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<SEC-DOCUMENT>/in/edgar/work/20000821/0000318673-00-000013/0000318673-00-000013.txt : 20000922
<SEC-HEADER>0000318673-00-000013.hdr.sgml : 20000922
ACCESSION NUMBER:		0000318673-00-000013
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20000630
FILED AS OF DATE:		20000821

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SECURITY NATIONAL FINANCIAL CORP
		CENTRAL INDEX KEY:			0000318673
		STANDARD INDUSTRIAL CLASSIFICATION:	 [6311
]		IRS NUMBER:				870345941
		STATE OF INCORPORATION:			UT
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-Q
			SEC ACT:		
			SEC FILE NUMBER:	000-09341
			FILM NUMBER:		706591
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		5300 S 360 WEST STE 310
				STREET 2:		P.O. BOX 57250
				CITY:			SALT LAKE CITY
				STATE:			UT
				ZIP:			84123
				BUSINESS PHONE:		8012641060
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		P.O. BOX 57250
					CITY:			SALT LAKE CITY
					STATE:			UT
					ZIP:			84123
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	SNL FINANCIAL CORP
						DATE OF NAME CHANGE:	19910401
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<TEXT>


                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                    FORM 10-Q

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




For Quarter Ended June 30, 2000           Commission File Number: 0-9341
                  -------------                                   ------



                     SECURITY NATIONAL FINANCIAL CORPORATION
                     ---------------------------------------
                            Exact Name of Registrant.




           UTAH                                           87-0345941
- ----------------------------                       -------------------------
(State or other jurisdiction                       IRS Identification Number
of incorporation or organization)



5300 South 360 West, Salt Lake City, Utah                   84123
- -----------------------------------------               ------------
(Address of principal executive offices)                 (Zip Code)




Registrant's telephone number, including Area Code     (801) 264-1060
                                                       --------------



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  XX         NO
                      -----

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



Class A Common Stock, $2.00 par value                  3,689,893
- -------------------------------------      ----------------------------------
         Title of Class                    Number of Shares Outstanding as of
                                                    June 30, 2000


Class C Common Stock, $.20 par value                   5,488,312
- -------------------------------------      ----------------------------------
         Title of Class                    Number of Shares Outstanding as of
                                                    June 30, 2000
<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                                    FORM 10Q

                           QUARTER ENDED JUNE 30, 2000

                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION



Item 1 Financial Statements                                        Page No.

         Consolidated Statements of Earnings -
         Six and Three months ended June 30, 2000 and 1999.............3

         Consolidated Balance Sheets - June 30, 2000
         and December 31, 1999.......................................4-5

         Consolidated Statements of Cash Flows -
         Six months ended June 30, 2000 and 1999.......................6

         Notes to Consolidated Financial Statements.................7-10


Item 2      Management's Discussion and Analysis...................10-13

Item 3      Quantitative and Qualitative Disclosure of
            Market Risk...............................................13

                           PART II - OTHER INFORMATION

            Other Information......................................13-15

            Signature Page............................................16

                                        2
<PAGE>
<TABLE>
<CAPTION>

                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)

                                           Six Months Ended June 30,               Three Months Ended June 30,
Revenues:                                    2000             1999                       2000              1999
<S>                                     <C>             <C>                         <C>              <C>
Insurance premiums and
   other considerations                 $  6,599,889    $  6,360,008                 $  3,206,115    $  3,010,592
Net investment income                      5,894,207       5,346,571                    3,090,458       2,805,006
Net mortuary and cemetery sales            5,186,292       5,258,203                    2,491,271       2,902,585
Realized gains on investments
   and other assets                           31,567         225,658                       (1,158)         55,965
Mortgage fee income                       11,108,165       6,719,818                    6,466,954       3,618,416
Other                                         66,689         778,062                       14,203         741,142
                                        ------------     -----------                  -----------     -----------
   Total revenue                          28,886,809      24,688,320                   15,267,843      13,133,706

Benefits and expenses:
Death benefits                             2,484,425       2,383,293                    1,294,389       1,392,483
Surrenders and other policy benefits       1,362,206       2,535,433                      768,130       1,322,294
Increase in future policy benefits ..      2,210,335       1,444,071                      862,627         601,892
Amortization of deferred policy
   acquisition costs and cost of
   insurance acquired                      2,317,592       2,526,176                    1,196,563       1,221,623
General and administrative expenses:
   Commissions                             8,939,115       5,249,708                    5,168,667       2,823,607
   Salaries                                3,933,161       3,749,167                    1,993,311       1,959,014
   Other                                   4,637,745       4,082,757                    2,406,049       2,139,098
Interest expense                             894,114         490,259                      561,276         228,997
Cost of goods and services sold
  of the mortuaries and cemeteries ..      1,660,660       1,724,774                      814,451         987,943
                                         -----------     -----------                  -----------     -----------
   Total benefits and expenses            28,439,353      24,185,638                   15,065,463      12,676,951

Earnings before income taxes                 447,456         502,682                      202,380         456,755
Income tax expense                          (110,316)       (159,413)                     (51,254)       (171,394)
Minority interest income
   of subsidiary                             (30,660)        (63,631)                     (11,852)        (94,750)
                                        ------------    ------------                 ------------    ------------
      Net earnings                      $    306,480    $    279,638                 $    139,274    $    190,611
                                        ============    ============                 ============    ============
Net earnings per common share                  $0.07           $0.06                        $0.03           $0.04
                                               =====           =====                        =====           =====
   Weighted average outstanding
      common shares                        4,307,694       4,407,069                    4,238,724       4,388,357
                                           =========       =========                   ==========      ==========
Net earnings per common
   share-assuming dilution                     $0.07           $0.06                        $0.03           $0.04
                                               =====           =====                        =====           =====
   Weighted average outstanding
      common shares assuming-dilution      4,356,876       4,407,069                     4,259,794       4,388,357
                                          ==========      ==========                    ==========      ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        3
<PAGE>

                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS



                                           June 30, 2000     December 31,
                                            (Unaudited)         1999
Assets:                                    --------------    ----------
- ------
Insurance-related investments:
Fixed maturity securities held
   to maturity, at amortized cost       $  41,943,663    $  39,629,851
Fixed maturity securities available
   for sale, at market                     22,675,530       24,119,190
Equity securities available for sale,
   at market                                5,677,291        5,745,213
Mortgage loans on real estate              17,865,330       18,926,628
Real estate, net of accumulated
   depreciation                             8,262,056        7,629,952
Policy, student and other loans            11,403,096       11,607,993
Short-term investments                        508,380        1,290,310
                                         ------------     ------------
      Total insurance-related
         investments                      108,335,346      108,949,137
Restricted assets
   of cemeteries and mortuaries             4,560,894        4,258,987
Cash                                        4,824,676       12,422,864
Receivables:
   Trade contracts                          5,075,613        4,232,030
   Mortgage loans sold to investors        28,137,545       29,071,913
   Receivable from agents                   2,293,212        2,272,624
   Receivable from officers                   115,100          118,400
   Other                                    4,217,825        3,847,079
                                         ------------      -----------
      Total receivables                    39,839,295       39,542,046
   Allowance for doubtful accounts         (1,556,368)      (1,467,954)
                                         ------------      -----------
   Net receivables                         38,282,927       38,074,092
Policyholder accounts on deposit
   with reinsurer                           7,747,099        7,806,866
Land and improvements held for sale         8,522,656        8,522,687
Accrued investment income                   1,517,439        1,493,013
Deferred policy acquisition costs          11,076,103       10,630,086
Property, plant and equipment, net         10,621,070       10,566,508
Cost of insurance acquired                  8,381,308        9,597,306
Excess of cost over net assets
   of acquired subsidiaries                 1,227,387        1,305,333
Other                                         710,826          671,558
                                       --------------   --------------
     Total assets                       $ 205,807,731    $ 214,298,437
                                        =============    =============

















See accompanying notes to consolidated financial statements.

