EXHIBIT 10.6


                      AMERICAN MEDICAL SECURITY GROUP, INC.
                      DIRECTORS DEFERRED COMPENSATION PLAN


SECTION I - PURPOSES OF PLAN

     American  Medical  Security  Group,  Inc. (the  "Company") has adopted this
Directors  Deferred  Compensation  Plan (the  "Plan") for the benefit of certain
outside  directors  of the  Company  who wish to defer the  receipt of  eligible
compensation  which they may  otherwise be entitled to receive from the Company.
The Plan is  intended  to enable the  Company to  attract,  retain and  motivate
qualified  Directors and to enhance the long-term  mutuality of interest between
Directors and shareholders of the Company.


SECTION II - DEFINITIONS

     When used in this Plan, the following  terms shall have the definitions set
forth in this Section:

2.1       "ACCOUNT(S)"  shall  mean a  Participant's  fully  vested  Stock  Unit
          Account and/or Interest Account.

2.2       "BENEFICIARY" shall mean the person,  persons, or entity designated by
          the Participant to receive any benefits  payable under this Plan on or
          after the Participant's  death. Each Participant shall be permitted to
          name, change or revoke the Participant's  designation of a Beneficiary
          in  writing  on  a  form  and  in  the   manner   prescribed   by  the
          Administrator,  provided,  however,  that the designation on file with
          the  Administrator  at the time of the  Participant's  death  shall be
          controlling.  Should a  Participant  fail to make a valid  Beneficiary
          designation or leave no named Beneficiary surviving,  any benefits due
          shall  be paid to such  Participant's  spouse,  if  living;  or if not
          living,  then any  benefits  due  shall be paid to such  Participant's
          estate.

2.3       "BOARD" or "BOARD OF  DIRECTORS"  shall mean the Board of Directors of
          the Company.

2.4       "CHANGE IN  CONTROL"  shall have the same  meaning as set forth in the
          American Medical Security Group, Inc. Equity Incentive Plan, as may be
          amended from time to time.

2.5       "COMMITTEE"  shall  mean the  Compensation  Committee  of the Board of
          Directors.

2.6       "COMPANY" shall mean American Medical Security Group, Inc.

2.7       "COMPENSATION"  shall  mean  the  annual  retainer  fees  earned  by a
          Director  for  service as a  Director,  any  retainer  fee earned by a
          Director for service as a member of a committee of the Board,  and any
          fees earned by a Director for  attendance  at meetings of the Board of
          Directors  and  any of  its  committees,  but  excluding  any  expense
          reimbursements made to a Director.

2.8       "DIRECTOR"  shall mean an elected  member of the Board of Directors of
          the Company who is not an employee of the  Company.  A Director who is
          an officer or  assistant  officer of the Company  and who  receives no
          compensation  for service in such  capacity is a Director for purposes
          of this Plan.

2.9       "EFFECTIVE DATE" shall mean January 1, 2000.

2.10      "EXCHANGE  ACT" shall mean the  Securities  Exchange  Act of 1934,  as
          amended.

2.11      "FAIR  MARKET  VALUE"  shall mean the closing  price for Shares on the
          relevant date, or (if there were no sales on such date) the average of
          the closing prices on the nearest day before and the nearest day after
          the  relevant  date,  on a stock  exchange  or over  the  counter,  as
          determined by the Administrator.

2.12      "INTEREST ACCOUNT" shall mean the bookkeeping  account  established to
          record  the  interests  of a  Participant  with  respect  to  deferred
          Compensation that is not deemed invested in Units.

2.13      "PARTICIPANT" shall mean a Director who commences participation in the
          Plan under Plan  Section 4.1 and any  Director or former  Director who
          previously  participated  in the  Plan  and is  entitled  to  benefits
          hereunder.

2.14      "PLAN" shall mean this American Medical Security Group, Inc. Directors
          Deferred Compensation Plan, as may be amended from time to time.

2.15      "SHARES" shall mean the shares of common stock of the Company.

2.16      "STOCK UNIT ACCOUNT" shall mean, with respect to a Participant who has
          elected  to  have  deferred   amounts  deemed  invested  in  Units,  a
          bookkeeping account established to record such Participant's  interest
          under the Plan related to such Units.

2.17      "UNIT" shall mean a contractual obligation of the Company to deliver a
          Share to a Participant or Beneficiary as provided herein.


SECTION III - ADMINISTRATION

3.1       ADMINISTRATION.  The Plan shall be  administered by the Committee (the
          "Administrator").  The Administrator shall have all authority that may
          be appropriate for  administering  the Plan,  including the discretion
          and authority to interpret the Plan and to adopt rules and regulations
          for   implementing,   amending  and   carrying   out  the  Plan.   All
          determinations  and  decisions  of the  Administrator  shall be final,
          conclusive, and binding on all parties.

