EXHIBIT 10.2


                         1995 DIRECTOR STOCK OPTION PLAN
                                       OF
                      AMERICAN MEDICAL SECURITY GROUP, INC.


              (Reflects all amendments through November 16, 1998*)















                         THIS DOCUMENT CONSTITUTES PART
                       OF A PROSPECTUS COVERING SECURITIES
                            THAT HAVE BEEN REGISTERED
                  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.












*As authorized September 25, 1998


<PAGE>


                         1995 DIRECTOR STOCK OPTION PLAN
                                       OF
                      AMERICAN MEDICAL SECURITY GROUP, INC.


1.       PURPOSE OF THE PLAN

     The purpose of the Plan is to attract  and retain  superior  Directors,  to
provide a stronger  incentive for such Directors to put forth maximum effort for
the  continued  success  and growth of the Company  and its  affiliates  and, in
combination  with these goals,  to encourage  stock  ownership in the Company by
Directors.

2.       DEFINITIONS

     Unless the context otherwise  requires,  the following terms shall have the
meanings set forth below:

          (a) "Administrator" shall mean the Board of Directors or any executive
     officer or  officers of the Company  designated  by the Board of  Directors
     which may include the Company's Director of Human Resources.

          (b) "Board of  Directors"  or "Board"  shall mean the entire  board of
     directors  of the Company,  consisting  of both  Employee and  non-Employee
     members.

          (c) "Cause" shall mean:  (I) willful and gross  misconduct on the part
     of a Participant  that is materially  and  demonstrably  detrimental to the
     Company;  or (ii) the commission by a Participant of one or more acts which
     constitute an indictable crime under United States Federal, state, or local
     law.

          (d) "Code" shall mean the Internal Revenue Code of 1986, as amended.

          (e) "Company"  shall mean American  Medical  Security  Group,  Inc., a
     Wisconsin corporation.

          (f) "Director"  shall mean an individual who is a non-Employee  member
     of the Board of Directors.

          (g)  "Disability"  shall mean a physical  or mental  incapacity  which
     results  in a  Director  no  longer  serving  as a member  of the  Board of
     Directors.

          (h) "Effective  Date" shall mean February 22, 1995, or such other date
     as the Board of Directors may establish as the Effective Date.

          (i) "Employee" shall mean an individual who is a full-time employee of
     the Company or a Subsidiary.

          (j) "Exchange Act" shall mean the Securities  Exchange Act of 1934, as
     amended.

          (k) "Fair Market  Value" for a Share shall mean the Market Price for a
     Share on the business day immediately preceding the relevant date.

          (l)  "Market  Price"  shall mean the  closing  price for Shares on the
     relevant date as reported on the New York Stock Exchange, or (if there were
     no sales on such date) the  average of closing  prices on the  nearest  day
     before and the nearest day after the relevant date.

          (m)  "Option"  shall mean an option  which  does not  comply  with the
     provisions  of Section 422 of the Code and which is granted  under the Plan
     to purchase Shares.

          (n) "Option  Agreement"  shall mean the agreement  between the Company
     and a Director whereby an Option is granted to a Director.

          (o)  "Participant"  shall  mean a  Director  of the  Company  who  has
     outstanding an Option granted under the Plan.

          (p) "Person"  shall have the meaning  ascribed to such term in Section
     3(a)(9) of the Exchange Act and used in Sections  13(d) and 14(d)  thereof,
     including a "group" as defined in Section 13(d).

          (q)  "Plan"  shall mean the 1995  Director  Stock  Option  Plan of the
     Company.

          (r)  "Retirement"  shall mean:  (i) a Director's  determination  after
     serving a full  three-year term not to stand for reelection to the Board of
     Directors at the next annual  meeting of the Board,  (ii) the  inability of
     the  Director to stand for  reelection  to the Board due to age  guidelines
     adopted by the Board, or (iii) a Director's  resigning from the Board after
     reaching seventy (70) years of age.

