United States
  dollars.  Sales production from the international market is from independent
  broker-agents, many of whom have been selling National Western products for 20
  or more years.
  
  Earnings  for  the  international  life  insurance  operating  segment  were
  $2,396,000 and $1,410,000 for the quarters ended March 31, 2000 and 1999,
  respectively.  Earnings in 2000 were higher primarily due to increases in
  universal life insurance revenues and lower policy benefits.  The higher
  earnings were also somewhat enhanced by slightly higher net investment income.
  
  A  comparative  analysis  of  results  of  operations  for  the  Company's
  international life insurance segment is detailed below:
  Three Months Ended March 31,
                                                      2000           1999
                                                         (In thousands)
  International Life Insurance Operations:
  Premiums and other revenue:
      Premiums and contract revenues            $       10,686         10,228
      Net investment income                              5,650          5,443
      Other income                                          27             12
  
  Total premiums and other revenue                      16,363         15,683
  
  Benefits and expenses:
      Policy benefits                                    3,650          4,702
      Amortization of deferred policy
      acquisition costs                                  3,157          3,279
      Universal life insurance
      contract interest                                  3,930          3,433
      Other operating expenses                           1,994          2,135
  
  Total benefits and expenses                           12,731         13,549
  
  Segment earnings before
  Federal income taxes                                   3,632          2,134
  
  Federal income taxes                                   1,236            724
  
  Segment earnings                              $        2,396          1,410
  As with domestic operations, revenues from the international life insurance
  segment include both premiums on traditional type products and revenues from
  universal life insurance.  The international operations' marketing efforts are
  also focused more on universal life insurance, and, as a result, revenues from
  these products continue to increase over traditional products.  Cost of
  insurance revenues continue to increase as the international block of business
  grows, while traditional life insurance premiums were also higher during the
  first quarter of 2000.  These increases were minimally affected by small
  decreases in surrender charges and policy fees and other revenues.  A
  comparative detail of premiums and contract revenues is provided below:
  Three Months Ended March 31,
                                                  2000           1999
                                                    (In thousands)
  Universal life insurance:
      Cost of insurance                     $        7,616         7,221
      Surrender charges                              1,891         1,956
      Policy fees and other revenues                   803           898
  Traditional life insurance premiums                  376           153
  
  Totals                                    $       10,686        10,228
  Actual universal life insurance deposits collected for the quarters ended
  March 31, 2000 and 1999 are detailed below.  Deposits collected on these
  nontraditional products are not reflected as revenues in the Company's
  statements  of  earnings,  as  they  are  recorded  directly  to  policyholder
  liabilities upon receipt, in accordance with generally accepted accounting
  principles.
  Three Months Ended March 31,
                                                     2000           1999
                                                        (In thousands)
  Universal life insurance:
      First year and single premiums           $        3,123          2,569
      Renewal premiums                                  8,343          8,486
  
  Totals                                       $       11,466         11,055
  Policy benefits were significantly lower in 2000 totaling $3,650,000 compared
  to $4,702,000 in 1999. The decrease in expenses was due to lower life
  insurance benefit claims.
  
  Universal life insurance contract interest increased from $3,433,000 in 1999
  to $3,930,000 in 2000.  The increase in contract interest is consistent with
  growth in the universal life insurance business.
  
  Annuity Operations
  
  The Company's annuity operations are almost exclusively in the United States.
  Like the Company's domestic life insurance operations, annuities are marketed
  in 43 states and the District of Columbia using independent agents, brokers,
  and  independent  marketing  organizations  (IMOs).    For  most  of  these
  organizations, annuity sales are much more significant than life insurance
  sales and are the primary focus of their business operations.  Although some
  of the Company's annuities are available in the international market, current
  sales are insignificant to total annuity sales.
  
  Annuities sold include single and flexible premium deferred annuities, single
  premium immediate annuities, and equity-indexed annuities.  These products can
  be tax qualified or nonqualified annuities.  In recent years the majority of
  annuities sold have been nonqualified deferred annuities.  The Company also
  continues to collect additional premiums on existing two-tier annuities, as a
  large portion of the two-tier block of business is flexible premium annuities
  on which renewal premiums continue to be collected.  However, the Company has
  not sold two-tier annuities since 1992.
  
  Earnings for the annuity operating segment were $8,271,000 and $7,367,000 for
  the quarters ended March 31, 2000 and 1999, respectively.  Earnings for 2000
  were up from 1999 primarily due to increased investment income over annuity
  contract interest.  Reducing this increase in earnings are lower premiums and
  contract revenues and higher amortization of deferred policy acquisition
  costs.
  
