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  JUNE 30,  2001
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 July 31, 2001: 14,009,083 shares



<PAGE>


                      AMERICAN MEDICAL SECURITY GROUP, INC.

                                      INDEX


PART I.       FINANCIAL INFORMATION

     Item 1.      Financial Statements (Unaudited)

                  Condensed Consolidated Balance Sheets
                      June 30, 2001 and December 31, 2000......................3

                  Condensed Consolidated Statements of Operations
                      Three months ended June 30, 2001 and 2000; Six months
                      ended June 30, 2001 and 2000.............................5

                  Condensed Consolidated Statements of Cash Flows
                      Six months ended June 30, 2001 and 2000..................6

                  Notes to Condensed Consolidated Financial Statements
                      June 30, 2001............................................7

     Item 2.      Management's Discussion and Analysis of Financial Condition
                  and Results of Operations...................................12

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


PART II.      OTHER INFORMATION

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

     Item 4.      Submission of Matters to Vote of Security Holders...........17

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

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

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


                                                                               2
<PAGE>


PART I.           FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS


                      AMERICAN MEDICAL SECURITY GROUP, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)



<table>
<caption>
                                                                                      June 30,       December 31,
                                                                                        2001             2000
                                                                                   ---------------------------------
                                                                                            (IN THOUSANDS)

<S>                                                                                 <C>                <C>
ASSETS

Investments:
   Securities available for sale, at fair value:
     Fixed maturities                                                               $    260,159      $    262,428
     Equity securities-preferred                                                           2,450             2,368
   Fixed maturity securities held to maturity, at amortized cost                           4,303             4,320
   Trading securities, at fair value                                                         332               260
                                                                                   ---------------------------------

       Total investments                                                                 267,244           269,376

Cash and cash equivalents                                                                 12,123            15,606

Other assets:
   Property and equipment, net                                                            33,576            32,451
   Goodwill and other intangibles, net                                                   105,748           107,562
   Other assets                                                                           42,319            46,928
                                                                                   ---------------------------------

       Total other assets                                                                181,643           186,941
                                                                                   ---------------------------------

Total assets                                                                        $    461,010      $    471,923
                                                                                   =================================
</table>


            See Notes to Condensed Consolidated Financial Statements

                                                                               3
<PAGE>



                      AMERICAN MEDICAL SECURITY GROUP, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)



<table>
<caption>
                                                                                      June 30,       December 31,
                                                                                        2001             2000
                                                                                   ---------------------------------
                                                                                            (IN THOUSANDS)

<S>                                                                                 <C>                <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Medical and other benefits payable                                               $    131,851      $    145,310
   Advance premiums                                                                       16,140            17,568
   Payables and accrued expenses                                                          33,047            25,902
   Notes payable                                                                          40,658            41,258
   Other liabilities                                                                      20,470            20,708
                                                                                   ---------------------------------

       Total liabilities                                                                 242,166           250,746

Shareholders' equity:
   Common stock (no par value, $1 stated value, 50,000,000 shares authorized,
     16,654,315 issued and 13,995,783 outstanding at June 30, 2001,
     16,654,315 issued and 14,270,945 outstanding at December 31, 2000)                   16,654            16,654
   Paid-in capital                                                                       187,956           187,956
   Retained earnings                                                                      32,621            36,295
   Accumulated other comprehensive loss (net of tax benefit of $517,000
     at June 30, 2001 and $2,126,000 at December 31, 2000)                                  (960)           (3,948)
   Treasury stock (2,658,532 shares at June 30, 2001
     and 2,383,370 shares at December 31, 2000, at cost)                                 (17,427)          (15,780)
                                                                                   ---------------------------------

       Total shareholders' equity                                                        218,844           221,177
                                                                                   ---------------------------------

Total liabilities and shareholders' equity                                          $    461,010      $    471,923
                                                                                   =================================
</table>


            See Notes to Condensed Consolidated Financial Statements

                                                                               4
<PAGE>


                      AMERICAN MEDICAL SECURITY GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)



<table>
<caption>

                                                          Three Months Ended                  Six Months Ended
                                                               June 30,                           June 30,
                                                   ---------------------------------   --------------------------------
                                                        2001              2000              2001             2000
                                                   ---------------------------------   --------------------------------
                                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                 <C>               <C>               <C>              <C>
Revenues:
   Insurance premiums                               $    213,645      $    240,537      $    436,115     $    488,442
   Net investment income                                   4,405             4,886             8,919            9,769
   Realized investment losses                               (152)             (112)             (179)            (112)
   Other revenue                                           5,408             5,015            10,709            9,904
                                                   ---------------------------------   --------------------------------
       Total revenues                                    223,306           250,326           455,564          508,003

Expenses:
   Medical and other benefits                            156,174           182,012           322,754          370,075
   Selling, general and administrative                    62,873            62,684           134,284          127,622
   Interest expense                                          744               883             1,620            1,779
   Amortization of goodwill and intangibles                  907               947             1,814            1,893
                                                   ---------------------------------   --------------------------------
       Total expenses                                    220,698           246,526           460,472          501,369
                                                   ---------------------------------   --------------------------------

