Exhibit 5







                                                                  April 18, 2001


CII Financial, Inc.
2716 North Tenaya Way
Las Vegas, Nevada 89128

                  Re:  Registration Statement on Form S-4

Ladies and Gentlemen:

                  We have acted as counsel to CII Financial,  Inc., a California
corporation (the "Company"),  in connection with the preparation and filing with
the  Securities and Exchange  Commission  (the  "Commission")  of a Registration
Statement  on Form  S-4,  including  the  exhibits  thereto  (the  "Registration
Statement"),  under the  Securities  Act of 1933,  as amended  (the  "Securities
Act"),  for the  proposed  issuance  by the Company of up to  $20,000,000  of 9%
Senior Debentures (the "Debentures").

                  The  Debentures   will  be  issued  under  an  Indenture  (the
"Indenture"),  to be entered  into the Company  and Wells Fargo Bank  Minnesota,
N.A., a national banking association,  as Trustee,  which will be filed with the
Commission as an Exhibit to the Registration Statement.

                  In connection with this opinion,  we have examined  originals,
or  copies  certified  or  otherwise  identified  to  our  satisfaction,  of the
Registration  Statement,  the Certificate of Incorporation  of the Company,  the
By-Laws of the Company,  the Indenture,  and such other  documents,  records and
other instruments of the Company as in our judgment are necessary or appropriate
for purposes of this opinion.

                  In such  examination,  we have assumed the  genuineness of all
signatures,  the legal  capacity  of  natural  person  the  authenticity  of all
documents submitted to us as originals,  the conformity to original documents of
all  documents  submitted  to us as  certified  or  Photostat  copies,  and  the
authenticity of the originals of such latter documents.




CII Financial, Inc.
April 18, 2001
Page 2





Based upon the  foregoing,  and subject to the  qualifications  and  limitations
stated herein, we are of the following opinion that :

         (1) The Company is a corporation  duly  organized and validly  existing
under the laws of the State of California.

         (2) The Debentures have been duly authorized by all requisite corporate
action of the Company and, when issued and  authenticated in accordance with the
terms of the Indenture, such Debentures will constitute legal, valid and binding
obligations  of the  Company  entitled  to the  benefits  of the  Indenture  and
enforceable against the Company in accordance with their terms.

                  Our  opinions  set forth  above are  subject to the effects of
bankruptcy,  insolvency, fraudulent conveyance,  reorganization,  moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable  principles  (whether  considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.

                  We are expressing the opinions above as members of the Bars of
the States of California and New York and express no opinion as to any law other
than the laws of the States of California and New York.

                  We hereby  consent to the use of this opinion as an exhibit to
the  Registration  Statement and to the reference to us under the heading "Legal
Matters"  in the  prospectus  that is part of such  Registration  Statement.  In
giving  such  consent,  we do not  thereby  admit that we are acting  within the
category of persons whose consent is required  under Section 7 of the Securities
Act or the rules and regulations of the Commission thereunder.

                                         Very truly yours,


                                         Morgan, Lewis & Bockius LLP