EXHIBIT 10.12  BLUE CROSS LICENSE AGREEMENT (Includes revisions, if any, adopted
by Member Plans through their November 15, 2001 meeting)  This agreement by
and between Blue Cross and Blue Shield Association (BCBSA) and The Blue Cross
Plan, known as WellPoint Health Networks Inc. (the Plan).  Preamble  WHEREAS, the Plan
and/or its predecessor(s) in interest (collectively the Plan) had the right
to use the BLUE CROSS and BLUE CROSS Design service marks (collectively the
Licensed Marks) for health care plans in its service area, which was
essentially local in nature;  WHEREAS, the Plan
was desirous of assuring nationwide protection of the Licensed Marks,
maintaining uniform quality controls among Plans, facilitating the provision of
cost effective health care services to the public and otherwise benefiting the
public;  WHEREAS, to better
attain such ends, the Plan and the predecessor of BCBSA in 1972 simultaneously
executed the BCA License Agreement (s) and the Ownership Agreement; and  WHEREAS, BCBSA and
the Plan desire to supercede said Agreement(s) to reflect their current
practices and to assure the continued integrity of the Licensed Marks and of
the BLUE CROSS system;  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 agree as follows:  
   Agreement  1.             BCBSA hereby grants to the Plan, upon the terms and
conditions of this License Agreement, the right to use BLUE CROSS in its trade
and/or corporate name (the Licensed Name), and the right to use the Licensed
Marks, in the sale, marketing and administration of health care plans and
related services in the Service Area set forth and defined in paragraph 5
below.  As used herein, health care
plans and related services shall include acting as a nonprofit health care
plan, a for-profit health care plan, or mutual health insurer operating on a
notforprofit or for-profit basis, under state law; financing
access to health care services; providing health care management and
administration; administering, but not underwriting, non-health portions of
Workers Compensation insurance; and delivering health care services, except
hospital services (as defined in the Guidelines to Membership Standards
Applicable to Regular Members).  2.             The Plan may use the Licensed Marks and Name in
connection with the offering of:  a)
health care plans and related services in the Service Area through Controlled
Affiliates, provided that each such Controlled Affiliate is separately licensed
to use the Licensed Marks and Name under the terms and conditions contained in
the Agreement attached as Exhibit 1 hereto (the Controlled Affiliate License
Agreement); and:  b) insurance
coverages offered by life insurers under the applicable law in the Service
Area, other than those which the Plan may offer in its own name, provided
through Controlled Affiliates, provided that each such Controlled Affiliate is
separately licensed to use the Licensed Marks and Name under the terms and
conditions contained in the Agreement attached as Exhibit 1A hereto (the
Controlled Affiliate License Agreement Applicable to Life Insurance
Companies) and further provided that the offering of such services does not
and will not dilute or tarnish the unique value of the Licensed Marks and Name;
and c) administration and underwriting of Workers Compensation Insurance
Controlled Affiliates, provided that each such Controlled Affiliate is separately
licensed to use the Licensed Marks and Name under the terms and conditions
contained in the Agreement attached as Exhibit 1 hereto (the Controlled
Affiliate License.).  As used herein, a
Controlled Affiliate is defined as an entity organized and operated in such a
manner that it is subject to the bona fide control of a Plan or Plans and, if
the entity meets the standards of subparagraph B but not subparagraph A of this
paragraph, the entity, its owners, and persons with authority to select or
appoint members or board members, other than a Plan or Plans, have received
written approval of BCBSA.  Absent
written approval by BCBSA of an alternative method of control, bona fide
control shall mean that a Plan or Plans authorized to use the Licensed Marks in
the Service Area of the Controlled Affiliate pursuant to this License
Agreement(s) with BCBSA, other than such Controlled Affiliates License
Agreement(s), (the Controlling Plan(s)), must have:  A.The
legal authority, directly or indirectly through wholly-owned subsidiaries: (a)
to select members of the Controlled Affiliates governing body having more than
50% voting control thereof; (b) to exercise control over the policy and
operations of the Controlled Affiliate; (c) to prevent any change in the
articles of incorporation, bylaws or other establishing or governing documents
of the Controlled Affiliate with which the Controlling Plan(s) do(es) not
concur. In addition, a Plan or Plans directly or indirectly through
wholly-owned subsidiaries shall own more than 50% of any forprofit
Controlled Affiliate; or Amended
as of March 11, 1999  2 
   B.The
legal authority directly or indirectly through wholly-owned subsidiaries (a) to
select members of the Controlled Affiliates governing body having not less
than 50% voting control thereof; (b) to prevent any change in the articles of
incorporation, bylaws or other establishing or governing documents of the
Controlled Affiliate with which the Controlling Plan(s) do(es) not concur; (c)
to exercise control over the policy and operations of the Controlled Affiliate
