<PAGE>


                                     BLUE CROSS
                             AFFILIATE LICENSE AGREEMENT


    This Agreement by and among Blue Cross and Blue Shield Association 
("BCBSA") and BC Life & Health Insurance Company ("Affiliate"), an affiliate 
of the Blue Cross Plan(s), known as Wellpoint Health Networks, Inc. ("Plan"), 
which is also a Party signatory hereto.

    WHEREAS, BCBSA is the owner of the BLUE CROSS and BLUE CROSS Design service
marks;

    WHEREAS, Plan and Affiliate desire that the latter be entitled to use the
BLUE CROSS and BLUE CROSS Design service marks (collectively the "Licensed
Marks") as service marks and be entitled to use the term BLUE CROSS in a trade
name ("Licensed Name");

    NOW THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

    1.   GRANT OF LICENSE

    Subject to the terms and conditions of this Agreement, BCBSA hereby grants
to Affiliate the right to use the Licensed Marks and Name in connection with,
and only in connection with:  (i) health care plans and related services and
administering the non-health portion of workers' compensation insurance, and
(ii) underwriting the indemnity portion of workers' compensation insurance,
provided that Affiliate's total premium revenue comprises less than 15 percent
of the sponsoring Plan's net subscription revenue.

This grant of rights is non-exclusive and is limited to the Service Area served
by the Plan.  Affiliate may not use the Licensed Marks and Name in its legal
name and may use the Licensed Marks and Name in its Trade Name only with the
prior consent of BCBSA.

    2.   QUALITY CONTROL

    A.   Affiliate agrees to use the Licensed Marks and Name only in connection
with the licensed services and further agrees to be bound by the conditions
regarding quality control shown in attached Exhibit A as they may be amended by
BCBSA from time-to-time.

<PAGE>

    B.   Affiliate agrees to comply with all applicable federal, state and
local laws.

    C.   Affiliate agrees that it will provide on an annual basis (or more
often if reasonably required by Plan or by BCBSA) a report or reports to Plan
and BCBSA demonstrating Affiliate's compliance with the requirements of this
Agreement including but not limited to the quality control provisions of this
paragraph and the attached Exhibit A.

    D.   Affiliate agrees that Plan and/or BCBSA may, from time-to-time, upon
reasonable notice, review and inspect the manner and method of Affiliate's
rendering of service and use of the Licensed Marks and Name.

    E.   As used herein, an Affiliate is defined as an entity organized and
operated in such a manner, that it meets the following requirements:

(1) If the Plan has 50 percent of the voting control of the Affiliate:

    (a)  the Plan must have the legal ability to prevent any change in the
    articles of incorporation, bylaws or other establishing or governing
    documents of the Affiliate with which it does not concur;

    (b)  the Plan must have at least equal control over the operations of the
    Affiliate;

    (c)  the Plan must concur in writing before the Affiliate can:

         (i)       change its legal and/or trade names;

         (ii)      change the geographic area in which it operates;

         (iii)     change the fundamental type(s) of business in which it
                   engages;

         (iv)      take any action that Plan or BCBSA reasonably
                   believes will adversely affect the Licensed Marks
                   and Name.

(2) If the Plan has more than 50 percent voting control of the
    Affiliate:

    (a)  the Plan must have the legal ability to prevent any change in the
    articles of incorporation, bylaws or other establishing or governing
    documents of the Affiliate with which it does not concur;


                                          2


<PAGE>

    (b)  the Plan must have control over the policy and operations of the
    Affiliate.

    3.   SERVICE MARK USE

    A.   Affiliate shall at all times make proper service mark use of the
Licensed Marks and Name, including but not limited to use of such symbols or
words as BCBSA shall specify to protect the Licensed Marks and Name and shall
comply with such rules (generally applicable to Affiliates licensed to use the
Licensed Marks and Name) relative to service mark use, as are issued from time-
to-time by BCBSA.  Affiliate recognizes and agrees that all use of the Licensed
Marks and Name by Affiliate shall inure to the benefit of BCBSA.