          (s) "Share" shall mean a share of the no par value common stock of the
     Company.

          (t) "Subsidiary" shall mean a subsidiary corporation of the Company as
     defined in Section 424(f) of the Code.

          (u)  "Triggering  Event"  shall be deemed to have  occurred  as of the
     first day that any one or more of the following  conditions shall have been
     satisfied:

               (i) Any  Person  (other  than  those  Persons  in  control of the
          Company  as of the  Effective  Date,  or other than a trustee or other
          fiduciary  holding  securities  under an employee  benefit plan of the
          Company,  or  a  corporation  owned  directly  or  indirectly  by  the
          stockholders of the Company in  substantially  the same proportions as
          their ownership of stock of the Company), becomes the beneficial owner
          (within the meaning of Rule 13d-3 under the Exchange Act), directly or
          indirectly,  of  securities  of the Company  representing  twenty-five
          percent  (25%) or more of the combined  voting power of the  Company's
          then outstanding securities; or

               (ii)  During  any  period  of  two  (2)  consecutive  years  (not
          including any period prior to the Effective Date),  individuals who at
          the  beginning  of such  period  constitute  the  Board  (and  any new
          Director, whose election by the Company's stockholders was approved by
          a vote of at least  two-thirds  (2/3) of the  Directors  then still in
          office who either were  Directors  at the  beginning  of the period or
          whose  election or  nomination  for  election  was so  approved)  (the
          "Incumbent  Board"),  cease for any  reason to  constitute  a majority
          thereof; PROVIDED,  HOWEVER, that any person becoming a Director after
          the Effective Date and whose initial  assumption of office occurs as a
          result of an actual or threatened  election  contest which was (or, if
          threatened, would have been) subject to Rule 14a-11 under the Exchange
          Act shall be excluded from being  considered a member of the Incumbent
          Board; or

               (iii) The  stockholders  of the  Company  approve:  (A) a plan of
          complete  liquidation of the Company; or (B) an agreement for the sale
          or disposition of all or substantially all of the Company's assets; or
          (C) a merger, consolidation,  or reorganization of the Company with or
          involving any other corporation,  other than a merger,  consolidation,
          or  reorganization  that would result in the voting  securities of the
          Company outstanding  immediately prior thereto continuing to represent
          (either by remaining  outstanding  or by being  converted  into voting
          securities of the surviving  entity),  at least fifty percent (50%) of
          the combined voting power of the voting  securities of the Company (or
          such  surviving  entity)  outstanding  immediately  after such merger,
          consolidation, or reorganization.

               However, in no event shall a "Triggering Event" be deemed to have
          occurred, with respect to a Participant, if the Participant is part of
          a purchasing group which consummates the Triggering Event transaction.
          A  Participant  shall be  deemed  "part  of a  purchasing  group"  for
          purposes of the  preceding  sentence if the  Participant  is an equity
          participant  in the  purchasing  company  or group  (except  for:  (i)
          passive  ownership of less than three percent (3%) of the stock of the
          purchasing  company;  or (ii) ownership of an equity  participation in
          the purchasing company or group which is otherwise not significant, as
          determined  prior  to  the  Triggering  Event  by a  majority  of  the
          continuing Directors).

               Following  the  occurrence  of an event which is not a Triggering
          Event whereby there is a successor holding company to the Company, or,
          if  there  is no  such  successor,  whereby  the  Company  is not  the
          surviving  corporation  in a merger or  consolidation,  the  surviving
          corporation  or  successor  holding  company (as the case may be), for
          purposes of this  definition,  shall  thereafter be referred to as the
          Company.

     Words  importing  the singular  shall include the plural and vice versa and
words importing the masculine shall include the feminine.

