SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                 AMENDMENT NO. 2
                                       TO
                                   SCHEDULE TO
                  TENDER OFFER STATEMENT UNDER SECTION 14(D)(1)
           OR SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
                             -----------------------

                               CII FINANCIAL, INC.
                      (Name of subject companies (issuer))

                         CII FINANCIAL, INC., as issuer
                 (Names of filing persons (identifying status as offeror,
                            issuer or other person))
                             -----------------------

                   7 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
                  DUE SEPTEMBER 15, 2001 OF CII FINANCIAL, INC.
                         (Title of Class of Securities)
                             -----------------------

                                    12551LAB7
                      (CUSIP Number of Class of Securities)

                             David Sonenstein, Esq.
                                 General Counsel
                              2716 North Tenaya Way
                               Las Vegas, NV 89128
                            Telephone: (702) 242-7046

 (Name, address and telephone number of person authorized to receive notices and
                   communications on behalf of filing persons)

                                   Copies to:

                            Stephen P. Farrell, Esq.
                              Howard A. Kenny, Esq.
                           Morgan, Lewis & Bockius LLP
                                 101 Park Avenue
                            New York, New York 10178
                            Telephone: (212) 309-6000

                            CALCULATION OF FILING FEE
                 Transaction Valuation (1)         Amount of Filing Fee
                          $47,059,000                    $12,424

(1)Pursuant to Rule 457(f)(2)  under the Securities Act of 1933,  this amount is
   based upon the book value of the $47,059,000  aggregate  principal  amount of
   the 7 1/2% convertible  subordinated  debentures due September 15, 2001, that
   may be received in the exchange offer.

[  X ] Check  box if any part of the fee is  offset  as  provided  by Rule  0-11
   (a)(2) and identify the filing with which the  offsetting  fee was previously
   paid.  Identify the previous filing by registration  statement number, or the
   Form or Schedule and the date of its filing.

Amount Previously Paid:  $12,424
Form or Registration No.:  Form S-4 (File No. 333-52726)
Filing Party:  CII Financial, Inc.
Date Filed:  December 26, 2000

[ ] Check the box if the filing  relates  solely to  preliminary  communications
made before the commencement of a tender offer.

Check the  appropriate  boxes below to designate any  transactions  to which the
statement relates:

[      ] third party tender offer subject to Rule 14d-1.
[  X ] issuer tender offer subject to Rule 13e-4.
[      ] going private transaction subject to Rule 13e-3.
[      ] amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]






                                  INTRODUCTION

         This Amendment No. 2 to a Tender Offer Statement on Schedule TO relates
to the offer by CII Financial, Inc., a California corporation ("CII Financial"),
to exchange up to $47,059,000 of the outstanding 7 1/2% convertible subordinated
debentures due September 15, 2001  ("Debentures"),  of CII Financial,  Inc., (or
such lesser  number as are  properly  tendered)  for new 9% senior  subordinated
debentures  due  September  15, 2006 or cash,  upon the terms and subject to the
conditions set forth in CII Financial's Registration Statement on Form S-4 (File
No. 333-52726) filed with the Securities and Exchange Commission on December 26,
2000,  and as amended on February  5, 2001 and March 1, 2001 (the  "Registration
Statement").

         The information in the Registration  Statement and the exhibits thereto
are  incorporated  herein by reference in this  Schedule TO in answer to some of
the items required in this Schedule TO.

         CII Financial hereby amends and supplements the Schedule TO as follows:

ITEM 12.      Materials to be filed as Exhibits.

(a)(12)*   Press Release Issued by the Company on February 26, 2001.

(a)(13)*   Press Release Issued by the Company on March 1, 2001.



* Previously filed with the Securities and Exchange Commission.





                                    SIGNATURE

         After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.

Date:    March 5, 2001

                               CII FINANCIAL, INC.


                               By:  /s/ Kathleen M. Marlon
                                    -----------------------
                                    Name:   Kathleen M. Marlon
                                    Title:  President, Chief Executive Officer
                                    and Chairman






                                INDEX TO EXHIBITS

                                     Exhibit


Exhibit
Number

(a)(12)*   Press Release Issued by the Company on February 26, 2001.

(a)(13)*   Press Release Issued by the Company on March 1, 2001.


* Previously filed with the Securities and Exchange Commission.