Disclosures Regarding
MEGA’s/AFS’s Business Relationship:
Introduction
Set forth below is information
concerning Americans for Financial
Security, Inc (“AFS”) and The MEGA Life
and Health Insurance Company (“MEGA”)
and a description of the relationships
between the two organizations.
More About AFS
AFS is a membership organization that
provides certain benefits to its
Members. 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 maintains a
website at www.afswebsite.org. AFS
Members are required to pay monetary
dues. AFS has no direct or indirect
ownership interest in UICI or
Specialized Association Services, Inc.
(“SAS”).
More About MEGA
MEGA is an Oklahoma domiciled life and
health insurance company with an
administrative office located in North
Richland Hills, TX. MEGA is licensed to
issue health, life and annuity insurance
policies to consumers in all states
except New York. MEGA is a wholly owned
subsidiary of UICI, a Delaware
corporation.
UICI is a public company that 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
Judiciary Plaza
450 Fifth Street, N. W.
Washington, D.C. 20549
or
Citicorp Center
500 West Madison Street
Chicago, IL 60661
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. Shares of UICI
common stock are traded on the New York
Stock Exchange under the symbol "UCI."
UICI maintains a website at
www.uici.net.
Relationships Between MEGA and
Affiliates and AFS
AFS and MEGA entered into an agreement
on or around February 26, 1999, as
amended, from time to time, pursuant to
which AFS has made available to its
Members certain MEGA insurance products.
This agreement with MEGA may only be
terminated by MEGA or by AFS upon not
less than one (1) year’s advance notice
to the other party.
The salesperson that a prospective
member or prospective insured speaks
with about AFS membership and about MEGA
insurance products serves both as a
licensed insurance agent of MEGA and as
a field service representative for new
Members for AFS, for which he or she
will receive compensation. The health
insurance premiums derived from the sale
of health insurance are paid to MEGA and
the membership dues derived from the
sale of memberships are paid to AFS. The
salesperson acts on behalf of MEGA (and
not AFS) when discussing, explaining,
and describing MEGA health insurance
products and premiums. The salesperson
acts on behalf of AFS (and not MEGA)
when discussing, explaining, and
describing other AFS benefits. AFS pays
an affiliate of UICI for enrolling new
Members and pays MEGA and/or affiliates
of MEGA for ongoing membership marketing
and administrative services for certain
AFS Member benefits obtained from MEGA
or its affiliates.
Ronald L. Jensen serves as Chairman of
UICI, and he, together with members of
his immediate family and trusts in which
he may have an interest, holds in the
aggregate approximately 16.4% of the
issued and outstanding capital stock of
UICI. SAS (which is controlled by Mr.
Jensen's adult children) has entered
into an agreement with AFS to provide
certain administrative services,
including billing, administrative,
fulfillment, and benefit procurement
services. AFS pays SAS for these
services. SAS has no ownership interest
in the AFS. A subsidiary of UICI also
sells new membership sales leads to the
field service representatives and video
and print services to AFS and SAS. UICI
nor MEGA has any ownership interest in
SAS or the AFS.
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