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, 1999
         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) 661-3075



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, 1999: 16,653,359 shares


<PAGE>


                      AMERICAN MEDICAL SECURITY GROUP, INC.

                                      INDEX


PART I.       FINANCIAL INFORMATION

  Item 1.      Financial Statements (Unaudited)

               Condensed Consolidated Balance Sheets--June 30, 1999 and
                 December 31, 1998.............................................3
               Condensed Consolidated Statements of Income--
                 Three months ended June 30, 1999 and 1998;
                 Six months ended June 30, 1999 and 1998.......................5
               Condensed Consolidated Statements of Cash Flows--
                 Six months ended June 30, 1999 and 1998.......................6
               Notes to Condensed Consolidated Financial Statements--
                 June 30, 1999.................................................7

  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


PART II.      OTHER INFORMATION

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

  Item 5.      Other Information..............................................18

  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

<TABLE>

                                       AMERICAN MEDICAL SECURITY GROUP, INC.

                                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                                    (Unaudited)



<CAPTION>
<S>                                                                                <C>                  <C>

                                                                                      June 30,          December 31,
                                                                                        1999                1998
                                                                                   -----------------------------------
                                                                                            (000'S OMITTED)

ASSETS

Investments:
   Securities available for sale, at fair value:
       Fixed maturities                                                               $  303,100         $  293,096
       Equity securities-preferred                                                         2,198              2,457
   Fixed maturity securities held to maturity, at amortized cost                           3,795              3,361
                                                                                   ----------------------------------

                Total Investments                                                        309,093            298,914

   Cash and Cash Equivalents                                                              (1,951)            10,648

Other Assets:
   Property and equipment, net                                                            34,470             35,356
   Goodwill and other intangibles, net                                                   114,035            116,093
   Other assets                                                                           43,913             37,711
                                                                                   ----------------------------------

                Total Other Assets                                                       192,418            189,160
                                                                                   ----------------------------------

Total Assets                                                                          $  499,560         $  498,722
                                                                                   ==================================










                             See Notes to Condensed Consolidated Financial Statements

</TABLE>




















                                                                               3
<PAGE>
<TABLE>


                                       AMERICAN MEDICAL SECURITY GROUP, INC.

                                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                                    (Unaudited)

<CAPTION>
<S>                                                                                <C>                  <C>
                                                                                      June 30,          December 31,
                                                                                        1999                1998
                                                                                   -----------------------------------
                                                                                            (000'S OMITTED)

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Medical and other benefits payable                                                 $  119,364         $  113,133
   Advance premiums                                                                       19,300             18,157
   Payables and accrued expenses                                                          25,749             23,439
   Notes payable                                                                          53,463             55,064
   Other liabilities                                                                      24,007             22,478
                                                                                   ----------------------------------

              Total Liabilities                                                          241,883            232,271

Redeemable preferred stock - Series A adjustable rate nonconvertible,
   $1,000 stated value, 25,000 shares authorized                                               -                  -

Shareholders' Equity:
   Preferred stock (no par value, 475,000 shares authorized)                                   -                  -
   Common stock (no par value, $1 stated value, 50,000,000 shares
     authorized, 16,653,303 and 16,653,179 issued and outstanding
     at June 30, 1999 and December 31, 1998, respectively)                                16,653             16,653
   Paid-in capital                                                                       187,950            188,981
   Retained earnings                                                                      59,037             59,572
   Accumulated other comprehensive income (loss), net of taxes of $3,211,000
     and $642,000 at June 30, 1999 and December 31, 1998, respectively                    (5,963)             1,245
                                                                                   ---------------    ---------------

              Total Shareholders' Equity                                                 257,677            266,451
                                                                                   ---------------    ---------------

Total Liabilities and Shareholders' Equity                                            $  499,560         $  498,722
                                                                                   ==================================







                             See Notes to Condensed Consolidated Financial Statements
</TABLE>
























                                                                               4
<PAGE>

<TABLE>

                      AMERICAN MEDICAL SECURITY GROUP, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<CAPTION>
<S>                                                  <C>                 <C>              <C>                 <C>


                                                            Three Months Ended                    Six Months Ended
                                                                 June 30,                             June 30,
                                                     ---------------------------------    ---------------------------------
                                                          1999              1998               1999              1998
                                                     ---------------------------------    ---------------------------------
                                                                    (000'S OMITTED, EXCEPT PER SHARE DATA)
Revenues:
   Insurance premiums                                   $  264,198        $  226,956         $  527,090        $  461,915
   Net investment income                                     4,700             5,723              9,675            11,804
   Other revenue                                             5,498             4,675             11,684             9,475
                                                     ---------------------------------    ---------------------------------
         Total Revenues                                    274,396           237,354            548,449           483,194

Expenses:
   Medical and other benefits                              210,758           174,325            409,165           353,610
   Selling, general and administrative                      67,109            57,693            135,790           116,735
   Interest expense                                            872             2,336              1,766             4,707
   Amortization of goodwill and intangibles                  1,010             2,195              2,058             4,435
                                                     ---------------------------------    ---------------------------------
         Total Expenses                                    279,749           236,549            548,779           479,487
                                                     ---------------------------------    ---------------------------------

