As filed with the Securities and Exchange Commission on July 17, 1998

                                            Registration No. 333-_______________
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            -------------------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                    UNDER THE
                             SECURITIES ACT OF 1933
                            -------------------------



                            ARM Financial Group, Inc.
             (Exact name of Registrant as specified in its charter)

           Delaware                                             61--1244251
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification Number)


                             515 West Market Street
                           Louisville, Kentucky 40202
                    (Address of Principal Executive Offices)


                            ARM Financial Group, Inc.
                  1998 Non-Employee Director Stock Option Plan

                            (Full title of the plans)
                            -------------------------


                                 Robert H. Scott
                            ARM Financial Group, Inc.
                             515 West Market Street
                           Louisville, Kentucky 40202
                     (Name and address of agent for service)

                                 (502) 582-7900
          (Telephone number, including area code, of agent for service)

                            -------------------------


                                          CALCULATION OF REGISTRATION FEE
<TABLE>


============================================================================================================================
<CAPTION>
               Title of                       Amount           Proposed Maximum      Proposed Maximum         Amount of
           Securities to be                    to be          Offering Price Per         Aggregate           Registration
              Registered                    Registered              Share             Offering Price             Fee
----------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                 <C>                  <C>                     <C>
Class A Convertible Common Stock              70,000              $23.2188  (1)        $1,625,316    (1)       $479.47
par value $.01 per share
----------------------------------------------------------------------------------------------------------------------------
Class A Convertible Common Stock              30,000              $22.53    (2)          $675,900    (2)       $199.40
par value $.01 per share                                                                                     ============
                                                                                                               $678.87
============================================================================================================================
<FN>

(1) The price shown is the average of the high and low prices of the Class A Convertible Common Stock on the New
    York Stock Exchange consolidated reporting system on July 10, 1998, in accordance with Rule 457(c), and is
    being utilized solely for the purpose of calculating the registration fee.

(2) Estimated solely for the purpose of calculating the registration fee.  Such estimate is calculated in accordance with
    Rule 457(h) and is based on the weighted average exercise price of the options previously granted under the ARM
    Financial Group, Inc. 1998 Non-Employee Director Stock Option Plan.
</FN>
</TABLE>

--------------------------------------------------------------------------------


<PAGE>



                                     Part I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1.           Plan Information.*

Item 2.           Registrant Information and Employee Plan Annual Information.*


























--------------------

*    Information  required  by  Part  I to be  contained  in the  Section  10(a)
     prospectus is omitted from this  Registration  Statement in accordance with
     Rule 428 under the Securities Act, and the "Note" to Part I of Form S-8.

                                        2

<PAGE>



                                     Part II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.           Incorporation of Documents by Reference.

                  The following  documents,  filed by ARM Financial Group,  Inc.
(the   "Registrant"),   are  incorporated  by  reference  in  this  Registration
Statement:

                  (a) the  Registrant's  Annual  Report  on Form  10-K for the
         fiscal year ended December 31,1997 ;

                  (b) the  Registrant's  Quarterly  Report  on Form 10-Q for the
         quarter ended March 31, 1998; and

                  (c) the  description of the  Registrant's  Class A Convertible
         Common Stock, par value $.01 per share (the "Common Stock"),  contained
         in the  Registrant's  Registration  Statement  on Form  8-A  (File  No.
         001-12294) for  registration  of such Common Stock under the Securities
         Exchange Act of 1934, as amended (the "Exchange Act").

                  All documents subsequently filed by the Registrant pursuant to
Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold,  shall be deemed
to be  incorporated by reference in this  Registration  Statement and to be part
hereof from the date of filing of such documents.

Item 4.           Description of Securities.

                  Not applicable.

Item 5.           Interests of Named Experts and Counsel.

                  Not applicable.


                                        3

<PAGE>



Item 6.           Indemnification of Directors and Officers.