at least equal to that exercised by persons or entities (jointly or
individually) other than the Controlling Plan(s). Notwithstanding anything to
the contrary in (a) through (c) hereof, the Controlled Affiliates establishing
or governing documents must also require written approval by the Controlling
Plan(s) before the Controlled Affiliate can:  1.             Change its legal and/or trade name;  2.             Change the geographic area in which it operates;  3.             Change any of the types of businesses in which it
engages;  4.             Create, or become liable for by way of guarantee, any
indebtedness, other than indebtedness arising in the ordinary course of
business;  5.             Sell any assets, except for sales in the ordinary course
of business or sales of equipment no longer useful or being replaced;  6.             Make any loans or advances except in the ordinary course
of business;  7.             Enter into any arrangement or agreement with any party
directly or indirectly affiliated with any of the owners of  the Controlled Affiliate or persons or
entities with the authority to select or appoint members or board members of
the Controlled Affiliate, other than the Plan or Plans (excluding owners of
stock holdings of under 5% in a publicly traded Controlled Affiliate);  8.             Conduct any business other than under the Licensed Marks
and Name;  9.             Take any action that any Controlling Plan or BCBSA
reasonably believes will adversely affect the Licensed Marks or Names.  In addition, a Plan or
Plans directly or indirectly through wholly owned subsidiaries shall own at
least 50% of any for-profit Controlled Affiliate.  Amended
as of June 11, 1998  2a 
   3.             The Plan may engage in activities not required by BCBSA
to be directly licensed through Controlled Affiliates and may indicate its
relationship thereto by use of the Licensed Name as a tag line, provided that
the engaging in such activities does not and will not dilute or tarnish the
unique value of the Licensed Marks and Name and further provided that such tag
line  use is not in a manner likely to
cause confusion or mistake.  Consistent
with the avoidance of confusion or mistake, each tag line use of the Plans
Licensed Name: (a) shall be in the style and manner specified by BCBSA from
time-to-time; (b) shall not include the design service marks; (c) shall not be
in a manner to import more than the Plans mere ownership of the Controlled
Affiliate; and (d) shall be restricted to the Service Area.  No rights are hereby created in any
Controlled Affiliate to use the Licensed Name in its own name or
otherwise.  At least annually, the Plan
shall provide BCBSA with representative samples of each such use of its
Licensed Name pursuant to the foregoing conditions.  4.             The Plan recognizes the importance of a comprehensive
national network of independent BCBSA licensees which are committed to
strengthening the Licensed Marks and Name. 
The Plan further recognizes that its actions within its Service Area may
affect the value of the Licensed Marks and Name nationwide.  The Plan agrees (a) to maintain in good
standing its membership in BCBSA; (b) promptly to pay its dues to BCBSA, said
dues to represent the royalties for this License Agreement; (c) materially to
comply with all applicable laws; (d) to comply with the Membership Standards
Applicable to Regular Members of BCBSA, a current copy of which is attached as
Exhibit 2 hereto; and (e) reasonably to permit BCBSA, upon a written, good
faith request and during reasonable business hours, to inspect the Plans books
and records necessary to ascertain compliance herewith.  As to other Plans and third parties, BCBSA
shall maintain the confidentiality of all documents and information furnished
by the Plan pursuant hereto, or pursuant to the Membership Standards, and
clearly designated by the Plan as containing proprietary information of the
Plan.  5.             The rights hereby granted are exclusive to the Plan
within the geographical area(s) served by the Plan on June 30, 1972, and/or as
to which the Plan has been granted a subsequent license, which is hereby
defined as the Service Area, except that BCBSA reserves the right to use the
Licensed Marks in said Service Area, and except to the extent that said Service
Area may overlap areas served by one or more other licensed Blue Cross Plans as
of said date or subsequent license, as to which overlapping areas the rights
hereby granted are nonexclusive as to such other Plan or Plans only.  Amended as of November 20, 1997  3 
   6.             Except as expressly provided by BCBSA with respect to
National Accounts, Government Programs and certain other necessary and
collateral uses, the current rules and regulations governing which are attached
as Exhibit 3 and Exhibit 4 hereto, or as expressly provided herein, the Plan
may not use the Licensed Marks and Name outside the Service Area or in
connection with other goods and services, nor may the Plan use the Licensed
Marks or Name in a manner which is intended to transfer in the Service Area the
goodwill associated therewith to another mark or name.  Nothing herein shall be construed to prevent
the Plan from engaging in lawful activity anywhere under other marks and names
not confusingly similar to the Licensed 
Marks and Name, provided that engaging in such activity does and will
