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                                                                   EXHIBIT 10.28



                                CERES GROUP, INC.

                     1999 SPECIAL AGENTS' STOCK OPTION PLAN


         1. PURPOSE. The purpose of this 1999 Special Agents' Stock Option Plan
(the "Plan") is to enable Ceres Group, Inc., a Delaware corporation (the
"Company") to attract, retain and reward those individuals appointed by the
Company as managing general agents and regional sales directors of and for the
Central Reserve Life Insurance Company, an Ohio-domiciled life insurance company
("CRL") and related Company subsidiaries and affiliates (individually, a "Key
Agent"; collectively, "Key Agents"). To do so, the Company expects to strengthen
the mutuality of interest between such Key Agents and the Company's general
shareholders by offering those Key Agents who satisfy certain eligibility
requirements options ("Options") to purchase the Company's $.001 par value
common shares ("Common Shares"). Options will be granted each calendar year the
Plan remains in effect (each such calendar year, a "Plan Year") to those Key
Agents who satisfy the eligibility requirements set forth in Section 2 hereof.

         2. GRANTS AND ELIGIBILITY.

         (a) Any individual who is a Key Agent is eligible for one (1) or more
grants of Options during the life of the Plan. However, Options for a particular
Plan Year shall be granted only to those Key Agents who: (a) are credited by CRL
with at least one million dollars ($1,000,000) in annualized premiums,
attributable to certificates of coverage issued in such Plan Year by CRL under
association or group health, accident & sickness contracts and policies; and (b)
submit (or cause agents within their control and supervision to submit) to CRL
health, accident & sickness coverage applications during such Plan Year that
result in the issuance of certificates of coverage covering at least seventy
percent (70%) of the individuals for whom such applications are submitted; and
(c) during such Plan Year, secure policy renewal commitments for at least
seventy-five percent (75%) of the health, accident & sickness insurance
certificates in force and credited to such Key Agent (comparing the certificates
in force as of the first day of such Plan Year with the certificates in force as
of the last day of such Plan Year). The Compensation Committee of the Board of
Directors of the Company (the "Compensation Committee") shall determine which
(if any) Key Agents are eligible for a grant of Options for a particular Plan
Year as of the close of such Plan Year. Employees, officers and members of the
Board of Directors of the Company and its subsidiaries are not eligible.

         (b) At the commencement of each Plan Year, the Compensation Committee
shall determine the aggregate number of Common Shares available for issuance in
connection with Options granted for such Plan Year, acting in consultation with
CRL officers and based on the increase in annualized premium realized by CRL for
such Plan Year. However, no Options shall be granted for any Plan Year in which
the increase in CRL's annualized premium is less than $100,000,000. Five hundred
thousand (500,000) Common Shares shall be available for issuance


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CERES GROUP, INC.
1999 SPECIAL AGENTS' STOCK OPTION PLAN
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in connection with the exercise of Options granted under the Plan; such Common
Shares may be treasury shares or authorized but unissued shares or a combination
of the foregoing.

         (c) Options for a particular Plan Year will actually be granted on the
first (1st) anniversary of the first day of such Plan Year. The date of any
grant of Options made to a Key Agent shall be the later of such anniversary date
or the date an option agreement signed by an elected officer of the Company is
actually delivered to such Key Agent. If an Option actually granted under the
Plan expires, terminates or is forfeited for any reason other than its exercise,
the shares subject to, but not delivered under, such Option shall be available
for the grant of other Options pursuant to the Plan. Each Key Agent granted
Options hereunder shall be considered an "Optionee"; collectively, all such
individuals shall be considered "Optionees".

         3. TERMS OF OPTIONS GRANTED; EXERCISE AND TRANSFERABILITY. Each Option
granted under the Plan shall have a term of ten years. All Options granted under
this Plan shall be fully vested and immediately exercisable in full as of the
date of grant. A Key Agent who resigns or whose appointment as a Managing
General Agent or Regional Sales Director for the Company (as applicable) is
terminated, forfeited, withdrawn or relinquished (other than with the prior
written consent of the Company) shall forfeit all Options then held by such Key
Agent. No Option is transferable by the Optionee other than by will or the laws
of descent and distribution; however, an Optionee may engage in a
non-compensatory transfer of Options then held by him to one or more of the
following parties: any trust settled and established by the Optionee (whether
testamentary, inter vivos, or otherwise); and any member of the Optionee's
family (as defined in Section 318(a)(1) of the Internal Revenue Code), while
such a member. Except as modified by the preceding sentence, Options are
exercisable during an Optionee's lifetime only by such Optionee or by his or her
legal guardian or legal representative. Notwithstanding the foregoing, if an
Optionee dies while holding unexercised Options, any Option held by such
Optionee at the time of his or her death may thereafter be exercised, to the
extent such Option was exercisable at the time of death, by the estate of the
Optionee (acting through its fiduciary), within a period of one year from the
date of such death regardless of the term of the Option remaining at the
Optionee's death.

