SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
         OR
     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES 
         EXCHANGE ACT OF 1934
         For the transition period from __________________ to __________________

                         COMMISSION FILE NUMBER 1-13154


                      AMERICAN MEDICAL SECURITY GROUP, INC.
             (Exact name of Registrant as specified in its charter)

       WISCONSIN                                        39-1431799
(State of Incorporation)                    (I.R.S. Employer Identification No.)

          3100 AMS BOULEVARD
         GREEN BAY, WISCONSIN                                            54313
(Address of principal executive offices)                              (Zip Code)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (920) 661-1500



Indicate by check mark whether  registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

           Yes __X__        No _____

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Common stock, no par value, outstanding as of April 30, 1999: 16,653,269 shares


<PAGE>


                      AMERICAN MEDICAL SECURITY GROUP, INC.

                                      INDEX


PART I.       FINANCIAL INFORMATION

  Item 1.      Financial Statements (Unaudited)

               Condensed Consolidated Balance Sheets--
                 March 31, 1999 and December 31, 1998..........................3
               Condensed Consolidated Statements of Income--
                 Three months ended March 31, 1999 and 1998....................5
               Condensed Consolidated Statements of Cash Flows--
                 Three months ended March 31, 1999 and 1998....................6
               Notes to Condensed Consolidated Financial Statements--
                 March 31, 1999................................................7

  Item 2.      Management's Discussion and Analysis of Financial 
                 Condition and Results of Operations..........................11

  Item 3.      Quantitative and Qualitative Disclosures About Market Risk.....15


PART II.      OTHER INFORMATION


  Item 6.      Exhibits and Reports on Form 8-K...............................16

               Signatures.....................................................17

               Exhibit Index................................................EX-1















































                                                                               2
<PAGE>




PART I.       FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

<TABLE>

                      AMERICAN MEDICAL SECURITY GROUP, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)


<CAPTION>
<S>                                                                                <C>                  <C>    
                                                                                     March 31,          December 31,
                                                                                        1999                1998
                                                                                   ------------------------------------
                                                                                             (000'S OMITTED)

ASSETS

Investments:
   Securities available for sale, at fair value:
       Fixed maturities                                                               $   292,272       $   293,096
       Equity securities-preferred                                                          2,130             2,457
   Fixed maturity securities held to maturity, at amortized cost                            3,541             3,361
                                                                                   ------------------------------------

           Total Investments                                                              297,943           298,914

   Cash and Cash Equivalents                                                               24,262            10,648

Other Assets:
   Property and equipment, net                                                             35,093            35,356
   Goodwill and other intangibles, net                                                    115,060           116,093
   Other assets                                                                            46,043            37,711
                                                                                   ------------------------------------

           Total Other Assets                                                             196,196           189,160
                                                                                   ------------------------------------

Total Assets                                                                          $   518,401       $   498,722
                                                                                   ====================================









            See Notes to Condensed Consolidated Financial Statements

</TABLE>






















                                                                               3
<PAGE>


<TABLE>


                      AMERICAN MEDICAL SECURITY GROUP, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)


<CAPTION>
<S>                                                                                <C>                   <C>    

                                                                                      March 31,          December 31,
                                                                                        1999                 1998
                                                                                   -------------------------------------
                                                                                             (000'S OMITTED)

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Medical and other benefits payable                                                  $  130,761         $  113,133
   Advance premiums                                                                        21,451             18,157
   Payables and accrued expenses                                                           23,864             23,439
   Notes payable                                                                           53,763             55,064
   Other liabilities                                                                       23,641             22,478
                                                                                   -------------------------------------

         Total Liabilities                                                                253,480            232,271

Redeemable preferred stock - Series A adjustable rate nonconvertible,
   $1,000 stated value, 25,000 shares authorized                                                -                  -

Shareholders' Equity:
   Preferred stock (no par value, 475,000 shares authorized)                                    -                  -
   Common stock (no par value, $1 stated value, 50,000,000 shares
     authorized, 16,653,262 and 16,653,179 issued and outstanding
     at March 31, 1999 and December 31, 1998, respectively)                                16,653             16,653
   Paid-in capital                                                                        187,949            188,981
   Retained earnings                                                                       62,567             59,572
   Accumulated other comprehensive income (loss), net of taxes of $1,211,000
     and $642,000 at March 31, 1999 and December 31, 1998, respectively                    (2,248)             1,245
                                                                                   ----------------    -----------------

         Total Shareholders' Equity                                                       264,921            266,451
                                                                                   ----------------    -----------------

Total Liabilities and Shareholders' Equity                                             $  518,401         $  498,722
                                                                                   =====================================








