UNITED STATES

                       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 SEPTEMBER 30, 2002
       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) 661-1111



Indicate by check mark whether the 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 October 31, 2002: 12,889,898
shares



<PAGE>




                      AMERICAN MEDICAL SECURITY GROUP, INC.

                                      INDEX

PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)

          Condensed Consolidated Balance Sheets

               September 30, 2002 and December 31, 2001........................3

          Condensed Consolidated Statements of Operations
               Three months ended September 30, 2002 and 2001;
               Nine months ended September 30, 2002 and 2001...................4

          Condensed Consolidated Statements of Cash Flows

                Nine months ended September 30, 2002 and 2001..................5

          Notes to Condensed Consolidated Financial Statements

               September 30, 2002..............................................6

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

Item 3.   Quantitative and Qualitative Disclosures About Market Risk..........16

Item 4.   Controls and Procedures.............................................16

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings...................................................17

Item 6.   Exhibits and Reports on Form 8-K....................................18

Signatures....................................................................19

Certifications................................................................20

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


                                        2
<PAGE>


PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>

                                                                                September 30,        December 31,
(THOUSANDS, EXCEPT SHARE DATA)                                                      2002                 2001
-----------------------------------------------------------------------------------------------------------------
                                                                                (Unaudited)
<S>                                                                             <C>                  <C>
ASSETS
Investments:
   Securities available for sale, at fair value:
     Fixed maturities                                                           $   276,601          $   269,753
     Equity securities-preferred                                                          -                  722
   Fixed maturity securities held to maturity, at amortized cost                      4,297                4,286
   Trading securities, at fair value                                                    786                  517
-----------------------------------------------------------------------------------------------------------------
Total investments                                                                   281,684              275,278


Cash and cash equivalents                                                            17,629               24,975
Property and equipment, net                                                          34,347               33,381
Goodwill, net                                                                        32,846              100,343
Other intangibles, net                                                                3,043                3,591
Other assets                                                                         44,141               35,447
-----------------------------------------------------------------------------------------------------------------
Total assets                                                                    $   413,690          $   473,015
-----------------------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Medical and other benefits payable                                           $   134,178          $   135,504
   Advance premiums                                                                  16,743               16,737
   Payables and accrued expenses                                                     27,850               28,032
   Notes payable                                                                     34,158               40,058
   Other liabilities                                                                 24,221               23,284
-----------------------------------------------------------------------------------------------------------------
Total liabilities                                                                   237,150              243,615

Shareholders' equity:
   Common stock (no par value, $1 stated value, 50,000,000 shares authorized,
     16,654,315 issued and 12,889,898 outstanding at September 30, 2002,
     16,654,315 issued and 13,955,439 outstanding at December 31, 2001)              16,654               16,654
   Paid-in capital                                                                  189,738              187,927
   Retained earnings (deficit)                                                       (3,219)              40,470
   Accumulated other comprehensive income (net of tax expense of
     $4,121 at September 30, 2002 and $1,024 at December 31, 2001)                    7,655                1,903
   Treasury stock (3,764,417 shares at September 30, 2002
     and 2,698,876 shares at December 31, 2001, at cost)                            (34,288)             (17,554)
-----------------------------------------------------------------------------------------------------------------
Total shareholders' equity                                                          176,540              229,400
-----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity                                      $   413,690          $   473,015
-----------------------------------------------------------------------------------------------------------------
</TABLE>

See Notes to Condensed Consolidated Financial Statements

                                        3
<PAGE>


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>

                                                       Three Months Ended            Nine Months Ended
                                                          September 30,                September 30,
                                                  --------------------------------------------------------
(THOUSANDS, EXCEPT PER COMMON SHARE DATA)           2002           2001           2002           2001
----------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>            <C>            <C>
REVENUES
   Insurance premiums                             $  187,135     $  204,399     $  572,323     $  640,514
   Net investment income                               3,591          4,280         11,314         13,199
   Net realized investment gains (losses)                 39           (660)           101           (839)
   Other revenue                                       4,945          5,369         15,288         16,078
----------------------------------------------------------------------------------------------------------
Total revenues                                       195,710        213,388        599,026        668,952


EXPENSES
   Medical and other benefits                        124,699        144,000        385,690        466,754
   Selling, general and administrative                60,972         61,513        184,024        195,797
   Interest expense                                      460            687          1,417          2,307
   Amortization of goodwill and intangibles              183            906            548          2,720
----------------------------------------------------------------------------------------------------------
Total expenses                                       186,314        207,106        571,679        667,578
----------------------------------------------------------------------------------------------------------

Income before income taxes and cumulative
   effect of a change in accounting principle          9,396          6,282         27,347          1,374

Income tax expense                                     3,658          2,778         10,938          1,544
----------------------------------------------------------------------------------------------------------

Income (loss) before cumulative effect
   of a change in accounting principle                 5,738          3,504         16,409           (170)

Cumulative effect of a change in accounting
   principle                                               -              -        (60,098)             -
----------------------------------------------------------------------------------------------------------
Net income (loss)                                 $    5,738     $    3,504     $  (43,689)    $     (170)
----------------------------------------------------------------------------------------------------------


Earnings (loss) per common share - basic:
   Income (loss) before cumulative effect of a
     change in accounting principle               $     0.45     $     0.25     $     1.25     $    (0.01)
   Cumulative effect of a change in accounting
     principle                                             -              -          (4.59)             -
----------------------------------------------------------------------------------------------------------
Net income (loss)                                 $     0.45     $     0.25     $    (3.34)    $    (0.01)
----------------------------------------------------------------------------------------------------------


Earnings (loss) per common share - diluted:
   Income (loss) before cumulative effect of a
     change in accounting principle               $     0.42     $     0.25     $     1.18     $    (0.01)
   Cumulative effect of a change in accounting
     principle                                             -              -          (4.31)             -
----------------------------------------------------------------------------------------------------------
Net income (loss)                                 $     0.42     $     0.25     $    (3.13)    $    (0.01)
----------------------------------------------------------------------------------------------------------



