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 JUNE 30, 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.

         35,585,504 Common shares, $.01 par value, as of August 4, 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.

1

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<CAPTION>

                      POLICY MANAGEMENT SYSTEMS CORPORATION


                                      INDEX

PART  I.  FINANCIAL  INFORMATION     PAGE

Item  1.  Financial  Statements


<S>                                                      <C>
Consolidated Statements of Operations for the Three and
Six Months Ended June 30, 2000 and 1999 . . . . . . . .   3

Consolidated Balance Sheets as of June 30, 2000 and
December 31, 1999 . . . . . . . . . . . . . . . . . . .   4

Consolidated Statements of Changes in Stockholders'
Equity and Comprehensive Income for the Six
Months Ended June 30, 2000. . . . . . . . . . . . . . .   5

Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2000 and 1999 . . . . . . . .   6

Notes to Consolidated Financial Statements. . . . . . .   7

Item 2. Management's Discussion and Analysis of
  Financial Condition and Results of Operations . . . .  16

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings . . . . . . . . . . . . . .  37

  Item 6. Exhibits and Reports on Form 8-K. . . . . . .  37

Signatures. . . . . . . . . . . . . . . . . . . . . . .  38


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2

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

                                               Three  Months        Six  Months
                                           Ended  June  30,       Ended  June  30,
                                         ------------------     ------------------
                                             2000       1999       2000      1999
                                           ------     ------     ------     -----
                                         (In  thousands,  except  per  share  data)



<S>                                      <C>        <C>         <C>        <C>
REVENUES
 Licensing. . . . . . . . . . . . . . .  $ 26,207   $ 43,697   $ 52,507   $ 78,463
 Services . . . . . . . . . . . . . . .   113,867    129,834    235,909    255,357
                                         ---------  ---------  ---------  ---------
                                          140,074    173,531    288,416    333,820
                                         ---------  ---------  ---------  ---------

OPERATING EXPENSES
 Cost of revenues
  Employee compensation and benefits. .    75,190     76,385    154,510    150,043
  Computer and communications expenses.    13,861     11,717     27,512     23,646
  Depreciation and amortization of
   property, equipment and
   capitalized software costs . . . . .    22,574     17,094     37,268     33,251
  Other costs & expenses. . . . . . . .     9,675      9,422     21,978     16,838
 Selling, general and administrative
   expenses . . . . . . . . . . . . . .    26,606     28,362     54,820     53,934
 Amortization of goodwill and
   other intangibles. . . . . . . . . .     3,784      3,461      7,169      6,538
 Restructuring and other charges. . . .     3,255          -     16,027          -
 Merger termination charges . . . . . .    24,347          -     24,347          -
                                         ---------  ---------  ---------  ---------


                                          179,292    146,441    343,631    284,250
                                         ---------  ---------  ---------  ---------

OPERATING (LOSS) INCOME . . . . . . . .   (39,218)    27,090    (55,215)    49,570

Equity in earnings of
   unconsolidated affiliates. . . . . .       270        148        711        288

Minority interest . . . . . . . . . . .        21        (40)        39        (78)

Other income and expenses:
  Investment income . . . . . . . . . .     3,698       183        6,076        435
  Interest expense and other charges. .    (6,795)    (2,747)   (13,478)    (4,240)
                                         --------- ----------  ---------  ---------
                                           (3,097)    (2,564)    (7,402)    (3,805)
                                         --------- ----------  ---------  ---------
(Loss) income before income taxes . . .   (42,024)    24,634    (61,867)    45,975
Income tax expense (benefit). . . . . .       863      9,122     (6,838)    17,012
                                         --------- ----------  ---------  ---------

NET (LOSS) INCOME . . . . . . . . . . .  $(42,887)  $ 15,512   $(55,029)  $ 28,963
                                         =========  =========  =========  =========

BASIC (LOSS) EARNINGS PER SHARE . . . .  $  (1.21)  $   0.44   $  (1.56)  $   0.81
                                         =========  =========  =========  =========

DILUTED (LOSS) EARNINGS PER SHARE . . .  $  (1.21)  $   0.42   $  (1.56)  $   0.77
                                         =========  =========  =========  =========

Weighted average common shares. . . . .    35,380     35,354     35,378     35,739
Weighted average common shares
  assuming dilution . . . . . . . . . .    35,380     36,584     35,378     37,458
<FN>

See  accompanying  notes
</TABLE>

3

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<TABLE>
<CAPTION>

                      POLICY MANAGEMENT SYSTEMS CORPORATION
                           CONSOLIDATED BALANCE SHEETS

                                                (Unaudited)      (Audited)
                                                 June  30,     December  31,
                                                    2000         1999
                                                   ------       ------
                                       (In  thousands,  except share  data)


<S>                                                 <C>        <C>
Assets
Current assets
 Cash and equivalents                               $ 20,552   $ 17,744
 Receivables, net of allowance for uncollectible
  amounts of $5,353 ($13,000 at December 31, 1999)   102,714     99,669
 Accrued revenues                                     24,889     36,393
 Deferred income taxes                                17,427     15,979
 Income tax receivable                                12,622      9,728
 Other receivable                                          -      7,788
 Prepaids                                              6,751     12,050
 Other                                                16,209     12,648
                                                    ---------  ---------
   Total current assets                              201,164    211,999

Property and equipment, at cost less accumulated
 depreciation and amortization of $126,144
 ($132,347 at December 31, 1999)                     136,835    142,867
Accrued revenues                                      24,296     16,130
Income tax receivable                                  4,041      4,041
Goodwill and other intangibles, net                  105,818    111,024
Capitalized software costs, net                      155,099    155,896
Deferred income taxes                                 29,327     29,850
Investments                                            5,921     13,332
Other                                                 19,684     21,149
                                                    ---------  ---------
     Total assets                                   $682,185   $706,288
                                                    =========  =========

Liabilities
Current liabilities
 Accounts payable and accrued expenses              $ 43,123     41,236
 Notes payable                                        21,000          -
 Current portion of long-term debt                   238,000      4,000
 Income taxes payable                                  4,128      4,616
 Unearned revenues                                    24,148     20,290
 Accrued restructuring and other charges               5,113      3,630
 Other                                                 1,881      2,223
                                                    ---------  ---------
   Total current liabilities                         337,393     75,995

Long-term debt                                             -    227,000
Deferred income taxes                                 72,207     68,514
Accrued restructuring and other charges                3,077      2,659
Other                                                  8,777      9,935
                                                    ---------  ---------
    Total liabilities                                421,454    384,103
                                                    ---------  ---------

Minority interest                                        593        624

Stockholders' equity
Special stock, $.01 par value, 5,000,000 shares
 authorized                                                -          -
Common stock, $.01 par value, 75,000,000 shares
 authorized, 35,585,581 shares issued and
 outstanding (35,585,078 at December 31, 1999)           356        356
Additional paid-in capital                            56,809     56,695
Retained earnings                                    232,454    287,483
Accumulated other comprehensive income               (19,783)   (12,972)
Stock employee compensation trust                     (9,698)   (10,001)
                                                    ---------  ---------
    Total stockholders' equity                       260,138    321,561
                                                    ---------  ---------
 Total liabilities and stockholders' equity         $682,185   $706,288
                                                    =========  =========
<FN>


See  accompanying  notes
</TABLE>

4

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<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. . . . . .         -         -   (55,029)             -          -    (55,029)
 Other comprehensive income,
  net of tax:
   Foreign currency
    translation adjustments .         -         -         -          (6,811)        -     (6,811)
                                                                                          -------
Total comprehensive income. .                                                            (61,840)
                                                                                        ---------

Restricted stock. . . . . . .         -        92         -                   -   303        395
Stock options exercised
  (1,168 shares). . . . . . .         -        22         -                   -     -         22
                               ---------  -------  ---------  ------------------ -----  ---------

BALANCE, JUNE 30, 2000. . . .  $    356   $56,809  $232,454   $    (19,783)  $ (9,698)  $260,138
                               =========  =======  =========  =============  =========  =========
<FN>


See  accompanying  notes

(1)     Comprehensive  (loss)  income for the three months ended June 30, 2000 and 1999 was $(45,227)
and  $14,178,  respectively.

     Comprehensive  income  for  the  six  months  ended  June  30,  1999  was  $25,960.

</TABLE>

5

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<TABLE>
<CAPTION>

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

                                                         Six  Months
                                                       Ended  June  30,
                                                     ---------------------
                                                        2000        1999
                                                      ------      ------
                                                        (In  thousands)



<S>                                                 <C>         <C>
Operating Activities
 Net (loss) income                                  $ (55,029)  $  28,963
 Adjustments to reconcile net (loss) income to net
  cash (used) provided by operating activities:
   Depreciation and amortization                       47,970      42,509
   Deferred income taxes                                2,768       6,285
   Provision for uncollectible accounts                 1,444         (22)
   Loss on disposal of property and equipment. . .        224         305
   Gain on sale of investments                         (5,298)          -
 Changes in assets and liabilities:
   Receivables                                         (5,710)     (9,437)
   Accrued revenues                                     3,338     (29,407)
   Other receivable                                     7,788      11,279
   Accounts payable and accrued expenses                1,051     (12,010)
   Accrued restructuring and other charges              2,724           -
   Income taxes                                        (3,382)      7,518
   Unearned revenues                                    3,858       1,534
   Other, net                                          (3,049)    (14,071)
                                                    ----------  ----------
      Cash (used) provided by operations               (1,303)     33,446
                                                    ----------  ----------

Investing Activities
 Acquisition of property and equipment                 (9,634)    (20,596)
 Capitalized internal software development costs      (24,377)    (34,553)
 Business acquisition and investments                  (6,816)    (67,313)
 Proceeds from sale of investments . . . . . . . .     17,199           -
 Other                                                  2,705       1,530
                                                    ----------  ----------
      Cash used by investing activities               (20,923)   (120,932)
                                                    ----------  ----------

Financing Activities
 Payments on long-term debt                          (145,000)    (34,971)
 Proceeds from borrowing under credit facility        154,000     165,700
 Purchase of stock for Stock Employee
  Compensation Trust                                        -     (10,094)
 Issuance of common stock under stock option plans         22       6,682
 Proceeds from note payable. . . . . . . . . . . .     19,000
 Repurchase of common stock                                 -     (33,045)
 Other                                                 (2,988)         29
                                                    ----------  ----------
       Cash provided by financing activities           25,034      94,301
                                                    ----------  ----------

Net increase in cash and equivalents                    2,808       6,815
Cash and equivalents at beginning of period            17,744      26,013
                                                    ----------  ----------
Cash and equivalents at end of period               $  20,552   $  32,828
                                                    ==========  ==========

Supplemental Information
 Interest paid                                      $   6,206   $   3,211
 Income taxes (refunded) paid                          (4,613)      4,023

6

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                      POLICY MANAGEMENT SYSTEMS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 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 three and six months ended June 30, 2000, as
the  net  loss  generated  in  those periods would cause the inclusion of common
stock  options  to  be anti-dilutive.  The average market price of the stock for
the  period was below the exercise price for the majority of options outstanding
during the period.  The following is a reconciliation of the denominator used in
the  EPS  calculations  (in  thousands):

</TABLE>
<TABLE>
<CAPTION>


                               Three  Months        Six  Months
                             Ended  June  30,      Ended  June  30,
                          -----------------     -----------------
                                2000    1999      2000    1999
                               -----   -----     -----   -----
Weighted  Average  Shares
-------------------------


<S>                             <C>     <C>     <C>     <C>
Basic EPS. . . . . . . . . . .  35,380  35,354  35,378  35,739
Effect of common stock options       -   1,230       -   1,719
                                ------  ------  ------  ------
Diluted EPS. . . . . . . . . .  35,380  36,584  35,378  37,458
                                ======  ======  ======  ======
</TABLE>



     Options  to purchase 6,367,769 shares of common stock at a weighted average
price  of  $31.52 per share were outstanding but not included in the computation
of  diluted  EPS  for  the  period  ending  June  30,  2000.

7

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OTHER  MATTERS

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

NOTE  2.     ACQUISITIONS

     On  May  31,  2000, the Company purchased DEKRU B.V., a Dutch subsidiary of
the  German  based DEKRA Group ("DEKRU"), for approximately $1.1 million in cash
plus  additional  consideration of up to $6.1 million contingent upon the future
performance of DEKRU to be recorded as royalty expense as incurred. DEKRU owns a
software  product  (KDX)  for  managing  and  adjusting  automobile claims.  The
Company  intends  to  market  and further develop KDX primarily for the European
market.

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  based  upon the performance of DORN.  Pursuant to an amendment to
this  agreement  in  the  2000 second quarter, this additional consideration was
limited to $1.1 million and was recorded as compensation expense in 1999 and the
first  half  of  2000.  DORN  owns the Riskmaster claims management software and
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.

8

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NOTE  3.     CONTINGENCIES

     On  June  9,  2000,  the  Company  and Chase Manhattan Mortgage Corporation
("Chase")  entered  into  a  confidential  settlement  of  previously  disclosed
litigation.  (See  Item  1,  Legal  Proceedings,  of  Part  II  contained in the
Company's report on Form 10-Q for the quarter ended March 31, 2000).  As part of
the  settlement,  the  Company  and  Chase agreed to release each other from all
claims  asserted  and  the  lawsuit was dismissed.  The amount of settlement was
placed  in  escrow  and  accrued  as  an  expense  in the first quarter of 2000.

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, tortuous 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
tortuous  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  May  22,  2000  an  amended  consolidated  complaint  was  filed in the
previously disclosed purported class action filed on behalf of purchasers of the
Company's  stock during the period October 22, 1998 and February 10, 2000.  (See
Item  1, Legal Proceedings, of Part II contained in the Company's report on Form
10-Q  for the quarter ended March 31, 2000).  The defendants have filed a motion
to  dismiss  the complaint and intend to vigorously pursue a full defense of the
action.

9

<PAGE>
Also on May 22, 2000, an amended complaint was filed in the previously disclosed
purported  class  action  brought  by  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,  against the Company, its Chairman and three
members  of  the  Administrative  Committee  of the Plan.  The amended complaint
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. The court has entered an order providing for the
coordination  of  proceedings  with the securities class action.  The defendants
have  filed  a motion to dismiss the complaint and intend to vigorously pursue a
full  defense  of  this  action.

     As  previously  disclosed,  between  March  31,  2000  and May 5, 2000 four
purported  class actions were filed against the Company and its directors in the
Court  of  Common  Pleas in Richland County, South Carolina.  (See Item 1, Legal
Proceedings,  of  Part II contained in the Company's report on Form 10-Q for the
quarter  ended  March  31, 2000).  These actions were consolidated into a single
action  and  an  amended consolidated complaint was filed on July 24, 2000.  The
amended  consolidated  complaint  alleges  that  the  defendants  breached their
fiduciary  duties  by  failing  to  conduct  a  market  check and agreeing to an
unreasonable  termination  fee in the June 20, 2000 Agreement and Plan of Merger
between  the  Company  and  Computer  Sciences Corporation (CSC transaction) and
breached  their  duty  of  candor  in  failing  to disclose material information
concerning  the  CSC transaction.  The plaintiffs seek preliminary and permanent
injunctive  relief  to enjoin payment of the termination fee under the Agreement
and  Plan  of  Merger  between  Politic Acquisition Corp. and the Company (Welsh
Carson  transaction)  which was terminated by the Company.  Plaintiffs also seek
to  enjoin consummation of the CSC tender offer until additional disclosures are
made,  to strike the termination fee in the CSC transaction, and seek reasonable
attorney fees and costs.  The plaintiffs' request for a temporary injunction was
denied on August 7, 2000 following a hearing on plaintiffs' request.  Defendants
have  filed  a  motion to dismiss the amended complaint and intend to vigorously
pursue  a  full  defense  of  this  action.

     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.

     In  a letter dated April 29, 1999, the Company was notified by 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 response. Furthermore, the Company
strongly disagrees with the proposed adjustments and is vigorously defending its
position.

10

<PAGE>


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

11

<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.