  A comparative analysis of results of operations for the Company's annuity
  segment is detailed below:
  Three Months Ended March 31,
                                                       2000           1999
                                                         (In thousands)
  Annuity Operations:
  Premiums and other revenue:
      Premiums and contract revenues            $        6,659          7,924
      Net investment income                             45,096         45,896
      Other income                                          88            122
  
  Total premiums and other revenue                      51,843         53,942
  
  Benefits and expenses:
      Policy benefits                                       67            201
      Amortization of deferred policy
      acquisiton costs                                   6,102          5,360
      Annuity contract interest                         30,499         34,729
      Other operating expenses                           2,637          2,504
  
  Total benefits and expenses                           39,305         42,794
  
  Segment earnings before
  Federal income taxes                                  12,538         11,148
  
  Federal income taxes                                   4,267          3,781
  
  Segment earnings                              $        8,271          7,367
  Revenues from annuity operations include primarily surrender charges and
  recognition of deferred revenues relating to immediate or payout annuities.
  Annuitizations result in transfers of policies from deferred to immediate or
  payout status.  The deferred revenues related to these annuities are amortized
  into income during the payout period.  Surrender charge revenues were down
  19.4% in 2000 compared to 1999 primarily due to reductions in surrender
  charges from two-tier annuities. Although total annuity policy surrenders were
  actually only down 2.2% from 1999 to 2000, the mix of surrender types was
  significantly  different.    While  single-tier  annuity  policy  surrenders
  increased 24% in 2000, two-tier annuity policy surrenders, which typically
  have much higher surrender charges, declined over 32%.  This decline in
  surrenders and related income from two-tier annuities is not unexpected and
  could continue, since this is a closed block of business.  The Company has not
  sold two-tier annuities since 1992.  A comparative detail of the components of
  premiums and annuity contract revenues is provided below.
  Three Months Ended March 31,
                                                      2000           1999
                                                        (In thousands)
  Surrender charges:
     Two-tier annuities                         $        3,052         4,643
     Single-tier annuities                               2,167         1,829
  
  Total surrender charges                                5,219         6,472
  Payout annuity and other revenues                      1,426         1,434
  Traditional annuity premiums                              14            18
  
  Totals                                        $        6,659         7,924
  Actual annuity deposits collected for the quarters ended March 31, 2000 and
  1999 are detailed below.  Deposits collected on these nontraditional products
  are not reflected as revenues in the Company's statements of earnings, as they
  are recorded directly to policyholder liabilities upon receipt, in accordance
  with generally accepted accounting principles.
  Three Months Ended March 31,
                                                      2000           1999
                                                        (In thousands)
  Deferred annuities:
      Equity-indexed                            $       34,239        45,630
      Other                                             51,357        51,818
  
  Total deferred annuities                              85,596        97,448
  Immediate annuities                                    7,725         7,624
  
  Totals                                        $       93,321       105,072
  Although total annuity deposits for the quarter ended March 31, 2000, were
  lower than the comparable 1999 period, the decline is primarily attributable
  to equity-indexed annuities.  Sales of the Company's other deferred annuity
  products and immediate annuities were virtually the same for the first
  quarters of 2000 and 1999.
  
  While sales were lower in 2000, equity-indexed annuities are a major portion
  of the Company's total annuity production.  The Company's equity-indexed
  annuities are flexible premium deferred annuities which combine the features
  associated with traditional fixed annuities, with the option to have interest
  rates that are linked in part to an equity index, the S&P 500 Index.  These
  annuities are long-term contracts designed as planning vehicles for retirement
  security.    These  annuities  are  attractive  to  customers,  as  they  have
  guaranteed  minimum  interest  rates,  coupled  with  the  potential  for
  significantly higher returns based on an equity index component.  Also,
  because the Company does not offer variable products or mutual funds, these
  products provide a key equity-based alternative to the Company's existing
  fixed annuity products.  In conjunction with the sale of these annuities, the
  Company uses an investment hedging program to offset the potential higher
  returns that could be paid on these products.  Specifically, the Company
  purchases index options from highly rated banks and brokerage firms.  These
  index options act as hedges to match closely the returns based on the S&P 500
  Index which may be paid to policyholders.
  
  Sales of equity-indexed annuities declined during the year ended December 31,
  1999, primarily due to volatility in the stock market.  This volatility
  affects both the immediate demand for these annuities and the pricing of these
  products.  Increased product costs from stock market volatility, particularly
  costs of index options used to hedge the equity return component of these
  annuities, can reduce potential credited interest to policyholders.  The lower
  production level has continued in the first quarter of 2000, which is
  consistent with volatility in the stock market, although first quarter 2000
  sales were higher than the fourth quarter of 1999.
  
