UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC  20549


                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended MARCH 31, 2000
                         Commission file number 1-10557


                      POLICY MANAGEMENT SYSTEMS CORPORATION
             (Exact name of registrant as specified in its charter)


            SOUTH  CAROLINA                   57-0723125
     (State  or  other  jurisdiction  of       (IRS  Employer
     incorporation  or  organization)      Identification  No.)


           ONE  PMSC  CENTER  (PO  BOX  TEN)
           BLYTHEWOOD,  SC  (COLUMBIA,  SC)      29016  (29202)
     (Address  of  principal  executive  offices)  (Zip  Code)


        Registrant's telephone number, including area code (803) 333-4000

     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.
                                                            ----        ----

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common  stock,  as  of  the  latest  practicable  date.

          35,586,038 Common shares, $.01 par value, as of May 5, 2000.

     The information furnished herein reflects all adjustments which are, in the
opinion  of  management,  necessary for the fair presentation of the results for
the  periods  reported.  Such information should be read in conjunction with the
Company's  Annual  Report  on  Form 10-K/A for the year ended December 31, 1999.

<PAGE>
<TABLE>
<CAPTION>

                      POLICY MANAGEMENT SYSTEMS CORPORATION


                                      INDEX


PART  I.  FINANCIAL  INFORMATION                    PAGE

Item  1.  Financial  Statements


<S>                                                   <C>
Consolidated Statements of Income for the Three
Months Ended March 31, 2000 and 1999 . . . . . . . .   3

Consolidated Balance Sheets as of March 31, 2000 and
December 31, 1999. . . . . . . . . . . . . . . . . .   4

Consolidated Statements of Changes in Stockholders'
Equity and Comprehensive Income for the Three
Months Ended March 31, 2000. . . . . . . . . . . . .   5

Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 2000 and 1999 . . . . .   6

Notes to Consolidated Financial Statements . . . . .   7

Item 2. Management's Discussion and Analysis of
  Financial Condition and Results of Operations. . .  15

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings. . . . . . . . . . . . .  27

Item 6. Exhibits and Reports on Form 8-K . . . . . .  27

Signatures . . . . . . . . . . . . . . . . . . . . .  28
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                                     PART I
                              FINANCIAL INFORMATION
                      POLICY MANAGEMENT SYSTEMS CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                    Three  Months
                                                   Ended  March  31,
                                                   2000       1999
                                                     (Unaudited)
                                                    --------------
                                                 (In  thousands,  except
                                                    per  share  data)


<S>                                               <C>        <C>
REVENUES
 Licensing . . . . . . . . . . . . . . . . . . .  $ 26,300   $ 34,766
 Services. . . . . . . . . . . . . . . . . . . .   122,042    125,523
                                                  ---------  ---------
                                                   148,342    160,289
                                                  ---------  ---------
OPERATING EXPENSES
 Cost of revenues
   Employee compensation and benefits. . . . . .    79,320     73,658
   Computer and communications expenses. . . . .    13,651     11,929
   Depreciation and amortization of property,
    equipment and capitalized software costs . .    14,694     16,157
   Other costs and expenses. . . . . . . . . . .    12,303      7,416
 Selling, general and administrative expenses. .    28,214     25,572
 Amortization of goodwill and other intangibles.     3,385      3,077
 Restructuring and other charges . . . . . . . .    12,772          -
                                                  ---------  ---------
                                                   164,339    137,809
                                                  ---------  ---------

OPERATING (LOSS) INCOME. . . . . . . . . . . . .   (15,997)    22,480


Equity in earnings of unconsolidated affiliates.       441        140

Minority interest. . . . . . . . . . . . . . . .        18        (38)

Other Income and Expenses
  Investment income. . . . . . . . . . . . . . .     2,378        252
  Interest expense and other charges . . . . . .    (6,683)    (1,493)
                                                  ---------  ---------
                                                    (4,305)    (1,241)
                                                  ---------  ---------
(Loss) income before income taxes. . . . . . . .   (19,843)    21,341
Income tax (benefit) expense . . . . . . . . . .    (7,701)     7,890
                                                  ---------  ---------

NET (LOSS) INCOME. . . . . . . . . . . . . . . .  $(12,142)  $ 13,451
                                                  =========  =========


BASIC (LOSS) EARNINGS PER SHARE. . . . . . . . .  $  (0.34)  $   0.37
                                                  =========  =========

DILUTED (LOSS) EARNINGS PER SHARE. . . . . . . .  $  (0.34)  $   0.35
                                                  =========  =========


Weighted average common shares . . . . . . . . .    35,376     36,128
Weighted average common shares assuming dilution    35,376     38,336

<FN>

See  accompanying  notes
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                       POLICY MANAGEMENT SYSTEMS CORPORATION
                            CONSOLIDATED BALANCE SHEETS

                                                          (Unaudited)    (Audited)
                                                          March  31, December  31,
                                                              2000         1999
                                                            --------     --------
                                                (In  thousands, except share data)


<S>                                                           <C>        <C>
Assets
Current assets
 Cash and equivalents. . . . . . . . . . . . . . . . . . . .  $ 15,143   $ 17,744
 Marketable securities . . . . . . . . . . . . . . . . . . .        80         89
 Receivables, net of allowance for uncollectible
  amounts of $11,550 ($13,000 at 1999) . . . . . . . . . . .    96,753     99,669
 Accrued revenues. . . . . . . . . . . . . . . . . . . . . .    34,759     36,393
 Deferred income taxes . . . . . . . . . . . . . . . . . . .    18,975     15,979
 Income tax receivable . . . . . . . . . . . . . . . . . . .    11,337      9,728
 Other receivable. . . . . . . . . . . . . . . . . . . . . .         -      7,788
 Prepaids. . . . . . . . . . . . . . . . . . . . . . . . . .    10,406     12,050
 Other . . . . . . . . . . . . . . . . . . . . . . . . . . .    16,015     12,559
                                                              ---------  ---------
   Total current assets. . . . . . . . . . . . . . . . . . .   203,468    211,999

Property and equipment, at cost less accumulated
 depreciation and amortization of $134,790
 ($132,347 at 1999). . . . . . . . . . . . . . . . . . . . .   139,547    142,867
Accrued revenues . . . . . . . . . . . . . . . . . . . . . .    16,183     16,130
Income tax receivable. . . . . . . . . . . . . . . . . . . .     4,041      4,041
Goodwill and other intangibles, net. . . . . . . . . . . . .   111,909    111,024
Capitalized software costs, net. . . . . . . . . . . . . . .   157,224    155,896
Deferred income taxes. . . . . . . . . . . . . . . . . . . .    31,995     29,850
Investments. . . . . . . . . . . . . . . . . . . . . . . . .     8,274     13,332
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .    20,430     21,149
                                                              ---------  ---------
     Total assets. . . . . . . . . . . . . . . . . . . . . .  $693,071   $706,288
                                                              =========  =========

Liabilities
Current liabilities
 Accounts payable and accrued expenses . . . . . . . . . . .  $ 43,933   $ 41,236
 Current portion of long-term debt . . . . . . . . . . . . .    70,000      4,000
 Income taxes payable. . . . . . . . . . . . . . . . . . . .     4,560      4,616
 Unearned revenues . . . . . . . . . . . . . . . . . . . . .    24,515     20,290
 Accrued restructuring and other charges . . . . . . . . . .     7,590      3,630
 Other . . . . . . . . . . . . . . . . . . . . . . . . . . .     2,228      2,223
                                                              ---------  ---------
   Total current liabilities . . . . . . . . . . . . . . . .   152,826     75,995

Long-term debt . . . . . . . . . . . . . . . . . . . . . . .   150,000    227,000
Deferred income taxes. . . . . . . . . . . . . . . . . . . .    72,078     68,514
Accrued restructuring and other charges. . . . . . . . . . .     3,163      2,659
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .     9,017      9,935
                                                              ---------  ---------
    Total liabilities. . . . . . . . . . . . . . . . . . . .   387,084    384,103
                                                              ---------  ---------

Minority interest. . . . . . . . . . . . . . . . . . . . . .       621        624

Commitments and contingencies (Note 3)

Stockholders' equity
Special stock, $.01 par value, 5,000,000 shares authorized .         -          -
Common stock, $.01 par value, 75,000,000 shares authorized,
 35,586,038 shares issued and outstanding
 (35,585,078 at December 31, 1999) . . . . . . . . . . . . .       356        356
Additional paid-in capital . . . . . . . . . . . . . . . . .    56,826     56,695
Retained earnings. . . . . . . . . . . . . . . . . . . . . .   275,341    287,483
Accumulated other comprehensive income . . . . . . . . . . .   (17,443)   (12,972)
Stock employee compensation trust. . . . . . . . . . . . . .    (9,714)   (10,001)
                                                              ---------  ---------
    Total stockholders' equity . . . . . . . . . . . . . . .   305,366    321,561
                                                              ---------  ---------
     Total liabilities and stockholders' equity. . . . . . .  $693,071   $706,288
                                                              =========  =========
<FN>


See  accompanying  notes
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                                POLICY MANAGEMENT SYSTEMS CORPORATION
                      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                       AND COMPREHENSIVE INCOME
                                             (Unaudited)

                                                                    Accumulated    Stock
                                               Additional              Other      Employee
                                      Common    Paid-In   Retained Comprehensive Compensation
                                       Stock    Capital   Earnings   Income(1)     Trust      Total
                                       -----    -------   --------   ---------   ---------   --------
                                              (Dollars  in  thousands)



<S>                                 <C>        <C>         <C>        <C>        <C>        <C>
BALANCE, DECEMBER 31, 1999 . . . .  $    356   $   56,695  $287,483   $(12,972)  $(10,001)  $321,561

Comprehensive income
 Net (loss) income . . . . . . . .         -            -   (12,142)         -          -    (12,142)
 Other comprehensive income,
  net of tax:
   Foreign currency
    translation adjustments. . . .         -            -         -     (4,471)         -     (4,471)
                                                                                            ---------
Total comprehensive (loss) income.                                                           (16,613)
                                                                                            ---------

Restricted stock returned. . . . .         -            -         -          -        (95)       (95)
Restricted stock forfeited . . . .         -           (8)     -             -          8          -
Restricted stock vested. . . . . .         -          117         -          -        374        491
Stock options exercised
  (1,168 shares) . . . . . . . . .         -           22         -          -          -         22
                                    ---------  ----------  ---------  ---------  ---------  ---------

BALANCE, MARCH 31, 2000. . . . . .  $    356   $   56,826  $275,341   $(17,443)  $ (9,714)  $305,366
                                    =========  ==========  =========  =========  =========  =========
<FN>


See  accompanying  notes

(1)     Comprehensive  income  for  the  three  months  ended  March  31,  1999  was  $11,080.


</TABLE>



<PAGE>

<PAGE>
<TABLE>
<CAPTION>

                      POLICY MANAGEMENT SYSTEMS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                              Three  Months
                                                            Ended  March  31,
                                                             2000       1999
                                                            ------     ------
                                                             (In  thousands)
Operating  Activities


<S>                                                       <C>        <C>
 Net (loss) income . . . . . . . . . . . . . . . . . . .  $(12,142)  $ 13,451
 Adjustments to reconcile net (loss) income to net
  cash provided by operating activities:
   Depreciation and amortization . . . . . . . . . . . .    19,988     20,403
   Deferred income taxes . . . . . . . . . . . . . . . .    (1,577)     1,364
   Provision for uncollectible accounts. . . . . . . . .       368       (299)
   Loss from disposal of property and equipment. . . . .        80        221
   Gain on sale of investment in unconsolidated
     Subsidiary. . . . . . . . . . . . . . . . . . . . .    (2,146)         -
 Changes in assets and liabilities:
   Receivables . . . . . . . . . . . . . . . . . . . . .     2,548    (18,675)
   Accrued revenues. . . . . . . . . . . . . . . . . . .     1,581    (15,890)
   Other receivable. . . . . . . . . . . . . . . . . . .     7,788     11,279
   Accounts payable and accrued expenses . . . . . . . .    (2,631)    (7,930)
   Accrued restructuring and other charges . . . . . . .     9,672       (604)
   Income taxes. . . . . . . . . . . . . . . . . . . . .    (1,665)     9,521
   Unearned revenues . . . . . . . . . . . . . . . . . .     4,225      4,657
   Other, net. . . . . . . . . . . . . . . . . . . . . .     1,527    (10,046)
                                                          ---------  ---------
      Cash provided by operations. . . . . . . . . . . .    27,616      7,452
                                                          ---------  ---------

Investing Activities
 Acquisition of property and equipment . . . . . . . . .    (4,726)   (12,254)
 Capitalized internal software development costs . . . .   (10,298)   (16,918)
 Business acquisitions and investments . . . . . . . . .    (5,091)   (26,117)
 Sale of investment in unconsolidated affiliate. . . . .     7,787          -
 Other, net. . . . . . . . . . . . . . . . . . . . . . .    (2,234)      (393)
                                                          ---------  ---------
      Cash used by investing activities. . . . . . . . .   (14,562)   (55,682)
                                                          ---------  ---------

Financing Activities
 Payments on long-term debt. . . . . . . . . . . . . . .   (57,000)   (27,471)
 Proceeds from borrowing under credit facility . . . . .    46,000     90,900
 Purchase of stock for Stock Employee Compensation Trust         -    (10,094)
 Issuance of common stock under stock option plans . . .        22      3,958
 Repurchase of common stock. . . . . . . . . . . . . . .         -    (20,797)
 Other, net. . . . . . . . . . . . . . . . . . . . . . .    (4,677)        15
                                                          ---------  ---------
      Cash (used) provided by financing activities . . .   (15,655)    36,511
                                                          ---------  ---------

Net decrease in cash and equivalents . . . . . . . . . .    (2,601)   (11,719)
Cash and equivalents at beginning of period. . . . . . .    17,744     26,013
                                                          ---------  ---------
Cash and equivalents at end of period. . . . . . . . . .  $ 15,143   $ 14,294
                                                          =========  =========

Supplemental Information
 Interest paid . . . . . . . . . . . . . . . . . . . . .  $  4,214   $  1,094
 Income taxes refunded . . . . . . . . . . . . . . . . .    (5,000)    (2,834)

<FN>


See  accompanying  notes
</TABLE>



<PAGE>
                      POLICY MANAGEMENT SYSTEMS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000


NOTE  1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BASIS  OF  PRESENTATION

     The  consolidated  financial  statements  of  Policy  Management  Systems
Corporation  (the "Company") have been prepared in accordance with the rules and
regulations  of  the  Securities  and  Exchange  Commission  (the "SEC").  These
consolidated  financial statements include estimates and assumptions that affect
the  reported amounts of assets and liabilities, disclosure of contingent assets
and  liabilities  and  the  amounts of revenues and expenses. Actual results may
differ  from  those  estimated.  In  the opinion of management, these statements
include  all adjustments necessary for a fair presentation of the results of all
interim  periods  reported  herein.  All  adjustments  are of a normal recurring
nature unless otherwise disclosed.  Certain information and footnote disclosures
prepared in accordance with generally accepted accounting principles either have
been  condensed  or  omitted  pursuant  to  SEC rules and regulations.  However,
management  believes  that  the  disclosures  made  are  adequate  for  a  fair
presentation of results of operations, financial position and cash flows.  These
consolidated  financial  statements  should  be  read  in  conjunction  with the
consolidated  financial  statements  and  accompanying  notes  included  in  the
Company's  latest  annual  report  on  Form  10-K/A.

BASIC  AND  DILUTED  EARNINGS  PER  SHARE

     Basic  and  diluted  earnings per share ("EPS") are calculated according to
the provisions of Statement of Financial Accounting Standards No. 128, "Earnings
Per  Share".  For  the Company, the numerator is the same for the calculation of
both  basic  and  diluted  EPS.  For  the  period  ended  March  31,  2000,  the
denominator  for  basic and diluted EPS is the same for two reasons.  First, the
net  loss  generated  in  the  period  would cause the inclusion of common stock
options  to be anti-dilutive.  Second, the average market price of the stock for
the  period  was below the exercise price for all options outstanding during the
period.  The  following  is  a reconciliation of the denominator used in the EPS
calculations  (in  thousands):
<TABLE>
<CAPTION>


                                        Three  Months
                                       Ended  March  31,
                                       -----------------
                                         2000    1999
                                        -----   -----
Weighted  Average  Shares
-------------------------


<S>                                     <C>     <C>
Basic EPS. . . . . . . . . . .          35,376  36,128
Effect of common stock options            -      2,208
                                        ------  ------
Diluted EPS. . . . . . . . . .          35,376  38,336
                                        ======  ======

<PAGE>
</TABLE>



     For  the  period ending March 31, 1999, options to purchase 2,776 and 1,388
shares  of  common  stock  at  $42.78  and  $45.56 per share, respectively, were
outstanding  but  were  not  included  in the computation of diluted EPS for the
period  ending  March  31,  1999.

OTHER  MATTERS

     Certain  prior  period amounts have been reclassified to conform to current
period  presentation.

NOTE  2.     ACQUISITIONS

     On  June  30,  1999,  the  Company  purchased  DORN  Technology Group, Inc.
("DORN"),  a  risk and claims management company, for $33.2 million in cash plus
additional  consideration  of  up  to  $3.0  million  contingent upon the future
performance  of  DORN,  to be recorded as compensation expense as incurred until
2001.  DORN  owns  the  Riskmaster  claims  management  software  and  the Quest
healthcare  facility  software, and provides risk and claims management software
and  services  mainly to the US self-insured market. The Company intends to grow
DORN's  business  and  further  develop  the  Riskmaster  and  Quest  systems to
complement  its  existing  claims  products.

     On  June 30, 1999, the Company purchased Financial Administrative Services,
Inc.  ("FAS"),  a  provider  of  business process outsourcing ("BPO"), for $13.0
million  plus  additional consideration of up to $12.0 million contingent on the
future  performance  of  FAS, to be capitalized as additional goodwill when paid
until  2005.  FAS  uses  the  Company's  PolicyLink  system to support the rapid
introduction  of variable insurance products and annuities in a business process
outsourcing  environment.  The  Company  intends  to grow the business acquired.

