EXHIBIT 3

           ARTICLES OF AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
                    WITH RESPECT TO DESIGNATION, PREFERENCES,
                         LIMITATIONS AND RELATIVE RIGHTS

                                       of

                   SERIES B JUNIOR CUMULATIVE PREFERRED STOCK

                                       of

                      AMERICAN MEDICAL SECURITY GROUP, INC.

                              ---------------------

     American Medical Security Group, Inc., a corporation organized and existing
under the Wisconsin Business  Corporation Law (the "WBCL")  (hereinafter  called
the "Corporation"),  hereby certifies that the following  resolution was adopted
by the Board of Directors of the  Corporation  at a meeting duly called and held
on August 9, 2001 in accordance with Sections 180.0602 and 180.1002 of the WBCL:

     RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") in  accordance  with the  provisions  of the  Restated  Articles of
Incorporation,  the Board of  Directors  hereby  creates  a series of  Preferred
Stock,  no par value per share (the "Preferred  Stock"),  of the Corporation and
hereby  states the  designation  and number of  shares,  and fixes the  relative
rights, preferences, and limitations thereof as follows:

     "Series B Junior Cumulative Preferred Stock:

     Section 1.  DESIGNATION  AND  AMOUNT.  The shares of such  series  shall be
designated  as  "Series B Junior  Cumulative  Preferred  Stock"  (the  "Series B
Preferred  Stock") and the number of shares  constituting the Series B Preferred
Stock shall be Ten Thousand (10,000).

     Section 2. DIVIDENDS AND DISTRIBUTIONS.

          A. Subject to the rights of the holders of any shares of any series of
     Preferred  Stock (or any similar  stock)  ranking prior and superior to the
     Series B Preferred  Stock with respect to dividends,  the holders of shares
     of Series B Preferred  Stock, in preference to the holders of Common Stock,
     no par value per share (the "Common Stock"), of the Corporation, and of any
     other junior stock,  shall be entitled to receive,  when and as declared by
     the Board of  Directors  out of funds  legally  available  for the purpose,
     cumulative  dividends  payable  in  cash  quarterly  on the  first  days of
     January,  April,  July and  October  in each year  (each  such  date  being
     referred to herein as a "Quarterly  Dividend Payment Date"),  commencing on
     the first  Quarterly  Dividend  Payment Date after the first  issuance of a
     share or fraction of a share of Series B Preferred  Stock, in an

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     amount per share  (rounded to the nearest cent) equal to the greater of (a)
     $1 or (b) subject to the provision for  adjustment  hereinafter  set forth,
     10,000  times the  aggregate  per share amount of all cash  dividends,  and
     10,000  times the  aggregate  per  share  amount  (payable  in kind) of all
     non-cash dividends or other distributions, other than a dividend payable in
     shares of Common Stock or a subdivision of the outstanding shares of Common
     Stock (by  reclassification  or  otherwise),  declared on the Common  Stock
     since the immediately  preceding  Quarterly  Dividend Payment Date or, with
     respect  to the first  Quarterly  Dividend  Payment  Date,  since the first
     issuance of any share or  fraction of a share of Series B Preferred  Stock.
     In the event the  Corporation  shall at any time after  August 9, 2001 (the
     "Rights  Declaration Date") declare or pay any dividend on the Common Stock
     payable in shares of Common Stock,  or effect a subdivision  or combination
     or   consolidation   of  the   outstanding   shares  of  Common  Stock  (by
     reclassification  or  otherwise  than by payment of a dividend in shares of
     Common  Stock) into a greater or lesser  number of shares of Common  Stock,
     then in each such case the  amount to which  holders  of shares of Series B
     Preferred Stock were entitled  immediately prior to such event under clause
     (b) of the preceding  sentence shall be adjusted by multiplying such amount
     by a  fraction,  the  numerator  of which is the number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were  outstanding  immediately
     prior to such event.

          B. The  Corporation  shall declare a dividend or  distribution  on the
     Series B  Preferred  Stock  as  provided  in  paragraph  A of this  Section
     immediately  after it  declares a dividend  or  distribution  on the Common
     Stock (other than a dividend  payable in shares of Common Stock);  provided
     that, in the event no dividend or distribution  shall have been declared on
     the Common Stock during the period between any Quarterly  Dividend  Payment
     Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
     $1 per share on the Series B Preferred Stock shall  nevertheless be payable
     on such subsequent Quarterly Dividend Payment Date.