  Net investment income for the first quarters of 2000 and 1999 totaled
  $45,096,000 and $45,896,000, respectively.  As previously described in Summary
  of Consolidated Operating Results, the decrease in net investment income is
  due to lower income from index options.  Declines in fair values of index
  options used to hedge the equity return component of the Company's equity-
  indexed annuity products resulted in lower investment income for the first
  quarter of 2000.  The decline is directly attributable to the decline in the
  S&P 500 Index over the same period.
  
  Annuity contract interest was $30.5 million in 2000 compared to $34.7 million
  in 1999.  The decrease is due to lower interest credited on equity-indexed
  annuities due to the decline in the S&P 500 Index.  Contract interest on
  equity-indexed annuities totaled $1,874,000 and $4,726,000 for the quarters
  ended March 31, 2000 and 1999, respectively. While 2000 contract interest is
  lower due to equity-indexed annuities, net investment income from index
  options for 2000 was also $3,300,000 lower than the comparable 1999 first
  quarter.  Although index options are used as hedges, differences between
  income from index options and contract interest credited to policyholders will
  occur for several reasons, some of which may only be timing differences
  between the recognition of income and expenses.  One reason is that the costs
  of the index options are essentially amortized against net investment income
  as the options are marked to fair value each reporting period.  The costs of
  options are covered by additional income earned on debt securities purchased
  with equity-indexed annuity premiums. Other differences are due to asset fees
  charged against policyholder contract interest, surrenders and death benefits
  on annuities within the annual hedging period, and inherent differences
  between index option fair values and policy liability reserving treatments
  related to minimum guaranteed interest rates.
  
  Amortization of deferred policy acquisition costs represents the amortization
  of the costs of acquiring or producing new business, primarily agents'
  commissions, the majority of which are amortized in direct relation to the
  anticipated future gross profits of the applicable blocks of business.
  Amortization is also impacted by the level and type of policy surrenders.
  Amortization for 2000 and 1999 was $6,102,000 and $5,360,000, respectively.
  
  Other operating expenses totaled $2,637,000 for the first quarter of 2000
  compared to $2,504,000 for the comparable 1999 period.  As previously
  described  in  Summary  of  Consolidated  Operating  Results,  the  Company
  implemented a new cost allocation study in the first quarter of 2000.  This
  resulted in lower investment expenses and corresponding higher other operating
  expenses.  However, the higher cost allocation to other operating expenses was
  substantially offset by lower agent commissions.  The Company is benefitting
  from lower agent bonus commissions as a result of a litigation settlement in
  1999, which terminated future bonus commissions on certain annuities in-force.
  
  Other Operations
  
  National Western's primary business encompasses its domestic and international
  life insurance operations and its annuity operations.  However, National
  Western also has small real estate and other investment operations through the
  following wholly owned subsidiaries: NWL Investments, Inc., NWL Properties,
  Inc., NWL 806 Main, Inc., NWL Services, Inc., and NWL Financial, Inc.  Also,
  during January, 1999, the Company's wholly owned subsidiary, The Westcap
  Corporation, completed its Chapter 11 bankruptcy reorganization.  With the
  reorganization complete, National Western transferred its investment real
  estate  holdings  totaling  approximately  $11,589,000  to  Westcap,  and  the
  subsidiary is now operating as a real estate management company.  Earnings for
  these other operations totaled $344,000 and $121,000 for the first quarters of
  2000 and 1999, respectively.
  
  Most of the income from the Company's subsidiaries is from a life interest in
  the Libbie Shearn Moody Trust.  This asset was owned by National Western Life
  Insurance Company prior to 1997 but was transferred to NWL Services, Inc., in
  1997.  Dividend distributions from the Trust are declared semi-annually in
  June and December each year.  Because the asset is a life interest, these
  distributions are only accrued in the Company's financial statements when
  declared.  Semi-annual distributions in recent years typically exceed $1.7
  million.
  
  LIQUIDITY AND CAPITAL RESOURCES
  
  Liquidity
  
  The liquidity requirements of the Company are met primarily by funds provided
  from  operations.  Premium  deposits  and  revenues,  investment  income,  and
  investment maturities are the primary sources of funds, while investment
  purchases and policy benefits are the primary uses of funds.  Primary sources
  of liquidity to meet cash needs are the Company's securities available for
  sale portfolio, net cash provided by operations, and a bank line of credit.
  The Company's investments consist primarily of marketable debt securities that
  could be readily converted to cash for liquidity needs.  The Company may also
  borrow up to $60 million on its bank line of credit for short-term cash needs.
  
  A primary liquidity concern for the Company's life insurance operations is the
  risk of early policyholder withdrawals.  Consequently, the Company closely
  evaluates and manages the risk of early surrenders or withdrawals.  The
  Company includes provisions within annuity and universal life insurance
  policies, such as surrender charges, that help limit early withdrawals.  The
  Company also prepares cash flow projections and performs cash flow tests under
  various market interest rate scenarios to assist in evaluating liquidity needs
  and adequacy.  The Company currently expects available liquidity sources and
  future cash flows to be adequate to meet the demand for funds.
  