not dilute or tarnish the unique value of the Licensed Marks and Name.  In addition to any and all remedies
available hereunder, BCBSA may impose monetary fines on the Plan for the Plans
use of the Licensed Marks and Names outside the Service Area provided that the
procedure used in imposing a fine is consistent with procedures specifically
prescribed by BCBSA from time to time in regulations of general application.  7.             The Plan agrees that it will display the Licensed Marks
and Name only in such form, style and manner as shall be specifically
prescribed by BCBSA from time-to-time in regulations of general application in
order to prevent impairment of the distinctiveness of the Licensed Marks and
Name and the goodwill pertaining thereto. The Plan shall cause to appear on all
materials on or in connection with which the Licensed Marks or Name are used
such legends, markings and notices as BCBSA may reasonably request in order to
give appropriate notice of service mark or other proprietary rights therein or
pertaining thereto.  8.             BCBSA agrees that: (a) it will not grant any other
license effective during the term of this License Agreement for the use of the
Licensed Marks or Name which is inconsistent with the rights granted to the
Plan hereunder; and (b) it will not itself use the Licensed Marks in derogation
of the rights of the Plan or in a manner to deprive the Plan of the full
benefits of this License Agreement.  The
Plan agrees that it will not attack the title of BCBSA in and to the Licensed
Marks or Name or attack the validity of the Licensed Marks or of this License
Agreement.  The Plan further agrees that
all use by it of the Licensed Marks and Name or any similar mark or name shall
inure to the benefit of BCBSA, and the Plan shall cooperate with BCBSA in
effectuating the assignment to BCBSA of any service mark or trademark
registrations of the Licensed Marks or any similar mark or name held by the
Plan or a Controlled Affiliate of the Plan, all or any portion of which
registration consists of the Licensed Marks.  Amended November 18, 1999  4 
   9.             (a).  Should the
Plan fail to comply with the provisions of paragraphs 24, 6, 7 and/or
12, and not cure such failure within thirty (30) days of receiving written
notice thereof (or commence curing such failure within such thirty day period
and continue diligent efforts to complete the curing of such failure if such curing
cannot reasonably be completed within such thirty day period), BCBSA shall have
the right to issue a notice that the Plan is in a state of noncompliance.
Except as to the termination of a Plans License Agreement or the merger of two
or more Plans, disputes as to noncompliance, and all other disputes between or
among BCBSA, the Plan, other Plans and/or Controlled Affiliates, shall be
submitted promptly to mediation and mandatory dispute resolution pursuant to
the rules and regulations of BCBSA, a current copy of which is attached as
Exhibit 5 hereto, and shall be timely presented and resolved. The mandatory
dispute resolution panel shall have authority to issue orders for specific
performance and assess monetary penalties. If a state of noncompliance as
aforesaid is undisputed by the Plan 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 License Agreement.  Except, however, as provided in paragraphs
9(d)(iii) and 15(a)(i)-(viii) below, no Plans license to use the Licensed
Marks and Name may be finally terminated 
for any reason without the affirmative vote of threefourths of
the Plans and three-fourths of the total then current weighted vote of all the
Plans.  (b).  Notwithstanding any other provision of this
License Agreement, a Plans license to use the Licensed Marks and Name may be
forthwith terminated by the affirmative vote of three-fourths of the Plans and
threefourths of the total then current weighted vote of all the Plans at
a special meeting expressly called by BCBSA for the purpose on ten (10) days
written notice to the Plan advising of the specific matters at issue and
granting the Plan an opportunity to be heard and to present its response to
Member Plans for: (i) failure to comply with any minimum capital or liquidity
requirement under the Membership Standard on Financial Responsibility; or (ii)
impending financial insolvency; or (iii) the pendency of any action instituted
against the Plan seeking its dissolution or liquidation or its assets or
seeking appointment of a trustee, interim trustee, receiver or other custodian
for any of its property or business or seeking the declaration or establishment
of a trust for any of its property of business, unless this License Agreement
has been earlier terminated under paragraph 15(a); or (iv) such other reason as
is determined in good faith immediately and irreparably to threaten the
integrity and reputation of BCBSA, the Plans and/or the Licensed Marks.  (c).  To the extent not otherwise provided
therein, neither: (i) the Membership Standards Applicable to Regular Members of
BCBSA; nor (ii) the rules and regulations governing National Accounts,
Government Programs and certain other uses; nor (iii) the rules and regulations
governing mediation and mandatory dispute resolution, may be amended unless and
until each such amendment is first adopted by the affirmative vote of
three-fourths of the Plans and of three-fourths of the total then current weighted
vote of all the Plans. Amended as of March 11, 1999  5 
   9.  (d). 