                                        4


<PAGE>

                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (Continued)


                                            June 30, 2000     December 31,
                                              (Unaudited)        1999
Liabilities:                               ---------------  ---------------
- -----------
Future life, annuity, and other
   policy benefits                        $ 139,184,908    $ 138,501,316
Unearned premium reserve                      1,481,659        1,866,523
Line of credit for financing
   of mortgage loans                          2,300,000        8,687,023
Bank loans payable                           10,148,574       10,768,098
Notes and contracts payable                   3,707,023        3,885,684
Estimated future costs of
   pre-need sales                             6,900,220        6,817,685
Accounts payable                                761,619          804,133
Funds held under reinsurance
   treaties                                   1,471,630        1,475,512
Other liabilities and
   accrued expenses                           3,886,876        3,219,166
Income taxes                                  5,657,306        5,736,860
                                           ------------     ------------
      Total liabilities                     175,499,815      181,762,000

Minority interest                             4,467,971        6,046,744

Stockholders' Equity:
Common stock:
      Class A: $2 par value,
         authorized 10,000,000
         shares, issued 4,864,238
         shares in 2000 and 4,863,731
         shares in 1999                       9,728,476        9,727,462
      Class C: $0.20 par value,
         authorized 7,500,000 shares,
         issued 5,550,291 shares in
         2000 and 5,555,350 shares
         in 1999                              1,110,058        1,111,070
                                            -----------      -----------
Total common stock                           10,838,534       10,838,532
Additional paid-in capital                   10,015,940       10,015,942
Accumulated other comprehensive
   income, net of deferred taxes                524,584          665,691
Retained earnings                             7,823,120        7,516,640
Treasury stock at cost (1,174,345
      Class A shares and 61,979 Class C
      shares in 2000; 966,139 Class A
      shares and 61,979 Class C shares
      in 1999 held by affiliated
      companies)                             (3,362,233)      (2,547,112)
                                          -------------    -------------
Total stockholders' equity                   25,839,945       26,489,693
                                          -------------    -------------
   Total liabilities and
      stockholders' equity                $ 205,807,731    $ 214,298,437
                                          =============    =============












See accompanying notes to consolidated financial statements.

                                        5
<PAGE>

                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



                                                 Six Months Ended June 30,
                                                  2000             1999
                                                --------        ----------
Cash flows from operating activities:
      Net cash provided by
         operating activities                 $  2,349,410    $  2,984,501

Cash flows from investing activities:
   Securities held to maturity:
      Purchase - fixed maturity securities      (4,798,597)             --
      Calls and maturities - fixed
        maturity securities                      2,520,856       3,657,999
   Securities available for sale:
      Purchases - equity securities                (92,563)        (43,759)
      Sales - equity securities                     71,913          43,781
      Calls and maturities - fixed
         maturity securities                     1,214,748       1,171,236
   Purchases of short-term investments          (2,917,187)     (6,401,565)
   Sales of short-term investments               3,699,117      10,493,964
   Purchases of restricted assets                 (301,907)        (47,148)
   Mortgage, policy, and other loans made       (2,244,580)     (4,022,131)
   Payments received for mortgage,
     policy, and other loans                     3,523,682       2,144,338
   Purchases of property, plant,
      and equipment                               (446,141)       (348,422)
   Purchases of real estate                       (808,421)       (303,626)
   Disposal of property, plant
      and equipment                                   (240)        179,343
                                                ----------      ----------
          Net cash provided by
             (used in) investing activities       (579,320)      6,524,010
                                                ----------      ----------
Cash flows from financing activities:
   Annuity receipts                              4,643,939       5,213,072
   Annuity withdrawals                          (6,011,888)     (6,217,085)
   Repayment of bank loans and
      notes and contracts payable                 (798,185)     (2,271,368)
   Net change in line of credit
      for financing of mortgage loans           (6,387,023)     (5,493,999)
   Purchase of treasury stock                     (815,121)       (339,830)
                                               -----------     -----------
   Net cash used in
      financing activities                      (9,368,278)     (9,109,210)
                                               -----------      ----------
Net change in cash                              (7,598,188)        339,301
Cash at beginning of period                     12,422,864       6,670,996
                                              ------------    ------------
Cash at end of period                         $  4,824,676    $  7,070,297
                                              ============    ============














See accompanying notes to consolidated financial statements.

                                        6
<PAGE>

            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 30, 2000
                                   (Unaudited)

1.  Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included. Operating results for the six months ended June 30, 2000, are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2000. For further information,  refer to the consolidated financial
statements and footnotes thereto for the year ended December 31, 1999,  included
in the Company's Annual Report on Form 10-K (file number 0-9341).

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual results could differ from those estimates.

The estimates  susceptible to  significant  change are those used in determining
the liability for future policy  benefits and claims,  those used in determining
valuation  allowances  for  mortgage  loans on real  estate,  and those  used in
determining  the  estimated  future  costs for  pre-need  sales.  Although  some
variability  is inherent in these  estimates,  management  believes  the amounts
provided are adequate.

2.   Comprehensive Income
     --------------------
For the six months  ended June 30,  2000 and 1999,  total  comprehensive  income
(loss)  amounted to $165,373 and $(82,643),  respectively.  For the three months
ended June 30, 2000 and 1999,  total  comprehensive  income amounted to $137,002
and $7,046 respectively.

3.  Capital  Stock  -------------  In  accordance  with SFAS 128,  the basic and
diluted earnings per share amounts were calculated as follows:

                                          Six Months Ended June 30,
                                             2000         1999
                                          ----------    ---------
Numerator:
      Net income                         $  306,480   $  279,638
                                         ==========   ==========
Denominator:
      Denominator for basic
        earnings per share--
        weighted-average shares           4,307,694    4,407,069
                                         ----------   ----------
      Effect of dilutive securities:
        Employee stock options               49,182           --
        Stock appreciation rights                --           --
                                         -----------   ----------
      Dilutive potential
        common shares                        49,182           --
                                         ----------    ----------
      Denominator for diluted earnings
        per share-adjusted weighted-
        average shares and assumed
        conversions                       4,356,876    4,407,069
                                        ===========   ==========
      Basic earnings per share                $0.07        $0.06
                                              =====        =====

      Diluted earnings per share              $0.07        $0.06
                                              =====        =====

There are no dilutive effects on net income for purpose of this calculation.