     On  March  31,  1999,  the  Company  purchased  Legalgard  Partners,  L.P.
("Legalgard"),  a  legal  cost  containment  business  for  $23.2  million  plus
additional  consideration  of  up  to  $4.3  million  contingent upon the future
performance  of  Legalgard,  to  be recorded as compensation expense as incurred
until  2003. Legalgard provides legal cost containment services mainly to the US
property and casualty insurance industry using the Counsel Partnership System, a
proprietary  software  system.  The  Company  intends  to  continue  growing
Legalgard's  existing  services business and developing the technology acquired.

     The  acquisitions  above  have  been  recorded using the purchase method of
accounting. Accordingly, the Consolidated Statement of Operations of the Company
does  not  include the results of operations before the date of the acquisition.

<PAGE>

NOTE  3.     CONTINGENCIES

     The  Company  is  involved in litigation commenced in February 2000, in the
District  Court of Dallas County, Texas, by Chase Manhattan Mortgage Corporation
("Chase")  related  to  the  Company's  mortgage  loan  origination products and
services.  The  complaint  alleges  breach  of  contract,  breach  of  warranty,
misrepresentation,  malpractice  and  mismanagement  and  seeks  a  declaratory
judgment  and damages in excess of $20.0 million including amounts paid by Chase
to the Company, internal costs, consulting fees, opportunity costs, reputational
costs, attorneys fees and costs and punitive and exemplary damages.  The Company
believes  that  the  allegations  are  without  merit and are subject to various
affirmative  defenses  and  counterclaims and will vigorously defend the matter.
The  Company  is  seeking  to  have  the  lawsuit  dismissed  or  stayed pending
alternative dispute resolution proceedings as required by the agreements between
the  parties.

     In  January  2000,  Computer Sciences Corporation ("CSC") filed a complaint
against  the  Company  alleging  that  the  Company  and  NeuronWorks, an entity
retained  by  the  Company in the development of Claims Outcome Advisor ("COA"),
misappropriated  CSC's  trade secrets related to CSC's Colossus product and used
such  trade  secrets  in  the  development  of  the  Company's  COA product. The
litigation  was  removed  from Texas State court and is currently pending in the
United States District Court for the Western District of Texas, Austin Division.
CSC's  complaint  alleges  unfair  competition,  product misappropriation, trade
secret  theft,  tortious  interference  with existing and prospective contracts,
aiding  and  abetting  breach  of  fiduciary  duty,  and civil conspiracy. CSC's
complaint seeks preliminary and permanent injunctive relief, damages, attorneys'
fees and punitive damages, all in an unspecified amount.  The Company has denied
the  allegations  against  it  and  asserted  various  affirmative  defenses and
counterclaims  against  CSC, including counterclaims for unfair trade practices,
false  representation,  false  promotion  and commercial disparagement under the
Lanham  Act,  business  disparagement,  injurious  falsehood,  defamation,  and
tortious  interference  with  existing  and prospective contractual and business
relationships.  On  March  22,  2000,  a  hearing  was held on CSC's request for
preliminary injunctive relief to enjoin the Company from marketing and licensing
COA.  CSC's  request for preliminary injunctive relief was denied.  The case has
been  set  for  trial  in  December  2000.  The Company believes CSC's remaining
claims  are  without  merit and is vigorously defending this matter and pursuing
relief  on  the  Company's  claims.

     On  January  7,  2000, following a morning news release by the Company that
fourth  quarter earnings would be below analyst estimates, the Company and three
of  its officers were named as defendants in an purported class action complaint
filed  on  behalf of purchasers of the Company's stock during the period between
October  22,  1998  and  January 6, 2000.  Since this initial filing, additional
purported  class  actions  have  been filed, three in the United States District
Court  for  the District of South Carolina and two in the United States District
Court  for  the Southern District of New York (which are in the process of being
transferred  to  South  Carolina),  purportedly  on  behalf of purchasers of the
Company's stock during the period between October 22, 1998 and February 9 or 10,
2000.


<PAGE>
These class action lawsuits allege violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 based on, among other things, alleged misleading
statements,  alleged  failure  to disclose material adverse information, alleged
false  financial  reporting,  alleged  failure  to  report  trends,  demands  or
uncertainties,  and  alleged failure to implement and maintain adequate internal
controls.  Each  of  the  complaints  seeks  unspecified  compensatory  damages,
including  interest,  costs  and  attorney  fees.

At  a  hearing  held  on March 20, 2000, the court granted plaintiffs' motion to
consolidate  all  six  cases,  appointed  four  members  of  the  class  as lead
plaintiffs  and  approved  their  selection  of  lead counsel, directed that the
complaints  in  all but the first-filed case be dismissed without prejudice, and
directed  plaintiffs  to  file  an amended consolidated complaint.  The time for
filing  the  amended  complaint  has  been  extended  until  May  22,  2000.

     Although  the Company has not yet filed formal responses to these lawsuits,
the  Company  believes the claims are without merit and is vigorously pursuing a
full  defense  of  these  actions  and  allegations.

     On  March  10,  2000,  one  of  the Company's employees, suing allegedly on
behalf of herself and all former or current participants in the Company's 401(k)
Retirement  Savings  Plan  ("Plan")  during  the period October 22, 1998 through
February  10,  2000, commenced a purported class action against the Company, its
Chairman  and  three  members  of the Administrative Committee of the Plan.  The
action  alleges  that  the  Plan's  investment  in  the Company's stock violated
Sections  502(a)(2)  and (3) of ERISA and constituted a breach of fiduciary duty
given  defendants'  alleged  knowledge  that  the  Company's  stock  price  was
artificially inflated throughout the class period as a result of the same series
of alleged materially false and misleading statements that form the basis of the
securities  class  action  described  above.

     Although  the Company's time to respond to this complaint has yet to occur,
the  Company  believes  the  claims  are  without  merit  and intends to mount a
vigorous  defense  to  the  allegations.

     On  March  30,  2000,  the  Company  and  Politic  Acquisition  Corporation
("Politic"),  an  affiliate  of  Welsh, Carson, Anderson & Stowe, entered into a
merger agreement under which Politic will merge with the Company and between 75%
and 93% of the outstanding shares of Company common stock will be converted into
the  right  to  receive  $14  per  share  in cash.  The exact percentage will be
determined  by  an election procedure under which the Company's stockholders can
elect  to  retain  their  shares  or  receive  $14  per  share  in cash.  If the
stockholders  elect  to  retain  more  than 25% or less than 7% of their shares,
stockholders  will be subject to proration to bring the amount of cash and stock
within these limits.  The merger agreement is described in the Company's Current
Report  on Form 8-K dated March 31, 2000.  The merger is subject to the approval
of  the  holders  of  two-thirds  of  the outstanding shares of the Company at a
special  meeting  of  stockholders  which  will  be  scheduled.

<PAGE>
Between  March  31,  2000, and May 5, 2000, four purported class action lawsuits
were filed against the Company and its directors in the Court of Common Pleas in
Richland  County,  South Carolina on behalf of all stockholders.  The complaints
allege  that  the  consideration  to be paid in the Politic merger is unfair and
grossly  inadequate  because  defendants  failed to conduct a "market check" and
because  the  Company  stock has consistently traded above $14 per share and its
market price is only temporarily depressed due to recent disappointing financial
results.  The complaints also allege that defendants have a substantial conflict
of  interest, to the extent they will continue their employment with the Company
after  the  merger.  The complaints seek an injunction directing that defendants
ensure  that  no  conflicts  exist that would prevent defendants from exercising
their  fiduciary  obligation  to  maximize  stockholder value, and an injunction
preventing  consummation  of the merger unless the Company implements a process,
such  as  an auction, to obtain the highest price for the Company, together with
an  award  of  costs  and  attorneys' fees.  The Company believes the claims are
without  merit  and  will  vigorously  defend  the  actions.

     In addition to the litigation described above, there are also various other
litigation  proceedings  and  claims arising in the ordinary course of business.
The  Company  believes  it  has meritorious defenses and is vigorously defending
these  matters.

     On  April  29,  1999, the Company received notice from the Internal Revenue
Service  ("IRS")  of  proposed  adjustments  to  its 1994, 1995 and 1996 federal
income  tax  returns. Should the IRS prevail in its position, a charge to income
of  approximately  $16.3  million  would  result.  The  Company  has submitted a
response to the IRS and is awaiting a formal decision.  Furthermore, the Company
strongly disagrees with the proposed adjustments and is vigorously defending its
position.

     While  the  resolution  of  any  of the above matters could have a material
adverse  effect on the results of operations in future periods, the Company does
not  expect  these matters to have a material adverse effect on its consolidated
financial  position.  The  Company,  however,  is unable to predict the ultimate
outcome  or  the  potential  financial  impact  of  these  matters.


<PAGE>


NOTE  4.     SEGMENT  INFORMATION

     The  Company's operating segments are the four revenue-producing components
of the Company for which separate financial information is produced for internal
decision  making  and  planning  purposes.  The  segments  are  as  follows:

1. Property and casualty enterprise software and services (generally referred to
as  "property  and casualty").  This segment provides software products, product
support,  professional services and outsourcing primarily to the US property and
casualty  insurance  market.

2. Claims and Risk Management (generally referred to as "claims").  This segment
provides  software  products,  product  support,  professional  services  and
outsourcing  primarily  to  the  claims  management function of the US insurance
industry  and risk management, i.e. self-insured, marketplace. Prior to the 2000
first  quarter,  claims  was  included  in  the  property  and casualty segment.

3.  Life  and  financial  solutions  enterprise software and services (generally
referred  to as "life and financial solutions").  This segment provides software
products,  product  support,  professional services and outsourcing primarily to
the  US  life  insurance  and  related  financial  services  markets.

4.  International.  This  segment  provides  software products, product support,
professional  services  and  outsourcing  to  the property and casualty and life
insurance  markets  primarily  in  Europe,  Asia,  Australia  and  Canada.

Prior  to  the  2000  first  quarter, life information services and property and
casualty  information services were included as segments for results included in
discontinued  operations.  Life  information  services  was  sold  in  May 1998.
Property  and  casualty  information  services  was  sold  in  August  1997.

<PAGE>

     Information about the Company's operations for the three months ended March
31,  2000  and  1999  is  as  follows:
<TABLE>
<CAPTION>


                                         Three  Months
                                        Ended  March  31,
                                      -------------------
                                          2000     1999
                                        ------   ------
                                         (In  thousands)
REVENUES  FROM  EXTERNAL  CUSTOMERS


<S>                               <C>             <C>
Property and casualty. . . . . .  $      54,451   $ 70,824
Claims and risk management . . .          7,317      2,867
Life and financial solutions . .         47,868     41,634
                                  --------------  ---------
  Total US revenues. . . . . . .        109,636    115,325
International. . . . . . . . . .         38,706     44,964
                                  --------------  ---------
  Total revenues . . . . . . . .  $     148,342   $160,289
                                  ==============  =========

OPERATING INCOME (EXPENSE)
Property and casualty. . . . . .  $       5,189   $ 19,590
Claims and risk management . . .            455      2,304
Life and financial solutions . .         (4,776)     8,107
Corporate and US administrative.        (12,874)    (8,022)
                                  --------------  ---------
  Total US operating income. . .        (12,006)    21,979
                                  --------------  ---------

International. . . . . . . . . .         (2,047)     2,280
International administrative . .         (1,944)    (1,779)
                                  --------------  ---------
  Total international. . . . . .         (3,991)       501
                                  --------------  ---------

  Operating (loss) income. . . .        (15,997)    22,480

Equity in earnings of
  unconsolidated affiliates. . .            441        140
Minority interest. . . . . . . .             18        (38)
Other income and expenses. . . .         (4,305)    (1,241)
Income tax (benefit) expense . .         (7,701)     7,890
                                  --------------  ---------
  Net (loss) income. . . . . . .  $     (12,142)  $ 13,451
                                  ==============  =========
</TABLE>



NOTE  5.  SPECIAL  CHARGES

     The  Company  considers  special  charges  to  be unusual events or unusual
transactions  related  to  continuing  business  activities.

     The  Company's operating results for the 2000 first quarter include pre-tax
special  charges  of approximately $12.7 million which are net of a $2.1 million
gain  on the sale of a 20 percent interest in an unconsolidated subsidiary and a
$1.2  million  recovery  of  a  banking  division receivable which was initially
reserved  as a special charge in the 1999 fourth quarter.  The majority of these
charges  have  or  will  be  paid  in  cash.

Restructuring  and  other  charges  of  approximately  $12.8  million  includes
approximately  $7.6  million  of  severance related to the reduction in force of
approximately  6  percent or 350 employees, announced in the 2000 first quarter.
Additionally, $5.2 million is included for customer dispute and litigation costs
(see  Note  3,  "Contingencies").

The  Company  continues  to  recognize  amortization expense related to software
products written down in the 1999 third and fourth quarters.  As a reflection of
their  estimated  impaired  status,  these  products  are being amortized on the
revenue  basis  which  is  faster  than  straight-line  method.  Revenue  based
amortization  related  to  products  written  down  in the 1999 third and fourth
quarters resulted in approximately $1.0 million more amortization expense in the
2000  first  quarter  than  would  have  been recognized under the straight-line
method.

     Selling,  general  and  administrative  expenses for the 2000 first quarter
includes  approximately  $1.4 million of brand expenses associated with changing
the  name  of  the  Company  (see  Note  6,  "Subsequent  Event").

     Investment  income  includes  a  $2.1  million  gain  on  the sale of a 20%
interest  in  an  unconsolidated  subsidiary, and interest expense includes $1.0
million of amortization of credit facilities fees paid in the 2000 first quarter
to  amend  the  Company's  existing  credit  facilities.

NOTE  6.  SUBSEQUENT  EVENTS


     On  April  28,  2000,  the  Company  filed with the Securities and Exchange
Commission  a  registration statement on Form S-4 related to the proposed merger
of  the  Company  with Politic Acquisition Corp., an affiliate of Welsh, Carson,
Anderson  &  Stowe.  Also  on April 28, 2000, the Company received a letter from
Electronic  Data  Systems  Corporation  ("EDS"),  in  which  EDS  set  forth  a
non-binding,  preliminary  proposal  to  acquire  100% of the outstanding common
stock  of the Company for $18 to $20 per share, in cash.  The board of directors
 authorized  the Company and its advisors to explore this proposal with EDS.
On  April  28, 2000, the Company issued a news release that included EDS' letter
and filed the news release on May 1, 2000, under Rule 425.  On May 15, 2000, EDS
issued  a  news  release announcing it had withdrawn its proposal to acquire the
Company.

On  May  1,  2000, the Company began doing business as Mynd Corporation ("Mynd")
following  an  earlier  announcement  of  plans  to  change  the Company's name.
Officially  changing  the  Company's  name  requires  a  two-thirds  vote of the
shareholders at a shareholder's meeting yet to be scheduled.  If approved by the
shareholders,  the  Company  will  formally  change its legal name with relevant
authorities  including  the  New  York  Stock  Exchange.  Meanwhile,  management
intends  to  proceed  with a campaign to promote acceptance and awareness of the
new  name.



<PAGE>
                      POLICY MANAGEMENT SYSTEMS CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion and analysis provides information which management
believes  is  relevant  to  an  assessment  and  understanding  of the Company's
consolidated  results  of  operations  and  financial condition.  The discussion
should  be  read  in  conjunction with the consolidated financial statements and
notes  thereto  contained  in  Part  I  of this report on Form 10-Q and with the
Company's  Annual  Report  on  Form 10-K/A for the year ended December 31, 1999.

                              RESULTS OF OPERATIONS

     Set  forth  below  are certain operating items expressed as a percentage of
revenues and the percent increase (decrease) for those items between the periods
presented:
<TABLE>
<CAPTION>

                                                                 2000 vs. 1999
                                                                    Percent
                                    Percentage of Revenues   Increase (Decrease)
                                   ------------------------  -------------------
                                               Three                 Three
                                            Months  Ended            Months
                                              March  31,             Ended
                                            ------------
                                             2000   1999            March  31
                                            -----  -----          --------------


<S>                                        <C>     <C>               <C>
Revenues
 Licensing . . . . . . . . . . . . .        17.7%   21.7%             (24)%
 Services. . . . . . . . . . . . . .        82.3    78.3               (3)
                                           ------  ------
                                           100.0   100.0               (7)
                                           ------  ------
Operating expenses
 Cost of revenues
  Employee compensation and benefits        53.5    46.0                8
  Computer & communication expenses.         9.2     7.5               14
  Depreciation & amortization
   property, equipment &
   capitalized software costs. . . .         9.9    10.0               (9)
  Other costs & expenses . . . . . .         8.3     4.6               66
 Selling, general &
   administrative expenses . . . . .        19.0    16.0               10
 Amortization of goodwill and
   other intangibles . . . . . . . .         2.3     1.9               10
 Restructuring and other charges . .         8.6       -              100
                                           ------  ------
                                           110.8    86.0               19
                                           ------  ------
Operating (loss) income. . . . . . .       (10.8)   14.0             (171)
Equity in earnings of unconsolidated
   affiliates. . . . . . . . . . . .         0.3     0.1              215
Other income and expenses. . . . . .        (2.9)   (0.7)             247
                                           ------  ------
(Loss) income before income taxes. .       (13.4)   13.4             (193)
Income tax (benefit) expense . . . .        (5.2)    5.0             (198)
                                           ------  ------
Net (loss) income. . . . . . . . . .       (8.2)%    8.4%            (190)%
                                           ======  ======
</TABLE>



<PAGE>
                             THREE MONTH COMPARISON

REVENUES
<TABLE>
<CAPTION>

                                   Three  Months
                                 Ended  March  31,
                                 -----------------
Licensing                      2000    1999   Change
---------                     -----   -----   ------
                             (Dollars  in  Millions)


<S>                           <C>     <C>     <C>
Initial charges. . . . . . .  $ 9.1   $17.5   (48)%
Monthly charges. . . . . . .   17.2    17.3       -
                              ------  ------
                              $26.3   $34.8   (24)%
                              ======  ======

Percentage of total revenues   17.7%   21.7%
                              ------  ------
</TABLE>



     In  licensing  the  Company's  products,  customers  generally  obligate
themselves  to a non-refundable initial license charge and a monthly license fee
payable  over  a  specified  period  of  time,  which  is  usually  six  years.

The  monthly  license charge entitles the customer, over the contract period, to
use  the  licensed  product  and  to  receive  product support and enhancements.