See Notes to Condensed Consolidated Financial Statements

</TABLE>

                                        4
<PAGE>


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
                                                                         Nine Months Ended
                                                                            September 30,
                                                                  -------------------------------
(THOUSANDS)                                                           2002                 2001
-------------------------------------------------------------------------------------------------
<S>                                                               <C>                <C>
OPERATING ACTIVITIES
Net loss                                                          $   (43,689)       $      (170)
Adjustments to reconcile net loss to net cash
  provided by operating activities:
    Cumulative effect of a change in accounting principle              60,098                  -
    Depreciation and amortization                                       6,683              7,757
    Net realized investment (gains) losses                               (101)               839
    Increase in trading securities                                       (269)              (128)
    Deferred income tax benefit                                       (10,586)              (702)
    Changes in operating accounts:
      Other assets                                                      6,384              2,186
      Medical and other benefits payable                               (1,326)           (13,282)
      Advance premiums                                                      6             (1,433)
      Payables and accrued expenses                                      (182)             4,456
      Other liabilities                                                 2,467                949
-------------------------------------------------------------------------------------------------
Net cash provided by operating activities                              19,485                472


INVESTING ACTIVITIES
Purchases of available for sale securities                           (141,287)           (87,078)
Proceeds from sale of available for sale securities                   139,899             93,594
Proceeds from maturity of available for sale securities                 3,350              8,030
Purchases of held to maturity securities                               (1,925)                 -
Proceeds from maturity of held to maturity securities                   1,925                  -
Purchases of property and equipment                                    (6,257)            (4,349)
Proceeds from sale of property and equipment                                7                  8
-------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities                    (4,288)            10,205


FINANCING ACTIVITIES
Issuance of common stock                                                2,897                 26
Purchase of treasury stock                                            (19,540)            (2,102)
Repayment of notes payable                                             (5,900)              (900)
-------------------------------------------------------------------------------------------------
Net cash used in financing activities                                 (22,543)            (2,976)
-------------------------------------------------------------------------------------------------

Cash and cash equivalents:
   Net increase (decrease)                                             (7,346)             7,701
   Balance at beginning of year                                        24,975             15,606
-------------------------------------------------------------------------------------------------
Balance at end of period                                          $    17,629        $    23,307
-------------------------------------------------------------------------------------------------
</TABLE>



See Notes to Condensed Consolidated Financial Statements

                                        5
<PAGE>


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2002


1.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States 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 accounting  principles  generally
accepted  in the United  States  ("GAAP")  for  complete  financial  statements.
Certain  reclassifications  have been made to the 2001 financial  information to
conform to the 2002 presentation.  In the opinion of management, all adjustments
(consisting of normal  recurring  adjustments)  considered  necessary for a fair
presentation have been included.  Operating results for the three and nine month
periods ended September 30, 2002 are not  necessarily  indicative of the results
that may be expected  for the year ending  December 31,  2002.  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. (the "Company") annual report on Form 10-K for the
year ended December 31, 2001.

2.  NEW ACCOUNTING STANDARD

On January 1, 2002,  the  Company  adopted  Statement  of  Financial  Accounting
Standards  No. 142,  GOODWILL AND OTHER  INTANGIBLE  ASSETS  ("Statement  142").
Statement  142  impacts the  Company in two ways.  First,  goodwill is no longer
amortized.  Second,  goodwill  is  subject  to an  initial  impairment  test  in
accordance  with  Statement  142, and any remaining  balance of goodwill will be
subject to future impairment testing. The Company completed the initial goodwill
impairment test during the second quarter of 2002 with the assistance of outside
valuation  consultants.  As a  result  of  this  impairment  test,  the  Company
recognized a non-cash goodwill impairment charge of approximately $60.1 million.
The  impairment  charge  is  recorded  as a  cumulative  effect  of a change  in
accounting  principle as of January 1, 2002,  and therefore  impacts the results
for the first  quarter of 2002 and results for the nine months  ended  September
30, 2002. Subsequent  impairment tests will be performed at least annually,  and
future goodwill impairments, if any, will be classified as operating expenses in
the Company's statement of operations.

The  following  table  illustrates  net income  (loss) and net income (loss) per
share adjusted to exclude the effects of amortizing goodwill:

<TABLE>

                                                        Three Months Ended            Nine Months Ended
                                                           September 30,                September 30,
                                                  ---------------------------------------------------------------
(THOUSANDS, EXCEPT PER COMMON SHARE DATA)             2002          2001             2002           2001
-----------------------------------------------------------------------------------------------------------------

<S>                                               <C>            <C>            <C>            <C>
Reported net income (loss)                        $    5,738    $    3,504      $  (43,689)    $     (170)
Add back:  goodwill amortization                           -           671               -          2,013
-----------------------------------------------------------------------------------------------------------------
Adjusted net income (loss)                        $    5,738    $    4,175      $  (43,689)    $    1,843
-----------------------------------------------------------------------------------------------------------------

Basic earnings (loss) per common share:
   Reported net income (loss)                     $     0.45    $     0.25      $    (3.34)    $    (0.01)
   Goodwill amortization                                   -          0.05               -           0.14
-----------------------------------------------------------------------------------------------------------------
   Adjusted net income (loss)                     $     0.45    $     0.30      $    (3.34)    $     0.13
-----------------------------------------------------------------------------------------------------------------

Diluted earnings (loss) per common share:
   Reported net income (loss)                     $     0.42    $     0.25      $    (3.13)    $    (0.01)
   Goodwill amortization                                   -          0.05               -           0.14
-----------------------------------------------------------------------------------------------------------------
   Adjusted net income (loss)                     $     0.42    $     0.30      $    (3.13)    $     0.13
-----------------------------------------------------------------------------------------------------------------
</TABLE>

                                        6

<PAGE>


3.  EARNINGS (LOSS) PER COMMON SHARE ("EPS")

Basic EPS are  computed by dividing net income  (loss) by the  weighted  average
number of common  shares  outstanding.  Diluted EPS are computed by dividing net
income  (loss) by the  weighted  average  number of common  shares  outstanding,
adjusted for the effect of dilutive stock options.

