SECOND AMENDMENT TO CREDIT AGREEMENT


     This Second Amendment to Credit  Agreement (the  "Amendment") is made as of
this 10th day of November,  2000 by and among AMERICAN  MEDICAL  SECURITY GROUP,
INC. (the "Borrower"), the Lenders named in the Credit Agreement (the "Lenders")
and  LASALLE  BANK  NATIONAL  ASSOCIATION,  as Agent and Swing Line  Lender (the
"Agent").

                               W I T N E S S E T H

     WHEREAS,  the  Borrower,  the Agent and the  Lenders  are  parties  to that
certain  Credit  Agreement,  dated as of March 24, 2000, as amended  pursuant to
that certain  First  Amendment to Credit  Agreement,  dated as of July 18, 2000,
(collectively, the "Credit Agreement); and

     WHEREAS, the parties desire to further amend the Credit Agreement,  as more
fully set forth herein.

     NOW, THEREFORE,  in consideration of the mutual agreements herein contained
and other  good and  valuable  consideration,  the  adequacy  of which is hereby
acknowledged, and subject to the terms and conditions hereof, the parties hereto
agree as follows:

SECTION 1. DEFINITIONS.  Unless otherwise defined herein,  all capitalized terms
shall have the meaning given to them in the Credit Agreement.

SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.

          2.1 Section  2.8(a) of the Credit  Agreement is hereby  deleted in its
     entirety and amended by inserting the following in its stead:

          "2.8.  Mandatory Commitment  Reductions.  (a) The Aggregate Commitment
     shall be automatically and permanently  reduced to the following amounts on
     the following dates:

     Date            Availability Reduction         Aggregate Commitment
November 10, 2000         $ 5,000,000                    $40,000,000
March 24, 2002            $ 5,000,000                    $35,000,000
March 24, 2003            $10,000,000                    $25,000,000
March 24, 2004            $10,000,000                    $15,000,000
March 24, 2005            $15,000,000                    $         0"

          2.2 Section  6.10(ii) of the Credit Agreement is hereby deleted in its
     entirety and amended by inserting the following in its stead:

               "(ii) AMS may repurchase its outstanding stock, provided that any
          such repurchases after the date hereof shall not exceed $10,200,000 in
          the aggregate."

SECTION  3.  CONDITIONS  PRECEDENT.  The  effectiveness  of  this  Amendment  is
expressly conditioned upon satisfaction of the following conditions precedent:

          3.1 The Agent  and the  Lenders  shall  have  received  copies of this
     Amendment duly executed by the Borrower.

          3.2 The Agent  shall have  received,  for the benefit of the Agent and
     the Lenders,  an amendment  fee of $22,500  payable and fully earned on the
     date hereof.

          3.3 The  Agent  and the  Lenders  shall  have  received  copies of the
     Collateral Assignment and Pledge Agreement,  dated as of November 10, 2000,
     duly  executed by the Borrower,  and Borrower  shall have  established  the
     Account  referred  to  therein  with  Agent  and  deposited  the  amount of
     $1,500,000 into the Account on or before the date hereof.

          3.4  The  Agent  and  the  Lenders  shall  have  received  such  other
     documents, certificates and assurances as they shall reasonably request.

SECTION 4.  REAFFIRMATION  OF THE BORROWER.  The Borrower hereby  represents and
warrants  to the  Agent and the  Lenders  that (i) the  warranties  set forth in
Article 5 of the  Credit  Agreement  are true and  correct on and as of the date
hereof,  except to the extent (a) that any such warranties  relate to a specific
date, or (b) changes  thereto are a result of  transactions  for which the Agent
and the Lenders have  granted  their  consent;  (ii) the Borrower is on the date
hereof  in  compliance  with all of the terms  and  provisions  set forth in the
Credit Agreement as hereby amended;  and (iii) upon execution hereof no Event of
Default has occurred and is continuing or has not previously been waived.

SECTION 5. FULL FORCE AND EFFECT. Except as herein amended, the Credit Agreement
and all other Loan Documents shall remain in full force and effect.

SECTION  6.  COUNTERPARTS.  This  Amendment  may be  executed  in  two  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same document.

                            [SIGNATURE PAGE FOLLOWS]
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     IN WITNESS WHEREOF,  the parties hereto have executed this Amendment on the
day and year specified above.

                                 AMERICAN MEDICAL SECURITY GROUP, INC.

                                 By:      /S/ CAROL P. SANDERS
                                 Name:    Carol P. Sanders
                                 Title:   Vice President and Treasurer


                                 LASALLE BANK NATIONAL ASSOCIATION

                                 By:      /S/ JANET R. GATES
                                 Name:    Janet R. Gates
                                 Title:   Senior Vice President


                                 FIRST UNION NATIONAL BANK, NATIONAL ASSOCIATION

                                 By:      /S/ THOMAS L. STITCHBERRY
                                 Name:    Thomas L. Stitchberry
                                 Title:   Senior Vice President


                                 ASSOCIATED BANK GREEN BAY, NATIONAL ASSOCIATION

                                 By:      /S/ DENIS F. HOGAN
                                 Name:    Denis F. Hogan
                                 Title:   Vice President

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                    ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR

     The undersigned,  AMERICAN MEDICAL SECURITY HOLDINGS, INC., hereby ratifies
and reaffirms that certain  Guaranty dated March 24, 2000 (the  "Guaranty") made
by the  undersigned  in favor of the Agent and the Lenders and each of the terms
and provisions contained therein, and agrees that the Guaranty continues in full
force  and  effect  following  the  execution  and  delivery  of  the  foregoing
Amendment.  The undersigned represents and warrants to the Agent and the Lenders
that the Guaranty was, on the date of the execution  and delivery  thereof,  and
continues to be, the valid and binding obligation of the undersigned enforceable
in accordance  with its terms and that the undersigned has no claims or defenses
to the enforcement of the rights and remedies of the Agent and the Lenders under
the Guaranty.

     IN WITNESS WHEREOF, this Acknowledgment and Agreement of Guarantor has been
duly authorized as of this 10th day of November, 2000.

                                 AMERICAN MEDICAL SECURITY HOLDINGS, INC.

                                 By:      /S/ CAROL P. SANDERS
                                 Name:    Carol P. Sanders
                                 Title:   Vice President and Treasurer