3.2       ADJUSTMENT  FOR  CORPORATE  TRANSACTIONS.  In the  event of any  stock
          dividend, extraordinary cash dividend, liquidation,  recapitalization,
          reorganization,    merger,    consolidation,    split-up,    spin-off,
          combination,  exchange  of  shares,  or  other  corporate  transaction
          affecting  the capital  structure  of the Company,  the  Administrator
          shall make such  adjustments  to the number of Units  credited to each
          Director's  Stock Unit Account as  determined  to be  appropriate  and
          equitable by the Administrator,  in its sole discretion,  to preserve,
          or to prevent  enlargement  of  Participant  rights  and the  benefits
          available under the Plan.


SECTION IV - PARTICIPATION AND PARTICIPANT DEFERRALS

4.1       ELECTION TO DEFER.  On or before  December 31, 1999 or any  subsequent
          December  31, a Director  who chooses to become a  Participant  in the
          Plan may  irrevocably  elect to defer  some or all of such  Director's
          Compensation  payable with respect to the calendar year  following the
          year in  which  such  election  is  made,  and to have  such  deferred
          Compensation credited, in whole or in part, to a Stock Unit Account or
          an Interest Account established on behalf of such Director. Any person
          who shall become a Director  during any calendar  year may elect,  not
          later than the 30th day after his or her term as a Director begins, to
          defer  payment of all or any part of his or her  Compensation  payable
          for the portion of such calendar year following such election.

4.2       METHOD OF  ELECTION.  A  deferral  election  shall be made by  written
          notice  filed  with  the  Corporate  Secretary  of the  Company.  Such
          election shall continue in effect with respect to Compensation payable
          for subsequent calendar years unless and until the Participant revokes
          or modifies  such  election by written  notice filed with the Company.
          Any such  revocation  or  modification  of a deferral  election  shall
          become  effective as of the first day of the calendar  year  following
          the  year  in  which  such  notice  is  given  and  applies   only  to
          Compensation payable for services rendered  thereafter.  A Participant
          who has revoked an election to defer  Compensation  under the Plan may
          at any time file a new  election  to defer  Compensation  payable  for
          services to be rendered in the  calendar  year  following  the year in
          which such election is filed.


SECTION V - CREDITS TO ACCOUNTS.

5.1       INVESTMENT ELECTION. At the time a Participant elects to defer receipt
          of  Compensation  pursuant  to  Section  4.1,  the  Participant  shall
          irrevocably  designate in writing the portion of such  Compensation to
          be credited to the Interest  Account (or such other  account as may be
          established from time to time by the Administrator) and the portion to
          be  credited  to the Stock Unit  Account.  If a  Participant  fails to
          notify the Corporate  Secretary as to how to allocate any Compensation
          between the Interest and Stock Unit  Accounts,  100% of such  deferred
          Compensation  shall be credited to the  Interest  Account.  By written
          notice filed with the Corporate  Secretary of the Company prior to the
          end of a calendar  year, a Director may change the manner in which the
          Compensation  payable with respect to services  rendered after the end
          of such  calendar  year are  allocated  among the  Accounts.  However,
          amounts credited to the  Participant's  Interest Account or Stock Unit
          Account prior to the effective  date of any election  change shall not
          be affected  by such  change and shall  continue to be credited to the
          Account  to  which  such  amounts  were   credited   pursuant  to  the
          Participant's prior election.  In no event may any previously deferred
          amounts be  transferred  between the Interest and Stock Unit Accounts,
          except as may be provided otherwise by Section 5.4.

5.2       INTEREST ACCOUNT.  Any Compensation  allocated to the Interest Account
          shall be credited to the  Interest  Account as of the last day of each
          calendar  year  quarter  (after the  crediting  of  interest  for such
          quarter).  Amounts credited to the Interest Account as of the last day
          of each calendar  quarter shall be credited with interest based on the
          performance of the Lehman Brothers  Intermediate  Government/Corporate
          Bond  Index,  unless  another  index  or  rate  is  determined  by the
          Administrator.  Interest shall be credited to a Participant's Interest
          Account  through  the end of the quarter  preceding  the date that the
          Participant's   entire   benefit  under  the  Plan  is  paid  to  such
          Participant, consistent with Section VI.