                                        7
<PAGE>

            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 30, 2000
                                   (Unaudited)

3.    Capital Stock (continued)

                                         Three Months Ended June 30,
                                             2000         1999
Numerator:
      Net income                           $139,274     $190,611
                                          =========     ========
Denominator:
      Denominator for basic
        earnings per share--
        weighted-average shares           4,238,724    4,388,357
                                          ---------    ---------
      Effect of dilutive securities:
        Employee stock options               21,070           --
        Stock appreciation rights                --           --
                                          ---------    ----------
      Dilutive potential
        common shares                        21,070           --
                                          ---------    ----------
      Denominator for diluted earnings
        per share-adjusted weighted-
        average shares and assumed
        conversions                       4,259,794    4,388,357
                                          =========   ==========

      Basic earnings per share                $0.03        $0.04
                                              =====        =====

      Diluted earnings per share              $0.03        $0.04
                                              =====        =====

There are no dilutive effects on net income for purpose of this calculation.

                                        8


<PAGE>
<TABLE>
<CAPTION>

            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 30, 2000
                                   (Unaudited)



4.  Business Segment

                                      Life           Cemetery/                                   Reconciling
                                    Insurance        Mortuary      Mortgage        Corporate        Items        Consolidated
                                    ---------        ---------     --------        ----------   --------------   ------------
<S>                                <C>             <C>            <C>               <C>          <C>             <C>

For the Six Months Ended
   June 30, 2000
- -------------------------
      Revenues from
             external customers    $10,782,158     $5,560,823     $12,543,770             $58      $      --     $28,886,809

      Intersegment revenues          1,501,044             --              --       1,932,619     (3,433,663)             --

      Segment profit                   114,344       (207,107)       (130,988)        671,207             --         447,456

      Identifiable assets          195,450,371     34,629,760       3,287,654       2,863,827    (30,423,881)    205,807,731

For the Six Months Ended
   June 30, 1999
- ------------------------
      Revenues from external
             customers             $11,736,641     $5,623,033      $7,317,485         $11,161        $    --     $24,688,320

      Intersegment revenues            999,088             --              --       1,916,181     (2,915,269)             --

      Segment profit                   261,913        (27,490)       (102,176)        370,435             --         502,682

      Identifiable assets          188,079,920     33,954,833       3,891,320       3,101,586    (24,479,142)    204,548,517

For the Three Months Ended
   June 30, 2000
- ---------------------------
      Revenues from
             external customers     $5,228,653     $2,683,449      $7,355,704             $37      $      --     $15,267,843

      Intersegment revenues            804,245             --              --         970,193     (1,774,438)             --

      Segment profit                   137,549       (271,551)        (44,644)        381,026             --         202,380


For the Three Months Ended
   June 30, 1999
- ---------------------------
      Revenues from external
             customers              $6,127,155     $3,079,731      $3,924,015          $2,805        $    --     $13,133,706

      Intersegment revenues            462,846             --              --         958,330     (1,421,176)             --

      Segment profit                   438,927        (80,816)         34,303          64,340             --         456,754

</TABLE>
                                        9
<PAGE>

            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 30, 2000
                                   (Unaudited)


5.   Acquisition of Southern Security Life Insurance Company

On December 17, 1998,  the Company  purchased all of the  outstanding  shares of
common stock of Consolidare Enterprises,  Inc. ("Consolidare") which owned 57.4%
of the  outstanding  shares of common stock of Southern  Security Life Insurance
Company ("Southern  Security").  Since then the Company has purchased 265,770 of
additional shares of Southern Security and owns 71% of the outstanding shares.

Item 2.  Management's Discussion and Analysis

Overview

The Company's  operations  over the last several years  generally  reflect three
trends or events which the Company expects to continue:  (i) increased attention
to "niche" insurance  products,  such as the Company's funeral plan policies and
interest  sensitive  products;  (ii) emphasis on cemetery and mortuary business;
and (iii) capitalizing on the strong economy in the United States by originating
and refinancing mortgage loans.

Results of Operations

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999

Total revenues  increased by $4,198,000,  or 17.0%,  to $28,887,000  for the six
months ended June 30, 2000,  from  $24,688,000 for the six months ended June 30,
1999.  Contributing to this increase in total revenues was a $4,388,000 increase
in mortgage  fee income,  a $240,000  increase in  insurance  premiums and other
considerations, and a $548,000 increase in net investment income.

Insurance premiums and other considerations  increased by $240,000,  or 3.8%, to
$6,600,000  for the six months  ended June 30,  2000,  from  $6,360,000  for the
comparable  period  in 1999.  This  increase  was  primarily  due to  additional
premiums from new business.

Net investment income increased by $548,000, or 10.2%, to $5,894,000 for the six
months ended June 30, 2000, from  $5,347,000 for the comparable  period in 1999.
This  increase  was  primarily   attributable   to  a  greater  number  of  loan
originations  during the six months of 2000,  due to the  expansion  of business
activities in new geographic markets.

Net mortuary and cemetery sales decreased by $72,000, or 1.4%, to $5,186,000 for
the six months ended June 30, 2000, from $5,258,000 for the comparable period in
1999. This decrease was primarily due to fewer pre-need cemetery sales.

Mortgage fee income  increased by $4,388,000,  or 65.3%,  to $11,108,000 for the
six months ended June 30, 2000,  from  $6,720,000 for the  comparable  period in
1999.  This  increase was  primarily  attributable  to a greater  number of loan
originations  during the six  months of 2000 due to the  expansion  of  business
activities in new geographic markets.

Total benefits and expenses were $28,439,000, or 98.4% of total revenues for the
six months ended June 30, 2000,  as compared to  $24,186,000,  or 98.0% of total
revenues for the comparable period in 1999.

Death  benefits,  surrenders and other policy  benefits,  and increase in future
policy  benefits  decreased by an aggregate of $306,000,  or 4.8%, to $6,057,000
for the six months  ended June 30,  2000,  from  $6,363,000  for the  comparable
period in 1999.  This  decrease  was  primarily  the  result of a  reduction  in
policyholder account balances.

Amortization of deferred policy acquisition costs and cost of insurance acquired
decreased by $209,000,  or 8.3%, to $2,317,000 for the six months ended June 30,
2000,  from  $2,526,000 for the comparable  period in 1999. This decrease was in
line with actuarial assumptions.

                                       10
<PAGE>

General and  administrative  expenses  increased  by  $4,428,000,  or 33.9%,  to
$17,510,000  for the six months ended June 30, 2000,  from  $13,082,000  for the
comparable period in 1999. This increase  primarily resulted from an increase in
commissions  and other  expenses due to additional  mortgage  loan  originations
having been made by the Company's  mortgage  subsidiary during the six months of
2000 due to the expansion of its business activities in new geographic markets.

Interest expense increased by $404,000, or 82.4%, to $894,000 for the six months
ended June 30, 2000,  from  $490,000  for the  comparable  period in 1999.  This
increase was primarily due to additional  warehouse lines of credit required for
the additional mortgage loan originations by the Company's mortgage subsidiary.