12

<PAGE>

Information  about  the  Company's operations for the three and six months ended
June  30,  2000  and  1999  is  as  follows  (in  thousands):
<TABLE>
<CAPTION>


                                         Three  Months          Six  Months
                                        Ended  June  30,     Ended  June  30,
                                      ------------------   ------------------
                                        2000     1999       2000      1999
                                      ------    ------     ------    ------
REVENUES  FROM  EXTERNAL  CUSTOMERS


<S>                                 <C>        <C>        <C>        <C>
Property and casualty. . . . . . .  $ 50,052   $ 70,321   $104,503   $141,145
Claims.. . . . . . . . . . . . . .     6,065      6,756     13,382      9,623
Life and financial solutions . . .    46,844     47,531     94,712     89,165
                                    ---------  ---------  ---------  ---------
  Total US revenues. . . . . . . .   102,961    124,608    212,597    239,933
International. . . . . . . . . . .    37,113     48,923     75,819     93,887
                                    ---------  ---------  ---------  ---------
  Total revenues . . . . . . . . .  $140,074   $173,531   $288,416   $333,820
                                    =========  =========  =========  =========

INCOME (LOSS) FROM OPERATIONS
Property and casualty. . . . . . .  $  4,236   $ 17,588   $  9,425   $ 37,178
Claims.. . . . . . . . . . . . . .    (1,717)     3,297     (3,001)     5,601
Life and financial solutions . . .       504     10,759     (2,533)    18,867
Corporate and US administrative. .   (43,006)    (8,210)   (55,881)   (16,233)
                                    ---------  ---------  ---------  ---------
  Total US operating (loss) income   (39,983)    23,434    (51,990)    45,413
                                    ---------  ---------  ---------  ---------

International. . . . . . . . . . .     2,516      5,519        470      7,799
International administrative . . .    (1,751)    (1,863)    (3,695)    (3,642)
                                    ---------  ---------  ---------  ---------
  Total international. . . . . . .       765      3,656     (3,225)     4,157
                                    ---------  ---------  ---------  ---------

  Operating (loss) income. . . . .   (39,218)    27,090    (55,215)    49,570

Equity in earnings of
  unconsolidated affiliates. . . .       270        148        711        288
Minority interest. . . . . . . . .        21        (40)        39        (78)
Other income and expenses. . . . .    (3,097)    (2,564)    (7,402)    (3,805)
Income tax (benefit) expense . . .       863      9,122     (6,838)    17,012
                                    ---------  ---------  ---------  ---------
  Net (loss) income. . . . . . . .  $(42,887)  $ 15,512   $(55,029)  $ 28,963
                                    =========  =========  =========  =========
</TABLE>




NOTE  5.  SPECIAL  CHARGES  AND  ACCOUNTING  CHANGES

     The  Company considers Special Charges to be unusual events or transactions
related  to  continuing business activities.  Accounting Changes include changes
in  accounting  principles  and  estimates  that  require  a cumulative catch-up
adjustment  in  accordance  with  Accounting  Principles  Board  Opinion No. 20,
"Accounting  Changes".

Second  Quarter  2000:

     The  Company's  results for the 2000 second quarter include pre-tax special
charges  of  approximately  $36.8  million.  Of  this  amount,  $8.3  million is
non-cash  and  the  remainder  of  these  charges  have or will be paid in cash.

13

<PAGE>

     The  majority  of  the  second  quarter  Special Charges result from merger
termination  charges  of  $24.3  million in fees and expenses resulting from the
Company's  termination  of  the  merger  agreement  with a subsidiary of  Welsh,
Carson,  Anderson  &  Stowe VIII, L.P. ("WCAS") (see Note 6, "Proposed Merger").

     During  the  2000  second  quarter,  management  committed  to  a  plan  to
restructure  the  operations  of  the  United  Kingdom  ("UK")  division  of its
international  segment.  The  plan,  among  other things, entailed reductions in
staff  and  space which resulted in a restructuring charge of approximately $1.2
million.  Further,  management  indefinitely suspended development and decreased
marketing  efforts  related to a software product in the UK. As a result, second
quarter  Special  Charges  include  $7.3  million of accelerated amortization to
write-off  this  product.

     During  the  second  quarter  the  Company  transferred  operational
responsibility for the Banking division's mortgage origination software business
to  a  third  party.  Additionally,  the Company is negotiating the sale of this
business  and  the  remainder  of  the  Banking division's operations.  The 2000
second  quarter  Special  Charges include the Banking division operating loss of
$3.6  million on revenues of $2.8 million.  Also, as a result of the decision to
sell  the Banking division's operations, Special Charges include $1.1 million of
accelerated  amortization  to  write-off  a  related  software  product.

     The  Company  recognizes certain revenue under the percentage of completion
method  of  accounting  ("POC")  in  accordance with Statement of Position 81-1.
During  the  2000 second quarter, management changed the estimated profit margin
on  a  significant contract accounted for under POC.  Based on a detailed review
of  contract  performance  in  the  second  quarter,  the  Company  recognized a
cumulative  adjustment of $1.5 million of additional professional services & ITO
("Information  Technology Outsourcing") revenue in the 2000 second quarter which
partially  offset  special  charges.

During  the  second quarter the Company sold minority interests in two companies
for  $9.4  million in cash.  Special Charges in the quarter are partially offset
by the related gain of $3.2 million on the sale of these investments included in
Other  income  and  expense.

     Selling,  general  and  administrative expenses for the 2000 second quarter
include  approximately  $0.7  million of brand expenses associated with changing
the  name  of  the  Company  (see  Note  7,  "Change  of  Company's  Name").

   Restructuring  and other charges includes $2.1 million in legal fees incurred
during  the  second  quarter  related to the shareholder and CSC litigation (see
Note  3,  "Contingencies").

     Interest expense includes $1.1 million of amortization of credit facilities
fees  paid  in  the  2000  first  quarter to amend the Company's existing credit
facilities.

14

<PAGE>

First  Quarter  2000:

     The  Company's  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  the Company's 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%  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").

During  the  2000  second  quarter  the  Company  transferred  operational
responsibility for the Banking division's mortgage origination software business
to  a  third  party.  Additionally,  the Company is negotiating the sale of this
business and the remainder of the Banking division's operations.  The 2000 first
quarter  Special  Charges  include  the  Banking division operating loss of $4.8
million  on  revenues  of  $2.8  million  including  the  recovery of previously
reserved  accounts  receivable  of  $1.2  million.

The  Company  continues  to  recognize  amortization expense related to software
products written down in the 1999 third and fourth quarters.  These products are
being  amortized  on  the  revenue  basis which is faster than the 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  7,  "Change  of  Company's  Name").

     Investment income in the 2000 first quarter included a $2.1 million gain on
the  sale  of  the  Company's  20% interest in an unconsolidated subsidiary, and
interest expense included $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.  PROPOSED  MERGER

     On  June  20,  2000,  the  Company  announced that it and Computer Sciences
Corporation  ("CSC")  entered  into an Agreement and Plan of Merger which, among
other  things,  provided  for  a  CSC  tender  offer  to  acquire  the Company's
outstanding  shares  at  a purchase price of $16 per share in cash.  On June 28,
2000,  the  Company  filed its Solicitation/Recommendation Statement on Schedule
14D-9  related  to CSC's tender offer. As a result of receiving a second request
for  information  from  the  Federal  Trade  Commission  concerning the proposed
merger,  CSC  extended  the  tender  offer  until  September  12,  2000.

15

<PAGE>
As  a  result of entering the Agreement and Plan of Merger with CSC, the Company
was  required  to  pay  a  $19.0  million  fee  and to pay up to $5.0 million in
expenses  for  terminating  its  previously proposed merger with WCAS.  The cash
required  to  pay  this  fee  was  loaned  to  the  Company  by  CSC.

NOTE  7.  CHANGE  OF  COMPANY'S  NAME

     Following  an  earlier  announcement of plans to change the Company's name,
the  Company  began  doing business as Mynd Corporation ("Mynd") on May 1, 2000.
Officially  changing  the  Company's  name  requires  a  two-thirds  vote of the
shareholders  at  a  shareholder's meeting for holders of record on September 5,
2000,  to  be  held  on  September  27, 2000, at the Company's headquarters.  If
approved  by  the  shareholders, the Company will formally change its legal name
with  relevant  authorities  including  the  New  York  Stock  Exchange.

16

<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                  Six             Three       Six
                                            Months  Ended         Months  Ended       Months     Months
                                              June  30,             June  30,          Ended      Ended
                                             -----------          -----------
                                            2000      1999        2000     1999          June  30
                                           -----      -----       -----  -----      ---------------------


<S>                                   <C>            <C>            <C>     <C>     <C>              <C>
Revenues
 Licensing . . . . . . . . . . . . .          18.7%          25.2%   18.2%   23.5%            (40)%  (33)%
 Services. . . . . . . . . . . . . .          81.3           74.8    81.8    76.5              (12)    (8)
                                      -------------  -------------  ------  ------
                                             100.0          100.0   100.0   100.0              (19)   (14)
                                      -------------  -------------  ------  ------
Operating expenses
 Cost of revenues
  Employee compensation and benefits          53.7           44.0    53.6    45.0               (2)     3
  Computer & communication expenses.           9.9            6.8     9.5     7.0               18     16
  Depreciation & amortization
   of property, equipment &
   capitalized software costs. . . .          16.1            9.9    12.9    10.0               32     12
  Other costs & expenses . . . . . .           6.9            5.4     7.6     5.0                3     31
 Selling, general &
   administrative expenses . . . . .          19.0           16.3    19.0    16.1               (6)     2
 Amortization of goodwill and
   other intangibles . . . . . . . .           2.7            2.0     2.5     2.0                9     10
 Restructuring & other charges . . .           2.3              -     5.6       -
 Merger termination charges. . . . .          17.4              -     8.4       -
                                      -------------  -------------  ------  ------
                                             128.0           84.4   119.1    85.1               22     21
                                      -------------  -------------  ------  ------
Operating (loss) income. . . . . . .         (28.0)          15.6   (19.1)   14.9             (245)  (211)
Equity in earnings of unconsolidated
   affiliates. . . . . . . . . . . .           0.2            0.1     0.2     0.1               82    147
Investment income. . . . . . . . . .           2.7            0.1     2.1     0.1   1,921    1,297
Interest expense and other charges .          (4.9)          (1.6)   (4.7)   (1.3)             147    218
                                      -------------  -------------  ------  ------
Income (loss) before income taxes. .         (30.0)          14.2   (21.5)   13.8             (271)  (235)
Income tax (benefit) expense . . . .           0.6            5.2    (2.4)    5.1              (91)  (140)
                                      -------------  -------------  ------  ------
Net (loss) income. . . . . . . . . .  (30.6)%  9.0%  (19.1)%  8.7%  (376)%  (290)%
                                      =============  =============


</TABLE>

17

<PAGE>
                             THREE MONTH COMPARISON

REVENUES

Licensing
---------

     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.
<TABLE>
<CAPTION>


                                    Three  Months
                                  Ended  June  30,
                                  ----------------
                                2000    1999   Change
                               -----   -----   ------
                              (Dollars  in  millions)


<S>                             <C>     <C>     <C>
  Initial charges. . . . . . .  $ 9.5   $26.8   (65)%
  Monthly charges. . . . . . .   16.7    16.9     (1)
                                ------  ------
                                $26.2   $43.7   (40)%
                                ======  ======

  Percentage of total revenues   18.7%   25.2%
                                ------  ------
</TABLE>




Initial  licensing

     Initial  license  revenues  decreased  $17.3  million  for  the 2000 second
quarter  compared  with the 1999 second quarter, with the following decreases by
business  segment:  property  and  casualty down 92% ($8.3 million); claims down
56%  ($2.4  million);  life and financial solutions down 35% ($2.0 million) with
one  new  CyberLife  license  in  the  quarter; and international down 58% ($4.6
million)  with  a  S3+  license expansion to include the acquirer of an existing
customer  in  Europe.

Initial  license  charges  for  the second quarter of 2000 included right-to-use
licenses to existing customers of $0.5 million. This compares to $5.3 million in
right-to-use  licenses  for  the  second 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.

     Second  quarter  1999  initial  license  charges  include  $2.0  million of
licenses  to  the  former owners of FAS which the Company acquired at the end of
the  second  quarter.

18

<PAGE>
Two  remarketing  agreements  for  Claim  Outcome Adviser  ("COA") totaling $3.5
million  are  included  in  initial  licensing revenue for the second quarter of
1999.  These  non-exclusive  agreements  provide two of the Company's nationally
recognized  vendors  the  right to relicense COA to the self-insured market. The
Company  also  renegotiated  with  one  of  these  vendors  an  extension to its
long-term  license  agreement  for operating software used in the Company's data
center.  These  agreements  were  effected  by  the  Company's adoption of Staff
Accounting  Bulletin 101 as of December 31, 1999. Consequently, the $3.5 million
of  initial license revenue was adjusted in the 1999 fourth quarter and is being
recognized ratably over the terms of the respective agreements.  Initial license
revenue  includes  $0.7  million  of  this  revenue  in the 2000 second quarter.

     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.

The Company believes that during the 2000 second quarter, uncertainty concerning
the  Company's  future  ownership,  including  the  proposed  merger  with  CSC,
adversely  affected  customers'  decisions to license software from the Company.
Management  anticipates  that  the  adverse  effect  will  continue  until  the
uncertainty  is  resolved.

     Set  forth  below is a comparison of initial license revenue by segment for
the  periods  ending  June  30,  2000  and  1999,  respectively:
<TABLE>
<CAPTION>


                                           Three  Months
                                          Ended  June  30,
                                          ----------------
                                        2000    1999  Change
                                        -----   -----  ------
                                      (Dollars  in  millions)


<S>                                      <C>    <C>     <C>
  Property and casualty . . . . . . . .  $0.7   $ 9.0   (92)%
  Claims. . . . . . . . . . . . . . . .   1.8     4.2    (57)
  Life and financial solutions. . . . .   3.7     5.7    (35)
  International . . . . . . . . . . . .   3.3     7.9    (58)
                                         -----  ------
                                         $9.5   $26.8   (65)%
                                         =====  ======

           Percentage of total revenues   6.8%   15.4%
                                         -----  ------
</TABLE>




Monthly  licensing

Monthly  license revenues in the 2000 second quarter were essentially consistent
with  the 1999 second quarter in total with the following increases or decreases
by  business segment:  property and casualty down 21% ($1.5 million) due to weak
1999  and  2000  first quarter licensing and the effect of previous right-to-use
licenses;  claims  up  650%  ($1.3  million);  life  and financial solutions and
international  were  relatively  unchanged  at $4.9 million and $4.5 million for
both  quarters,  respectively.

19

<PAGE>
Set  forth  below  is a comparison of monthly license revenue by segment for the
periods  ending  June  30,  2000  and  1999,  respectively:
<TABLE>
<CAPTION>


                                    Three  Months
                                  Ended  June  30,
                                  ----------------
                                2000    1999  Change
                                -----   -----  ------
                               (Dollars  in  millions)


<S>                             <C>     <C>     <C>
  Property and casualty. . . .  $ 5.8   $ 7.3   (21)%
  Claims . . . . . . . . . . .    1.5     0.2    650
  Life and financial solutions    4.9     4.9      -
  International. . . . . . . .    4.5     4.5      -
                                -----  ------
                                $16.7   $16.9    (1)%
                                =====  ======  =====

  Percentage of total revenues   11.9%   9.8%
                                -----   -----
</TABLE>



Services
---------

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.
<TABLE>
<CAPTION>


                                     Three  Months
                                   Ended  June  30,
                                   ----------------
                                2000    1999  Change
                                -----   -----  ------
                               (Dollars  in  millions)


<S>                             <C>      <C>      <C>
  Professional services & ITO.  $ 86.9   $111.1   (22)%
  BPO. . . . . . . . . . . . .    25.0     16.9     48
  Other. . . . . . . . . . . .     2.0      1.8     11
                                -------  -------
                                $113.9   $129.8   (12)%
                                =======  =======

  Percentage of total revenues    81.3%    74.8%
                                -------  -------
</TABLE>




Professional  Services  &  ITO

Professional services & ITO revenues decreased $24.2 million for the 2000 second
quarter  compared with the 1999 second quarter, with the following decreases and
increase  by  business segment:  property and casualty down 27% ($10.9 million);
claims  up  13%  ($0.3  million);  life  and  financial solutions down 12% ($3.8
million);  and  international down 27% ($9.8 million). The increase in claims is
primarily  due  to  the  Company's  1999  acquisitions.  All other segments were
negatively  impacted  by  weak  initial licensing activity in 1999 and the first
half  of 2000.  In addition, property and casualty was affected by the migration
of  ITO customers from mainframe Series II processing to AS400 Point processing.
Also,  international  was  adversely  affected  by the loss of a significant ITO
customer  in  the  1999  third  quarter.  The  2000 second quarter international
segment's  revenue  includes  a  cumulative catch-up adjustment of approximately
$1.5  million of revenue recognized in the 2000 second quarter based on a change
in  accounting  estimate associated with a significant contract accounted for on
the  basis  of  POC.

20

<PAGE>


Set  forth  below  is  a  comparison  of  professional services & ITO revenue by
segment  for  the  periods  ending  June  30,  2000  and  1999,  respectively:
<TABLE>
<CAPTION>


                                     Three  Months
                                   Ended  June  30,
                                   ----------------
                                2000    1999  Change
                                -----   -----  ------
                               (Dollars  in  millions)


<S>                             <C>      <C>      <C>
  Property and casualty. . . .  $ 29.9   $ 40.8   (27)%
  Claims . . . . . . . . . . .     2.7      2.4     13
  Life and financial solutions    28.1     31.9   (12)
  International. . . . . . . .    26.2     36.0   (27)
                                -------  -------
                                $ 86.9   $111.1   (22)%
                                ======   ======  ======

  Percentage of total revenues    62.1%    64.1%
                                ------   -------
</TABLE>



     BPO

BPO  revenues  increased  $8.1 million for the 2000 second quarter compared with
the  1999  second  quarter,  with  the  following increases by business segment:
property and casualty up 5% ($0.6 million); life and financial solutions up 100%
($5.1  million) due to internal growth and the acquisition of FAS ($2.8 million)
in  1999; and international up 1,200% ($2.4 million) due to increased processing
in  Europe  and  South  Africa.  The  claims  segment  has  no  BPO  operations.