Income (loss) before income taxes                          2,608             3,800            (4,908)           6,634

Income tax expense (benefit)                               1,142             1,540            (1,234)           2,715
                                                   ---------------------------------   --------------------------------

Net income (loss)                                   $      1,466      $      2,260      $     (3,674)    $      3,919
                                                   =================================   ================================


Net income (loss) per common share:
   Basic                                            $       0.10      $       0.15      $      (0.26)    $       0.26
   Diluted                                          $       0.10      $       0.15      $      (0.26)    $       0.26
</table>

                 See Notes to Consolidated Financial Statements

                                                                               5
<PAGE>



                      AMERICAN MEDICAL SECURITY GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<table>
<caption>
                                                                                           Six Months Ended
                                                                                               June 30,
                                                                                   ---------------------------------
                                                                                        2001              2000
                                                                                   ---------------------------------
                                                                                            (IN THOUSANDS)
<S>                                                                                 <C>                <C>
OPERATING ACTIVITIES:
Net income (loss)                                                                   $     (3,674)     $      3,919
Adjustments to reconcile net income (loss) to net cash
   used in operating activities:
     Depreciation and amortization                                                         5,071             4,879
     Net realized investment gains                                                           179               112
     Increase in trading securities                                                          (72)              (49)
     Deferred income tax expense (benefit)                                                (1,891)            3,442
     Changes in operating accounts:
       Other assets                                                                        4,891            14,928
       Medical and other benefits payable                                                (13,459)          (28,944)
       Advance premiums                                                                   (1,428)            4,172
       Payables and accrued expenses                                                       7,145            (1,463)
       Other liabilities                                                                    (238)           (8,649)
                                                                                   ---------------------------------
         Net cash used in operating activities                                            (3,476)           (7,653)


INVESTING ACTIVITIES:
Purchases of available for sale securities                                               (66,407)          (13,838)
Proceeds from sale of available for sale securities                                       67,593             9,487
Proceeds from maturity of available for sale securities                                    4,750               720
Proceeds from maturity of held to maturity securities                                          -               630
Purchases of property and equipment                                                       (3,697)           (2,912)
Proceeds from sale of property and equipment                                                   -                10
                                                                                   ---------------------------------
         Net cash provided by (used in) investing activities                               2,239            (5,903)


FINANCING ACTIVITIES:
Issuance of common stock                                                                       -                 4
Purchase of treasury stock                                                                (1,646)           (6,580)
Borrowings under line of credit agreement                                                      -            35,158
Repayment on line of credit agreement                                                          -           (35,158)
Repayment of notes payable                                                                  (600)             (665)
                                                                                   ---------------------------------
         Net cash used in financing activities                                            (2,246)           (7,241)
                                                                                   ---------------------------------

Cash and cash equivalents:
   Net decrease                                                                           (3,483)          (20,797)
   Balance at beginning of year                                                           15,606            17,266
                                                                                   ---------------------------------
Balance at end of period                                                            $     12,123      $     (3,531)
                                                                                   =================================
</table>


            See Notes to Condensed Consolidated Financial Statements

                                                                               6
<PAGE>


                      AMERICAN MEDICAL SECURITY GROUP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


                                  June 30, 2001


NOTE A. 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. 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 six month  periods  ended June 30, 2001 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending December 31, 2001.  These  condensed  consolidated  financial  statements
should be read in conjunction  with the  consolidated  financial  statements and
footnotes  thereto included in the American Medical Security Group, Inc. ("AMSG"
or the  "Company")  annual  report on Form 10-K for the year ended  December 31,
2000.

NOTE B. EARNINGS (LOSS) PER COMMON SHARE

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

     The following  table  provides a  reconciliation  of the number of weighted
average basic and diluted shares outstanding:

<table>
<caption>
                                                  Three Months Ended                  Six Months Ended
                                                       June 30,                           June 30,
                                            --------------------------------   --------------------------------
                                                 2001             2000              2001             2000
                                            --------------------------------   --------------------------------

<S>                                            <C>              <C>               <C>              <C>
     Weighted average common
        shares outstanding - basic             14,041,590       15,100,507        14,125,650       15,302,693

     Effect of dilutive stock options              52,485           55,635                 -           61,872
                                            --------------------------------   --------------------------------

     Weighted average common
        shares outstanding - diluted           14,094,075       15,156,142        14,125,650       15,364,565
                                            ================================   ================================
</table>

     The effect of dilutive  securities  was excluded from the diluted  earnings
(loss) per common  share  computation  for the six  months  ended June 30,  2001
because the Company had a net loss in 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.