            See Notes to Condensed Consolidated Financial Statements
</TABLE>





















                                                                               4
<PAGE>

<TABLE>

                      AMERICAN MEDICAL SECURITY GROUP, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<CAPTION>
<S>                                                                <C>                     <C>   

                                                                            Three Months Ended
                                                                                 March 31,
                                                                   --------------------------------------
                                                                         1999                  1998
                                                                   --------------------------------------
                                                                   (000'S OMITTED, EXCEPT PER SHARE DATA)
Revenues:
   Insurance premiums                                                 $    262,892         $    234,959
   Net investment income                                                     4,975                6,081
   Other revenue                                                             6,186                4,800
                                                                   --------------------------------------
         Total Revenues                                                    274,053              245,840

Expenses:
   Medical and other benefits                                              198,407              179,285
   Selling, general and administrative                                      68,681               59,042
   Interest                                                                    894                2,371
   Amortization of goodwill and other intangibles                            1,048                2,240
                                                                   --------------------------------------
         Total Expenses                                                    269,030              242,938
                                                                   --------------------------------------

Income From Continuing Operations,
   Before Income Taxes                                                       5,023                2,902

Income Tax Expense                                                           2,028                1,351
                                                                   --------------------------------------

Income From Continuing Operations                                            2,995                1,551

Income from Discontinued Operations
   Less Applicable Income Taxes                                                 -                 4,840
                                                                   --------------------------------------
Net Income                                                            $      2,995         $      6,391
                                                                   ======================================

Earnings Per Common Share - Basic
   Income from continuing operations                                  $       0.18         $      0.09
   Income from discontinued operations                                          -                 0.29
                                                                   --------------------------------------
Net Income Per Common Share                                           $       0.18         $      0.38

Earnings Per Common Share - Diluted
   Income from continuing operations                                  $       0.18         $      0.09
   Income from discontinued operations                                          -                 0.29
                                                                   --------------------------------------
Net Income Per Common Share                                           $       0.18         $      0.38
                                                                   ======================================

            See Notes to Condensed Consolidated Financial Statements
</TABLE>



















                                                                               5
<PAGE>

<TABLE>

                      AMERICAN MEDICAL SECURITY GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<CAPTION>
<S>                                                                      <C>                      <C>  

                                                                                    Three Months Ended
                                                                                         March 31,
                                                                         ------------------------------------------
                                                                                1999                   1998
                                                                         ------------------------------------------
                                                                                      (000'S OMITTED)
OPERATING ACTIVITIES:                                                           
   Income from continuing operations                                       $        2,995         $       1,551
     Adjustments to reconcile income from continuing operations to
     net cash provided by (used in) operating activities:
       Depreciation and amortization                                                2,590                 3,874
       Net realized investment (gains) losses                                          61                  (876)
       Deferred income tax benefit (expense)                                         (430)                  334
       Changes in operating accounts:
           Other assets                                                            (8,347)               (5,899)
           Medical and other benefits payable                                      17,628               (10,830)
           Advance premiums                                                         3,293                 1,962
           Payables and accrued expenses                                              425                (6,886)
           Other liabilities                                                        2,442                10,509
                                                                         ------------------------------------------
             Net Cash Provided by (Used in) Operating Activities                   20,657                (6,261)

INVESTING ACTIVITIES:
   Acquisition of subsidiaries (net of cash and cash
     equivalents acquired of $2,773,000)                                                -                 2,623
   Purchases of available for sale securities                                    (147,926)              (82,278)
   Proceeds from sale of available for sale securities                            142,590                66,001
   Proceeds from maturity of available for sale securities                            700                     -
   Purchases of held to maturity securities                                          (200)                    -
   Purchases of property and equipment                                               (993)                 (395)
   Proceeds from sale of property and equipment                                        85                    54
                                                                         ------------------------------------------
             Net Cash Used in Investing Activities                                 (5,744)              (13,995)

FINANCING ACTIVITIES:
   Cash dividends paid                                                                  -                (1,982)
   Issuance of common stock                                                             1                   893
   Borrowings under line of credit agreement                                        5,000                     -
   Repayment on line of credit agreement                                           (5,000)                    -
   Repayment of notes payable                                                      (1,300)                 (408)
                                                                         ------------------------------------------
             Net Cash Used in Financing Activities                                 (1,299)               (1,497)
Net Cash Provided by Discontinued Operations                                            -                   128
                                                                         ------------------------------------------
Cash and Cash Equivalents:
   Net increase (decrease)                                                         13,614               (21,625)
   Balance at beginning of year                                                    10,648                45,291
                                                                         ------------------------------------------
             Balance at End of Period                                      $       24,262         $      23,666
                                                                         ==========================================




            See Notes to Condensed Consolidated Financial Statements
</TABLE>















                                                                               6
<PAGE>




                      AMERICAN MEDICAL SECURITY GROUP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


                                 March 31, 1999


NOTE A.       BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation  S-X.  Accordingly,  they do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements. In the opinion of management,  all adjustments (consisting
of  only  normal  recurring   adjustments)   considered  necessary  for  a  fair
presentation  have been included.  Operating  results for the three month period
ended March 31, 1999 are not  necessarily  indicative of the results that may be
expected  for the year ended  December 31, 1999.  These  condensed  consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  and footnotes  thereto  included in the American  Medical
Security Group,  Inc.  ("AMSG" or the "Company")  annual report or Form 10-K for
the year ended December 31, 1998.