  Initial  licensing

     Initial  license  revenues  decreased $8.4 million for the first quarter of
2000  compared  with  the first quarter of 1999, with the following increases or
decreases  by  business  segment: property and casualty down 88% ($7.1 million);
claims  down  7%  ($0.2  million);  life  and financial solutions down 52% ($1.7
million);  and  international  increased  18%  ($0.6  million).

The emergence of the internet as a viable distribution channel between insurers,
agents,  suppliers  and consumers, and the resulting change in technological and
functional  requirements,  requires  the  Company to transition its products and
business  models  to  capitalize  on  this market change.  The company's results
reflect  this  transition.

Lingering customer Y2K concerns and uncertainty surrounding the Company's credit
agreements  and  the  delayed  filing  of the Company's 1999 annual report had a
negative  effect  on  initial  licensing  activity  in  the  2000 first quarter.
Furthermore,  initial  license  charges  for  the  first  quarter of 2000 do not
include  any  right-to-use  licenses.  This  compares  to  $6.1  million  in
right-to-use  licenses  for  the  first  quarter of 1999.  Right-to-use licenses
represent  the acquisition by certain customers of the right-to-use component of
their  remaining monthly license charge obligation, if any, plus the acquisition
of  a  perpetual  right-to-use  the  product  thereafter.  Since  these types of
licenses  represent  an  acceleration  of  future  revenues,  they reduce future
monthly  license  charges.

First  quarter  1999  initial  license  charges include the first license of the
Company's  new  workplace injury claims management tool, Claims Outcome Advisor,
which  was  sold  in  conjunction  with  the  purchase  of  Legalgard.

<PAGE>

Set  forth  below  is a comparison of initial license revenue by segment for the
periods  ending  March  31,  2000  and  1999,  respectively.
<TABLE>
<CAPTION>


                             Three  Months
                            Ended  March  31,
                            -----------------
                               2000    1999
                              -----   -----
(Dollars  in  Millions)


<S>                           <C>    <C>
Property and casualty. . . .  $1.0   $ 8.1
Claims . . . . . . . . . . .   2.7     2.9
Life and financial solutions   1.5     3.2
International. . . . . . . .   3.9     3.3
                              -----  ------
                              $9.1   $17.5
                              =====  ======

Percentage of total revenues   6.1%   10.9%
                              -----  ------
</TABLE>




  Monthly  licensing

     Monthly license charges remained relatively unchanged for the first quarter
of  2000 compared with the first quarter of 1999 with the following increases or
decreases  by  business  segment:  property and casualty down 15% ($1.1 million)
reflecting  the impact of right-to-use licenses in prior years; claims increased
to $1.5 million; life and financial solutions remained relatively unchanged; and
international  down  9%  ($0.5  million).

     Set forth below is a comparison of monthly licensing revenue by segment for
the  periods  ending  March  31,  2000  and  1999,  respectively.
<TABLE>
<CAPTION>


                              Three  Months
                             Ended  March  31,
                             -----------------
                               2000    1999
                              -----   -----
(Dollars  in  Millions)


<S>                           <C>     <C>
Property and casualty. . . .  $ 6.4   $ 7.5
Claims . . . . . . . . . . .    1.5       -
Life and financial solutions    5.0     5.0
International. . . . . . . .    4.3     4.8
                              ------  ------
                              $17.2   $17.3
                              ======  ======

Percentage of total revenues   11.6%   10.8%
                              ------  ------
</TABLE>





<TABLE>
<CAPTION>

                                  Three  Months
                                 Ended  March  31,
                                 -----------------
Services                          2000    1999   Change
--------                         -----   -----   ------
                              (Dollars  In  Millions)


<S>                           <C>            <C>      <C>
Professional services & ITO.  $       97.8   $109.8    (11)%
BPO                                   23.1 .   15.4     51
Other. . . . . . . . . . . .           1.1      0.3     237
                              -------------  -------
                              $      122.0   $125.5     (3)%
                              =============  =======

Percentage of total revenues          82.3%    78.3%
                              -------------  -------
</TABLE>



The  Company's  services  revenue  consists primarily of Professional services &
Information  Technology  Outsourcing  ("ITO")  and  Business Process Outsourcing
("BPO").  Services  revenue is derived from professional support services, which
include  implementation  and  integration  assistance,  consulting and education
services  and  outsourcing  services.


  Professional  services  &  ITO

Professional  services  &  ITO  revenues  decreased  $12.0 million for the first
quarter  of  2000  compared  with  the first quarter of 1999, with the following
increases  or  decreases  by  business  segment:  property and casualty down 22%
($9.4  million);  claims up $3.2 million; life insurance and financial solutions
up  7% ($1.9 million); and international down 21% ($7.7 million).  The decreases
are principally due to weak initial licensing activity during 1999. The increase
in  claims  is  primarily due to the Company's 1999 acquisitions. The 1999 first
quarter  revenues  include  $1.6  million for professional services rendered and
received  in connection with the settlement of a dispute with a customer who has
terminated  its  relationship  with  the Company. Amounts paid by the Company in
connection  with  the  resolution  of this dispute were covered by insurance and
existing  legal  reserves  and had no impact on the Company's operating results.

     Set  forth  below is a comparison of professional services & ITO revenue by
segment  for  the  periods  ending  March  31,  2000  and  1999,  respectively.
<TABLE>
<CAPTION>


                               Three  Months
                             Ended  March  31,
                             -----------------
                                2000    1999
                               -----   -----
(Dollars  in  Millions)


<S>                           <C>     <C>
Property and casualty. . . .  $34.2   $ 43.6
Claims . . . . . . . . . . .    3.2        -
Life and financial solutions   31.5     29.6
International. . . . . . . .   28.9     36.6
                              ------  -------
                              $97.8   $109.8
                              ======  =======

Percentage of total revenues   65.9%    68.5%
                              ------  -------
</TABLE>




  BPO

     BPO  revenues increased $7.7 million for the first quarter of 2000 compared
with  the  first  quarter  of  1999,  with  the  following increases by business
segment:  property  and  casualty  up  5%  ($0.6  million);  life  insurance and
financial  solutions  up  157%  ($6.0  million)  due  to internal growth and the
acquisition  of  FAS  ($2.3  million);  and  international  up  $1.1  million.

<PAGE>
Set forth below is a comparison of BPO revenue by segment for the periods ending
March  31,  2000  and  1999,  respectively.
<TABLE>
<CAPTION>


                               Three  Months
                              Ended  March  31,
                              -----------------
                                2000    1999
                               -----   -----
(Dollars  in  Millions)


<S>                           <C>     <C>
Property and casualty. . . .  $11.9   $11.3
Claims . . . . . . . . . . .      -       -
Life and financial solutions    9.8     3.8
International. . . . . . . .    1.4      .3
                              ------  ------
                              $23.1   $15.4
                              ======  ======

Percentage of total revenues   15.6%    9.6%
                              ------  ------
</TABLE>





OPERATING  EXPENSES

COST  OF  REVENUES

     Employee  compensation  and  benefits increased 8% for the first quarter of
2000  compared  with the first quarter of 1999, due primarily to acquisitions in
1999  (see  Note  2  of  Notes to Consolidated Financial Statements). Before the
effect  of  1999  acquisitions, employee compensation and benefits for the first
quarter  of  2000  remained  relatively  unchanged  when compared with the first
quarter  of  1999  with  reductions  in  force  being  offset  by growth in BPO.
Compensation  and  benefits  increased  14%  ($7.0 million)   domestically   and
decreased 6%  ($1.4  million)  internationally.

     Computer and communications expenses increased 14% for the first quarter of
2000  compared  with  the  first  quarter  of  1999  due  to  the Company's 1999
acquisitions,  an  increase  in  processing  volume  and  data  center operating
software  license  fees.

     Depreciation  and  amortization  of  property,  equipment  and  capitalized
software  costs  decreased 9% primarily due to accelerated amortization recorded
in  the  1999 third and fourth quarters, partially offset by the acquisitions of
Dorn  and  Legalgard.  As a percentage of revenue, depreciation and amortization
remained  relatively  unchanged  for the first quarter of 2000 compared with the
first  quarter  of  1999.

     The Company continues to recognize amortization expense related to software
products written down in the 1999 third and fourth quarters.  As a reflection of
their  estimated  impaired  status,  these  products  are being amortized on the
revenue  basis  which  is  faster  than  straight-line  method.  Revenue  based
amortization  related  to  products  written  down  in the 1999 third and fourth
quarters  resulted  in  approximately $1.0 million  more amortization expense in
the  2000  first quarter than would have been recognized under the straight-line
method.

     Other  operating  costs and expenses increased 66% for the first quarter of
2000  compared  with  the  first  quarter of 1999.  This increase was due to the
Company's acquisitions in 1999 and a decrease in the amounts capitalized related
to  internal  software development and internal use systems partially off-set by
the  recovery  of approximately $1.2 million of receivables reserved in the 1999
fourth  quarter.

<PAGE>

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling,  general  and  administrative expenses increased 10% for the first
quarter  of  2000  compared  with  the  first quarter of 1999 due largely to the
Company's  1999  acquisitions  and  approximately $1.4 million of brand expenses
associated  with  changing  the name of the Company. (see Note 6 of Notes to the
Consolidated  Financial  Statements  regarding  branding).

AMORTIZATION  OF  GOODWILL  AND  OTHER  INTANGIBLES

     Amortization  of goodwill and other intangibles increased 10% for the first
quarter  of  2000  compared  with  the first quarter of 1999, principally due to
increased  amortization  related  to  the  Company's  1999  acquisitions.

RESTRUCTURING  AND  OTHER  CHARGES

     Restructuring  and other charges include approximately $7.6 million of cash
charges  paid or to be paid as a result of an initiative taken by the Company in
the  2000 first quarter for a worldwide reduction in force of six percent or 350
employees.  An  additional  $5.2 million relates to a contingent liability ($3.5
million)  established  pending  the  outcome  of  a dispute settlement and legal
expenses  ($1.7  million)  associated with the CSC and shareholder lawsuits (see
Note  3  of  Notes  to  Consolidated  Financial  Statements).

OPERATING  (LOSS)  INCOME

     The 2000 first quarter produced an operating loss of $16.0 million compared
with  the  1999  first quarter operating income of $22.5 million. The 2000 first
quarter  operating  loss  includes  the  banking division operating loss of $4.1
million.  The  2000  first  quarter  operating loss includes approximately $12.7
million of unusual events or unusual transactions related to continuing business
activities  described  as  special  charges  (see  Note  5  of  the Notes to the
Consolidated Financial Statements). Before these special charges, the 2000 first
quarter  produced  an operating loss of approximately $2.1 million compared with
operating income of $22.5 million in the 1999 first quarter. Also before special
charges,  decreases  in  segment  operating  income  were: property and casualty
decreased 58%, claims decreased 78%, life and financial solutions decreased 112%
and  international  decreased  487% (see discussion of "Revenues" and "Operating
Expenses"  above).

     A  significant  portion  of  both  the Company's revenues and its operating
income  is  derived  from  initial  licensing agreements received as part of the
Company's  software  licensing  activities.  Because  a  substantial  portion of
initial  licensing  revenues  are recorded at the time new systems are licensed,
there  can  be  significant fluctuations from quarter to quarter in revenues and
operating  income  derived  from  licensing  activities.  This  is  attributable
principally  to  the  timing  of  customers'  decisions  to  enter  into license
agreements  with  the  Company,  which  the  Company  is  unable  to  control.

Set  forth  below is a comparison of initial license revenues for the last eight
quarters  expressed  as  a  percentage of total revenues for each of the periods
presented:

<TABLE>
<CAPTION>


                            2000            1999                   1998
                           ----- ---------------- ----------------------------
                             1st   4th   3rd   2nd   1st     4th    3rd    2nd
                           ----- ----------------------- ---------------------
                                          (Dollars  in  Millions)


<S>

                           <C>     <C>    <C>   <C>    <C>    <C>    <C>    <C>
Initial license revenues   $9.1    $8.7  $19.2  $26.7  $17.5  $27.4  $14.7  $13.0
% of total revenues         6.1%    6.1%  11.4%  15.4%  11.0%  16.0%   9.7%   9.0%
</TABLE>





     The  increasing  rate  of  change  in  the insurance and banking industries
coupled  with  the rapid evolution of eCommerce technology and the volatility of
initial  license  revenues,  as  illustrated  by the above table, is leading the
Company  to  consider  new  business  models that place less emphasis on initial
license  revenue  and  place  more  emphasis  on  transaction based revenue. The
Company  expects  this transition to occur gradually over the next several years
and  will  likely  affect  the  amount  and  timing of revenue recognized in the
Company's  financial  statements.

OTHER  INCOME  AND  EXPENSE

          Investment  income  includes  a $2.1 million gain on the sale of a 20%
interest  in  an  unconsolidated  subsidiary.

     Interest expense increased 348% for the first quarter of 2000 compared with
the  first  quarter  of 1999, principally due to higher levels of borrowed funds
under the Company's credit agreements and $1.0 million of amortization of credit
facilities  fees  paid  in the 2000 first quarter to amend the Company's  credit
agreements.  The  nominal  interest  rates  applicable  to  borrowings under the
Company's credit agreements during the first quarter of 2000 ranged from 8.75 to
9.60  percent.

INCOME  TAXES

The effective income tax rate (income taxes expressed as a percentage of pre-tax
income)  was  38.8%  and  37.0%  for  the  first  quarters  of  2000  and  1999,
respectively.  The  effective  rate for the first quarter of 2000 is higher than
the  federal  statutory  rate  principally  due to the effect of state and local
income  taxes.


<PAGE>

                         LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>

                                                  March  31,  December  31,
                                                    2000         1999
---------------------------------------------------------------------
                                                  (Dollars  in  Millions)


<S>                                                <C>        <C>
Cash and equivalents and marketable
  securities. . . . . . . . . . . .                $ 15.2     $ 17.8
Current assets. . . . . . . . . . .                 203.5      212.0
Current liabilities . . . . . . . .                 152.8       76.0
Working capital . . . . . . . . . .                  50.7      136.0
Long-term debt. . . . . . . . . . .                 150.0      227.0
</TABLE>




<TABLE>
<CAPTION>

                                                    Three  Months  Ended
                                                         March  31,
                                                     2000         1999
----------------------------------------------------------------------
                                                  (Dollars  in  Millions)


<S>                                                 <C>       <C>
Cash provided by operations. . . . . . . . .       $ 27.6    $  7.5
Cash used by investing activities. . . . . .        (14.6)    (55.7)
Cash (used) provided by financing activities        (15.7)     36.5
</TABLE>




     The  Company's  total debt, net of cash and marketable securities, at March
31,  2000  was  $205.0  million,  a  decrease from the comparable amount ($213.0
million)  at  December  31,  1999.  Historically, the Company has used cash from
operations  for  the  development  and  acquisition  of  new  products,  capital
expenditures,  acquisition of businesses and repurchases of the Company's stock.
For  the first quarter of 2000, compared with the first quarter of 1999 however,
the  Company  significantly  decreased  expenditures  in  all  these  areas.

As of March 31, 2000, the Company had the following credit facilities:  a $180.0
million line of credit expiring in July 2001 that had $150.0 million outstanding
and  a  $70.0  million term loan expiring in January 2001 that had $70.0 million
outstanding.  Because  of the net loss in the fourth quarter, the Company was in
violation  of  one of the financial covenants of both the line of credit and the
term  loan.  Amendments  of  the  related  agreements were executed in March and
April  2000  that  returned  the  Company  to  compliance  with these covenants.
Additionally,  the  amendments include an extension of the term loan maturity to
January  31,  2001  and,  among  other  things, an increase in the interest rate
payable  on  the term loan and line of credit, a security agreement covering the
Company's assets and a restriction on the Company's ability to make acquisitions
and  certain  similar investments and repurchases of the Company's common stock.
Total funds available under the line of credit will be reduced to $125.0 million
on  April  1,  2001.

The results for the quarter ended March 31, 2000, resulted in a violation of the
Leverage Ratio financial covenant of both the credit and term loan agreements as
amended.  Consequently,  the  Company entered into an amendment in April waiving
this covenant through December 30, 2000.  In connection with this amendment, the
Company  agreed  to establish a new covenant applicable during the waiver period
based  upon quarterly consolidated adjusted cash flows, as defined, less capital
expenditures.  The  amendment requires that quarterly consolidated adjusted cash
flow  less  capital  expenditures at least equal  $(2.0) million for the quarter
ended  March  31,  2000,  $15.0  million for the quarter ended June 30, 2000 and
$30.0  million  for  the  quarter  ended  September  30,  2000.

     Future credit availability under the Company's amended credit agreements is
dependent  upon the Company achieving improvements in its operating performance.
In  light  of the uncertainties surrounding future performance and the Company's
current  debt  position, the Company, prior to making an agreement with Politic,
concluded  that it must restructure its capital base in order to reduce debt and
take  advantage  of  various  growth  opportunities.  Accordingly,  the Board of
Directors authorized the Company's management to explore various alternatives to
achieve  efficiencies  and  obtain  equity  or  other  financing.

     Significant  expenditures  planned  for  2000,  excluding  new  product
development  are  as  follows: acquisition of data processing and communications
equipment,  support  software,  buildings,  building  improvements  and  office
furniture, fixtures and equipment and costs related to the continued enhancement
of  existing  software  products.


                     FACTORS THAT MAY AFFECT FUTURE RESULTS

     The  Company's operating results and financial condition may be impacted by
a  number of factors, including, but not limited to, the following, any of which
could  cause  actual  results  to  vary  materially  from current and historical
results  or  the  Company's  anticipated  future  results.

Currently,  the  Company's  business  is  focused  principally within the global
property  and  casualty and life and financial services industries.  Significant
changes in the regulatory or market environment of these industries could impact
demand  for the Company's software products and services. Additionally, there is
significant  competition  for the Company's products and services, and there can
be  no  assurance  that  the Company's current products and services will remain
competitive,  or  that  the  Company's development efforts will produce products
with  the  cost and performance characteristics necessary to remain competitive.
Furthermore, the market for the Company's products and services is characterized
by  rapid  changes  in  technology and the emergence of the Internet as a viable
insurance  distribution channel.  The Company's success will depend on the level
of  market  acceptance of the Company's products, technologies and enhancements,
and its ability to introduce such products, technologies and enhancements to the
market  on  a  timely  and  cost  effective  basis,  and  maintain a labor force
sufficiently  skilled  to  compete  in  the  current  environment.