    B.   Affiliate may not directly or indirectly use the Licensed Marks and
Name in a manner that transfers or is intended to transfer in the Service Area
the goodwill associated therewith to another mark or name, nor may Affiliate
engage in activity that may dilute or tarnish the unique value of the Licensed
Marks and Name.

    C.   If Affiliate meets the standards of 2E(1) but not 2E(2) above and any
of  Affiliate's advertising or promotional material is reasonably determined by
BCBSA and/or the Plan to be in contravention of rules and regulations governing
the use of the Licensed Marks and Name,  Affiliate shall for ninety (90) days
thereafter obtain prior approval from BCBSA of advertising and promotional
efforts using the Licensed Marks and Name, approval or disapproval thereof to be
forthcoming within five (5) business days of receipt of same by BCBSA or its
designee.  In all advertising and promotional efforts, Affiliate shall observe
the Service Area limitations applicable to Plan.

    D.   Affiliate shall use its best efforts in the Service Area to promote
and build the value of the Licensed Marks and Name.

    4.   SUBLICENSING AND ASSIGNMENT

    Affiliate shall not sublicense, transfer, hypothecate, sell, encumber or
mortgage, by operation of law or otherwise, the rights granted hereunder and any
such act shall be voidable at the sole option of Plan or BCBSA.  This Agreement
and all rights and duties hereunder are personal to Affiliate.

    5.   INFRINGEMENT

    Affiliate shall promptly notify Plan and Plan shall promptly notify BCBSA
of any suspected acts of infringement, unfair competition or passing off that
may occur in relation to the Licensed Marks and Name.  Affiliate shall not be
entitled 


                                          3


<PAGE>



to require Plan or BCBSA to take any actions or institute any
proceedings to prevent infringement, unfair competition or passing off by third
parties.  Affiliate agrees to render to Plan and BCBSA, without charge, all
reasonable assistance in connection with any matter pertaining to the protection
of the Licensed Marks and Name by BCBSA.

    6.   LIABILITY INDEMNIFICATION

    Affiliate and Plan hereby agree to save, defend, indemnify and hold BCBSA
harmless from and against all claims, damages, liabilities and costs of every
kind, nature and description (except those arising solely as a result of BCBSA's
negligence) that may arise as a result of or related to Affiliate's rendering of
services under the Licensed Marks and Name.

    7.   LICENSE TERM

    A.   Except as otherwise provided herein, the license granted by this
Agreement shall remain in effect for a period of one (1) year and shall be
automatically extended for additional one (1) year periods unless terminated
pursuant to the provisions herein.

    B.   This Agreement and all of Affiliate's rights hereunder shall
immediately terminate without any further action by any party or entity in the
event that Plan ceases to be authorized to use the Licensed Marks and Name.

    C.   Notwithstanding any other provision of this Agreement, this license to
use the Licensed Marks and Name may be forthwith terminated by the Plan or the
affirmative vote of the majority of the Board of Directors of BCBSA present and
voting at a special meeting expressly called by BCBSA for the purpose on ten
(10) days written notice for:  (1) failure to comply with any applicable minimum
capital or liquidity requirement under the quality control standards of this
Agreement; or (2) failure to comply with the "Organization and Governance"
quality control standard of this Agreement; or (3) impending financial
insolvency; or (4) for a Smaller Affiliate (as defined in Exhibit A), failure to
comply with any of the applicable requirements of Standards 2, 3, 4, 5 or 7 of
attached Exhibit A; or  (5) such other reason as is determined in good faith
immediately and irreparably to threaten the integrity and reputation of BCBSA,
the Plans, any other licensee including Affiliate and/or the Licensed Marks and
Name.


