EXHIBIT 10.1


                              RETIREMENT AGREEMENT

     THIS  RETIREMENT  AGREEMENT  ("Agreement")  is made as of the last date set
forth  opposite  any  signature   hereto  by  and  between  Gary  D.  Guengerich
("Employee")  and American  Medical  Security  Group,  Inc.,  its affiliates and
subsidiaries (collectively, the "Company").

                                   BACKGROUND

     Employee has been employed by the  Company's  affiliate,  American  Medical
Security,  Inc.,  to provide  services as  Executive  Vice  President  and Chief
Financial  Officer.  Employee  has  decided to retire from  employment  with the
Company and the Company has agreed to accept such  retirement  effective  at the
close of business  December 31, 2002 (the "Retirement  Date").  Employee and the
Company  desire to resolve all aspects of the  employment  relationship  between
them, provide for certain severance arrangements,  and reduce their agreement to
writing.

     NOW,  THEREFORE,  in consideration of the foregoing premises and the mutual
covenants   hereinafter   set  forth,   the  sufficiency  of  which  are  hereby
acknowledged, the parties agree as follows:

     1.   UNCONDITIONAL   PAYMENTS   BY  THE   COMPANY.   The   Company   agrees
unconditionally  to pay Employee his base pay and related benefits in accordance
with the Company's practice,  through and including the Retirement Date ("Salary
Payments").

     2.   CONDITIONAL  BENEFITS  TO  EMPLOYEE.  Subject to and  conditional upon
Employee executing this Agreement within the timeframe  specified  hereunder and
upon Employee not  exercising his revocation  rights  hereunder,  and subject to
fulfillment  of Employee's  obligations  under  Paragraph 5 hereof,  the Company
agrees to pay  Employee a bonus equal to  Employee's  "Target  Bonus"  under the
Company's Executive  Management Incentive Program for the 2002 compensation year
("Bonus  Payment").  The Bonus  Payment shall be paid not later than the date on
which the  Company  pays 2002  bonuses  to its  executive  officers.  The Salary
Payments and the Bonus Payment shall be referred to  collectively  herein as the
"Benefits".

     3.   PAYMENTS  UNDER THIS  AGREEMENT.  The Company  shall withhold from the
Benefits all applicable federal and state or local withholding, payroll or other
taxes or charges  which the  company may from time to time be required to deduct
under any  applicable  law.  The  Company  shall  have the right to rely upon an
opinion of its regular accountants or other tax advisors if any questions should
arise as to any such deduction(s).

     4.   WAIVER AND RELEASE OF ALL CLAIMS.

          A.  EMPLOYEE'S  RELEASE.  In exchange for the Benefits and payments to
     Employee  described in this Agreement (which he acknowledges to be greater,
     in their  totality,  than any  benefits  due him  absent  this  Agreement),
     Employee hereby waives and

                                        1
<PAGE>

     irrevocably and  unconditionally releases, and fully and forever discharges
     the Company and all of its past and current officers, directors, agents and
     employees  (acting  in  their  capacity  as  such),  and  their  respective
     successors  and assigns (the  "Released  Parties") from and against any and
     all  claims,  liabilities,  obligations,  covenants,  rights,  demands  and
     damages of any nature whatsoever,  whether known or unknown, anticipated or
     unanticipated,  relating to or arising out of any agreement, act, omission,
     occurrence,  transaction  or  matter up to and  including  the date of this
     Agreement including,  without limitation, any and all claims relating to or
     arising out of his  employment by the Company or the  termination  thereof.
     This  Release  of Claims  includes,  but is not  limited  to, any claims or
     remedies arising under or affected by the Age  Discrimination in Employment
     Act of 1967,  as  amended,  Title VII of the Civil  Rights Act of 1964,  as
     amended,  the Civil Rights Act of 1991, the Equal Pay Act, as amended,  the
     Employee Retirement Income Security Act of 1974, as amended ("ERISA"),  the
     Americans With  Disabilities Act, the Fair Labor Standards Act, as amended,
     the Family and Medical  Leave Act of 1993,  the Wisconsin  Fair  Employment
     Act, as amended,  the Wisconsin  Family and Medical Leave Act, or any other
     local, state or federal laws, whether codified or not, or any claim arising
     in contract or in tort.  This  Release of Claims also  includes  any claims
     Employee  may have had under the  American  Medical  Security  Group,  Inc.
     Change of Control  Severance  Benefit  Plan, as amended.  Employee  further
     agrees to waive any benefit which may be conferred in any administrative or
     judicial proceeding involving claims released hereunder.