The Plan may operate as a for-profit company on the following
conditions:  (i)            The Plan shall discharge all
responsibilities which it has to the Association and to other Plans by virtue
of this Agreement and the Plans membership in BCBSA.  (ii)           The Plan shall not use the licensed
Marks and Name, or any derivative thereof, as part of its legal name or any
symbol used to identify the Plan in any securities market.  The Plan shall use the licensed Marks and
Name as part of its trade name within its service area for the sale, marketing
and administration of health care and related services in the service area.  (iii)          The Plans license to use the Licensed
Marks and Name shall automatically terminate effective: (a) thirty days after
the Plan knows, or there is an SEC filing indicating that, any Institutional
Investor, has become the Beneficial Owner of securities representing 10% or
more of the voting power of the Plan (Excess Institutional Voter), unless
such Excess Institutional Voter shall cease to be an Excess Institutional Voter
prior to such automatic termination becoming effective; (b) thirty days after
the Plan knows, or there is an SEC filing indicating that, any Noninstitutional
Investor has become the Beneficial Owner of securities representing 5% or more
of the voting power of the Plan (Excess Noninstitutional Voter) unless such
Excess Noninstitutional Voter shall cease to be an Excess Noninstitutional
Voter prior to such automatic termination becoming effective; (c) thirty days
after the Plan knows, or there is an SEC filing indicating that, any Person has
become the Beneficial Owner of 20% or more of the Plans then outstanding common
stock or other equity securities which (either by themselves or in combination)
represent an ownership interest of 20% or more pursuant to determinations made
under paragraph 9(d)(iv) below (Excess Owner), unless such Excess Owner shall
cease to be an Excess Owner prior to such automatic termination becoming
effective; (d) ten business days after individuals who at the time the Plan
went public constituted the Board of Directors of the Plan (together with any
new directors whose election to the Board was approved by a vote of 2/3 of the
directors then still in office who were directors at the time the Plan went
public or whose election or nomination was previously so approved) (the
Continuing Directors) cease for any reason to constitute a majority of the
Board of Directors; or (e) ten business days after the Plan consolidates with
or merges with or into any person or conveys, assigns, transfers or sells all
or substantially all of its assets to any person other than a merger in which
the Plan is the surviving entity and immediately after which merger, no person
is an Excess Institutional Voter, an Excess Noninstitutional Voter or an Excess
Owner:  provided that, if requested by
the affected Plan in a writing received by BCBSA prior to such automatic
termination becoming effective, the provisions of this paragraph 9(d)(iii) may
be waived, in whole or in part, Amended as of September 17, 1997  5a 
   upon the
affirmative vote of a majority of the disinterested Plans and a majority of the
total then current weighted vote of the disinterested Plans.  Any waiver so granted may be conditioned
upon such additional requirements (including but not limited to imposing new
and independent grounds for termination of this License) as shall be approved
by the affirmative vote of a majority of the disinterested Plans and a majority
of the total then current weighted vote of the disinterested Plans.  If a timely waiver request is received, no
automatic termination shall become effective until the later of: (1) the
conclusion of the applicable time period specified in paragraphs
9(d)(iii)(a)-(d) above, or (2) the conclusion of the first Member Plan meeting
after receipt of such a waiver request.  In the event that
the Plans license to use the Licensed Marks and Name is terminated pursuant to
this Paragraph 9(d)(iii), the license may be reinstated in BCBSAs sole
discretion if, within 30 days of the date of such termination, the Plan
demonstrates that the Person referred to in clause (a), (b) or (c) of the
preceding paragraph is no longer an Excess Institutional Voter, an Excess
Noninstitutional Voter or an Excess Owner.  (iv)          The Plan shall not issue any class or
series of security other than (i) shares of common stock having identical terms
or options or derivatives of such common stock, (ii) non-voting,
non-convertible debt securities or (iii) such other securities as the Plan may
approve, provided that BCBSA receives notice at least thirty days prior to the
issuance of such securities, including a description of the terms for such
securities, and BCBSA shall have the authority to determine how such other
securities will be counted in determining whether any Person is an Excess
Institutional Voter, Excess Noninstitutional Voter or an Excess Owner.  (v)           For purposes of paragraph 9(d)(iii),
the following definitions shall apply:  (a)     Affiliate and Associate shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended and in
effect on November 17, 1993 (the Exchange Act).  (b)     A Person shall be deemed the Beneficial
Owner of and shall be deemed to beneficially own any securities:  (i)         which such Person or any of such
Persons Affiliates or Associates beneficially owns, directly or indirectly; Amended as of September 17, 1997  5b 
   (ii)        which such Person or any of such
Persons Affiliates or Associates has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or  (iii)       which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Persons Affiliates or Associates) has any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities) relating to the acquisition, holding, voting
(except to the extent contemplated by the proviso to (b)(ii)(B) above) or
disposing of any securities of the Plan.  Notwithstanding
anything in this definition of Beneficial Ownership to the contrary, the phrase