5.3       STOCK  UNIT  ACCOUNT.  Any  Compensation  allocated  to the Stock Unit
          Account  shall be deemed to be  invested in a number of Units equal to
          the  quotient of (i) the amount of such  Compensation  divided by (ii)
          the Fair Market  Value on the last  trading day of the  calendar  year
          quarter  during which the  Compensation  being  allocated to the Stock
          Unit Account would otherwise have been paid. Fractional Units shall be
          credited,  but shall be rounded to the nearest  hundredth  percentile,
          with amounts equal to or greater than .005 rounded up and amounts less
          than .005  rounded  down.  Whenever a  dividend  other than a dividend
          payable in the form of Shares is declared  with respect to the Shares,
          the  number of Units in the  Director's  Stock Unit  Account  shall be
          increased by a number of Units  determined by dividing (i) the product
          of (A) the number of Units in the Director's Stock Unit Account on the
          related  dividend record date, and (B) the amount of any cash dividend
          declared by the  Company on a Share (or,  in the case of any  dividend
          distributable  in property  other than Shares,  the per share value of
          such dividend, as determined by the Company for purposes of income tax
          reporting),  by (ii) the Fair  Market  Value on the  related  dividend
          payment date. In the case of any dividend  declared on Shares which is
          payable  in  Shares,  the  Director's  Stock  Unit  Account  shall  be
          increased  by the  number  of Units  equal to the  product  of (i) the
          number of Units credited to the  Director's  Stock Unit Account on the
          related dividend record date, and (ii) the number of Shares (including
          any fraction thereof) distributable as a dividend on a Share.

5.4       INVESTMENT TRANSFERS.  A Participant may, by written notice filed with
          the Corporate Secretary of the Company,  elect to transfer some or all
          of  the  amounts  credited  to  the  Participant's  Interest  Account,
          determined as of the quarterly  date  coincident  with or  immediately
          preceding the date the notice is received by the Corporate  Secretary,
          to the  Participant's  Stock Unit Account.  Such bookkeeping  transfer
          shall be effected as soon as practicable  after such written notice is
          received by the Corporate Secretary and such transferred amounts shall
          be deemed to be invested in a number of Units equal to the quotient of
          (i) the  transferred  amount  divided by (ii) the Fair Market Value on
          the trading day coincident with or immediately  preceding the date the
          transfer is effected. No more than one transfer under this Section 5.4
          may be made in any calendar year.

5.5       STATEMENTS.  The  Administrator  shall provide each Participant with a
          statement   detailing  the  amounts  credited  to  the   Participant's
          bookkeeping  Accounts under the Plan. Such statement shall be provided
          annually or more frequently as determined by the Administrator.


SECTION VI - DISTRIBUTIONS

6.1       DISTRIBUTION.  Subject to the provisions of Section 6.3 and 6.4 below,
          after a  Participant's  termination  of service  as a Director  of the
          Company for any reason  (including  retirement,  death,  disability or
          other termination), the Participant's interest in his Accounts will be
          determined  and  paid  to the  Participant  (or in  the  event  of the
          Participant's death, to the Participant's Beneficiary) at the time and
          in the manner as specified in the Participant's  payment election made
          pursuant to Section 6.2. Payment shall be made either in the form of a
          single sum or substantially  equal annual installment  payments not to
          exceed ten (10) years.  Absent an election under Section 6.2,  payment
          of a  Participant's  interest in the  Participant's  Accounts shall be
          made in a lump sum payment and shall  commence as soon as  practicable
          after the first business day of the calendar year quarter  immediately
          following the date on which the  Participant  ceases to be a Director.
          In the case of any  distribution  being  made in annual  installments,
          each  installment  after  the first  installment  shall be paid on the
          anniversary  date of the first  installment,  or as soon as  practical
          thereafter,  until the entire  amount  credited  to the  Participant's
          Accounts has been paid. The dollar amount  involved in any installment
          payment shall be determined by multiplying  the amount credited to the
          Participant's  Interest Account  immediately prior to the distribution
          by a fraction,  the numerator of which is one and the  denominator  of
          which  is  the  number  of   installments   (including   the   current
          installment)  remaining to be paid.  The number of Shares  involved in
          any installment  payment shall be determined by multiplying the number
          of Units credited to the Participant's  Stock Unit Account immediately
          prior to the distribution by a fraction, the numerator of which is one
          and the denominator of which is the number of installments  (including
          the current  installment)  remaining to be paid, and rounded up to the
          next whole Unit. Notwithstanding any of the foregoing, a Participant's
          distribution  from his Interest  Account  shall be made solely in cash
          and distribution  from the  Participant's  Stock Unit Account shall be
          made solely in Shares (except that any  fractional  Unit shall be paid
          in cash). Neither the Participant nor the Administrator shall have any
          authority to alter such cash or Shares mode of distribution.