Cost of mortuaries and cemeteries  goods and services sold decreased by $64,000,
or 3.7%, to $1,661,000 for the six months ended June 30, 2000,  from  $1,725,000
for the  comparable  period in 1999.  This  decrease was  primarily due to fewer
pre-need cemetery sales.

Second Quarter of 2000 Compared to Second Quarter of 1999

Total revenues  increased by $2,134,000,  or 16.2%, to $15,268,000 for the three
months ended June 30, 2000, from $13,134,000 for the three months ended June 30,
1999.  Contributing to this increase in total revenues was a $2,849,000 increase
in mortgage  fee income,  a $196,000  increase in  insurance  premiums and other
considerations and a $285,000 increase in net investment income.

Insurance premiums and other considerations  increased by $195,000,  or 6.5%, to
$3,206,000  for the three months ended June 30, 2000,  from  $3,011,000  for the
comparable  period  in 1999.  This  increase  was  primarily  due to  additional
premiums from new business.

Net investment  income  increased by $285,000,  or 10.2%,  to $3,090,000 for the
three months ended June 30, 2000, from  $2,805,000 for the comparable  period in
1999.  This  increase was  primarily  attributable  to a greater  number of loan
originations during the second quarter of 2000, due to the expansion of business
activities in new geographic markets.

Net mortuary and cemetery sales  decreased by $411,000,  or 14.2%, to $2,491,000
for the three months ended June 30, 2000,  from  $2,903,000  for the  comparable
period in 1999. This decrease is primarily due to fewer pre-need cemetery sales.

Mortgage fee income  increased by  $2,849,000,  or 78.7%,  to $6,467,000 for the
three months ended June 30, 2000, from  $3,618,000 for the comparable  period in
1999.  This  increase was  primarily  attributable  to a greater  number of loan
originations  during the second quarter of 2000 due to the expansion of business
activities in new geographic markets.

Total benefits and expenses were $15,065,000, or 98.7% of total revenues for the
three months ended June 30 2000, as compared to  $12,677,000,  or 96.5% of total
revenues for the comparable period in 1999.

Death  benefits,  surrenders and other policy  benefits,  and increase in future
policy benefits  decreased by an aggregate of $392,000,  or 11.8%, to $2,925,000
for the three months ended June 30, 2000,  from  $3,317,000  for the  comparable
period in 1999.  This  decrease  was  primarily  the  result of a  reduction  in
policyholder account balances.

Amortization of deferred policy acquisition costs and cost of insurance acquired
decreased by $25,000,  or 2.1%, to  $1,197,000,  for the three months ended June
30, 2000, from  $1,222,000 for the comparable  period in 1999. This decrease was
in line with actuarial assumptions.

General  and  administrative  expenses  increased  by  $2,646,000  or 38.2%,  to
$9,568,000  for the three months ended June 30, 2000,  from  $6,922,000  for the
comparable period in 1999. This increase  primarily resulted from an increase in
commissions  and other  expenses due to additional  mortgage  loan  originations
having been made by the Company's mortgage  subsidiary during the second quarter
of  2000  as a  result  of the  expansion  of  its  business  activities  in new
geographic markets.

                                       11
<PAGE>

Interest  expense  increased by $332,000,  or 145.1%,  to $561,000 for the three
months ended June 30, 2000,  from  $229,000 for the  comparable  period in 1999.
This increase was primarily due to additional warehouse lines of credit required
for  the  additional  mortgage  loan  originations  by  the  Company's  mortgage
subsidiary.

Cost of mortuaries and cemeteries goods and services sold decreased by $173,000,
or 17.6%,  to $815,000 for the three months ended June 30, 2000,  from  $988,000
for the  comparable  period in 1999.  This  decrease was  primarily due to fewer
pre-need cemetery sales.

Liquidity and Capital Resources

The Company's life insurance subsidiaries and cemetery and mortuary subsidiaries
realize  cash flow  from  premiums,  contract  payments  and  sales on  personal
services  rendered  for  cemetery  and  mortuary  business,  from  interest  and
dividends  on  invested  assets,  and from the  proceeds  from the  maturity  of
held-to-maturity  investments,  or  sale  of  other  investments.  The  mortgage
subsidiary realizes cash flow from fees generated by originating and refinancing
mortgage loans and interest  earned on mortgages sold to investors.  The Company
considers these sources of cash flow to be adequate to fund future  policyholder
and  cemetery and mortuary  liabilities,  which  generally  are  long-term,  and
adequate to pay current policyholder claims,  annuity payments,  expenses on the
issuance of new policies,  the maintenance of existing  policies,  debt service,
and operating expenses.

The  Company  attempts  to  match  the  duration  of  invested  assets  with its
policyholder  and  cemetery  and  mortuary  liabilities.  The  Company  may sell
investments other than those  held-to-maturity  in the portfolio to help in this
timing;  however,  to date, that has not been necessary.  The Company  purchases
short-term  investments  on a  temporary  basis  to  meet  the  expectations  of
short-term  requirements  of the Company's  products.  The Company's  investment
philosophy is intended to provide a rate of return which will persist during the
expected  duration  of  policyholder  and  cemetery  and  mortuary   liabilities
regardless of future interest rate movements.

The Company's  investment  policy is to invest  predominantly  in fixed maturity
securities,  mortgage loans, and warehouse  mortgage loans on a short-term basis
before selling the loans to investors in accordance  with the  requirements  and
laws  governing  the  life  insurance  subsidiaries.  Bonds  owned  by the  life
insurance  subsidiaries amounted to $64,620,000 as of June 30, 2000, compared to
$63,749,000  as of December 31,  1999.  This  represents  59.6% and 58.5% of the
total insurance-related  investments as of June 30, 2000, and December 31, 1999,
respectively.  Generally, all bonds owned by the life insurance subsidiaries are
rated by the National Association of Insurance Commissioners.  Under this rating
system,  there are six categories  used for rating bonds. At June 30, 2000, 1.5%
($994,000)  and at December 31, 1999,  1.6%  ($994,000) of the  Company's  total
investment  in bonds were invested in bonds in rating  categories  three through
six, which are considered non-investment grade.

The Company has  classified  certain of its fixed income  securities,  including
high-yield  securities,  in its  portfolio  as  available  for  sale,  with  the
remainder  classified as held to maturity.  However,  in accordance with Company
policy,  any such securities  purchased in the future will be classified as held
to maturity.  Business conditions,  however, may develop in the future which may
indicate a need for a higher level of liquidity in the investment portfolio.  In
that event the  Company  believes  it could  sell  short-term  investment  grade
securities before liquidating higher-yielding longer term securities.

The Company is subject to risk based capital guidelines established by statutory
regulators  requiring  minimum  capital  levels based on the  perceived  risk of
assets, liabilities, disintermediation, and business risk. At June 30, 2000, and
December  31,  1999,  the life  insurance  subsidiary  exceeded  the  regulatory
criteria.