                                                                               7
<PAGE>

NOTE C. COMPREHENSIVE INCOME (LOSS)

     Comprehensive  income  (loss) is defined as net income (loss) plus or minus
other  comprehensive  income  (loss),  which  for the  Company,  under  existing
accounting  standards,  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>
<caption>
                                                  Three Months Ended                  Six Months Ended
                                                       June 30,                           June 30,
                                            --------------------------------   --------------------------------
                                                 2001             2000              2001             2000
                                            --------------------------------   --------------------------------
                                                                      (IN THOUSANDS)

<S>                                          <C>              <C>               <C>              <C>
     Net income (loss)                       $      1,466     $      2,260      $     (3,674)    $      3,920

     Unrealized gain (loss) on
        available for sale securities                (404)            (200)            2,988              118
                                            --------------------------------   --------------------------------

     Comprehensive income (loss)             $      1,062     $      2,060      $       (686)    $      4,038
                                            ================================   ================================
</table>

NOTE D. CREDIT AGREEMENT

     At June 30, 2001,  the Company  maintained a revolving  bank line of credit
agreement ("Credit  Agreement") with a maximum commitment of $35.2 million and a
$10.0 million  sublimit for swingline  loans.  At June 30, 2001, the outstanding
balance of advances  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 Credit  Agreement  was amended in
April 2001 to revise the Company's applicable interest rate on outstanding loans
and the  schedule of mandatory  future  commitment  reductions  including a $4.8
million  maximum  commitment  reduction  from $40.0  million to $35.2 million on
April 27,  2001.  Revised  future  annual  principal  amounts due for all of the
Company's  debt as of June 30, 2001 are $0.6 million for 2001,  $6.2 million for
2002,  $11.2  million for 2003,  $12.5  million for 2004,  and $10.2 million for
2005.

NOTE E. CONTINGENCIES

     On August 26, 1999, a $6.9 million  verdict was entered against the Company
in a  lawsuit  filed by  Skilstaf,  Inc.  which  principally  alleged  breach of
contract involving the timing of claims payments.  Following an adverse decision
from the appeals court on March 12, 2001,  the Company  recognized an additional
accrual  during the first quarter of 2001  representing  the full potential loss
including  punitive  damages and other expenses.  The Company has petitioned the
United  States  Supreme Court to review the case. In July 2001, at the direction
of the  district  court,  the Company  paid the full amount of the verdict  plus
interest,  even though final resolution of the case by the United States Supreme
Court is  pending.  The  plaintiff  has  posted a letter  of  credit  to  secure
repayment of the verdict in the event of a decision favorable to the Company.

     On February 7, 2000, a $5.4 million verdict was entered against the Company
in a lawsuit filed by Health Administrators, Inc., an insurance agency owned and
operated by a former  agent of the  Company,  which  alleged  breach of contract
involving  commission  amounts due to such agent.  On March 29,  2001,  the Ohio
Court  of  Appeals  affirmed  a  portion  of  the  verdict,  with  modification,
representing  approximately  $3.0 million in damages,  and reversed and remanded
the  remaining  issue in the case  representing  approximately  $2.4  million in
damages.  The Company  appealed the $3.0  million  portion of the damages to the
Ohio Supreme Court,  which declined to take the appeal.  The remanded portion of
the case is awaiting further action by the trial court. Management believes that
the Company has adequately provided for losses which may result from this case.

                                                                               8
<page>

     The  Company is  involved in various  other  legal and  regulatory  matters
occurring in the normal course of its business.  The Company's financial results
for the six months ended June 30, 2001 reflect a first quarter pre-tax charge of
$9.0 million ($5.9 million  after-tax) to cover estimated  potential  losses and
related  expenses  for legal  related  matters.  In the  opinion of  management,
adequate  provision  has been made for losses  which may  result  from legal and
regulatory actions; accordingly, the outcome of these matters is not expected to
have a material adverse effect on the consolidated financial statements.

NOTE F. NEW ACCOUNTING STANDARDS

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting  Standards No. 141,  BUSINESS  COMBINATIONS,  and No. 142,
GOODWILL AND OTHER INTANGIBLE ASSETS, effective for fiscal years beginning after
December 15, 2001. Under the new rules,  goodwill (and intangible  assets deemed
to have  indefinite  lives) will no longer be  amortized  but will be subject to
annual  impairment  tests in accordance  with the Statements.  Other  intangible
assets will  continue to be  amortized  over their  useful  lives.  Based on the
Company's current  accounting policy of measuring  goodwill  impairment based on
undiscounted cash flows, there is no goodwill impairment indicated.

     The Company will apply the new rules on  accounting  for goodwill and other
intangible  assets  beginning in the first quarter of 2002.  Application  of the
nonamortization provisions of the Statement is expected to result in an increase
in net income of  approximately  $2.4  million  ($0.17 per share) per year.  The
Company will perform the first of the required  impairment tests of goodwill and
intangible  assets  deemed to have  indefinite  lives as of  January  1, 2002 by
comparing  the fair value of the  Company's  reporting  units to their  carrying
amounts (book value),  including goodwill.  In determining the fair value of the
Company's reporting units, management will consider valuation techniques such as
the quoted market price of the Company's stock, the present value of future cash
flows and market  comparison of similar assets and  liabilities.  As of June 30,
2001,  the  Company's  book value per share was  significantly  higher  than the
quoted market value of a share of stock. The Company has not yet determined what
the effect of these tests will be on the earnings and financial  position of the
Company.  If it is determined  that an impairment  exists as of January 1, 2002,
the charge  recognized would be reported as the cumulative effect of a change in
accounting  principle  in  the  Company's  GAAP  basis  consolidated   financial
statements and would have no impact on cash flows or the statutory basis capital
and surplus of the Company's insurance subsidiaries.