Set forth below is a comparison of BPO revenue by segment for the periods ending
June  30,  2000  and  1999,  respectively:
<TABLE>
<CAPTION>


                                      Three  Months
                                    Ended  June  30,
                                    ----------------
                                 2000    1999     Change
                                -----   -----     ------
                                (Dollars  in  millions)


<S>                             <C>      <C>     <C>
  Property and casualty. . . .  $ 12.2   $11.6       5%
  Claims . . . . . . . . . . .       -       -       -
  Life and financial solutions    10.2     5.1     100
  International. . . . . . . .     2.6     0.2   1,200
                                ------   -----  ------
                                $ 25.0   $16.9      48%
                                ======   =====   ======

  Percentage of total revenues    17.8%    9.7%
                                -------  ------
</TABLE>



21

<PAGE>
OPERATING  EXPENSES

COST  OF  REVENUES

     Employee compensation and benefits decreased 2% for the 2000 second quarter
compared  with the 1999 second quarter. Before the effect of the acquisitions in
1999  (see  Note  2  of  Notes  to  Consolidated Financial Statements), employee
compensation  and  benefits  for  the  second  quarter of 2000 decreased 7% when
compared  with  second quarter 1999.  Domestic employee compensation in the 2000
second  quarter is essentially consistent with the 1999 second quarter. Domestic
benefits expense increased $1.3 million due to the acceleration of health claims
paid as a result of previous reductions in force. International compensation and
benefits  decreased  15%  ($3.3  million)  largely due to previous reductions in
force.

Computer  and  communications expenses increased 18% for the 2000 second quarter
compared with the 1999 second quarter due to the Company's 1999 acquisitions and
increases in processing volumes and data center operating software license fees.

     Depreciation  and  amortization  of  property,  equipment  and  capitalized
software  costs increased 32% for the 2000 second quarter compared with the 1999
second  quarter.  Depreciation  and amortization expense was reduced as a result
of  software  write-downs  recorded  in the 1999 third and fourth quarters and a
reduction  in  the  Company's  capital  expenditures  for  property,  plant  and
equipment.  However,  these  savings  were  more  than offset by the 2000 second
quarter software write-offs discussed below and the acquisitions of Dorn and FAS
in  1999  (see  Note  5  of  Notes  to  Consolidated  Financial  Statements).

     As  part  of the UK restructuring plan (see Note 5 of Notes to Consolidated
Financial  Statements),  management  indefinitely  suspended  development  and
decreased  marketing  efforts  related  to  a  software  product in the UK. As a
result,  approximately  $7.3  million  of  previously  capitalized  software
development  costs  has been expensed as accelerated amortization. An additional
$1.1  million of accelerated amortization was similarly recognized in connection
with  the  decision  to  sell  the  Banking  division  operations.

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 $0.3 million more amortization expense in the
2000  second  quarter  than  would  have been recognized under the straight-line
method.

     Other  operating  costs and expenses increased 3% for the second quarter of
2000  compared with the 1999 second quarter due to the Company's acquisitions in
1999  and  a  decrease  in  the amounts capitalized related to internal software
development  and  internal  use  systems.

22

<PAGE>

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling, general and administrative expenses increased from 16% of revenues
in the 1999 second quarter compared to 19% in the 2000 second quarter.  However,
the  dollar  amount  decreased  6% for the 2000 second quarter compared with the
1999  second  quarter  in part due to the reduction in force and decreased costs
associated  with  the  Company's  lower  revenues  offset  by the effects of the
Company's  1999  acquisitions  and  approximately $0.7 million of brand expenses
associated  with changing Company's name. Before the effects of acquisitions and
brand  expenses,  selling,  general  and  administrative expenses decreased 14%.

AMORTIZATION  OF  GOODWILL  AND  OTHER  INTANGIBLES

     Amortization  of  goodwill  and other intangibles increased 9% for the 2000
second  quarter  compared  with  the  1999  second  quarter,  due largely to the
Company's  1999  acquisitions.

RESTRUCTURING  AND  OTHER  CHARGES

     Restructuring  and other charges include approximately $1.2 million of cash
charges  paid  or  to be paid as a result of initiatives taken by the Company in
the  2000 second quarter for an international reduction in force of 37 employees
in  the  UK.  Additionally,  restructuring  and  other  charges  includes  legal
expenses  ($2.1  million)  associated with the CSC and shareholder lawsuits (see
Note  3  of  Notes  to  Consolidated  Financial  Statements).

MERGER  TERMINATION  CHARGES

     Merger termination charges include a $19.0 termination fee and $5.3 million
of  accrued expenses resulting from the Company's termination of the WCAS merger
(see  Note  6  of  Notes  to  Consolidated  Financial  Statements).


OPERATING  INCOME  (LOSS)

     The  2000  second  quarter  operating  loss  of  $39.2 million includes net
Special  Charges  of  approximately  $38.8  million  (see  Note  5  of  Notes to
Consolidated  Financial  Statements).  The  1999 second quarter operating income
was  $27.1  million  including  the Banking division which is treated as Special
Charges  in  the  2000  second quarter.  Exclusive of the Banking division, 1999
first  quarter  operating  income  was  $25.9  million by comparison to the 2000
second  quarter  operating  loss  before  special  charges  of  $0.4  million.

23

<PAGE>

Set  forth  below  is a comparison of operating income (loss) by segment for the
periods  ending  June  30,  2000  and  1999,  respectively:
<TABLE>
<CAPTION>


                                     Three  Months
OPERATING  INCOME  (LOSS)           Ended  June  30,
                                    ----------------
                                  2000    1999  Changes
                                 -----   -----  -------
                                (Dollars  in  millions)


<S>                             <C>      <C>     <C>
  Property and casualty. . . .  $  4.2   $17.5    (76)%
  Claims . . . . . . . . . . .    (1.7)    3.3    (152)
  Life and financial solutions     0.5    10.8     (95)
  Corporate. . . . . . . . . .   (43.0)   (8.2)   (424)
  International. . . . . . . .     0.8     3.7     (78)
                                ------   -------  ------
                                $(39.2)  $27.1   (245)%
                                ======   =======  ======
</TABLE>



     Property  and  casualty operating income decreased $13.3 million or 76% due
primarily  to  an  $8.3  million decrease in initial license charges and a $10.9
million  decline  in  professional  services  &  ITO  revenue.  Additionally,
professional  services  &  ITO  margins  declined  from  33%  to  21%.

     Claims  segment  operating  income decreased $5.0 million to a loss of $1.7
million  due primarily to $2.4 million lower initial license charges in the 2000
second  quarter  and  higher  operating  costs  due  to  1999  acquisitions.

     Life  and  financial  solutions  segment  operating  income  declined $10.3
million or 95% due primarily to the operating loss of the Banking division ($3.6
million),  lower  initial  license  charges  ($2.0  million)  and  a  decline in
professional  services  &  ITO  revenue  and  margins.

     Not withstanding the Company's reduction in force, the reduction in expense
lagged behind the decline in revenues resulting in lower margins in its property
and  casualty  and  life  segments.

     International  segment  operating  income  declined  $2.9  million  or  78%
primarily  due  to  a  $4.6 million decline in initial license charges offset by
savings  from  the 1999 third quarter restructuring.  Before special charges the
international segment's operating income increased $4.3 million of 118% compared
to  the  1999  second quarter reflecting the benefits of previous restructuring.

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.

24

<PAGE>

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


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



<S>                       <C>
Initial license revenues  $9.5   9.1    $8.7  $19.2  $26.8  $17.5  $27.4  $14.7
% of total revenues        6.8%  6.1%    6.1%  11.4%  15.4%  11.0%  16.0%   9.7%
</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.

     The Company believes that during the second quarter, uncertainty concerning
the  Company's  future  ownership,  including  the  proposed  merger  with  CSC,
adversely  affected  customers'  decisions to license software from the Company.
Management  anticipates  that  this  adverse  effect  will  continue  until  the
uncertainty  is  resolved.


OTHER  INCOME  AND  EXPENSE

     Investment  income includes a $3.2 million gain on the sale of investments.

     Interest  expense  and  other  charges  is  comprised primarily of interest
expense  which  increased $4.0 million for the 2000 second quarter compared with
the  1999  second  quarter,  principally  due to higher levels of borrowed funds
under  the Company's credit agreements along with higher interest rates and $1.2
million  of  amortization  expense  for  credit facilities fees paid in the 2000
first  quarter  to  amend the Company's credit agreements.  The nominal interest
rate  applicable  to borrowings under the Company's credit facilities during the
second quarter of 2000 ranged from 7.375% to 9.5% compared to a range of 5.1625%
to  5.25%  in  the  1999  second  quarter.

INCOME  TAXES

The effective income tax rate (income taxes expressed as a percentage of pre-tax
income)  was  -2.1%  and  37.0%  for  the  second  quarters  of  2000  and 1999,
respectively.  The  effective  rate  for the three months ended June 30, 2000 is
not  comparable to the three months ended June 30, 1999 due primarily to non-tax
effected  merger  related costs incurred during the period and the establishment
of  a  valuation  allowance  for  certain  deferred  tax  assets.  The valuation
allowance  was  established  due to the uncertain realization of those assets in
light  of  the  Company's  operating  performance  in  the  2000 second quarter.

25

<PAGE>
                              SIX MONTH COMPARISON

REVENUES
<TABLE>
<CAPTION>

                                      Six  Months
                                    Ended  June  30,
                                    ----------------
  Licensing                      2000    1999   Change
                                -----   -----   ------
                                (Dollars  in  millions)


<S>                             <C>     <C>     <C>
  Initial charges. . . . . . .  $18.6   $44.3   (58)%
  Monthly charges. . . . . . .   33.9    34.2     (1)
                                ------  ------
                                $52.5   $78.5   (33)%
                                ======  ======

  Percentage of total revenues   18.2%   23.5%
                                ------  ------

Initial licensing
------------------------------
</TABLE>



     Initial  license  revenues decreased $25.7 million for the first six months
of 2000 compared with the first six months of 1999, with the following decreases
by  business  segment:  property  and  casualty  down  90%  ($15.4  million) due
primarily  to  right-to-use agreements included in the first six months of 1999;
claims  down 37% ($2.6 million) due primarily to remarketing agreements included
in  the  first  six  months of 1999; life and financial solutions down 42% ($3.7
million)  with no Banking division licenses in 2000 compared with strong Banking
division  licenses  in  the first half of 1999; and international down 36% ($4.0
million).

Initial  license  charges  for the first six months of 2000 include right-to-use
licenses  to  existing customers of $0.5 million compared with $11.2 million for
the  first  six months 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. The
Company  expects  the  occurrence  of right-to-use licenses to be minimal in the
future.

Initial  license  charges  for  the  first  six months of 1999 include the first
license of the Company's new workplace injury claims management tool, COA, which
was  licensed  in conjunction with the purchase of Legalgard and $2.0 million of
licenses  to  the  former owners of FAS which the Company acquired at the end of
the  second  quarter.

Two  remarketing  agreements  for  COA,  totaling  $3.5 million, are included in
initial licensing revenues for the first six months of 1999. These non-exclusive
agreements  provide two of the Company's nationally recognized vendors the right
to re-license COA to the self-insured market. The Company also renegotiated with
one  of  these  vendors  an  extension  to  its  long-term license agreement for
operating  software  used  in  the  Company's data center. These agreements were
affected  by  the  Company's  adoption  of  Staff  Accounting Bulletin 101 as of
December 31, 1999. Consequently, the $3.5 million of initial license revenue was
adjusted  in  the  1999  fourth quarter and is being recognized ratably over the
terms  of  the  respective  agreements.  Initial  license  revenue includes $1.7
million  of  this  revenue  in  the  first  six  months  of  2000.

26

<PAGE>

     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.

The  company  believes  that  lingering  customer  Y2K  concerns,  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,  the Company believes that the WCAS
merger  agreement,  and its subsequent termination upon entering into the merger
agreement  with  CSC  made  it  difficult  for  the  Company to conclude initial
licenses  with  customers  in the second quarter due to uncertainties concerning
the  Company's  ownership.

     Set  forth  below is a comparison of initial license revenue by segment for
the  periods  ending  June  30,  2000  and  1999,  respectively:

<TABLE>
<CAPTION>


                                      Six  Months
                                   Ended  June  30,
                                   ----------------
                               2000    1999     Change
                              -----   -----     ------
                              (Dollars  in  millions)


<S>                             <C>    <C>     <C>
  Property and casualty. . . .  $1.8   $17.2    (90)%
  Claims . . . . . . . . . . .   4.5     7.1    (37)
  Life and financial solutions   5.2     8.9    (42)
  International. .. .            7.1    11.1    (36)
                                -----  -----  ------
                                $18.6  $44.3    (58)%
                                =====  ======

  Percentage of total revenues   6.5%   13.3%
                                -----  ------
</TABLE>




Monthly  licensing
                  -

     Monthly  license charges decreased $0.3 million for the first six months of
2000  compared with the first six months of 1999 with the following increases or
decreases  by  business  segment:  property and casualty down 17% ($2.6 million)
due  to  weak  1999 and 2000 first half licensing and the effect of right-to-use
licenses;  claims  up  $2.8  million  primarily due to the effect of 1999 second
quarter acquisitions (see Note 2 of Notes to Consolidated Financial Statements);
life and financial solutions was relatively unchanged; and international down 5%
($0.5  million).

27

<PAGE>
<TABLE>
<CAPTION>


                                      Six  Months
                                   Ended  June  30,
                                   ----------------
                                2000    1999     Change
                                -----   -----     ------
                                (Dollars  in  millions)


<S>                             <C>     <C>      <C>
  Property and casualty. . . .  $12.3   $ 14.9     (17)%
  Claims . . . . . . . . . . .    2.9      0.1    2,800
  Life and financial solutions    9.9      9.9        -
  International. . . . . . . .    8.8      9.3       (5)
                                -----  -------    ------
                                $33.9   $ 34.2      (1)%
                                =====  =======    ======

  Percentage of total revenues   11.8%   10.3%
                                -----  ------
</TABLE>


<TABLE>
<CAPTION>


                                      Six  Months
                                   Ended  June  30,
                                   ----------------
  Services                      2000    1999   Change
                                -----   -----   ------
                               (Dollars  in  millions)


<S>                             <C>      <C>      <C>
  Professional services & ITO.  $184.8   $221.0   (16)%
  BPO. . . . . . . . . . . . .    48.1     32.2      49
  Other. . . . . . . . . . . .     3.0      2.1      43
                                -------  -------
                                $235.9   $255.3    (8)%
                                =======  =======

  Percentage of total revenues    81.8%    76.5%
                                -------  -------
</TABLE>




Professional  services  &  ITO


     Professional  services & ITO revenues decreased $36.2 million for the first
six  months  of  2000  compared  with  the  first  six  months of 1999, with the
following  decreases  or  increases  by business segment:  property and casualty
down  24%  ($20.3  million);  claims  up 146% ($3.5 million); life and financial
solutions  down  3%  ($1.8 million); and international down 24% ($17.6 million).
The decreases are principally due to weak initial licensing activity during 1999
and  the  first  half  of 2000. In addition, property and casualty was adversely
affected  by  the migration of ITO customers from mainframe Series II processing
to  AS400  Point  processing.  Also, international was adversely affected by the
loss  of  a  significant  ITO  customer  in  the  1999  third  quarter.

     In  the  first  six  months  of  2000,  the international segment's revenue
includes  a  $1.5  million  cumulative  catch-up adjustment based on a change in
accounting  estimate associated with a significant contract accounted for on the
basis  of  POC.  The  property  and  casualty  segment's 1999 six month 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.

28

<PAGE>
     Set  forth  below  is  a  comparison professional services & ITO revenue by
segment  for  the  periods  ending  June  30,  2000  and  1999,  respectively:
<TABLE>
<CAPTION>


                                      Six  months
                                   Ended  June  30,
                                  ----------------
                               2000      1999     Change
                              -----     -----     ------
                                (Dollars  in  millions)


<S>                             <C>      <C>      <C>
  Property and casualty. . . .  $ 64.1   $ 84.4   (24)%
  Claims . . . . . . . . . . .    5.9       2.4   146
  Life and financial solutions    59.7     61.5    (3)
  International. . . . . . . .    55.1     72.7   (24)
                                ------  -------
                                $184.8   $221.0    16%
                                ======  ========

  Percentage of total revenues    64.1%   66.2%
                                ------  -------
</TABLE>



BPO

BPO  revenues  increased $15.9 million for the first six months of 2000 compared
with  the  first  six  months  of 1999, with the following increases by business
segment:  property  and  casualty  up  5%  ($1.2  million);  life  insurance and
financial  solutions  up  125%  ($11.1  million)  due to internal growth and the
acquisition of FAS ($2.8 million) in 1999; and international up $3.6 million due
to  increased  processing  in Europe and South Africa. The claims segment has no
BPO  operations.

