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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, and Americans for Financial Security:

Introduction
Set forth below is additional information concerning Americans for Financial Security (“AFS”), The Chesapeake Life Insurance Company (“CLICO”), Mid-West National Life Insurance Company of Tennessee (“Mid-West”), and The MEGA Life and Health Insurance Company (“MEGA”), and a description of the relationships between the 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 board of directors are elected every three years by members of AFS. Members of AFS are entitled to vote on the selection of members of the board of directors when the election meeting of AFS is held. 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 HealthMarkets, Inc. f/k/a UICI, a Delaware corporation (“HealthMarkets”) or Specialized Association Services, Ltd. (“SAS").

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

Effective April 5, 2006, HealthMarkets is 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.

Relationships between CLICO and Affiliates and AFS
AFS and CLICO are parties to an agreement, pursuant to which AFS has agreed to make available to its Members certain insurance products offered by CLICO. The agreement may only be terminated by CLICO or by AFS upon not less than one year’s advance notice to the other party.

The salesperson that a prospective Member or prospective insured speaks with about AFS Membership and CLICO insurance products serves both as a licensed insurance agent of CLICO and as a Field Service Representative for new Members for AFS, for which he or she will receive compensation, from AFS or CLICO, as the case may be. The insurance premiums derived from the sale of insurance go to CLICO and the membership dues derived from the sale of the AFS Memberships go to AFS. The salesperson acts on behalf of CLICO (and not AFS) when discussing, explaining, and describing CLICO insurance products and premiums. The salesperson acts on behalf of AFS (and not CLICO) when discussing, explaining, and describing other AFS benefits. AFS pays an affiliate of HealthMarkets for enrolling new Members in AFS and pays CLICO and/or affiliates of CLICO for ongoing membership marketing and for certain AFS Member benefits obtained from CLICO or its affiliates.

Relationships between MEGA and Affiliates and the AFS
AFS and MEGA are parties to an agreement, pursuant to which AFS has agreed to make available to its Members certain insurance products offered by MEGA. The agreement may only be terminated by MEGA or by AFS upon not less than one year’s advance notice to the other party.

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 of MEGA and as a Field Service Representative for new Members for AFS, for which he or she will receive compensation, from AFS or MEGA, as the case may be. The insurance premiums derived from the sale of insurance go to MEGA and the membership dues derived from the sale of the 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 an affiliate of HealthMarkets for enrolling new Members in AFS and pays MEGA and/or affiliates of MEGA for ongoing membership marketing and for certain AFS benefits obtained from MEGA or its affiliates.

Relationships between Mid-West and Affiliates and the AFS
AFS and Mid-West are parties to an agreement, pursuant to which AFS has agreed to make available to its Members certain insurance products offered by Mid-West. The agreement may only be terminated by Mid-West or by AFS upon not less than one year’s advance notice to the other party.

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 of Mid-West and as a Field Service Representative for new Members for AFS, for which he or she will receive compensation, from AFS or Mid-West, as the case may be. The insurance premiums derived from the sale of insurance go to Mid-West and the membership dues derived from the sale of the 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 an affiliate of HealthMarkets for enrolling new Members in AFS and pays Mid-West and/or affiliates of Mid-West 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, CLICO, MEGA, nor Mid-West has 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 CLICO, MEGA, and Mid-West (the “Insurance Company”). In states that 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 most 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.