The Company's total  capitalization  of  stockholders'  equity and bank debt and
notes payable was $39,696,000 as of June 30, 2000, as compared to $41,144,000 as
of  December  31,  1999.  Stockholders'  equity as a percent  of  capitalization
increased to 65.1% as of June 30, 2000, from 64.4% as of December 31, 1999.

                                       12
<PAGE>

Lapse  rates  measure the amount of  insurance  terminated  during a  particular
period.  The  Company's  lapse  rate for  life  insurance  in 1999 was  13.2% as
compared to a rate of 6.0% for 1998.  The 2000 lapse rate is  approximately  the
same as 1999.

At June 30, 2000, $21,263,000 of the Company's consolidated stockholders' equity
represents  the statutory  stockholders'  equity of the Company's life insurance
subsidiaries.  The life  insurance  subsidiaries  cannot pay a  dividend  to its
parent company without the approval of insurance regulatory authorities.

Item 3.  Quantitative and Qualitative Disclosure of Market Risk

There have been no  significant  changes since the annual report Form 10-K filed
for the year ended December 31, 1999.

                           Part II Other Information:

Item 1.        Legal Proceedings

               Security   National   Mortgage   Company   ("Security    National
               Mortgage"),  a wholly- owned subsidiary of the Company,  has been
               notified  that it may be subject to an  administrative  action by
               the U.S. Department of Housing and Urban Development  ("HUD"). By
               way of  letter  from  HUD to  Security  National  Mortgage  dated
               February 15, 2000 and  received on February  25,  2000,  Security
               National  Mortgage was advised "that the Mortgagee  Review Board"
               of HUD "is considering an administrative  action against Security
               National Mortgage ... pursuant to 24 CFR Part 25 ... and a civil
               money  penalty  pursuant to 24 CFR part 30 ...."  In the letter,
               HUD  set  forth  alleged   violations  of   HUD/Federal   Housing
               Administration  ("FHA")  requirements  which  included among such
               violations:   (1)  failure  to  comply  with  Security   National
               Mortgage's own policy and procedures  outlined in a July 17, 1997
               letter to HUD; (2)  acceptance  of loans  originated by personnel
               not employed by or not exclusively  employed by Security National
               Mortgage;  (3) acceptance of loans originated by non-HUD approved
               entities;  (4) payment of fees and  compensation  to unauthorized
               entities or individuals in connection with FHA insured mortgages;
               and (5) certification of inaccurate HUD-1s.

               Concerning the administrative action by HUD relating to the above
               allegations,  dependent  upon the  facts and  circumstances,  HUD
               asserts it has alternatives such as settlement,  issuing a letter
               of reprimand,  placing Security National Mortgage on probation or
               even  suspending  or  withdrawing  Security  National  Mortgage's
               approval function as a HUD/FHA lender.  The letter indicates that
               the Mortgagee Review Board intends to seek a civil money penalty.
               With  respect  to any  civil  money  penalty,  which  would be in
               addition  to the  foregoing,  the letter from HUD states that the
               "amount of the civil money  penalty  shall not exceed  $5,500 for
               each such listed or described  violation"  and that a "continuing
               violation may  constitute a separate  violation for each day that
               violation continues."

               Security  National  Mortgage  is allowed to respond in writing to
               what is  asserted  by HUD and the  procedure  permits at a future
               time, if necessary, an evidentiary hearing. Management recognizes
               the serious alternative  sanctions claimed by HUD to be available
               to it including the sanction of the loss of the ability to do FHA
               lending  work.  Recognizing  the  importance  of  the  matter,  a
               detailed  written response to the letter was filed with HUD and a
               meeting  was held with the HUD staff in an effort to insure  that
               Security National Mortgage's position on the matter is fairly and
               properly  presented.  Further  response or decision  has not been
               received from HUD.

               On or about March 6, 2000, Kelly Darrow ("Darrow") filed a Charge
               of   Discrimination   with   the   Labor   Commission   of  Utah,
               Anti-Discrimination  Division against Security  National Mortgage
               Company.  It is asserted that Security National Mortgage violated
               the Americans with  Disabilities  Act of 1990 ("ADA") as amended,
               and the Utah  Anti-Discrimination Act of 1965 ("UAD") as amended,
               for the alleged reasons of "demoted, denied promotion.

                                       13
<PAGE>

               received less pay than others,  denied  reasonable  accommodation
               for ...  disability,  forced to go on contract vendor status, and
               when ...  complained  of the  treatment  ... was  fired."  Darrow
               withdrew  the charge in favor of a "right to sue letter" so as to
               be able to file a suit in federal  court.  Remedies  which may be
               sought   include  back  pay  and   benefits,   attorneys'   fees,
               reinstatement and punitive damages.

               Management   takes  the   position   that   Darrow  was   treated
               appropriately and that Security National Mortgage did not violate
               the ADA or UAD. At this point,  however, a complete evaluation of
               the matter has not been finalized.

               The Company is not a party to any other legal proceedings outside
               the  ordinary  course of the  Company's  business or to any other
               legal  proceedings  which,  adversely  determined,  would  have a
               material adverse effect on the Company or its business.

Item 2.        Changes in Securities

               NONE

Item 3.        Defaults Upon Senior Securities

               NONE

Item 4.        Submission of Matters to a Vote of Security Holders

               NONE

Item 5.        Other Information

               NONE

Item 6.        Exhibits and Reports on Form 8-K

   (a)         Exhibits

     3.  A.     Articles of Restatement of Articles of Incorporation (8)
         B.     Bylaws (1)

     4.  A. Specimen Class A Stock Certificate (1)
         B. Specimen Class C Stock Certificate (1)
         C. Specimen Preferred Stock Certificate and Certificate of Designation
            of Preferred Stock (1)
    10.  A. Restated and Amended Employee Stock Ownership Plan and Trust
            Agreement (1)
         B. Deferred Compensation Agreement with George R. Quist (2)
         C. 1993 Stock  Option Plan (3)
         D. Promissory  Note with Key Bank of Utah (4)
         E. Loan and Security Agreement with Key Bank of Utah (4)
         F. General  Pledge  Agreement with Key Bank of Utah (4)
         G. Note Secured by Purchase Price Deed of Trust and  Assignment of
            Rents with the Carter Family Trust and the Leonard M. Smith
            Family Trust  (5)
         H. Deed of Trust and Assignment of Rents with the Carter Family Trust
            and the Leonard M. Smith Family Trust (5)
         I. Promissory Note with Page and Patricia Greer  (6)
         J. Pledge Agreement with Page and Patricia Greer (6)
         K. Promissory Note with Civil Service Employees Insurance Company (7)
         L. Deferred Compensation Agreement with William C.Sargent (8)
         M. Employment Agreement with Scott M. Quist. (8)
         N. Acquisition Agreement with Consolidare Enterprises, Inc., and
            certain shareholders of Consolidare.   (9)
         O. Agreement and Plan of Merger between Consolidare Enterprises, Inc.,
            and SSLIC Holding Company. (10)
         P. Administrative Services Agreement with Southern Security Life
            Insurance Company. (11)