          B.  SCOPE OF WAIVER AND RELEASE.  Nothing in the waivers and  releases
     set forth in this  Agreement  shall be  construed to apply to any rights or
     claims  against the Company  arising under this Agreement or after the date
     of this  Agreement.  This Waiver and Release will not apply to any accrued,
     vested  benefits that Employee may have as of the Date of Separation in any
     benefit plan  maintained  by the Company.  This Waiver and Release will not
     apply to any rights of indemnification that the Employee may have as a past
     or present  director,  officer,  or  employee  of the Company or any of its
     subsidiaries under the Delaware General Corporation Law, Wisconsin Business
     Corporation Law and/or under Article VII of the Company's Bylaws or similar
     provisions of the bylaws of any of the Company's subsidiaries.

     5.   EMPLOYEE'S  OBLIGATIONS.  In exchange for the benefits and payments to
him described in this Agreement, Employee covenants and agrees as follows:

          A.  RETURN  OF  DOCUMENTS  AND  EQUIPMENT.  Prior  to  ceasing  active
     employment at the Company's principal offices,  Employee will return to the
     Company, and upon request certify in writing to the Company,  that Employee
     has returned to the Company,  all of the  Company's  papers,  documents and
     things,  including  information stored for use in or with the computers and
     software  applicable  to the Company's  business (and all copies  thereof),
     which are in Employee's possession or under Employee's control,  regardless
     of  whether  such  papers,   documents  or  things   contain   confidential
     information  or trade  secrets.  In addition,  Employee  will return to the
     Company any physical equipment of the Company in the Employee's possession,
     including but phone,

                                        2
<PAGE>

     automobile and any  other  company-owned  equipment  in the  possession  of
     Employee, wherever located.


          B.  CONFIDENTIAL INFORMATION.   Employee acknowledges that during  his
     employment   with  the  Company  he  has  received   certain   confidential
     information  of the  Company  and/or  its  affiliated  entities.  As  such,
     Employee has a continuing obligation and will not use, publish, disclose or
     authorize  anyone  else to use,  publish  or  disclose,  without  the prior
     written consent of the Company, any confidential  information pertaining to
     the Company or its affiliated entities,  including, without limitation, any
     information relating to existing or potential business,  customers, agents,
     trade or industrial practices,  plans, costs,  processes, or trade secrets.
     Employee  agrees  that the  terms  of this  Agreement  and the  discussions
     leading to its  execution  are  confidential  and he will not  disclose any
     information  concerning them or concerning his termination of employment to
     anyone at any time, except to his spouse, if applicable,  and his attorneys
     and  tax  advisors,  any  and  all of  whom  shall  be  informed  of  these
     requirements  and shall be bound by them,  unless  compelled to do so under
     subpoena or other judicial process.

          C.  OTHER EMPLOYMENT.  Employee agrees that he will not take, announce
     an intent to take, or allow any other person to announce his intent to take
     other employment prior to January 15, 2003.

          D.  EXERCISE OF OPTIONS.   Employee  currently  owns vested options to
     purchase  shares  of the Company's stock  and will have  additional options
     vest  prior to  the Retirement  Date (Employee's Stock Options").  Employee
     agrees to use his best efforts to avoid exercising Employee's Stock Options
     in  any  manner that is  reasonably  likely  to have a  materially  adverse
     effect  on  the  intermediate or long term  trading  price of the Company's
     stock.

          E.  FUTURE  STATEMENTS.  Employee  warrants  and agrees  that  he will
     refrain  from  making   any  disparaging,  damaging   or  false  statements
     concerning  the  Company,  its  affiliates,  their  management,  directors,
     agents or employees, or  their methods of doing business, their  quality of
     services, their role in the community or their  treatment  of employees  or
     medical  professionals.  This warranty will apply to any successor agent or
     assignee of the  Company.  Employee  warrants  and agrees that he will take
     no action or make any  statements  which will impugn or damage the business
     reputation  or goodwill of the Company.  Company  warrants  and agrees that
     it will  not, and  will  use commercially reasonable efforts to ensure that
     its employees will not, make any disparaging, damaging or false  statements
     concerning Employee or take any action or make any statements   which would
     impugn or damage the business reputation of the Employee.

     6.   EXECUTION AND REVOCATION RIGHTS.

          A.  Employee  has the right to sign  this  Agreement  any time  within
twenty-one (21) calendar days following receipt of this document.

                                        3
<PAGE>

          B.  Following  his signing of the Agreement, Employee has the right to
     revoke the  Agreement at  any  time  within seven (7) calendar  days of his
     signing  it,  not  including  the  date  of  his  signing  (the "Revocation
     Period").  A  notice  of  revocation  shall be  given  in writing and hand-
     delivered or mailed to:

                            American Medical Security, Inc.
                            Attn:   Vice President, Human Resources
                            P.O. Box 19032
                            Green Bay, WI 54307-9032

     A notice of revocation  shall be  deemed  effective  when  delivered.  This
     Agreement  shall not become  effective or enforceable  until the Revocation
     Period has  expired.  If Employee  gives  notice of  revocation  during the
     Revocation  Period,  this  Agreement  shall  become null and void,  and all
     rights and claims of the  parties  which  would have  existed,  but for the
     execution of this Agreement, shall be restored.