NOTE G. SEGMENT INFORMATION

     The Company has two reportable segments: 1) health insurance products,  and
2) life insurance  products.  The Company's health insurance products consist of
the following  coverages related to small group preferred provider  organization
products:  MedOne (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"  segment  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 Company's All Other segment also includes data for its
health maintenance organization ("HMO") subsidiary.  The reportable segments are
managed separately because they differ in the nature of the products offered and
in profit margins.

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

     A   reconciliation   of  segment  income  (loss)  before  income  taxes  to
consolidated income (loss) before income taxes is as follows:

                                                                               9
<page>

<table>
<caption>
                                                  Three Months Ended                  Six Months Ended
                                                       June 30,                           June 30,
                                            --------------------------------   --------------------------------
                                                 2001             2000              2001             2000
                                            --------------------------------   --------------------------------
                                                                      (IN THOUSANDS)

<S>                                          <C>              <C>              <C>               <C>
     Health segment                          $      1,321     $        548     $      (7,185)    $      1,264
     Life segment                                   1,598            2,790             3,348            5,030
     All other                                       (311)             462            (1,071)             340
                                            --------------------------------   --------------------------------
        Income (loss) before income taxes    $      2,608     $      3,800      $     (4,908)    $      6,634
                                            ================================   ================================
</table>

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

<table>
<caption>
                                                  Three Months Ended                  Six Months Ended
                                                       June 30,                           June 30,
                                            --------------------------------   --------------------------------
                                                 2001             2000              2001             2000
                                            --------------------------------   --------------------------------
                                                                      (IN THOUSANDS)

<S>                                         <C>               <C>               <C>              <C>
     HEALTH SEGMENT

     OPERATING RESULTS

     Revenues:
        Insurance premium                   $     209,124     $    228,437      $    426,098     $    461,391
        Net investment income                       2,265            2,353             4,715            4,898
        Other revenue                               4,357            4,020             8,587            7,983
                                            --------------------------------   --------------------------------
          Total revenues                          215,746          234,810           439,400          474,272

     Expenses:
        Medical and other benefits                154,981          175,569           319,178          354,074
        Selling, general and administrative        59,444           58,693           127,407          118,934
                                            --------------------------------   --------------------------------
          Total expenses                          214,425          234,262           446,585          473,008
                                            --------------------------------   --------------------------------

     Income (loss) before income taxes       $      1,321     $        548      $     (7,185)    $      1,264
                                            ================================   ================================

     FINANCIAL STATISTICS

     Loss ratio                                     74.1%            76.9%             74.9%            76.7%
     Expense ratio                                  26.3%            23.9%             27.9%            24.0%
                                            --------------------------------   --------------------------------
        Combined ratio                             100.4%           100.8%            102.8%           100.7%
                                            ================================   ================================


     Membership at End of Period:
     Health:
        Fully insured medical                     394,387          498,415
        Self funded medical                        45,462           50,680
        Stand-alone dental                        186,990          179,760
                                            --------------------------------
          Total health                            626,839          728,855
</table>


(a)  Total health  membership for the Company of 626,867 and 740,335 at June 30,
     2001 and 2000 includes HMO membership of 28 and 11,480,  respectively.  HMO
     operations are not included in health segment operating results.

                                                                              10
<PAGE>

<table>
<caption>
                                                  Three Months Ended                  Six Months Ended
                                                       June 30,                           June 30,
                                            --------------------------------   --------------------------------
                                                 2001             2000              2001             2000
                                            --------------------------------   --------------------------------
                                                                      (IN THOUSANDS)

<S>                                          <C>              <C>               <C>              <C>
     LIFE SEGMENT

     OPERATING RESULTS

     REVENUES:
        Insurance premiums                   $      4,483     $      5,774      $      9,446     $     11,846
        Net investment income                         162              157               336              316
        Other revenue                                  40               58                82              114
                                            --------------------------------   --------------------------------
          Total revenues                            4,685            5,989             9,864           12,276

     Expenses:
        Medical and other benefits                  1,690            1,547             3,682            3,837
        Selling, general and administrative         1,397            1,652             2,834            3,409
                                            --------------------------------   --------------------------------
          Total expenses                            3,087            3,199             6,516            7,246
                                            --------------------------------   --------------------------------

     Income before income taxes              $      1,598     $      2,790      $      3,348     $      5,030
                                            ================================   ================================