The following  table  illustrates  the computation of EPS for income (loss) from
continuing  operations and provides a  reconciliation  of the number of weighted
average basic and diluted shares outstanding:
<TABLE>

                                                       Three Months Ended              Nine Months Ended
                                                         September 30,                   September 30,
                                                  --------------------------------------------------------------
(THOUSANDS, EXCEPT PER COMMON SHARE DATA)              2002           2001           2002           2001
----------------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>            <C>            <C>
Numerator:
   Income (loss) before cumulative effect
     of a change in accounting principle          $    5,738    $    3,504      $   16,409     $     (170)
----------------------------------------------------------------------------------------------------------------

Denominator:
   Denominator for basic EPS                          12,890        13,992          13,099         14,081
   Effect of dilutive employee stock options             824            71             855              -
----------------------------------------------------------------------------------------------------------------
   Denominator for diluted EPS                        13,714        14,063          13,954         14,081
----------------------------------------------------------------------------------------------------------------

Earnings (loss) per common share
   before cumulative effect of a change
   in accounting principle:
   Basic                                          $     0.45    $     0.25      $     1.25     $    (0.01)
   Diluted                                        $     0.42    $     0.25      $     1.18     $    (0.01)
----------------------------------------------------------------------------------------------------------------
</TABLE>

     The effect of dilutive  securities  was excluded from the diluted  earnings
(loss) per common share computation for the nine months ended September 30, 2001
because the Company had a net loss for this period;  therefore,  their inclusion
would have been  antidilutive.  Certain  options  to  purchase  shares  were not
included in the computation of diluted  earnings (loss) per common share because
the options'  exercise  prices were greater than the average market price of the
outstanding common shares for the period.

4.  COMPREHENSIVE INCOME (LOSS)

Comprehensive  income (loss) is defined as net income (loss) plus or minus other
comprehensive  income  (loss).  For  the  Company,   under  existing  accounting
standards,  other  comprehensive  income (loss)  includes  unrealized  gains and
losses,  net of income tax effects,  on certain  investments  in debt and equity
securities.  Comprehensive  income  (loss)  for the  Company  is  calculated  as
follows:

<TABLE>

                                                       Three Months Ended             Nine Months Ended
                                                          September 30,                 September 30,
                                                  --------------------------------------------------------------
(THOUSANDS)                                            2002           2001           2002           2001
----------------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>            <C>            <C>
Net income (loss)                                 $    5,738     $    3,504     $  (43,689)    $     (170)
Unrealized gain on available
   for sale securities                                 4,604          4,944          5,752          7,932
----------------------------------------------------------------------------------------------------------------
Comprehensive income (loss)                       $   10,342     $    8,448     $  (37,937)    $    7,762
----------------------------------------------------------------------------------------------------------------
</TABLE>

                                        7

<PAGE>


5.  CREDIT AGREEMENT

At September 30, 2002,  the Company  maintained a revolving  bank line of credit
agreement with an outstanding  balance and maximum  commitment of $30.2 million.
At December 31, 2001, the outstanding  balance and maximum  commitment under the
credit  agreement was $35.2 million.  The credit  agreement  contains  customary
covenants  which,  among other matters,  require the Company to achieve  minimum
financial  results and restrict the Company's  ability to incur additional debt,
pay future cash dividends and dispose of assets  outside the ordinary  course of
business. The Company was in compliance with all such covenants at September 30,
2002  and  anticipates  continued  compliance  in the  foreseeable  future.  The
Company's   obligations  under  the  credit  agreement  are  guaranteed  by  its
subsidiary,  American  Medical Security  Holdings,  Inc. ("AMS  Holdings"),  and
secured by pledges of stock of AMS Holdings and United  Wisconsin Life Insurance
Company ("UWLIC"), the Company's principal insurance subsidiary.

6.  CONTINGENCIES

In February  2000, a class action  lawsuit was filed  against the Company in the
state of  Florida  alleging  the  Company  did not  follow  Florida  law when it
discontinued  writing certain health insurance policies and offered new policies
in 1998. Plaintiffs claim the Company wrongfully terminated coverage, improperly
notified  insureds of conversion  rights and charged  improper  premiums for new
coverage.  Plaintiffs also alleged that the Company's renewal rating methodology
violates Florida law. On April 24, 2002, a Circuit Court Judge ruled against the
Company and ordered the question of damages be tried at a later date. Plaintiffs
are seeking damages unspecified in the complaint.  A new judge has been assigned
to the case and a trial date for the damages  portion of the lawsuit has not yet
been rescheduled.

In a separate administrative  proceeding involving substantially similar issues,
the Florida  Department of Insurance issued an administrative  complaint against
the Company in May 2001, challenging the Company's rating and other practices in
Florida  relating  to  the  Company's  MedOneSM  products  for  individuals  and
families.  MedOneSM products sold by the Company in Florida are written pursuant
to a group master policy issued to an association domiciled in another state. In
a recommended  order entered April 25, 2002, the  Administrative  Law Judge held
that the evidence  presented  by the Florida  Department  of  Insurance  did not
support a conclusion  that the Company had violated  any  provisions  of Florida
law.  The   Administrative   Law  Judge  recommended  that  all  counts  of  the
administrative  complaint be dismissed.  The  recommended  order was sent to the
Commissioner of the Florida  Department of Insurance for entry of a final order.
On July 24,  2002,  the Florida  Department  of  Insurance  issued a final order
affirming the recommendations  from the Administrative Law Judge with respect to
six of eight  counts.  Among other  things,  the final order  affirmed  that the
policy  issued  to  the   association   was  exempt  from  most  Florida  rating
requirements.  However,  the Department  reversed the Administrative Law Judge's
finding  that tier  rating  does not violate  state law  applicable  to policies
issued out of state, and ordered the suspension of the Company's license to sell
new  business  in Florida  for one year.  The  Department's  order  specifically
permits the Company to continue to renew its  existing  business in Florida.  On
July 29,  2002,  the First  District  Court of Appeals  for the State of Florida
stayed the order of the Florida  Department of Insurance.  The stay is effective
until the Court of Appeals rules on the Company's request to overturn the order.
The Company anticipates a reversal of the final order on appeal. The Company has
voluntarily  implemented  a block  rating  system for its  MedOneSM  business in
Florida effective  November 1, 2002, and has discontinued its tier rating system
in that state.

The Company is involved in various other legal and regulatory  actions occurring
in the normal course of business.  These actions  include  threatened and actual
challenges to the Company's rating  methodology.  Based on current  information,
including  consultation with outside counsel,  management  believes any ultimate
liability  that may  arise  from the  above-mentioned  and all  other  legal and
regulatory  actions  would not  materially  affect  the  Company's  consolidated
financial position or results of operations. However, management's evaluation of
the likely impact of these actions could change in the future and an unfavorable
outcome  could  have a material  adverse  effect on the  Company's  consolidated
financial position, results of operations or cash flow of a future period.