3.       ADMINISTRATION

     The  Plan  shall  be  administered  by the  Administrator.  The  terms  and
conditions  under which Options may be granted are set forth in Paragraph 6. The
Administrator  shall have the authority to interpret the provisions of the Plan,
to  establish  such rules and  procedures  as may be  necessary  or advisable to
administer  the Plan and to make all  determinations  necessary or advisable for
the administration of the Plan; PROVIDED,  HOWEVER,  that no such interpretation
or determination  shall change or affect the eligibility of Directors to receive
Options, the number of Shares covered by or the timing of any Option grant under
the  Plan  or  the  terms  and  conditions   thereof.   The  interpretation  and
construction  by  the  Administrator  of any  Plan  provision  or of any  Option
Agreement shall be final and binding upon all persons.

4.       SHARES RESERVED UNDER THE PLAN

     The  aggregate  number of Shares which may be issued or sold under the Plan
and which are  subject  to  outstanding  Options  at any time  shall not  exceed
seventy-five   thousand  (75,000)  Shares,  which  may  be  treasury  Shares  or
authorized  but  unissued  Shares,  or a  combination  of the  two,  subject  to
adjustment as provided in Paragraph 10 hereof.  Any Shares  subject to an Option
which  expires or  terminates  for any reason  (whether by voluntary  surrender,
lapse of time or otherwise)  and is  unexercised  as to such Shares may again be
the subject of an Option under the Plan subject to the limits set forth above. A
Director  shall be  entitled  to the rights and  privileges  of  ownership  with
respect to the  Shares  subject to the Option  only after  actual  purchase  and
issuance of such Shares pursuant to exercise of all or part of an Option.

5.       PARTICIPATION

     Only Directors shall be eligible to receive Options under the Plan.

6.       OPTIONS:  TERMS AND CONDITIONS

          (a) OPTION  AGREEMENT.  Each  Option  granted  under the Plan shall be
     evidenced by a written Option  Agreement  which shall specify the number of
     Shares that may be acquired  through its  exercise,  and which shall comply
     with and be subject to the following terms and conditions:

               (i) INITIAL  OPTION  GRANTS.  Upon the Effective Date of the Plan
          each Director  shall be granted an Option to purchase  three  thousand
          (3,000)  Shares,  subject to  adjustment  as provided in  Paragraph 10
          hereof.  The  effective  date of  these  initial  grants  shall be the
          Effective Date of the Plan.

               (ii) GRANTS TO  SUBSEQUENT  DIRECTORS.  To the extent  Shares are
          available for grant under the Plan, each Director who is first elected
          as  a  Director  subsequent  to  the  Effective  Date  (a  "Subsequent
          Director")  shall be granted,  as of the date on which such Subsequent
          Director is  qualified  and first  begins to serve as a  Director,  an
          Option to purchase  5,000 Shares,  subject to  adjustment  pursuant to
          Paragraph  10, or to purchase  such lesser  number of Shares as remain
          available  for grant  under the Plan.  In the event that the number of
          Shares  available for grant under the Plan is insufficient to make all
          grants hereby  specified on the relevant date,  then all Directors who
          are entitled to a grant on such date shall share ratably in the number
          of Shares then  available for grant under the Plan. The purchase price
          per Share  deliverable  upon  exercise of such Option  shall equal the
          Fair  Market  Value of a Share on the date the grant of this Option is
          effective.

               If sufficient  Shares are not available under the Plan to fulfill
          the grant of Options to any  Subsequent  Director  first elected after
          the Effective Date, and thereafter additional Shares become available,
          such  Subsequent  Director  receiving  an Option  for fewer than 5,000
          Shares  shall then  receive an Option to purchase an amount of Shares,
          determined by dividing the number of Shares  available  pro-rata among
          each  Subsequent  Director  receiving  an Option  for fewer than 5,000
          Shares,  then  available  under the Plan,  not to exceed 5,000 Shares,
          subject to adjustment as to any one Subsequent  Director.  The date of
          grant shall be the date such additional Shares become  available.  The
          purchase price per Share  deliverable upon exercise of an Option shall
          equal  the Fair  Market  Value of a Share  on the date the  Option  is
          granted.

