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Disclosures Regarding Certain Business Relationships Between The Chesapeake Life Insurance Company, Mid-West National Life Insurance Company of Tennessee, The MEGA Life and Health Insurance Company, Insphere Insurance Solutions, Inc., and Americans for Financial Security.

Introduction
Set forth below is additional information concerning Americans for Financial Security (“AFS”), The Chesapeake Life Insurance Company (“Chesapeake”), Mid-West National Life Insurance Company of Tennessee (“Mid-West”), The MEGA Life and Health Insurance Company (“MEGA”), and Insphere Insurance Solutions, Inc.(“Insphere”) and a description of the relationships between the organizations.

More About AFS
AFS is a membership organization founded in 1992. AFS is organized under the laws of the District of Columbia. AFS is governed by a board of directors, the members of which are elected annually by Members of AFS. Members of AFS are entitled to vote on the selection of members of the board of directors at the annual meeting of AFS. AFS provides a variety of benefits to its Members. AFS Members are required to pay monetary dues. Neither AFS nor any of the members of the Board of Directors have any direct or indirect ownership interest in HealthMarkets, Inc. f/k/a UICI, a Delaware corporation (“HealthMarkets”) or Specialized Association Services, Ltd. (“SAS”).

More about Chesapeake, Mid-West, MEGA, Insphere and HealthMarkets
Chesapeake is an Oklahoma domiciled life and health insurance company with an administrative office located in North Richland Hills, Texas. Chesapeake is licensed to issue health, life, and annuity insurance policies to consumers in all states except New Jersey, New York, and Vermont. Chesapeake is a wholly-owned subsidiary of MEGA.

Mid-West is a Texas domiciled life and health insurance company with an administrative office located in North Richland Hills, Texas. Mid-West is licensed to issue health, life, and annuity insurance policies to consumers in all states except Maine, New Hampshire, New York and Vermont. Mid-West is an indirect wholly-owned subsidiary of HealthMarkets.

MEGA is an Oklahoma domiciled life and health insurance company with an administrative office located in North Richland Hills, Texas. MEGA is licensed to issue health, life, and annuity insurance policies to consumers in all states except New York. MEGA is an indirect wholly-owned subsidiary of HealthMarkets.

Insphere is a Texas domiciled insurance agency with an administrative office located in North Richland Hills, Texas. Insphere is licensed and actively sells a variety of forms of health, life, disability, long term care and other supplemental insurance products on a national basis, including association group insurance products issued by its affiliates MEGA and Mid-West, supplemental insurance products issued by Chesapeake, as well as health, life and other forms of supplemental insurance products issued and underwritten by independent insurance companies. Insphere is an indirect wholly-owned subsidiary of HealthMarkets and an affiliate of MEGA, Mid-West, and Chesapeake.

Effective April 5, 2006, HealthMarkets became a privately held company, the principal shareholders of which include investment affiliates of The Blackstone Group, Goldman Sachs Capital Partners, and DLJ Merchant Banking Partners (each of which is a private equity firm), certain members of current management, and independent insurance agents associated with the insurance company subsidiaries of HealthMarkets.

HealthMarkets remains subject to the reporting and certain other obligations under the Securities Exchange Act of 1934, as amended, and files annual, quarterly, and current reports, proxy statements, and other information with the Securities and Exchange Commission. You may inspect and copy such reports, proxy statements, and other information at the public reference facilities maintained by the Securities and Exchange Commission at:

Room 1204		Citicorp Center
Judiciary Plaza	or	500 West Madison Street
450 Fifth Street, N. W.		Chicago, IL 60661
Washington, D.C. 20549

You may call the Securities and Exchange Commission at 1-800-SEC-0330 for further information about the public reference facilities. This material may also be obtained from the Securities and Exchange Commission's worldwide web site at http://www.sec.gov. HealthMarkets maintains a website at www.healthmarketsinc.com.

Relationship between Insphere and AFS
The Field Service Representative that a prospective Member speaks with about an AFS Membership is also in most instances a licensed insurance agent contracted with Insphere. A Membership in AFS sold by a Field Service Representative of Insphere provides access to a variety of insurance benefits, which may vary from state to state. The Membership dues paid by a Member of AFS are paid to AFS Insphere receives compensation from AFS for selling AFS Memberships and the Field Service Representative in turn receives compensation from Insphere for the sale of AFS Memberships. The Field Service Representative acts on behalf of AFS only when discussing, explaining and describing AFS Membership benefits. Field Service Representatives are not employees of AFS and the association does not contract directly with Field Service Representatives.