NOTE B.       DISCONTINUED OPERATIONS

     On May 27,  1998,  the Board of  Directors  of the  Company,  then known as
United Wisconsin Services, Inc. ("UWS"), approved a plan to spin off its managed
care  companies  and  specialty  management  business to its  shareholders  (the
"Spin-off").  In connection with the Spin-off, UWS changed its name to "American
Medical  Security  Group,  Inc." On September 25, 1998, the  distribution  date,
shareholders  of AMSG  received  one  share of  common  stock of a newly  formed
company,  Newco/UWS,  Inc.  ("Newco/UWS"),  for every  share of AMSG owned as of
September 11, 1998,  the record date.  The net assets of Newco/UWS  consisted of
assets and  liabilities  of the managed care and specialty  business  along with
$70.0  million in debt that was assumed by  Newco/UWS  in  conjunction  with the
Spin-off.  Newco/UWS  was  renamed  United  Wisconsin  Services,  Inc.  AMSG has
obtained a private ruling from the Internal  Revenue  Service to the effect that
the Spin-off qualifies as tax free to AMSG,  Newco/UWS and to AMSG shareholders.
The  operations of Newco/UWS are reflected in  discontinued  operations  through
September 25, 1998. All prior periods of the Company's financial statements have
been  restated  to reflect  Newco/UWS  operations  as  discontinued  operations.
Interest  expense on the $70.0 million in debt assumed by Newco/UWS is reflected
in continuing operations through September 11, 1998.






























                                                                               7
<PAGE>


NOTE C.       EARNINGS PER SHARE

     Basic  earnings per common share are computed by dividing net income by the
weighted  average  number of common  shares  outstanding.  Diluted  earnings per
common share are computed by dividing net income by the weighted  average number
of common shares outstanding, adjusted for the effect of dilutive employee stock
options.

     The following  table  provides a  reconciliation  of the number of weighted
average basic and diluted shares outstanding:
<TABLE>
<CAPTION>
<S>                                                            <C>              <C>    

                                                                      Three Months Ended
                                                                           March 31,
                                                               ----------------------------------
                                                                    1999              1998
                                                               ---------------- -----------------
Weighted average common shares outstanding - Basic               16,653,226        16,515,874
Effect of dilutive stock options                                    173,473           171,410
                                                               ---------------- -----------------
Weighted average common shares outstanding - Dilutive            16,826,699        16,687,284
                                                               ================ =================
</TABLE>


     Other options to purchase  shares were not included in the  computation  of
earnings per diluted  common share  because the  options'  exercise  prices were
greater than the average market price of the  outstanding  common shares for the
period. In addition,  1,000,000  options,  which were at exercise prices greater
than the average market price of the common stock, were surrendered in the first
quarter of 1999.


NOTE D.       COMPREHENSIVE INCOME

     Comprehensive  loss from  continuing  operations  was $0.5  million for the
three  months  ended  March  31,  1999.  Comprehensive  income  from  continuing
operations  and  discontinued  operations  was $0.8  million  and $5.8  million,
respectively,  for the three months ended March 31, 1998.  Comprehensive  income
for the Company is net income plus or minus unrealized  gains or losses,  net of
income tax effects, on certain investments in debt and equity securities.


NOTE E.       SEGMENT INFORMATION

     The Company has two reportable  segments:  1) health insurance products and
2) life insurance  products.  The Company's health insurance products consist of
the following  coverages related to small group preferred provider  organization
products:  fully insured  medical,  self funded  medical,  dental and short-term
disability.  Life  products  consist  primarily  of group  term-life  insurance.
Operations  not  directly  related to the  business  segments  (i.e.,  corporate
investment income,  interest expense on corporate debt, amortization of goodwill
and  intangibles,   unallocated   overhead   expenses  and  health   maintenance
organization  ("HMO")  operations)  are included in "All Other".  The reportable
segments  are  managed  separately  because  they  differ  in the  nature of the
products offered and in profit margins.