Set  forth  below  is a comparison BPO revenue by segment for the periods ending
June  30,  2000  and  1999,  respectively:
<TABLE>
<CAPTION>

                                     Six  months
                                  Ended  June  30,
                                  ----------------
                              2000      1999     Change
                             -----     -----     ------
                               (Dollars  in  millions)


<S>                             <C>      <C>     <C>
  Property and casualty. . . .  $ 24.0   $22.8      5%
  Claims . . . . . . . . . . .       -       -      -
  Life and financial solutions    20.0     8.9    125
  International. . . . . . . .     4.1     0.5    720
                                ------  ------
                                $ 48.1   $32.2    49%
                                ======  ======

  Percentage of total revenues    16.7%    9.6%
                                ------  -------
</TABLE>



OPERATING  EXPENSES

COST  OF  REVENUES

     Employee compensation and benefits increased 3% for the first six months of
2000  compared  with  the  first  six  months  of  1999,  due  primarily  to the
acquisitions  in 1999 (see Note 2 of Notes to Consolidated Financial Statements)
partially  offset  by  the  reductions  in  force.  Before  the  effect  of
these  acquisitions  employee compensation and benefits for the first six months
of  2000 decreased 3% when compared with the first six months of 1999.  Domestic
employee  compensation  in  the  first  six  months  of  2000 increased 9% ($9.2
million)  compared  with  the  first  six  months  of  1999  with the effects of
reductions  in  force in prior quarters being offset by acquisitions in 1999 and
an  increase  in  benefit  expense due to the acceleration of health claims paid

29

<PAGE>
as  a  result of the reduction in force. International compensation and benefits
decreased  10%  ($4.7  million) reflecting the benefit of 1999 third quarter and
2000  first  quarter  reductions  in  force.

Computer  and  communications expenses increased 16% for the first six months of
2000  compared  with  the  first  six months of 1999. The increase is due to the
Company's  1999  acquisitions, an increase in processing volumes and data center
operating  software  license  fees.

Depreciation  and  amortization  of property, equipment and capitalized software
costs increased 12% for the first six months of 2000 compared with the first six
months  of  1999.  Depreciation  and  amortization  was  reduced  as a result of
software  write-downs  recorded  in  the  1999  third  and fourth quarters and a
reduction  in  the  Company's  capital  expenditures for property and equipment.
However, these savings were more than offset by the 2000 second quarter software
write-offs  (see Note 5 of Notes to Consolidated Financial Statements) discussed
below  and  the  acquisitions  of  Dorn  and  FAS  in  1999.

Other  operating  costs  and  expenses increased 31% for the first six months of
2000  compared  with the first six months of 1999.  This increase was due to the
Company's  acquisitions  in  1999  being  partially off-set by a decrease in the
amount  of  development  expense  capitalized  related  to  internal  software
development  and  internally  used  systems.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling, general and administrative expenses increased 2% for the first six
months  of  2000 compared with the first six months of 1999.  Before the effects
of  the  Company's  1999  acquisitions  and  approximately $2.1 million of brand
expenses associated with changing the Company's name (see Note 7 of Notes to the
Consolidated  Financial  Statements regarding Change of Company's Name) selling,
general  and administrative expenses decreased 8% due partly to the reduction in
force  and  decreased  costs associated with the Company's lower revenues in the
first  six  months  of  2000.  Selling,  general  and  administrative  expenses
increased to 17% of revenues in the first six months of 2000 compared to 16% for
the  first  six  months  of  1999.

AMORTIZATION  OF  GOODWILL  AND  OTHER  INTANGIBLES

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

RESTRUCTURING  AND  OTHER  CHARGES

     Restructuring  and other charges include approximately $8.7 million of cash
charges  paid  or  to be paid as a result of initiatives taken by the Company in
the first six months of 2000 for a worldwide reduction in force of 350 employees
in the first quarter and a reduction in force in the international segment of 37
employees  in  the  second  quarter.  An  additional  $7.3  million relates to a
settlement  of  a dispute with a customer and legal expenses associated with the
CSC  and  shareholder  lawsuits  (see  Note 3 of Notes to Consolidated Financial
Statements).

30

<PAGE>

MERGER  TERMINATION  CHARGES

     Merger termination charges include a $19.0 termination fee and $5.3 million
of accrued WCAS and Company expenses resulting from the Company's termination of
the  WCAS  merger  (see  Note  6 of Notes to Consolidated Financial Statements).


OPERATING  (LOSS)  INCOME

     The  2000  six  month  results  produced an operating loss of $55.2 million
compared  with  the  1999 six month operating income of $49.6 million.  The 2000
six  month  operating loss includes Special Charges of $57.4 million (see Note 5
of  the  Notes  to the Consolidated Financial Statements).  Before these special
charges,  the  2000  six  month  resulted  in  operating  income of $2.2 million
compared  with  operating  income  of $48.9 million in the 1999 six months.  The
remaining $46.7 million decrease relates primarily to a $25.7 million decline in
initial  license  revenue  and  declining  services  revenue  and  margins.

     Set  forth  below is a comparison of operating income (loss) by segment for
the  periods  ending  June  30,  2000  and  1999,  respectively:
<TABLE>
<CAPTION>


                                         Six  Months
OPERATING  INCOME  (LOSS)            Ended  June  30,
                                      ----------------
                                 2000    1999     Change
                                 -----   -----     ------
                                (Dollars  in  millions)


<S>                             <C>       <C>      <C>
  Property and casualty. . . .  $  9.4    $37.2    (75)%
  Claims . . . . . . . . . . .    (3.0)     5.6    (154)
  Life and financial solutions    (2.5)    18.8    (113)
  Corporate. . . . . . . . . .   (55.9)   (16.2)   (245)
  International. . . . . . . .    (3.2)     4.2    (176)
                                ----------------
                                $(55.2)   $49.6    (211)%
                                =======  =======  ======
</TABLE>



     Property  and  casualty segment operating income decreased $27.8 million or
75%  primarily  due  to  a  $15.4  million  decrease  in initial license charges
accompanied  by  a  $20.3 million or 24% decrease in professional services & ITO
revenue.

     Claims  segment  operating  income decreased $8.6 million to a loss of $3.0
million  principally  due  to a $2.6 million decrease in initial license charges
and  higher  operating  costs  due  to  1999  acquisitions.

     Life  segment  operating  income  decreased $21.3 million to a loss of $2.5
million  principally  due  to  Banking division losses of $8.4 million and lower
initial  license  charges  of  $3.7  million.

     International  segment operating income decreased $7.4 million to a loss of
$3.2 million primarily due to special charges of $9.4 million described above, a
$4.0 million decrease in initial license charges and lower professional services
&  ITO  revenue.

31

<PAGE>
     Not withstanding the Company's reduction in force, the reduction in expense
lagged behind the decline in revenues resulting in lower margins in its property
and  casualty,  life  and  international  segments.

     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.

     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.

     The Company believes that during the second quarter, uncertainty concerning
the  Company's  future  ownership,  including  the  proposed  merger  with  CSC,
adversely  affected  customers'  decisions to license software from the Company.
Management  anticipates  that  this  adverse  effect  will  continue  until  the
uncertainty  is  resolved.

OTHER  INCOME  AND  EXPENSE

     Investment  income  includes  $5.3  million of gain on sale of investments.

     Interest  expense  and  other  charges  is  comprised primarily of interest
expense  which  increased $9.2 million for the first six months of 2000 compared
with  the  first six months of 1999, principally due to higher interest rates on
higher  levels  of  borrowed  funds  under  the Company's credit agreements. The
remainder  of  the  increase  is due to $2.1 million of amortization expense for
credit  facilities  fees  paid  in the 2000 first quarter to amend the Company's
credit agreements.  The nominal interest rate applicable to borrowings under the
Company's credit facility during the first six months of 2000 ranged from 7.375%
to  9.6%  compared  to  a range of 5.1625% to 5.85% for the same period in 1999.

INCOME  TAXES

     The  effective  income  tax rate (income taxes expressed as a percentage of
pre-tax  income)  was 11.1% and 37.0% for the first six months of 2000 and 1999,
respectively.  The  effective rate for the six months ended June 30, 2000 is not
comparable  to  the  six  months  ended  June  30, 1999 due primarily to non-tax
effected  merger  related  costs  incurred during the first half of 2000 and the
establishment  of  a  valuation  allowance for certain deferred tax assets.  The
valuation  allowance  was  established due to the uncertain realization of those
assets  in  light  of  the  Company's  operating  performance.

32

<PAGE>


                         LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>

                                  June  30,  December  31,
                                     2000         1999
-----------------------------------------------------------
                                    (Dollars  in  millions)


<S>                                  <C>       <C>
Cash and equivalents and marketable
  securities. . . . . . . . . . . .  $  20.6   $ 17.8
Current assets. . . . . . . . . . .    201.2    212.0
Current liabilities . . . . . . . .    337.4     76.0
Working capital . . . . . . . . . .   (136.2)   136.0
Long-term debt. . . . . . . . . . .      0.0    227.0
</TABLE>




<TABLE>
<CAPTION>

                                      Six  Months  Ended
                                           June  30,
                                       2000         1999
--------------------------------------------------------
                                  (Dollars  in  millions)


<S>                                    <C>      <C>
Cash (used) provided by operations. .  $ (1.3)  $  33.5
Cash used by investing activities . .   (20.9)   (120.9)
Cash provided by financing activities    25.0      94.3
</TABLE>



   The  Company's total debt, net of cash and marketable securities, at June 30,
2000 was $238.4 million, an increase from the comparable amount ($205.0 million)
at  March 31, 2000 which resulted primarily from the termination fees related to
the  WCAS  transaction.  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
second  quarter  of  2000, compared with the second quarter of 1999 however, the
Company  significantly  decreased  expenditures  in  all these areas and expects
these  expenditures  during  2000  to  continue  at  amounts  lower  than 1999.

   As of June 30, 2000, the Company had a $180.0 million line of credit of which
$168.0  million  was  outstanding.  Availability  under this credit line will be
reduced  to  $125 million on April 1, 2001 and will expire on July 1, 2001.  The
Company's  $70.0  million  term  loan,  all of which was outstanding at June 30,
2000, matures on January 31, 2001.  In addition, CSC advanced to the Company the
cash  necessary  to  pay  the $19.0 million termination fee due to WCAS upon the
termination  of  the  WCAS merger agreement, and committed to advance up to $5.0
million for related expenses.  The amount of these expenses are yet to be agreed
but  are  expected  to  be paid in the 2000 third quarter. CSC also provided the
Company  a  line  of  credit up to $30.0 million for operational working capital
needs.  Any  amounts due CSC mature on July 3, 2001.  Since all of the Company's
debt matures on or before July 3, 2001 and in light of the issues concerning the
Company's  ability  to meet its financial covenants, more fully discussed below,
all  of  the  Company's  indebtedness  is shown under current liabilities in the
accompanying  balance  sheet  as  of  June  30,  2000.

33

<PAGE>

   The  results  for  the quarter ended June 30, 2000 resulted in a violation of
the  defined Consolidated Adjusted Cash Flow covenant of both the $180.0 million
line of credit and $70.0 million term loan agreements as amended in April, 2000.
Consequently,  the  Company  entered  into  an  amendment in August, 2000, which
brought it into compliance with its agreements.  That amendment provides for the
exclusion  from  the  Consolidated  Adjusted  Cash Flow and Consolidated Minimum
Tangible  Net  Worth  covenants  of up to $24.0 million in fees and expenses due
WCAS.  In  addition,  the  amendment  reduced  the  required  minimum  amount of
Consolidated  Adjusted  Cash Flow for the quarter ended June 30, 2000 from $15.0
million  to $10.0 million, but did not amend the required minimum amount for the
quarter  ended  September  30,  2000 which is $30.0 million.  The amendment left
unchanged  the  required  level of Minimum Consolidated Tangible Net Worth as at
September  30,  2000,  which  is  $196.7  million

   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 is exploring alternative means to reduce its
debt,  some  of  which  would  be  subject  to  approval  by  CSC.

     Significant  expenditures  anticipated for the remainder of 2000, excluding
new  product  development  are  as  follows:  acquisition of data processing and
communications  equipment,  support  software,  office  furniture,  fixtures and
equipment  ($10.0  million)  and  costs relating to the continued enhancement of
existing  software  products  ($20.0  million).


                     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.

34

<PAGE>
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 Company believes that during the second quarter, uncertainty concerning
the  Company's  future  ownership,  including  the  proposed  merger  with  CSC,
adversely  affected  customers'  decisions to license software from the Company.
Management  anticipates  that  this  adverse  effect  will  continue  until  the
uncertainty  is  resolved.

35

<PAGE>
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.

36

<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.

     The  Company  did not file any reports on Form 8-K during the quarter ended
June  30,  2000.

37

<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:  August  14,  2000     Timothy  V.  Williams
     Executive  Vice  President
     (Chief  Financial  Officer)

38

<PAGE>



           POLICY  MANAGEMENT  SYSTEMS  CORPORATION

                      EXHIBIT  INDEX

     TO  FORM  10-Q  FOR  QUARTER  ENDED  JUNE  30,  2000


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

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

A.     Agreement  and Plan of Merger between Politic Acquisition 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)

C.     Agreement  and  Plan  of Merger among Computer Sciences Corporation,
Patriot  Acquisition Corporation and Policy Management Systems Corporation dated
June  20,  2000 (filed as an exhibit to Schedule 14-D9/A dated July 19, 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)

39

<PAGE>
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)

40

<PAGE>

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)

41

<PAGE>
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)

42

<PAGE>
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)

43

<PAGE>
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 as an exhibit to Form 10-Q for the
Quarter ended March 31,  2000  and  is incorporated  herein  by  reference)

          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  Director  (filed  as  an exhibit to  Form
10-Q  for  the Quarter ended  March  31,  2000  and  is incorporated  herein  by
reference)

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 as an exhibit to Form 10-Q for
the  Quarter  ended  March  31,  2000  and  is incorporated herein by reference)

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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

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 as an exhibit to Form 10-Q for
the  Quarter  ended  March  31,  2000  and  is incorporated herein by reference)

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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

44

<PAGE>
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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

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  as  an exhibit to Form 10-Q for the Quarter ended
March  31,  2000  and  is  incorporated  herein  by  reference)

DDD.     Mortgage  Agreement  dated  as  of  April  28,  2000,  between   Policy
Management  Systems  Corporation  and  Bank  of America, N.A., as Administrative
Agent (filed as an exhibit to Form 10-Q for the Quarter ended March 31, 2000 and
is  incorporated  herein  by  reference)

EEE.     Form  of Employee Stock Option/Non Compete Agreement dated April 3,2000
with schedule identifying particulars for each named officer (filed herewith)

          The  Schedule  for  EEE  [57]  contained  the  following:

          OFFICERS                         OPTIONS  RECEIVED
          --------                         -----------------
          David  T.  Bailey                     35,000
          Michael  D.  Gantt                    35,000
          Harald  J.  Karlsen                   25,000
          Stephen  G.  Morrison                 35,000
          Michael  W.  Risley                   35,000
          Timothy  V.  Williams                 35,000
          G.  Larry  Wilson                     75,000

FFF.     Form  of  Memorandum  regarding  Grant  of  15,000  Stock Options dated
April  5,  2000  with  schedule  identifying  particulars  for   each   director
(filed herewith)

          The  Schedule  for  FFF  [58]  contained  the  following:

          DIRECTORS
          ---------

          Alfred  R.  Berkeley,  III
          Donald  W.  Feddersen
          Dr.  John  M.  Palms
          Joseph  D  Sargent
          John  P.  Seibels
          Richard  G.  Trub


GGG.     Consent  and  Waiver  dated  June  19,  2000  relating  to  the  Credit
Agreement between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

HHH.     Consent,  Waiver and Amendment  dated  June 19, 2000  relating  to  the
Term  Loan  Agreement   between   Policy  Management  Systems  Corporation,  the
Guarantors,  Bank of America, N.A., and the other financial institutions thereto
(filed  herewith)

45

<PAGE>
III.     Consent  and  Waiver  dated  June  20,  2000  relating  to  the  Credit
Agreement between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

JJJ.     Consent  and  Waiver dated June 20, 2000  relating  to  the  Term  Loan
Agreement between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

KKK.     Consent, Waiver and Fifth Amendment  to  Credit  Agreement  dated  July
14,  2000 between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

LLL.     Consent  and  Waiver dated July 14, 2000  relating  to  the  Term  Loan
Agreement between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

MMM.     Fifth  Amendment  to  Term  Loan Agreement dated as of August ___, 2000
between  Policy  Management  Systems  Corporation,  Bank  of  America, N.A., the
Guarantors,  and  the  other  financial  institutions  thereto  (filed herewith)

NNN.     Sixth  Amendment  to  the  Credit  Agreement  dated  as  of  August __,
2000  between  Policy Management Systems Corporation, Bank of America, N.A., the
Guarantors,  and  the  other  financial  institutions  thereto  (filed herewith)

OOO.     Subordination  Agreement  dated June 20, 2000 between Computer Sciences
Corporation, Bank of  America,  N.A.  and  Policy Management Systems Corporation
(filed  herewith)

PPP.     Promissory  Note  dated  June  20, 2000  by  Policy  Management Systems
Corporation  in  favor  of  Computer  Sciences  Corporation  (filed  herewith)

QQQ.     Working  Capital  Promissory  Note  dated  August  3,  2000  by  Policy
Management  Systems Corporation in favor of Computer Sciences Corporation (filed
herewith)

27.     FINANCIAL  DATA  SCHEDULE

A.      Filed  herewith

46

<PAGE>
[{"type": "10-Q", "sequence": "1", "filename": "0001.txt", "secsgml_size_bytes": 128984}]
{"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": "701845"}, "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 JUNE 30, 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.