     7.   REPRESENTATIONS OF EMPLOYEE.  Employee represents and warrants to  the
Company that:

          A.  BY SIGNING  THIS AGREEMENT,  EMPLOYEE  UNDERSTANDS  THAT HE HEREBY
     WAIVES AND  RELEASES ANY AND ALL RIGHTS AND CLAIMS  ARISING  UNDER  THE AGE
     DISCRIMINATION  IN  EMPLOYMENT  ACT  OF  1967, AS  AMENDED,  ITS  STATE LAW
     EQUIVALENT  AND  ALL  OTHER  CLAIMS  AGAINST  THE  COMPANY AND THE RELEASED
     PARTIES ARISING UP AND TO AND INCLUDING THE DATE HE SIGNS THIS AGREEMENT;

          B.  Employee  has  executed  this  Agreement  on  the date  set  forth
     opposite his name on the signature page hereof; and

          C.  This  Agreement  has  been  carefully  read by Employee,  and  its
     contents are known and  understood  by  Employee,  and is signed freely and
     voluntarily by Employee, who intends to be bound by it.

     8.   TAX-QUALIFIED   RETIREMENT  PLAN.   Employee   acknowledges  that  his
retirement  does not constitute a retirement under any tax-qualified  retirement
plan of the Company.

     9.   NON-ADMISSION. Neither the negotiations concerning this Agreement, nor
the  actual  provision  of  consideration  set forth in this  document,  nor the
Company's  drafting or execution  of this  document  nor  Employee's  review and
execution of this document shall be construed as an  acknowledgment or admission
by the Company of any liability to Employee or any other individual or entity or
of any wrongdoing under federal, state or local law.

     10.  ENTIRE   AGREEMENT.    This   Agreement   constitutes   the   complete
understanding  between the parties  concerning all matters affecting  Employee's
employment with the Company and the termination thereof and supersedes all prior
agreements, understandings and practices

                                        4
<PAGE>

concerning such matters,  including,  without  limitation,  any prior employment
agreement or  engagement  letter  Employee may have had with the Company and the
provisions of any other Company personnel documents,  handbooks or policies,  or
any prior customs or practices of the Company with respect to bonuses, severance
pay, fringe benefits or otherwise.

     11.  NO PREVAILING PARTY DESIGNATION. The parties agree that this Agreement
shall not be  construed  to render  Employee  a  "prevailing  party"  within the
meaning of the Civil Rights Act of 1964, as amended,  the Age  Discrimination in
Employment  Act of 1967, as amended,  the Fair Labor  Standards Act, as amended,
the Wisconsin Fair Employment Act, as amended,  ERISA, or under any law, statute
or ordinance allowing  attorneys' fees and/or costs to a party who "prevails" in
any manner or sense,  nor shall this  Agreement be deemed to constitute a factor
supporting  an award of attorneys'  fees and/or costs under any law,  statute or
ordinance.  All  parties  are  responsible  for  their  own  attorney's  fees in
connection with the presentation and resolution of their disputes.

     12.  GOVERNING  LAW;  SUCCESSORS  AND  ASSIGNS.  This  Agreement  shall  be
governed  and  construed in  accordance  with the laws of the State of Wisconsin
without regard to principles of conflicts of laws, and shall be binding upon the
parties hereto and their respective successors and assigns.


                                        5
<PAGE>


     13.  MODIFICATION;  WAIVER.  No provision of this Agreement may be modified
waived or discharged unless such waiver,  modification or discharge is agreed to
in  writing  and signed by  Employee  and such  officer  as may be  specifically
designated by the Company.

          THIS AGREEMENT WAIVES LEGAL CLAIMS AGAINST THE COMPANY, INCLUDING
     POTENTIAL  AGE DISCRIMINATION AND OTHER CLAIMS.  YOU  ARE  ADVISED  TO
     CONSULT  YOUR  OWN  ATTORNEY  PRIOR TO SIGNING  THE DOCUMENT. YOU HAVE
     TWENTY-ONE (21) DAYS  TO SIGN  THIS AGREEMENT.  YOUR  DECISION TO SIGN
     THE AGREEMENT MUST BE KNOWING AND VOLUNTARY.

     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on the
last day, month and year written below.



COMPANY:                                    AMERICAN MEDICAL SECURITY GROUP INC.


                                            By: /s/ Samuel V. Miller
                                                Samuel V. Miller, President
                                                Date:  August 2, 2002


EMPLOYEE:                                   GARY D. GUENGERICH

                                            /s/ Gary D. Guengerich
                                            Date:  August 1, 2002


                                        6