                                          4


<PAGE>

    D.   Except as otherwise provided in Paragraphs 7(B), 7(C) or 7(E) herein,
should Affiliate fail to comply with the provisions of this Agreement and not
cure such failure within thirty (30) days of receiving written notice thereof
(or commence a cure within such thirty day period and continue diligent efforts
to complete the cure if such curing cannot reasonably be completed within such
thirty day period) BCBSA or the Plan shall have the right to issue a notice that
the Affiliate is in a state of noncompliance.   If a state of noncompliance as
aforesaid is undisputed by the Affiliate or is found to exist by a mandatory
dispute resolution panel and is uncured as provided above, BCBSA shall have the
right to seek judicial enforcement of the Agreement or to issue a notice of
termination thereof.   Notwithstanding any other provisions of this Agreement,
any disputes as to the termination of this License pursuant to Paragraphs 7(B),
7(C) or 7(E) of this Agreement shall not be subject to mediation and mandatory
dispute resolution.  All other disputes between BCBSA, the Plan and/or Affiliate
shall be submitted promptly to mediation and mandatory dispute resolution.  The
mandatory dispute resolution panel shall have authority to issue orders for
specific performance and assess monetary penalties.  Except, however, as
provided in Paragraphs 7(B) and 7(E) of this Agreement, this license to use the
Licensed Marks and Name may not be finally terminated for any reason without the
affirmative vote of a majority of the present and voting members of the Board of
Directors of BCBSA.

    E.   This Agreement and all of Affiliate's rights hereunder shall
immediately terminate without any further action by any party or entity in the
event that:

    (1)  Affiliate shall no longer comply with item 2(E) above;

    (2)  Appropriate dues, royalties and other payments for Affiliate pursuant
to paragraph 9 hereof, which are the royalties for this License Agreement, are
more than sixty (60) days in arrears to BCBSA; or

    (3)  Any of the following events occur:  (i) a voluntary petition shall be
filed by Affiliate seeking bankruptcy, reorganization, arrangement with
creditors or other relief under the bankruptcy laws of the United States or any
other law governing insolvency or debtor relief, or (ii) an involuntary petition
or proceeding shall be filed against Affiliate seeking bankruptcy,
reorganization, arrangement with creditors or other relief under the bankruptcy
laws of the United States or any other law governing insolvency or debtor relief
and such petition or proceeding is consented to or acquiesced in by Affiliate or
is not dismissed within sixty (60) days of the date upon which the petition or
other document commencing the proceeding is served upon the Affiliate, or (iii)
an order for relief is entered against Affiliate in any case under the
bankruptcy laws of the United States, or Affiliate is adjudged bankrupt or
insolvent as those terms are defined in the Uniform Commercial Code as enacted
in the State of Illinois


                                          5


<PAGE>

by any court of competent jurisdiction, or (iv) Affiliate makes a general
assignment of its assets for the benefit of creditors, or (v) the Department of
Insurance or other regulatory agency assumes control of Affiliate or delinquency
proceedings (voluntary or involuntary) are instituted, or (vi) an action is
brought by Affiliate seeking its dissolution or liquidation of its assets or
seeking the appointment of a trustee, interim trustee, receiver or other
custodian for any of its property or business, or (vii) an action is instituted
against Affiliate seeking its dissolution or liquidation of its assets or
seeking the appointment of a trustee, interim trustee, receiver or other
custodian for any of its property or business and such action is consented to or
acquiesced in by Affiliate or is not dismissed within sixty (60) days of the
date upon which the pleading or other document commencing the action is served
upon the Affiliate, or (viii) a trustee, interim trustee, receiver or other
custodian for any of  Affiliate's property or business is appointed.

    F.   Upon termination of this Agreement for cause or otherwise, Affiliate
agrees that it shall immediately discontinue all use of the Licensed Marks and
Name, including any use in its trade name.

    G.   Upon termination of this Agreement, Affiliate shall immediately notify
all of its customers that it is no longer a licensee of BCBSA and, if directed
by the Association's Board of Directors, shall provide instruction on how the
customer can contact BCBSA or a designated licensee to obtain further
information on securing coverage.  The notification required by this paragraph
shall be in writing and in a form approved by BCBSA.  The BCBSA shall have the
right to audit the terminated entity's books and records to verify compliance
with this paragraph.