                  Section 145 of the Delaware General  Corporation Law provides,
in summary,  that directors and officers of Delaware  corporations are entitled,
under  certain  circumstances,  to  be  indemnified  against  all  expenses  and
liabilities  (including  attorneys'  fees) incurred by them as a result of suits
brought  against them in their capacity as a director or officer,  if they acted
in good faith and in a manner they  reasonably  believed to be in or not opposed
to the best  interests  of the  corporation,  and,  with respect to any criminal
action or proceeding,  if they had no reasonable  cause to believe their conduct
was unlawful;  provided that no indemnification  may be made against expenses in
respect of any claim,  issue or matter as to which they shall have been adjudged
to be liable to the corporation, unless and only to the extent that the court in
which such action or suit was brought shall  determine  upon  application  that,
despite the  adjudication of liability but in view of all the  circumstances  of
the case, they are fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper. Any such  indemnification  may be made by the
corporation only as authorized in each specific case upon a determination by the
stockholders or disinterested  directors that  indemnification is proper because
the indemnitee has met the applicable standard of conduct.

                  The  Certificate  of  Incorporation  of  the  Registrant  (the
"Certificate  of  Incorporation")  provides  that no director of the  Registrant
shall be personally  liable to the Registrant or its  stockholders  for monetary
damages for any breach of fiduciary  duty as a director,  except for  liability:
(i) for any breach of the  director's  duty of loyalty to the  Registrant or its
stockholders;  (ii) for acts or  omissions  not in good  faith or which  involve
intentional  misconduct  or a knowing  violation  of law;  (iii) in  respect  of
certain unlawful dividend payments or stock redemptions or purchases or (iv) for
any transaction from which the director derived an improper personal benefit.

                  The  Certificate  of  Incorporation  and  the  By-laws  of the
Registrant  provide for  indemnification  of its  directors  and officers to the
fullest  extent  permitted by Delaware law, as the same may be amended from time
to time.  In addition,  Morgan  Stanley Dean Witter & Co.  ("MSDW")  indemnifies
those directors of the Registrant who are also employees of Morgan Stanley & Co.
Incorporated.

                  In addition, the Registrant and MSDW maintain directors' and
officers' liability insurance for their respective directors and officers.

Item 7.           Exemption from Registration Claimed.

                  Not applicable.


                                        4

<PAGE>



Item 8.           Exhibits.

                  The following  exhibits are filed as part of this Registration
Statement:

4.1               ARM Financial Group, Inc. 1998 Non-Employee Director Stock
                  Option Plan.

4.2               Form of Restated Certificate of Incorporation of ARM Financial
                  Group, Inc. (incorporated by reference to the Registrant's
                  Registration Statement on Form S-1 (File No. 333-14693)).

4.3               Form of Second Amended and Restated By-laws of ARM Financial
                  Group, Inc. (incorporated by reference to the Form 10-Q filed
                  by the Registrant on May 15, 1998).

5                 Opinion of Shearman & Sterling regarding the legality of the
                  securities being registered hereby.

23.1              Consent of Ernst & Young LLP.

23.3              Consent of Shearman & Sterling (included in Exhibit 5).

24                Powers of Attorney (included on signature page).



                                        5

<PAGE>



Item 9.           Undertakings.

                  (a)      The undersigned Registrant hereby undertakes:

                  (1) To file,  during any  period in which  offers or sales are
         being made, a post-effective  amendment to this Registration  Statement
         to  include  any  material  information  with  respect  to the  plan of
         distribution not previously disclosed in this Registration Statement or
         any material change to such information in this Registration Statement;

                  (2) That, for the purpose of determining  any liability  under
         the Securities Act, each such post-effective  amendment shall be deemed
         to be a new registration  statement  relating to the securities offered
         therein,  and the  offering  of such  securities  at that time shall be
         deemed to be the initial bona fide offering thereof; and

                  (3) To remove from  registration by means of a  post-effective
         amendment any of the securities being registered which remain unsold at
         the termination of the offering.

                  (b) The undersigned Registrant hereby further undertakes that,
for purposes of determining  any liability  under the Securities Act of 1933, as
amended (the "Securities  Act"),  each filing of the Registrant's  annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act that is  incorporated  by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof.