         4. OPTION PRICE AND PAYMENT. The option price for each Common Share
purchasable under an Option granted for a particular Plan Year shall be the
lower of (a) the fair market value of a Common Share on the date such Option
actually is granted in accordance with Section 2; or (b) the lowest price at
which a Common Share is publicly traded or exchanged during the one (1)-year
period commencing on the first day of the Plan Year for which such Option is
granted, subject to a minimum traded price equal to fifty percent (50%) of the
price determined in part (a) hereof. The option price shall be payable in cash
or by check acceptable to the Company.

         5.       CHANGE IN CONTROL.

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CERES GROUP, INC.
1999 SPECIAL AGENTS' STOCK OPTION PLAN
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         (a) IMPACT OF EVENT. In the event of a "Change in Control" as defined
in Section 5(b), all Options granted under the Plan shall vest upon the later to
occur of (i) such Change in Control; or (ii) six months and one day after the
date of grant of such Options.

         (b) DEFINITION OF CHANGE IN CONTROL. For purposes of Section 5(a), a
"Change in Control" shall be deemed to have occurred if, after the Effective
Date of the Plan: (i) a tender offer shall be made and consummated for the
ownership of 25% or more of the outstanding voting securities of the Company;
(ii) the Company shall be merged or consolidated with another company and, as a
result of such merger or consolidation, less than 75% of the outstanding voting
securities of the surviving or resulting company shall be owned in the aggregate
by the former shareholders of the Company as the same shall have existed
immediately prior to such merger or consolidation; (iii) the Company shall sell
substantially all of its operating assets to another company which is not a
wholly owned subsidiary; or (iv) a person, within the meaning of Section 3(a)(9)
or of Section 13(d)(3) (as in effect on the date hereof) of the Securities
Exchange Act of 1934 (the "Exchange Act"), shall acquire, other than by reason
of inheritance, twenty-five percent (25%) or more of the outstanding voting
securities of the Company (whether directly, indirectly, beneficially or of
record). In determining whether a Change in Control has occurred, gratuitous
transfers made by a person to an affiliate of such person (as determined by the
Board of Directors of the Company), whether by gift, devise or otherwise, shall
not be taken into account. For purposes of this Plan, ownership of voting
securities shall take into account and shall include ownership as determined by
applying the provisions of Rule 13d-3(d)(1)(i) of the Exchange Act as in effect
on the date hereof.

         6. ADJUSTMENTS.

         (a) If, at any time subsequent to the date of adoption of the Plan, the
number of Common Shares increases or decreases, or changes into or is exchanged
for a different number or kind of shares or other securities of the Company or
of another entity (whether as a result of a share split, share dividend,
combination or exchange of shares or other equity interests, exchange for other
securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or otherwise): (i) there shall automatically be
substituted for each Common Share subject to an unexercised Option (in whole or
in part) granted under the Plan, the number and kind of shares or other
securities into which each outstanding Common Share shall be changed or for
which each such Common Share shall be exchanged; and (ii) the option price per
Common Share or unit of securities shall be increased or decreased
proportionately so that the aggregate purchase price for the securities subject
to an Option shall remain the same as immediately prior to such event.

         (b) No adjustment pursuant to this Section 6 shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in such number or price; however, any adjustments which by reason of this
Section 6 are not required to be made shall be carried forward. Calculations
under this Section 6 shall be made to the nearest cent or to the nearest full
share, as the case may be. Anything in this Section 6 to the contrary
notwithstanding, the Company shall make such reductions in the option price, in
addition to

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1999 SPECIAL AGENTS' STOCK OPTION PLAN
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those required by this Section 6, as it, in its discretion, shall determine to
be advisable in order that any share dividends, subdivisions or splits of
shares, distribution of rights to purchase shares or securities, or a
distribution of securities convertible into or exchangeable for shares hereafter
made by the Company to its shareholders shall not be taxable.