               If a  Subsequent  Director  receives an Option to purchase  fewer
          than 5,000  Shares,  subject to  adjustment  pursuant to  Paragraph 10
          hereof, and additional Shares  subsequently become available under the
          Plan, an Option to purchase such Shares shall first be allocated as of
          the  date  of  availability  to any  Subsequent  Director  who has not
          previously  been granted an Option.  Such Options  shall be granted to
          purchase  a number  of  Shares no  greater  than the  number of Shares
          covered by Options granted to other Subsequent Directors first elected
          subsequent to the  Effective  Date,  but who have received  Options to
          purchase  fewer than 5,000 Shares  (subject to adjustment  pursuant to
          Paragraph 10).  Thereafter,  Options for any remaining Shares shall be
          granted  pro-rata among all Subsequent  Directors  granted  Options to
          purchase fewer than 5,000 Shares.  No Director first elected after the
          Effective  Date shall  receive an Option to  purchase  more than 5,000
          Shares (subject to adjustment under Paragraph 10).

               Notwithstanding  anything  to  the  contrary  contained  in  this
          Paragraph 6(a)(ii),  no person who was a participant at any time prior
          to July 24,  1998 shall be  entitled  to receive an Option to purchase
          Shares in excess of 3,000 Shares per such  Participant  as a result of
          the July 24, 1998 amendment of this Paragraph increasing the number of
          Shares  subject to each Option from 3,000 to 5,000  Shares;  provided,
          however, that any such person who continues as a participant following
          completion  of the  distribution  to  shareholders  of the  Company of
          shares of stock of the Company's  wholly owned  subsidiary  Newco/UWS,
          Inc. and who has not already  received  Options to purchase a total of
          5,000 Shares shall be granted an Option to purchase a number of Shares
          equal to 5,000 MINUS the total number of Shares  currently  subject to
          issued and outstanding  Options with respect to such Participant.  

          (b) OPTION EXERCISE PRICE.  The per share exercise price of the Shares
     purchasable  under each Option shall be equal to one hundred percent (100%)
     of the Fair Market Value per Share on the date of grant of such Option.

          (c)  VESTING OF  OPTIONS.  An Option  for Shares can not be  exercised
     until it is vested.  Subject to  acceleration  as provided  below,  Options
     shall  vest  annually  at the rate of  thirty-three  and one third  percent
     (33-1/3%) of the aggregate number of Shares granted  annually  beginning on
     the  first  anniversary  of  the  date  of  grant  and on  each  subsequent
     anniversary of the date of grant thereafter.

          If a Director's tenure ends during the applicable  three-year  period,
     however, the Director's rights in the Option shall be as follows:

               (i)  DEATH,  DISABILITY.  Upon  the  death  or  Disability  of  a
          Director,  each  Option  of such  Director  shall  become  immediately
          exercisable  as to one hundred  percent  (100%) of the Shares  covered
          thereby as of the  Director's  last day of service as a Director  with
          the Company;

               (ii) RETIREMENT. In the event of a Director's Retirement from the
          Board,  such  Director's  Option  shall become  exercisable  as to one
          hundred percent (100%) of the Shares covered thereby as of the earlier
          of:  (I) the date of the  Company's  annual  shareholders'  meeting at
          which he or she would otherwise, but for said Retirement, be a nominee
          for  election  to the  Board,  or (ii) the date on which the  Director
          attains seventy (70) years of age;

               (iii)  TRIGGERING  EVENT.  Upon the  occurrence  of a  Triggering
          Event, each Option outstanding under the Plan shall become immediately
          exercisable  as to one hundred  percent  (100%) of the Shares  covered
          thereby; or

               (iv) ANY OTHER REASON. If a Director's tenure ends for any reason
          other  than  death,  Disability,  Retirement  or as  the  result  of a
          Triggering Event, the unvested portion of such Director's Option shall
          lapse immediately.