Contracts  with  governmental  agencies  involve  a  variety  of  special risks,
including  the risk of early contract termination by the governmental agency and
changes  associated  with newly elected state administrations or newly appointed
regulators.

The  timing  and  amount  of  the  Company's revenues are subject to a number of
factors,  such as the timing of customers' decisions to enter into large license
agreements with the Company, which make estimation of operating results prior to
the  end  of  a  quarter  or  year  extremely  uncertain.

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements, as
well  as  the  reported  amounts  of  revenues and expenses during the reporting
period. Amounts affected by these estimates include, but are not limited to, the
estimated  useful lives, related amortization expense and carrying values of the
Company's intangible assets and the net realizable value of capitalized software
development  costs  and  accrued  reserves established for contingencies such as
litigation  and  restructuring  activities.  Changes  in  the  status of certain
matters  or  facts  or  circumstances underlying these estimates could result in
material  changes to these estimates, and actual results could differ from these
estimates.

     A  significant  portion  of  both  the Company's revenues and its operating
income  is  derived  from  initial  licensing agreements received as part of the
Company's software licensing activities.  Because a substantial portion of these
revenues are recorded at the time systems are licensed, there can be significant
fluctuations  from  quarter-to-quarter  and  year-to-year  in  the  revenues and
operating  income  derived  from  licensing  activities.  This  is  attributable
principally  to  the  timing  of  customers'  decisions  to  enter  into license
agreements  with  the  Company,  which  the  Company  is  unable  to  control.

     The  Year  2000  has caused an unprecedented level of investment in systems
and  remediation  services  that  may  adversely  affect customers' decisions to
invest  in  new  application  software.  In  addition, the Company believes that
system  evaluations  and  decision processes are being affected by uncertainties
related  to  the  Internet  and its emergence as a viable insurance distribution
channel  is  causing  a re-evaluation of the traditional methods of distribution
for  insurance  products.  The Company also believes that in order for insurance
companies to capitalize on this new distribution method they will be required to
redesign  their  business models and related support systems.  The issues raised
by  the  emergence  of  the Internet and related technology requirements will be
distracting  and  confusing  for  many  insurance  companies  and complicate the
process  of  transitioning  the  insurance  industry  to  modern  architecture.
Therefore,  customer  uncertainty  as  to their Internet and enterprise business
strategies  may  extend  sales  cycles  for large enterprise systems.  The above
factors limit the Company's ability to accurately predict licensing and services
demand.

     Because  of  the  foregoing factors, as well as other factors affecting the
Company's operating results, past financial performance should not be considered
to  be  a reliable indicator of future performance, and investors should not use
historical  trends  to  anticipate  results  or  trends  in  future  periods.


SAFE  HARBOR  STATEMENT  UNDER  THE  PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:  Statements  in  this report that are not descriptions of historical facts
may  be  forward-looking statements that are subject to risks and uncertainties,
including  economic,  competitive  and  technological  factors  affecting  the
Company's  operations,  markets, products, services and prices, as well as other
specific  factors  discussed  above  and  in  the  Company's  filings  with  the
Securities  and  Exchange  Commission.  These and other factors may cause actual
results  to  differ  materially  from  those  anticipated.

<PAGE>

                                     PART II
                                OTHER INFORMATION

                      POLICY MANAGEMENT SYSTEMS CORPORATION


ITEM  1.  LEGAL  PROCEEDINGS

     See  Note  3, Contingencies, of Notes to Consolidated Financial Statements,
which  is  incorporated  by  reference  in  this  Item.

ITEMS  2,  3,  4  AND  5  are  not  applicable.

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K.

Exhibits

     Exhibits  required  to be filed with this Quarterly Report on Form 10-Q are
listed  in  the  following  Exhibit  Index.

Reports  on  Form  8-K

     The  Company  filed  a report under Item 5 Other Events on January 7, 2000,
disclosing  that  the  Company  did  not  expect to report earnings per share in
excess  of the low teens (cents per share) for the fourth quarter.  No financial
statements  were  filed  with  this  8-K.

The  Company  filed  a  report  under  Item  5  Other  Events on March 31, 2000,
disclosing  that  the  Company and Politic Acquisition Corp. ("Acquisition"), an
affiliate of Welsh, Carson, Anderson & Stowe, entered into an Agreement and Plan
of  Merger  pursuant  to  which  Acquisition  will  merge  into  the  Company.

<PAGE>







                      POLICY MANAGEMENT SYSTEMS CORPORATION


                                   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.


                      POLICY MANAGEMENT SYSTEMS CORPORATION
                      -------------------------------------
                                  (Registrant)




Date:  May  15,  2000               Timothy  V.  Williams
                                    Executive  Vice  President
                                    (Chief  Financial  Officer)



<PAGE>

                  POLICY  MANAGEMENT  SYSTEMS  CORPORATION

                                EXHIBIT  INDEX


Exhibit
-------
Number
------

2.     PLAN  OF  ACQUISITION,  REORGANIZATION,  ARRANGEMENT,  LIQUIDATION  OR
SUCCESSION

A.     Agreement and Plan of Merger between Politic Acquisitions Corporation and
Policy  Management Systems Corporation dated March 30, 2000 (filed as an exhibit
to  Form  8-K  dated  March  30,  2000  and is incorporated herein by reference)

B.     Amended  and  Restated  Agreement and Plan of Merger between Politic
Acquisition  Corporation  and  Policy Management Systems Corporation dated as of
April  27,  2000 (filed as an exhibit to Form S-4, Registration Statement, dated
April  29,  2000  and  is  incorporated  herein  by  reference.

3.     ARTICLES  OF  INCORPORATION  AND  BY-LAWS

A.     Bylaws of the Company, as amended through September 2, 1999 incorporating
all amendments thereto subsequent to July 19, 1994 (filed as an Exhibit to Form
10-Q  for  the quarter  ended September 30, 1999, and is incorporated herein by
 reference)

B.     Articles  of Incorporation of the Company, as amended through October 13,
1994,  incorporating  all  amendments  thereto  subsequent  to December 31, 1993
(filed  as  an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

4.     INSTRUMENTS  DEFINING  THE  RIGHTS  OF  SECURITY  HOLDERS,  INCLUDING
INDENTURES

A.     Specimen forms of certificates for Common Stock of the Company (filed as
an  Exhibit  to Registration Statement No. 2-74821, dated December 16, 1981, and
is  incorporated  herein  by  reference)

B.     Articles  of Incorporation of the Company, as amended through October 13,
1994,  incorporating  all  amendments  thereto  subsequent  to December 31, 1993
(filed  as  an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

10.     MATERIAL  CONTRACTS

A.     Conformed  copy  of  Development  and  Marketing  Agreement  between
International  Business  Machines  Corporation  and  Policy  Management  Systems
Corporation,  dated  July 26, 1989 (File No. 0-10175 - filed under cover of Form
SE  filed  on  September  29,  1989,  and  is  incorporated herein by reference)

B.     Policy  Management  Systems  Corporation 1989 Stock Option Plan (File No.
0-10175  -  filed  under cover of Form SE on March 22, 1991, and is incorporated
herein  by  reference)
<PAGE>

C.     Deferred Compensation Agreement with G. Larry Wilson (filed as an Exhibit
to Form 10-K for the year ended December 31, 1993, and is incorporated herein by
reference)

D.     Employment  Agreement  with  Stephen  G. Morrison (filed as an Exhibit to
Form  10-Q  for  the quarter ended March 31, 1994, and is incorporated herein by
reference)

E.     Stock  Option/Non-Compete Agreement with Stephen G. Morrison (filed as an
Exhibit  to  Form 10-Q for the quarter ended March 31, 1994, and is incorporated
herein  by  reference)

F.     Employment  Agreement  with  Timothy  V. Williams (filed as an Exhibit to
Form  10-K  for  the year ended December 31, 1994, and is incorporated herein by
reference)

G.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as an Exhibit to Form 10-Q for the quarter ended September 30, 1992, and
is  incorporated  herein  by  reference)

H.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as an Exhibit to Form 10-Q for the quarter ended September 30, 1994, and
is  incorporated  herein  by  reference)

I.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as  an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

J.     Policy  Management  Systems Corporation 1993 Long-Term Incentive Plan for
Executives  (filed  as  an  Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

K.     First  Amendment  to the Policy Management Systems Corporation 1989 Stock
Option  Plan  (filed  as an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

L.     Fourth  Amendment to the Policy Management Systems Corporation 1989 Stock
Option  Plan  (filed as an Exhibit to Form 10-Q for the quarter ending March 31,
1995,  and  is  incorporated  herein  by  reference)

M.     Second  and Third Amendments to the Policy Management Systems Corporation
1989  Stock  Option  Plan (filed as an Exhibits and to Form 10-Q for the quarter
ended  June  30,  1995,  and  is  incorporated  herein  by  reference)

N.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as  an  Exhibit to Form 10-Q for the quarter ended June 30, 1995, and is
incorporated  herein  by  reference)

O.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as  an  Exhibit  to  Form  10-K for year ended December 31, 1995, and is
incorporated  herein  by  reference)
<PAGE>

P.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as  an  Exhibit  to  Form  10-K for year ended December 31, 1995, and is
incorporated  herein  by  reference)

Q.     Stock  Option/Non-Compete  Agreement  with  Timothy  V.  Williams  dated
February  1,  1994 (filed as an Exhibit to Form 10-K for year ended December 31,
1995,  and  is  incorporated  herein  by  reference)

R.     Stock Option/Non-Compete Agreement with Timothy V. Williams dated May 10,
1995  (filed as an Exhibit to Form 10-K for year ended December 31, 1995, and is
incorporated  herein  by  reference)

S.     Registration  Rights  Agreement,  dated  March  8,  1996,  between Policy
Management  Systems  Corporation  and  Continental Casualty Company (filed as an
Exhibit  to  Form 10-Q for the quarter ended March 31, 1996, and is incorporated
herein  by  reference)

T.     Shareholders Agreement dated March 8, 1996 between Policy Management
Systems Corporation  and  Continental Casualty Company (filed as an Exhibit to
Form 10-Q  for the  quarter ended March 31, 1996, and is incorporated herein by
 reference)

U.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together
with schedule identifying particulars for each named executive officer (filed as
an Exhibit to Form 10-Q for the quarter ended June 30, 1996, and is incorporated
herein  by  reference)

V.     Employment  Agreement  Form  dated  November  7,  1996  for  Messrs.
Morrison  and Williams together with a schedule identifying particulars for each
executive  officer (filed as an Exhibit to Form 10-K for year ended December 31,
1996  and  is  incorporated  herein  by  reference)

W.     Stock  Option/Non-Compete  Agreement  with Stephen G. Morrison dated
October  22,  1996 (filed as an Exhibit to Form 10-K for year ended December 31,
1996  and  is  incorporated  herein  by  reference)

X.     Stock Option/Non-Compete Form Agreement for named executive officers
together with schedule identifying particulars for each executive officer (filed
as  an  Exhibit  to  Form  10-Q  for  the  quarter  ended  March 31, 1997 and is
incorporated  herein  by  reference)

Y.     Form  of  Amendment  No. 1 to the Employment Agreements with Messrs.
Morrison  and  Williams, together with schedule identifying particulars for each
executive  officer  (filed as an Exhibit to Form 10-Q for Quarter ended June 30,
1997  and  is  incorporated  herein  by  reference)

Z.     Form  of  Employment  Agreements  with  Messrs.  Wilson  and Bailey,
together with schedule identifying particulars for each executive officer (filed
as  an  Exhibit  to  Form  10-Q  for  Quarter  ending  September 30, 1997 and is
incorporated  herein  by  reference)

AA.     Credit Agreement dated as of August 8, 1997 among Policy Management
Systems Corporation, the Guarantors Party hereto, Bank of America National Trust
and  Savings Association and the Other Financial Institution Party Hereto (filed
as  an  Exhibit  to  Form  10-Q  for  Quarter  ending  September 30, 1997 and is
incorporated  herein  by  reference)
<PAGE>

BB.     Stock  Option/Non-Compete  Form  Agreement  for  named  executive
officers together with schedule identifying particulars for each named executive
officer  (filed  as  an Exhibit to the Form 10-Q for the quarter ended March 31,
1998,  and  is  incorporated  herein  by  reference)

CC.     Policy  Management  Systems  Corporation Restricted Stock Ownership
Plan  (filed as an Exhibit to Form 10-Q for Quarter ended September 30, 1998 and
is  incorporated  herein  by  reference)

DD.     Form of Restricted Stock Award Agreement dated August 11, 1998 with
Messrs.  Berkeley,  Feddersen,  Palms,  Sargent,  Seibels  and Trub (filed as an
Exhibit  to  Form  10-Q for Quarter ended September 30, 1998 and is incorporated
herein  by  reference)

EE.     Employment  Agreement  with  Michael  W.  Risley dated February 23,
1999, effective November 10, 1998 (filed as an Exhibit to Form 10-K for the year
ended  December  31,  1998  and  is  incorporated  herein  by  reference)

FF.     Form  of  Restricted Stock Award Agreement dated March 1, 1999 with
Messrs.  Berkeley,  Feddersen,  Palms,  Sargent,  Seibels  and Trub (filed as an
Exhibit  to  Form  10-Q  for  Quarter  ending March 31, 1999 and is incorporated
herein  by  reference)

GG.     Form  of  Restricted  Stock  Award  Agreement  for  named executive
officers together with schedule identifying particulars for each named executive
officer  (filed as an Exhibit to Form 10-Q for Quarter ending March 31, 1999 and
is  incorporated  herein  by  reference)

HH.     Stock  Option/Non-Compete  Form  Agreement  for  named  executive
officers together with schedule identifying particulars for each named executive
officer  (filed  as an Exhibit to Form 10-Q for Quarter ending June 30, 1999 and
is  incorporated  herein  by  reference)

II.     Stock  Option/Non-Compete  Form  Agreement  with  Michael W. Risley
dated May 11, 1999 (filed as an Exhibit to Form 10-Q for Quarter ending June 30,
1999  and  is  incorporated  herein  by  reference)

JJ.     Form  of 1999 Bonus Plan for named executive officers together with
schedule  identifying  particulars for each named executive officer (filed as an
Exhibit to Form 10-Q for Quarter ending June 30, 1999 and is incorporated herein
by  reference)

KK.     Promissory  Note  dated  July  21,  1999  between Policy Management
Systems  Corporation  and First Union National Bank (filed as an Exhibit to Form
10-Q  for  Quarter  ending  September  30,  1999  and  is incorporated herein by
reference)

LL.     Modification  Number  One  dated October 15, 1999 to the Promissory
Note between Policy Management Systems Corporation and First Union National Bank
dated  July  21,  1999  (filed  as  an  exhibit  to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

MM.     Modification  Number  Two  dated October 28, 1999 to the Promissory
Note between Policy Management Systems Corporation and First Union National Bank
dated  July  21,  1999  (filed  as  an  exhibit  to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

<PAGE>
NN.     Stock  Option/Non-Compete  Form  Agreement  dated  May 11, 1999 for
named executive officers together with schedule identifying particulars for each
named  executive  officer  (filed  as an exhibit to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

OO.     Stock  Option/Non-Compete  Form Agreement dated August 9, 1999 with
Mr.  Harald  J.  Karlsen  (filed  as  an exhibit to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

PP.     Stock  Option/Non-Compete Form Agreement dated November 8, 1999 for
named executive officers together with schedule identifying particulars for each
named  executive  officer  (filed  as an exhibit to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

QQ.     Form  of  Restricted Stock Award Agreement dated February, 1999 for
Mr.  Michael  D.  Gantt
          (filed as an exhibit to Form 10-K for the year ended December 31, 1999
and  is  incorporated  herein  by  reference)

RR.     Change  in  Control  Severance  Pay Plan for Select Employees dated
October  22,  1996 together with schedule identifying particulars for Michael D.
Gantt  and  Harald  J.  Karlsen  (filed  as an exhibit to Form 10-K for the year
ended  December  31,  1999  and  is  incorporated  herein  by  reference)

SS.     Term  Loan Agreement between Policy Management Systems Corporation,
the  Guarantors Party, Bank of America, N.A. and other financial institutions in
the  amount  of  $70 million dated November 5, 1999 (filed as an exhibit to Form
10-K  for  the  year  ended  December  31,  1999  and  is incorporated herein by
reference)

TT.     Form  of  Restricted Stock Award Agreement dated March 1, 2000 with
Messrs.  Berkeley,  Feddersen,  Palms,  Sargent  and  Trub  with  schedule
Identifying particulars  for  each  named director  (filed  herewith)

          The  Schedule  for  TT  contained  the  following:

          Named  Director     Number  Granted
          ---------------     ---------------
          Al  Berkeley              1,491
          Don  Feddersen            1,491
          John  Palms               1,491
          Joe  Sargent              1,491
          Richard  Trub             1,491


UU.     First  Amendment  to  the  Credit Agreement dated as of November 5,
1999,  between  Policy Management Systems Corporation, Bank of America, N.A. and
the  other  financial  institutions  thereto  (filed  herewith)

VV.     Second  Amendment  to the Credit Agreement dated as of February 10,
2000  between  Policy  Management Systems Corporation, Bank of America, N.A. and
the  other  financial  institutions  thereto  (filed  herewith)

<PAGE>
WW.     Third  Amendment to the Credit Agreement dated as of March 30, 2000
between  Policy  Management  Systems  Corporation, Bank of America, N.A. and the
other  financial  institutions  thereto  (filed  herewith)

XX.     Fourth Amendment to the Credit Agreement dated as of April 24, 2000
between  Policy  Management  Systems  Corporation, Bank of America, N.A. and the
other  financial  institutions  thereto  (filed  herewith)

YY.     First  Amendment  to  Term  Loan Agreement dated as of February 10,
2000  between  Policy  Management Systems Corporation, Bank of America, N.A. and
the  other  financial  institutions  thereto  (filed  herewith)

ZZ.     Second  Amendment to Term Loan Agreement dated as of March 30, 2000
between  Policy  Management  Systems  Corporation, Bank of America, N.A. and the
other  financial  institutions  thereto  (filed  herewith)

AAA.     Third  Amendment to Term Loan Agreement dated as of April 24, 2000
between  Policy  Management  Systems  Corporation, Bank of America, N.A. and the
other  financial  institutions  thereto  (filed  herewith)

BBB.     Security  Agreement  dated  as  of  April  28,  2000, among Policy
Management  Systems  Corporation,  certain  of  its  subsidiaries,  and  Bank of
America,  N.A.,  as  Administrative  Agent  (filed  herewith)

CCC.     Pledge  Agreement  dated  as  of  April  28,  2000, between Policy
Management  Systems  Corporation,  certain  of  its  subsidiaries,  and  Bank of
America,  N.A.,  as  Administrative  Agent  (filed  herewith)

DDD.     Mortgage  Agreement  dated  as  of  April 28, 2000, between Policy
Management  Systems  Corporation  and  Bank  of America, N.A., as Administrative
Agent  (filed  herewith)

27.     FINANCIAL  DATA  SCHEDULE

A.      Filed  herewith
[{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 91351}]
{"company-data": {"conformed-name": "POLICY MANAGEMENT SYSTEMS CORP", "cik": "0000356226", "assigned-sic": "6411", "irs-number": "570723125", "state-of-incorporation": "SC", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-10557", "film-number": "636450"}, "business-address": {"street1": "ONE PMSC CTR", "street2": "PO BOX TEN", "city": "COLUMBIA", "state": "SC", "zip": "29202", "phone": "8037354000"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC  20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended MARCH 31, 2000
                         Commission file number 1-10557

                      POLICY MANAGEMENT SYSTEMS CORPORATION
             (Exact name of registrant as specified in its charter)

            SOUTH  CAROLINA                   57-0723125
     (State  or  other  jurisdiction  of       (IRS  Employer
     incorporation  or  organization)      Identification  No.)