         35,585,504 Common shares, $.01 par value, as of August 4, 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.

1
POLICY MANAGEMENT SYSTEMS CORPORATION

                                      INDEX

PART  I.  FINANCIAL  INFORMATION     PAGE

Item  1.  Financial  Statements
Consolidated Statements of Operations for the Three and
Six Months Ended June 30, 2000 and 1999 . . . . . . . .   3

Consolidated Balance Sheets as of June 30, 2000 and
December 31, 1999 . . . . . . . . . . . . . . . . . . .   4

Consolidated Statements of Changes in Stockholders'
Equity and Comprehensive Income for the Six
Months Ended June 30, 2000. . . . . . . . . . . . . . .   5

Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2000 and 1999 . . . . . . . .   6

Notes to Consolidated Financial Statements. . . . . . .   7

Item 2. Management's Discussion and Analysis of
  Financial Condition and Results of Operations . . . .  16

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings . . . . . . . . . . . . . .  37

  Item 6. Exhibits and Reports on Form 8-K. . . . . . .  37

Signatures. . . . . . . . . . . . . . . . . . . . . . .  38
2
PART I
                                         FINANCIAL INFORMATION
                                 POLICY MANAGEMENT SYSTEMS CORPORATION
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                              (Unaudited)

                                               Three  Months        Six  Months
                                           Ended  June  30,       Ended  June  30,
                                         ------------------     ------------------
                                             2000       1999       2000      1999
                                           ------     ------     ------     -----
                                         (In  thousands,  except  per  share  data)
REVENUES
 Licensing. . . . . . . . . . . . . . .  $ 26,207   $ 43,697   $ 52,507   $ 78,463
 Services . . . . . . . . . . . . . . .   113,867    129,834    235,909    255,357
                                         ---------  ---------  ---------  ---------
                                          140,074    173,531    288,416    333,820
                                         ---------  ---------  ---------  ---------

OPERATING EXPENSES
 Cost of revenues
  Employee compensation and benefits. .    75,190     76,385    154,510    150,043
  Computer and communications expenses.    13,861     11,717     27,512     23,646
  Depreciation and amortization of
   property, equipment and
   capitalized software costs . . . . .    22,574     17,094     37,268     33,251
  Other costs & expenses. . . . . . . .     9,675      9,422     21,978     16,838
 Selling, general and administrative
   expenses . . . . . . . . . . . . . .    26,606     28,362     54,820     53,934
 Amortization of goodwill and
   other intangibles. . . . . . . . . .     3,784      3,461      7,169      6,538
 Restructuring and other charges. . . .     3,255          -     16,027          -
 Merger termination charges . . . . . .    24,347          -     24,347          -
                                         ---------  ---------  ---------  ---------

                                          179,292    146,441    343,631    284,250
                                         ---------  ---------  ---------  ---------

OPERATING (LOSS) INCOME . . . . . . . .   (39,218)    27,090    (55,215)    49,570

Equity in earnings of
   unconsolidated affiliates. . . . . .       270        148        711        288

Minority interest . . . . . . . . . . .        21        (40)        39        (78)

Other income and expenses:
  Investment income . . . . . . . . . .     3,698       183        6,076        435
  Interest expense and other charges. .    (6,795)    (2,747)   (13,478)    (4,240)
                                         --------- ----------  ---------  ---------
                                           (3,097)    (2,564)    (7,402)    (3,805)
                                         --------- ----------  ---------  ---------
(Loss) income before income taxes . . .   (42,024)    24,634    (61,867)    45,975
Income tax expense (benefit). . . . . .       863      9,122     (6,838)    17,012
                                         --------- ----------  ---------  ---------

NET (LOSS) INCOME . . . . . . . . . . .  $(42,887)  $ 15,512   $(55,029)  $ 28,963
                                         =========  =========  =========  =========

BASIC (LOSS) EARNINGS PER SHARE . . . .  $  (1.21)  $   0.44   $  (1.56)  $   0.81
                                         =========  =========  =========  =========

DILUTED (LOSS) EARNINGS PER SHARE . . .  $  (1.21)  $   0.42   $  (1.56)  $   0.77
                                         =========  =========  =========  =========

Weighted average common shares. . . . .    35,380     35,354     35,378     35,739
Weighted average common shares
  assuming dilution . . . . . . . . . .    35,380     36,584     35,378     37,458
See  accompanying  notes
3
POLICY MANAGEMENT SYSTEMS CORPORATION
                           CONSOLIDATED BALANCE SHEETS

                                                (Unaudited)      (Audited)
                                                 June  30,     December  31,
                                                    2000         1999
                                                   ------       ------
                                       (In  thousands,  except share  data)
Assets
Current assets
 Cash and equivalents                               $ 20,552   $ 17,744
 Receivables, net of allowance for uncollectible
  amounts of $5,353 ($13,000 at December 31, 1999)   102,714     99,669
 Accrued revenues                                     24,889     36,393
 Deferred income taxes                                17,427     15,979
 Income tax receivable                                12,622      9,728
 Other receivable                                          -      7,788
 Prepaids                                              6,751     12,050
 Other                                                16,209     12,648
                                                    ---------  ---------
   Total current assets                              201,164    211,999

Property and equipment, at cost less accumulated
 depreciation and amortization of $126,144
 ($132,347 at December 31, 1999)                     136,835    142,867
Accrued revenues                                      24,296     16,130
Income tax receivable                                  4,041      4,041
Goodwill and other intangibles, net                  105,818    111,024
Capitalized software costs, net                      155,099    155,896
Deferred income taxes                                 29,327     29,850
Investments                                            5,921     13,332
Other                                                 19,684     21,149
                                                    ---------  ---------
     Total assets                                   $682,185   $706,288
                                                    =========  =========

Liabilities
Current liabilities
 Accounts payable and accrued expenses              $ 43,123     41,236
 Notes payable                                        21,000          -
 Current portion of long-term debt                   238,000      4,000
 Income taxes payable                                  4,128      4,616
 Unearned revenues                                    24,148     20,290
 Accrued restructuring and other charges               5,113      3,630
 Other                                                 1,881      2,223
                                                    ---------  ---------
   Total current liabilities                         337,393     75,995

Long-term debt                                             -    227,000
Deferred income taxes                                 72,207     68,514
Accrued restructuring and other charges                3,077      2,659
Other                                                  8,777      9,935
                                                    ---------  ---------
    Total liabilities                                421,454    384,103
                                                    ---------  ---------

Minority interest                                        593        624

Stockholders' equity
Special stock, $.01 par value, 5,000,000 shares
 authorized                                                -          -
Common stock, $.01 par value, 75,000,000 shares
 authorized, 35,585,581 shares issued and
 outstanding (35,585,078 at December 31, 1999)           356        356
Additional paid-in capital                            56,809     56,695
Retained earnings                                    232,454    287,483
Accumulated other comprehensive income               (19,783)   (12,972)
Stock employee compensation trust                     (9,698)   (10,001)
                                                    ---------  ---------
    Total stockholders' equity                       260,138    321,561
                                                    ---------  ---------
 Total liabilities and stockholders' equity         $682,185   $706,288
                                                    =========  =========
See  accompanying  notes
4
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. . . . . .         -         -   (55,029)             -          -    (55,029)
 Other comprehensive income,
  net of tax:
   Foreign currency
    translation adjustments .         -         -         -          (6,811)        -     (6,811)
                                                                                          -------
Total comprehensive income. .                                                            (61,840)
                                                                                        ---------

Restricted stock. . . . . . .         -        92         -                   -   303        395
Stock options exercised
  (1,168 shares). . . . . . .         -        22         -                   -     -         22
                               ---------  -------  ---------  ------------------ -----  ---------

BALANCE, JUNE 30, 2000. . . .  $    356   $56,809  $232,454   $    (19,783)  $ (9,698)  $260,138
                               =========  =======  =========  =============  =========  =========
See  accompanying  notes

(1)     Comprehensive  (loss)  income for the three months ended June 30, 2000 and 1999 was $(45,227)
and  $14,178,  respectively.

     Comprehensive  income  for  the  six  months  ended  June  30,  1999  was  $25,960.
5
POLICY MANAGEMENT SYSTEMS CORPORATION
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (Unaudited)

                                                         Six  Months
                                                       Ended  June  30,
                                                     ---------------------
                                                        2000        1999
                                                      ------      ------
                                                        (In  thousands)
Operating Activities
 Net (loss) income                                  $ (55,029)  $  28,963
 Adjustments to reconcile net (loss) income to net
  cash (used) provided by operating activities:
   Depreciation and amortization                       47,970      42,509
   Deferred income taxes                                2,768       6,285
   Provision for uncollectible accounts                 1,444         (22)
   Loss on disposal of property and equipment. . .        224         305
   Gain on sale of investments                         (5,298)          -
 Changes in assets and liabilities:
   Receivables                                         (5,710)     (9,437)
   Accrued revenues                                     3,338     (29,407)
   Other receivable                                     7,788      11,279
   Accounts payable and accrued expenses                1,051     (12,010)
   Accrued restructuring and other charges              2,724           -
   Income taxes                                        (3,382)      7,518
   Unearned revenues                                    3,858       1,534
   Other, net                                          (3,049)    (14,071)
                                                    ----------  ----------
      Cash (used) provided by operations               (1,303)     33,446
                                                    ----------  ----------

Investing Activities
 Acquisition of property and equipment                 (9,634)    (20,596)
 Capitalized internal software development costs      (24,377)    (34,553)
 Business acquisition and investments                  (6,816)    (67,313)
 Proceeds from sale of investments . . . . . . . .     17,199           -
 Other                                                  2,705       1,530
                                                    ----------  ----------
      Cash used by investing activities               (20,923)   (120,932)
                                                    ----------  ----------

Financing Activities
 Payments on long-term debt                          (145,000)    (34,971)
 Proceeds from borrowing under credit facility        154,000     165,700
 Purchase of stock for Stock Employee
  Compensation Trust                                        -     (10,094)
 Issuance of common stock under stock option plans         22       6,682
 Proceeds from note payable. . . . . . . . . . . .     19,000
 Repurchase of common stock                                 -     (33,045)
 Other                                                 (2,988)         29
                                                    ----------  ----------
       Cash provided by financing activities           25,034      94,301
                                                    ----------  ----------

Net increase in cash and equivalents                    2,808       6,815
Cash and equivalents at beginning of period            17,744      26,013
                                                    ----------  ----------
Cash and equivalents at end of period               $  20,552   $  32,828
                                                    ==========  ==========

Supplemental Information
 Interest paid                                      $   6,206   $   3,211
 Income taxes (refunded) paid                          (4,613)      4,023

6
POLICY MANAGEMENT SYSTEMS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 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 three and six months ended June 30, 2000, as
the  net  loss  generated  in  those periods would cause the inclusion of common
stock  options  to  be anti-dilutive.  The average market price of the stock for
the  period was below the exercise price for the majority of options outstanding
during the period.  The following is a reconciliation of the denominator used in
the  EPS  calculations  (in  thousands):
Three  Months        Six  Months
                             Ended  June  30,      Ended  June  30,
                          -----------------     -----------------
                                2000    1999      2000    1999
                               -----   -----     -----   -----
Weighted  Average  Shares
-------------------------
Basic EPS. . . . . . . . . . .  35,380  35,354  35,378  35,739
Effect of common stock options       -   1,230       -   1,719
                                ------  ------  ------  ------
Diluted EPS. . . . . . . . . .  35,380  36,584  35,378  37,458
                                ======  ======  ======  ======
Options  to purchase 6,367,769 shares of common stock at a weighted average
price  of  $31.52 per share were outstanding but not included in the computation
of  diluted  EPS  for  the  period  ending  June  30,  2000.

7
OTHER  MATTERS

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

NOTE  2.     ACQUISITIONS

     On  May  31,  2000, the Company purchased DEKRU B.V., a Dutch subsidiary of
the  German  based DEKRA Group ("DEKRU"), for approximately $1.1 million in cash
plus  additional  consideration of up to $6.1 million contingent upon the future
performance of DEKRU to be recorded as royalty expense as incurred. DEKRU owns a
software  product  (KDX)  for  managing  and  adjusting  automobile claims.  The
Company  intends  to  market  and further develop KDX primarily for the European
market.

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  based  upon the performance of DORN.  Pursuant to an amendment to
this  agreement  in  the  2000 second quarter, this additional consideration was
limited to $1.1 million and was recorded as compensation expense in 1999 and the
first  half  of  2000.  DORN  owns the Riskmaster claims management software and
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.

8
NOTE  3.     CONTINGENCIES

     On  June  9,  2000,  the  Company  and Chase Manhattan Mortgage Corporation
("Chase")  entered  into  a  confidential  settlement  of  previously  disclosed
litigation.  (See  Item  1,  Legal  Proceedings,  of  Part  II  contained in the
Company's report on Form 10-Q for the quarter ended March 31, 2000).  As part of
the  settlement,  the  Company  and  Chase agreed to release each other from all
claims  asserted  and  the  lawsuit was dismissed.  The amount of settlement was
placed  in  escrow  and  accrued  as  an  expense  in the first quarter of 2000.

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, tortuous 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
tortuous  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  May  22,  2000  an  amended  consolidated  complaint  was  filed in the
previously disclosed purported class action filed on behalf of purchasers of the
Company's  stock during the period October 22, 1998 and February 10, 2000.  (See
Item  1, Legal Proceedings, of Part II contained in the Company's report on Form
10-Q  for the quarter ended March 31, 2000).  The defendants have filed a motion
to  dismiss  the complaint and intend to vigorously pursue a full defense of the
action.

9
Also on May 22, 2000, an amended complaint was filed in the previously disclosed
purported  class  action  brought  by  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,  against the Company, its Chairman and three
members  of  the  Administrative  Committee  of the Plan.  The amended complaint
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. The court has entered an order providing for the
coordination  of  proceedings  with the securities class action.  The defendants
have  filed  a motion to dismiss the complaint and intend to vigorously pursue a
full  defense  of  this  action.

     As  previously  disclosed,  between  March  31,  2000  and May 5, 2000 four
purported  class actions were filed against the Company and its directors in the
Court  of  Common  Pleas in Richland County, South Carolina.  (See Item 1, Legal
Proceedings,  of  Part II contained in the Company's report on Form 10-Q for the
quarter  ended  March  31, 2000).  These actions were consolidated into a single
action  and  an  amended consolidated complaint was filed on July 24, 2000.  The
amended  consolidated  complaint  alleges  that  the  defendants  breached their
fiduciary  duties  by  failing  to  conduct  a  market  check and agreeing to an
unreasonable  termination  fee in the June 20, 2000 Agreement and Plan of Merger
between  the  Company  and  Computer  Sciences Corporation (CSC transaction) and
breached  their  duty  of  candor  in  failing  to disclose material information
concerning  the  CSC transaction.  The plaintiffs seek preliminary and permanent
injunctive  relief  to enjoin payment of the termination fee under the Agreement
and  Plan  of  Merger  between  Politic Acquisition Corp. and the Company (Welsh
Carson  transaction)  which was terminated by the Company.  Plaintiffs also seek
to  enjoin consummation of the CSC tender offer until additional disclosures are
made,  to strike the termination fee in the CSC transaction, and seek reasonable
attorney fees and costs.  The plaintiffs' request for a temporary injunction was
denied on August 7, 2000 following a hearing on plaintiffs' request.  Defendants
have  filed  a  motion to dismiss the amended complaint and intend to vigorously
pursue  a  full  defense  of  this  action.

     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.

     In  a letter dated April 29, 1999, the Company was notified by 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 response. Furthermore, the Company
strongly disagrees with the proposed adjustments and is vigorously defending its
position.

10
Resolution of any of the above matters could have a material adverse effect
on  the results of operations and consolidated financial position of the Company
in  future  periods.  While  the Company does not expect these matters to have a
material  adverse  effect in future periods it is unable to predict the ultimate
outcome  or  the  potential  financial  impact  of  these  matters.

11
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.