                                          6
<PAGE>

    H.   In the event that the Plan has more than 50 percent voting control of
the Affiliate under Paragraph 2(E)(2) above and is a Larger Affiliate (as
defined in Exhibit A), then the vote called for in Paragraphs 7(C) and 7(D)
above shall require the affirmative vote of three-fourths of the Blue Cross
Plans which are Regular Members of BCBSA and three-fourths of the total then
current weighted vote of all the Blue Cross Plans which are Regular Member Plans
of BCBSA.

    8.   DISPUTE RESOLUTION

    The parties agree that any disputes between them or between or among either
of them and one or more Plans or Affiliates of Plans that use in any manner the
Blue Cross and Blue Shield Marks and Name are subject to the Mediation and
Mandatory Dispute Resolution process attached to and made a part of Plan's
License from BCBSA to use the Licensed Marks and Name as Exhibits 5, 5A and 5B
as amended from time-to-time, which documents are incorporated herein by
reference as though fully set forth herein.


                                    7

<PAGE>

    9.   LICENSE FEE

    Affiliate will pay to BCBSA a fee for this License determined pursuant to
the formula(s) set forth in Exhibit B.

    10.  JOINT VENTURE

    Nothing contained in the Agreement shall be construed as creating a joint
venture, partnership, agency or employment relationship between Plan and
Affiliate or between either and BCBSA.

    11.  NOTICES AND CORRESPONDENCE

    Notices regarding the subject matter of this Agreement or breach or
termination thereof shall be in writing and shall be addressed in duplicate to
the last known address of each other party, marked respectively to the attention
of its President and, if any, its General Counsel.

    12.  COMPLETE AGREEMENT

    This Agreement contains the complete understandings of the parties in
relation to the subject matter hereof.  This Agreement may only be amended by a
writing executed by all parties hereto or by the vote of three-fourths of the
Plans and three-fourths of the total then current weighted vote of all the
Plans.

    13.  SEVERABILITY

    If any term of this Agreement is held to be unlawful by a court of
competent jurisdiction, such findings shall in no way affect the remaining
obligations of the parties hereunder and the court may substitute a lawful term
or condition for any unlawful term or condition so long as the effect of such
substitution is to provide the parties with the benefits of this Agreement.

    14.  NONWAIVER

    No waiver by BCBSA of any breach or default in performance on the part of
Affiliate or any other licensee of any of the terms, covenants or conditions of
this Agreement shall constitute a waiver of any subsequent breach or default in
performance of said terms, covenants or conditions.


                                          7

<PAGE>













                         THIS PAGE IS INTENTIONALLY BLANK.







                                        8




<PAGE>

    15.  GOVERNING LAW

    This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Illinois.

    16.  HEADINGS

    The headings inserted in this agreement are for convenience only and shall
have no bearing on the interpretation hereof.

    IN WITNESS WHEREOF, the parties have caused this License Agreement to be
executed and effective as of the date of last signature written below.


AFFILIATE: BC Life & Health Insurance Company

By: /s/
   --------------------------------

Date: 11/1/96
    ------------------------------

PLAN: Wellpoint Health Networks, Inc.

By: /s/ Leonard Shaeffer
   --------------------------------

Date: 11/1/96
    ------------------------------


BLUE CROSS AND BLUE SHIELD ASSOCIATION

By:
   --------------------------------

Date: 1/13/97
    ------------------------------


                                          9


<PAGE>

EXHIBIT A



AFFILIATE LICENSE STANDARDS
June 1996

PREAMBLE



The standards for licensing affiliates are established by BCBSA and are subject
to change from time-to-time upon the affirmative vote of three-fourths (3/4) of
the Plans and three-fourths (3/4) of the total weighted vote.  Each licensed
Plan is required to use a standard affiliate license form provided by BCBSA and
to cooperate fully in assuring that the licensed affiliate maintains compliance
with the license standards.

The Affiliate License provides a flexible vehicle to accommodate the potential
range of health and workers' compensation related products and services Plan
affiliates provide.  The Affiliate License collapses former health affiliate
licenses (HCC, HMO, PPO, TPA, and IDS) into a single license using the following
business-based criteria to provide a framework for license standards:

-   Percent of affiliate controlled by parent:  Greater than 50 percent or 50
    percent?