     FINANCIAL STATISTICS

     Loss ratio                                     37.7%            26.8%             39.0%            32.4%
     Expense ratio                                  30.3%            27.6%             29.1%            27.8%
                                            --------------------------------   --------------------------------
        Combined ratio                              68.0%            54.4%             68.1%            60.2%
                                            ================================   ================================

     Membership at End of Period                  211,547          270,600
</table>

                                                                              11
<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  ("AMSG" or the "Company"),  is a provider of health care benefits and
insurance  products for  individuals  and small employer  groups.  The Company's
principal  product  offerings are (1) health insurance for small employer groups
and (2) health  insurance for individuals and families  ("MedOne").  The Company
also offers life,  dental,  prescription  drug,  disability and accidental death
insurance,  and provides  stop-loss  reinsurance and benefit  administration for
self funded employer groups.  The Company's products are actively marketed in 32
states and the District of Columbia through  independent  agents.  The Company's
products generally provide discounts to insureds that utilize preferred provider
organizations  ("PPOs").  AMSG  owns  a  preferred  provider  network  and  also
contracts  with other networks to ensure  cost-effective  health care choices to
its customers.

RESULTS OF OPERATIONS

     The Company  reported net income of $1.5 million or $0.10 per share for the
second quarter of 2001. This compares to net income of $2.3 million or $0.15 per
share for the second  quarter of 2000.  The  decrease  in income from the second
quarter of the prior year primarily  reflects (1) a higher selling,  general and
administrative  expense  ratio from  higher  agent  commissions  and issue costs
resulting from the company's change in product mix, (2) lower premium  revenues,
and (3) lower  investment  income.  Partially  offsetting  these  factors was an
improvement in the health loss ratio.

     For the six months ended June 30, 2001, the Company  reported a net loss of
$3.7 million or $0.26 per share, compared to net income of $3.9 million or $0.26
per share for the same period in 2000. The six month results for 2001 reflect an
after-tax  charge of $5.9 million or $0.41 per share taken in the first  quarter
for legal  related  matters.  See "Part II.,  Item 1. Legal  Proceedings"  for a
detailed discussion.

     Excluding  the effect of the legal accrual  recorded in the first  quarter,
the  results  for the second  quarter of 2001  represent  the third  consecutive
quarter of improved earnings for the Company.  The Company's recent  improvement
in performance  results from its pricing  actions as well as early benefits from
implementation  of management's  strategic plan. The Company's health loss ratio
has  declined  for the third  consecutive  quarter and is at its lowest point in
more than two years.  Management anticipates that the trend of health loss ratio
and earnings improvement will continue during the remainder of 2001.  Management
now  anticipates  earnings to be between  $0.42 and $0.52 per share for the full
year of 2001, excluding the first quarter legal accrual.

INSURANCE PREMIUMS AND MEMBERSHIP

     Insurance premiums for the three months ended June 30, 2001 decreased 11.2%
to $213.6  million from $240.5  million for the same period in 2000. For the six
month period ended June 30, 2001, insurance premiums decreased to $436.1 million
from  $488.4  million  for the same  period  in the  prior  year.  The  decrease
primarily  resulted from a decline in membership  in select  unprofitable  small
group and  exited  markets,  partially  offset by  rising  premium  rates on the
continuing  block of business.  Average fully insured medical premium per member
per month for the second quarter of 2001 increased by 14.2% to $153, compared to
the second  quarter of 2000,  reflecting  significant  rate actions taken by the
Company.  Insurance  premiums for the Company's  MedOne product  increased 27.1%
from the  second  quarter of the prior  year.  Management  considers  the MedOne
product to be a key strategic  product and continues to take steps to accelerate
membership and premium growth in this market through an expanded agent force and
additional regional and national distribution agreements.

     Total medical and dental  membership  declined from 740,335 members at June
30,  2000 to 626,867  members at June 30,  2001.  The  membership  decrease is a
result of the Company's success in terminating  business in several unprofitable
markets,  including  exited markets,  and lower sales due to aggressive  premium

                                                                              12
<page>

rate  increases.  Based on the most  recent  sales  projections  and the rate of
membership terminations,  management anticipates 2001 insurance premiums will be
down  approximately 10% from 2000 and membership will be down  approximately 15%
before beginning to improve early in 2002. The expected improvement in insurance
premiums and membership in 2002 should result from  management's  efforts to add
distribution outlets and the introduction of promising new products.

NET INVESTMENT INCOME

     Net investment  income  includes  investment  income and realized gains and
losses on  investments.  Investment  gains and losses are realized in the normal
investment  process in response to market  opportunities.  Net investment income
for the three  months  ended June 30, 2001  decreased  to $4.3 million from $4.8
million for the three months ended June 30, 2000. Net investment income was $8.7
million  for the six months  ended June 30,  2001  compared to $9.7 for the same
period in 2000.  The  decrease in net  investment  income is due  primarily to a
decrease in average invested assets. Average invested assets at cost were $268.8
million for the second quarter of 2001. In comparison,  average  invested assets
were  $298.6  million  for the  second  quarter  of  2000.  The  average  annual
investment  yield  was 6.6% for both  periods.  Invested  assets  have  declined
primarily as a result of the repurchase of company stock and negative  operating
cash flows.