6.2       DISTRIBUTION  ELECTION.  At  the  time a  Participant  first  makes  a
          deferral  election pursuant to Section 4.1, the Participant shall also
          file with the  Corporate  Secretary of the Company a written  election
          regarding the time and form of the Participant's distribution.  Unless
          the total value of the Participant's Accounts is less than $25,000 and
          payment is made in a single sum under  Section 6.3, the  Participant's
          payment election shall address:

          (i)       whether  distribution of such  Participant's  Accounts shall
                    commence as soon as practicable following the first business
                    day of the  calendar  year  quarter  following  the date the
                    Participant ceases to be a Director or on the first business
                    day of any calendar  year  following  the  calendar  year in
                    which the Participant ceases to be a Director; and

          (ii)      whether such  distribution  shall be in one lump sum payment
                    or in such number of annual installments (not to exceed ten)
                    as the Participant may designate.

6.3       PAYMENT OF SMALL  AMOUNTS.  Notwithstanding  the provisions of Section
          6.1 and Section 6.2 above,  if the combined  value of a  Participant's
          Interest Account and Stock Unit Account is less than $25,000 as of the
          date the Participant's service as a Director terminates,  the entirety
          of the  Participant's  Accounts shall be paid to the  Participant  (in
          cash from the  Participant's  Interest  Account and in Shares from the
          Stock Unit Account) in a lump sum  distribution as soon as practicable
          after the first business day of the calendar year quarter  immediately
          following the date on which the Participant ceases to be a Director.

6.4       ADMINISTRATOR DISCRETION.  Notwithstanding any other provision in this
          Section VI to the contrary,  the Administrator  reserves the right, in
          its sole discretion,  to override or modify any Participant's election
          as to the timing and/or form of payment of such Participant's  Account
          under  this  Plan at any time and for any  reason,  even as to  future
          installments  payable  under a  previously-elected  method of payment;
          provided,  however,  that the  Administrator  may not modify  payments
          accelerated  after a Change in Control under Section 6.6, and provided
          further  that in no event  may the  Administrator  modify  the mode of
          distribution  (i.e., cash or Shares),  and in all events, cash will be
          distributed to reflect amounts credited to the Participant's  Interest
          Account and Shares will be distributed  from the  Participant's  Stock
          Unit Account.

6.5       LIMITATIONS   ON  PAYMENT.   Unless   determined   otherwise   by  the
          Administrator  under  Section  6.4,  under  no  circumstances  will  a
          Participant  be  eligible  to  receive  payment  of the  Participant's
          interest  in the  Participant's  Accounts  prior to the  Participant's
          termination  of  service  as  a  Director.   Further,   payment  of  a
          Participant's  Accounts shall commence no later than the calendar year
          following the later of (i) the Participant's termination of service as
          a director or (ii) the Participant's attainment or age 70.

6.6       CHANGE IN CONTROL. In the event of a Change in Control, any terminated
          Participant  (including any Participant  terminated in connection with
          the Change in Control) shall automatically receive distribution of the
          entirety  of his  Accounts  (in cash from the  Participant's  Interest
          Account  and in Shares  from the  Stock  Unit  Account)  in a lump sum
          distribution  as soon as  practicable  after  such  Change in  Control
          occurs,  unless such Participant  waives such  accelerated  payment by
          written notice to the Corporate Secretary of the Corporation  received
          prior to the  occurrence  of the Change in  Control.  If a  terminated
          Participant waives  acceleration under this Section 6.6, payment shall
          be  made in  accordance  with  the  Participant's  prior  distribution
          election and shall be again subject to the Administrator's  discretion
          under Section 6.4.

6.7       PAYMENT IN SHARES. To the extent that shareholder approval of the Plan
          would  otherwise be required under  applicable New York Stock Exchange
          shareholder  approval policies,  all Shares payable in accordance with
          this  Section  VI shall  be in the form of  Shares  which  are  either
          treasury Shares or Shares purchased in the open market.


SECTION VII - UNFUNDED STATUS

     Each  Participant's  Accounts shall be utilized  solely as a device for the
measurement  and  determination  of the  amounts to be paid to such  Participant
under the Plan.  Participant  Accounts shall be bookkeeping accounts only and no
Participant or Beneficiary shall have any proprietary  rights in any assets held
by the  Company,  whether or not held for the purpose of funding  the  Company's
obligation  under  this  Plan.  This Plan  constitutes  the mere  promise of the
Company  to  make  benefit  payments  in the  future.  To the  extent  that  any
Participant  or  Beneficiary  acquires a right to receive any  payment  from the
Company  pursuant to this Plan, such right shall be no greater than the right of
an unsecured general creditor of the Company.