           ONE  PMSC  CENTER  (PO  BOX  TEN)
           BLYTHEWOOD,  SC  (COLUMBIA,  SC)      29016  (29202)
     (Address  of  principal  executive  offices)  (Zip  Code)

        Registrant's telephone number, including area code (803) 333-4000

     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.
                                                            ----        ----

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common  stock,  as  of  the  latest  practicable  date.

          35,586,038 Common shares, $.01 par value, as of May 5, 2000.

     The information furnished herein reflects all adjustments which are, in the
opinion  of  management,  necessary for the fair presentation of the results for
the  periods  reported.  Such information should be read in conjunction with the
Company's  Annual  Report  on  Form 10-K/A for the year ended December 31, 1999.
POLICY MANAGEMENT SYSTEMS CORPORATION

                                      INDEX

PART  I.  FINANCIAL  INFORMATION                    PAGE

Item  1.  Financial  Statements
Consolidated Statements of Income for the Three
Months Ended March 31, 2000 and 1999 . . . . . . . .   3

Consolidated Balance Sheets as of March 31, 2000 and
December 31, 1999. . . . . . . . . . . . . . . . . .   4

Consolidated Statements of Changes in Stockholders'
Equity and Comprehensive Income for the Three
Months Ended March 31, 2000. . . . . . . . . . . . .   5

Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 2000 and 1999 . . . . .   6

Notes to Consolidated Financial Statements . . . . .   7

Item 2. Management's Discussion and Analysis of
  Financial Condition and Results of Operations. . .  15

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings. . . . . . . . . . . . .  27

Item 6. Exhibits and Reports on Form 8-K . . . . . .  27

Signatures . . . . . . . . . . . . . . . . . . . . .  28
PART I
                              FINANCIAL INFORMATION
                      POLICY MANAGEMENT SYSTEMS CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                    Three  Months
                                                   Ended  March  31,
                                                   2000       1999
                                                     (Unaudited)
                                                    --------------
                                                 (In  thousands,  except
                                                    per  share  data)
REVENUES
 Licensing . . . . . . . . . . . . . . . . . . .  $ 26,300   $ 34,766
 Services. . . . . . . . . . . . . . . . . . . .   122,042    125,523
                                                  ---------  ---------
                                                   148,342    160,289
                                                  ---------  ---------
OPERATING EXPENSES
 Cost of revenues
   Employee compensation and benefits. . . . . .    79,320     73,658
   Computer and communications expenses. . . . .    13,651     11,929
   Depreciation and amortization of property,
    equipment and capitalized software costs . .    14,694     16,157
   Other costs and expenses. . . . . . . . . . .    12,303      7,416
 Selling, general and administrative expenses. .    28,214     25,572
 Amortization of goodwill and other intangibles.     3,385      3,077
 Restructuring and other charges . . . . . . . .    12,772          -
                                                  ---------  ---------
                                                   164,339    137,809
                                                  ---------  ---------

OPERATING (LOSS) INCOME. . . . . . . . . . . . .   (15,997)    22,480

Equity in earnings of unconsolidated affiliates.       441        140

Minority interest. . . . . . . . . . . . . . . .        18        (38)

Other Income and Expenses
  Investment income. . . . . . . . . . . . . . .     2,378        252
  Interest expense and other charges . . . . . .    (6,683)    (1,493)
                                                  ---------  ---------
                                                    (4,305)    (1,241)
                                                  ---------  ---------
(Loss) income before income taxes. . . . . . . .   (19,843)    21,341
Income tax (benefit) expense . . . . . . . . . .    (7,701)     7,890
                                                  ---------  ---------

NET (LOSS) INCOME. . . . . . . . . . . . . . . .  $(12,142)  $ 13,451
                                                  =========  =========

BASIC (LOSS) EARNINGS PER SHARE. . . . . . . . .  $  (0.34)  $   0.37
                                                  =========  =========

DILUTED (LOSS) EARNINGS PER SHARE. . . . . . . .  $  (0.34)  $   0.35
                                                  =========  =========

Weighted average common shares . . . . . . . . .    35,376     36,128
Weighted average common shares assuming dilution    35,376     38,336
See  accompanying  notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                            CONSOLIDATED BALANCE SHEETS

                                                          (Unaudited)    (Audited)
                                                          March  31, December  31,
                                                              2000         1999
                                                            --------     --------
                                                (In  thousands, except share data)
Assets
Current assets
 Cash and equivalents. . . . . . . . . . . . . . . . . . . .  $ 15,143   $ 17,744
 Marketable securities . . . . . . . . . . . . . . . . . . .        80         89
 Receivables, net of allowance for uncollectible
  amounts of $11,550 ($13,000 at 1999) . . . . . . . . . . .    96,753     99,669
 Accrued revenues. . . . . . . . . . . . . . . . . . . . . .    34,759     36,393
 Deferred income taxes . . . . . . . . . . . . . . . . . . .    18,975     15,979
 Income tax receivable . . . . . . . . . . . . . . . . . . .    11,337      9,728
 Other receivable. . . . . . . . . . . . . . . . . . . . . .         -      7,788
 Prepaids. . . . . . . . . . . . . . . . . . . . . . . . . .    10,406     12,050
 Other . . . . . . . . . . . . . . . . . . . . . . . . . . .    16,015     12,559
                                                              ---------  ---------
   Total current assets. . . . . . . . . . . . . . . . . . .   203,468    211,999

Property and equipment, at cost less accumulated
 depreciation and amortization of $134,790
 ($132,347 at 1999). . . . . . . . . . . . . . . . . . . . .   139,547    142,867
Accrued revenues . . . . . . . . . . . . . . . . . . . . . .    16,183     16,130
Income tax receivable. . . . . . . . . . . . . . . . . . . .     4,041      4,041
Goodwill and other intangibles, net. . . . . . . . . . . . .   111,909    111,024
Capitalized software costs, net. . . . . . . . . . . . . . .   157,224    155,896
Deferred income taxes. . . . . . . . . . . . . . . . . . . .    31,995     29,850
Investments. . . . . . . . . . . . . . . . . . . . . . . . .     8,274     13,332
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .    20,430     21,149
                                                              ---------  ---------
     Total assets. . . . . . . . . . . . . . . . . . . . . .  $693,071   $706,288
                                                              =========  =========

Liabilities
Current liabilities
 Accounts payable and accrued expenses . . . . . . . . . . .  $ 43,933   $ 41,236
 Current portion of long-term debt . . . . . . . . . . . . .    70,000      4,000
 Income taxes payable. . . . . . . . . . . . . . . . . . . .     4,560      4,616
 Unearned revenues . . . . . . . . . . . . . . . . . . . . .    24,515     20,290
 Accrued restructuring and other charges . . . . . . . . . .     7,590      3,630
 Other . . . . . . . . . . . . . . . . . . . . . . . . . . .     2,228      2,223
                                                              ---------  ---------
   Total current liabilities . . . . . . . . . . . . . . . .   152,826     75,995

Long-term debt . . . . . . . . . . . . . . . . . . . . . . .   150,000    227,000
Deferred income taxes. . . . . . . . . . . . . . . . . . . .    72,078     68,514
Accrued restructuring and other charges. . . . . . . . . . .     3,163      2,659
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .     9,017      9,935
                                                              ---------  ---------
    Total liabilities. . . . . . . . . . . . . . . . . . . .   387,084    384,103
                                                              ---------  ---------

Minority interest. . . . . . . . . . . . . . . . . . . . . .       621        624

Commitments and contingencies (Note 3)

Stockholders' equity
Special stock, $.01 par value, 5,000,000 shares authorized .         -          -
Common stock, $.01 par value, 75,000,000 shares authorized,
 35,586,038 shares issued and outstanding
 (35,585,078 at December 31, 1999) . . . . . . . . . . . . .       356        356
Additional paid-in capital . . . . . . . . . . . . . . . . .    56,826     56,695
Retained earnings. . . . . . . . . . . . . . . . . . . . . .   275,341    287,483
Accumulated other comprehensive income . . . . . . . . . . .   (17,443)   (12,972)
Stock employee compensation trust. . . . . . . . . . . . . .    (9,714)   (10,001)
                                                              ---------  ---------
    Total stockholders' equity . . . . . . . . . . . . . . .   305,366    321,561
                                                              ---------  ---------
     Total liabilities and stockholders' equity. . . . . . .  $693,071   $706,288
                                                              =========  =========
See  accompanying  notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                       AND COMPREHENSIVE INCOME
                                             (Unaudited)

                                                                    Accumulated    Stock
                                               Additional              Other      Employee
                                      Common    Paid-In   Retained Comprehensive Compensation
                                       Stock    Capital   Earnings   Income(1)     Trust      Total
                                       -----    -------   --------   ---------   ---------   --------
                                              (Dollars  in  thousands)
BALANCE, DECEMBER 31, 1999 . . . .  $    356   $   56,695  $287,483   $(12,972)  $(10,001)  $321,561

Comprehensive income
 Net (loss) income . . . . . . . .         -            -   (12,142)         -          -    (12,142)
 Other comprehensive income,
  net of tax:
   Foreign currency
    translation adjustments. . . .         -            -         -     (4,471)         -     (4,471)
                                                                                            ---------
Total comprehensive (loss) income.                                                           (16,613)
                                                                                            ---------

Restricted stock returned. . . . .         -            -         -          -        (95)       (95)
Restricted stock forfeited . . . .         -           (8)     -             -          8          -
Restricted stock vested. . . . . .         -          117         -          -        374        491
Stock options exercised
  (1,168 shares) . . . . . . . . .         -           22         -          -          -         22
                                    ---------  ----------  ---------  ---------  ---------  ---------

BALANCE, MARCH 31, 2000. . . . . .  $    356   $   56,826  $275,341   $(17,443)  $ (9,714)  $305,366
                                    =========  ==========  =========  =========  =========  =========
See  accompanying  notes

(1)     Comprehensive  income  for  the  three  months  ended  March  31,  1999  was  $11,080.
POLICY MANAGEMENT SYSTEMS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                              Three  Months
                                                            Ended  March  31,
                                                             2000       1999
                                                            ------     ------
                                                             (In  thousands)
Operating  Activities
Net (loss) income . . . . . . . . . . . . . . . . . . .  $(12,142)  $ 13,451
 Adjustments to reconcile net (loss) income to net
  cash provided by operating activities:
   Depreciation and amortization . . . . . . . . . . . .    19,988     20,403
   Deferred income taxes . . . . . . . . . . . . . . . .    (1,577)     1,364
   Provision for uncollectible accounts. . . . . . . . .       368       (299)
   Loss from disposal of property and equipment. . . . .        80        221
   Gain on sale of investment in unconsolidated
     Subsidiary. . . . . . . . . . . . . . . . . . . . .    (2,146)         -
 Changes in assets and liabilities:
   Receivables . . . . . . . . . . . . . . . . . . . . .     2,548    (18,675)
   Accrued revenues. . . . . . . . . . . . . . . . . . .     1,581    (15,890)
   Other receivable. . . . . . . . . . . . . . . . . . .     7,788     11,279
   Accounts payable and accrued expenses . . . . . . . .    (2,631)    (7,930)
   Accrued restructuring and other charges . . . . . . .     9,672       (604)
   Income taxes. . . . . . . . . . . . . . . . . . . . .    (1,665)     9,521
   Unearned revenues . . . . . . . . . . . . . . . . . .     4,225      4,657
   Other, net. . . . . . . . . . . . . . . . . . . . . .     1,527    (10,046)
                                                          ---------  ---------
      Cash provided by operations. . . . . . . . . . . .    27,616      7,452
                                                          ---------  ---------

Investing Activities
 Acquisition of property and equipment . . . . . . . . .    (4,726)   (12,254)
 Capitalized internal software development costs . . . .   (10,298)   (16,918)
 Business acquisitions and investments . . . . . . . . .    (5,091)   (26,117)
 Sale of investment in unconsolidated affiliate. . . . .     7,787          -
 Other, net. . . . . . . . . . . . . . . . . . . . . . .    (2,234)      (393)
                                                          ---------  ---------
      Cash used by investing activities. . . . . . . . .   (14,562)   (55,682)
                                                          ---------  ---------

Financing Activities
 Payments on long-term debt. . . . . . . . . . . . . . .   (57,000)   (27,471)
 Proceeds from borrowing under credit facility . . . . .    46,000     90,900
 Purchase of stock for Stock Employee Compensation Trust         -    (10,094)
 Issuance of common stock under stock option plans . . .        22      3,958
 Repurchase of common stock. . . . . . . . . . . . . . .         -    (20,797)
 Other, net. . . . . . . . . . . . . . . . . . . . . . .    (4,677)        15
                                                          ---------  ---------
      Cash (used) provided by financing activities . . .   (15,655)    36,511
                                                          ---------  ---------

Net decrease in cash and equivalents . . . . . . . . . .    (2,601)   (11,719)
Cash and equivalents at beginning of period. . . . . . .    17,744     26,013
                                                          ---------  ---------
Cash and equivalents at end of period. . . . . . . . . .  $ 15,143   $ 14,294
                                                          =========  =========

Supplemental Information
 Interest paid . . . . . . . . . . . . . . . . . . . . .  $  4,214   $  1,094
 Income taxes refunded . . . . . . . . . . . . . . . . .    (5,000)    (2,834)
See  accompanying  notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000

NOTE  1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BASIS  OF  PRESENTATION

     The  consolidated  financial  statements  of  Policy  Management  Systems
Corporation  (the "Company") have been prepared in accordance with the rules and
regulations  of  the  Securities  and  Exchange  Commission  (the "SEC").  These
consolidated  financial statements include estimates and assumptions that affect
the  reported amounts of assets and liabilities, disclosure of contingent assets
and  liabilities  and  the  amounts of revenues and expenses. Actual results may
differ  from  those  estimated.  In  the opinion of management, these statements
include  all adjustments necessary for a fair presentation of the results of all
interim  periods  reported  herein.  All  adjustments  are of a normal recurring
nature unless otherwise disclosed.  Certain information and footnote disclosures
prepared in accordance with generally accepted accounting principles either have
been  condensed  or  omitted  pursuant  to  SEC rules and regulations.  However,
management  believes  that  the  disclosures  made  are  adequate  for  a  fair
presentation of results of operations, financial position and cash flows.  These
consolidated  financial  statements  should  be  read  in  conjunction  with the
consolidated  financial  statements  and  accompanying  notes  included  in  the
Company's  latest  annual  report  on  Form  10-K/A.

BASIC  AND  DILUTED  EARNINGS  PER  SHARE

     Basic  and  diluted  earnings per share ("EPS") are calculated according to
the provisions of Statement of Financial Accounting Standards No. 128, "Earnings
Per  Share".  For  the Company, the numerator is the same for the calculation of
both  basic  and  diluted  EPS.  For  the  period  ended  March  31,  2000,  the
denominator  for  basic and diluted EPS is the same for two reasons.  First, the
net  loss  generated  in  the  period  would cause the inclusion of common stock
options  to be anti-dilutive.  Second, the average market price of the stock for
the  period  was below the exercise price for all options outstanding during the
period.  The  following  is  a reconciliation of the denominator used in the EPS
calculations  (in  thousands):
Three  Months
                                       Ended  March  31,
                                       -----------------
                                         2000    1999
                                        -----   -----
Weighted  Average  Shares
-------------------------
Basic EPS. . . . . . . . . . .          35,376  36,128
Effect of common stock options            -      2,208
                                        ------  ------
Diluted EPS. . . . . . . . . .          35,376  38,336
                                        ======  ======
For  the  period ending March 31, 1999, options to purchase 2,776 and 1,388
shares  of  common  stock  at  $42.78  and  $45.56 per share, respectively, were
outstanding  but  were  not  included  in the computation of diluted EPS for the
period  ending  March  31,  1999.

OTHER  MATTERS

     Certain  prior  period amounts have been reclassified to conform to current
period  presentation.

NOTE  2.     ACQUISITIONS

     On  June  30,  1999,  the  Company  purchased  DORN  Technology Group, Inc.
("DORN"),  a  risk and claims management company, for $33.2 million in cash plus
additional  consideration  of  up  to  $3.0  million  contingent upon the future
performance  of  DORN,  to be recorded as compensation expense as incurred until
2001.  DORN  owns  the  Riskmaster  claims  management  software  and  the Quest
healthcare  facility  software, and provides risk and claims management software
and  services  mainly to the US self-insured market. The Company intends to grow
DORN's  business  and  further  develop  the  Riskmaster  and  Quest  systems to
complement  its  existing  claims  products.

     On  June 30, 1999, the Company purchased Financial Administrative Services,
Inc.  ("FAS"),  a  provider  of  business process outsourcing ("BPO"), for $13.0
million  plus  additional consideration of up to $12.0 million contingent on the
future  performance  of  FAS, to be capitalized as additional goodwill when paid
until  2005.  FAS  uses  the  Company's  PolicyLink  system to support the rapid
introduction  of variable insurance products and annuities in a business process
outsourcing  environment.  The  Company  intends  to grow the business acquired.

