EXHIBIT 10.3


                      AMERICAN MEDICAL SECURITY GROUP, INC.
                    DEFERRED COMPENSATION PLAN FOR DIRECTORS
                  (AS AMENDED AND RESTATED SEPTEMBER 25, 1998)


1.       PURPOSE OF PLAN

     The  purpose  of  the  American  Medical  Security  Group,   Inc.  Deferred
Compensation  Plan for  Directors  ("Plan") is to provide a procedure  whereby a
member of the Board of Directors of American Medical  Security Group,  Inc. (the
"Company") who is not an employee of the Company or any of its subsidiaries (the
"Director")  may  defer  the  payment  of  all  or a  specified  portion  of the
compensation  payable to the Director for services as a Director,  including the
retainer,  meeting fees,  and other fees payable in  connection  with his or her
Board and committee responsibilities ("Fees").

2.       ADMINISTRATION

     The Plan shall be administered by a committee  ("Committee")  consisting of
members of the Compensation  Committee of the Board of Directors.  The Committee
shall have  plenary  authority  in its  discretion,  but  subject to the express
provisions of the Plan, to interpret the Plan, to prescribe,  amend, and rescind
rules and  regulations  relating  to it,  and to make all  other  determinations
deemed  necessary  or  advisable  for  the   administration  of  the  Plan.  The
determinations of the Committee on the foregoing matters shall be conclusive and
binding on all interested parties.

3.       ELECTION TO DEFER

     A Director may elect,  at any time,  to defer payment of all or a specified
portion of any unearned Fees.  Such election shall be effective on the first day
of the month following receipt by the Secretary of the Company of written notice
thereof.

4.       DIRECTORS' ACCOUNTS

     There shall be established for each Director  participating  in the Plan an
account  on the  books  of the  Company,  to be  designated  as such  Director's
deferred compensation account ("Account").  All amounts deferred pursuant to the
Plan,  together  with  any  further  amounts  accrued  thereon,  as  hereinafter
provided,  shall  be held in a  designated  fund of the  Company  and  shall  be
credited to the Director's Account.  The Company shall furnish quarterly or upon
request to each participating Director a statement of such Director's Account.

5.       PAYMENT FROM DIRECTORS' ACCOUNTS

     At the time a Director  elects to  participate in the Plan, he or she shall
also  make  an  election,  which  election  shall  be  irrevocable,   except  as
hereinafter  provided,  as to his or her deferral payment terms. Payment will be
made either:

          1) in a lump sum as of the end of the  quarter  in which the  Director
     terminates his or her relationship with the Company, or

          2) in  annual  installments  over  10  years  beginning  in  the  year
     following the year in which the Director terminates his or her relationship
     with the Company or reaches age 65, whichever comes first.  When a Director
     is to receive  the  balance of his or her  Account in annual  installments,
     each such  annual  installment  shall be a fraction  of the balance in such
     Account on the date such annual installment is to be paid, the numerator of
     which  is one  and  the  denominator  of  which  is  the  total  number  of
     installments then remaining to be paid.

     Payment  shall be  calculated  based  upon  the  value as of the end of the
calendar year and issued during the first quarter of the following year.

6.       PAYMENT IN EVENT OF DEATH OR HARDSHIP

     If a Director  should die before the  balance in his or her  Account  shall
have been paid in full,  the  balance  then  remaining  shall be paid as soon as
administratively  feasible in a lump sum to such Director's  estate or to his or
her  designated  beneficiary or  beneficiaries.  A Director may designate one or
more  beneficiaries  (which  may be an entity  other  than a natural  person) to
receive any payments to be made upon the Director's death. At any time, and from
time to time,  any such  designation  may be changed or canceled by the Director
without  notice to or the  consent  of any  beneficiary.  Any such  designation,
change, or cancellation  shall be effective upon receipt by the secretary of the
Company of  written  notice  thereof.  If a  Director  designates  more than one
beneficiary,  any payments to such  beneficiaries  shall be made in equal shares
unless the Director has designated  otherwise.  If no beneficiary has been named
by the Director,  or if the designated  beneficiary or beneficiaries  shall have
predeceased  him or her, or shall no longer exist,  the balance shall be paid to
the Director's estate.

     The Committee may, at any time, under rules which it may prescribe,  direct
the  Company to pay a lump sum to a Director  all or any  portion of the balance
then in the Director's  Account, if the Committee finds, in its sole discretion,
that continued  deferral of all or any portion of such balance shall result in a
financial  hardship to such Director or that such Director has become  disabled.
In the case of a then existing election to defer, the Committee's  determination
to pay all or any  portion  of  such  balance  shall  immediately  operate  as a
termination of such election to defer.

7.       TERMINATION OF ELECTION TO DEFER

     A Director may at any time  terminate  his or her election to defer payment
of Fees. Such termination shall become effective on the last day of the month in
which  written  notice  thereof is received  by the  Secretary  of the  Company;
provided,  however,  that any balance in the Account of a Director  prior to the
effective  date of  termination  of an  election  to defer shall not be affected
thereby and shall be paid only in  accordance  with Sections 5 and 6. A Director
who has filed a termination  of election to defer or whose election to defer has
been  terminated  in  accordance  with  Section 6 may  thereafter  again file an
election to defer in accordance with Section 3.

8.       NONASSIGNABILITY

     During  a  Director's  lifetime,  the  right to the  balance  in his or her
Account shall not be transferable or assignable.  Nothing  contained in the Plan
shall create, or be deemed to create, a trust,  actual or constructive,  for the
benefit of a Director or his or her beneficiary,  or shall give, or be deemed to
give,  to any  Director or his or her  beneficiary  any interest in any specific
assets of the Company.

9.       AMENDMENT

     The Board of Directors of the Company may, at any time, without the consent
of the  participants,  amend,  suspend,  or terminate  the Plan.  Subject to any
applicable laws and regulations, no amendment, suspension, or termination of the
Plan shall  operate to annul an election  already in effect for the then current
calendar  year or for any preceding  calendar  year.  Fees shall  continue to be
deferred  until  the end of such  current  calendar  year in  accordance  with a
Director's  then current  election;  and the balance in the  Director's  Account
shall  continue  to be payable in  accordance  with a  Director's  then  current
election and, until paid, to be measured by a factor to be determined  from time
to time by the Committee.

10.      GOVERNING LAW

     The Plan shall be construed and enforced according to the laws of the State
of Wisconsin,  and all the provisions thereof shall be administered according to
the laws of said State.

11.      SEVERABILITY OF PROVISIONS

     If any of the  provisions  of the Plan or the  application  thereof  to any
Director  shall  be held  invalid,  neither  the  remainder  of the Plan nor its
application to any other Director shall be affected thereby.

12.      EFFECTIVE DATE

     The Plan shall become effective on December 1, 1995