     The  Company  evaluates  segment  performance  based on profit or loss from
operations  before income taxes, not including gains and losses on the Company's
investment portfolio. The accounting policies of the reportable segments are the
same as those used to report the Company's  consolidated  financial  statements.
Intercompany  transactions  have been eliminated  prior to reporting  reportable
segment information.














                                                                               8
<PAGE>


     A  reconciliation  of segment  income before  income taxes to  consolidated
income from continuing operations before income taxes is as follows:
<TABLE>
<CAPTION>
            <S>                 <C>              <C>

                                      Three Months Ended
                                           March 31,
                                --------------------------------
                                     1999             1998
                                ---------------- ---------------
                                        (000'S OMITTED)
            Health               $      3,481     $      (393)
            Life                        1,876           2,426
            All other                    (334)            869
                                ---------------- ---------------
                                  $     5,023     $     2,902
                                ================ ===============
</TABLE>

     Operating results and statistics for each of the Company's  segments are as
follows:
<TABLE>
<CAPTION>
<S>                                                    <C>               <C>    

                                                               Three Months Ended
                                                                    March 31,
                                                       -----------------------------------
                                                             1999              1998
                                                       ----------------- -----------------
                                                        (000'S OMITTED, EXCEPT FINANCIAL
                                                                   STATISTICS)
HEALTH SEGMENT

OPERATING RESULTS

Revenues:
  Insurance premiums                                     $  246,652        $  222,872
  Net investment income                                       2,268             2,137
  Other revenue                                               5,212             3,507
                                                       ----------------- -----------------
     Total Revenues                                         254,132           228,516

Expenses:
  Medical and other benefits                                187,420           174,145
  Selling, general and administrative                        63,231            54,764
                                                       ----------------- -----------------
     Total Expenses                                         250,651           228,909
                                                       ----------------- -----------------
       Income Before Income Taxes                        $    3,481        $     (393)
                                                       ================= =================

FINANCIAL STATISTICS

Loss ratio                                                    76.0%             78.1%
Expense ratio                                                 23.5%             23.0%
                                                       ----------------- -----------------
     Combined ratio                                           99.5%            101.1%
                                                       ================= =================

Membership at End of Period:
  Medical:
     Fully insured                                          586,042           512,182
     Self funded                                             49,264            68,746
                                                       ----------------- -----------------
       Total medical*                                       635,306           580,928
  Dental                                                    357,860           451,772

*Total medical  membership of the Company  includes HMO membership of 26,820 and
 13,657 at March 31, 1999 and 1998 respectively. HMO operations are not included
 in health segment operating results.
</TABLE>





   
                                                                               9
<PAGE>

<TABLE>
<CAPTION>
<S>                                                    <C>               <C>   


                                                              Three Months Ended
                                                                   March 31,
                                                       -----------------------------------
                                                             1999              1998
                                                       ----------------- -----------------
                                                       (000'S OMITTED, EXCEPT FINANCIAL
                                                                  STATISTICS)
LIFE SEGMENT

OPERATING RESULTS

Revenues:
  Insurance premiums                                     $    6,660        $    6,470
  Net investment income                                          51                55
  Other revenue                                                  72                40
                                                       ----------------- -----------------
     Total Revenues                                           6,783             6,565

Expenses:
  Medical and other benefits                                  2,773             2,135
  Selling, general and administrative                         2,134             2,004
                                                       ----------------- -----------------
     Total Expenses                                           4,907             4,139
                                                       ----------------- -----------------
       Income Before Income Taxes                        $    1,876        $    2,426
                                                       ================= =================

FINANCIAL STATISTICS

Loss ratio                                                    41.6%             33.0%
Expense ratio                                                 31.0%             30.4%
                                                       ----------------- -----------------
     Combined ratio                                           72.6%             63.4%
                                                       ================= =================

Membership at end of period                                 307,674           238,824


</TABLE>




































                                                                              10
<PAGE>


ITEM 2.       MANAGEMENT'S  DISCUSSION   AND  ANALYSIS  OF  FINANCIAL  CONDITION
              AND RESULTS OF OPERATIONS




OVERVIEW

     American Medical Security Group,  Inc.,  formerly known as United Wisconsin
Services,   Inc.,  together  with  its  subsidiary   companies  ("AMSG"  or  the
"Company"),  is a provider of life and health insurance products for individuals
and employer  groups.  The Company's  principal  product offering is small group
health insurance.  It also sells individual and large group health insurance and
group  life,  dental,   prescription  drug,   disability  and  accidental  death
insurance.  The  Company's  products are actively  marketed in 33 states and the
District  of  Columbia  through   independent  agents.  The  Company's  products
generally  provide  discounts  to  insureds  that  utilize  preferred   provider
organizations. The average group size is eight lives.