                  (c) Insofar as indemnification  for liabilities  arising under
the  Securities  Act may be permitted  to  directors,  officers and  controlling
persons of the Registrant  pursuant to the foregoing  provisions,  or otherwise,
the  Registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange Commission,  such indemnification is against public policy as expressed
in the  Securities  Act and is,  therefore,  unenforceable.  In the event that a
claim for  indemnification  against such liabilities  (other than the payment by
the  Registrant  of  expenses  incurred  or  paid  by  a  director,  officer  or
controlling  person of the Registrant in the  successful  defense of any action,
suit or proceeding) is asserted by such director,  officer or controlling person
in connection with the securities being registered,  the Registrant will, unless
in the  opinion  of its  counsel  the matter  has been  settled  by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification  by it is  against  public  policy  as  expressed  in  the
Securities Act and will be governed by the final adjudication of such issue.

                                        6

<PAGE>



                                   SIGNATURES

                  Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly authorized, in the City of Louisville, Commonwealth of Kentucky on the 17th
day of July, 1998.


                                   ARM FINANCIAL GROUP, INC.

                                   By:  /s/ Martin H. Ruby
                                       -------------------------------------
                                   Name: Martin H. Ruby
                                   Title: Chairman of the Board of Directors
                                             and Chief Executive Officer
                                             (Principal Executive Officer)



                                POWER OF ATTORNEY

                  Each of the undersigned  whose signature  appears below hereby
constitutes  and appoints Martin H. Ruby and Robert H. Scott his true and lawful
attorney-in-fact  and agent, with full power of substitution and resubstitution,
for him and in his name,  place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) and supplements to this
Registration Statement and any and all related registration statements necessary
to  register  additional  securities,  and to file the same,  with all  exhibits
thereto,  and other documents in connection  therewith,  with the Securities and
Exchange  Commission,  granting unto said  attorney-in-fact and agent full power
and  authority  to do and  perform  each and every act and thing  requisite  and
necessary  to be done in and about the  premises,  as fully to all  intents  and
purposes as he might or could do in person,  hereby ratifying and confirming all
that said  attorney-in-fact  and agent,  or his substitute or  substitutes,  may
lawfully do or cause to be done by virtue hereof.








                                        7

<PAGE>



                  Pursuant to the requirements of the Securities Act of 1933, as
amended,  this  Registration  Statement  has been signed below by the  following
persons in the indicated capacities on July 17, 1998.

               Signature                     Title
               ---------                     -----

        /s/ Martin H. Ruby
     _____________________________      Chairman of the Board of
          Martin H. Ruby                Directors and Chief Executive
                                        Officer (Principal Executive Officer)

        /s/ Edward L. Zeman
     _____________________________      Executive Vice President--
          Edward L. Zeman               Chief Financial Officer
                                        (Principal Financial Officer)

        /s/ Barry G. Ward 
     _____________________________      Controller (Principal Accounting
          Barry G. Ward                 Officer)

      /s/ Dudley J. Godfrey, Jr.
     _____________________________      Director
          Dudley J. Godfrey, Jr.

        /s/ Edward D. Powers
     _____________________________      Director
          Edward D. Powers

        /s/ Colin F. Raymond
     _____________________________      Director
          Colin F. Raymond

        /s/ John R. Lindholm
     _____________________________      Director
          John R. Lindholm

       /s/ Irwin T. Vanderhoof
     _____________________________       Director
          Irwin T. Vanderhoof



                                        8

<PAGE>



                                  Exhibit Index


Exhibit No.    Description of Document

4.1            ARM Financial Group, Inc.
               1998 Non-Employee Director Stock Option Plan

4.2            Form of Restated Certificate of Incorporation of
               ARM Financial Group, Inc. (incorporated by
               reference to the Registrant's Registration Statement
               on Form S-1 (File No. 333-14693)).

4.3            Form of Second Amended and Restated By-laws of
               ARM Financial Group, Inc. (incorporated by
               reference to the Form 10-Q filed by the Registrant on May 15,
               1998 ).

5              Opinion of Shearman & Sterling regarding the legality of the
               securities being registered hereby.