     On  March  31,  1999,  the  Company  purchased  Legalgard  Partners,  L.P.
("Legalgard"),  a  legal  cost  containment  business  for  $23.2  million  plus
additional  consideration  of  up  to  $4.3  million  contingent upon the future
performance  of  Legalgard,  to  be recorded as compensation expense as incurred
until  2003. Legalgard provides legal cost containment services mainly to the US
property and casualty insurance industry using the Counsel Partnership System, a
proprietary  software  system.  The  Company  intends  to  continue  growing
Legalgard's  existing  services business and developing the technology acquired.

     The  acquisitions  above  have  been  recorded using the purchase method of
accounting. Accordingly, the Consolidated Statement of Operations of the Company
does  not  include the results of operations before the date of the acquisition.
NOTE  3.     CONTINGENCIES

     The  Company  is  involved in litigation commenced in February 2000, in the
District  Court of Dallas County, Texas, by Chase Manhattan Mortgage Corporation
("Chase")  related  to  the  Company's  mortgage  loan  origination products and
services.  The  complaint  alleges  breach  of  contract,  breach  of  warranty,
misrepresentation,  malpractice  and  mismanagement  and  seeks  a  declaratory
judgment  and damages in excess of $20.0 million including amounts paid by Chase
to the Company, internal costs, consulting fees, opportunity costs, reputational
costs, attorneys fees and costs and punitive and exemplary damages.  The Company
believes  that  the  allegations  are  without  merit and are subject to various
affirmative  defenses  and  counterclaims and will vigorously defend the matter.
The  Company  is  seeking  to  have  the  lawsuit  dismissed  or  stayed pending
alternative dispute resolution proceedings as required by the agreements between
the  parties.

     In  January  2000,  Computer Sciences Corporation ("CSC") filed a complaint
against  the  Company  alleging  that  the  Company  and  NeuronWorks, an entity
retained  by  the  Company in the development of Claims Outcome Advisor ("COA"),
misappropriated  CSC's  trade secrets related to CSC's Colossus product and used
such  trade  secrets  in  the  development  of  the  Company's  COA product. The
litigation  was  removed  from Texas State court and is currently pending in the
United States District Court for the Western District of Texas, Austin Division.
CSC's  complaint  alleges  unfair  competition,  product misappropriation, trade
secret  theft,  tortious  interference  with existing and prospective contracts,
aiding  and  abetting  breach  of  fiduciary  duty,  and civil conspiracy. CSC's
complaint seeks preliminary and permanent injunctive relief, damages, attorneys'
fees and punitive damages, all in an unspecified amount.  The Company has denied
the  allegations  against  it  and  asserted  various  affirmative  defenses and
counterclaims  against  CSC, including counterclaims for unfair trade practices,
false  representation,  false  promotion  and commercial disparagement under the
Lanham  Act,  business  disparagement,  injurious  falsehood,  defamation,  and
tortious  interference  with  existing  and prospective contractual and business
relationships.  On  March  22,  2000,  a  hearing  was held on CSC's request for
preliminary injunctive relief to enjoin the Company from marketing and licensing
COA.  CSC's  request for preliminary injunctive relief was denied.  The case has
been  set  for  trial  in  December  2000.  The Company believes CSC's remaining
claims  are  without  merit and is vigorously defending this matter and pursuing
relief  on  the  Company's  claims.

     On  January  7,  2000, following a morning news release by the Company that
fourth  quarter earnings would be below analyst estimates, the Company and three
of  its officers were named as defendants in an purported class action complaint
filed  on  behalf of purchasers of the Company's stock during the period between
October  22,  1998  and  January 6, 2000.  Since this initial filing, additional
purported  class  actions  have  been filed, three in the United States District
Court  for  the District of South Carolina and two in the United States District
Court  for  the Southern District of New York (which are in the process of being
transferred  to  South  Carolina),  purportedly  on  behalf of purchasers of the
Company's stock during the period between October 22, 1998 and February 9 or 10,
2000.
These class action lawsuits allege violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 based on, among other things, alleged misleading
statements,  alleged  failure  to disclose material adverse information, alleged
false  financial  reporting,  alleged  failure  to  report  trends,  demands  or
uncertainties,  and  alleged failure to implement and maintain adequate internal
controls.  Each  of  the  complaints  seeks  unspecified  compensatory  damages,
including  interest,  costs  and  attorney  fees.

At  a  hearing  held  on March 20, 2000, the court granted plaintiffs' motion to
consolidate  all  six  cases,  appointed  four  members  of  the  class  as lead
plaintiffs  and  approved  their  selection  of  lead counsel, directed that the
complaints  in  all but the first-filed case be dismissed without prejudice, and
directed  plaintiffs  to  file  an amended consolidated complaint.  The time for
filing  the  amended  complaint  has  been  extended  until  May  22,  2000.

     Although  the Company has not yet filed formal responses to these lawsuits,
the  Company  believes the claims are without merit and is vigorously pursuing a
full  defense  of  these  actions  and  allegations.

     On  March  10,  2000,  one  of  the Company's employees, suing allegedly on
behalf of herself and all former or current participants in the Company's 401(k)
Retirement  Savings  Plan  ("Plan")  during  the period October 22, 1998 through
February  10,  2000, commenced a purported class action against the Company, its
Chairman  and  three  members  of the Administrative Committee of the Plan.  The
action  alleges  that  the  Plan's  investment  in  the Company's stock violated
Sections  502(a)(2)  and (3) of ERISA and constituted a breach of fiduciary duty
given  defendants'  alleged  knowledge  that  the  Company's  stock  price  was
artificially inflated throughout the class period as a result of the same series
of alleged materially false and misleading statements that form the basis of the
securities  class  action  described  above.

     Although  the Company's time to respond to this complaint has yet to occur,
the  Company  believes  the  claims  are  without  merit  and intends to mount a
vigorous  defense  to  the  allegations.

     On  March  30,  2000,  the  Company  and  Politic  Acquisition  Corporation
("Politic"),  an  affiliate  of  Welsh, Carson, Anderson & Stowe, entered into a
merger agreement under which Politic will merge with the Company and between 75%
and 93% of the outstanding shares of Company common stock will be converted into
the  right  to  receive  $14  per  share  in cash.  The exact percentage will be
determined  by  an election procedure under which the Company's stockholders can
elect  to  retain  their  shares  or  receive  $14  per  share  in cash.  If the
stockholders  elect  to  retain  more  than 25% or less than 7% of their shares,
stockholders  will be subject to proration to bring the amount of cash and stock
within these limits.  The merger agreement is described in the Company's Current
Report  on Form 8-K dated March 31, 2000.  The merger is subject to the approval
of  the  holders  of  two-thirds  of  the outstanding shares of the Company at a
special  meeting  of  stockholders  which  will  be  scheduled.
Between  March  31,  2000, and May 5, 2000, four purported class action lawsuits
were filed against the Company and its directors in the Court of Common Pleas in
Richland  County,  South Carolina on behalf of all stockholders.  The complaints
allege  that  the  consideration  to be paid in the Politic merger is unfair and
grossly  inadequate  because  defendants  failed to conduct a "market check" and
because  the  Company  stock has consistently traded above $14 per share and its
market price is only temporarily depressed due to recent disappointing financial
results.  The complaints also allege that defendants have a substantial conflict
of  interest, to the extent they will continue their employment with the Company
after  the  merger.  The complaints seek an injunction directing that defendants
ensure  that  no  conflicts  exist that would prevent defendants from exercising
their  fiduciary  obligation  to  maximize  stockholder value, and an injunction
preventing  consummation  of the merger unless the Company implements a process,
such  as  an auction, to obtain the highest price for the Company, together with
an  award  of  costs  and  attorneys' fees.  The Company believes the claims are
without  merit  and  will  vigorously  defend  the  actions.

     In addition to the litigation described above, there are also various other
litigation  proceedings  and  claims arising in the ordinary course of business.
The  Company  believes  it  has meritorious defenses and is vigorously defending
these  matters.

     On  April  29,  1999, the Company received notice from the Internal Revenue
Service  ("IRS")  of  proposed  adjustments  to  its 1994, 1995 and 1996 federal
income  tax  returns. Should the IRS prevail in its position, a charge to income
of  approximately  $16.3  million  would  result.  The  Company  has submitted a
response to the IRS and is awaiting a formal decision.  Furthermore, the Company
strongly disagrees with the proposed adjustments and is vigorously defending its
position.

     While  the  resolution  of  any  of the above matters could have a material
adverse  effect on the results of operations in future periods, the Company does
not  expect  these matters to have a material adverse effect on its consolidated
financial  position.  The  Company,  however,  is unable to predict the ultimate
outcome  or  the  potential  financial  impact  of  these  matters.
NOTE  4.     SEGMENT  INFORMATION

     The  Company's operating segments are the four revenue-producing components
of the Company for which separate financial information is produced for internal
decision  making  and  planning  purposes.  The  segments  are  as  follows:

1. Property and casualty enterprise software and services (generally referred to
as  "property  and casualty").  This segment provides software products, product
support,  professional services and outsourcing primarily to the US property and
casualty  insurance  market.

2. Claims and Risk Management (generally referred to as "claims").  This segment
provides  software  products,  product  support,  professional  services  and
outsourcing  primarily  to  the  claims  management function of the US insurance
industry  and risk management, i.e. self-insured, marketplace. Prior to the 2000
first  quarter,  claims  was  included  in  the  property  and casualty segment.

3.  Life  and  financial  solutions  enterprise software and services (generally
referred  to as "life and financial solutions").  This segment provides software
products,  product  support,  professional services and outsourcing primarily to
the  US  life  insurance  and  related  financial  services  markets.

4.  International.  This  segment  provides  software products, product support,
professional  services  and  outsourcing  to  the property and casualty and life
insurance  markets  primarily  in  Europe,  Asia,  Australia  and  Canada.

Prior  to  the  2000  first  quarter, life information services and property and
casualty  information services were included as segments for results included in
discontinued  operations.  Life  information  services  was  sold  in  May 1998.
Property  and  casualty  information  services  was  sold  in  August  1997.
Information about the Company's operations for the three months ended March
31,  2000  and  1999  is  as  follows:
Three  Months
                                        Ended  March  31,
                                      -------------------
                                          2000     1999
                                        ------   ------
                                         (In  thousands)
REVENUES  FROM  EXTERNAL  CUSTOMERS
Property and casualty. . . . . .  $      54,451   $ 70,824
Claims and risk management . . .          7,317      2,867
Life and financial solutions . .         47,868     41,634
                                  --------------  ---------
  Total US revenues. . . . . . .        109,636    115,325
International. . . . . . . . . .         38,706     44,964
                                  --------------  ---------
  Total revenues . . . . . . . .  $     148,342   $160,289
                                  ==============  =========

OPERATING INCOME (EXPENSE)
Property and casualty. . . . . .  $       5,189   $ 19,590
Claims and risk management . . .            455      2,304
Life and financial solutions . .         (4,776)     8,107
Corporate and US administrative.        (12,874)    (8,022)
                                  --------------  ---------
  Total US operating income. . .        (12,006)    21,979
                                  --------------  ---------

International. . . . . . . . . .         (2,047)     2,280
International administrative . .         (1,944)    (1,779)
                                  --------------  ---------
  Total international. . . . . .         (3,991)       501
                                  --------------  ---------

  Operating (loss) income. . . .        (15,997)    22,480

Equity in earnings of
  unconsolidated affiliates. . .            441        140
Minority interest. . . . . . . .             18        (38)
Other income and expenses. . . .         (4,305)    (1,241)
Income tax (benefit) expense . .         (7,701)     7,890
                                  --------------  ---------
  Net (loss) income. . . . . . .  $     (12,142)  $ 13,451
                                  ==============  =========
NOTE  5.  SPECIAL  CHARGES

     The  Company  considers  special  charges  to  be unusual events or unusual
transactions  related  to  continuing  business  activities.

     The  Company's operating results for the 2000 first quarter include pre-tax
special  charges  of approximately $12.7 million which are net of a $2.1 million
gain  on the sale of a 20 percent interest in an unconsolidated subsidiary and a
$1.2  million  recovery  of  a  banking  division receivable which was initially
reserved  as a special charge in the 1999 fourth quarter.  The majority of these
charges  have  or  will  be  paid  in  cash.

Restructuring  and  other  charges  of  approximately  $12.8  million  includes
approximately  $7.6  million  of  severance related to the reduction in force of
approximately  6  percent or 350 employees, announced in the 2000 first quarter.
Additionally, $5.2 million is included for customer dispute and litigation costs
(see  Note  3,  "Contingencies").

The  Company  continues  to  recognize  amortization expense related to software
products written down in the 1999 third and fourth quarters.  As a reflection of
their  estimated  impaired  status,  these  products  are being amortized on the
revenue  basis  which  is  faster  than  straight-line  method.  Revenue  based
amortization  related  to  products  written  down  in the 1999 third and fourth
quarters resulted in approximately $1.0 million more amortization expense in the
2000  first  quarter  than  would  have  been recognized under the straight-line
method.

     Selling,  general  and  administrative  expenses for the 2000 first quarter
includes  approximately  $1.4 million of brand expenses associated with changing
the  name  of  the  Company  (see  Note  6,  "Subsequent  Event").

     Investment  income  includes  a  $2.1  million  gain  on  the sale of a 20%
interest  in  an  unconsolidated  subsidiary, and interest expense includes $1.0
million of amortization of credit facilities fees paid in the 2000 first quarter
to  amend  the  Company's  existing  credit  facilities.

NOTE  6.  SUBSEQUENT  EVENTS

     On  April  28,  2000,  the  Company  filed with the Securities and Exchange
Commission  a  registration statement on Form S-4 related to the proposed merger
of  the  Company  with Politic Acquisition Corp., an affiliate of Welsh, Carson,
Anderson  &  Stowe.  Also  on April 28, 2000, the Company received a letter from
Electronic  Data  Systems  Corporation  ("EDS"),  in  which  EDS  set  forth  a
non-binding,  preliminary  proposal  to  acquire  100% of the outstanding common
stock  of the Company for $18 to $20 per share, in cash.  The board of directors
 authorized  the Company and its advisors to explore this proposal with EDS.
On  April  28, 2000, the Company issued a news release that included EDS' letter
and filed the news release on May 1, 2000, under Rule 425.  On May 15, 2000, EDS
issued  a  news  release announcing it had withdrawn its proposal to acquire the
Company.

On  May  1,  2000, the Company began doing business as Mynd Corporation ("Mynd")
following  an  earlier  announcement  of  plans  to  change  the Company's name.
Officially  changing  the  Company's  name  requires  a  two-thirds  vote of the
shareholders at a shareholder's meeting yet to be scheduled.  If approved by the
shareholders,  the  Company  will  formally  change its legal name with relevant
authorities  including  the  New  York  Stock  Exchange.  Meanwhile,  management
intends  to  proceed  with a campaign to promote acceptance and awareness of the
new  name.
POLICY MANAGEMENT SYSTEMS CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion and analysis provides information which management
believes  is  relevant  to  an  assessment  and  understanding  of the Company's
consolidated  results  of  operations  and  financial condition.  The discussion
should  be  read  in  conjunction with the consolidated financial statements and
notes  thereto  contained  in  Part  I  of this report on Form 10-Q and with the
Company's  Annual  Report  on  Form 10-K/A for the year ended December 31, 1999.

                              RESULTS OF OPERATIONS

     Set  forth  below  are certain operating items expressed as a percentage of
revenues and the percent increase (decrease) for those items between the periods
presented:
2000 vs. 1999
                                                                    Percent
                                    Percentage of Revenues   Increase (Decrease)
                                   ------------------------  -------------------
                                               Three                 Three
                                            Months  Ended            Months
                                              March  31,             Ended
                                            ------------
                                             2000   1999            March  31
                                            -----  -----          --------------
Revenues
 Licensing . . . . . . . . . . . . .        17.7%   21.7%             (24)%
 Services. . . . . . . . . . . . . .        82.3    78.3               (3)
                                           ------  ------
                                           100.0   100.0               (7)
                                           ------  ------
Operating expenses
 Cost of revenues
  Employee compensation and benefits        53.5    46.0                8
  Computer & communication expenses.         9.2     7.5               14
  Depreciation & amortization
   property, equipment &
   capitalized software costs. . . .         9.9    10.0               (9)
  Other costs & expenses . . . . . .         8.3     4.6               66
 Selling, general &
   administrative expenses . . . . .        19.0    16.0               10
 Amortization of goodwill and
   other intangibles . . . . . . . .         2.3     1.9               10
 Restructuring and other charges . .         8.6       -              100
                                           ------  ------
                                           110.8    86.0               19
                                           ------  ------
Operating (loss) income. . . . . . .       (10.8)   14.0             (171)
Equity in earnings of unconsolidated
   affiliates. . . . . . . . . . . .         0.3     0.1              215
Other income and expenses. . . . . .        (2.9)   (0.7)             247
                                           ------  ------
(Loss) income before income taxes. .       (13.4)   13.4             (193)
Income tax (benefit) expense . . . .        (5.2)    5.0             (198)
                                           ------  ------
Net (loss) income. . . . . . . . . .       (8.2)%    8.4%            (190)%
                                           ======  ======
THREE MONTH COMPARISON

REVENUES
Three  Months
                                 Ended  March  31,
                                 -----------------
Licensing                      2000    1999   Change
---------                     -----   -----   ------
                             (Dollars  in  Millions)
Initial charges. . . . . . .  $ 9.1   $17.5   (48)%
Monthly charges. . . . . . .   17.2    17.3       -
                              ------  ------
                              $26.3   $34.8   (24)%
                              ======  ======

Percentage of total revenues   17.7%   21.7%
                              ------  ------
In  licensing  the  Company's  products,  customers  generally  obligate
themselves  to a non-refundable initial license charge and a monthly license fee
payable  over  a  specified  period  of  time,  which  is  usually  six  years.

The  monthly  license charge entitles the customer, over the contract period, to
use  the  licensed  product  and  to  receive  product support and enhancements.