OTHER REVENUE

     Other revenue,  which primarily  consists of administrative fee income from
claims processing and other administrative  services,  increased to $5.4 million
for the quarter  compared to $5.0 million for the second quarter of 2000, and to
$10.7  million for the six months  ended June 30, 2001 from $9.9 million for the
same period in 2000.  The increase  from the prior year is  primarily  due to an
increase in fees charged for administrative services.

LOSS RATIO

     The health loss ratio for the second  quarter of 2001 was 74.1% compared to
76.9% for the second  quarter of 2000.  The health loss ratio for the six months
ended June 30, 2001 was 74.9%  compared  to 76.7% for the six months  ended June
30,  2000.  The  significant  improvement  was due to  management's  actions and
strategies  to increase  premiums and combat  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 MedOne  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 more  than  offset by  increased
premiums per member per month.  Management  believes its pricing strategies will
maintain premium  increases ahead of expected claim costs,  which should further
improve the loss ratio during 2001.

     The life  segment  loss ratio for the three  months ended June 30, 2001 was
37.7%  compared  to 26.8% for the three  months  ended June 30,  2000.  The life
segment  loss ratio for the  current  reporting  period is  consistent  with the
Company's  average  historical trend and anticipated  future experience for this
segment.  The life  segment loss ratio  reported  for the second  quarter of the
prior year was unusually low due to an unexpected decrease in actual life claims
experience for that period. The life segment loss ratio for the six months ended
June 30, 2001 was 39.0%  compared  with 32.4% for the six months  ended June 30,
2000.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RATIO

     The selling,  general and  administrative  ("SG&A")  expense ratio includes
commissions and selling expenses, administrative expenses, and premium taxes and
assessments.  The SG&A expense ratio for health  segment  products for the three
months ended June 30, 2001 was 26.3%.  This  compares to 23.9%  reported for the
three months ended June 30, 2000.  Excluding  the  non-recurring  legal  accrual
recorded  during the first  quarter of 2001,  the SG&A expense  ratio for health
segment products for the six months ended June 30, 2001 was 25.8%

                                                                              13
<page>

compared  with 24.0% for the same period in 2000.  The increase is due to higher
agent commissions and issue costs resulting from the Company's change in product
mix and the effects of lower premium volume.

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 used in operations  was $3.5 million for the six months
ended June 30, 2001.  This  compares to cash used in  operations of $7.7 million
for the six months ended June 30, 2000.  The  improvement in cash flow primarily
reflects a leveling of claim inventories and a slow-down in terminated business.
Management expects cash flow to be negative for the full year of 2001 due to the
payment of litigation matters during the third quarter.

     The Company's  investment  portfolio consists primarily of investment grade
bonds and has limited exposure to equity  securities.  At June 30, 2001,  $264.5
million or 99.0% of the Company's investment portfolio was invested in bonds. At
December 31, 2000, $267.0 million or 99.0% of the Company's investment portfolio
was invested in bonds.  The bond portfolio had an average  quality rating of Aa3
at June 30, 2001 and December 31, 2000, as measured by Moody's Investor Service.
The majority of the bond  portfolio was  classified  as available for sale.  The
Company has no  investment in mortgage  loans,  non-publicly  traded  securities
(except for principal only strips of U.S.  Government  securities),  real estate
held for investment or financial derivatives.

     The Company's insurance subsidiaries operate in states that require certain
levels of  regulatory  capital and surplus and may  restrict  dividends to their
parent companies. Based upon the financial statements of the Company's insurance
subsidiaries as of December 31, 2000, as filed with the insurance regulators, no
dividends may be paid by these subsidiaries 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,  2000,  the  Company's  principal
insurance company  subsidiaries had RBC ratios that were substantially above the
levels which would require regulatory action.

     During 2000, the Company's Board of Directors authorized an increase to the
Company's share repurchase  program to a maximum  allowable  repurchase of $18.0
million.  The Company  purchased  88,900 shares of its outstanding  common stock
during the second quarter of 2001,  bringing the total  purchased to 2.7 million
shares at an aggregate purchase price of $17.4 million.

     In determining  when and whether to purchase  future shares under the stock
repurchase  program,  management  considers  market price,  the number of shares
actively  traded in the market,  indications of seller  interest,  the number of
shares held by large shareholders,  the effect of purchases on shareholder value
and other relevant factors. Because of the unpredictability of these factors, no
assurance can be given as to how many, if any,  shares may be repurchased in the
future.