then outstanding, when used with reference to a Persons Beneficial Ownership
of securities of the Plan, shall mean the number of such securities then issued
and outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own beneficially
hereunder.  (c)        A Person shall be deemed an
Institutional Investor if (but only if) such Person (i) is an entity or group
identified in the SECs Rule 13d-1(b)(1)(ii) as constituted on June 1, 1997,
and (ii) every filing made by such Person with the SEC under Regulation 13D-G
(or any successor Regulation) with respect to such Persons Beneficial
Ownership of Plan securities shall have contained a certification identical to
the one required by item 10 of SEC Schedule 13G as constituted on June 1, 1997.  Amended as of September 17, 1997  5c 
   (d)        Noninstitutional Investor means any
Person who is not an Institutional Investor.  (e)        Person shall mean any individual,
firm, partnership, corporation, trust, association, joint venture or other
entity, and shall include any successor (by merger or otherwise) of such
entity.  Amended as of September 17, 1997  5d 
   10.           This License Agreement shall remain
in effect: (a) until terminated as provided herein; or (b) until this and all
such other License Agreements are terminated by the affirmative vote of
three-fourths of the Plans and three-fourths of the total then current weighted
vote of all the Plans; (c) until terminated by the Plan upon six (6) months
written notice to BCBSA.  11.           Except as otherwise provided in
paragraph 15 below or by the affirmative vote of three-fourths of the Plans and
threefourths of the total then current weighted vote of all the Plans,
or unless this and all such other License Agreements are simultaneously
terminated by force of law, the termination of this License Agreement for any
reason whatsoever shall cause the reversion to BCBSA of all rights in and to
the Licensed Marks and Name, and the Plan agrees that it will promptly
discontinue all use of the Licensed Marks and Name, will not use them
thereafter, and will promptly, upon written notice from BCBSA, change its
corporate name so as to eliminate the Licensed Name therefrom.  12.           The license hereby granted to Plan to
use the Licensed Marks and Name is and shall be personal to the Plan so
licensed and shall not be assignable by any act of the Plan, directly or
indirectly, without the written consent of BCBSA.  Said license shall not be assignable by operation of law, nor
shall Plan mortgage or part with possession or control of this license or any
right hereunder, and the Plan shall have no right to grant any sublicense to
use the Licensed Marks and Name.  13.           BCBSA shall maintain appropriate
service mark registrations of the Licensed Marks and BCBSA shall take such
lawful steps and proceedings as may be necessary or proper to prevent use of
the Licensed Marks by any person who is not authorized to use the same.  Any actions or proceedings undertaken by
BCBSA under the provisions of this paragraph shall be at BCBSAs sole cost and
expense.  BCBSA shall have the sole right
to determine whether or not any legal action shall be taken on account of unauthorized
use of the Licensed Marks, such right not to be unreasonably exercised.  The Plan shall report any unlawful usage of
the Licensed Marks to BCBSA in writing and agrees, free of charge, to cooperate
fully with BCBSAs program of enforcing and protecting the service mark rights,
trade name rights and other rights in the Licensed Marks.  6 
   14.           The Plan hereby agrees to save,
defend, indemnify and hold BCBSA and any other Plan(s) harmless from and
against all claims, damages, liabilities and costs of every kind, nature and
description which may arise exclusively and directly as a result of the
activities of the Plan.  BCBSA hereby
agrees to save, defend, indemnify and hold the Plan and any other Plan(s)
harmless from and against all claims, damages, liabilities and costs of every
kind, nature and description which may arise exclusively and directly as a
result of the activities of BCBSA.  15.           (a).          This
Agreement shall automatically terminate upon the occurrence of any of the
following events:  (i) a voluntary
petition shall be filed by the Plan or by BCBSA 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
the Plan or BCBSA 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 the Plan or BCBSA 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 Plan or BCBSA respectively, or
(iii) an order for relief is entered against the Plan or BCBSA in any case
under the bankruptcy laws of the United States, or the Plan or BCBSA is
adjudged bankrupt or insolvent (as that term is defined in the Uniform
Commercial Code as enacted in the state of Illinois) by any court of competent
jurisdiction, or (iv) the  Plan or BCBSA
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 the
Plan or delinquency proceedings (voluntary or involuntary) are instituted, or
(vi) an action is brought by the Plan or BCBSA 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 by any governmental entity or officer against the Plan or
BCBSA seeking its dissolution or liquidation of its assets or seeking
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
the Plan or BCBSA or is not dismissed within one hundred thirty (130) days of
the date upon which the pleading or other document commencing the action is
served upon the Plan or BCBSA respectively, provided that if the action is
stayed or its prosecution is enjoined, the one hundred thirty (130) day period
is tolled for the duration of the stay or injunction, and provided further,
that the Associations Board of Directors may toll or extend the 130 day period
at any time prior to its expiration, or (viii) a trustee, interim trustee,
receiver or other custodian for any of the Plans or BCBSAs property or
business is appointed, or the Plan or BCBSA is ordered dissolved or liquidated,
or (ix) the Plan shall fail to pay its dues and shall not cure such failure