  Initial  licensing

     Initial  license  revenues  decreased $8.4 million for the first quarter of
2000  compared  with  the first quarter of 1999, with the following increases or
decreases  by  business  segment: property and casualty down 88% ($7.1 million);
claims  down  7%  ($0.2  million);  life  and financial solutions down 52% ($1.7
million);  and  international  increased  18%  ($0.6  million).

The emergence of the internet as a viable distribution channel between insurers,
agents,  suppliers  and consumers, and the resulting change in technological and
functional  requirements,  requires  the  Company to transition its products and
business  models  to  capitalize  on  this market change.  The company's results
reflect  this  transition.

Lingering customer Y2K concerns and uncertainty surrounding the Company's credit
agreements  and  the  delayed  filing  of the Company's 1999 annual report had a
negative  effect  on  initial  licensing  activity  in  the  2000 first quarter.
Furthermore,  initial  license  charges  for  the  first  quarter of 2000 do not
include  any  right-to-use  licenses.  This  compares  to  $6.1  million  in
right-to-use  licenses  for  the  first  quarter of 1999.  Right-to-use licenses
represent  the acquisition by certain customers of the right-to-use component of
their  remaining monthly license charge obligation, if any, plus the acquisition
of  a  perpetual  right-to-use  the  product  thereafter.  Since  these types of
licenses  represent  an  acceleration  of  future  revenues,  they reduce future
monthly  license  charges.

First  quarter  1999  initial  license  charges include the first license of the
Company's  new  workplace injury claims management tool, Claims Outcome Advisor,
which  was  sold  in  conjunction  with  the  purchase  of  Legalgard.
Set  forth  below  is a comparison of initial license revenue by segment for the
periods  ending  March  31,  2000  and  1999,  respectively.
Three  Months
                            Ended  March  31,
                            -----------------
                               2000    1999
                              -----   -----
(Dollars  in  Millions)
Property and casualty. . . .  $1.0   $ 8.1
Claims . . . . . . . . . . .   2.7     2.9
Life and financial solutions   1.5     3.2
International. . . . . . . .   3.9     3.3
                              -----  ------
                              $9.1   $17.5
                              =====  ======

Percentage of total revenues   6.1%   10.9%
                              -----  ------
Monthly  licensing

     Monthly license charges remained relatively unchanged for the first quarter
of  2000 compared with the first quarter of 1999 with the following increases or
decreases  by  business  segment:  property and casualty down 15% ($1.1 million)
reflecting  the impact of right-to-use licenses in prior years; claims increased
to $1.5 million; life and financial solutions remained relatively unchanged; and
international  down  9%  ($0.5  million).

     Set forth below is a comparison of monthly licensing revenue by segment for
the  periods  ending  March  31,  2000  and  1999,  respectively.
Three  Months
                             Ended  March  31,
                             -----------------
                               2000    1999
                              -----   -----
(Dollars  in  Millions)
Property and casualty. . . .  $ 6.4   $ 7.5
Claims . . . . . . . . . . .    1.5       -
Life and financial solutions    5.0     5.0
International. . . . . . . .    4.3     4.8
                              ------  ------
                              $17.2   $17.3
                              ======  ======

Percentage of total revenues   11.6%   10.8%
                              ------  ------
Three  Months
                                 Ended  March  31,
                                 -----------------
Services                          2000    1999   Change
--------                         -----   -----   ------
                              (Dollars  In  Millions)
Professional services & ITO.  $       97.8   $109.8    (11)%
BPO                                   23.1 .   15.4     51
Other. . . . . . . . . . . .           1.1      0.3     237
                              -------------  -------
                              $      122.0   $125.5     (3)%
                              =============  =======

Percentage of total revenues          82.3%    78.3%
                              -------------  -------
The  Company's  services  revenue  consists primarily of Professional services &
Information  Technology  Outsourcing  ("ITO")  and  Business Process Outsourcing
("BPO").  Services  revenue is derived from professional support services, which
include  implementation  and  integration  assistance,  consulting and education
services  and  outsourcing  services.

  Professional  services  &  ITO

Professional  services  &  ITO  revenues  decreased  $12.0 million for the first
quarter  of  2000  compared  with  the first quarter of 1999, with the following
increases  or  decreases  by  business  segment:  property and casualty down 22%
($9.4  million);  claims up $3.2 million; life insurance and financial solutions
up  7% ($1.9 million); and international down 21% ($7.7 million).  The decreases
are principally due to weak initial licensing activity during 1999. The increase
in  claims  is  primarily due to the Company's 1999 acquisitions. The 1999 first
quarter  revenues  include  $1.6  million for professional services rendered and
received  in connection with the settlement of a dispute with a customer who has
terminated  its  relationship  with  the Company. Amounts paid by the Company in
connection  with  the  resolution  of this dispute were covered by insurance and
existing  legal  reserves  and had no impact on the Company's operating results.

     Set  forth  below is a comparison of professional services & ITO revenue by
segment  for  the  periods  ending  March  31,  2000  and  1999,  respectively.
Three  Months
                             Ended  March  31,
                             -----------------
                                2000    1999
                               -----   -----
(Dollars  in  Millions)
Property and casualty. . . .  $34.2   $ 43.6
Claims . . . . . . . . . . .    3.2        -
Life and financial solutions   31.5     29.6
International. . . . . . . .   28.9     36.6
                              ------  -------
                              $97.8   $109.8
                              ======  =======

Percentage of total revenues   65.9%    68.5%
                              ------  -------
BPO

     BPO  revenues increased $7.7 million for the first quarter of 2000 compared
with  the  first  quarter  of  1999,  with  the  following increases by business
segment:  property  and  casualty  up  5%  ($0.6  million);  life  insurance and
financial  solutions  up  157%  ($6.0  million)  due  to internal growth and the
acquisition  of  FAS  ($2.3  million);  and  international  up  $1.1  million.
Set forth below is a comparison of BPO revenue by segment for the periods ending
March  31,  2000  and  1999,  respectively.
Three  Months
                              Ended  March  31,
                              -----------------
                                2000    1999
                               -----   -----
(Dollars  in  Millions)
Property and casualty. . . .  $11.9   $11.3
Claims . . . . . . . . . . .      -       -
Life and financial solutions    9.8     3.8
International. . . . . . . .    1.4      .3
                              ------  ------
                              $23.1   $15.4
                              ======  ======

Percentage of total revenues   15.6%    9.6%
                              ------  ------
OPERATING  EXPENSES

COST  OF  REVENUES

     Employee  compensation  and  benefits increased 8% for the first quarter of
2000  compared  with the first quarter of 1999, due primarily to acquisitions in
1999  (see  Note  2  of  Notes to Consolidated Financial Statements). Before the
effect  of  1999  acquisitions, employee compensation and benefits for the first
quarter  of  2000  remained  relatively  unchanged  when compared with the first
quarter  of  1999  with  reductions  in  force  being  offset  by growth in BPO.
Compensation  and  benefits  increased  14%  ($7.0 million)   domestically   and
decreased 6%  ($1.4  million)  internationally.

     Computer and communications expenses increased 14% for the first quarter of
2000  compared  with  the  first  quarter  of  1999  due  to  the Company's 1999
acquisitions,  an  increase  in  processing  volume  and  data  center operating
software  license  fees.

     Depreciation  and  amortization  of  property,  equipment  and  capitalized
software  costs  decreased 9% primarily due to accelerated amortization recorded
in  the  1999 third and fourth quarters, partially offset by the acquisitions of
Dorn  and  Legalgard.  As a percentage of revenue, depreciation and amortization
remained  relatively  unchanged  for the first quarter of 2000 compared with the
first  quarter  of  1999.

     The Company continues to recognize amortization expense related to software
products written down in the 1999 third and fourth quarters.  As a reflection of
their  estimated  impaired  status,  these  products  are being amortized on the
revenue  basis  which  is  faster  than  straight-line  method.  Revenue  based
amortization  related  to  products  written  down  in the 1999 third and fourth
quarters  resulted  in  approximately $1.0 million  more amortization expense in
the  2000  first quarter than would have been recognized under the straight-line
method.

     Other  operating  costs and expenses increased 66% for the first quarter of
2000  compared  with  the  first  quarter of 1999.  This increase was due to the
Company's acquisitions in 1999 and a decrease in the amounts capitalized related
to  internal  software development and internal use systems partially off-set by
the  recovery  of approximately $1.2 million of receivables reserved in the 1999
fourth  quarter.
SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling,  general  and  administrative expenses increased 10% for the first
quarter  of  2000  compared  with  the  first quarter of 1999 due largely to the
Company's  1999  acquisitions  and  approximately $1.4 million of brand expenses
associated  with  changing  the name of the Company. (see Note 6 of Notes to the
Consolidated  Financial  Statements  regarding  branding).

AMORTIZATION  OF  GOODWILL  AND  OTHER  INTANGIBLES

     Amortization  of goodwill and other intangibles increased 10% for the first
quarter  of  2000  compared  with  the first quarter of 1999, principally due to
increased  amortization  related  to  the  Company's  1999  acquisitions.

RESTRUCTURING  AND  OTHER  CHARGES

     Restructuring  and other charges include approximately $7.6 million of cash
charges  paid or to be paid as a result of an initiative taken by the Company in
the  2000 first quarter for a worldwide reduction in force of six percent or 350
employees.  An  additional  $5.2 million relates to a contingent liability ($3.5
million)  established  pending  the  outcome  of  a dispute settlement and legal
expenses  ($1.7  million)  associated with the CSC and shareholder lawsuits (see
Note  3  of  Notes  to  Consolidated  Financial  Statements).

OPERATING  (LOSS)  INCOME

     The 2000 first quarter produced an operating loss of $16.0 million compared
with  the  1999  first quarter operating income of $22.5 million. The 2000 first
quarter  operating  loss  includes  the  banking division operating loss of $4.1
million.  The  2000  first  quarter  operating loss includes approximately $12.7
million of unusual events or unusual transactions related to continuing business
activities  described  as  special  charges  (see  Note  5  of  the Notes to the
Consolidated Financial Statements). Before these special charges, the 2000 first
quarter  produced  an operating loss of approximately $2.1 million compared with
operating income of $22.5 million in the 1999 first quarter. Also before special
charges,  decreases  in  segment  operating  income  were: property and casualty
decreased 58%, claims decreased 78%, life and financial solutions decreased 112%
and  international  decreased  487% (see discussion of "Revenues" and "Operating
Expenses"  above).

     A  significant  portion  of  both  the Company's revenues and its operating
income  is  derived  from  initial  licensing agreements received as part of the
Company's  software  licensing  activities.  Because  a  substantial  portion of
initial  licensing  revenues  are recorded at the time new systems are licensed,
there  can  be  significant fluctuations from quarter to quarter in revenues and
operating  income  derived  from  licensing  activities.  This  is  attributable
principally  to  the  timing  of  customers'  decisions  to  enter  into license
agreements  with  the  Company,  which  the  Company  is  unable  to  control.

Set  forth  below is a comparison of initial license revenues for the last eight
quarters  expressed  as  a  percentage of total revenues for each of the periods
presented:
2000            1999                   1998
                           ----- ---------------- ----------------------------
                             1st   4th   3rd   2nd   1st     4th    3rd    2nd
                           ----- ----------------------- ---------------------
                                          (Dollars  in  Millions)
Initial license revenues   $9.1    $8.7  $19.2  $26.7  $17.5  $27.4  $14.7  $13.0
% of total revenues         6.1%    6.1%  11.4%  15.4%  11.0%  16.0%   9.7%   9.0%
The  increasing  rate  of  change  in  the insurance and banking industries
coupled  with  the rapid evolution of eCommerce technology and the volatility of
initial  license  revenues,  as  illustrated  by the above table, is leading the
Company  to  consider  new  business  models that place less emphasis on initial
license  revenue  and  place  more  emphasis  on  transaction based revenue. The
Company  expects  this transition to occur gradually over the next several years
and  will  likely  affect  the  amount  and  timing of revenue recognized in the
Company's  financial  statements.

OTHER  INCOME  AND  EXPENSE

          Investment  income  includes  a $2.1 million gain on the sale of a 20%
interest  in  an  unconsolidated  subsidiary.

     Interest expense increased 348% for the first quarter of 2000 compared with
the  first  quarter  of 1999, principally due to higher levels of borrowed funds
under the Company's credit agreements and $1.0 million of amortization of credit
facilities  fees  paid  in the 2000 first quarter to amend the Company's  credit
agreements.  The  nominal  interest  rates  applicable  to  borrowings under the
Company's credit agreements during the first quarter of 2000 ranged from 8.75 to
9.60  percent.

INCOME  TAXES

The effective income tax rate (income taxes expressed as a percentage of pre-tax
income)  was  38.8%  and  37.0%  for  the  first  quarters  of  2000  and  1999,
respectively.  The  effective  rate for the first quarter of 2000 is higher than
the  federal  statutory  rate  principally  due to the effect of state and local
income  taxes.
LIQUIDITY AND CAPITAL RESOURCES
March  31,  December  31,
                                                    2000         1999
---------------------------------------------------------------------
                                                  (Dollars  in  Millions)
Cash and equivalents and marketable
  securities. . . . . . . . . . . .                $ 15.2     $ 17.8
Current assets. . . . . . . . . . .                 203.5      212.0
Current liabilities . . . . . . . .                 152.8       76.0
Working capital . . . . . . . . . .                  50.7      136.0
Long-term debt. . . . . . . . . . .                 150.0      227.0
Three  Months  Ended
                                                         March  31,
                                                     2000         1999
----------------------------------------------------------------------
                                                  (Dollars  in  Millions)
Cash provided by operations. . . . . . . . .       $ 27.6    $  7.5
Cash used by investing activities. . . . . .        (14.6)    (55.7)
Cash (used) provided by financing activities        (15.7)     36.5
The  Company's  total debt, net of cash and marketable securities, at March
31,  2000  was  $205.0  million,  a  decrease from the comparable amount ($213.0
million)  at  December  31,  1999.  Historically, the Company has used cash from
operations  for  the  development  and  acquisition  of  new  products,  capital
expenditures,  acquisition of businesses and repurchases of the Company's stock.
For  the first quarter of 2000, compared with the first quarter of 1999 however,
the  Company  significantly  decreased  expenditures  in  all  these  areas.

As of March 31, 2000, the Company had the following credit facilities:  a $180.0
million line of credit expiring in July 2001 that had $150.0 million outstanding
and  a  $70.0  million term loan expiring in January 2001 that had $70.0 million
outstanding.  Because  of the net loss in the fourth quarter, the Company was in
violation  of  one of the financial covenants of both the line of credit and the
term  loan.  Amendments  of  the  related  agreements were executed in March and
April  2000  that  returned  the  Company  to  compliance  with these covenants.
Additionally,  the  amendments include an extension of the term loan maturity to
January  31,  2001  and,  among  other  things, an increase in the interest rate
payable  on  the term loan and line of credit, a security agreement covering the
Company's assets and a restriction on the Company's ability to make acquisitions
and  certain  similar investments and repurchases of the Company's common stock.
Total funds available under the line of credit will be reduced to $125.0 million
on  April  1,  2001.

The results for the quarter ended March 31, 2000, resulted in a violation of the
Leverage Ratio financial covenant of both the credit and term loan agreements as
amended.  Consequently,  the  Company entered into an amendment in April waiving
this covenant through December 30, 2000.  In connection with this amendment, the
Company  agreed  to establish a new covenant applicable during the waiver period
based  upon quarterly consolidated adjusted cash flows, as defined, less capital
expenditures.  The  amendment requires that quarterly consolidated adjusted cash
flow  less  capital  expenditures at least equal  $(2.0) million for the quarter
ended  March  31,  2000,  $15.0  million for the quarter ended June 30, 2000 and
$30.0  million  for  the  quarter  ended  September  30,  2000.

     Future credit availability under the Company's amended credit agreements is
dependent  upon the Company achieving improvements in its operating performance.
In  light  of the uncertainties surrounding future performance and the Company's
current  debt  position, the Company, prior to making an agreement with Politic,
concluded  that it must restructure its capital base in order to reduce debt and
take  advantage  of  various  growth  opportunities.  Accordingly,  the Board of
Directors authorized the Company's management to explore various alternatives to
achieve  efficiencies  and  obtain  equity  or  other  financing.

     Significant  expenditures  planned  for  2000,  excluding  new  product
development  are  as  follows: acquisition of data processing and communications
equipment,  support  software,  buildings,  building  improvements  and  office
furniture, fixtures and equipment and costs related to the continued enhancement
of  existing  software  products.

                     FACTORS THAT MAY AFFECT FUTURE RESULTS

     The  Company's operating results and financial condition may be impacted by
a  number of factors, including, but not limited to, the following, any of which
could  cause  actual  results  to  vary  materially  from current and historical
results  or  the  Company's  anticipated  future  results.

Currently,  the  Company's  business  is  focused  principally within the global
property  and  casualty and life and financial services industries.  Significant
changes in the regulatory or market environment of these industries could impact
demand  for the Company's software products and services. Additionally, there is
significant  competition  for the Company's products and services, and there can
be  no  assurance  that  the Company's current products and services will remain
competitive,  or  that  the  Company's development efforts will produce products
with  the  cost and performance characteristics necessary to remain competitive.
Furthermore, the market for the Company's products and services is characterized
by  rapid  changes  in  technology and the emergence of the Internet as a viable
insurance  distribution channel.  The Company's success will depend on the level
of  market  acceptance of the Company's products, technologies and enhancements,
and its ability to introduce such products, technologies and enhancements to the
market  on  a  timely  and  cost  effective  basis,  and  maintain a labor force
sufficiently  skilled  to  compete  in  the  current  environment.

Contracts  with  governmental  agencies  involve  a  variety  of  special risks,
including  the risk of early contract termination by the governmental agency and
changes  associated  with newly elected state administrations or newly appointed
regulators.

The  timing  and  amount  of  the  Company's revenues are subject to a number of
factors,  such as the timing of customers' decisions to enter into large license
agreements with the Company, which make estimation of operating results prior to
the  end  of  a  quarter  or  year  extremely  uncertain.

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements, as
well  as  the  reported  amounts  of  revenues and expenses during the reporting
period. Amounts affected by these estimates include, but are not limited to, the
estimated  useful lives, related amortization expense and carrying values of the
Company's intangible assets and the net realizable value of capitalized software
development  costs  and  accrued  reserves established for contingencies such as
litigation  and  restructuring  activities.  Changes  in  the  status of certain
matters  or  facts  or  circumstances underlying these estimates could result in
material  changes to these estimates, and actual results could differ from these
estimates.