-   Risk assumption:  yes or no?

-   Medical care delivery:  yes or no?

-   Importance of the affiliate to the parent: If the affiliate has health or
    workers' compensation administration business, does such business
    constitute 15 percent or more (referred to as a "larger" affiliate) of the
    parent's and other licensed health subsidiaries' contract enrollment?


                                          


<PAGE>

EXHIBIT A (CONTINUED)

For purposes of definition:

-   A "smaller affiliate:"  (1) comprises less than fifteen percent (15%) of
    Plan's and its licensed affiliates' total contract enrollment (as reported
    on the BCBSA Quarterly Enrollment Report, excluding rider and freestanding
    coverage, and treating an entity seeking licensure as licensed);* or (2)
    underwrites the indemnity portion of workers' compensation insurance and
    has total premium revenue less than 15 percent of the sponsoring Plan's net
    subscription revenue.

-   A "larger affiliate" comprises fifteen percent (15%) or more of Plan's and
    its licensed affiliates' total contract enrollment (as reported on the
    BCBSA Quarterly Enrollment Report, excluding rider and freestanding
    coverage, and treating an entity seeking licensure as licensed.)*

Conversion to the new license shall be:

-   For smaller affiliates:
    -    immediately for new applicants, and
    -    January 1, 1996 for existing HMO, PPO, TPA and IDS licensees under
         fifteen percent (15%).

-   For larger affiliates:
    -    immediately for new applicants,
    -    July 1, 1995 for existing health coverage carrier licensees, and
    -    June 1996, for all other currently licensed affiliates presently at or
         over fifteen percent(15%).

Changes in affiliate status:

If ANY affiliate's status changes regarding: its Plan ownership level, its risk
acceptance or direct delivery of medical care, the affiliate shall notify BCBSA
within thirty (30) days of such occurrence in writing and come into compliance
with the applicable standards within six (6) months.

If a smaller affiliate's health and workers' compensation administration
business surpasses fifteen percent (15%) of the total contract enrollment of the
Plan and licensed affiliates, the affiliate shall:




<PAGE>

EXHIBIT A (CONTINUED)


1.  Within thirty (30) days, notify BCBSA of this fact in writing, including
    evidence that the affiliate meets the minimum liquidity and capital (BCBSA
    Capital Benchmark and state-established minimum reserve) requirements of
    the larger affiliate Financial Responsibility standard; and

2.  Within six (6) months after surpassing the fifteen percent (15%) threshold,
    demonstrate compliance with all license requirements for a larger
    affiliate.

If an affiliate that underwrites the indemnity portion of workers' compensation
insurance receives a change in rating or proposed change in rating, the
affiliate shall notify BCBSA within 30 days of notification by the external
rating agency.


---------------

*For purposes of this calculation,

The numerator equals:

Applicant affiliate's contract enrollment, as defined in BCBSA's Quarterly
Enrollment Report (excluding rider and freestanding coverage).

The denominator equals:

Numerator PLUS Plan and all other licensed affiliates' contract enrollment, as
reported in BCBSA's Quarterly Enrollment Report (excluding rider and
freestanding coverage).




<PAGE>

EXHIBIT A (CONTINUED)

                          STANDARDS FOR LICENSED AFFILIATES

Each affiliate seeking licensure must answer all four questions. Depending on
the affiliate's answers, certain standards apply:

1.  What percent of the affiliate is controlled by the parent Plan?

      More than 50%                    50%
           |                            |
    Standard 1A, 4                Standard 1B, 4


                                     IN ADDITION,

2.  Is risk being assumed?

                                  Yes
                   |               |                  |
Affiliate underwrites   Affiliate comprises           Affiliate comprises
any indemnity portion   less than                     greater than or equal to
of workers'             15% of total contract         15% of total contract
compensation insurance  enrollment of Plan            enrollment of Plan
         |              and its licensed              and its licensed
Standards 7A-7E         affiliates, and does          affiliates, and does
                        not underwrite the            not underwrite the
                        indemnity portion of          indemnity portion of
                        workers' compensation         workers' compensation
                        insurance                     insurance
                             |                             |
                        Standard 2                    Standard 6H
                        (Guidelines 2.1,2.2)


                                  No
                             |         |
Affiliate comprises less than          Affiliate comprises greater than
15% of total contract                  or equal to 15% of total contract
enrollment of Plan and its             enrollment of Plan and its
licensed affiliates                    licensed affiliates
    |                                       |
Standard 2                             Standard 6H
(Guidelines 2.1,2.3)


                                     IN ADDITION,
3.  Is medical care being directly provided?