within thirty (30) days of receiving written notice thereof.  Notwithstanding any other provision of this
Agreement, a declaration or a request for declaration of the existence of a
trust over any of the Plans or BCBSAs property or business shall not in
itself be deemed to constitute or seek appointment of a trustee, interim
trustee, receiver or other custodian for purposes of subparagraphs 15(a)(vii)
and (viii) of this Agreement. Amended March 12, 1998  7 
   (b).         BCBSA, or the Plans (as provided and in
addition to the rights conferred in Paragraph 10(b) above), may terminate this
Agreement immediately upon written notice upon the occurrence of either
of the following events:  (a) the Plan
or BCBSA becomes insolvent (as that term is defined in the Uniform Commercial
Code enacted in the state of Illinois), or (b) any final judgment against the
Plan or BCBSA remains unsatisfied or unbonded of record for a period of sixty
(60) days or longer.  (c).          If this License Agreement is
terminated as to BCBSA for any reason stated in subparagraphs 15(a) and (b)
above, the ownership of the Licensed Marks shall revert to each of the Plans.  (d).         Upon termination of this License
Agreement or any Controlled Affiliate License Agreement of a Larger Controlled
Affiliate, as defined in Exhibit 1 to this License Agreement:  (i)The
terminated entity shall send a notice through the U.S. mails, with first class
postage affixed, to all individual and group customers, providers, brokers and
agents of products or services sold, marketed, underwritten or administered by
the terminated entity or its Controlled Affiliates under the Licensed Marks and
Name.  The form and content of the
notice shall be specified by BCBSA and shall, at a minimum, notify the
recipient of the termination of the license, the consequences thereof, and
instructions for obtaining alternate products or services licensed by
BCBSA.  This notice shall be mailed
within 15 days after termination or, if termination is pursuant to
paragraph 10(d) of this Agreement, within 15 days after the written notice
to BCBSA described in paragraph 10(d).  (ii)The
terminated entity shall deliver to BCBSA within five days of a request by BCBSA
a listing of national accounts in which the terminated entity is involved (in a
Control, Participating or Servicing capacity), identifying the national account
and the terminated entitys role therein. 
For those accounts where the terminated entity is the Control Plan, the
Plan must also indicate the Participating and Servicing Plans in the national
account syndicate.  Amended as of September 19, 1996  8 
   (iii)Unless the
cause of termination is an event stated in paragraph 15(a) or (b) above
respecting BCBSA, the Plan and its Licensed Controlled Affiliates shall be
jointly liable for payment to BCBSA of an amount equal to $25 multiplied by the
number of Licensed Enrollees of the terminated entity and its Licensed
Controlled Affiliates; provided that if any other Plan is permitted by BCBSA to
use marks or names licensed by BCBSA in the Service Area established by this
Agreement, the payment shall be multiplied by a fraction, the numerator of
which is the number of Licensed Enrollees of the terminated entity and its
Licensed Controlled Affiliates and the denominator of which is the total number
of Licensed Enrollees in the Service Area. 
Licensed Enrollee means each and every person and covered dependent who
is enrolled as an individual or member of a group receiving products or
services sold, marketed or administered under marks or names licensed by BCBSA
as determined at the earlier of (a) the end of the last fiscal year of the
terminated entity which ended prior to termination or (b) the fiscal year which
ended before any transactions causing the termination began.  Notwithstanding the foregoing, the amount
payable pursuant to this subparagraph (d)(iii) shall be due only to the extent
that, in BCBSAs opinion, it does not cause the net worth of the Plan to fall
below 100% of the capital benchmark formula or its equivalent under any
successor formula, as set forth in the applicable financial responsibility
standards established by BCBSA (provided such equivalent is approved for
purposes of this sub paragraph by the affirmative vote of three-fourths of the
Plans and three-fourths of the total then current weighted vote of all the
Plans), measured as of the date of termination and adjusted for the value of
any transactions not made in the ordinary course of business.  This payment shall not be due in connection
with transactions exclusively by or among Plan or their affiliates, including
reorganizations, combinations or mergers, where the BCBSA Board of Directors
determines that the license termination does not result in a material
diminution in the number of Licensed Enrollees or the extent of their coverage.  Amended as of November 19, 1998  8a 
   (iv)BCBSA shall
have the right to audit the books and records of the terminated entity and its
Licensed Controlled Affiliates to verify compliance with this paragraph 15(d).  (v)As to a
breach of 15 (d) (i), (ii), (iii) or (iv), the parties agree that the
obligations are immediately enforceable in a court of competent
jurisdiction.  As to a breach of 15 (d)
(i), (ii) or (iv) by the Plan, the parties agree there is no adequate remedy at
law and BCBSA is entitled to obtain specific performance.  (e).                  BCBSA shall be entitled to
enjoin the Plan or any related party in a court of competent jurisdiction from
entry into any transaction which would result in a termination of this License
Agreement unless the License Agreement has been terminated pursuant to
paragraph 10 (d) of this Agreement upon the required six (6) month written
notice.  (f).                   BCBSA acknowledges that it is
not the owner of assets of the Plan.  16.                This Agreement supersedes any
and all other agreements between the parties with respect to the subject matter
herein, and contains all of the covenants and agreements of the parties as to
the licensing of the Licensed Marks and Name. 