HISTORY

     Prior to and for most of the year 1998,  the business of the Company,  then
known as "United Wisconsin  Services,  Inc.",  consisted of two main components:
the small  group  business  and the  managed  care and  specialty  business.  On
September 11, 1998, the Company  contributed all of its subsidiaries  comprising
the managed care and  specialty  business to a newly  created  subsidiary  named
"Newco/UWS, Inc.", a Wisconsin corporation ("Newco/UWS"). On September 25, 1998,
the  Company  spun  off the  managed  care  and  specialty  business  through  a
distribution  of 100% of the issued and  outstanding  shares of common  stock of
Newco/UWS to the Company's  shareholders of record as of September 11, 1998. The
Company  thereupon adopted its current name of "American Medical Security Group,
Inc." and Newco/UWS  changed its name to "United Wisconsin  Services,  Inc." The
net assets of Newco/UWS  consisted of assets and liabilities of the managed care
and  specialty  management  business  along with $70.0  million in debt that was
assumed by  Newco/UWS  in  conjunction  with the  Spin-off.  The  operations  of
Newco/UWS are reflected in discontinued  operations  through September 25, 1998.
Interest  expense on the $70.0 million in debt assumed by Newco/UWS is reflected
in continuing  operations  through  September 11, 1998. After the Spin-off,  the
business of the Company  consisted solely of the Company's small group insurance
business.  The continuing operations of the Company reflect the historical small
group insurance portion of the Company's business.

RESULTS OF CONTINUING OPERATIONS

INSURANCE PREMIUMS

     Insurance  premiums  for the three  months  ended March 31, 1999  increased
11.9% to  $262.9  million  from  $235.0  million  for the same  period  in 1998.
Effective  January 1, 1999,  the  Company  acquired  the  majority  of the fully
insured group health  business of Continental  Assurance  Company  ("CNA").  The
results for the three  months  ended March 31, 1999  included  $28.5  million of
premium related to the CNA acquired business.

     Average fully insured medical premium per member per month during the three
month period ended March 31, 1999 increased 2.4% to $126 compared to $123 during
the same period in 1998. Medical membership (including HMO members) at March 31,
1999 increased 11.4% to 662,126 from 594,585 at March 31, 1998. New sales growth
combined with the addition of CNA business has caused the membership in force to
grow.

















 


                                                                              11
<PAGE>


NET INVESTMENT INCOME

     Net  investment  income  includes  investment  income  and  realized  gains
(losses) on investments.  Net investment income for the three months ended March
31, 1999  declined  18.2% to $5.0 million from $6.1 million for the three months
ended March 31,  1998.  The decline is due to lower  average  annual  investment
yields  and a  decrease  in  realized  gains  of $0.9  million.  Average  annual
investment yields,  excluding realized gains and losses,  were 6.7% and 7.5% for
the three months ended March 31, 1999 and 1998,  respectively.  Investment gains
and losses are realized in the normal  investment  process in response to market
opportunities. Average invested assets for the three months ended March 31, 1999
and March 31, 1998 were $299.2 million and $276.2 million, respectively.

OTHER REVENUE

     Other  revenue  increased  to $6.2 million for the three months ended March
31,  1999  from  $4.8  million  for the same  period in 1998.  The  increase  is
primarily  due to an increase in fee revenue  associated  with the Pan  American
Life Insurance  Company  business  acquired July 1998 and CNA business  acquired
January  1999,  offset by lower self funded fee  revenue on smaller  self funded
membership.  Management  expects that other revenue will decline slightly during
the remainder of 1999 as the acquired blocks of business run off.

LOSS RATIO

     The health segment loss ratio for the three months ended March 31, 1999 was
76.0%  compared  with  78.1% for the three  months  ended  March 31,  1998.  The
improved loss ratio for the quarter  reflects the  cancellation  of unprofitable
business during the second half of 1998,  including the one-life dental business
effective July 1, 1998,  increased margin on new business,  and the repricing of
existing  business.  The first  quarter  1999 loss ratio  reflects a higher loss
ratio  on the  business  acquired  from CNA than  experienced  on the  Company's
existing business.  The health loss ratio for the remainder of 1999 is dependent
upon future  events  including  claim cost trends,  membership  utilization  and
regulatory approvals and actions.  Management continues to pursue rate increases
aggressively in various states where the loss ratio has not responded as quickly
as expected. However, there can be no guarantee that these actions will have the
desired  effect on the health loss ratio in future  periods or when such results
may be realized.