          C.  Dividends  shall begin to accrue and be cumulative on  outstanding
     shares of Series B Preferred Stock from the Quarterly Dividend Payment Date
     next  preceding the date of issue of such shares,  unless the date of issue
     of such shares is prior to the record date for the first Quarterly Dividend
     Payment Date, in which case  dividends on such shares shall begin to accrue
     from the date of issue of such  shares,  or  unless  the date of issue is a
     Quarterly  Dividend Payment Date or is a date after the record date for the
     determination  of holders of shares of Series B Preferred Stock entitled to
     receive a quarterly  dividend and before such  Quarterly  Dividend  Payment
     Date, in either of which events such dividends shall begin to accrue and be
     cumulative from such Quarterly  Dividend  Payment Date.  Accrued but unpaid
     dividends shall not bear interest. Dividends paid on the shares of Series B
     Preferred  Stock in an amount less than the total amount of such  dividends
     at the time accrued and payable on such shares shall be allocated  pro rata
     on a  share-by-share  basis among all such shares at the time  outstanding.
     The  Board of  Directors  may fix a record  date for the  determination  of
     holders of shares of Series B Preferred  Stock entitled to receive  payment
     of a dividend or distribution declared thereon,  which record date shall be
     not more than 60 days prior to the date fixed for the payment thereof.

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     Section 3. VOTING RIGHTS. The holders of shares of Series B Preferred Stock
shall have the following voting rights:

          A. Subject to the provision for adjustment hereinafter set forth, each
     share of Series B  Preferred  Stock  shall  entitle  the holder  thereof to
     10,000 votes on all matters  submitted to a vote of the Shareholders of the
     Corporation.  In the  event  the  Corporation  shall at any time  after the
     Rights  Declaration  Date  declare or pay any  dividend on the Common Stock
     payable in shares of Common Stock,  or effect a subdivision  or combination
     or   consolidation   of  the   outstanding   shares  of  Common  Stock  (by
     reclassification  or  otherwise  than by payment of a dividend in shares of
     Common  Stock) into a greater or lesser  number of shares of Common  Stock,
     then in each such case the  number of votes per share to which  holders  of
     shares of Series B Preferred Stock were entitled  immediately prior to such
     event  shall be  adjusted by  multiplying  such  number by a fraction,  the
     numerator  of which is the  number of shares  of Common  Stock  outstanding
     immediately  after such event and the denominator of which is the number of
     shares of Common  Stock  that were  outstanding  immediately  prior to such
     event.

          B.  Except  as  otherwise  provided  herein,  in any  other  amendment
     creating a series of Preferred  Stock or any similar stock, or by law or by
     the  resolution  or  resolutions  providing  for the issue of any series of
     Preferred  Stock, the holders of shares of Series B Preferred Stock and the
     holders  of  shares of Common  Stock  and any  other  capital  stock of the
     Corporation  having  general voting rights shall vote together as one class
     on all matters submitted to a vote of shareholders of the Corporation.

          C. Except as set forth  herein or as  otherwise  provided by law,  the
     holders of Series B Preferred Stock shall have no special voting rights and
     their consent shall not be required (except to the extent they are entitled
     to vote with  holders of Common  Stock as set forth  herein) for taking any
     corporate action.

     Section 4. CERTAIN RESTRICTIONS.

          A. Whenever  quarterly  dividends or other dividends or  distributions
     payable on the Series B  Preferred  Stock as  provided  in Section 2 are in
     arrears,  thereafter  and  until  all  accrued  and  unpaid  dividends  and
     distributions,  whether or not  declared,  on shares of Series B  Preferred
     Stock outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends, or make any other distributions, on
          any shares of stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the  Series B  Preferred
          Stock;

               (ii) declare or pay dividends,  or make any other  distributions,
          on any shares of stock ranking on a parity  (either as to dividends or
          upon  liquidation,  dissolution  or  winding  up)  with  the  Series B
          Preferred  Stock,  except  dividends  paid  ratably  on the  Series  B
          Preferred  Stock  and all such  parity  stock on which  dividends  are
          payable or in arrears in  proportion to the total amounts to which the
          holders of all such shares are then entitled;

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               (iii) redeem or purchase or otherwise  acquire for  consideration
          shares of any stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the  Series B  Preferred
          Stock, provided that the Corporation may at any time redeem,  purchase
          or otherwise  acquire  shares of any such junior stock in exchange for
          shares of any stock of the  Corporation  ranking  junior (either as to
          dividends  or upon  dissolution,  liquidation  or  winding  up) to the
          Series B Preferred Stock; or

               (iv) redeem or purchase or  otherwise  acquire for  consideration
          any shares of Series B Preferred Stock, or any shares of stock ranking
          on a parity with the Series B Preferred  Stock,  except in  accordance
          with a purchase offer made in writing or by publication (as determined
          by the Board of  Directors)  to all  holders of such  shares upon such
          terms as the Board of Directors, after consideration of the respective
          annual dividend rates and other relative rights and preferences of the
          respective  Series and  classes,  shall  determine  in good faith will
          result in fair and equitable  treatment among the respective series or
          classes.

          B. The Corporation  shall not permit any subsidiary of the Corporation
     to purchase or otherwise  acquire for  consideration any shares of stock of
     the  Corporation  unless the Corporation  could,  under paragraph A of this
     Section 4,  purchase or  otherwise  acquire such shares at such time and in
     such manner.