Income (Loss) From Continuing Operations,
   Before Income Taxes                                      (5,353)              805               (330)            3,707

Income Tax Expense (Benefit)                                (1,823)              413                205             1,764
                                                     ---------------------------------    ---------------------------------

Income (Loss) From Continuing Operations                    (3,530)              392               (535)            1,943

Income From Discontinued Operations,
   Less Applicable Income Taxes                                  -               874                  -             5,714
                                                     ---------------   ---------------    ---------------   ---------------

Net Income (Loss)                                       $   (3,530)       $    1,266         $     (535)       $    7,657
                                                     =================================    =================================

Earnings (Loss) Per Common Share - Basic
   Income (loss) from continuing operations             $   (0.21)        $     0.03         $   (0.03)        $     0.12
   Income from discontinued operations                           -              0.05                  -              0.34
                                                     ---------------   ---------------    ---------------   ---------------
Net Income (Loss) Per Common Share                      $   (0.21)        $     0.08         $   (0.03)        $     0.46
                                                     =================================    =================================

Earnings (Loss) Per Common Share - Diluted
   Income (loss) from continuing operations             $   (0.21)        $     0.03         $   (0.03)        $     0.12
   Income from discontinued operations                           -              0.05                  -              0.34
                                                     ---------------   ---------------    ---------------   ---------------
Net Income (Loss) Per Common Share                      $   (0.21)        $     0.08         $   (0.03)        $     0.46
                                                     =================================    =================================

                             See Notes to Condensed Consolidated Financial Statements
</TABLE>













                                                                               5
<PAGE>

<TABLE>

                                       AMERICAN MEDICAL SECURITY GROUP, INC.

                                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (Unaudited)


<CAPTION>
<S>                                                                                <C>                   <C>

                                                                                           Six Months Ended
                                                                                               June 30,
                                                                                   ----------------------------------
                                                                                        1999               1998
                                                                                   ----------------------------------
                                                                                            (000'S OMITTED)
OPERATING ACTIVITIES:
   Income (loss) from continuing operations                                           $     (535)        $    1,943
     Adjustments to reconcile income (loss) from continuing
        operations to net cash provided by (used in) operating activities:
       Depreciation and amortization                                                       5,299              7,740
       Net realized investment (gains) losses                                                282             (1,465)
       Deferred income tax (benefit) expense                                                (320)               185
       Changes in operating accounts:
           Other assets                                                                   (6,202)               589
           Medical and other benefits payable                                              6,231            (20,521)
           Advance premiums                                                                1,143                354
           Payables and accrued expenses                                                   2,310             (9,167)
           Other liabilities                                                               4,697              9,884
                                                                                   ----------------------------------
             Net Cash Provided by (Used in) Operating Activities                          12,905            (10,458)

INVESTING ACTIVITIES:
   Acquisition of subsidiaries (net of cash and cash equivalents
      acquired of $2,773,000)                                                                  -              2,623
   Purchases of available for sale securities                                           (183,689)          (176,093)
   Proceeds from sale of available for sale securities                                   143,046            140,948
   Proceeds from maturity of available for sale securities                                18,496              8,700
   Purchases of held to maturity securities                                                 (200)                 -
   Purchases of property and equipment                                                    (1,589)            (2,070)
   Proceeds from sale of property and equipment                                               31                 54
                                                                                   ----------------------------------
             Net Cash Used in Investing Activities                                       (23,905)           (25,838)

FINANCING ACTIVITIES:
   Cash dividends paid                                                                         -             (3,967)
   Issuance of common stock                                                                    2              1,718
   Borrowings under line of credit agreement                                               5,000                  -
   Repayment on line of credit agreement                                                  (5,000)                 -
   Repayment of notes payable                                                             (1,601)              (837)
                                                                                   ----------------------------------
             Net Cash Used in Financing Activities                                        (1,599)            (3,086)

Net Cash Provided by Discontinued Operations                                                   -              1,169
                                                                                   ----------------------------------
Cash and Cash Equivalents:
   Net decrease                                                                          (12,599)           (38,213)
   Balance at beginning of year                                                           10,648             45,291
                                                                                   ----------------------------------
             Balance at End of Period                                                 $   (1,951)        $    7,078
                                                                                   ==================================

                             See Notes to Condensed Consolidated Financial Statements
</TABLE>














                                                                               6
<PAGE>


                      AMERICAN MEDICAL SECURITY GROUP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


                                  June 30, 1999


NOTE A.       BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles 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 generally accepted accounting  principles for complete
financial statements. In the opinion of management,  all adjustments (consisting
of  only  normal  recurring   adjustments)   considered  necessary  for  a  fair
presentation  have been included.  Operating results for the three and six month
periods ended June 30, 1999 are not  necessarily  indicative of the results that
may  be  expected  for  the  year  ended  December  31,  1999.  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, 1998.