  In the past, cash flows from the Company's insurance operations have been more
  than adequate to meet current needs.  Cash flows from operating activities
  were $46.3 million and $28.4 million for the three months ended March 31, 2000
  and  1999,  respectively.    Net  cash  flows  from  the  Company's  financing
  activities, which includes universal life and investment annuity deposit
  product operations, totaled $16.4 million and $16.1 million in the first
  quarters of 2000 and 1999, respectively.  While annuity production declined in
  2000 due to lower equity-indexed annuity sales, surrenders remained relatively
  stable.  Cash flows from financing activities also include $12.0 million from
  utilization of the Company's line of credit short-term borrowing facility.
  The  borrowings  were  used  for  cash  management  purposes  related  to  the
  settlement of routine investment transactions.
  
  The  Company  also  has  significant  cash  flows  from  both  scheduled  and
  unscheduled investment security maturities, redemptions, and prepayments.
  These cash flows totaled $25.6 million and $41.9 million for the quarters
  ended March 31, 2000 and 1999, respectively.  The Company again expects
  significant cash flows from these sources throughout the remainder of 2000.
  
  Capital Resources
  
  The Company relies on stockholders' equity for its capital resources, as there
  has been no long-term debt outstanding in 2000 or recent years.  The Company
  does not anticipate the need for any long-term debt in the near future.  There
  are  also  no  current  or  anticipated  material  commitments  for  capital
  expenditures in 2000.
  
  Stockholders' equity totaled $478.6 million at March 31, 2000, reflecting an
  increase of $3.1 million from December 31, 1999.  The increase in capital is
  primarily from net earnings of $12.3 million, offset by an increase in net
  unrealized losses on investment securities totaling $9.6 million during the
  first quarter of 2000.  The increase in unrealized losses was due to market
  interest rate conditions and transfers of securities from held to maturity to
  available for sale.  As previously described in Investments in Debt and Equity
  Securities, the debt securities transfers were executed due to significant
  credit deterioration of the issuing companies.  Book value per share at March
  31, 2000, was $136.73.
  
  FORWARD-LOOKING STATEMENTS
  
  The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
  for forward-looking statements.  Certain information contained herein or in
  other written or oral statements made by or on behalf of National Western Life
  Insurance Company or its subsidiaries are or may be viewed as forward-looking.
  Although the Company has used appropriate care in developing any such
  information, forward-looking information involves risks and uncertainties that
  could significantly impact actual results.  These risks and uncertainties
  include, but are not limited to, matters described in the Company's SEC
  filings such as exposure to market risks, anticipated cash flows or operating
  performance, future capital needs, and statutory or regulatory related issues.
  However, National Western, as a matter of policy, does not make any specific
  projections as to future earnings, nor does it endorse any projections
  regarding future performance that may be made by others.  Whether or not
  actual results differ materially from forward-looking statements may depend on
  numerous foreseeable and unforeseeable events or developments.  Also, the
  Company undertakes no obligation to publicly update or revise any forward-
  looking  statements,  whether  as  a  result  of  new  information,  future
  developments, or otherwise.
  
                ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK
  
  This information is included in Item 2, Management's Discussion and Analysis
  of Financial Condition and Results of Operations, in the Investments in Debt
  and Equity Securities section.
  
                           PART II.  OTHER INFORMATION
  
                    ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  (a) Exhibits
  
  Exhibit 11 -Computation of Earnings Per Share (filed on page __ of this
               report).
  
  Exhibit 27 -Financial Data Schedule (filed electronically pursuant to
               Regulation S-K).
  
  (b) Reports on Form 8-K
  
  No reports on Form 8-K were filed during the quarter ended March 31, 2000.
  
                                    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.
  
                     NATIONAL WESTERN LIFE INSURANCE COMPANY
                                   (Registrant)
  
  Date:  May 10, 2000                  /S/ Ross R. Moody
                                       Ross R. Moody
                                       President, Chief Operating Officer,
                                       and Director
                                       (Authorized Officer)
  
  Date:  May 10, 2000                 /S/ Robert L. Busby, III
                                      Robert L. Busby, III
                                      Senior Vice President -
                                      Chief Administrative Officer,
                                      Chief Financial Officer and Treasurer
                                      (Principal Financial Officer)
  
  Date:  May 10, 2000                 /S/ Vincent L. Kasch
                                      Vincent L. Kasch
                                      Vice President - Controller
                                      and Assistant Treasurer
                                      (Principal Accounting Officer)