     Section  5.  REACQUIRED  SHARES.  Any  shares of Series B  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and canceled promptly after the acquisition  thereof.  All such
shares shall upon their  cancellation  become  authorized but unissued shares of
Preferred  Stock and may be reissued as part of a new series of Preferred  Stock
subject to the conditions and restrictions on issuance set forth herein,  in the
Restated Articles of Incorporation,  or in any other amendment creating a series
of Preferred Stock or any similar stock or as otherwise required by law.

     Section 6.  LIQUIDATION,  DISSOLUTION OR WINDING UP. Upon any  liquidation,
dissolution or winding up of the Corporation,  no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation,  dissolution or winding up) to the Series B Preferred Stock unless,
prior  thereto,  the  holders of shares of Series B  Preferred  Stock shall have
received  $100 per share,  plus an amount equal to accrued and unpaid  dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided  that the  holders  of  shares  of Series B  Preferred  Stock  shall be
entitled to receive an aggregate amount per share,  subject to the provision for
adjustment  hereinafter set forth, equal to 10,000 times the aggregate amount to
be  distributed  per share to holders of shares of Common  Stock,  or (2) to the
holders of shares of stock  ranking on a parity  (either as to dividends or upon
liquidation,  dissolution  or  winding  up) with the Series B  Preferred  Stock,
except  distributions  made ratably on the Series B Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled  upon such  liquidation,  dissolution  or winding up. In the
event the  Corporation  shall at any time  declare  or pay any  dividend  on the
Common  Stock  payable in shares of Common  Stock,  or effect a  subdivision  or
combination  or  consolidation  of the  outstanding  shares of Common  Stock (by
reclassification  or otherwise than

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by  payment of a dividend  in shares of Common  Stock)  into a greater or lesser
number of shares of Common Stock then in each such case the aggregate  amount to
which holders of shares of Series B Preferred  Stock were  entitled  immediately
prior to such event shall be adjusted by  multiplying  such amount by a fraction
the  numerator  of which is the  number of shares  of Common  Stock  outstanding
immediately  after  such  event and the  denominator  of which is the  number of
shares of Common Stock that were outstanding immediately prior to such event.

     Section 7. CONSOLIDATION,  MERGER, ETC. In case the Corporation shall enter
into any  consolidation,  merger,  combination or other transaction in which the
shares  of  Common  Stock are  exchanged  for or  changed  into  other  stock or
securities,  cash and/or any other property, then in any such case each share of
Series B  Preferred  Stock  shall at the same  time be  similarly  exchanged  or
changed  into an amount  per  share,  subject to the  provision  for  adjustment
hereinafter  set forth,  equal to 10,000  times the  aggregate  amount of stock,
securities,  cash and/or any other property  (payable in kind),  as the case may
be, into which or for which each share of Common Stock is changed or  exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
declare any dividend on the Common Stock payable in shares of Common  Stock,  or
effect a subdivision or combination or consolidation  of the outstanding  shares
of Common Stock (by  reclassification or otherwise than by payment of a dividend
in shares of Common  Stock) into a greater or lesser  number of shares of Common
Stock,  then in each such case the  amount set forth in the  preceding  sentence
with  respect to the  exchange or change of shares of Series B  Preferred  Stock
shall be adjusted by  multiplying  such amount by a fraction,  the  numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the  denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

     Section 8. REDEMPTION.  The shares of Series B Preferred Stock shall not be
redeemable.

     Section 9. RANK. The Series B Preferred  Stock shall rank,  with respect to
the payment of dividends  and the  distribution  of assets,  junior to all other
series of the Corporation's Preferred Stock, unless the terms of any such series
shall provide otherwise.

     Section  10.  AMENDMENT.  At any time when any shares of Series B Preferred
Stock are outstanding, the Restated Articles of Incorporation of the Corporation
shall not be amended in any manner  which would  materially  alter or change the
powers,  preferences or special rights of the Series B Preferred  Stock so as to
affect them adversely  without the  affirmative  vote of the holders of at least
two-thirds  of the  outstanding  shares  of  Series B  Preferred  Stock,  voting
together as a single class.

     Section 11.  FRACTIONAL  SHARES.  Series B Preferred Stock may be issued in
fractions  of a share which shall  entitle the  holder,  in  proportion  to such
holder's  fractional  shares,  to exercise  voting  rights,  receive  dividends,
participate  in  distributions  and to have the  benefit of all other  rights of
holders of Series B Preferred Stock."

     None of the shares of the Series B  Preferred  Stock have been issued as of
the date hereof.

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     IN WITNESS  WHEREOF,  these Articles of Amendment are executed on behalf of
the Corporation by its Executive Vice President this 14th day of August, 2001.



                                      /S/ GARY D. GUENGERICH
                                      Executive Vice President