NOTE B.       DISCONTINUED OPERATIONS

     On May 27,  1998,  the Board of  Directors  of the  Company,  then known as
United Wisconsin Services, Inc. ("UWS"), approved a plan to spin off its managed
care  companies  and  specialty  management  business to its  shareholders  (the
"Spin-off").  In connection with the Spin-off, UWS changed its name to "American
Medical  Security  Group,  Inc." On September 25, 1998, the  distribution  date,
shareholders  of AMSG  received  one  share of  common  stock of a newly  formed
company,  Newco/UWS,  Inc.  ("Newco/UWS"),  for every  share of AMSG owned as of
September 11, 1998,  the record date.  The net assets of Newco/UWS  consisted of
assets and  liabilities  of the managed care and specialty  business  along with
$70.0  million in debt that was assumed by  Newco/UWS  in  conjunction  with the
Spin-off.  Newco/UWS  was  renamed  United  Wisconsin  Services,  Inc.  AMSG has
obtained a private ruling from the Internal  Revenue  Service to the effect that
the Spin-off qualifies as tax free to AMSG,  Newco/UWS and to AMSG shareholders.
The  operations of Newco/UWS are reflected in  discontinued  operations  through
September 25, 1998. All prior periods of the Company's financial statements have
been  restated  to reflect  Newco/UWS  operations  as  discontinued  operations.
Interest  expense on the $70.0 million in debt assumed by Newco/UWS is reflected
in continuing operations through September 11, 1998.
































                                                                               7
<PAGE>


NOTE C.       EARNINGS PER SHARE

     Basic  earnings per common share are computed by dividing net income by the
weighted  average  number of common  shares  outstanding.  Diluted  earnings per
common share are computed by dividing net income 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>
<S>                                             <C>              <C>            <C>              <C>

                                                     Three Months Ended               Six Months Ended
                                                          June 30,                        June 30,
                                                -----------------------------   -----------------------------
                                                     1999          1998              1999          1998
                                                -----------------------------   -----------------------------
Weighted average common shares
   outstanding - Basic                             16,653,282    16,546,176        16,653,254    16,531,108
Effect of dilutive stock options                            -       175,925                 -       173,671
                                                -----------------------------   -----------------------------
Weighted average common shares
   outstanding - Diluted                           16,653,282    16,722,101        16,653,254    16,704,779
                                                =============================   =============================
</TABLE>


     The effect of dilutive securities is excluded from the diluted earnings per
common  share  computation  for the three and six  months  ended  June 30,  1999
because  employee stock options are  antidilutive  during such periods.  Certain
options to purchase  shares  were not  included  in the  computation  of diluted
earnings per common share because the options' exercise prices were greater than
the average market price of the outstanding  common shares for the three and six
month periods ended June 30, 1998.

NOTE D.       COMPREHENSIVE INCOME

     Comprehensive income (loss) for the Company is defined as net income (loss)
plus or minus unrealized gains or losses, net of income tax effects,  on certain
investments in debt and equity securities.  Comprehensive  income (loss) totaled
$(7.2)  million and $(1.5)  million for the three months ended June 30, 1999 and
1998, respectively, and $(7.7) million and $5.1 million for the six months ended
June 30, 1999 and 1998, respectively.

NOTE E.       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:  fully insured  medical,  self funded  medical,  dental and short-term
disability.  Life  products  consist  primarily  of group  term-life  insurance.
Operations  not  directly  related to the  business  segments  (i.e.,  corporate
investment income,  interest expense on corporate debt, amortization of goodwill
and  intangibles,   unallocated   overhead   expenses  and  health   maintenance
organization  ("HMO")  operations) are included in "All Other". The segments are
reported  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 from
operations  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.













                                                                               8
<PAGE>


     A   reconciliation   of  segment  income  (loss)  before  income  taxes  to
consolidated income (loss) from continuing  operations before income taxes is as
follows:
<TABLE>
<CAPTION>
<S>                           <C>             <C>                 <C>            <C>

                                    Three Months Ended                  Six Months Ended
                                         June 30,                           June 30,
                              -------------------------------     ------------------------------
                                   1999            1998               1999            1998
                              --------------- ---------------     -------------- ---------------
                                 (000'S OMITTED)
            Health              $ (7,426)      $     421           $  (3,945)     $      28
            Life                   2,700           3,061               4,576          5,487
            All other               (627)         (2,677)               (961)        (1,808)
                              --------------- ---------------     -------------- ---------------
                               $  (5,353)      $     805           $    (330)     $   3,707
                              =============== ===============     ============== ===============
</TABLE>

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

                                                      Three Months Ended               Six Months Ended
                                                           June 30,                        June 30,
                                                  ---------------------------     ---------------------------
                                                      1999          1998              1999          1998
                                                  ------------- -------------     ------------- -------------
                                                         (000'S OMITTED, EXCEPT FINANCIAL STATISTICS)
HEALTH SEGMENT

OPERATING RESULTS

Revenues:
  Insurance premiums                              $    246,752  $    215,649      $    493,404  $    438,521
  Net investment income                                  2,297         2,151             4,565         4,288
  Other revenue                                          4,696         3,400             9,908         6,907
                                                  ------------- -------------     ------------- -------------
     Total Revenues                                    253,745       221,200           507,877       449,716