                                       14
<PAGE>

         Q.     Promissory Note with George R. Quist. (12)
         R.     Settlement Agreement with Capitol Indemnity Corporation,
                George A. Fait, and Joel G. Fait.
         (1)    Incorporated by reference from Registration Statement on
                Form S-1, as filed on June 29, 1987.
         (2)    Incorporated by reference from Annual Report on Form 10-K,
                as filed on March 31, 1989.
         (3)    Incorporated by reference from Annual Report on Form 10-K, as
                filed on March 31, 1994.
         (4)    Incorporated by reference from Report on Form 8-K, as filed on
                February 24, 1995.
         (5)    Incorporated by reference from Annual Report on Form 10K, as
                filed on March 31, 1995.
         (6)    Incorporated by reference from Report on Form 8-K, as filed on
                May 1, 1995.
         (7)    Incorporated by reference from Report on Form 8-K, as filed on
                January 16, 1996.
         (8)    Incorporated by reference from Annual Report on Form 10-K, as
                filed on March 31, 1998.
         (9)    Incorporated by reference from Report on Form 8-K, as filed
                on May 11, 1998.
        (10)    Incorporated by reference from Report on Form 8-K, as filed on
                January 4, 1999.
        (11)    Incorporated by reference from Report on Form 8-K, as filed on
                March 4, 1999.
        (12)    Incorporated by reference from Annual Report on Form 10-K, as
                filed on April 14, 1999.


    27.  Financial Data Schedule

    (b)  Reports on Form 8-K:

            NONE


                                       15

                                   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.


                                   REGISTRANT
                     SECURITY NATIONAL FINANCIAL CORPORATION
                                   Registrant



DATED: August 21, 2000           By:    George R. Quist,
       ---------------                  ----------------
                                        Chairman of the Board,
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)


DATED: August 21, 2000           By:    Scott M. Quist
       ---------------                  --------------
                                        First Vice President, General Counsel,
                                        Treasurer (Principal Financial and
                                        Accounting Officer)


                                       16
<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>SETTLEMENT AGREEMENT
<TEXT>


                              SETTLEMENT AGREEMENT


     THIS  SETTLEMENT  AGREEMENT  (the  "Agreement")  is made and  entered  into
effective as of December 31, 1999, by and among CAPITOL INDEMNITY CORPORATION, a
Wisconsin  corporation  ("Capitol  Indemnity"),  GEORGE A. FAIT ("George Fait"),
President  of  Capitol  Indemnity,  JOEL G. FAIT  ("Joel  Fait"),  an officer of
Capitol Indemnity,  SECURITY NATIONAL FINANCIAL CORPORATION,  a Utah Corporation
("Security  National"),   SECURITY  NATIONAL  LIFE  INSURANCE  COMPANY,  a  Utah
corporation  and  a  wholly-owned  subsidiary  of  Security  National,  SOUTHERN
SECURITY LIFE INSURANCE COMPANY, a Florida corporation ("Southern Security") and
SSLIC HOLDING  COMPANY,  a Florida  corporation,  formerly  known as CONSOLIDARE
ENTERPRISES, INC. ("Consolidare").

                                   WITNESSETH:

     WHEREAS,  Capitol  Indemnity,  George  Fait  and Joel  Fait  are  currently
shareholders of Southern  Security,  with Capitol Indemnity the owner of 151,871
shares of common stock ("Common  Stock") of Southern  Security,  George Fait the
owner of 33,000 shares of Common Stock of Southern  Security,  and Joel Fait the
owner  of  2,000  shares  of  Common  Stock of  Southern  Security  (hereinafter
collectively referred to as the "Shares");

     WHEREAS,  on November 4, 1998,  Capitol  Indemnity  and the State of Idaho,
Department of Insurance,  as Rehabilitator for Universe Life Insurance  Company,
an Idaho  corporation,  instituted  an action  against  Consolidare  and  George
Pihakis,  Samuel P. Brewer,  Stephen Reck, A. Thomas Frank,  Frank A. Hulet,  C.
Wesley Johnston, Lewis E. Kassis, Robert L. Martin, Charles W. Mullenix,  Ferris
S. Ritchey, Jr., John M. Roehm, David C. Thompson, Nikki Clark and Lloyd Zobrist
(collectively,  the  "Individual  Defendants"),  that  action  being  styled and
denominated as Capitol Indemnity Corp., et al. v. Consolidare Enterprises, Inc.,
et al., Case No. 98-2286-CA-16-K, pending in the Circuit Court of the Eighteenth
Judicial Circuit, Seminole County Florida;

     WHEREAS,  on December 17, 1998,  Security National through its wholly-owned
subsidiary,  Security  National  Life  Insurance  Company,  acquired  all of the
outstanding  shares of  common  stock of  Consolidare,  which  owned at  closing
approximately  57.4% of the  outstanding  shares  of  Common  Stock of  Southern
Security;

     WHEREAS, Consolidare desires to purchase all of the Shares owned by Capitol
Indemnity, George Fait and Joel Fait at an agreed upon price of $8.50 per share,
provided  that  Capitol  Indemnity  dismiss  its claims  with  prejudice  in the
above-entitled action against Consolidare and the Individual Defendants;

     WHEREAS, Capitol Indemnity,  George Fait and Joel Fait desire to sell their
shares of Common  Stock of Southern  Security to  Consolidare  at an agreed upon
price of $8.50 per share  and,  as a  condition  to such sale of stock,  Capitol
Indemnity  agrees to dismiss its claims with  prejudice in the  above-referenced
action against Consolidare;

     WHEREAS,  Security  National,  Security National Life Insurance Company and
Southern Security will guarantee the payments by Consolidare for the purchase of
the Shares; and

     WHEREAS, the parties to this Agreement,  in order to reduce the expense and
inconvenience  incident  to  further  litigation,   now  desire  to  settle  the
above-entitled  civil action on condition that  Consolidare  purchase all of the
Shares  of Common  Stock of  Southern  Security  collectively  owned by  Capitol
Indemnity,  George Fait and Joel Fait, that Security National, Security National
Life Insurance  Company and Southern  Security  guarantee payment by Consolidare
for the  purchase  of the  Shares,  and that  Southern  Security  pay the sum of
$5,000.00 to Capitol Indemnity and that Security National, Southern Security and
Consolidare  assign  their  rights to  Capitol  Indemnity  to  receive a $35,000
contribution   from  National  Union  Fire  Insurance   Company  of  Pittsburgh,
Pennsylvania  in  settlement  of the  claims  asserted  against  the  Individual
Defendants.

     NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth  herein,  and other  good and  valuable  consideration,  the  receipt  and
adequacy of which each party does hereby  acknowledge,  the parties hereto agree
as follows:


                                       17

     1. Capitol  Indemnity hereby agrees to dismiss its claims with prejudice in
the above-entitled  action against Consolidare and the Individual Defendants and
hereby authorizes Foley & Lardner, its counsel of record, to sign on its behalf,
immediately  upon the execution of this  Agreement,  the  Stipulation  and Joint
Motion for  Dismissal  with  Prejudice,  a copy of which is  attached  hereto as
Exhibit A, and to arrange for the filing of said Stipulation with the court.