This Agreement may be amended only by the affirmative vote of
three-fourths of the Plans and three-fourths of the total then current weighted
vote of all the Plans as officially recorded by the BCBSA Corporate Secretary.  17.           If any provision or any part of any
provision of this Agreement is judicially declared unlawful, each and every
other provision, or any part of any provision, shall continue in full force and
effect notwithstanding such judicial declaration.  18.           No waiver by BCBSA or the Plan of any
breach or default in performance on the part of BCBSA or the Plan 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.  19a.         All notices provided for hereunder
shall be in writing and shall be sent in duplicate by regular mail to BCBSA or
the Plan at the address currently published for each by BCBSA and shall be
marked respectively to the attention of the President and, if any, the General
Counsel, of BCBSA or the Plan.  Amended as of November 20, 1997  8b 
   19b.         Except as provided in paragraphs 9(b),
9(d)(iii), 15(a), and 15(b) above, this Agreement may be terminated for a
breach only upon at least 30 days written notice to the Plan advising of the
specific matters at issue and granting the Plan an opportunity to be heard and
to present its response to the Member Plans.  19c.         For all provisions of this Agreement
referring to voting, the term Plans shall mean all entities licensed under
the Blue Cross License Agreement and/or the Blue Shield License Agreement, and
in all votes of the Plans under this Agreement the Plans shall vote
together.  For weighted votes of the
Plans, the Plan shall have a number of votes equal to the number of weighted
votes (if any) that it holds as a Blue Cross Plan plus the number of weighted
votes (if any) that it holds as a Blue Shield Plan.  For all other votes of the Plans, the Plan shall have one
vote.  For all questions requiring an
affirmative three-fourths weighted vote of the Plans, the requirement shall be
deemed satisfied with a lesser weighted vote unless six (6) or more Plans fail
to cast weighted votes in favor of the question.  Amended as of June 16, 2000  8c 
   20.           Nothing herein contained shall be
construed to constitute the parties hereto as partners or joint venturers, or
either as the agent of the other, and Plan shall have no right to bind or
obligate BCBSA in any way, nor shall it represent that it has any right to do
so.  BCBSA shall have no liability to
third parties with respect to any aspect of the business, activities,
operations, products, or services of the Plan.  21.           This Agreement shall be governed, construed
and interpreted in accordance with the laws of the State of Illinois.  IN WITNESS
WHEREOF, the parties have caused this License Agreement to be executed,
effective as of the date of last signature written below.  BLUE CROSS AND BLUE SHIELD ASSOCIATION  By
  /s/ Scott P. SerotaTitle
  PresidentDate
  January 31, 2002   WellPoint
  Health Networks Inc.By
  /s/ Leonard D.
  SchaefferTitle
  Chairman and Chief
  Executive OfficerDate
  January 31, 2002   9 
   EXHIBIT
1 BLUE
CROSS CONTROLLED AFFILIATE LICENSE AGREEMENT (Includes
revisions adopted by Member Plans through their November 15, 2001 meeting)  This Agreement by and among Blue Cross and Blue Shield
Association (BCBSA) and         (Controlled
Affiliate), a Controlled Affiliate of the Blue Cross Plan(s), known as
           (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 Controlled 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 Controlled 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,
as defined in BCBSAs License Agreement with Plan, and administering the
non-health portion of workers compensation insurance, and (ii) underwriting
the indemnity portion of workers compensation insurance, provided that
Controlled 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.  Controlled
Affiliate may use the Licensed Marks and Name in its legal name on the
following conditions: (i) the legal name must be approved in advance, in
writing, by BCBSA; (ii) Controlled Affiliate shall not do business outside the
Service Area under any name or mark; and (iii) Controlled Affiliate shall not
use the Licensed Marks and Name, or any derivative thereof, as part of any name
or symbol used to identify itself in any securities market. Controlled
Affiliate may use the Licensed Marks and Name in its Trade Name only with the
prior, written, consent of BCBSA.  2.             QUALITY
CONTROL  A.            Controlled 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. Amended
as of  November 16, 2000  
    B.            Controlled Affiliate agrees to comply with all applicable
federal, state and local laws.  C.            Controlled 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 Controlled 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.            Controlled Affiliate agrees that Plan and/or BCBSA may,
from time-to-time, upon reasonable notice, review and inspect the manner and
method of Controlled Affiliates rendering of service and use of the Licensed
Marks and Name.  E.             As used herein, a Controlled Affiliate is defined as an
entity organized and operated in such a manner, that it meets the following
requirements:  (1)           A Plan or Plans
authorized to use the Licensed Marks in the Service Area of the Controlled
Affiliate pursuant to separate License Agreement(s) with BCBSA, other than such