Expenses:
  Medical and other benefits                           199,474       167,887           386,894       342,032
  Selling, general and administrative                   61,697        52,892           124,928       107,656
                                                  ------------- -------------     ------------- -------------
     Total Expenses                                    261,171       220,779           511,822       449,688
                                                  ------------- -------------     ------------- -------------
       Income (Loss) Before Income Taxes          $    (7,426)  $        421      $    (3,945)  $         28
                                                  ============= =============     ============= =============

FINANCIAL STATISTICS

Loss ratio                                               80.8%         77.9%             78.4%         78.0%
Expense ratio                                            23.1%         22.9%             23.3%         23.0%
                                                  ------------- -------------     ------------- -------------
       Combined ratio                                   103.9%        100.8%            101.7%        101.0%
                                                  ============= =============     ============= =============


Membership at End of Period:
  Medical:
     Fully insured                                     615,729       518,584
     Self funded                                        49,964        58,936
                                                  ------------- -------------
       Total medical*                                  665,693       577,520
  Dental                                               350,806       411,364

*Total medical  membership of the Company  includes HMO membership of 29,182 and
 16,404 at June 30, 1999 and 1998, respectively. HMO operations are not included
 in health segment operating results.
</TABLE>





                                                                               9
<PAGE>

<TABLE>
<CAPTION>
<S>                                               <C>           <C>               <C>           <C>


                                                      Three Months Ended               Six Months Ended
                                                           June 30,                        June 30,
                                                  ---------------------------     ---------------------------
                                                      1999          1998              1999          1998
                                                  ------------- -------------     ------------- -------------
                                                         (000'S OMITTED, EXCEPT FINANCIAL STATISTICS)
LIFE SEGMENT

OPERATING RESULTS

Revenues:
  Insurance premiums                              $      6,450  $      6,082      $     13,110  $     12,552
  Net investment income                                     48            59                99           114
  Other revenue                                             66            38               138            78
                                                  ------------- -------------     ------------- -------------
     Total Revenues                                      6,564         6,179            13,347        12,744

Expenses:
  Medical and other benefits                             2,078         1,250             4,851         3,385
  Selling, general and administrative                    1,786         1,868             3,920         3,872
                                                  ------------- -------------     ------------- -------------
     Total Expenses                                      3,864         3,118             8,771         7,257
                                                  ------------- -------------     ------------- -------------
       Income Before Income Taxes                 $      2,700  $      3,061      $      4,576  $      5,487
                                                  ============= =============     ============= =============

FINANCIAL STATISTICS

Loss ratio                                               32.2%         20.6%             37.0%         27.0%
Expense ratio                                            26.7%         30.1%             28.8%         30.2%
                                                  ------------- -------------     ------------- -------------
       Combined ratio                                    58.9%         50.7%             65.8%         57.2%
                                                  ============= =============     ============= =============


Membership at end of period                            309,173       228,832
</TABLE>


NOTE F.           RECLASSIFICATIONS

         Certain  reclassifications have been made to the consolidated financial
statements for 1998 to conform with the 1999 presentation.
































                                                                              10
<PAGE>


ITEM 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS



OVERVIEW

     American Medical Security Group,  Inc. ("AMSG" or the "Company"),  formerly
known as United Wisconsin Services, Inc., together with its subsidiary companies
is a provider of health and life insurance products for individuals and employer
groups.  The  Company's   principal  product  offering  is  small  group  health
insurance.  It also sells  individual and large group health insurance and group
life, dental,  prescription drug, disability and accidental death insurance. The
Company's  products  are  actively  marketed  in 33 states and the  District  of
Columbia through  independent  agents.  The Company's products generally provide
discounts to insureds that utilize preferred provider organizations. The average
group size is six lives.

HISTORY

     Prior to and for most of the year 1998,  the business of the Company,  then
known as "United Wisconsin  Services,  Inc.",  consisted of two main components:
the small  group  business  and the  managed  care and  specialty  business.  On
September 11, 1998, the Company  contributed all of its subsidiaries  comprising
the managed care and  specialty  business to a newly  created  subsidiary  named
"Newco/UWS, Inc.", a Wisconsin corporation ("Newco/UWS"). On September 25, 1998,
the  Company  spun  off the  managed  care  and  specialty  business  through  a
distribution  of 100% of the issued and  outstanding  shares of common  stock of
Newco/UWS to the Company's  shareholders of record as of September 11, 1998. The
Company  thereupon adopted its current name of "American Medical Security Group,
Inc." and Newco/UWS  changed its name to "United Wisconsin  Services,  Inc." The
net assets of Newco/UWS  consisted of assets and liabilities of the managed care
and  specialty  management  business  along with $70.0  million in debt that was
assumed by Newco/UWS in  conjunction  with the  distribution.  The operations of
Newco/UWS are reflected in discontinued  operations  through September 25, 1998.
Interest  expense on the $70.0 million in debt assumed by Newco/UWS is reflected
in continuing  operations  through  September 11, 1998. After the Spin-off,  the
business of the Company  consisted solely of the Company's small group insurance
business.  The continuing operations of the Company reflect the historical small
group insurance portion of the Company's business.