                                        8
<PAGE>


7.  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  preferred  provider  organization   products:
MedOneSM (for  individuals  and families) and small group  medical,  self funded
medical,  dental and short-term  disability.  Life products consist primarily of
group  term-life  insurance.  The "All Other" category  includes  operations not
directly related to the business segments and unallocated corporate items (i.e.,
corporate investment income, interest expense on corporate debt, amortization of
goodwill and  intangibles  and unallocated  overhead  expenses).  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 income or loss before income
taxes,  excluding 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 segment information.

A  reconciliation  of segment  income (loss) before income taxes and  cumulative
effect of a change in accounting  principle to consolidated income (loss) before
income taxes is as follows:

<TABLE>

                                                       Three Months Ended           Nine Months Ended
                                                         September 30,                September 30,
                                                  --------------------------------------------------------------
(THOUSANDS)                                            2002           2001           2002           2001
----------------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>            <C>            <C>
Health segment                                    $    8,488     $    5,788     $   24,940     $   (1,397)
Life segment                                           1,521          1,615          4,456          4,963
All other                                               (613)        (1,121)        (2,049)        (2,192)
----------------------------------------------------------------------------------------------------------------
Income before income taxes and cumulative effect  $    9,396     $    6,282     $   27,347     $    1,374
of a change in accounting principle
----------------------------------------------------------------------------------------------------------------

</TABLE>
                                        9

<PAGE>


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

                                                           Three Months Ended               Nine Months Ended
HEALTH SEGMENT                                               September 30,                    September 30,
                                                        ----------------------------------------------------------
(THOUSANDS)                                               2002           2001              2002           2001
------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>               <C>            <C>

REVENUES
   Insurance premiums                                   $  183,752    $  200,256        $  561,786     $  626,354
   Net investment income                                     1,484         2,299             5,227          7,014
   Other revenue                                             4,115         4,370            12,638         12,957
------------------------------------------------------------------------------------------------------------------
Total revenues                                             189,351       206,925           579,651        646,325


EXPENSES
   Medical and other benefits                              123,792       142,766           382,541        461,944
   Selling, general and administrative                      57,071        58,371           172,170        185,778
------------------------------------------------------------------------------------------------------------------
Total expenses                                             180,863       201,137           554,711        647,722
------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                       $    8,488    $    5,788        $   24,940     $   (1,397)
------------------------------------------------------------------------------------------------------------------


Loss ratio                                                    67.4%         71.3%             68.1%          73.8%
Expense ratio                                                 28.8%         27.0%             28.4%          27.6%
------------------------------------------------------------------------------------------------------------------
Combined ratio                                                96.2%         98.3%             96.5%         101.4%
------------------------------------------------------------------------------------------------------------------


Health membership at end of period:
   Fully insured medical                                   309,980       363,922
   Self funded medical                                      43,426        45,180
   Dental                                                  235,454       257,970
---------------------------------------------------------------------------------
Total health membership                                    588,860       667,072
---------------------------------------------------------------------------------
</TABLE>

<TABLE>

                                                           Three Months Ended               Nine Months Ended
LIFE SEGMENT                                                 September 30,                    September 30,
                                                        ----------------------------------------------------------
(THOUSANDS)                                                2002           2001              2002           2001
------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>               <C>            <C>
REVENUES
   Insurance premiums                                   $    3,383    $    4,135        $   10,534     $   13,581
   Net investment income                                       141           160               444            496
   Other revenue                                                27            38                88            120
------------------------------------------------------------------------------------------------------------------
Total revenues                                               3,551         4,333            11,066         14,197


EXPENSES
   Medical and other benefits                                  907         1,356             3,142          5,038
   Selling, general and administrative                       1,123         1,362             3,468          4,196
------------------------------------------------------------------------------------------------------------------
Total expenses                                               2,030         2,718             6,610          9,234
------------------------------------------------------------------------------------------------------------------
Income before income taxes                              $    1,521    $    1,615        $    4,456     $    4,963
------------------------------------------------------------------------------------------------------------------


Loss ratio                                                    26.8%         32.8%             29.8%          37.1%
Expense ratio                                                 32.4%         32.0%             32.1%          30.0%
------------------------------------------------------------------------------------------------------------------
Combined ratio                                                59.2%         64.8%             61.9%          67.1%
-------------------------------------------------------------------------------------------------------------------


Life membership at end of period                           158,343       196,035
---------------------------------------------------------------------------------
</TABLE>

                                        10
<PAGE>


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


OVERVIEW

American Medical Security Group,  Inc.,  together with its subsidiary  companies
(the "Company"),  is a provider of individual and small employer group insurance
products.  The Company's  principal  product  offerings are health insurance for
small employer groups and health insurance  products marketed to individuals and
families ("MedOneSM").  The Company also offers dental, life, prescription drug,
disability  and  accidental  death  insurance,  and provides self funded benefit
administration.  The Company  markets its products in 32 states and the District
of Columbia through  independent  agents. The Company has approximately 75 sales
managers  located in sales offices  throughout  the United States to support the
independent  agents.  The  Company's  products  generally  provide  discounts to
insureds that utilize preferred  provider  organizations  ("PPOs").  The Company
owns a preferred  provider  network and also  contracts  with other  networks to
ensure cost-effective health care choices to its members.

RESULTS OF OPERATIONS

The Company  reported net income of $5.7 million or $0.42 per diluted  share for
the third  quarter of 2002,  compared to net income of $3.5 million or $0.25 per
diluted  share  for the  third  quarter  of  2001.  The  third  quarter  of 2002
represents the Company's  eighth  consecutive  quarter of improved  earnings per
share, excluding  non-recurring items. For the nine month period ended September
30, 2002, the Company  reported a net loss of $43.7 million or $3.13 per diluted
share, including a $60.1 million write-down of goodwill during the first quarter
of 2002, resulting from the implementation of a new accounting principle. Income
before cumulative  effect of a change in accounting  principle was $16.4 million
for the nine months ended  September 30, 2002,  compared with a net loss of $0.2
million for the same period of the prior year.