          Once any portion of an Option  becomes  exercisable,  it shall  remain
     exercisable  for the  shortest  period of (1) twelve years from the date of
     grant; or (2) two (2) years following the date on which the Director ceases
     to serve in such capacity for any reason other than removal for Cause. If a
     Director  is  removed  for  Cause,  all  outstanding  Options  held  by the
     Participant shall immediately be forfeited to the Company and no additional
     exercise  period shall be allowed,  regardless  of the vested status of the
     Options.

          (d) PAYMENT OF EXERCISE PRICE. The purchase or exercise price shall be
     payable in whole or in part in cash or Shares; and such price shall be paid
     in full at the time that an Option is  exercised.  If a Director  elects to
     pay all or a part  of the  purchase  or  exercise  price  in  Shares,  such
     Director  shall make such payment by  delivering to the Company a number of
     Shares  already  owned by the  Director  equal in value to the  purchase or
     exercise  price.  All Shares so  delivered  shall be valued at their Market
     Price on the  business  day  immediately  preceding  the day on which  such
     Shares are delivered.

7.       TRANSFERABILITY

     An Option granted to a Director  under this Plan shall not be  transferable
or subject to execution,  attachment or similar process, and during the lifetime
of the Director shall be exercisable only by the Director. A Director shall have
the right to transfer the Option upon such Director's death, either by the terms
of such Director's will or under the laws of descent and  distribution,  and all
such  distributees  shall be subject to all terms and conditions of this Plan to
the same extent as would the Director,  except as otherwise  expressly  provided
herein.

     Each  Participant  under  the  Plan  may,  from  time  to  time,  name  any
beneficiary or beneficiaries  (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she  receives  any or all of such  benefit.  Each such  designation  shall
revoke  all  prior  designations  by the  same  Participant,  shall be in a form
prescribed by the Company, and will be effective only when any necessary spousal
consent is obtained and filed by the  Participant  in writing with the Secretary
of the Company  during the  Participant's  lifetime.  In the absence of any such
designation,  benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.

8.       EXERCISE

     An Option shall be  exercisable  by a Director's  giving  written notice of
exercise to the Secretary of the Company  specifying  the number of Shares to be
purchased and such other  documentation  as the  Administrator  shall reasonably
require  accompanied  by payment in full of the  required  exercise  price.  The
Company  shall have the right to delay the issue or delivery of any Shares under
the Plan until: (a) the completion of such registration or qualification of such
Shares under any federal or state law, ruling or regulation as the Company shall
determine  to be necessary  or  advisable,  and (b) receipt from the Director of
such documents and  information as the Company may deem necessary or appropriate
in  connection  with such  registration  or  qualification.  In no event may any
Option  become  exercisable  prior to six (6) months  following  the date of its
grant.

     The  Administrator  also may allow cashless exercise as permitted under the
Federal  Reserve  Board's  Regulation  T, subject to applicable  securities  law
restrictions,  or exercise by any other means which the Administrator determines
to be consistent with the Plan's purpose and applicable law.

9.       SECURITIES LAWS

     Each Option  Agreement shall contain such  representations,  warranties and
other terms and  conditions  as shall be  necessary in the opinion of counsel to
the Company to comply with all applicable federal and state securities laws. The
Plan is intended to comply with Rule 16b-3  promulgated  under the Exchange Act.
Any provision of the Plan or of any Option Agreement inconsistent with the terms
of such Rule shall be inoperative and shall not affect the validity of the Plan,
such Option Agreement or any provision thereof.

10.      ADJUSTMENT PROVISIONS

     In the event of any stock  dividend,  split-up,  recapitalization,  merger,
consolidation,  combination  or exchange of shares,  or the like, as a result of
which shares of any class shall be issued in respect of the outstanding  Shares,
or the Shares shall be changed  into the same or a different  number of the same
or another class of stock, or into  securities of another person,  cash or other
property  (not  including a regular cash  dividend),  the total number of Shares
authorized  to be offered in accordance  with  Paragraph 4, the number of Shares
subject to each outstanding  Option,  the exercise price applicable to each such
Option,  and/or the  consideration  to be  received  upon  exercise of each such
Option shall be appropriately adjusted.