RESULTS OF CONTINUING OPERATIONS

RESERVE STRENGTHENING CHARGE

     During the second quarter of 1999, the Company recorded an after-tax charge
to earnings of $5.8 million or $0.35 per share to strengthen  its medical claims
reserves.  The reserve  strengthening  is the result of an adverse  medical loss
ratio trend identified by management in the second quarter.  The adverse medical
loss  ratio  trend  relates  primarily  to three  principle  areas of its health
segment:  1)  continued  adverse  trends  in its  one  and  two  life  business,
particularly in Florida where the corrective  action plan initiated late in 1998
has  developed  more slowly than  expected;  2) adverse  trends on certain older
blocks of business;  and 3) increased utilization claim cost trends particularly
in pharmacy benefits.

     In response, management has developed and implemented a series of strategic
action  plans  directed  at  improving  the  profitability  of these  identified
under-performing  segments.  Specifically,  in Florida,  the  Company's  actions
include a redesigned  product line, the conversion of older benefit plans to new
plans with higher deductibles, and widespread repricing.


















                                                                              11
<PAGE>


     Other plans  designed to improve the  Company's  health loss ratio  include
raising  its average  rate  increases  on renewals  during the last half of this
year, accelerated repricing in certain targeted business segments,  introduction
of redesigned products,  and the conversion of older group health plans into new
benefit  designs.  In August 1999,  the Company is also  introducing  a two-tier
copay plan to help reverse the unfavorable pharmacy cost trend. While management
is  confident in the success of these  actions,  the  financial  impact of these
actions will not be  significant  during the remainder of 1999.  However,  it is
anticipated  that the  financial  impact will be  significant  early in the year
2000.  Management  anticipates that the Company's financial  performance for the
second  half of 1999  will  be  break  even  to a  small  profit.  In  addition,
management  anticipates  that earnings per share for the year 2000 will be $0.70
or greater.  These  performance  and earnings  forecasts  are subject to certain
risks, uncertainties and assumptions. Factors that could cause actual results to
differ  materially  include,   but  are  not  limited  to,  claim  cost  trends,
utilization  persistency,  new sales, regulatory approvals of rate increases and
other factors discussed in "Forward Looking Statements" below.

INSURANCE PREMIUMS

     Insurance premiums for the three months ended June 30, 1999 increased 16.4%
to $264.2  million  from $227.0  million for the same period in 1998.  Insurance
premiums  for the six  months  ended  June 30,  1999  increased  14.1% to $527.1
million from $461.9  million for the same period in 1998.  The premium  increase
reflects  both  internal  growth and growth from  business  acquired  from other
insurance carriers. The Company acquired the majority of the fully insured group
health business of Continental  Assurance  Company ("CNA")  effective January 1,
1999.  The  results for the three and six months  ended June 30,  1999  included
$23.7 and $52.3 million,  respectively,  of premium  related to the CNA acquired
business.

     Average fully insured  medical  premium per member per month during the six
month period ended June 30, 1999  increased 2.4% to $126 compared to $123 during
the same period in 1998.  Medical membership at June 30, 1999 increased 15.3% to
665,693 from 577,520 at June 30, 1998, primarily due to new sales growth and the
addition of the CNA business.

NET INVESTMENT INCOME

     Net investment  income  includes  investment  income and realized gains and
losses on investments. Net investment income for the three months ended June 30,
1999 declined 17.9% to $4.7 million from $5.7 million for the three months ended
June 30, 1998. The decline is due to lower average annual investments yields and
a decrease in realized gains of $0.8 million.  Net investment income for the six
months ended June 30, 1999  decreased  18.0% to $9.7 million from $11.8  million
for the same period one year ago. Average annual  investment  yields,  excluding
realized gains and losses were 6.4% and 6.5% for the three months and six months
ended  June  30,  1999,  respectively,  compared  to 7.1%  and 7.4% for the same
respective  periods in the prior year.  Investment gains and losses are realized
in the normal investment  process in response to market  opportunities.  Average
invested  assets at cost for the three  months  ended June 30,  1999 were $309.8
million compared to $290.0 million for the three months ended June 30, 1998.

OTHER REVENUE

     Other revenue increased to $5.5 million for the three months ended June 30,
1999 from $4.7  million for the same period in 1998.  The  increase is primarily
due to an  increase  in fee  revenue  associated  with  the  Pan  American  Life
Insurance  Company business acquired July 1998 and CNA business acquired January
1999.  Other revenue for the six month period increased to $11.7 million in 1999
from $9.5 million in 1998.  Management  expects that other  revenue will decline
slightly  during the  remainder of 1999 as the  acquired  blocks of business run
off.

















                                                                              12
<PAGE>


LOSS RATIO

     The health  segment loss ratio for the three months ended June 30, 1999 was
80.8%  compared  with  77.9% for the  three  months  ended  June 30,  1998.  The
unfavorable health loss ratio for the quarter reflects the reserve strengthening
in the second quarter as discussed  above. The health segment loss ratio for the
six months ended June 30, 1999 was 78.4%  compared with 78.0% for the six months
ended  June 30,  1998.  As  discussed  previously,  management  is  aggressively
pursuing  strategic  action plans designed to improve the Company's  health loss
ratio.  Management anticipates the health loss ratio will be approximately 78.5%
to 79.0% for the last half of 1999.  However,  the Company's  actual health loss
ratio for the remainder of 1999 is dependent upon future events  including claim
cost trends,  utilization  persistency,  new sales, regulatory approvals of rate
increases and other  factors.  Consequently,  there can be no assurance that the
Company's  action plans will have the desired effect on the health loss ratio in
future periods.