The improvement in profitability from the prior year emanates principally from a
lower  MedOneSM and small  employer  group loss ratio as premiums per member per
month  continue  to  increase  faster  than  claims per  member  per month.  The
improvement in the loss ratio is primarily attributed to management's  strategic
actions including  increased premium rates on new and renewal business,  focused
marketing  efforts for small  employer  group  products in markets with the best
prospects for profitability and future growth,  and redesigned  products to meet
the changing needs of today's insurance  consumers.  The elimination of goodwill
amortization  due to a change in  accounting  for goodwill and other  intangible
assets contributed  approximately  $0.05 per diluted share to third quarter 2002
earnings  and $0.14 per diluted  share for the nine months ended  September  30,
2002. See the table in Note 2 to the Company's condensed  consolidated financial
statements for an illustration of the impact of the accounting method change.

Effective  January 1, 2002,  the  Company  adopted new rules on  accounting  for
goodwill and other  intangible  assets.  The new rules impact the Company in two
ways. First, goodwill is no longer amortized.  Second, goodwill is subject to an
initial  impairment  test in  accordance  with the new rules,  and any remaining
balance of goodwill will be subject to future  impairment  testing.  The Company
completed the initial goodwill impairment test during the second quarter of 2002
with the  assistance  of  outside  valuation  consultants.  As a result  of this
impairment test, the Company recognized a non-cash goodwill impairment charge of
approximately  $60.1  million,  which is classified as a cumulative  effect of a
change in accounting  principle as of January 1, 2002. The impairment charge has
no  impact on cash  flows or the  statutory-basis  capital  and  surplus  of the
Company's insurance subsidiaries.  Subsequent impairment tests will be performed
at least annually,  and future goodwill impairments,  if any, will be classified
as operating expenses in the Company's statement of operations.

                                        11
<PAGE>


INSURANCE PREMIUMS AND MEMBERSHIP

Insurance  premiums for the three months ended September 30, 2002 decreased 8.5%
to $187.1  million from $204.4 million for the same period in 2001. For the nine
month period ended  September 30, 2002,  insurance  premiums  decreased 10.6% to
$572.3  million from $640.5  million for the same period in the prior year.  The
decrease  primarily  resulted  from a decline in  membership.  Total medical and
dental membership declined from 667,072 members at September 30, 2001 to 588,860
members at September 30, 2002.  The  membership  decrease from the prior year is
primarily the result of the Company's efforts in terminating business in several
unprofitable  markets.  Premium rate increases  resulting in lower new sales and
higher  lapse rates on existing  business  also  contributed  to the  membership
decline. Partially offsetting the effect of declining membership was the rise in
premium rates on the continuing block of business. Average fully insured medical
premium  per member  per month for the nine  months  ended  September  30,  2002
increased by 12.0% to $170, compared to the same period in 2001,  reflecting the
Company's  continued  pricing  discipline.  Membership  at the end of the  third
quarter 2002 also  declined  compared to membership of 597,983 at the end of the
second quarter of 2002.  Management believes the membership decline in the third
quarter  resulted  from a  reduction  in new  sales  primarily  due to  negative
national publicity  surrounding the Company's tier rating system and the related
legal matters in the state of Florida.

The Company is currently  expanding and  realigning  its sales  organization  to
improve new member enrollment and persistency.  The Company continues to analyze
its  pricing  posture  in key  states  to ensure  competitiveness,  roll out new
products,  establish  regional  marketing centers to expand  distribution of the
Company's  MedOneSM  product,  and implement  aggressive  agent  recruitment and
incentive  programs.  Management is also  continuing  its focus on the Company's
small group business,  which is experiencing  increased new member enrollment as
well as improved profitability.

NET INVESTMENT INCOME

Net investment  income was $3.6 million for the three months ended September 30,
2002,  compared to $4.3 million for the same period in 2001.  For the nine month
period  ended  September  30, 2002,  net  investment  income  decreased to $11.3
million from $13.2  million for the same period in the prior year.  The decrease
in net  investment  income is due primarily to a decrease in the average  annual
investment yield from 2001 to 2002. The average annual investment yield was 5.5%
for the first nine months of 2002  compared to 6.6% for the first nine months of
2001.

LOSS RATIO

The health loss ratio for the third quarter of 2002 was 67.4%  compared to 71.3%
for the third  quarter of 2001.  The health loss ratio for the nine months ended
September  30,  2002 was  68.1%  compared  to 73.8%  for the nine  months  ended
September  30, 2001.  The third  quarter 2002 health loss ratio is at its lowest
point  in three  years.  The  significant  improvement  was due to  management's
actions  and  strategies  to  increase  premium  rates and  combat the impact of
medical  inflation.  These actions included premium rate increases,  claims cost
control  initiatives  and the exit from  unprofitable  small group markets.  The
reduction also reflects increased sales of MedOneSM  products,  which are priced
for a lower loss ratio but have higher  selling  and  administrative  costs.  As
anticipated,  claim costs per member per month have increased slightly, but were
surpassed by increased premiums per member per month. Average premium per member
per month for the nine months ended  September 30, 2002 increased 12.0% compared
to the same period in 2001.  Average  claims costs  increased only 4.2% over the
same period. Medical and other benefits payable includes the Company's estimated
cost to settle or resolve claims-related litigation. Management closely monitors
developments  in litigation and emerging trends in claims costs to determine the
adequacy and  reasonableness  of the Company's related reserves and adjusts such
reserves when necessary.

The life segment loss ratio for the three  months ended  September  30, 2002 was
26.8% compared to 32.8% for the three months ended  September 30, 2001. The life
segment loss ratio may  fluctuate  from quarter to quarter as actual life claims
experience  fluctuates.  The life  segment  loss ratio for the nine months ended
September 30, 2002 was 29.8% compared with 37.1% for the same period in 2001.

                                        12
<PAGE>


SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RATIO

The  selling,   general  and  administrative  ("SG&A")  expense  ratio  includes
commissions and selling expenses, administrative expenses (less other revenues),
and premium taxes and  assessments.  The SG&A expense  ratio for health  segment
products for the three months ended September 30, 2002 was 28.8%.  This compares
to the third quarter of 2001 SG&A expense ratio of 27.0%. The SG&A expense ratio
has  increased  over the past two years.  The increase  largely  reflects  lower
premium  volume  and a product  mix  change  driven  by  growth in the  MedOneSM
business,  which has higher  selling  and  administrative  costs but lower claim
costs than small employer group products.