     Nothing  contained in this Plan and no action  taken  pursuant to this Plan
shall  create or be  construed  to  create a trust of any kind or any  fiduciary
relationship between the Company and any Participant or Beneficiary or any other
person.  Any reserves that may be established by the Company in connection  with
this Plan shall  continue to be treated as the assets of the Company for federal
income tax purposes and remain subject to the claims of the Company's creditors.
The Company has not  segregated  or earmarked any Shares or any of the Company's
assets for the benefit of a Participant or his/her Beneficiary and the Plan does
not, and shall not be construed to, require the Company to do so.


SECTION VIII - AMENDMENT AND TERMINATIONS

8.1       AMENDMENT OR TERMINATION.  The Board of Directors or the Committee may
          amend or terminate this Plan at any time; provided,  however,  that no
          such  amendment  or  termination  shall  deprive  any  Participant  or
          Beneficiary of any amounts  deferred under this Plan prior to the date
          of such amendment or termination.

8.2       EFFECT OF TERMINATION. If this Plan is terminated, amounts credited to
          Participant  Accounts  hereunder as of the date of  termination  shall
          continue to be held and paid in accordance  with the terms of the Plan
          (subject to the  Administrator's  discretion  as  described in Section
          VI). However, no additional Compensation deferrals shall be made after
          the Plan's termination.


SECTION IX - GENERAL PROVISIONS

9.1       NO RIGHT TO SERVE AS A  DIRECTOR.  This  Plan  shall  not  impose  any
          obligations  on the Company to retain any  Participant  as a Director,
          nor shall it impose any  obligation on the part of any  Participant to
          remain as a Director of the Company.

9.2       SECURITIES  AND  RELATED  MATTERS.  If at any time  the  Administrator
          determines in its  discretion  that action is necessary to comply with
          any requirement of the Exchange Act, any national  securities exchange
          or any  state or  federal  law,  or the  consent  or  approval  of any
          governmental  regulatory body is necessary or desirable as a condition
          of or in  connection  with the delivery of Shares under this Plan,  no
          payment will be made and no Shares will be delivered  unless and until
          such action, consent or approval shall have been effected or obtained,
          or otherwise  provided for, free of any  conditions  not acceptable to
          the  Administrator.  The transactions  under this Plan are intended to
          comply with Rule 16b-3 under Section 16(b) of the Exchange Act and the
          Administrator  shall take any actions it deems  necessary or desirable
          to ensure such compliance.

9.3       SEVERABILITY  OF  PROVISIONS.  If any  provision of this Plan shall be
          held  invalid  or  unenforceable,  this Plan  shall be  construed  and
          enforced as if such provision had not been included; provided however,
          that such  invalidity or  unenforceability  shall not affect any other
          provisions hereof.

9.4       INCAPACITY.  If any  Participant or Beneficiary  entitled to receive a
          distribution  under  the Plan is a minor or  incompetent  person or is
          unable  to  attend to his or her own  financial  affairs,  in the good
          faith judgment of the Administrator, then payment may be authorized by
          the Administrator to be made to the person or persons responsible for,
          caring for, or supporting  such  Participant  or  Beneficiary,  in the
          discretion  of  the  Administrator.   Any  such  payment  shall  fully
          discharge any  liability or obligation of the Board of Directors,  the
          Company and all other parties with respect thereto.

9.5       ASSIGNMENT  BY  PARTICIPANT  PROHIBITED.  No right or  interest of any
          Participant or Beneficiary in the Plan shall,  prior to actual payment
          or distribution to such Participant or Beneficiary,  be subject in any
          manner  to  anticipation,   alienation,  sale,  transfer,  assignment,
          pledge,  encumbrance,  attachment,  or garnishment by creditors of the
          Participant or of the Beneficiary.

9.6       ASSIGNMENT BY COMPANY.  The Company shall have the right to assign all
          of its  rights,  title and  obligations  in and under this Plan upon a
          merger or  consolidation  or upon the  purchase of  substantially  its
          entire  business or assets,  provided such assignee  agrees to perform
          after  the  effective  date  of  such  assignment  all of  the  terms,
          conditions  and provisions  imposed by this Plan upon the Company.  In
          the event of such an assignment,  all of the rights and obligations of
          the Company under this Plan shall thereupon cease and terminate.

9.7       CONSTRUCTION OF THE PLAN. The validity, construction,  interpretation,
          administration  and effect of the Plan, and the rights relating to the
          Plan,  shall be determined  solely in accordance  with the laws of the
          State of Wisconsin.