12
Information  about  the  Company's operations for the three and six months ended
June  30,  2000  and  1999  is  as  follows  (in  thousands):
Three  Months          Six  Months
                                        Ended  June  30,     Ended  June  30,
                                      ------------------   ------------------
                                        2000     1999       2000      1999
                                      ------    ------     ------    ------
REVENUES  FROM  EXTERNAL  CUSTOMERS
Property and casualty. . . . . . .  $ 50,052   $ 70,321   $104,503   $141,145
Claims.. . . . . . . . . . . . . .     6,065      6,756     13,382      9,623
Life and financial solutions . . .    46,844     47,531     94,712     89,165
                                    ---------  ---------  ---------  ---------
  Total US revenues. . . . . . . .   102,961    124,608    212,597    239,933
International. . . . . . . . . . .    37,113     48,923     75,819     93,887
                                    ---------  ---------  ---------  ---------
  Total revenues . . . . . . . . .  $140,074   $173,531   $288,416   $333,820
                                    =========  =========  =========  =========

INCOME (LOSS) FROM OPERATIONS
Property and casualty. . . . . . .  $  4,236   $ 17,588   $  9,425   $ 37,178
Claims.. . . . . . . . . . . . . .    (1,717)     3,297     (3,001)     5,601
Life and financial solutions . . .       504     10,759     (2,533)    18,867
Corporate and US administrative. .   (43,006)    (8,210)   (55,881)   (16,233)
                                    ---------  ---------  ---------  ---------
  Total US operating (loss) income   (39,983)    23,434    (51,990)    45,413
                                    ---------  ---------  ---------  ---------

International. . . . . . . . . . .     2,516      5,519        470      7,799
International administrative . . .    (1,751)    (1,863)    (3,695)    (3,642)
                                    ---------  ---------  ---------  ---------
  Total international. . . . . . .       765      3,656     (3,225)     4,157
                                    ---------  ---------  ---------  ---------

  Operating (loss) income. . . . .   (39,218)    27,090    (55,215)    49,570

Equity in earnings of
  unconsolidated affiliates. . . .       270        148        711        288
Minority interest. . . . . . . . .        21        (40)        39        (78)
Other income and expenses. . . . .    (3,097)    (2,564)    (7,402)    (3,805)
Income tax (benefit) expense . . .       863      9,122     (6,838)    17,012
                                    ---------  ---------  ---------  ---------
  Net (loss) income. . . . . . . .  $(42,887)  $ 15,512   $(55,029)  $ 28,963
                                    =========  =========  =========  =========
NOTE  5.  SPECIAL  CHARGES  AND  ACCOUNTING  CHANGES

     The  Company considers Special Charges to be unusual events or transactions
related  to  continuing business activities.  Accounting Changes include changes
in  accounting  principles  and  estimates  that  require  a cumulative catch-up
adjustment  in  accordance  with  Accounting  Principles  Board  Opinion No. 20,
"Accounting  Changes".

Second  Quarter  2000:

     The  Company's  results for the 2000 second quarter include pre-tax special
charges  of  approximately  $36.8  million.  Of  this  amount,  $8.3  million is
non-cash  and  the  remainder  of  these  charges  have or will be paid in cash.

13
The  majority  of  the  second  quarter  Special Charges result from merger
termination  charges  of  $24.3  million in fees and expenses resulting from the
Company's  termination  of  the  merger  agreement  with a subsidiary of  Welsh,
Carson,  Anderson  &  Stowe VIII, L.P. ("WCAS") (see Note 6, "Proposed Merger").

     During  the  2000  second  quarter,  management  committed  to  a  plan  to
restructure  the  operations  of  the  United  Kingdom  ("UK")  division  of its
international  segment.  The  plan,  among  other things, entailed reductions in
staff  and  space which resulted in a restructuring charge of approximately $1.2
million.  Further,  management  indefinitely suspended development and decreased
marketing  efforts  related to a software product in the UK. As a result, second
quarter  Special  Charges  include  $7.3  million of accelerated amortization to
write-off  this  product.

     During  the  second  quarter  the  Company  transferred  operational
responsibility for the Banking division's mortgage origination software business
to  a  third  party.  Additionally,  the Company is negotiating the sale of this
business  and  the  remainder  of  the  Banking division's operations.  The 2000
second  quarter  Special  Charges include the Banking division operating loss of
$3.6  million on revenues of $2.8 million.  Also, as a result of the decision to
sell  the Banking division's operations, Special Charges include $1.1 million of
accelerated  amortization  to  write-off  a  related  software  product.

     The  Company  recognizes certain revenue under the percentage of completion
method  of  accounting  ("POC")  in  accordance with Statement of Position 81-1.
During  the  2000 second quarter, management changed the estimated profit margin
on  a  significant contract accounted for under POC.  Based on a detailed review
of  contract  performance  in  the  second  quarter,  the  Company  recognized a
cumulative  adjustment of $1.5 million of additional professional services & ITO
("Information  Technology Outsourcing") revenue in the 2000 second quarter which
partially  offset  special  charges.

During  the  second quarter the Company sold minority interests in two companies
for  $9.4  million in cash.  Special Charges in the quarter are partially offset
by the related gain of $3.2 million on the sale of these investments included in
Other  income  and  expense.

     Selling,  general  and  administrative expenses for the 2000 second quarter
include  approximately  $0.7  million of brand expenses associated with changing
the  name  of  the  Company  (see  Note  7,  "Change  of  Company's  Name").

   Restructuring  and other charges includes $2.1 million in legal fees incurred
during  the  second  quarter  related to the shareholder and CSC litigation (see
Note  3,  "Contingencies").

     Interest expense includes $1.1 million of amortization of credit facilities
fees  paid  in  the  2000  first  quarter to amend the Company's existing credit
facilities.

14
First  Quarter  2000:

     The  Company's  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  the Company's 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%  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").

During  the  2000  second  quarter  the  Company  transferred  operational
responsibility for the Banking division's mortgage origination software business
to  a  third  party.  Additionally,  the Company is negotiating the sale of this
business and the remainder of the Banking division's operations.  The 2000 first
quarter  Special  Charges  include  the  Banking division operating loss of $4.8
million  on  revenues  of  $2.8  million  including  the  recovery of previously
reserved  accounts  receivable  of  $1.2  million.

The  Company  continues  to  recognize  amortization expense related to software
products written down in the 1999 third and fourth quarters.  These products are
being  amortized  on  the  revenue  basis which is faster than the 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  7,  "Change  of  Company's  Name").

     Investment income in the 2000 first quarter included a $2.1 million gain on
the  sale  of  the  Company's  20% interest in an unconsolidated subsidiary, and
interest expense included $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.  PROPOSED  MERGER

     On  June  20,  2000,  the  Company  announced that it and Computer Sciences
Corporation  ("CSC")  entered  into an Agreement and Plan of Merger which, among
other  things,  provided  for  a  CSC  tender  offer  to  acquire  the Company's
outstanding  shares  at  a purchase price of $16 per share in cash.  On June 28,
2000,  the  Company  filed its Solicitation/Recommendation Statement on Schedule
14D-9  related  to CSC's tender offer. As a result of receiving a second request
for  information  from  the  Federal  Trade  Commission  concerning the proposed
merger,  CSC  extended  the  tender  offer  until  September  12,  2000.

15
As  a  result of entering the Agreement and Plan of Merger with CSC, the Company
was  required  to  pay  a  $19.0  million  fee  and to pay up to $5.0 million in
expenses  for  terminating  its  previously proposed merger with WCAS.  The cash
required  to  pay  this  fee  was  loaned  to  the  Company  by  CSC.

NOTE  7.  CHANGE  OF  COMPANY'S  NAME

     Following  an  earlier  announcement of plans to change the Company's name,
the  Company  began  doing business as Mynd Corporation ("Mynd") on May 1, 2000.
Officially  changing  the  Company's  name  requires  a  two-thirds  vote of the
shareholders  at  a  shareholder's meeting for holders of record on September 5,
2000,  to  be  held  on  September  27, 2000, at the Company's headquarters.  If
approved  by  the  shareholders, the Company will formally change its legal name
with  relevant  authorities  including  the  New  York  Stock  Exchange.

16
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                  Six             Three       Six
                                            Months  Ended         Months  Ended       Months     Months
                                              June  30,             June  30,          Ended      Ended
                                             -----------          -----------
                                            2000      1999        2000     1999          June  30
                                           -----      -----       -----  -----      ---------------------
Revenues
 Licensing . . . . . . . . . . . . .          18.7%          25.2%   18.2%   23.5%            (40)%  (33)%
 Services. . . . . . . . . . . . . .          81.3           74.8    81.8    76.5              (12)    (8)
                                      -------------  -------------  ------  ------
                                             100.0          100.0   100.0   100.0              (19)   (14)
                                      -------------  -------------  ------  ------
Operating expenses
 Cost of revenues
  Employee compensation and benefits          53.7           44.0    53.6    45.0               (2)     3
  Computer & communication expenses.           9.9            6.8     9.5     7.0               18     16
  Depreciation & amortization
   of property, equipment &
   capitalized software costs. . . .          16.1            9.9    12.9    10.0               32     12
  Other costs & expenses . . . . . .           6.9            5.4     7.6     5.0                3     31
 Selling, general &
   administrative expenses . . . . .          19.0           16.3    19.0    16.1               (6)     2
 Amortization of goodwill and
   other intangibles . . . . . . . .           2.7            2.0     2.5     2.0                9     10
 Restructuring & other charges . . .           2.3              -     5.6       -
 Merger termination charges. . . . .          17.4              -     8.4       -
                                      -------------  -------------  ------  ------
                                             128.0           84.4   119.1    85.1               22     21
                                      -------------  -------------  ------  ------
Operating (loss) income. . . . . . .         (28.0)          15.6   (19.1)   14.9             (245)  (211)
Equity in earnings of unconsolidated
   affiliates. . . . . . . . . . . .           0.2            0.1     0.2     0.1               82    147
Investment income. . . . . . . . . .           2.7            0.1     2.1     0.1   1,921    1,297
Interest expense and other charges .          (4.9)          (1.6)   (4.7)   (1.3)             147    218
                                      -------------  -------------  ------  ------
Income (loss) before income taxes. .         (30.0)          14.2   (21.5)   13.8             (271)  (235)
Income tax (benefit) expense . . . .           0.6            5.2    (2.4)    5.1              (91)  (140)
                                      -------------  -------------  ------  ------
Net (loss) income. . . . . . . . . .  (30.6)%  9.0%  (19.1)%  8.7%  (376)%  (290)%
                                      =============  =============
17
THREE MONTH COMPARISON

REVENUES

Licensing
---------

     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.
Three  Months
                                  Ended  June  30,
                                  ----------------
                                2000    1999   Change
                               -----   -----   ------
                              (Dollars  in  millions)
Initial charges. . . . . . .  $ 9.5   $26.8   (65)%
  Monthly charges. . . . . . .   16.7    16.9     (1)
                                ------  ------
                                $26.2   $43.7   (40)%
                                ======  ======

  Percentage of total revenues   18.7%   25.2%
                                ------  ------
Initial  licensing

     Initial  license  revenues  decreased  $17.3  million  for  the 2000 second
quarter  compared  with the 1999 second quarter, with the following decreases by
business  segment:  property  and  casualty down 92% ($8.3 million); claims down
56%  ($2.4  million);  life and financial solutions down 35% ($2.0 million) with
one  new  CyberLife  license  in  the  quarter; and international down 58% ($4.6
million)  with  a  S3+  license expansion to include the acquirer of an existing
customer  in  Europe.

Initial  license  charges  for  the second quarter of 2000 included right-to-use
licenses to existing customers of $0.5 million. This compares to $5.3 million in
right-to-use  licenses  for  the  second 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.

     Second  quarter  1999  initial  license  charges  include  $2.0  million of
licenses  to  the  former owners of FAS which the Company acquired at the end of
the  second  quarter.

18
Two  remarketing  agreements  for  Claim  Outcome Adviser  ("COA") totaling $3.5
million  are  included  in  initial  licensing revenue for the second quarter of
1999.  These  non-exclusive  agreements  provide two of the Company's nationally
recognized  vendors  the  right to relicense COA to the self-insured market. The
Company  also  renegotiated  with  one  of  these  vendors  an  extension to its
long-term  license  agreement  for operating software used in the Company's data
center.  These  agreements  were  effected  by  the  Company's adoption of Staff
Accounting  Bulletin 101 as of December 31, 1999. Consequently, the $3.5 million
of  initial license revenue was adjusted in the 1999 fourth quarter and is being
recognized ratably over the terms of the respective agreements.  Initial license
revenue  includes  $0.7  million  of  this  revenue  in the 2000 second quarter.

     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.

The Company believes that during the 2000 second quarter, uncertainty concerning
the  Company's  future  ownership,  including  the  proposed  merger  with  CSC,
adversely  affected  customers'  decisions to license software from the Company.
Management  anticipates  that  the  adverse  effect  will  continue  until  the
uncertainty  is  resolved.

     Set  forth  below is a comparison of initial license revenue by segment for
the  periods  ending  June  30,  2000  and  1999,  respectively:
Three  Months
                                          Ended  June  30,
                                          ----------------
                                        2000    1999  Change
                                        -----   -----  ------
                                      (Dollars  in  millions)
Property and casualty . . . . . . . .  $0.7   $ 9.0   (92)%
  Claims. . . . . . . . . . . . . . . .   1.8     4.2    (57)
  Life and financial solutions. . . . .   3.7     5.7    (35)
  International . . . . . . . . . . . .   3.3     7.9    (58)
                                         -----  ------
                                         $9.5   $26.8   (65)%
                                         =====  ======

           Percentage of total revenues   6.8%   15.4%
                                         -----  ------
Monthly  licensing

Monthly  license revenues in the 2000 second quarter were essentially consistent
with  the 1999 second quarter in total with the following increases or decreases
by  business segment:  property and casualty down 21% ($1.5 million) due to weak
1999  and  2000  first quarter licensing and the effect of previous right-to-use
licenses;  claims  up  650%  ($1.3  million);  life  and financial solutions and
international  were  relatively  unchanged  at $4.9 million and $4.5 million for
both  quarters,  respectively.

19
Set  forth  below  is a comparison of monthly license revenue by segment for the
periods  ending  June  30,  2000  and  1999,  respectively:
Three  Months
                                  Ended  June  30,
                                  ----------------
                                2000    1999  Change
                                -----   -----  ------
                               (Dollars  in  millions)
Property and casualty. . . .  $ 5.8   $ 7.3   (21)%
  Claims . . . . . . . . . . .    1.5     0.2    650
  Life and financial solutions    4.9     4.9      -
  International. . . . . . . .    4.5     4.5      -
                                -----  ------
                                $16.7   $16.9    (1)%
                                =====  ======  =====

  Percentage of total revenues   11.9%   9.8%
                                -----   -----
Services
---------

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.
Three  Months
                                   Ended  June  30,
                                   ----------------
                                2000    1999  Change
                                -----   -----  ------
                               (Dollars  in  millions)
Professional services & ITO.  $ 86.9   $111.1   (22)%
  BPO. . . . . . . . . . . . .    25.0     16.9     48
  Other. . . . . . . . . . . .     2.0      1.8     11
                                -------  -------
                                $113.9   $129.8   (12)%
                                =======  =======

  Percentage of total revenues    81.3%    74.8%
                                -------  -------
Professional  Services  &  ITO

Professional services & ITO revenues decreased $24.2 million for the 2000 second
quarter  compared with the 1999 second quarter, with the following decreases and
increase  by  business segment:  property and casualty down 27% ($10.9 million);
claims  up  13%  ($0.3  million);  life  and  financial solutions down 12% ($3.8
million);  and  international down 27% ($9.8 million). The increase in claims is
primarily  due  to  the  Company's  1999  acquisitions.  All other segments were
negatively  impacted  by  weak  initial licensing activity in 1999 and the first
half  of 2000.  In addition, property and casualty was affected by the migration
of  ITO customers from mainframe Series II processing to AS400 Point processing.
Also,  international  was  adversely  affected  by the loss of a significant ITO
customer  in  the  1999  third  quarter.  The  2000 second quarter international
segment's  revenue  includes  a  cumulative catch-up adjustment of approximately
$1.5  million of revenue recognized in the 2000 second quarter based on a change
in  accounting  estimate associated with a significant contract accounted for on
the  basis  of  POC.

20
Set  forth  below  is  a  comparison  of  professional services & ITO revenue by
segment  for  the  periods  ending  June  30,  2000  and  1999,  respectively:
Three  Months
                                   Ended  June  30,
                                   ----------------
                                2000    1999  Change
                                -----   -----  ------
                               (Dollars  in  millions)
Property and casualty. . . .  $ 29.9   $ 40.8   (27)%
  Claims . . . . . . . . . . .     2.7      2.4     13
  Life and financial solutions    28.1     31.9   (12)
  International. . . . . . . .    26.2     36.0   (27)
                                -------  -------
                                $ 86.9   $111.1   (22)%
                                ======   ======  ======

  Percentage of total revenues    62.1%    64.1%
                                ------   -------
BPO

BPO  revenues  increased  $8.1 million for the 2000 second quarter compared with
the  1999  second  quarter,  with  the  following increases by business segment:
property and casualty up 5% ($0.6 million); life and financial solutions up 100%
($5.1  million) due to internal growth and the acquisition of FAS ($2.8 million)
in  1999; and international up 1,200% ($2.4 million) due to increased processing
in  Europe  and  South  Africa.  The  claims  segment  has  no  BPO  operations.