OTHER MATTERS

In  twenty-two  states,  the Company uses a methodology  for  computing  renewal
premium for its MedOneSM  products  known as "tier  rating." In ten states,  the
Company uses a "block rating" methodology. In August 2002, the Company announced
that by January 1, 2003, it would implement a block rating system for all of its
MedOneSM health benefit  products in all states in which it does business.  This
change has been fully  implemented for all business renewing on or after January
1, 2003.  Management  believes the change will have no material effect on future
earnings.  The  Company's  tier  rating  methodology  has  been the  subject  of
significant adverse publicity and actual and threatened  litigation.  See Note 6
to the Company's condensed  consolidated  financial statements and Part II, Item
1, Legal Proceedings.

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  payment of medical and other  benefits,  SG&A expenses and debt service
costs.  Positive cash flows are invested pending future payments of 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 provided by operations was $19.5 million for the nine months
ended September 30, 2002, already exceeding cash flow provided by operations for
the full year of 2001 of $17.6  million.  Cash provided by  operations  was $0.5
million for the nine months ended  September 30, 2001.  The  improvement in cash
flow  primarily  reflects  increased  profitability  of the Company.  Management
expects positive cash provided by operations during the fourth quarter of 2002.

The Company's  investment portfolio consists primarily of investment grade bonds
and has  limited  exposure  to equity  securities.  At  September  30,  2002 and
December 31, 2001,  greater than 99% of the Company's  investment  portfolio was
invested in bonds.  The bond  portfolio had an average  quality  rating of AA at
September  30,  2002 and  December  31,  2001,  as measured by Standard & Poor's
Corporation.  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 principal insurance subsidiary,  UWLIC, is domiciled in Wisconsin,
which  requires  certain  minimum  levels of regulatory  capital and surplus and
which  may  restrict   dividends  to  UWLIC's  parent  company.   The  Wisconsin
Commissioner of Insurance may disapprove any dividend which, together with other
dividends paid in the prior 12 months, exceeds the regulatory maximum,  computed
as the  lesser of 10% of  statutory  surplus  or total  statutory  net gain from
operations  as of the end of the  preceding  calendar  year.  Based upon UWLIC's
financial  statements  as of  December  31,  2001,  as filed with the  insurance
regulators,  and  dividends  paid in  2002,  UWLIC  is  restricted  from  paying
dividends in 2002 without prior regulatory approval.

The National  Association  of  Insurance  Commissioners  has adopted  risk-based
capital ("RBC")  standards for health and life 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, 2001, each of


                                        13
<PAGE>

the  Company's  insurance  subsidiaries  had RBC ratios that were  substantially
above the levels which would require action by the Company or a regulator.

At September 30, 2002,  the Company  maintained a revolving  bank line of credit
agreement with an outstanding  balance and maximum  commitment of $30.2 million.
At December 31, 2001, the outstanding  balance and maximum  commitment under the
credit  agreement was $35.2 million.  The credit  agreement  contains  customary
covenants  which,  among other matters,  require the Company to achieve  minimum
financial  results and restrict the Company's  ability to incur additional debt,
pay future cash dividends and dispose of assets  outside the ordinary  course of
business. The Company was in compliance with all such covenants at September 30,
2002  and  anticipates  continued  compliance  in the  foreseeable  future.  The
Company's   obligations  under  the  credit  agreement  are  guaranteed  by  its
subsidiary,  American  Medical Security  Holdings,  Inc. ("AMS  Holdings"),  and
secured by pledges of stock of AMS Holdings and UWLIC.

During the first  quarter of 2002,  the Company  entered  into a stock  purchase
agreement with Cobalt  Corporation  ("Cobalt") and its wholly owned  subsidiary,
Blue Cross & Blue Shield United of Wisconsin  ("BCBSUW"),  the Company's largest
shareholder,  to repurchase  1.4 million  shares of the  Company's  common stock
owned by BCBSUW at a total cost of $19.5 million,  including related transaction
costs. In conjunction  with the stock  repurchase,  BCBSUW completed the sale of
3,001,500  shares of the  Company's  common stock in an  underwritten  secondary
offering during the second quarter of 2002. The public offering price was $18.00
per share. As a result of these transactions,  Cobalt's ownership of the Company
was reduced from  approximately 45% at December 31, 2001 to approximately 15% at
the end of the second  quarter of 2002.  As a result of open market sales during
the third quarter,  Cobalt owned approximately 13% of the Company's  outstanding
common stock at September 30, 2002.

CAUTIONARY FACTORS

This report and other documents or oral  presentations  prepared or delivered by
and on behalf of the Company contain or may contain "forward-looking statements"
within the meaning of the safe harbor  provisions of the United  States  Private
Securities  Litigation  Reform  Act  of  1995.  Forward-looking  statements  are
statements based upon management's  expectations at the time such statements are
made and are subject to risks and  uncertainties  that could cause the Company's
actual results to differ  materially from those  contemplated in the statements.
Readers  are  cautioned  not to  place  undue  reliance  on the  forward-looking
statements.  When used in written  documents  or oral  presentations,  the terms
"anticipate,"  "believe,"  "estimate,"  "expect,"  "may,"  "objective,"  "plan,"
"possible,"  "potential," "project," "will" 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 could cause the Company's  actual results to differ  materially  from those
contemplated  in any  forward-looking  statements  include,  among  others,  the
following:

     o    Unexpected  increases in health care costs  resulting from advances in
          medical  technology,  increased  utilization  of medical  services and
          prescription drugs resulting from bioterrorism or otherwise,  possible
          epidemics  and  natural  or  man-made   disasters  and  other  factors
          affecting  the  delivery  and cost of health  care that are beyond the
          Company's control.  There are also known trends,  such as the aging of
          the  population,  that can have an  uncertain  effect on  health  care
          costs.

     o    The Company's ability to distribute and sell its products  profitably,
          including  its  ability  to retain  key  producing  sales  agents  and
          maintain  satisfactory  relationships with independent agents who sell
          the  Company's  products,  and the  Company's  ability  to expand  its
          distribution  network through regional  marketing centers and by other
          means,  generate new sales,  retain existing  members,  predict future
          health care cost trends and adequately price its products, and control
          expenses   during  a  time  of  declining   revenue  and   membership.
          Competitive  factors  such as the entrance of  additional  competitors
          into the Company's markets and competitive  pricing practices also can
          have an uncertain effect on the Company's sales.

     o    Publicity  about the Company that affects or may affect the  Company's
          sales or its relationship with regulators.