         7. OTHER TERMS. Each Grant of Options hereunder shall be evidenced by
an Option Agreement in substantially the form attached hereto as Exhibit A. When
exercisable in accordance with Section 3, Options may be exercised, in whole or
in part, by giving written notice of exercise to the Company specifying the
number of Common Shares to be purchased. Such notice shall be accompanied by
payment of the option price of the Common Shares for which the Option is
exercised in accordance with Section 4 hereof.

         8. GENERAL PROVISIONS. The form and substance of Option agreements made
hereunder, whether granted at the same or different times, need not be
identical. Nothing in this Plan or in any agreement shall confer upon any
individual any right to retain any office, position, licensure, appointment, or
other relationship (whether or not contractual) then held by, from or in respect
of the Company or any of its subsidiary companies, to be entitled to any
remuneration, payment, commission or benefits not set forth in this Plan or in
any option agreement to which the Company is a party, or to interfere with or
limit the right of the Company or any subsidiary company to terminate the
relationship between such individual and the Company at any time, with or
without cause. Nothing contained in this Plan or in any option agreement shall
be construed as entitling any optionee to any rights of a shareholder as a
result of the grant of an Option until such time as Common Shares are actually
issued to such optionee pursuant to the exercise of such Option. The successors
and assigns of the Company may assume this Plan. The liability of the Company
under this Plan and any sale made hereunder is limited to the obligations set
forth herein with respect to such sale and no term or provision of this Plan
shall be construed to impose any liability on the Company in favor of any Key
Agent or other party with respect to any loss, cost or expense which the Key
Agent or other party may incur in connection with or arising out of any
transaction in connection with this Plan. The expense of administering the Plan
shall be borne by the Company. The captions and section numbers appearing in
this Plan are inserted only as a matter of convenience. They do not define,
limit, construe or describe the scope or intent of the provisions of this Plan.

         9. AMENDMENT, SUSPENSION OR EARLY TERMINATION. The Board may at any
time amend, modify, suspend or terminate this Plan; provided, that the Board
shall not make any amendment or alteration which would amend or alter the method
by which the number or kind of securities to be granted to any Optionee is
determined if such amendment or alteration is made less than six months and one
day after the previous such amendment or alteration was made.

         10. TERMINATION OF PLAN. The Plan shall terminate, and no further
Options shall be granted hereunder, on December 31, 2008, if the Plan is not
earlier terminated in accordance with Section 9 hereof.

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CERES GROUP, INC.
1999 SPECIAL AGENTS' STOCK OPTION PLAN
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         11. COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODY. No Option is
exercisable and no Common Shares will be delivered under this Plan except in
compliance with all applicable federal and state laws and regulations,
including, without limitation, compliance with applicable information reporting
and withholding requirements, if any, and with the rules of all domestic stock
exchanges on which the Common Shares may be listed. Any share certificates
issued to evidence Common Shares as to which an Option is exercised may bear
such legends and statements as the Company shall deem advisable to assure
compliance with federal and state laws and regulations; the Company may, if it
deems appropriate, condition its grant of any Options hereunder upon receipt of
the following investment representation from the Optionee:

        "I agree that any Common Shares of Ceres Group, Inc. that I may acquire
        by virtue of this Option shall be acquired for investment purposes only
        and not with a view to distribution or resale, and may not be
        transferred, sold, assigned, pledged, hypothecated or otherwise disposed
        of by me unless (i) a registration statement or post-effective amendment
        to a registration statement under the Securities Act of 1933, as
        amended, with respect to said Common Shares has become effective so as
        to permit the sale or other disposition of said shares by me; or (ii)
        there is presented to Ceres Group, Inc. an opinion of counsel
        satisfactory to Ceres Group, Inc. to the effect that the sale or other
        proposed disposition of said Common Shares by me may lawfully be made
        otherwise than pursuant to an effective registration statement or
        post-effective amendment to a registration statement relating to such
        Common Shares under the Securities Act of 1933, as amended."

No Option is exercisable, and no Common Shares will be delivered under this
Plan, until the Company has obtained such consent or approval from the
regulatory body, federal or state, having jurisdiction over such matters as the
Company may deem advisable. In the case of the exercise of an Option by a person
or estate acquiring the right to exercise such Option by bequest or inheritance,
the Company may require reasonable evidence as to the ownership of such Option
and may require any consents and releases of taxing authorities deemed advisable
by the Company.

         12. EFFECTIVE DATE. The Plan shall be effective as of January 1, 1999,
subject to approval by the Board of Directors.

         13. GOVERNING LAW. The Plan, all options and actions taken thereunder
and any agreements relating thereto shall be governed by and controlled in
accordance with Delaware law.