     The life  segment  loss ratio for the three  months ended June 30, 1999 was
32.2%  compared  to 20.6% for the three  months  ended June 30,  1998.  The life
segment  loss ratio for the six months  ended June 30,  1999 was 37.0%  compared
with  27.0% for the six  months  ended June 30,  1998.  The  results in the life
segment for the second quarter of 1999 are consistent with historical trends and
management's  expectations on an on-going basis. The fluctuation from the second
quarter of 1998 is due to unusually low claims  utilization  during that period.
Management  expects  the life  segment  loss ratio to remain  relatively  stable
during the remainder of 1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RATIO

     The selling,  general and  administrative  ("SGA") expense ratio for health
segment  products for the three  months  ended June 30, 1999 was 23.1%  compared
with 22.9% for the three months  ended June 30,  1998.  For the six months ended
June 30, 1999 and 1998,  the SGA expense ratio for health  segment  products was
23.3% and 23.0%,  respectively.  The slight increase in the SGA expense ratio is
the  result  of  higher  commissions  on new  policy  sales  offset  by a  lower
administrative  expense ratio caused by a leveraging of the Company's operations
over increased revenues.

OTHER EXPENSES

     Interest expense  decreased to $0.9 million for the three months ended June
30, 1999 from $1.1  million  for the same period in the prior year.  For the six
months ended June 30, 1999, interest expense decreased to $1.8 million from $2.3
million for the six months ended June 30, 1998. The decrease in interest expense
for the quarter and six month period reflects the assumption of $70.0 million in
debt by Newco/UWS on September 11, 1998, as part of the Spin-off transaction, as
described in Note B of the Notes to Condensed Consolidated Financial Statements.

     Amortization of goodwill and other intangibles totaled $1.0 million for the
second quarter of 1999,  compared with $2.2 million of amortization  expense for
the second  quarter of 1998. On a year to date basis,  amortization  of goodwill
and  intangibles  decreased to $2.1 million from $4.4 million for the six months
ended June 30,  1998.  The decline in  amortization  is  principally  due to the
write-off of the Company's  distribution system intangible asset at December 31,
1998,  as described  in the  Company's  annual  report on Form 10-K for the year
ended December 31, 1998.  Management  believes that no other material impairment
of goodwill and other intangible assets exists at June 30, 1999.

     The  effective  tax rate was 34.1% for the three months ended June 30, 1999
compared with 51.3% for the three months ended June 30, 1998.  The effective tax
rate for the six months ended June 30, 1999 was (62.1%)  compared with 47.6% for
the six months ended June 30, 1998. The effective tax rate is impacted primarily
by level amortization of non-deductible  goodwill in relation to varying pre-tax
income.















                                                                              13
<PAGE>


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 medical and other benefits and operating expense payments. Positive cash
flows are invested  pending  future  payments of medical and other  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 flow from  operations was positive at $12.9 million for
the six months ended June 30,  1999.  This  compares to negative  cash flow from
operations of $10.5 million for the six months ended June 30, 1998. The positive
results are due to growth in membership  and lower debt costs as a result of the
assumption of $70.0 million in debt by Newco/UWS in September 1998.

     The Company's  investment  portfolio from  continuing  operations  consists
primarily  of  investment  grade  bonds  and  has  limited  exposure  to  equity
securities.  At June 30,  1999,  $306.9  or 99.3%  of the  Company's  investment
portfolio  was invested in bonds.  At December 31, 1998,  $296.5 or 99.2% of the
Company's  investment portfolio was invested in bonds. The bond portfolio had an
average  quality rating of Aa3 at June 30, 1999, and A1 at December 31, 1998, 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.  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, 1998,
the Company's principal insurance company subsidiaries had an RBC ratio that was
substantially above the levels which would require regulatory action.

     The  Company  has a five  year  revolving  line of  credit  with a  maximum
commitment of $70.0 million,  and a $10.0 million  sublimit for swingline loans.
The outstanding line of credit balance at June 30, 1999 was $45.2 million, which
is included in notes payable.

     In addition to internally  generated  funds and periodic  borrowings on its
bank  line  of  credit,  the  Company  believes  that  additional  financing  to
facilitate  long-term  growth could be obtained through equity  offerings,  debt
offerings, or bank borrowings, as market conditions may permit or dictate.

YEAR 2000

     The Year 2000 issue is the result of computer  programs being written using
two digits rather than four to define the applicable  year.  Computer  equipment
and software  devices  with  embedded  technology  that are  time-sensitive  may
recognize  a date using "00" as the year 1900  rather  than the year 2000.  This
could  result in a system  failure or  miscalculations  causing  disruptions  of
operations,  including,  among other  things,  a temporary  inability to process
transactions or engage in similar normal business activities.

