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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.


 

 

©2008 Americans For Financial Security For More Information: 1-800-492-1016