     The life  segment  loss ratio for the three months ended March 31, 1999 was
41.6%  compared to 33.0% for the three months ended March 31, 1998. The increase
in the life loss  ratio  for the first  quarter  of 1999 is due  primarily  to a
fluctuation  in claims  experience.  Management  expects  the life loss ratio to
return to historical patterns during the remainder of 1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RATIO

     The selling,  general and  administrative  ("SGA") expense ratio for health
segment  products for the three  months ended March 31, 1999 was 23.5%  compared
with 23.0% for the three months  ended March 31,  1998.  The increase in the SGA
expense ratio is the result of higher  commissions on new policy sales offset by
a  lower  administrative  expense  ratio  resulting  from  a  leveraging  of the
Company's operations over increased revenues.

OTHER EXPENSES

     Interest expense decreased to $0.9 million for the three months ended March
31, 1999 from $2.4  million for the same period in the prior year.  The decrease
in  interest  expense  reflects  the  assumption  of  $70.0  million  in debt by
Newco/UWS  on  September  11,  1998,  as part of the  spin-off  transaction,  as
described in Note B of the Notes to Condensed Consolidated Financial Statements.

     Amortization of goodwill and other intangibles totaled $1.0 million for the
first quarter of 1999,  compared with $2.2 million of  amortization  expense for
the first quarter of 1998. The decline in amortization is principally due to the
write-off of the Company's  distribution system intangible asset at December 31,
1998,  as described  in 
 










                                                                              12
<PAGE>

the Company's  annual report on Form 10-K for the year ended  December 31, 1998.
Management  believes  that no other  material  impairment  of goodwill and other
intangible assets existed at March 31, 1999.

     The  effective tax rate was 40.4% for the three months ended March 31, 1999
compared with 46.6% for the three months ended March 31, 1998. The effective tax
rate is impacted primarily by level  amortization of non-deductible  goodwill in
relation to varying pretax income.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's sources of cash flow consist primarily of insurance premiums,
administrative  fee  revenue and  investment  income.  The primary  uses of cash
include medical and other benefits and operating expense payments. Positive cash
flows are invested  pending  future  payments of medical and other  benefits and
other  operating  expenses.  The Company's  investment  policies are designed to
maximize yield,  preserve  principal and provide  liquidity to meet  anticipated
payment obligations.

     The Company's  cash flow from  operations was positive at $20.7 million for
the three months ended March 31, 1999.  This compares to negative cash flow from
operations  of $6.3  million  for the three  months  ended March 31,  1998.  The
positive  results  are  due  to an  increase  in  claims  inventory,  growth  in
membership  and lower debt costs as a result of the  assumption of $70.0 million
in debt by Newco/UWS in September 1998.

     The Company's  investment  portfolio from  continuing  operations  consists
primarily  of  investment  grade  bonds  and  has  limited  exposure  to  equity
securities.  At March  31,  1999,  $295.8 or 99.3% of the  Company's  investment
portfolio  was invested in bonds.  At December 31, 1998,  $296.5 or 99.2% of the
Company's  investment portfolio was invested in bonds. The bond portfolio had an
average quality rating of Aa3 at March 31, 1999, and A1 at December 31, 1998, as
measured by Moody's  Investor  Service.  The majority of the bond  portfolio was
classified  as available  for sale.  The Company has no  investment  in mortgage
loans,  non-publicly traded securities (except for principal only strips of U.S.
Government   securities),   real  estate  held  for   investment   or  financial
derivatives.

     The Company's insurance subsidiaries operate in states that require certain
levels of  regulatory  capital and surplus and may  restrict  dividends to their
parent  companies.  The  National  Association  of Insurance  Commissioners  has
adopted  risk-based  capital  ("RBC")  standards  for life and  health  insurers
designed to evaluate the  adequacy of statutory  capital and surplus in relation
to various  business  risks faced by such  insurers.  The RBC formula is used by
state  insurance  regulators  as an early  warning  tool to  identify  insurance
companies that potentially are inadequately  capitalized.  At December 31, 1998,
the Company's principal insurance company subsidiaries had an RBC ratio that was
substantially above the levels which would require regulatory action.

     The  Company  has a five  year  revolving  line of  credit  with a  maximum
commitment of $70.0 million,  and a $10.0 million  sublimit for swingline loans.
The  outstanding  line of credit  balance at March 31,  1999 was $45.2  million,
which is included in notes payable.

     In addition to internally  generated  funds and periodic  borrowings on its
bank  line  of  credit,  the  Company  believes  that  additional  financing  to
facilitate  long-term  growth could be obtained through equity  offerings,  debt
offerings, or bank borrowings, as market conditions may permit or dictate.






















                                                                              13
<PAGE>


YEAR 2000

     The Year 2000 issue is the result of computer  programs being written using
two digits rather than four to define the applicable  year.  Computer  equipment
and software  devices  with  embedded  technology  that are  time-sensitive  may
recognize  a date using "00" as the year 1900  rather  that the year 2000.  This
could  result in a system  failure or  miscalculations  causing  disruptions  of
operations,  including,  among other  things,  a temporary  inability to process
transactions or engage in similar normal business activities.