Set forth below is a comparison of BPO revenue by segment for the periods ending
June  30,  2000  and  1999,  respectively:
Three  Months
                                    Ended  June  30,
                                    ----------------
                                 2000    1999     Change
                                -----   -----     ------
                                (Dollars  in  millions)
Property and casualty. . . .  $ 12.2   $11.6       5%
  Claims . . . . . . . . . . .       -       -       -
  Life and financial solutions    10.2     5.1     100
  International. . . . . . . .     2.6     0.2   1,200
                                ------   -----  ------
                                $ 25.0   $16.9      48%
                                ======   =====   ======

  Percentage of total revenues    17.8%    9.7%
                                -------  ------
21
OPERATING  EXPENSES

COST  OF  REVENUES

     Employee compensation and benefits decreased 2% for the 2000 second quarter
compared  with the 1999 second quarter. Before the effect of the acquisitions in
1999  (see  Note  2  of  Notes  to  Consolidated Financial Statements), employee
compensation  and  benefits  for  the  second  quarter of 2000 decreased 7% when
compared  with  second quarter 1999.  Domestic employee compensation in the 2000
second  quarter is essentially consistent with the 1999 second quarter. Domestic
benefits expense increased $1.3 million due to the acceleration of health claims
paid as a result of previous reductions in force. International compensation and
benefits  decreased  15%  ($3.3  million)  largely due to previous reductions in
force.

Computer  and  communications expenses increased 18% for the 2000 second quarter
compared with the 1999 second quarter due to the Company's 1999 acquisitions and
increases in processing volumes and data center operating software license fees.

     Depreciation  and  amortization  of  property,  equipment  and  capitalized
software  costs increased 32% for the 2000 second quarter compared with the 1999
second  quarter.  Depreciation  and amortization expense was reduced as a result
of  software  write-downs  recorded  in the 1999 third and fourth quarters and a
reduction  in  the  Company's  capital  expenditures  for  property,  plant  and
equipment.  However,  these  savings  were  more  than offset by the 2000 second
quarter software write-offs discussed below and the acquisitions of Dorn and FAS
in  1999  (see  Note  5  of  Notes  to  Consolidated  Financial  Statements).

     As  part  of the UK restructuring plan (see Note 5 of Notes to Consolidated
Financial  Statements),  management  indefinitely  suspended  development  and
decreased  marketing  efforts  related  to  a  software  product in the UK. As a
result,  approximately  $7.3  million  of  previously  capitalized  software
development  costs  has been expensed as accelerated amortization. An additional
$1.1  million of accelerated amortization was similarly recognized in connection
with  the  decision  to  sell  the  Banking  division  operations.

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 $0.3 million more amortization expense in the
2000  second  quarter  than  would  have been recognized under the straight-line
method.

     Other  operating  costs and expenses increased 3% for the second quarter of
2000  compared with the 1999 second quarter due to the Company's acquisitions in
1999  and  a  decrease  in  the amounts capitalized related to internal software
development  and  internal  use  systems.

22
SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling, general and administrative expenses increased from 16% of revenues
in the 1999 second quarter compared to 19% in the 2000 second quarter.  However,
the  dollar  amount  decreased  6% for the 2000 second quarter compared with the
1999  second  quarter  in part due to the reduction in force and decreased costs
associated  with  the  Company's  lower  revenues  offset  by the effects of the
Company's  1999  acquisitions  and  approximately $0.7 million of brand expenses
associated  with changing Company's name. Before the effects of acquisitions and
brand  expenses,  selling,  general  and  administrative expenses decreased 14%.

AMORTIZATION  OF  GOODWILL  AND  OTHER  INTANGIBLES

     Amortization  of  goodwill  and other intangibles increased 9% for the 2000
second  quarter  compared  with  the  1999  second  quarter,  due largely to the
Company's  1999  acquisitions.

RESTRUCTURING  AND  OTHER  CHARGES

     Restructuring  and other charges include approximately $1.2 million of cash
charges  paid  or  to be paid as a result of initiatives taken by the Company in
the  2000 second quarter for an international reduction in force of 37 employees
in  the  UK.  Additionally,  restructuring  and  other  charges  includes  legal
expenses  ($2.1  million)  associated with the CSC and shareholder lawsuits (see
Note  3  of  Notes  to  Consolidated  Financial  Statements).

MERGER  TERMINATION  CHARGES

     Merger termination charges include a $19.0 termination fee and $5.3 million
of  accrued expenses resulting from the Company's termination of the WCAS merger
(see  Note  6  of  Notes  to  Consolidated  Financial  Statements).

OPERATING  INCOME  (LOSS)

     The  2000  second  quarter  operating  loss  of  $39.2 million includes net
Special  Charges  of  approximately  $38.8  million  (see  Note  5  of  Notes to
Consolidated  Financial  Statements).  The  1999 second quarter operating income
was  $27.1  million  including  the Banking division which is treated as Special
Charges  in  the  2000  second quarter.  Exclusive of the Banking division, 1999
first  quarter  operating  income  was  $25.9  million by comparison to the 2000
second  quarter  operating  loss  before  special  charges  of  $0.4  million.

23
Set  forth  below  is a comparison of operating income (loss) by segment for the
periods  ending  June  30,  2000  and  1999,  respectively:
Three  Months
OPERATING  INCOME  (LOSS)           Ended  June  30,
                                    ----------------
                                  2000    1999  Changes
                                 -----   -----  -------
                                (Dollars  in  millions)
Property and casualty. . . .  $  4.2   $17.5    (76)%
  Claims . . . . . . . . . . .    (1.7)    3.3    (152)
  Life and financial solutions     0.5    10.8     (95)
  Corporate. . . . . . . . . .   (43.0)   (8.2)   (424)
  International. . . . . . . .     0.8     3.7     (78)
                                ------   -------  ------
                                $(39.2)  $27.1   (245)%
                                ======   =======  ======
Property  and  casualty operating income decreased $13.3 million or 76% due
primarily  to  an  $8.3  million decrease in initial license charges and a $10.9
million  decline  in  professional  services  &  ITO  revenue.  Additionally,
professional  services  &  ITO  margins  declined  from  33%  to  21%.

     Claims  segment  operating  income decreased $5.0 million to a loss of $1.7
million  due primarily to $2.4 million lower initial license charges in the 2000
second  quarter  and  higher  operating  costs  due  to  1999  acquisitions.

     Life  and  financial  solutions  segment  operating  income  declined $10.3
million or 95% due primarily to the operating loss of the Banking division ($3.6
million),  lower  initial  license  charges  ($2.0  million)  and  a  decline in
professional  services  &  ITO  revenue  and  margins.

     Not withstanding the Company's reduction in force, the reduction in expense
lagged behind the decline in revenues resulting in lower margins in its property
and  casualty  and  life  segments.

     International  segment  operating  income  declined  $2.9  million  or  78%
primarily  due  to  a  $4.6 million decline in initial license charges offset by
savings  from  the 1999 third quarter restructuring.  Before special charges the
international segment's operating income increased $4.3 million of 118% compared
to  the  1999  second quarter reflecting the benefits of previous restructuring.

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.

24
Set  forth  below is a comparison of initial license revenues for the last eight
quarters  expressed  as  a  percentage  of total revenues of each of the periods
presented:
2000             1999                1998
                              -----         ----------------      ---------
                           2nd   1st   4th    3rd    2nd    1st   4th    3rd
                                          (Dollars  in  Millions)
                            ---------- -------------------------- ------------
Initial license revenues  $9.5   9.1    $8.7  $19.2  $26.8  $17.5  $27.4  $14.7
% of total revenues        6.8%  6.1%    6.1%  11.4%  15.4%  11.0%  16.0%   9.7%
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.

     The Company believes that during the second quarter, uncertainty concerning
the  Company's  future  ownership,  including  the  proposed  merger  with  CSC,
adversely  affected  customers'  decisions to license software from the Company.
Management  anticipates  that  this  adverse  effect  will  continue  until  the
uncertainty  is  resolved.

OTHER  INCOME  AND  EXPENSE

     Investment  income includes a $3.2 million gain on the sale of investments.

     Interest  expense  and  other  charges  is  comprised primarily of interest
expense  which  increased $4.0 million for the 2000 second quarter compared with
the  1999  second  quarter,  principally  due to higher levels of borrowed funds
under  the Company's credit agreements along with higher interest rates and $1.2
million  of  amortization  expense  for  credit facilities fees paid in the 2000
first  quarter  to  amend the Company's credit agreements.  The nominal interest
rate  applicable  to borrowings under the Company's credit facilities during the
second quarter of 2000 ranged from 7.375% to 9.5% compared to a range of 5.1625%
to  5.25%  in  the  1999  second  quarter.

INCOME  TAXES

The effective income tax rate (income taxes expressed as a percentage of pre-tax
income)  was  -2.1%  and  37.0%  for  the  second  quarters  of  2000  and 1999,
respectively.  The  effective  rate  for the three months ended June 30, 2000 is
not  comparable to the three months ended June 30, 1999 due primarily to non-tax
effected  merger  related costs incurred during the period and the establishment
of  a  valuation  allowance  for  certain  deferred  tax  assets.  The valuation
allowance  was  established  due to the uncertain realization of those assets in
light  of  the  Company's  operating  performance  in  the  2000 second quarter.

25
SIX MONTH COMPARISON

REVENUES
Six  Months
                                    Ended  June  30,
                                    ----------------
  Licensing                      2000    1999   Change
                                -----   -----   ------
                                (Dollars  in  millions)
Initial charges. . . . . . .  $18.6   $44.3   (58)%
  Monthly charges. . . . . . .   33.9    34.2     (1)
                                ------  ------
                                $52.5   $78.5   (33)%
                                ======  ======

  Percentage of total revenues   18.2%   23.5%
                                ------  ------

Initial licensing
------------------------------
Initial  license  revenues decreased $25.7 million for the first six months
of 2000 compared with the first six months of 1999, with the following decreases
by  business  segment:  property  and  casualty  down  90%  ($15.4  million) due
primarily  to  right-to-use agreements included in the first six months of 1999;
claims  down 37% ($2.6 million) due primarily to remarketing agreements included
in  the  first  six  months of 1999; life and financial solutions down 42% ($3.7
million)  with no Banking division licenses in 2000 compared with strong Banking
division  licenses  in  the first half of 1999; and international down 36% ($4.0
million).

Initial  license  charges  for the first six months of 2000 include right-to-use
licenses  to  existing customers of $0.5 million compared with $11.2 million for
the  first  six months 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. The
Company  expects  the  occurrence  of right-to-use licenses to be minimal in the
future.

Initial  license  charges  for  the  first  six months of 1999 include the first
license of the Company's new workplace injury claims management tool, COA, which
was  licensed  in conjunction with the purchase of Legalgard and $2.0 million of
licenses  to  the  former owners of FAS which the Company acquired at the end of
the  second  quarter.

Two  remarketing  agreements  for  COA,  totaling  $3.5 million, are included in
initial licensing revenues for the first six months of 1999. These non-exclusive
agreements  provide two of the Company's nationally recognized vendors the right
to re-license COA to the self-insured market. The Company also renegotiated with
one  of  these  vendors  an  extension  to  its  long-term license agreement for
operating  software  used  in  the  Company's data center. These agreements were
affected  by  the  Company's  adoption  of  Staff  Accounting Bulletin 101 as of
December 31, 1999. Consequently, the $3.5 million of initial license revenue was
adjusted  in  the  1999  fourth quarter and is being recognized ratably over the
terms  of  the  respective  agreements.  Initial  license  revenue includes $1.7
million  of  this  revenue  in  the  first  six  months  of  2000.

26
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.

The  company  believes  that  lingering  customer  Y2K  concerns,  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,  the Company believes that the WCAS
merger  agreement,  and its subsequent termination upon entering into the merger
agreement  with  CSC  made  it  difficult  for  the  Company to conclude initial
licenses  with  customers  in the second quarter due to uncertainties concerning
the  Company's  ownership.

     Set  forth  below is a comparison of initial license revenue by segment for
the  periods  ending  June  30,  2000  and  1999,  respectively:
Six  Months
                                   Ended  June  30,
                                   ----------------
                               2000    1999     Change
                              -----   -----     ------
                              (Dollars  in  millions)
Property and casualty. . . .  $1.8   $17.2    (90)%
  Claims . . . . . . . . . . .   4.5     7.1    (37)
  Life and financial solutions   5.2     8.9    (42)
  International. .. .            7.1    11.1    (36)
                                -----  -----  ------
                                $18.6  $44.3    (58)%
                                =====  ======

  Percentage of total revenues   6.5%   13.3%
                                -----  ------
Monthly  licensing
                  -

     Monthly  license charges decreased $0.3 million for the first six months of
2000  compared with the first six months of 1999 with the following increases or
decreases  by  business  segment:  property and casualty down 17% ($2.6 million)
due  to  weak  1999 and 2000 first half licensing and the effect of right-to-use
licenses;  claims  up  $2.8  million  primarily due to the effect of 1999 second
quarter acquisitions (see Note 2 of Notes to Consolidated Financial Statements);
life and financial solutions was relatively unchanged; and international down 5%
($0.5  million).

27
Six  Months
                                   Ended  June  30,
                                   ----------------
                                2000    1999     Change
                                -----   -----     ------
                                (Dollars  in  millions)
Property and casualty. . . .  $12.3   $ 14.9     (17)%
  Claims . . . . . . . . . . .    2.9      0.1    2,800
  Life and financial solutions    9.9      9.9        -
  International. . . . . . . .    8.8      9.3       (5)
                                -----  -------    ------
                                $33.9   $ 34.2      (1)%
                                =====  =======    ======

  Percentage of total revenues   11.8%   10.3%
                                -----  ------
Six  Months
                                   Ended  June  30,
                                   ----------------
  Services                      2000    1999   Change
                                -----   -----   ------
                               (Dollars  in  millions)
Professional services & ITO.  $184.8   $221.0   (16)%
  BPO. . . . . . . . . . . . .    48.1     32.2      49
  Other. . . . . . . . . . . .     3.0      2.1      43
                                -------  -------
                                $235.9   $255.3    (8)%
                                =======  =======

  Percentage of total revenues    81.8%    76.5%
                                -------  -------
Professional  services  &  ITO

     Professional  services & ITO revenues decreased $36.2 million for the first
six  months  of  2000  compared  with  the  first  six  months of 1999, with the
following  decreases  or  increases  by business segment:  property and casualty
down  24%  ($20.3  million);  claims  up 146% ($3.5 million); life and financial
solutions  down  3%  ($1.8 million); and international down 24% ($17.6 million).
The decreases are principally due to weak initial licensing activity during 1999
and  the  first  half  of 2000. In addition, property and casualty was adversely
affected  by  the migration of ITO customers from mainframe Series II processing
to  AS400  Point  processing.  Also, international was adversely affected by the
loss  of  a  significant  ITO  customer  in  the  1999  third  quarter.

     In  the  first  six  months  of  2000,  the international segment's revenue
includes  a  $1.5  million  cumulative  catch-up adjustment based on a change in
accounting  estimate associated with a significant contract accounted for on the
basis  of  POC.  The  property  and  casualty  segment's 1999 six month 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.

28
Set  forth  below  is  a  comparison professional services & ITO revenue by
segment  for  the  periods  ending  June  30,  2000  and  1999,  respectively:
Six  months
                                   Ended  June  30,
                                  ----------------
                               2000      1999     Change
                              -----     -----     ------
                                (Dollars  in  millions)
Property and casualty. . . .  $ 64.1   $ 84.4   (24)%
  Claims . . . . . . . . . . .    5.9       2.4   146
  Life and financial solutions    59.7     61.5    (3)
  International. . . . . . . .    55.1     72.7   (24)
                                ------  -------
                                $184.8   $221.0    16%
                                ======  ========

  Percentage of total revenues    64.1%   66.2%
                                ------  -------
BPO

BPO  revenues  increased $15.9 million for the first six months of 2000 compared
with  the  first  six  months  of 1999, with the following increases by business
segment:  property  and  casualty  up  5%  ($1.2  million);  life  insurance and
financial  solutions  up  125%  ($11.1  million)  due to internal growth and the
acquisition of FAS ($2.8 million) in 1999; and international up $3.6 million due
to  increased  processing  in Europe and South Africa. The claims segment has no
BPO  operations.