     A  significant  portion  of  both  the Company's revenues and its operating
income  is  derived  from  initial  licensing agreements received as part of the
Company's software licensing activities.  Because a substantial portion of these
revenues are recorded at the time systems are licensed, there can be significant
fluctuations  from  quarter-to-quarter  and  year-to-year  in  the  revenues and
operating  income  derived  from  licensing  activities.  This  is  attributable
principally  to  the  timing  of  customers'  decisions  to  enter  into license
agreements  with  the  Company,  which  the  Company  is  unable  to  control.

     The  Year  2000  has caused an unprecedented level of investment in systems
and  remediation  services  that  may  adversely  affect customers' decisions to
invest  in  new  application  software.  In  addition, the Company believes that
system  evaluations  and  decision processes are being affected by uncertainties
related  to  the  Internet  and its emergence as a viable insurance distribution
channel  is  causing  a re-evaluation of the traditional methods of distribution
for  insurance  products.  The Company also believes that in order for insurance
companies to capitalize on this new distribution method they will be required to
redesign  their  business models and related support systems.  The issues raised
by  the  emergence  of  the Internet and related technology requirements will be
distracting  and  confusing  for  many  insurance  companies  and complicate the
process  of  transitioning  the  insurance  industry  to  modern  architecture.
Therefore,  customer  uncertainty  as  to their Internet and enterprise business
strategies  may  extend  sales  cycles  for large enterprise systems.  The above
factors limit the Company's ability to accurately predict licensing and services
demand.

     Because  of  the  foregoing factors, as well as other factors affecting the
Company's operating results, past financial performance should not be considered
to  be  a reliable indicator of future performance, and investors should not use
historical  trends  to  anticipate  results  or  trends  in  future  periods.

SAFE  HARBOR  STATEMENT  UNDER  THE  PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:  Statements  in  this report that are not descriptions of historical facts
may  be  forward-looking statements that are subject to risks and uncertainties,
including  economic,  competitive  and  technological  factors  affecting  the
Company's  operations,  markets, products, services and prices, as well as other
specific  factors  discussed  above  and  in  the  Company's  filings  with  the
Securities  and  Exchange  Commission.  These and other factors may cause actual
results  to  differ  materially  from  those  anticipated.
PART II
                                OTHER INFORMATION

                      POLICY MANAGEMENT SYSTEMS CORPORATION

ITEM  1.  LEGAL  PROCEEDINGS

     See  Note  3, Contingencies, of Notes to Consolidated Financial Statements,
which  is  incorporated  by  reference  in  this  Item.

ITEMS  2,  3,  4  AND  5  are  not  applicable.

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K.

Exhibits

     Exhibits  required  to be filed with this Quarterly Report on Form 10-Q are
listed  in  the  following  Exhibit  Index.

Reports  on  Form  8-K

     The  Company  filed  a report under Item 5 Other Events on January 7, 2000,
disclosing  that  the  Company  did  not  expect to report earnings per share in
excess  of the low teens (cents per share) for the fourth quarter.  No financial
statements  were  filed  with  this  8-K.

The  Company  filed  a  report  under  Item  5  Other  Events on March 31, 2000,
disclosing  that  the  Company and Politic Acquisition Corp. ("Acquisition"), an
affiliate of Welsh, Carson, Anderson & Stowe, entered into an Agreement and Plan
of  Merger  pursuant  to  which  Acquisition  will  merge  into  the  Company.
POLICY MANAGEMENT SYSTEMS CORPORATION

                                   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.

                      POLICY MANAGEMENT SYSTEMS CORPORATION
                      -------------------------------------
                                  (Registrant)

Date:  May  15,  2000               Timothy  V.  Williams
                                    Executive  Vice  President
                                    (Chief  Financial  Officer)
POLICY  MANAGEMENT  SYSTEMS  CORPORATION

                                EXHIBIT  INDEX

Exhibit
-------
Number
------

2.     PLAN  OF  ACQUISITION,  REORGANIZATION,  ARRANGEMENT,  LIQUIDATION  OR
SUCCESSION

A.     Agreement and Plan of Merger between Politic Acquisitions Corporation and
Policy  Management Systems Corporation dated March 30, 2000 (filed as an exhibit
to  Form  8-K  dated  March  30,  2000  and is incorporated herein by reference)

B.     Amended  and  Restated  Agreement and Plan of Merger between Politic
Acquisition  Corporation  and  Policy Management Systems Corporation dated as of
April  27,  2000 (filed as an exhibit to Form S-4, Registration Statement, dated
April  29,  2000  and  is  incorporated  herein  by  reference.

3.     ARTICLES  OF  INCORPORATION  AND  BY-LAWS

A.     Bylaws of the Company, as amended through September 2, 1999 incorporating
all amendments thereto subsequent to July 19, 1994 (filed as an Exhibit to Form
10-Q  for  the quarter  ended September 30, 1999, and is incorporated herein by
 reference)

B.     Articles  of Incorporation of the Company, as amended through October 13,
1994,  incorporating  all  amendments  thereto  subsequent  to December 31, 1993
(filed  as  an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

4.     INSTRUMENTS  DEFINING  THE  RIGHTS  OF  SECURITY  HOLDERS,  INCLUDING
INDENTURES

A.     Specimen forms of certificates for Common Stock of the Company (filed as
an  Exhibit  to Registration Statement No. 2-74821, dated December 16, 1981, and
is  incorporated  herein  by  reference)

B.     Articles  of Incorporation of the Company, as amended through October 13,
1994,  incorporating  all  amendments  thereto  subsequent  to December 31, 1993
(filed  as  an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

10.     MATERIAL  CONTRACTS

A.     Conformed  copy  of  Development  and  Marketing  Agreement  between
International  Business  Machines  Corporation  and  Policy  Management  Systems
Corporation,  dated  July 26, 1989 (File No. 0-10175 - filed under cover of Form
SE  filed  on  September  29,  1989,  and  is  incorporated herein by reference)

B.     Policy  Management  Systems  Corporation 1989 Stock Option Plan (File No.
0-10175  -  filed  under cover of Form SE on March 22, 1991, and is incorporated
herein  by  reference)
C.     Deferred Compensation Agreement with G. Larry Wilson (filed as an Exhibit
to Form 10-K for the year ended December 31, 1993, and is incorporated herein by
reference)

D.     Employment  Agreement  with  Stephen  G. Morrison (filed as an Exhibit to
Form  10-Q  for  the quarter ended March 31, 1994, and is incorporated herein by
reference)

E.     Stock  Option/Non-Compete Agreement with Stephen G. Morrison (filed as an
Exhibit  to  Form 10-Q for the quarter ended March 31, 1994, and is incorporated
herein  by  reference)

F.     Employment  Agreement  with  Timothy  V. Williams (filed as an Exhibit to
Form  10-K  for  the year ended December 31, 1994, and is incorporated herein by
reference)

G.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as an Exhibit to Form 10-Q for the quarter ended September 30, 1992, and
is  incorporated  herein  by  reference)

H.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as an Exhibit to Form 10-Q for the quarter ended September 30, 1994, and
is  incorporated  herein  by  reference)

I.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as  an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

J.     Policy  Management  Systems Corporation 1993 Long-Term Incentive Plan for
Executives  (filed  as  an  Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

K.     First  Amendment  to the Policy Management Systems Corporation 1989 Stock
Option  Plan  (filed  as an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

L.     Fourth  Amendment to the Policy Management Systems Corporation 1989 Stock
Option  Plan  (filed as an Exhibit to Form 10-Q for the quarter ending March 31,
1995,  and  is  incorporated  herein  by  reference)

M.     Second  and Third Amendments to the Policy Management Systems Corporation
1989  Stock  Option  Plan (filed as an Exhibits and to Form 10-Q for the quarter
ended  June  30,  1995,  and  is  incorporated  herein  by  reference)

N.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as  an  Exhibit to Form 10-Q for the quarter ended June 30, 1995, and is
incorporated  herein  by  reference)

O.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as  an  Exhibit  to  Form  10-K for year ended December 31, 1995, and is
incorporated  herein  by  reference)
P.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together  with schedule identifying particulars for each named executive officer
(filed  as  an  Exhibit  to  Form  10-K for year ended December 31, 1995, and is
incorporated  herein  by  reference)

Q.     Stock  Option/Non-Compete  Agreement  with  Timothy  V.  Williams  dated
February  1,  1994 (filed as an Exhibit to Form 10-K for year ended December 31,
1995,  and  is  incorporated  herein  by  reference)

R.     Stock Option/Non-Compete Agreement with Timothy V. Williams dated May 10,
1995  (filed as an Exhibit to Form 10-K for year ended December 31, 1995, and is
incorporated  herein  by  reference)

S.     Registration  Rights  Agreement,  dated  March  8,  1996,  between Policy
Management  Systems  Corporation  and  Continental Casualty Company (filed as an
Exhibit  to  Form 10-Q for the quarter ended March 31, 1996, and is incorporated
herein  by  reference)

T.     Shareholders Agreement dated March 8, 1996 between Policy Management
Systems Corporation  and  Continental Casualty Company (filed as an Exhibit to
Form 10-Q  for the  quarter ended March 31, 1996, and is incorporated herein by
 reference)

U.     Stock  Option/Non-Compete  Form  Agreement  for  named executive officers
together
with schedule identifying particulars for each named executive officer (filed as
an Exhibit to Form 10-Q for the quarter ended June 30, 1996, and is incorporated
herein  by  reference)

V.     Employment  Agreement  Form  dated  November  7,  1996  for  Messrs.
Morrison  and Williams together with a schedule identifying particulars for each
executive  officer (filed as an Exhibit to Form 10-K for year ended December 31,
1996  and  is  incorporated  herein  by  reference)

W.     Stock  Option/Non-Compete  Agreement  with Stephen G. Morrison dated
October  22,  1996 (filed as an Exhibit to Form 10-K for year ended December 31,
1996  and  is  incorporated  herein  by  reference)

X.     Stock Option/Non-Compete Form Agreement for named executive officers
together with schedule identifying particulars for each executive officer (filed
as  an  Exhibit  to  Form  10-Q  for  the  quarter  ended  March 31, 1997 and is
incorporated  herein  by  reference)

Y.     Form  of  Amendment  No. 1 to the Employment Agreements with Messrs.
Morrison  and  Williams, together with schedule identifying particulars for each
executive  officer  (filed as an Exhibit to Form 10-Q for Quarter ended June 30,
1997  and  is  incorporated  herein  by  reference)

Z.     Form  of  Employment  Agreements  with  Messrs.  Wilson  and Bailey,
together with schedule identifying particulars for each executive officer (filed
as  an  Exhibit  to  Form  10-Q  for  Quarter  ending  September 30, 1997 and is
incorporated  herein  by  reference)

AA.     Credit Agreement dated as of August 8, 1997 among Policy Management
Systems Corporation, the Guarantors Party hereto, Bank of America National Trust
and  Savings Association and the Other Financial Institution Party Hereto (filed
as  an  Exhibit  to  Form  10-Q  for  Quarter  ending  September 30, 1997 and is
incorporated  herein  by  reference)
BB.     Stock  Option/Non-Compete  Form  Agreement  for  named  executive
officers together with schedule identifying particulars for each named executive
officer  (filed  as  an Exhibit to the Form 10-Q for the quarter ended March 31,
1998,  and  is  incorporated  herein  by  reference)

CC.     Policy  Management  Systems  Corporation Restricted Stock Ownership
Plan  (filed as an Exhibit to Form 10-Q for Quarter ended September 30, 1998 and
is  incorporated  herein  by  reference)

DD.     Form of Restricted Stock Award Agreement dated August 11, 1998 with
Messrs.  Berkeley,  Feddersen,  Palms,  Sargent,  Seibels  and Trub (filed as an
Exhibit  to  Form  10-Q for Quarter ended September 30, 1998 and is incorporated
herein  by  reference)

EE.     Employment  Agreement  with  Michael  W.  Risley dated February 23,
1999, effective November 10, 1998 (filed as an Exhibit to Form 10-K for the year
ended  December  31,  1998  and  is  incorporated  herein  by  reference)

FF.     Form  of  Restricted Stock Award Agreement dated March 1, 1999 with
Messrs.  Berkeley,  Feddersen,  Palms,  Sargent,  Seibels  and Trub (filed as an
Exhibit  to  Form  10-Q  for  Quarter  ending March 31, 1999 and is incorporated
herein  by  reference)

GG.     Form  of  Restricted  Stock  Award  Agreement  for  named executive
officers together with schedule identifying particulars for each named executive
officer  (filed as an Exhibit to Form 10-Q for Quarter ending March 31, 1999 and
is  incorporated  herein  by  reference)

HH.     Stock  Option/Non-Compete  Form  Agreement  for  named  executive
officers together with schedule identifying particulars for each named executive
officer  (filed  as an Exhibit to Form 10-Q for Quarter ending June 30, 1999 and
is  incorporated  herein  by  reference)

II.     Stock  Option/Non-Compete  Form  Agreement  with  Michael W. Risley
dated May 11, 1999 (filed as an Exhibit to Form 10-Q for Quarter ending June 30,
1999  and  is  incorporated  herein  by  reference)

JJ.     Form  of 1999 Bonus Plan for named executive officers together with
schedule  identifying  particulars for each named executive officer (filed as an
Exhibit to Form 10-Q for Quarter ending June 30, 1999 and is incorporated herein
by  reference)

KK.     Promissory  Note  dated  July  21,  1999  between Policy Management
Systems  Corporation  and First Union National Bank (filed as an Exhibit to Form
10-Q  for  Quarter  ending  September  30,  1999  and  is incorporated herein by
reference)

LL.     Modification  Number  One  dated October 15, 1999 to the Promissory
Note between Policy Management Systems Corporation and First Union National Bank
dated  July  21,  1999  (filed  as  an  exhibit  to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

MM.     Modification  Number  Two  dated October 28, 1999 to the Promissory
Note between Policy Management Systems Corporation and First Union National Bank
dated  July  21,  1999  (filed  as  an  exhibit  to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)
NN.     Stock  Option/Non-Compete  Form  Agreement  dated  May 11, 1999 for
named executive officers together with schedule identifying particulars for each
named  executive  officer  (filed  as an exhibit to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

OO.     Stock  Option/Non-Compete  Form Agreement dated August 9, 1999 with
Mr.  Harald  J.  Karlsen  (filed  as  an exhibit to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

PP.     Stock  Option/Non-Compete Form Agreement dated November 8, 1999 for
named executive officers together with schedule identifying particulars for each
named  executive  officer  (filed  as an exhibit to Form 10-K for the year ended
December  31,  1999  and  is  incorporated  herein  by  reference)

QQ.     Form  of  Restricted Stock Award Agreement dated February, 1999 for
Mr.  Michael  D.  Gantt
          (filed as an exhibit to Form 10-K for the year ended December 31, 1999
and  is  incorporated  herein  by  reference)

RR.     Change  in  Control  Severance  Pay Plan for Select Employees dated
October  22,  1996 together with schedule identifying particulars for Michael D.
Gantt  and  Harald  J.  Karlsen  (filed  as an exhibit to Form 10-K for the year
ended  December  31,  1999  and  is  incorporated  herein  by  reference)

SS.     Term  Loan Agreement between Policy Management Systems Corporation,
the  Guarantors Party, Bank of America, N.A. and other financial institutions in
the  amount  of  $70 million dated November 5, 1999 (filed as an exhibit to Form
10-K  for  the  year  ended  December  31,  1999  and  is incorporated herein by
reference)

TT.     Form  of  Restricted Stock Award Agreement dated March 1, 2000 with
Messrs.  Berkeley,  Feddersen,  Palms,  Sargent  and  Trub  with  schedule
Identifying particulars  for  each  named director  (filed  herewith)

          The  Schedule  for  TT  contained  the  following:

          Named  Director     Number  Granted
          ---------------     ---------------
          Al  Berkeley              1,491
          Don  Feddersen            1,491
          John  Palms               1,491
          Joe  Sargent              1,491
          Richard  Trub             1,491

UU.     First  Amendment  to  the  Credit Agreement dated as of November 5,
1999,  between  Policy Management Systems Corporation, Bank of America, N.A. and
the  other  financial  institutions  thereto  (filed  herewith)

VV.     Second  Amendment  to the Credit Agreement dated as of February 10,
2000  between  Policy  Management Systems Corporation, Bank of America, N.A. and
the  other  financial  institutions  thereto  (filed  herewith)
WW.     Third  Amendment to the Credit Agreement dated as of March 30, 2000
between  Policy  Management  Systems  Corporation, Bank of America, N.A. and the
other  financial  institutions  thereto  (filed  herewith)

XX.     Fourth Amendment to the Credit Agreement dated as of April 24, 2000
between  Policy  Management  Systems  Corporation, Bank of America, N.A. and the
other  financial  institutions  thereto  (filed  herewith)

YY.     First  Amendment  to  Term  Loan Agreement dated as of February 10,
2000  between  Policy  Management Systems Corporation, Bank of America, N.A. and
the  other  financial  institutions  thereto  (filed  herewith)

ZZ.     Second  Amendment to Term Loan Agreement dated as of March 30, 2000
between  Policy  Management  Systems  Corporation, Bank of America, N.A. and the
other  financial  institutions  thereto  (filed  herewith)

AAA.     Third  Amendment to Term Loan Agreement dated as of April 24, 2000
between  Policy  Management  Systems  Corporation, Bank of America, N.A. and the
other  financial  institutions  thereto  (filed  herewith)

BBB.     Security  Agreement  dated  as  of  April  28,  2000, among Policy
Management  Systems  Corporation,  certain  of  its  subsidiaries,  and  Bank of
America,  N.A.,  as  Administrative  Agent  (filed  herewith)

CCC.     Pledge  Agreement  dated  as  of  April  28,  2000, between Policy
Management  Systems  Corporation,  certain  of  its  subsidiaries,  and  Bank of
America,  N.A.,  as  Administrative  Agent  (filed  herewith)

DDD.     Mortgage  Agreement  dated  as  of  April 28, 2000, between Policy
Management  Systems  Corporation  and  Bank  of America, N.A., as Administrative
Agent  (filed  herewith)

27.     FINANCIAL  DATA  SCHEDULE

A.      Filed  herewith