     At June 30, 2001,  the Company  maintained a revolving  bank line of credit
agreement ("Credit  Agreement") with a maximum commitment of $35.2 million and a
$10.0 million  sublimit for swingline  loans.  At June 30, 2001, the outstanding
balance of advances  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

                                                                              14
<page>

of assets  outside the ordinary  course of business.  The Credit  Agreement  was
amended  in April  2001 to revise  the  Company's  applicable  interest  rate on
outstanding  loans and the schedule of mandatory  future  commitment  reductions
including a $4.8 million  maximum  commitment  reduction  from $40.0  million to
$35.2 million on April 27, 2001. Revised future annual principal amounts due for
all of the  Company's  debt as of June 30, 2001 are $0.6 million for 2001,  $6.2
million for 2002,  $11.2  million for 2003,  $12.5  million for 2004,  and $10.2
million for 2005.

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,"
"objective," "plan," "possible,"  "potential," "project" and similar expressions
are  intended  to  identify  forward-looking  statements.  In  addition  to  the
assumptions  and other factors  referred to specifically in connection with such
statements,  factors  that could cause the  Company's  actual  results to differ
materially from those contemplated in any  forward-looking  statements  include,
among others, the following:

--   Unexpected  increases in health care costs  resulting from the aging of the
     population,  advances  in  medical  technology,  increased  utilization  of
     medical   services   and   prescription   drugs,   health  care   inflation
     (particularly   technology-driven  procedures  and  drug  costs),  possible
     epidemics and natural  disasters  and other factors  affecting the delivery
     and cost of health care that are beyond the Company's control.

--   The  Company's  ability to  profitably  distribute  and sell its  products,
     including,  changes in its business  relationships  with independent agents
     who sell the  Company's  products,  the  Company's  ability  to retain  key
     producing sales agents,  the Company's  ability to expand its  distribution
     network, competitive factors such as the entrance of additional competitors
     into the Company's markets,  competitive  pricing practices,  the Company's
     ability  to  generate  new sales,  sell new  products  and retain  existing
     customers,  the Company's ability to predict future health care cost trends
     and  adequately  price its products,  and the Company's  ability to control
     expenses during a time of declining revenue and membership.

--   Federal  and state  health  care  reform  laws  adopted  in  recent  years,
     currently  proposed (such as the "Patients' Bill of Rights") or that may be
     proposed  in  the  future,   which  affect  or  may  affect  the  Company's
     operations,  products,  profitability  or business  prospects.  Reform laws
     adopted in recent years  generally limit the ability of insurers and health
     plans to use risk  selection  as a method  of  controlling  costs for small
     group business.

--   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.

--   Factors related to the Company's  efforts to deal with adverse medical loss
     ratio in its  small  group  health  business  (which  include  implementing
     significant rate increases,  terminating business in unprofitable  markets,
     and  introducing   redesigned  products),   including  the  willingness  of
     employers and individuals to accept rate increases,  premium  repricing and
     redesigned products.

--   The development of and changes in claims reserves,  particularly for highly
     regulated  markets and exited  markets  where  insureds  may be inclined to
     increase utilization prior to termination of their policies.

                                                                              15
<page>

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

--   The  cost  and  other  effects  of legal  and  administrative  proceedings,
     including the expense of investigating,  litigating and settling any claims
     against the  Company,  and the general  increase  in  litigation  involving
     managed care and medical insurers.

--   Adverse outcomes of litigation against the Company.

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

--   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.

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

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

--   The Company's ability to integrate effectively the operational,  managerial
     and financial aspects of future acquisitions.

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

--   Other business or investment considerations that may be disclosed from time
     to time in the  Company's  Securities & 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, 2000.

                                                                              16
<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     On August 26,  1999, a $6.9 million  verdict was entered  against  American
Medical  Security,  Inc. ("AMS Inc."),  the Company's third party  administrator
("TPA") subsidiary,  in the United States District Court for the Middle District
of  Alabama.  The  decision  was made in a lawsuit  brought  against AMS Inc. by
Skilstaf,  Inc.  ("Skilstaf"),  an Alabama employee leasing company,  in January
1998  alleging  that AMS Inc.  delayed  claims  payments  under a contract  with
Skilstaf.  Skilstaf sought unspecified damages. The contract,  which was entered
into in 1992  and  terminated  by  Skilstaf  in  1996,  was a TPA  contract  for
Skilstaf's self funded employee benefit plan. AMS Inc. has argued that this case
is governed by the Employee  Retirement Income Security Act of 1974, as amended,
which  preempts  all state law causes of action and limits  damages to  contract
damages. AMS Inc.'s post-trial motion to set aside the jury's finding was denied
by the court on March 20, 2000. As a result,  AMS Inc.  filed a notice of appeal
with the Eleventh  Circuit Federal Appeals Court on April 17, 2000. On March 12,
2001, the Company received the Court of Appeal's decision,  rendered on March 9,
2001,  affirming the decision of the District Court. On March 30, 2001, AMS Inc.
filed a petition  with the Court of Appeals for a rehearing by the full Court of
Appeals, which was denied on May 4, 2001. On August 1, 2001, the Company filed a
petition with the United States Supreme Court for a writ of certiorari to review
the  decision of the Court of Appeals.  In July 2001,  at the  direction  of the
district  court,  the Company paid the full amount of the verdict plus interest,
even though final  resolution of the case by the United States  Supreme Court is
pending.  The plaintiff has posted a letter of credit to secure repayment of the
verdict in the event of a decision favorable to the Company.