              Yes                           No
               |                            |
          Standard 3A                   Standard 3B

                                     IN ADDITION,
4.  If the affiliate has health or workers' compensation administration
business, does such business comprise 15% or more of the total contract
enrollment of Plan and its licensed affiliates?

              Yes                                 No
               |                               |      |
         Standards 6A-6I          Affiliate is a      Affiliate is not a
                                  former primary      former primary
                                  licensee            licensee
                                       |                   |
                                  Standards 5,8,9     Standards 5,8




<PAGE>

EXHIBIT A (CONTINUED)


STANDARD 1 - ORGANIZATION AND GOVERNANCE

1A.)  The Standard for more than 50% Plan ownership is:

An affiliate shall be organized and operated in such a manner that it is
controlled by a licensed Plan or Plans which have, directly or indirectly: 1)
more than 50% of the voting control of the affiliate; and 2) the legal ability
to prevent any change in the articles of incorporation, bylaws or other
establishing or governing documents of the affiliate with which it does not
concur; and 3) operational control of the affiliate.

1B.)  The Standard for 50% Plan ownership is:

An affiliate shall be organized and operated in such a manner that a licensed
Plan or Plans have directly or indirectly:

1)  not less than 50% of the voting control of the affiliate; and

2)  the legal ability to prevent any change in the articles of incorporation,
    bylaws or other establishing or governing documents of the affiliate with
    which it does not concur; and

3)  at least equal direct or indirect control over the operations of the
    affiliate; and

4)  sufficient authority so that changes in the following require the approval
    of the Licensed Plan or Plans:

    o    geographic operating area of the affiliate

    o    the legal and trade names of the affiliate

    o    the types of activity in which the affiliate engages

    o    any action which would cause the affiliate to be in violation of the
         Standards applicable to Licensure by BCBSA.




<PAGE>

EXHIBIT A (CONTINUED)


STANDARD 2 - FINANCIAL RESPONSIBILITY

An affiliate shall be operated in a manner that provides reasonable financial
assurance that it can fulfill all of its contractual obligations to its
customers.  If a risk-assuming affiliate ceases operations for any reason, Blue
Cross and/or Blue Shield Plan coverage will be offered to all affiliate
subscribers without exclusions, limitations or conditions based on health
status.  If a nonrisk-assuming affiliate ceases operations for any reason,
sponsoring Plan(s) will provide for services to its (their) customers.

STANDARD 3 - STATE LICENSURE/CERTIFICATION

3A.)     The Standard for an affiliate that employs, owns or contracts on a
         substantially exclusive basis for medical services is:

An affiliate shall maintain unimpaired licensure or certification for its
medical care providers to operate under applicable state laws.


3B.) The Standard for an affiliate that does not employ, own or contract on a
    substantially exclusive basis for medical services is:

An affiliate shall maintain unimpaired licensure or certification to operate
under applicable state laws.

STANDARD 4 - CERTAIN DISCLOSURES

An affiliate shall make adequate disclosure in contracting with third parties
and in disseminating public statements of 1) the structure of the Blue Cross and
Blue Shield System; and 2) the independent nature of every licensee; and 3) the
affiliate's financial condition.

STANDARD 5 - REPORTS AND RECORDS FOR CERTAIN SMALLER AFFILIATES

For a smaller affiliate that does not underwrite the indemnity portion of
workers' compensation insurance, the Standard is:

An affiliate and/or its licensed Plan(s) shall furnish, on a timely and accurate
basis, reports and records relating to these Standards and the License
Agreements between BCBSA and affiliate.