                                        14
<PAGE>


     o    Federal and state laws adopted in recent years, currently proposed, or
          that may be  proposed in the  future,  which  affect or may affect the
          Company's operations,  products,  profitability or business prospects,
          such as the Health  Insurance  Portability and  Accountability  Act of
          1996 privacy  rules,  U.S.  Department of Labor claims  procedures for
          employee benefit plans,  proposed  Patients' Bill of Rights, and state
          prompt  pay laws for the  payment of claims.  Reform  laws  adopted in
          recent  years  generally  limit the ability of the Company to use risk
          selection  as a method of  controlling  costs  for its small  employer
          group business.

     o    Regulatory factors,  including delays in regulatory  approvals of rate
          increases and policy forms;  regulatory  action  resulting from market
          conduct activity and general administrative  compliance with state and
          federal   laws;   restrictions   on  the  ability  of  the   Company's
          subsidiaries   to   transfer   funds  to  the  Company  or  its  other
          subsidiaries in the form of cash dividends,  loans or advances without
          prior approval or notification;  the granting and revoking of licenses
          to  transact  business;  the amount and type of  investments  that the
          Company  may hold;  minimum  reserve  and  surplus  requirements;  and
          risk-based capital requirements.

     o    Factors  related to the Company's  efforts to maintain an  appropriate
          medical  loss ratio in its small  employer  group  health and MedOneSM
          health business,  (including implementing  significant rate increases,
          terminating business in unprofitable markets,  introducing  redesigned
          products and implementing a block rating methodology for the Company's
          MedOneSM  business),  and the willingness of employers and individuals
          to accept rate increases, premium repricing and redesigned products.

     o    The development of and changes in claims reserves.

     o    The  effectiveness  of the  Company's  strategy to expand sales of its
          MedOneSM  products for  individuals  and families,  to focus its small
          employer  group health  product  sales in core markets and to grow its
          ancillary  products,  including  its  dental,  life,  and  self-funded
          benefit administration business.

     o    The cost and other  effects  of legal and  administrative  proceedings
          particularly  as  they  relate  to  the  Company's   health  insurance
          business,  including  the  expense of  investigating,  litigating  and
          settling  claims or paying  judgments  against the  Company  which may
          include substantial non-economic,  treble or punitive damages; and the
          general  increase in  litigation  involving  health  insurers  and the
          Company's rating methodology.

     o    Adverse  outcomes of litigation  in excess of  provisions  made by the
          Company.

     o    The Company's  ability to continue  purchasing  insurance  policies in
          connection with its risk management  program at affordable rates, with
          reasonable terms and deductibles and/or adequate policy limits.

     o    Restrictions   imposed  by  financing   arrangements  that  limit  the
          Company's  ability to incur additional debt, pay future cash dividends
          and transfer assets.

     o    Changes in rating agency policies and practices and the ability of the
          Company's  insurance  subsidiaries  to  maintain  or  exceed  their A-
          (Excellent) rating by A.M. Best.

     o    General economic conditions, including changes in employment, interest
          rates and inflation  that may impact the  performance of the Company's
          investment  portfolio  or decisions of  individuals  and  employers to
          purchase the Company's products.

     o    The  Company's  ability  to  maintain  attractive  preferred  provider
          networks for its insureds.

     o    Factors  affecting  the  Company's  ability  to hire  and  retain  key
          executive, managerial, professional and technical employees.

     o    Changes  in  accounting  principles  and the  effects  related to such
          changes.

                                        15
<PAGE>


     o    Other  business  or  investment  considerations  that the  Company may
          disclose from time to time in its Securities  and Exchange  Commission
          filings or in other publicly disseminated written documents.

The  Company   undertakes  no  obligation  to  publicly  update  or  revise  any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The Company's market risk has not substantially changed from the year ended
December 31, 2001.

Item 4.  Controls and Procedures

In order to ensure that the information the Company must disclose in its filings
with the  Securities  and Exchange  Commission  ("SEC") is recorded,  processed,
summarized  and  reported on a timely  basis,  the Company  has  formalized  its
disclosure  controls and procedures.  The Company's  principal executive officer
and  principal  financial  officer have  reviewed and  evaluated  the  Company's
disclosure  controls  and  procedures  as of a date  within 90 days prior to the
filing date of this report (the  "evaluation  date").  Based on such evaluation,
such officers have  concluded  that, as of the  evaluation  date,  the Company's
disclosure  controls and procedures are effective in bringing to their attention
on a timely basis material  information  relating to the Company  required to be
included in the Company's periodic SEC filings. Since the evaluation date, there
have not been any significant  changes in the internal  controls of the Company,
or in other factors that could significantly affect these controls subsequent to
the evaluation date.

                                        16
<PAGE>


PART II.      OTHER INFORMATION

Item 1.  Legal Proceedings

The  following  report of  recent  developments  in  previously  reported  legal
proceedings should be read in conjunction with Item 3, Legal Proceedings, in the
Company's annual report on Form 10-K for the fiscal year ended December 31, 2001
and Item 1, Legal Proceedings,  in the Company's  quarterly reports on Form 10-Q
for the quarters ended March 31, 2002 and June 30, 2002.

FLORIDA REGULATORY ACTION AND CLASS ACTION LITIGATION

A class  action  lawsuit was filed  against two of the  Company's  subsidiaries,
American  Medical  Security,  Inc.  ("AMS") and United  Wisconsin Life Insurance
Company ("UWLIC"),  in February 2000 in the Circuit Court for Palm Beach County,
Florida, by Evelyn Addison and others alleging that the Company failed to follow
Florida law when it discontinued  writing certain health insurance  policies and
offering  new  policies  in 1998,  and that the  Company  wrongfully  terminated
coverage, improperly notified insureds of conversion rights and charged improper
premiums for new coverage.  Plaintiffs  also alleged that UWLIC's renewal rating
methodology  violates Florida law. Plaintiffs are seeking damages unspecified in
the complaint.