     On February 7, 2000,  a $5.4 million  verdict was entered  against AMS Inc.
and United Wisconsin Life Insurance Company ("UWLIC"),  the Company's  insurance
subsidiary,  in the Common Pleas Court of Delaware County, Ohio, Civil Division,
in a lawsuit brought against AMS Inc. and UWLIC in 1996 by Health Administrators
of America,  Inc.  ("Health  Administrators"),  an  insurance  agency  owned and
operated by a former agent of AMS Inc. The lawsuit alleges breach of written and
oral contracts  involving  commission  amounts and fraud. The case was heard and
decided by a magistrate who awarded damages to Health  Administrators,  based on
breach of written  commission and agent contracts and ruled in favor of AMS Inc.
and UWLIC on breach of oral contracts and fraud.  On February 22, 2000, AMS Inc.
and UWLIC  filed  objections  with the Common  Pleas Court  requesting  that the
magistrate's  decision against AMS Inc. and UWLIC be reversed.  The Common Pleas
Court  approved the  magistrate's  decision on April 10, 2000. As a result,  AMS
Inc.  and UWLIC  filed a notice of appeal  with the Court of  Appeals,  Delaware
County, Ohio, Fifth Appellate District on April 18, 2000. On March 29, 2001, the
Court  of  Appeals  affirmed  a  portion  of the  verdict,  with  modifications,
representing  approximately  $3.0 million in damages,  and reversed and remanded
the  remaining  issue in the case  representing  approximately  $2.4  million in
damages.  On May 2, 2001, the Company  appealed the $3.0 million  portion of the
damages to the Ohio Supreme Court, which, on July 25, 2001, declined to take the
appeal. The remanded portion of the case is awaiting further action by the trial
court.  Management  believes the Company has adequately provided for losses that
may result from this case.

     The Company is involved in various legal and regulatory  actions  occurring
in the normal course of its  business.  In the opinion of  management,  adequate
provision  has been made for losses which may result from  litigation  and other
legal and regulatory actions;  accordingly,  the outcome of these matters is not
expected  to  have a  material  adverse  effect  on its  consolidated  financial
statements.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Annual Meeting of  Shareholders of the Company was held on May 15, 2001
for the purpose of electing four directors for terms expiring at the 2004 Annual
Meeting of Shareholders.  All four of the Company's  nominees were elected.  The
voting results for the election were as follows:
                                                                              17
<page>

         ELECTION OF DIRECTORS FOR TERMS EXPIRING IN 2004:

         Mark A. Brodhagen:
         For                      13,852,597 shares
         Withheld                     47,235 shares
         Abstained                                0
         Broker Non-Votes                         0

         Eugene A. Menden:
         For                      13,850,784 shares
         Withheld                     49,048 shares
         Abstained                                0
         Broker Non-Votes                         0

         Samuel V. Miller:
         For                      13,852,846 shares
         Withheld                     46,986 shares
         Abstained                                0
         Broker Non-Votes                         0

         Michael T. Riordan:
         For                      13,853,102 shares
         Withheld                     46,730 shares
         Abstained                                0
         Broker Non-Votes                         0

     Further  information  concerning these matters,  including the names of the
directors whose terms continued after the meeting, is contained in the Company's
Proxy  Statement dated March 30, 2001 with respect to the 2001 Annual Meeting of
Shareholders.


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

     A Form 8-K dated May 18,  2001,  was  submitted  by the  Company to furnish
under Item 9, Regulation FD Disclosure, a financial presentation included on the
Company's  website.  The Company also filed a Form 8-K dated August 9, 2001,  to
report the adoption of a shareholder rights plan.

                                                                              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:  AUGUST 14, 2001


                       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>


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

                                  EXHIBIT INDEX
                                       TO
                           FORM 10-Q QUARTERLY REPORT
                         for quarter ended June 30, 2001


<table>
<caption>
                                                                      INCORPORATED
                                                                      HEREIN                                    FILED
EXHIBIT NO.       DESCRIPTION                                         BY REFERENCE TO                           HEREWITH

<S>               <C>                                                 <c>                                       <c>
       3          Articles of Amendment to Restated                                                             X
                  Articles of Incorporation with Respect to
                  Designation, Preferences, Limitations and
                  Relative Rights of Series B Junior
                  Cumulative Preferred Stock

       4          Rights Agreement, dated as of August 9,             Exhibit 1 to the Registrant's
                  2001, between American Medical                      Registration Statement on Form 8-A
                  Security Group, Inc. and Firstar Bank,              filed on August 14, 2001 and Exhibit 4
                  N.A., as Rights Agents, including the               to the Registrant's Current Report on
                  form of Right Certificate as Exhibit B              Form 8-K dated August 9, 2001, and
                  thereto.                                            field on August 14, 2001.
</table>

                                                                            EX-1