<PAGE>

EXHIBIT A (CONTINUED)


STANDARD 6 - OTHER STANDARDS FOR LARGER AFFILIATES

Standards 6(A) - (I) that follow apply to larger affiliates.

Standard 6(A):  Board of Directors

An affiliate Governing Board shall act in the interest of its Corporation in
providing cost-effective health care services to its customers.  An affiliate
shall maintain a governing Board, which shall control the affiliate, composed of
a majority of persons other than providers of health care services, who shall be
known as public members.  A public member shall not be an employee of or have a
financial interest in a health care provider, nor be a member of a profession
which provides health care services.

Standard 6(B):  Responsiveness to Customers

An affiliate shall be operated in a manner responsive to customer needs and
requirements.

Standard 6(C):  Participation in National Programs

An affiliate shall effectively and efficiently participate in each national
program as from time to time may be adopted by the Member Plans for the purposes
of providing portability of membership between the licensees and ease of claims
processing for customers receiving benefits outside of the affiliate's Service
Area.

Such programs are applicable to licensees, and include:

    A.   Transfer Program;

    B.   National Account Equalization Program;

    C.   BlueCard Program;




<PAGE>

EXHIBIT A (CONTINUED)


    D.   Inter-Plan Teleprocessing System (ITS); and

    E.   Inter-Plan Data Reporting (IPDR) Program.


Standard 6(D):   Financial Performance Requirements

In addition to requirements under the national programs listed in
Standard 6C:  Participation in National Programs, an affiliate shall take such
action as required to ensure its financial performance in programs and contracts
of an inter-licensee nature or where BCBSA is a party.

Standard 6(E):  Cooperation with Plan Performance Response Process

An affiliate shall cooperate with BCBSA's Board of Directors and its Plan
Performance and Financial Standards Committee in the administration of the Plan
Performance Response Process and in addressing affiliate performance problems
identified thereunder.

Standard 6(F):  Independent Financial Rating

An affiliate shall obtain a rating of its financial strength from an independent
rating agency approved by BCBSA's Board of Directors for such purpose.

Standard 6(G):  Best Efforts

During each year, an affiliate shall use its best efforts in the designated
Service Area to promote and build the value of the Blue Cross Mark.

Standard 6(H):  Financial Responsibility

An affiliate shall be operated in a manner that provides reasonable financial
assurance that it can fulfill all of its contractual obligations to its
customers.




<PAGE>

EXHIBIT A (CONTINUED)


Standard 6(I):  Reports and Records

An affiliate shall furnish to BCBSA on a timely and accurate basis reports and
records relating to compliance with these Standards and the License Agreements
between BCBSA and affiliate.  Such reports and records are the following:

A)       BCBSA Affiliate Licensure Information Request; and

B)       Biennial trade name and service mark usage material, including
         disclosure material; and

C)       Changes in the ownership and governance of the affiliate, including
         changes in its charter, articles of incorporation, or bylaws, changes
         in an affiliate's Board composition, or changes in the identity of the
         affiliate's Principal Officers, and changes in risk acceptance,
         contract growth, or direct delivery of medical care; and

D)       Quarterly Financial Report including the Capital Benchmark Worksheet,
         Annual Financial Forecast, Annual Certified Audit Report, Insurance
         Department Examination Report, Annual Statement filed with State
         Insurance Department (with all attachments); and

E)       Quarterly Utilization Report, Quarterly Enrollment Report, Cost
         Containment Report, NMIS Quarterly Report.

STANDARD 7 - OTHER STANDARDS FOR RISK-ASSUMING WORKERS' COMPENSATION AFFILIATES

Standards 7(A) - (E) that follow apply to affiliates that underwrite the
indemnity portion of workers' compensation insurance.
EXHIBIT A (CONTINUED)


Standard 7 (A):  Financial Responsibility

An affiliate shall be operated in a manner that provides reasonable financial
assurance that it can fulfill all of its contractual obligations to its
customers.