     The Company has divided the Year 2000 issues facing the  organization  into
three major sections:  1) software  applications  developed in-house  ("In-house
Applications");  2) software  applications acquired from a third party that have
been  customized  by the Company  ("Customized  Applications");  and 3) software
applications  acquired  from a third party that have not been  customized by the
Company and those products and services provided to the Company by third parties
("Third Party Products").













                                                                              14
<PAGE>


     In-house  Applications  represent  the  primary  operating  software of the
Company and include premium billing and cash posting,  claims  adjudication  and
commission  payment  processing  applications.  The project to make all in-house
Applications Year 2000 compliant was completed in November 1998. The deletion of
temporary  bridges  and  workfiles  used  to  facilitate  communication  between
compliant   and   non-compliant   computer   codes  during  the  course  of  the
implementation was completed in early March 1999.

     Customized   Applications   software   products  include   electronic  data
interchange  applications,  publishing  systems,  fax  capabilities,  accounting
packages  and other  special  application  software as well as utility  software
packages that serve as links between different packages.  Each of these software
packages is currently  being upgraded or replaced.  It is  anticipated  that all
Customized  Applications will be compliant prior to the end of the third quarter
of 1999.

     With respect to Third Party Products, the Company has reviewed its business
processes  that may have  Year  2000  concerns  performed  by,  with or  through
external  business  associates.  This  includes  computer  hardware,   telephone
systems,  security  systems and other  numerous  products as well as third party
applications  that have not been  customized  by the  Company.  The  Company has
evaluated  various  third  parties  that provide  products or services,  such as
printing  companies,  power  and  utility  companies  and other  vendors.  Where
appropriate, agreements with third party vendors have been amended and Year 2000
compliance certifications have been obtained.  Significant business partners and
vendors  will be  required  to  provide  the  Company  with Year 2000  certified
products or services. Such products and services are being tested by the Company
to  validate  the  compliance  certification.  This  portion  of the plan is 93%
complete, is on schedule and is planned for completion in September 1999.
<TABLE>
<CAPTION>
         <S>                              <C>                                <C>

         YEAR 2000 PLAN                   PERCENT COMPLETE                   COMPLETION DATE

         In-house Applications                   100%                         March 1999

         Customized Applications                  91%                         September 1999

         Third Party Products                     93%                         September 1999
</TABLE>

     The cost of the Year 2000 project is being funded  through  operating  cash
flows and is not expected to be material to the  Company's  financial  position.
For the six months ended June 30, 1999,  the Company has incurred  costs of $2.8
million ($0.3 million in the second  quarter of 1999)  relating to the Year 2000
project.  For the remainder of 1999, the Company  anticipates an additional cost
of $0.3 million which will be expensed as incurred. The company has made capital
expenditures of $4.4 million for the six months ended June 30, 1999, and expects
to make an  additional  $0.5  million in capital  expenditures  to complete  the
project.

     During  the  second   quarter  of  1999,   the  Company  has   completed  a
comprehensive  analysis of the operational problems and costs (including loss of
revenues) that could result from the unlikely failure by the Company and certain
third parties to complete efforts necessary to achieve Year 2000 compliance on a
timely basis. While the Company currently believes that the timely completion of
its Year 2000 project  will limit  exposure so that the Year 2000 issue will not
pose  material  operational  problems,  the Company  cannot  control third party
systems.  Contingency  plans have been developed and documented for dealing with
the worst case scenarios with the highest chance of occurring.


















                                                                              15
<PAGE>


     The  costs  of the  project  and the  date on which  the  Company  plans to
complete the necessary Year 2000  modifications  are based on management's  best
estimates,  which were  derived  using  numerous  assumptions  of future  events
including  the  continued   availability  of  certain  resources,   third  party
remediation  plans  and other  factors.  There can be no  guarantee  that  these
timelines or estimates will be achieved.  Actual results could differ materially
from those planned.  Specific factors that might cause such material differences
to occur include, but are not limited to, the availability and cost of personnel
trained in this area;  the ability to locate and correct all  relevant  computer
codes;  and the ability of the Company's  significant  suppliers,  customers and
others  with which it  conducts  business,  including  federal,  state and local
governmental  agencies,  to identify and resolve  their own Year 2000 issues and
similar uncertainties.  Due to these uncertainties, the Company may face certain
claims,  the impact of which is not  currently  estimable.  No assurance  can be
given that the cost of defending  and  resolving  such claims,  if any, will not
significantly  affect the Company's results of operations.  Although the Company
has some  agreements  with  third  party  vendors  and  suppliers  that  contain
indemnification  provisions that protect the Company under certain circumstances
relating  to  Year  2000  issues,   there  can  be  no   assurances   that  such
indemnification provisions will cover all of the Company's liabilities and costs
related to Year 2000 claims by third parties.