In a final judgment entered April 24, 2002, the Circuit Court Judge in the class
action lawsuit found, among other things,  that the policy issued by the Company
outside Florida was not exempt from any Florida rating laws and ordered that the
question of damages be tried before a jury.  On  September 9, 2002,  the Circuit
Court Judge  declared a mistrial  in the  damages  portion of the lawsuit on the
grounds that the trial could not be completed within the time constraints of the
Court,  and indicated his intention to reschedule the trial for January 2003. On
September 27, 2002, the Circuit Court Judge recused himself from the case. A new
judge has been assigned to the case and a trial date for the damages  portion of
the lawsuit has not yet been rescheduled.

In a separate  proceeding  involving  substantially  similar issues, the Florida
Department of Insurance issued an  administrative  complaint in May 2001 against
UWLIC, a wholly owned subsidiary of the Company,  challenging UWLIC's rating and
other practices in Florida relating to UWLIC's MedOneSM products for individuals
and their  families.  MedOneSM  products  sold by UWLIC in Florida  are  written
pursuant to a group master policy issued to an association  domiciled in another
state.  In a recommended  order entered April 25, 2002, the  Administrative  Law
Judge held that the evidence  presented by the Florida  Department  of Insurance
did not support a conclusion  that UWLIC had violated any  provisions of Florida
law and recommended that all counts of the Department's administrative complaint
be dismissed.  The recommended order was sent to the Commissioner of the Florida
Department  of  Insurance  for entry of a final  order.  On July 24,  2002,  the
Florida   Department   of  Insurance   issued  a  final  order   affirming   the
recommendations  from the  Administrative Law Judge with respect to six of eight
counts.  Among other things,  the final order affirmed that the policy issued to
the association was exempt from most Florida rating  requirements.  However, the
Department reversed the Administrative Law Judge's finding that tier rating does
not violate state law  applicable to policies  issued out of state,  and ordered
the suspension of UWLIC's  license to sell new business in Florida for one year.
The  Department's  order  specifically  permits  UWLIC to  continue to renew its
existing  business in Florida.  On July 29, 2002,  the First  District  Court of
Appeals for the State of Florida  stayed the order of the Florida  Department of
Insurance.  The  stay is  effective  until  the  Court of  Appeals  rules on the
Company's  request to overturn the order. The Company  anticipates a reversal of
the final order on appeal.  Although the Company believes tier rating is a legal
rating  methodology  in all the states where it is used, the Company has decided
to voluntarily replace its tier rating method with a block rating system for all
of its  MedOneSM  products  by the  end of 2002  due to  adverse  publicity  and
misperceptions about tier rating.

                                        17
<PAGE>


ALABAMA LAWSUIT

On April 28, 2001,  Evelyn Saucier and others filed suit in the Circuit Court of
Mobile County, Alabama against two of the Company's subsidiaries, AMS and UWLIC,
seeking damages relating to alleged misrepresentations of the rating methodology
that would be used by the Company. In February, 2002, this case was consolidated
with  one  other  case.  The  complaint  was  later  amended  to add  additional
plaintiffs and now involves a total of 32 plaintiffs.  The Company believes that
this  lawsuit  is  unfounded  and the  disputed  amounts of rate  increases  are
immaterial  to the  financial  condition of the Company.  Nevertheless,  Alabama
juries have, in the past, given large awards for emotional  distress in contract
cases and have awarded punitive damages  substantially  higher than the level of
economic damages incurred. The Company intends to vigorously defend this action.

The Company is involved in various other legal and regulatory  actions occurring
in the normal course of business.  These actions  include  threatened and actual
challenges to the Company's rating  methodology.  Based on current  information,
including  consultation with outside counsel,  management  believes any ultimate
liability  that may  arise  from the  above-mentioned  and all  other  legal and
regulatory  actions  would not  materially  affect  the  Company's  consolidated
financial position or results of operations. However, management's evaluation of
the likely impact of these actions could change in the future and an unfavorable
outcome  could  have a material  adverse  effect on the  Company's  consolidated
financial position, results of operations or cash flow of a future period.

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 following reports on Form 8-K were filed or submitted during the third
quarter of 2002:

     o    A Form 8-K dated July 24,  2002,  was filed by the Company on July 31,
          2002,  to report recent  developments  in  previously  reported  legal
          proceedings.

     o    A Form 8-K  dated  September  9,  2002,  was filed by the  Company  on
          September  9, 2002,  to report  recent  developments  in a  previously
          reported legal proceeding.


                                        18
<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:   November 13, 2002


                                       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)


                                        19

<PAGE>


CERTIFICATIONS

I, Samuel V. Miller, Chief Executive Officer of American Medical Security Group,
Inc., certify that:

1.   I have  reviewed  this  quarterly  report on Form 10-Q of American  Medical
     Security Group, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:   NOVEMBER 13, 2002                            /S/ SAMUEL V. MILLER
                                                     Chief Executive Officer

                                        20
<PAGE>


I, Gary D. Guengerich, Chief Financial Officer of American Medical Security
Group, Inc., certify that:

1.   I have  reviewed  this  quarterly  report on Form 10-Q of American  Medical
     Security Group, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  NOVEMBER 13, 2002                             /S/ GARY D. GUENGERICH
                                                     Chief Financial Officer

                                        21
<PAGE>




                      AMERICAN MEDICAL SECURITY GROUP, INC.

                               (the "Registrant")

                          (Commission File No. 1-13154)

                                  EXHIBIT INDEX

                                       TO

                           FORM 10-Q QUARTERLY REPORT

                      for quarter ended September 30, 2002


 EXHIBIT                                         INCORPORATED HEREIN     Filed
 NUMBER    DESCRIPTION                             BY REFERENCE TO      HEREWITH

   4.1     Sixth Amendment dated as of           Exhibit 4.1 to the
           August 1, 2002 to Credit              Registrant's Form
           Agreement dated as of March 24,       10-Q for the quarter
           2000 among the Registrant,            ended June 30, 2002
           LaSalle Bank National Association
           and other Lenders

  10.1     Retirement Agreement dated as of                                 X
           August 1, 2002 between the Registrant
           and Gary D. Guengerich

  99.1     Certification Pursuant to 18 U.S.C.                              X
           Section 1350, as Adopted Pursuant to
           Section 906 of the Sarbanes-Oxley Act
           of 2002

  99.2     Certification Pursuant to 18 U.S.C.                              X
           Section 1350, as Adopted Pursuant to
           Section 906 of the Sarbanes-Oxley Act
           of 2002




                                        EX-1