     The Company has divided the Year 2000 issues facing the  organization  into
three major sections:  1) software  applications  developed in-house  ("In-house
Applications");  2) software  applications acquired from a third party that have
been  customized  by the Company  ("Customized  Applications");  and 3) software
applications  acquired  from a third party that have not been  customized by the
Company and those products and services provided to the Company by third parties
("Third Party Products").

     In-house  Applications  represent  the  primary  operating  software of the
Company and include  applications that perform premium billing and cash posting,
claims adjudication and commission payment  processing.  The project to make all
In-House  Applications  Year 2000  compliant was completed in November 1998. The
deletion of temporary  bridges and workfiles  used to  facilitate  communication
between  compliant  and  non-compliant  computer  codes during the course of the
implementation was completed in early March 1999.

     Customized  Applications include electronic data interchange  applications,
publishing  systems,  fax  capabilities,  accounting  packages and other special
application  software as well as utility  software  packages that serve as links
between different  packages.  Each of these software packages is currently being
upgraded or replaced. It is anticipated that all Customized Applications will be
compliant prior to the end of the third quarter of 1999.

     With respect to Third Party Products, the Company has reviewed its business
processes  that may have  Year  2000  concerns  performed  by,  with or  through
external  business  associates.  This  includes  computer  hardware,   telephone
systems,  security  systems and numerous  other  products as well as third party
applications  that have not been  customized  by the  Company.  The  Company has
evaluated  various  third  parties  that provide  products or services,  such as
printing  companies,  power  and  utility  companies  and other  vendors.  Where
appropriate, agreements with third party vendors have been amended and Year 2000
compliance certifications have been obtained.  Significant business partners and
vendors  will be  required  to  provide  the  Company  with Year 2000  certified
products or services. Such products and services are being tested by the Company
to validate the compliance certification.  The Company estimates this portion of
the plan is  approximately  80%  complete,  is on  schedule  and is planned  for
completion in September 1999.
<TABLE>
<CAPTION>
         <S>                                    <C>                                <C>    

         YEAR 2000 PLAN                         PERCENT COMPLETE                   COMPLETION DATE

         In-house Applications                         100%                        March 1999

         Customized Applications                        76%                        September 1999

         Third Party Products                           80%                        September 1999
</TABLE>

     The cost of the Year 2000 project is being funded  through  operating  cash
flows and is not expected to be material to the  Company's  financial  position.
Through  March 31, 1999,  the Company had incurred  costs of $2.5 million  ($0.5
million in 1999)  relating to the Year 2000 project.  For the remainder of 1999,
the  Company  anticipates  an  additional  cost of $0.6  million  which  will be
expensed as incurred.  The Company has made capital expenditures of $4.2 million
through  March 31,  1999,  and  expects to make an  additional  $0.7  million in
capital expenditures to complete the project.











                                                                              14
<PAGE>


     The Company is  developing  a  comprehensive  analysis  of the  operational
problems  and costs  (including  loss of  revenues)  that could  result from the
unlikely  failure by the Company and certain third  parties to complete  efforts
necessary to achieve Year 2000 compliance on a timely basis. The majority of the
contingency  plans has been  developed and documented for dealing with the worst
case scenarios with the highest chance of occurring. The Company currently plans
to complete such analysis and contingency  planning during the second quarter of
1999.

     The  costs of the  project  and the  dates on which  the  Company  plans to
complete the necessary Year 2000  modifications  are based on management's  best
estimates,  which were  derived  using  numerous  assumptions  of future  events
including  the  continued   availability  of  certain  resources,   third  party
remediation  plans  and other  factors.  There can be no  guarantee  that  these
timelines or estimates will be achieved.  Actual results could differ materially
from those planned.  Specific factors that might cause such material differences
to occur include, but are not limited to, the availability and cost of personnel
trained in this area;  the ability to locate and correct all  relevant  computer
codes;  and the ability of the Company's  significant  suppliers,  customers and
others  with which it  conducts  business,  including  federal,  state and local
governmental  agencies,  to identify and resolve  their own Year 2000 issues and
similar uncertainties.  Due to these uncertainties, the Company may face certain
claims,  the impact of which is not  currently  estimable.  No assurance  can be
given that the cost of defending  and  resolving  such claims,  if any, will not
significantly  affect the Company's results of operations.  Although the Company
has some  agreements  with  third  party  vendors  and  suppliers  that  contain
indemnification  provisions that protect the Company under certain circumstances
relating  to  Year  2000  issues,   there  can  be  no   assurances   that  such
indemnification provisions will cover all of the Company's liabilities and costs
related to Year 2000 claims by third parties.