FORWARD LOOKING STATEMENTS

     Statements  contained  in this  report  that are not  historical  facts are
forward looking  statements subject to inherent risks and uncertainties that may
cause actual results or events to differ  materially from those  contemplated by
such forward looking statements. The terms "anticipate",  "believe", "estimate",
"expect", "objective", "plan", "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 may  cause  actual  results  or  events to  differ  materially  from  those
contemplated by such forward looking statements,  include, among others, (1) the
Company's  ability to  successfully  implement  the action plans to improve loss
ratios;  (2) the effects of either  federal or state health care reform or other
legislation;  (3) rising health care costs,  including the Company's  ability to
predict such costs and adequately price its products;  (4) changes in membership
utilization  and  risk;  (5)  government   regulations,   including  changes  in
insurance, health care and other regulatory conditions; (6) delays in regulatory
approvals,  and regulatory  action  resulting  from market conduct  activity and
general  administrative  compliance  with state and  federal  laws;  (7) general
business  conditions,   including  competitive  practices  and  demand  for  the
Company's  products;  (8)  development  of and changes in claims  reserves;  (9)
rating  agency  policies  and  practices;   (10)  general  economic  conditions,
including  changes  in  interest  rates and the  effect of such  changes  on the
Company's  investment  portfolio;   (11)  the  Company's  ability  to  integrate
acquisitions;  (12) unforeseen  costs or consequences of Year 2000 issues;  (13)
the retention of key management and technical employees,  and (14) other factors
that may be referred to in the Company's  reports filed with the  Securities and
Exchange Commission from time to time.

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company's market risk has not substantially changed from the year ended
December 31, 1998.
























                                                                              16
<PAGE>


PART II.   OTHER INFORMATION

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

     The Annual Meeting of  shareholders of the Company was held on May 27, 1999
for the purpose of (1) electing  three  directors for terms expiring at the 2002
Annual Meeting of Shareholders, (2) amending the Company's Equity Incentive Plan
(the "Equity Incentive Plan") to allow non-employee  directors to participate in
the Equity  Incentive Plan and to make other  amendments to the Equity Incentive
Plan, and (3) approving the Company's Executive Annual Incentive Plan.

     All three of the  Company's  nominees  were  elected,  the amendment of the
Equity Incentive Plan was approved,  and the Executive Annual Incentive Plan was
approved. The voting results for the proposals were as follows:
<TABLE>
<CAPTION>

         ELECTION OF DIRECTORS FOR TERMS EXPIRING IN 2002:
         <S>                      <C>                           <C>                      <C>

         Roger H. Ballou:                                       W. Francis Brennan:
         For                      15,646,802 shares             For                      15,649,815 shares
         Withheld                    806,547 shares             Withheld                    803,534 shares
         Abstained                                0             Abstained                                0
         Broker Non-Votes                         0             Broker Non-Votes                         0

         J. Gus Swoboda:
         For                      15,649,425 shares
         Withheld                    803,924 shares
         Abstained                                0
         Broker Non-Votes                         0

         AMENDMENT OF EQUITY INCENTIVE PLAN:

         For                      12,878,509 shares
         Against                   3,567,765 shares
         Abstained                     7,075 shares
         Broker Non-Votes                  0 shares

         APPROVAL OF EXECUTIVE ANNUAL INCENTIVE PLAN:

         For                      16,162,427 shares
         Against                     276,568 shares
         Abstained                    14,354 shares
         Broker Non-Votes                  0 shares
</TABLE>

     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 April 14, 1999 with respect to the 1999 Annual Meeting of
Shareholders.




























                                                                              17
<PAGE>


ITEM 5.       OTHER INFORMATION

     On August 3, 1999,  the Company  announced  that its Board of Directors has
authorized  the  Company  to  repurchase  up to $10  million  of  the  Company's
outstanding common stock. The plan to repurchase its common stock will allow the
Company to buy back its shares,  from time to time,  in open market or privately
negotiated transactions,  subject to price and market conditions.  Any purchases
will be made in a manner to comply with the  provisions of Rule 10b-18 under the
Securities  Exchange Act of 1934.  In  determining  when and whether to purchase
shares,  management will also consider,  among other factors,  market price, the
number of shares actively traded in the market,  indications of seller interest,
the number of shares held by large shareholders,  and the effect of purchases on
shareholder  value.  Because  of  the  unpredictability  of  these  factors,  no
assurance can be given as to how many shares may be repurchased.


 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  Current  Report  dated May 24, 1999 was filed by the Company to
report  (under  Item 5) the  announcement  by the Company of its plans to take a
charge in the second quarter of 1999 to strengthen its medical claims reserves.


















































                                                                              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 12, 1999
     -----------------

                      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>
<TABLE>



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

                                                   EXHIBIT INDEX
                                                        TO
                                            FORM 10-Q QUARTERLY REPORT
                                          for quarter ended June 30, 1999
<CAPTION>
<S>               <C>                                                  <C>                               <C>

                                                                       INCORPORATED HEREIN                 FILED
  EXHIBIT NO.                    DESCRIPTION                             BY REFERENCE TO                 HEREWITH

3.2               Bylaws of the Company as amended and                                                       X
                  restated May 27, 1999

27.1              Financial Data Schedule                                                                    X

27.2              Restated Financial Data Schedule                                                           X
                  (six months ended June 30, 1998)



</TABLE>





















































                                                                            EX-1