23.1           Consent of Ernst & Young LLP.

23.3           Consent of Shearman & Sterling (included in
               Exhibit 5).

24             Powers of Attorney (included on signature page).

                                        9
[{"type": "S-8", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 18092}]
{"company-data": {"conformed-name": "ARM FINANCIAL GROUP INC", "cik": "0000910562", "assigned-sic": "6311", "irs-number": "611244251", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-59321", "film-number": "98668084"}, "business-address": {"street1": "515 W MARKET STREET", "city": "LOUISVILLE", "state": "KY", "zip": "40202", "phone": "5025827900"}, "mail-address": {"street1": "515 W MARKET STREET", "city": "LOUISVILLE", "state": "KY", "zip": "40202"}}
As filed with the Securities and Exchange Commission on July 17, 1998

                                            Registration No. 333-_______________
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            -------------------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                    UNDER THE
                             SECURITIES ACT OF 1933
                            -------------------------

                            ARM Financial Group, Inc.
             (Exact name of Registrant as specified in its charter)

           Delaware                                             61--1244251
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification Number)

                             515 West Market Street
                           Louisville, Kentucky 40202
                    (Address of Principal Executive Offices)

                            ARM Financial Group, Inc.
                  1998 Non-Employee Director Stock Option Plan

                            (Full title of the plans)
                            -------------------------

                                 Robert H. Scott
                            ARM Financial Group, Inc.
                             515 West Market Street
                           Louisville, Kentucky 40202
                     (Name and address of agent for service)

                                 (502) 582-7900
          (Telephone number, including area code, of agent for service)

                            -------------------------

                                          CALCULATION OF REGISTRATION FEE

============================================================================================================================
Title of                       Amount           Proposed Maximum      Proposed Maximum         Amount of
           Securities to be                    to be          Offering Price Per         Aggregate           Registration
              Registered                    Registered              Share             Offering Price             Fee
----------------------------------------------------------------------------------------------------------------------------
Class A Convertible Common Stock              70,000              $23.2188  (1)        $1,625,316    (1)       $479.47
par value $.01 per share
----------------------------------------------------------------------------------------------------------------------------
Class A Convertible Common Stock              30,000              $22.53    (2)          $675,900    (2)       $199.40
par value $.01 per share                                                                                     ============
                                                                                                               $678.87
============================================================================================================================
(1) The price shown is the average of the high and low prices of the Class A Convertible Common Stock on the New
    York Stock Exchange consolidated reporting system on July 10, 1998, in accordance with Rule 457(c), and is
    being utilized solely for the purpose of calculating the registration fee.

(2) Estimated solely for the purpose of calculating the registration fee.  Such estimate is calculated in accordance with
    Rule 457(h) and is based on the weighted average exercise price of the options previously granted under the ARM
    Financial Group, Inc. 1998 Non-Employee Director Stock Option Plan.
--------------------------------------------------------------------------------
Part I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1.           Plan Information.*

Item 2.           Registrant Information and Employee Plan Annual Information.*

--------------------

*    Information  required  by  Part  I to be  contained  in the  Section  10(a)
     prospectus is omitted from this  Registration  Statement in accordance with
     Rule 428 under the Securities Act, and the "Note" to Part I of Form S-8.

                                        2
Part II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.           Incorporation of Documents by Reference.

                  The following  documents,  filed by ARM Financial Group,  Inc.
(the   "Registrant"),   are  incorporated  by  reference  in  this  Registration
Statement:

                  (a) the  Registrant's  Annual  Report  on Form  10-K for the
         fiscal year ended December 31,1997 ;

                  (b) the  Registrant's  Quarterly  Report  on Form 10-Q for the
         quarter ended March 31, 1998; and

                  (c) the  description of the  Registrant's  Class A Convertible
         Common Stock, par value $.01 per share (the "Common Stock"),  contained
         in the  Registrant's  Registration  Statement  on Form  8-A  (File  No.
         001-12294) for  registration  of such Common Stock under the Securities
         Exchange Act of 1934, as amended (the "Exchange Act").

                  All documents subsequently filed by the Registrant pursuant to
Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold,  shall be deemed
to be  incorporated by reference in this  Registration  Statement and to be part
hereof from the date of filing of such documents.

Item 4.           Description of Securities.

                  Not applicable.

Item 5.           Interests of Named Experts and Counsel.

                  Not applicable.