<PAGE>


Standard 7(B):  Reports and Records

An affiliate shall furnish, on a timely and accurate basis, reports and records
relating to compliance with these Standards and the License Agreements between
BCBSA and the affiliate.  Such reports and records are the following:

    A.   BCBSA Affiliate Licensure Information Request; and

    B.   Biennial trade name and service mark usage materials, including
         disclosure materials; and

    C.   Annual Certified Audit Report, Annual Statement as filed with the
         State Insurance Department (with all attachments), Annual NAIC's
         Risk-Based Capital Worksheets for Property and Casualty Insurers, and
         Annual Financial Forecast; and

    D.   Quarterly Financial Report, Quarterly Estimated Risk-Based Capital for
         Property and Casualty Insurers, Insurance Department Examination
         Report, and Quarterly NMIS Report (for licensed health business only);
         and

    E.   Notification of all changes and proposed changes to independent
         ratings within 30 days of receipt and submission of  a copy of all
         rating reports; and

    F.   Changes in the ownership and governance of the affiliate including
         changes in its charter, articles of incorporation, or bylaws, changes
         in an affiliate's Board composition, Plan control, state license
         status, operating area, the affiliate's Principal Officers or direct
         delivery of medical care.


Standard 7(C):  Loss Prevention

An affiliate shall apply loss prevention protocol to both new and existing
business.


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Standard 7(D):  Claims Administration

An affiliate shall maintain an effective claims administration process that
includes all the necessary functions to assure prompt and proper resolution of
medical and indemnity claims.

Standard 7(E):  Disability and Provider Management

An affiliate shall arrange for the provision of appropriate and necessary
medical and rehabilitative services to facilitate early intervention by medical
professionals and timely and appropriate return to work.

STANDARD 8 - COOPERATION WITH AFFILIATE LICENSE PERFORMANCE RESPONSE PROCESS
PROTOCOL

An affiliate and its Sponsoring Plan(s) shall cooperate with BCBSA's Board of
Directors and its Plan Performance and Financial Standards  Committee in the
administration of the Affiliate License Performance Response Process Protocol
(ALPRPP) and in addressing affiliate compliance problems identified thereunder.

STANDARD 9 - PARTICIPATION IN NATIONAL PROGRAMS BY SMALLER AFFILIATES

A smaller affiliate for which this standard applies pursuant to the Preamble
section of Exhibit A of the Affiliate  License Agreement shall effectively and
efficiently participate in certain national programs from time to time as may be
adopted by Member Plans for the purposes of providing ease of claims processing
for customers receiving benefits outside of the affiliate's service area and be
subject to certain relevant financial and reporting requirements.




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EXHIBIT B

ROYALTY FORMULA FOR SECTION 9 OF THE
AFFILIATE LICENSE AGREEMENT

Affiliate will pay BCBSA a fee for this license in accordance with the following
formula:

FOR RISK PRODUCTS:

For affiliates not underwriting the indemnity portion of workers' compensation
insurance:

An amount equal to its pro rata share of each sponsoring Plan's dues payable to
BCBSA computed with the addition of the affiliate's subscription revenue and
contracts arising from products using the marks.  The payment by each sponsoring
Plan of its dues to BCBSA, including that portion described in this paragraph,
will satisfy the requirement of this paragraph, and no separate payment will be
necessary.

For affiliates underwriting the indemnity portion of workers' compensation
insurance:

An amount equal to 0.35 percent of the gross revenue per annum of affiliate
arising from products using the marks; plus, an annual fee of $5,000 per license
for an affiliate subject to Standard 7.

FOR NONRISK PRODUCTS:

An amount equal to 0.24 percent of the gross revenue per annum of affiliate
arising from products using the marks; plus:

1)  An annual fee of $5,000 per license for an affiliate subject to
    Standard 6.

2)  An annual fee of $2,000 per license for all other affiliates.

The foregoing shall be reduced by one-half where both a BLUE CROSS-Registered
Trademark- and BLUE SHIELD-Registered Trademark- License are issued to the same
affiliate.  In the event that any license period is greater or less than one (1)
year, any amounts due shall be prorated.  Royalties under this formula will be
calculated, billed and paid in arrears.