The Field Service Representative selling AFS Memberships may also make available and sell a variety of insurance products to Members issued and underwritten by MEGA, Mid-West, or Chesapeake, as well as products issued and underwritten by a variety of other third party insurance carriers. When acting in this capacity as an Insurance Agent of Insphere the Insurance Agent is acting on behalf of Insphere and the issuing insurance company only when discussing, explaining and describing the insurance products and benefits.

Relationship between Chesapeake and AFS
The salesperson that a prospective Member or prospective insured speaks with about an AFS Membership and/or a Chesapeake supplemental insurance product serves both as a licensed insurance agent for Insphere selling insurance products on behalf of Chesapeake and as a Field Service Representative for new Members for AFS. Insphere receives compensation from Chesapeake and AFS, respectively, for the sale of these products. Insphere then pays compensation to the salesperson for the sale of the products. The insurance premiums derived from the sale of insurance go to Chesapeake and the membership dues derived from the sale of AFS Memberships go to AFS. The salesperson acts on behalf of Chesapeake (and not AFS) when discussing, explaining and describing Chesapeake insurance products and premiums. The salesperson acts on behalf of AFS (and not Chesapeake) when discussing, explaining, and describing other AFS benefits. AFS pays Insphere for enrolling new Members in AFS and for ongoing membership marketing.

Relationship between MEGA and AFS
AFS and MEGA are parties to an agreement, pursuant to which AFS has agreed to make available in a limited number of states to its Members certain insurance products offered by MEGA. The salesperson that a prospective Member or prospective insured speaks with about AFS Membership and MEGA insurance products serves both as a licensed insurance agent for Insphere selling insurance products on behalf of MEGA and as a Field Service Representative for new Members for AFS. Insphere receives compensation from AFS or MEGA, respectively, for the sale of the products. Insphere then pays compensation to the sales person for the sale of the products. . The insurance premiums derived from the sale of insurance go to MEGA and the membership dues derived from the sale of AFS Memberships go to AFS. The salesperson acts on behalf of MEGA (and not AFS) when discussing, explaining, and describing MEGA insurance products and premiums. The salesperson acts on behalf of AFS (and not MEGA) when discussing, explaining, and describing other AFS benefits. AFS pays Insphere for enrolling new Members in AFS and for ongoing membership marketing.

Relationship between Mid-West and AFS
AFS and Mid-West are parties to an agreement, pursuant to which AFS has agreed to make available in a limited number of states to its Members certain insurance products offered by Mid-West.

The salesperson that a prospective Member or prospective insured speaks with about AFS Membership and Mid-West insurance products serves both as a licensed insurance agent for Insphere selling insurance products on behalf of Mid-West and as a Field Service Representative for new Members for AFS. Insphere receives compensation from AFS or Mid-West, respectively, for the sale of the products. Insphere then pays compensation to the salesperson for the sale of the products. . The insurance premiums derived from the sale of insurance go to Mid-West and the membership dues derived from the sale of AFS Memberships go to AFS. The salesperson acts on behalf of Mid-West (and not AFS) when discussing, explaining, and describing Mid-West insurance products and premiums. The salesperson acts on behalf of AFS (and not Mid-West) when discussing, explaining, and describing other AFS benefits. AFS pays Inpshere for enrolling new Members in AFS and for ongoing membership marketing and for certain AFS Member benefits obtained from Mid-West or its affiliates.

Relationship between AFS and SAS
SAS (which is controlled by the adult children of the late Ronald L. Jensen, HealthMarkets’ founder) is a party to an agreement with AFS to provide certain administrative services, including billing, administrative, fulfillment, and benefit procurement services. AFS pays SAS for these services. Neither HealthMarkets, Chesapeake, MEGA, Mid-West, nor Insphere have any ownership interest in SAS or in AFS.  

Disclosures Regarding Association Group Insurance

About Association Group Insurance
AFS makes available to its members insurance coverage provided through , MEGA, and Mid-West (the “Insurance Company”). In a limited number of states where MEGA and Mid-West offer association group coverage, AFS serves as the Association Group Master Policyholder of an association group insurance policy issued by the applicable Insurance Company. In the event the Insurance Company approves your application, the Insurance Company will issue to you an individual insurance certificate evidencing your insurance coverage under the Association Group Master Policy. Under the law of these states, you may not acquire insurance coverage under an association group - type master policy unless you are also a member of an association. However, association membership is not required to maintain the insurance.

Underwriting
While the master policy issued by the Insurance Company to AFS is referred to as an association group policy, the law of most states permits the Insurance Company to review and underwrite your individual application, both at the time of your initial application and thereafter if you apply for coverage under a different master policy form issued by the Insurance Company or if you apply to add coverage under the policy form on which your initial coverage was issued. As a result, based on the Insurance Company’s assessment of your health, the Insurance Company may elect to accept coverage or decline to issue to you a certificate evidencing coverage under the Association Group Master Policy.