                                        3
Item 6.           Indemnification of Directors and Officers.

                  Section 145 of the Delaware General  Corporation Law provides,
in summary,  that directors and officers of Delaware  corporations are entitled,
under  certain  circumstances,  to  be  indemnified  against  all  expenses  and
liabilities  (including  attorneys'  fees) incurred by them as a result of suits
brought  against them in their capacity as a director or officer,  if they acted
in good faith and in a manner they  reasonably  believed to be in or not opposed
to the best  interests  of the  corporation,  and,  with respect to any criminal
action or proceeding,  if they had no reasonable  cause to believe their conduct
was unlawful;  provided that no indemnification  may be made against expenses in
respect of any claim,  issue or matter as to which they shall have been adjudged
to be liable to the corporation, unless and only to the extent that the court in
which such action or suit was brought shall  determine  upon  application  that,
despite the  adjudication of liability but in view of all the  circumstances  of
the case, they are fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper. Any such  indemnification  may be made by the
corporation only as authorized in each specific case upon a determination by the
stockholders or disinterested  directors that  indemnification is proper because
the indemnitee has met the applicable standard of conduct.

                  The  Certificate  of  Incorporation  of  the  Registrant  (the
"Certificate  of  Incorporation")  provides  that no director of the  Registrant
shall be personally  liable to the Registrant or its  stockholders  for monetary
damages for any breach of fiduciary  duty as a director,  except for  liability:
(i) for any breach of the  director's  duty of loyalty to the  Registrant or its
stockholders;  (ii) for acts or  omissions  not in good  faith or which  involve
intentional  misconduct  or a knowing  violation  of law;  (iii) in  respect  of
certain unlawful dividend payments or stock redemptions or purchases or (iv) for
any transaction from which the director derived an improper personal benefit.

                  The  Certificate  of  Incorporation  and  the  By-laws  of the
Registrant  provide for  indemnification  of its  directors  and officers to the
fullest  extent  permitted by Delaware law, as the same may be amended from time
to time.  In addition,  Morgan  Stanley Dean Witter & Co.  ("MSDW")  indemnifies
those directors of the Registrant who are also employees of Morgan Stanley & Co.
Incorporated.

                  In addition, the Registrant and MSDW maintain directors' and
officers' liability insurance for their respective directors and officers.

Item 7.           Exemption from Registration Claimed.

                  Not applicable.

                                        4
Item 8.           Exhibits.

                  The following  exhibits are filed as part of this Registration
Statement:

4.1               ARM Financial Group, Inc. 1998 Non-Employee Director Stock
                  Option Plan.

4.2               Form of Restated Certificate of Incorporation of ARM Financial
                  Group, Inc. (incorporated by reference to the Registrant's
                  Registration Statement on Form S-1 (File No. 333-14693)).

4.3               Form of Second Amended and Restated By-laws of ARM Financial
                  Group, Inc. (incorporated by reference to the Form 10-Q filed
                  by the Registrant on May 15, 1998).

5                 Opinion of Shearman & Sterling regarding the legality of the
                  securities being registered hereby.

23.1              Consent of Ernst & Young LLP.

23.3              Consent of Shearman & Sterling (included in Exhibit 5).

24                Powers of Attorney (included on signature page).

                                        5
Item 9.           Undertakings.

                  (a)      The undersigned Registrant hereby undertakes:

                  (1) To file,  during any  period in which  offers or sales are
         being made, a post-effective  amendment to this Registration  Statement
         to  include  any  material  information  with  respect  to the  plan of
         distribution not previously disclosed in this Registration Statement or
         any material change to such information in this Registration Statement;

                  (2) That, for the purpose of determining  any liability  under
         the Securities Act, each such post-effective  amendment shall be deemed
         to be a new registration  statement  relating to the securities offered
         therein,  and the  offering  of such  securities  at that time shall be
         deemed to be the initial bona fide offering thereof; and

                  (3) To remove from  registration by means of a  post-effective
         amendment any of the securities being registered which remain unsold at
         the termination of the offering.

                  (b) The undersigned Registrant hereby further undertakes that,
for purposes of determining  any liability  under the Securities Act of 1933, as
amended (the "Securities  Act"),  each filing of the Registrant's  annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act that is  incorporated  by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof.