FORWARD LOOKING STATEMENTS

     Statements  contained  in this  report  that are not  historical  facts are
forward looking  statements subject to inherent risks and uncertainties that may
cause actual results or events to differ  materially from those  contemplated by
such forward looking statements. The terms "anticipate",  "believe", "estimate",
"expect", "objective", "plan", "project" and similar expressions are intended to
identify  forward looking  statements.  In addition to the assumptions and other
factors  referred to specifically in connection  with such  statements,  factors
that may  cause  actual  results  or  events to  differ  materially  from  those
contemplated by such forward looking statements,  include, among others, (1) the
effects of either federal or state health care reform or other legislation;  (2)
rising health care costs,  including the Company's ability to predict such costs
and adequately  price its products;  (3) changes in membership  utilization  and
risk; (4) government  regulations,  including changes in insurance,  health care
and other  regulatory  conditions;  (5)  delays  in  regulatory  approvals,  and
regulatory   action   resulting  from  market   conduct   activity  and  general
administrative  compliance  with state and federal  laws;  (6) general  business
conditions,  including  competitive  practices  and  demand  for  the  Company's
products;  (7)  development of claims  reserves;  (8) rating agency policies and
practices; (9) general economic conditions,  including changes in interest rates
and the effect of such changes on the Company's investment  portfolio;  (10) the
Company's   ability  to  integrate   acquisitions;   (11)  unforeseen  costs  or
consequences  of Year 2000  issues;  (12) the  retention of key  management  and
technical  employees,  and (13) other  factors  that may be  referred  to in the
Company's reports filed with the Securities and Exchange Commission from time to
time.

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's market risk exposure has not changed  substantially  from the
year ended December 31, 1998. See Item 7.  Management's  Discussion and Analysis
of Financial Condition and Results of Operations - "Market Risk Exposure" in the
Company's annual report or Form 10-K for the year ended December 31, 1998.













 
                                                                              15
<PAGE>



PART II.      OTHER INFORMATION



ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

         (a)      EXHIBITS

     See the Exhibit Index following the Signature page of this report, which is
incorporated herein by reference.

         (b)      REPORTS ON FORM 8-K

     The  Company did not file any Form 8-K  reports  during the  quarter  ended
March 31, 1999.































































                                                                              16
<PAGE>


                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


DATE:  MAY 12, 1999
     ----------------  

                       AMERICAN MEDICAL SECURITY GROUP, INC.


                                  /s/  Gary D. Guengerich
                       ---------------------------------------------------------
                       Gary D. Guengerich
                       Executive Vice President and Chief Financial Officer
                       (Principal Financial Officer and Chief Accounting Officer
                       and duly authorized to sign on behalf of the Registrant)



























































                                                                              17
<PAGE>

<TABLE>

                      AMERICAN MEDICAL SECURITY GROUP, INC.
                          (COMMISSION FILE NO. 1-13154)

                                  EXHIBIT INDEX
                                       TO
                           FORM 10-Q QUARTERLY REPORT
                        for quarter ended March 31, 1999
<CAPTION>
<S>               <C>                                         <C>                                        <C>    

                                                                       INCORPORATED HEREIN                 FILED
  EXHIBIT NO.                    DESCRIPTION                             BY REFERENCE TO                 HEREWITH

3.1               Restated Articles of Incorporation of       Exhibit 3.1 to the Company's Annual
                  American Medical Security Group, Inc.       Report on Form 10-K for the year
                  (the "Company") dated as of February 17,    ended December 31, 1998 (the "1998
                  1999                                        10-K")

3.2               Bylaws of the Company as amended and        Exhibit 3.2 to 1998 10-K
                  restated February 17, 1999

10.1              Equity Incentive Plan as amended and        Exhibit 10.1 to 1998 10-K
                  restated March 15, 1999

10.2              Amendment dated March 30, 1999 to                                                          X
                  Employment and Noncompetition Agreement
                  between American Medical Security
                  Holdings, Inc. ("AMS Holdings") and
                  Wallace J. Hilliard

10.3              Option Surrender Agreement dated March                                                     X
                  30, 1999 between AMS Holdings and Wallace
                  J. Hilliard

10.4              Amendment dated March 30, 1999 to                                                          X
                  Employment and Noncompetition Agreement
                  between AMS Holdings and Ronald A. Weyers

10.5              Option Surrender Agreement dated March                                                     X
                  30, 1999 between AMS Holdings and Ronald
                  A. Weyers

27.1              Financial Data Schedule                                                                    X

27.2              Restated Financial Data Schedule                                                           X
                  (three months ended March 31, 1998)





























                                                                            EX-1
</TABLE>