     2. Capitol  Indemnity  agrees to sell,  transfer and deliver to Consolidare
and  Consolidare  agrees to purchase from Capitol  Indemnity  151,871  shares of
Common  Stock of Southern  Security.  These shares of Common Stock shall be sold
and  delivered  to   Consolidare   upon  the  execution  of  this  Agreement  in
consideration  for  Consolidare  making  payments  to Capitol  Indemnity  in the
principal  amount  of  $1,290,903.50,   payable  as  follows:  (a)  the  sum  of
$645,451.75 to be paid in certified funds upon execution of this Agreement;  and
(b) five annual  payments,  beginning one year from the  effective  date of this
Agreement,  each payment in the principal amount of $129,090.35 plus interest on
the unpaid  principal  balance at a rate of 6-1/2% per annum until the principal
and accrued interest thereon have been paid in full.

     3. George  Fait agrees to sell,  transfer  and deliver to  Consolidare  and
Consolidare agrees to purchase from George Fait 33,000 shares of Common Stock of
Southern  Security.  These shares of Common Stock shall be sold and delivered to
Consolidare  upon execution of this Agreement in  consideration  for Consolidare
making payments to George Fait in the principal  amount of $280,500.00,  payable
as  follows:  (a) the sum of  $140,250.00  to be paid in  certified  funds  upon
execution of this Agreement;  and (b) five annual  payments,  beginning one year
from the effective date of this Agreement,  each payment in the principal amount
of $28,050.00 plus interest on the unpaid principal  balance at a rate of 6-1/2%
per annum until the  principal  and accrued  interest  thereon have been paid in
full.

     4. Joel Fait  agrees to sell,  transfer  and  deliver  to  Consolidare  and
Consolidare  agrees to purchase  from Joel Fait 2,000  shares of Common Stock of
Southern  Security.  These shares of Common Stock shall be sold and delivered to
Consolidare  upon execution of this Agreement in  consideration  for Consolidare
making payments to Joel Fait in the principal  amount of $17,000.00,  payable as
follows:  (a) the sum of $8,500.00 to be paid in certified  funds upon execution
of this  Agreement;  and (b) five annual  payments,  beginning one year from the
effective  date of this  Agreement,  each  payment  in the  principal  amount of
$1,700.00 plus interest on the unpaid principal  balance at a rate of 6-1/2% per
annum until the principal and accrued interest thereon have been paid in full.

     5. Consolidare shall execute and deliver to Capitol Indemnity,  George Fait
and Joel Fait upon  execution of this Agreement  promissory  notes (the "Notes")
bearing  interest  at a rate of 6-12% per annum,  which  shall  provide  for the
payments  required to be made by Consolidare  pursuant to paragraphs 2 through 4
of this Agreement.

     6. Security National, Security National Life Insurance Company and Southern
Security shall execute and deliver Guarantees to Capitol Indemnity,  George Fait
and Joel Fait upon execution of this Agreement, which shall guarantee payment of
the Notes.

     7.  Consolidare may at any time prepay any balance owed on any of the Notes
to be issued to Capitol  Indemnity,  George Fait or Joel Fait hereunder  without
premium or penalty by paying the  principal  balance owed on any such Notes plus
the interest thereon at a rate of 6-1/2% per annum to the date of such payment.

     8. Security National agrees upon execution of this Agreement to pay the sum
of $5,000.00 to Capitol Indemnity on behalf of the Individual Defendants in full
settlement of all claims  asserted by Capital  Indemnity  against the Individual
Defendants in the  above-entitled  civil  action.  Security  National,  Southern
Security and Consolidare also agree to assign to Capitol  Indemnity their rights
to  the  $35,000.00   contribution  that  National  Fire  Insurance  Company  of
Pittsburgh,   Pennsylvania   is   prepared   to  make  in   settlement   of  the
above-referenced  action against the  Individual  Defendants as set forth in the
letter of March 2, 2000 from  Laurie  Beatus of  D'Amato & Lynch to Don B. Long,
Jr. of  Johnston,  Barton,  Proctor & Powell,  LLP, a copy of which is  attached
hereto as Exhibit "B" and by this reference made a part hereof.


                                       18

     9. Capitol Indemnity, George Fait and Joel Fait, singly and jointly, hereby
release, indemnify, and hold harmless Consolidare, and the Individual Defendants
from and against any and all claims,  suits, actions of any kind, whether legal,
administrative or other proceedings  brought or initiated by Capitol  Indemnity,
George Fait or Joel Fait relating to or in any way rising out of the acquisition
of  Consolidare  by Security  National  and  Security  National  Life  Insurance
Company.

     10.  Capitol  Indemnity,  George  Fait and Joel Fait,  singly and  jointly,
hereby release,  indemnify,  and hold harmless  Consolidare,  Southern Security,
Security  National,  Security National Life Insurance Company and the Individual
Defendants  from and  against any and all  claims,  suits,  actions of any kind,
whether  legal,  administrative  or other  proceedings  brought or  initiated by
Capitol  Indemnity,  George  Fait or Joel  Fait  against  Consolidare,  Southern
Security,  Security  National or Security National Life Insurance Company or any
of their  present  or past  directors,  officers  or  employees,  including  the
Individual  Defendants,  relating to or in any way arising out of the conduct of
the business and affairs of Consolidare, Southern Security, Security National or
Security National Life Insurance  Company by any of their respective  directors,
officers or employees prior to the date of this Agreement.

     11. Security National,  Security National Life Insurance Company,  Southern
Security, and Consolidare singly and jointly, hereby release, indeminfy and hold
harmless Capital  Indemnity,  George Fait and Joel Fait from and against any and
all claims,  suits, actions of any kind, whether legal,  administrative or other
proceedings  brought or initiated by Security  National,  Security National Life
Insurance Company,  Southern Security or Consolidare  against Capitol Indemnity,
George Fait or Joel Fait relating to or in any way arising out of the conduct of
the business and affairs of Consolidare,  Southern Security or Capital Indemnity
by any of their respective directors, officers or employees prior to the date of
this Agreement.

     12.  Each of the  parties  to  this  Agreement  (referred  to  herein  as a
"Representing  Party")  hereby  represents  and  warrants  to the other  parties
(referred to herein as the "Other Parties") that;

               (a)  Such  Representing  Party  has all  requisite  authority  to
               execute and deliver  this  Agreement  and to carry out and comply
               with the terms hereof;

               (b) This Agreement  constitutes a legal and binding obligation of
               the Representing Party, enforceable in accordance with its terms;

               (c) Neither the execution and delivery by the Representing  Party
               of this  Agreement,  nor  the  consummation  of the  transactions
               contemplated hereby, conflicts with or results in a breach of any
               of the  terms,  conditions  or  provisions  of any  agreement  or
               instrument to which the Representing Party is a party or by which
               the  Representing  Party is otherwise  bound,  or  constitutes  a
               default under any such agreement or instrument;

               (d) Each of the Parties  acknowledge  that they have received the
               benefit of separate  independent legal counsel in connection with
               the  negotiation  and  settlement of the matters  relating to and
               which are the subject matter of this Agreement. Capital Indemnity
               Corp.,  George  Fait and Joel Fait have been  represented  by the
               firm of Foley & Lardner of  Tallahassee,  Florida,  and  Security
               National,  Security  National Life Insurance Company and Southern
               Security  have been  represented  by the firm of  Mackey  Price &
               Williams of Salt Lake City, Utah; and

               (e) The  representations and warranties made herein shall survive
               the parties' execution and delivery of this Agreement.