11.      TAXES

     The Company  shall have the power and the right to deduct or  withhold,  or
require a Participant to remit to the Company,  an amount  sufficient to satisfy
Federal,  state,  and local taxes required by law to be withheld with respect to
any taxable event arising or as a result of this Plan, and the Company may defer
making delivery of Shares  obtained  pursuant to the exercise of an Option until
arrangements  satisfactory  to it  have  been  made  with  respect  to any  such
withholding  obligations.  If a withholding  obligation should arise, a Director
exercising an Option may, at his or her election,  provided  applicable laws and
regulations  are complied  with,  satisfy his or her  obligation  for payment of
withholding  taxes either by having the Company retain a number of Shares having
an  aggregate  Market  Price on the date the  Shares are  withheld  equal to the
amount of the  withholding  tax or by delivering to the Company  Shares  already
owned by the  Director  having an  aggregate  Market  Price on the  business day
immediately  preceding the day on which such Shares are  delivered  equal to the
amount of the withholding tax. In addition, the Director's tax obligation may be
satisfied through a cashless exercise, if the Administrator so allows.

12.      EFFECTIVE DATE OF THE PLAN

     Upon  approval  by the  Board  of  Directors  of the  Company,  subject  to
ratification  by an  affirmative  vote of a  majority  of  Shares  at an  annual
shareholders'  meeting of the  Company,  the Plan shall  become  effective as of
February  22,  1995,  or such later date as the Board may  determine,  and shall
remain in effect as provided herein. Options may be granted prior to shareholder
ratification  of the Plan;  provided,  however,  that in the  event  shareholder
approval of the Plan is not obtained,  all outstanding Options shall become null
and void.

13.      TERMINATION AND AMENDMENT

     With  the  approval  of the  Board  of  Directors,  the  Administrator  may
terminate the Plan or make such  modifications or amendments thereof as it shall
deem advisable,  including, but not limited to, such modifications or amendments
as it  shall  deem  advisable  in  order  to  conform  to any law or  regulation
applicable thereto; provided,  HOWEVER, that the Administrator may not amend the
Plan more  frequently  than once  every six months  (except  as to comport  with
changes in the Code or the Employee  Retirement  Income Security Act of 1974, as
amended) and may not,  unless  otherwise  permitted  under federal law,  without
further approval of the holders of a majority of the Shares voted at any meeting
of shareholders at which a quorum is present and voting,  adopt any amendment to
the Plan for which shareholder approval is required under tax, securities or any
other applicable law,  including,  but not limited to, any amendment to the Plan
which would cause the Plan to no longer  comply with Rule 16b-3 of the  Exchange
Act or any successor rule or other regulatory requirements. Subject to the right
of the Administrator to terminate the Plan at any time, the Plan shall remain in
effect  until all Shares  subject to it shall have been  purchased  or  acquired
according to the Plan's provisions.  However, in no event may an Option award be
granted  under  the  Plan  on  or  after  February  22,  2005.  No  termination,
modification  or amendment  of the Plan may,  without the consent of a Director,
adversely  affect the rights of such Director under an  outstanding  Option then
held by the Director.

14.      TENURE

     The grant of an Option pursuant to the Plan is no guarantee that a Director
will be renominated,  reelected or reappointed as a Director, and nothing in the
Plan shall be construed as  conferring  upon a Director the right to continue to
be associated with the Company as a Director or otherwise.

15.      SUCCESSORS

     All  obligations  of the  Company  under the Plan,  with  respect to Option
grants hereunder,  shall be binding on any successor to the Company, whether the
existence  of such  successor  is the result of a direct or  indirect  purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

16.      APPLICABLE LAW

     The Plan will be  administered  in accordance with the laws of the State of
Wisconsin.