                  (c) Insofar as indemnification  for liabilities  arising under
the  Securities  Act may be permitted  to  directors,  officers and  controlling
persons of the Registrant  pursuant to the foregoing  provisions,  or otherwise,
the  Registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange Commission,  such indemnification is against public policy as expressed
in the  Securities  Act and is,  therefore,  unenforceable.  In the event that a
claim for  indemnification  against such liabilities  (other than the payment by
the  Registrant  of  expenses  incurred  or  paid  by  a  director,  officer  or
controlling  person of the Registrant in the  successful  defense of any action,
suit or proceeding) is asserted by such director,  officer or controlling person
in connection with the securities being registered,  the Registrant will, unless
in the  opinion  of its  counsel  the matter  has been  settled  by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification  by it is  against  public  policy  as  expressed  in  the
Securities Act and will be governed by the final adjudication of such issue.

                                        6
SIGNATURES

                  Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly authorized, in the City of Louisville, Commonwealth of Kentucky on the 17th
day of July, 1998.

                                   ARM FINANCIAL GROUP, INC.

                                   By:  /s/ Martin H. Ruby
                                       -------------------------------------
                                   Name: Martin H. Ruby
                                   Title: Chairman of the Board of Directors
                                             and Chief Executive Officer
                                             (Principal Executive Officer)

                                POWER OF ATTORNEY

                  Each of the undersigned  whose signature  appears below hereby
constitutes  and appoints Martin H. Ruby and Robert H. Scott his true and lawful
attorney-in-fact  and agent, with full power of substitution and resubstitution,
for him and in his name,  place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) and supplements to this
Registration Statement and any and all related registration statements necessary
to  register  additional  securities,  and to file the same,  with all  exhibits
thereto,  and other documents in connection  therewith,  with the Securities and
Exchange  Commission,  granting unto said  attorney-in-fact and agent full power
and  authority  to do and  perform  each and every act and thing  requisite  and
necessary  to be done in and about the  premises,  as fully to all  intents  and
purposes as he might or could do in person,  hereby ratifying and confirming all
that said  attorney-in-fact  and agent,  or his substitute or  substitutes,  may
lawfully do or cause to be done by virtue hereof.

                                        7
Pursuant to the requirements of the Securities Act of 1933, as
amended,  this  Registration  Statement  has been signed below by the  following
persons in the indicated capacities on July 17, 1998.

               Signature                     Title
               ---------                     -----

        /s/ Martin H. Ruby
     _____________________________      Chairman of the Board of
          Martin H. Ruby                Directors and Chief Executive
                                        Officer (Principal Executive Officer)

        /s/ Edward L. Zeman
     _____________________________      Executive Vice President--
          Edward L. Zeman               Chief Financial Officer
                                        (Principal Financial Officer)

        /s/ Barry G. Ward 
     _____________________________      Controller (Principal Accounting
          Barry G. Ward                 Officer)

      /s/ Dudley J. Godfrey, Jr.
     _____________________________      Director
          Dudley J. Godfrey, Jr.

        /s/ Edward D. Powers
     _____________________________      Director
          Edward D. Powers

        /s/ Colin F. Raymond
     _____________________________      Director
          Colin F. Raymond

        /s/ John R. Lindholm
     _____________________________      Director
          John R. Lindholm

       /s/ Irwin T. Vanderhoof
     _____________________________       Director
          Irwin T. Vanderhoof

                                        8
Exhibit Index

Exhibit No.    Description of Document

4.1            ARM Financial Group, Inc.
               1998 Non-Employee Director Stock Option Plan

4.2            Form of Restated Certificate of Incorporation of
               ARM Financial Group, Inc. (incorporated by
               reference to the Registrant's Registration Statement
               on Form S-1 (File No. 333-14693)).

4.3            Form of Second Amended and Restated By-laws of
               ARM Financial Group, Inc. (incorporated by
               reference to the Form 10-Q filed by the Registrant on May 15,
               1998 ).

5              Opinion of Shearman & Sterling regarding the legality of the
               securities being registered hereby.

23.1           Consent of Ernst & Young LLP.

23.3           Consent of Shearman & Sterling (included in
               Exhibit 5).

24             Powers of Attorney (included on signature page).

                                        9