     13. The Agreement and  undertakings  contained in this  Agreement have been
entered  into and made by the  parties  solely  for the  purpose  of  completely
settling and  compromising  claims which Capital  Indemnity has asserted against
Consolidare  and the Individual  Defendants in the  above-entitled  action,  any
liability  with  respect  to  any  such  claims  being  specifically  denied  by
Consolidare and the Individual Defendants named in the action.


                                       19

     14. The parties to this Agreement shall hold in strict confidence the terms
and conditions of this Agreement and shall not use any data or information  with
respect to this Agreement to the detriment of any other  parties,  provided that
the parties  hereto shall be entitled to disclose  such terms and  conditions as
may be required by law or a court of law or equity.

     15. The Representing  Parties will not, by words or actions, do anything or
issue any statements,  either orally or in writing,  that would tend to or would
disparage or defame the Other Parties or their reputations.

     16. Capital Indemnity,  George Fait and Joel Fait each hereby represent and
warrant to Security National, Security National Life Insurance Company, Southern
Security and Consolidare in connection with its purchase of the Shares of Common
Stock  of  Southern  Security  that  each  of  them  has  sufficient  investment
experience  to enable  them to  evaluate  the merits and risks of selling  their
Shares of Common Stock of Southern Security to Consolidare.  Capital  Indemnity,
George Fait,  and Joel Fait have  conducted all of the due diligence of Southern
Security,  its officers,  directors,  shareholders,  markets and prospects which
they have  deemed  necessary  in  evaluating  whether  to sell  their  Shares to
Consolidare.

     17. (a) The covenants and agreements contained herein shall be binding upon
and inure to the benefit of the successors and assigns of the respective parties
hereto;

          (b) The invalidity or unenforceability of any particular  provision in
          this Agreement shall not affect the other provisions  hereof, and this
          Agreement  shall be  construed  in all  respects as if such invalid or
          unenforceable provisions were omitted;

          (c) This  Agreement  sets  forth the  entire  understanding  among the
          parties  and shall not be  amended or  terminated  except by a written
          instrument duly executed by all the parties hereto;

          (d) This  Agreement  shall be  interpreted,  construed and enforced in
          accordance with and governed by the  substantive  laws of the state of
          Utah.

          (e) In the event any dispute or contest  shall arise  hereunder or any
          party  shall  breach  or  fail  to  perform  or  discharge  any of its
          obligations hereunder,  any party to this Agreement that shall prevail
          in  litigation  concerning  any such  dispute,  contest  or failure to
          perform or discharge, shall be entitled to an award against the losing
          party (or  jointly  against the losing  parties,  if more than one) of
          reasonable attorneys' fees and other costs incurred by such prevailing
          party (whether  incurred by such  prevailing  party (whether  incurred
          before or after commencement of such litigation);

          (f) Each party  agrees to and shall  forthwith  provide such other and
          further  assurances,  and agrees to and shall  forthwith  execute  and
          deliver such other and further instruments,  as any other party may at
          any  time  hereafter  reasonably  request  to  effectuate  any  of the
          purposes of this Agreement;

          (g)  Each  party  agrees  to  bear  its or his  own  costs,  including
          attorney's fees relating to the above-referenced action, including the
          preparation of this Agreement; and

          (h) This Agreement may be executed  simultaneously,  or in a number of
          counterparts,  each of which shall be deemed an  original,  but all of
          which together shall constitute one and the same Agreement.

     IN WITNESS WHEREOF,  the parties have executed this Agreement  effective as
of the date first above written.

                                    CAPITOL INDEMNITY CORPORATION


                                    By:____________________________________
                                    Its:____________________________




                                    _______________________________________
                                    George A. Fait


                                    _______________________________________
                                    Joel G. Fait


                                    SECURITY NATIONAL FINANCIAL CORPORATION


                                    By:____________________________________
                                    Its:____________________________

                                    SECURITY NATIONAL LIFE INSURANCE COMPANY



                                    By:____________________________________
                                    Its:____________________________

                                    SOUTHERN SECURITY LIFE INSURANCE COMPANY



                                    By:____________________________________
                                    Its:____________________________


                                    SSLIC HOLDING COMPANY, FORMERLY KNOWN AS
                                    CONSOLIDARE ENTERPRISES, INC.



                                    By:____________________________________
                                    Its:____________________________


                                       21
</TEXT>
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<TYPE>EX-27
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>FDS --
<TEXT>

<TABLE> <S> <C>

<ARTICLE>                                          7

<S>                                                <C>
<PERIOD-TYPE>                                      6-MOS
<FISCAL-YEAR-END>                                  DEC-31-1999
<PERIOD-END>                                       JUN-30-2000
<DEBT-HELD-FOR-SALE>                                                22,675,530
<DEBT-CARRYING-VALUE>                                               41,943,663
<DEBT-MARKET-VALUE>                                                 41,726,466
<EQUITIES>                                                           5,677,291
<MORTGAGE>                                                          17,865,330
<REAL-ESTATE>                                                        8,262,056
<TOTAL-INVEST>                                                     108,335,346
<CASH>                                                               4,824,676
<RECOVER-REINSURE>                                                     459,877
<DEFERRED-ACQUISITION>                                              19,457,411
<TOTAL-ASSETS>                                                     205,807,731
<POLICY-LOSSES>                                                     50,147,314
<UNEARNED-PREMIUMS>                                                  1,481,659
<POLICY-OTHER>                                                       2,007,009
<POLICY-HOLDER-FUNDS>                                               87,030,585
<NOTES-PAYABLE>                                                     16,155,597
<PREFERRED-MANDATORY>                                                        0
<PREFERRED>                                                                  0
<COMMON>                                                            10,838,534
<OTHER-SE>                                                          10,015,940
<TOTAL-LIABILITY-AND-EQUITY>                                       205,807,731
<PREMIUMS>                                                           6,599,889
<INVESTMENT-INCOME>                                                  5,894,207
<INVESTMENT-GAINS>                                                      31,567
<OTHER-INCOME>                                                          66,689
<BENEFITS>                                                           6,056,966
<UNDERWRITING-AMORTIZATION>                                          2,317,592
<UNDERWRITING-OTHER>                                                         0
<INCOME-PRETAX>                                                        447,456
<INCOME-TAX>                                                           110,316
<INCOME-CONTINUING>                                                    306,480
<DISCONTINUED>                                                               0
<EXTRAORDINARY>                                                              0
<CHANGES>                                                                    0
<NET-INCOME>                                                           306,480
<EPS-BASIC>                                                               0.07
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<RESERVE-OPEN>                                                               0
<PROVISION-CURRENT>                                                          0
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<PAYMENTS-CURRENT>                                                           0
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