Set  forth  below  is a comparison BPO revenue by segment for the periods ending
June  30,  2000  and  1999,  respectively:
Six  months
                                  Ended  June  30,
                                  ----------------
                              2000      1999     Change
                             -----     -----     ------
                               (Dollars  in  millions)
Property and casualty. . . .  $ 24.0   $22.8      5%
  Claims . . . . . . . . . . .       -       -      -
  Life and financial solutions    20.0     8.9    125
  International. . . . . . . .     4.1     0.5    720
                                ------  ------
                                $ 48.1   $32.2    49%
                                ======  ======

  Percentage of total revenues    16.7%    9.6%
                                ------  -------
OPERATING  EXPENSES

COST  OF  REVENUES

     Employee compensation and benefits increased 3% for the first six months of
2000  compared  with  the  first  six  months  of  1999,  due  primarily  to the
acquisitions  in 1999 (see Note 2 of Notes to Consolidated Financial Statements)
partially  offset  by  the  reductions  in  force.  Before  the  effect  of
these  acquisitions  employee compensation and benefits for the first six months
of  2000 decreased 3% when compared with the first six months of 1999.  Domestic
employee  compensation  in  the  first  six  months  of  2000 increased 9% ($9.2
million)  compared  with  the  first  six  months  of  1999  with the effects of
reductions  in  force in prior quarters being offset by acquisitions in 1999 and
an  increase  in  benefit  expense due to the acceleration of health claims paid

29
as  a  result of the reduction in force. International compensation and benefits
decreased  10%  ($4.7  million) reflecting the benefit of 1999 third quarter and
2000  first  quarter  reductions  in  force.

Computer  and  communications expenses increased 16% for the first six months of
2000  compared  with  the  first  six months of 1999. The increase is due to the
Company's  1999  acquisitions, an increase in processing volumes and data center
operating  software  license  fees.

Depreciation  and  amortization  of property, equipment and capitalized software
costs increased 12% for the first six months of 2000 compared with the first six
months  of  1999.  Depreciation  and  amortization  was  reduced  as a result of
software  write-downs  recorded  in  the  1999  third  and fourth quarters and a
reduction  in  the  Company's  capital  expenditures for property and equipment.
However, these savings were more than offset by the 2000 second quarter software
write-offs  (see Note 5 of Notes to Consolidated Financial Statements) discussed
below  and  the  acquisitions  of  Dorn  and  FAS  in  1999.

Other  operating  costs  and  expenses increased 31% for the first six months of
2000  compared  with the first six months of 1999.  This increase was due to the
Company's  acquisitions  in  1999  being  partially off-set by a decrease in the
amount  of  development  expense  capitalized  related  to  internal  software
development  and  internally  used  systems.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling, general and administrative expenses increased 2% for the first six
months  of  2000 compared with the first six months of 1999.  Before the effects
of  the  Company's  1999  acquisitions  and  approximately $2.1 million of brand
expenses associated with changing the Company's name (see Note 7 of Notes to the
Consolidated  Financial  Statements regarding Change of Company's Name) selling,
general  and administrative expenses decreased 8% due partly to the reduction in
force  and  decreased  costs associated with the Company's lower revenues in the
first  six  months  of  2000.  Selling,  general  and  administrative  expenses
increased to 17% of revenues in the first six months of 2000 compared to 16% for
the  first  six  months  of  1999.

AMORTIZATION  OF  GOODWILL  AND  OTHER  INTANGIBLES

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

RESTRUCTURING  AND  OTHER  CHARGES

     Restructuring  and other charges include approximately $8.7 million of cash
charges  paid  or  to be paid as a result of initiatives taken by the Company in
the first six months of 2000 for a worldwide reduction in force of 350 employees
in the first quarter and a reduction in force in the international segment of 37
employees  in  the  second  quarter.  An  additional  $7.3  million relates to a
settlement  of  a dispute with a customer and legal expenses associated with the
CSC  and  shareholder  lawsuits  (see  Note 3 of Notes to Consolidated Financial
Statements).

30
MERGER  TERMINATION  CHARGES

     Merger termination charges include a $19.0 termination fee and $5.3 million
of accrued WCAS and Company expenses resulting from the Company's termination of
the  WCAS  merger  (see  Note  6 of Notes to Consolidated Financial Statements).

OPERATING  (LOSS)  INCOME

     The  2000  six  month  results  produced an operating loss of $55.2 million
compared  with  the  1999 six month operating income of $49.6 million.  The 2000
six  month  operating loss includes Special Charges of $57.4 million (see Note 5
of  the  Notes  to the Consolidated Financial Statements).  Before these special
charges,  the  2000  six  month  resulted  in  operating  income of $2.2 million
compared  with  operating  income  of $48.9 million in the 1999 six months.  The
remaining $46.7 million decrease relates primarily to a $25.7 million decline in
initial  license  revenue  and  declining  services  revenue  and  margins.

     Set  forth  below is a comparison of operating income (loss) by segment for
the  periods  ending  June  30,  2000  and  1999,  respectively:
Six  Months
OPERATING  INCOME  (LOSS)            Ended  June  30,
                                      ----------------
                                 2000    1999     Change
                                 -----   -----     ------
                                (Dollars  in  millions)
Property and casualty. . . .  $  9.4    $37.2    (75)%
  Claims . . . . . . . . . . .    (3.0)     5.6    (154)
  Life and financial solutions    (2.5)    18.8    (113)
  Corporate. . . . . . . . . .   (55.9)   (16.2)   (245)
  International. . . . . . . .    (3.2)     4.2    (176)
                                ----------------
                                $(55.2)   $49.6    (211)%
                                =======  =======  ======
Property  and  casualty segment operating income decreased $27.8 million or
75%  primarily  due  to  a  $15.4  million  decrease  in initial license charges
accompanied  by  a  $20.3 million or 24% decrease in professional services & ITO
revenue.

     Claims  segment  operating  income decreased $8.6 million to a loss of $3.0
million  principally  due  to a $2.6 million decrease in initial license charges
and  higher  operating  costs  due  to  1999  acquisitions.

     Life  segment  operating  income  decreased $21.3 million to a loss of $2.5
million  principally  due  to  Banking division losses of $8.4 million and lower
initial  license  charges  of  $3.7  million.

     International  segment operating income decreased $7.4 million to a loss of
$3.2 million primarily due to special charges of $9.4 million described above, a
$4.0 million decrease in initial license charges and lower professional services
&  ITO  revenue.

31
Not withstanding the Company's reduction in force, the reduction in expense
lagged behind the decline in revenues resulting in lower margins in its property
and  casualty,  life  and  international  segments.

     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.

     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.

     The Company believes that during the second quarter, uncertainty concerning
the  Company's  future  ownership,  including  the  proposed  merger  with  CSC,
adversely  affected  customers'  decisions to license software from the Company.
Management  anticipates  that  this  adverse  effect  will  continue  until  the
uncertainty  is  resolved.

OTHER  INCOME  AND  EXPENSE

     Investment  income  includes  $5.3  million of gain on sale of investments.

     Interest  expense  and  other  charges  is  comprised primarily of interest
expense  which  increased $9.2 million for the first six months of 2000 compared
with  the  first six months of 1999, principally due to higher interest rates on
higher  levels  of  borrowed  funds  under  the Company's credit agreements. The
remainder  of  the  increase  is due to $2.1 million of amortization expense for
credit  facilities  fees  paid  in the 2000 first quarter to amend the Company's
credit agreements.  The nominal interest rate applicable to borrowings under the
Company's credit facility during the first six months of 2000 ranged from 7.375%
to  9.6%  compared  to  a range of 5.1625% to 5.85% for the same period in 1999.

INCOME  TAXES

     The  effective  income  tax rate (income taxes expressed as a percentage of
pre-tax  income)  was 11.1% and 37.0% for the first six months of 2000 and 1999,
respectively.  The  effective rate for the six months ended June 30, 2000 is not
comparable  to  the  six  months  ended  June  30, 1999 due primarily to non-tax
effected  merger  related  costs  incurred during the first half of 2000 and the
establishment  of  a  valuation  allowance for certain deferred tax assets.  The
valuation  allowance  was  established due to the uncertain realization of those
assets  in  light  of  the  Company's  operating  performance.

32
LIQUIDITY AND CAPITAL RESOURCES
June  30,  December  31,
                                     2000         1999
-----------------------------------------------------------
                                    (Dollars  in  millions)
Cash and equivalents and marketable
  securities. . . . . . . . . . . .  $  20.6   $ 17.8
Current assets. . . . . . . . . . .    201.2    212.0
Current liabilities . . . . . . . .    337.4     76.0
Working capital . . . . . . . . . .   (136.2)   136.0
Long-term debt. . . . . . . . . . .      0.0    227.0
Six  Months  Ended
                                           June  30,
                                       2000         1999
--------------------------------------------------------
                                  (Dollars  in  millions)
Cash (used) provided by operations. .  $ (1.3)  $  33.5
Cash used by investing activities . .   (20.9)   (120.9)
Cash provided by financing activities    25.0      94.3
The  Company's total debt, net of cash and marketable securities, at June 30,
2000 was $238.4 million, an increase from the comparable amount ($205.0 million)
at  March 31, 2000 which resulted primarily from the termination fees related to
the  WCAS  transaction.  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
second  quarter  of  2000, compared with the second quarter of 1999 however, the
Company  significantly  decreased  expenditures  in  all these areas and expects
these  expenditures  during  2000  to  continue  at  amounts  lower  than 1999.

   As of June 30, 2000, the Company had a $180.0 million line of credit of which
$168.0  million  was  outstanding.  Availability  under this credit line will be
reduced  to  $125 million on April 1, 2001 and will expire on July 1, 2001.  The
Company's  $70.0  million  term  loan,  all of which was outstanding at June 30,
2000, matures on January 31, 2001.  In addition, CSC advanced to the Company the
cash  necessary  to  pay  the $19.0 million termination fee due to WCAS upon the
termination  of  the  WCAS merger agreement, and committed to advance up to $5.0
million for related expenses.  The amount of these expenses are yet to be agreed
but  are  expected  to  be paid in the 2000 third quarter. CSC also provided the
Company  a  line  of  credit up to $30.0 million for operational working capital
needs.  Any  amounts due CSC mature on July 3, 2001.  Since all of the Company's
debt matures on or before July 3, 2001 and in light of the issues concerning the
Company's  ability  to meet its financial covenants, more fully discussed below,
all  of  the  Company's  indebtedness  is shown under current liabilities in the
accompanying  balance  sheet  as  of  June  30,  2000.

33
The  results  for  the quarter ended June 30, 2000 resulted in a violation of
the  defined Consolidated Adjusted Cash Flow covenant of both the $180.0 million
line of credit and $70.0 million term loan agreements as amended in April, 2000.
Consequently,  the  Company  entered  into  an  amendment in August, 2000, which
brought it into compliance with its agreements.  That amendment provides for the
exclusion  from  the  Consolidated  Adjusted  Cash Flow and Consolidated Minimum
Tangible  Net  Worth  covenants  of up to $24.0 million in fees and expenses due
WCAS.  In  addition,  the  amendment  reduced  the  required  minimum  amount of
Consolidated  Adjusted  Cash Flow for the quarter ended June 30, 2000 from $15.0
million  to $10.0 million, but did not amend the required minimum amount for the
quarter  ended  September  30,  2000 which is $30.0 million.  The amendment left
unchanged  the  required  level of Minimum Consolidated Tangible Net Worth as at
September  30,  2000,  which  is  $196.7  million

   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 is exploring alternative means to reduce its
debt,  some  of  which  would  be  subject  to  approval  by  CSC.

     Significant  expenditures  anticipated for the remainder of 2000, excluding
new  product  development  are  as  follows:  acquisition of data processing and
communications  equipment,  support  software,  office  furniture,  fixtures and
equipment  ($10.0  million)  and  costs relating to the continued enhancement of
existing  software  products  ($20.0  million).

                     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.

34
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 Company believes that during the second quarter, uncertainty concerning
the  Company's  future  ownership,  including  the  proposed  merger  with  CSC,
adversely  affected  customers'  decisions to license software from the Company.
Management  anticipates  that  this  adverse  effect  will  continue  until  the
uncertainty  is  resolved.

35
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.

36
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.

     The  Company  did not file any reports on Form 8-K during the quarter ended
June  30,  2000.

37
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:  August  14,  2000     Timothy  V.  Williams
     Executive  Vice  President
     (Chief  Financial  Officer)

38
POLICY  MANAGEMENT  SYSTEMS  CORPORATION

                      EXHIBIT  INDEX

     TO  FORM  10-Q  FOR  QUARTER  ENDED  JUNE  30,  2000

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

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

A.     Agreement  and Plan of Merger between Politic Acquisition 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)

C.     Agreement  and  Plan  of Merger among Computer Sciences Corporation,
Patriot  Acquisition Corporation and Policy Management Systems Corporation dated
June  20,  2000 (filed as an exhibit to Schedule 14-D9/A dated July 19, 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)

39
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)

40
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)

41
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)

42
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)

43
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 as an exhibit to Form 10-Q for the
Quarter ended March 31,  2000  and  is incorporated  herein  by  reference)

          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  Director  (filed  as  an exhibit to  Form
10-Q  for  the Quarter ended  March  31,  2000  and  is incorporated  herein  by
reference)

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 as an exhibit to Form 10-Q for
the  Quarter  ended  March  31,  2000  and  is incorporated herein by reference)

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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

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 as an exhibit to Form 10-Q for
the  Quarter  ended  March  31,  2000  and  is incorporated herein by reference)

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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

44
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 as an exhibit to Form 10-Q for the
Quarter  ended  March  31,  2000  and  is  incorporated  herein  by  reference)

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  as  an exhibit to Form 10-Q for the Quarter ended
March  31,  2000  and  is  incorporated  herein  by  reference)

DDD.     Mortgage  Agreement  dated  as  of  April  28,  2000,  between   Policy
Management  Systems  Corporation  and  Bank  of America, N.A., as Administrative
Agent (filed as an exhibit to Form 10-Q for the Quarter ended March 31, 2000 and
is  incorporated  herein  by  reference)

EEE.     Form  of Employee Stock Option/Non Compete Agreement dated April 3,2000
with schedule identifying particulars for each named officer (filed herewith)

          The  Schedule  for  EEE  [57]  contained  the  following:

          OFFICERS                         OPTIONS  RECEIVED
          --------                         -----------------
          David  T.  Bailey                     35,000
          Michael  D.  Gantt                    35,000
          Harald  J.  Karlsen                   25,000
          Stephen  G.  Morrison                 35,000
          Michael  W.  Risley                   35,000
          Timothy  V.  Williams                 35,000
          G.  Larry  Wilson                     75,000

FFF.     Form  of  Memorandum  regarding  Grant  of  15,000  Stock Options dated
April  5,  2000  with  schedule  identifying  particulars  for   each   director
(filed herewith)

          The  Schedule  for  FFF  [58]  contained  the  following:

          DIRECTORS
          ---------

          Alfred  R.  Berkeley,  III
          Donald  W.  Feddersen
          Dr.  John  M.  Palms
          Joseph  D  Sargent
          John  P.  Seibels
          Richard  G.  Trub

GGG.     Consent  and  Waiver  dated  June  19,  2000  relating  to  the  Credit
Agreement between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

HHH.     Consent,  Waiver and Amendment  dated  June 19, 2000  relating  to  the
Term  Loan  Agreement   between   Policy  Management  Systems  Corporation,  the
Guarantors,  Bank of America, N.A., and the other financial institutions thereto
(filed  herewith)

45
III.     Consent  and  Waiver  dated  June  20,  2000  relating  to  the  Credit
Agreement between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

JJJ.     Consent  and  Waiver dated June 20, 2000  relating  to  the  Term  Loan
Agreement between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

KKK.     Consent, Waiver and Fifth Amendment  to  Credit  Agreement  dated  July
14,  2000 between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

LLL.     Consent  and  Waiver dated July 14, 2000  relating  to  the  Term  Loan
Agreement between Policy Management Systems Corporation, the Guarantors, Bank of
America,  N.A.,  and  the  other financial institutions thereto (filed herewith)

MMM.     Fifth  Amendment  to  Term  Loan Agreement dated as of August ___, 2000
between  Policy  Management  Systems  Corporation,  Bank  of  America, N.A., the
Guarantors,  and  the  other  financial  institutions  thereto  (filed herewith)

NNN.     Sixth  Amendment  to  the  Credit  Agreement  dated  as  of  August __,
2000  between  Policy Management Systems Corporation, Bank of America, N.A., the
Guarantors,  and  the  other  financial  institutions  thereto  (filed herewith)

OOO.     Subordination  Agreement  dated June 20, 2000 between Computer Sciences
Corporation, Bank of  America,  N.A.  and  Policy Management Systems Corporation
(filed  herewith)

PPP.     Promissory  Note  dated  June  20, 2000  by  Policy  Management Systems
Corporation  in  favor  of  Computer  Sciences  Corporation  (filed  herewith)

QQQ.     Working  Capital  Promissory  Note  dated  August  3,  2000  by  Policy
Management  Systems Corporation in favor of Computer Sciences Corporation (filed
herewith)

27.     FINANCIAL  DATA  SCHEDULE

A.      Filed  herewith

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