Controlled Affiliates License Agreement(s), 
(the Controlling Plan(s)), must have the legal authority directly or
indirectly through wholly-owned subsidiaries to select members of the Controlled
Affiliates governing body having not less than 50% voting control thereof and
to:  (a)           prevent any change in the articles of
incorporation, bylaws or other establishing or governing documents of the
Controlled Affiliate with which the Controlling Plan(s) do(es) not concur;  (b)           exercise control over the policy and
operations of the Controlled Affiliate at least equal to that exercised by
persons or entities (jointly or individually) other than the Controlling
Plan(s); and  Notwithstanding anything to the contrary in (a) through (b) hereof, the
Controlled Affiliates establishing or governing documents must also require
written approval by the Controlling Plan(s) before the Controlled Affiliate
can:  (i)change
its legal and/or trade names;  (ii)change
the geographic area in which it operates;  (iii)change
any of the type(s) of businesses in which it engages;  2 
   (iv)create,
or become liable for by way of guarantee, any indebtedness, other than
indebtedness arising in the ordinary course of business;  (v)sell
any assets, except for sales in the ordinary course of business or sales of
equipment no longer useful or being replaced;  (vi)make any
loans or advances except in the ordinary course of business;  (vii)enter into
any arrangement or agreement with any party directly or indirectly affiliated
with any of the owners or persons or entities with the authority to select or
appoint members or board members of the Controlled Affiliate, other than the
Plan or Plans (excluding owners of stock holdings of under 5% in a publicly
traded Controlled Affiliate);  (viii)conduct any
business other than under the Licensed Marks and Name;  (ix)take
any action that any Controlling Plan or BCBSA reasonably believes will
adversely affect the Licensed Marks and Name.  In addition, a Plan or Plans directly or indirectly through wholly
owned subsidiaries shall own at least 50% of any for-profit Controlled
Affiliate.  Or  (2)           A Plan or Plans
authorized to use the Licensed Marks in the Service Area of the Controlled
Affiliate pursuant to separate License Agreement(s) with BCBSA, other than such
Controlled Affiliates License Agreement(s), (the Controlling Plan(s)), have
the legal authority directly or indirectly through wholly-owned subsidiaries to
select members of the Controlled Affiliates governing body having more than
50% voting control thereof and to:  (a)prevent
any change in the articles of incorporation, bylaws or other establishing or
governing documents of the Controlled Affiliate with which the Controlling
Plan(s) do(es) not concur; (b)exercise
control over the policy and operations of the Controlled Affiliate.  3 
   In addition, a Plan or Plans directly or indirectly through
wholly-owned subsidiaries shall own more than 50% of any for-profit Controlled
Affiliate.  3.            SERVICE
MARK USE  A.            Controlled
Affiliate recognizes the importance of a comprehensive national network of
independent BCBSA licensees which are committed to strengthening the Licensed Marks
and Name.  The Controlled Affiliate
further recognizes that its actions within its Service Area may affect the
value of the Licensed Marks and Name nationwide.  B.            Controlled
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 Controlled Affiliates licensed to use the
Licensed Marks and Name) relative to service mark use, as are issued from
time-to-time by BCBSA.  Controlled
Affiliate recognizes and agrees that all use of the Licensed Marks and Name by
Controlled Affiliate shall inure to the benefit of BCBSA.  C.            Controlled
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 Controlled
Affiliate engage in activity that may dilute or tarnish the unique value of the
Licensed Marks and Name.  D.            If
Controlled Affiliate meets the standards of 2E(1) but not 2E(2) above and any
of  Controlled 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,  Controlled 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, Controlled Affiliate shall
observe the Service Area limitations applicable to Plan.  E.             Controlled
Affiliate shall use its best efforts in the Service Area to promote and build
the value of the Licensed Marks and Name.  4 
   4.             SUBLICENSING
AND ASSIGNMENT  Controlled Affiliate shall not, directly or
indirectly, 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 Controlled Affiliate.  5.             INFRINGEMENT  Controlled 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.  Controlled Affiliate shall not be
entitled to require Plan or BCBSA to take any actions or institute any
proceedings to prevent infringement, unfair competition or passing off by third
parties.  Controlled 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  Controlled 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 Controlled 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 Controlled 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 to the Plan advising of the specific matters at issue and granting the
Plan an opportunity to be heard and to present its response to  5 
   the Board 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 Controlled 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) the
pendency of any action instituted against the Controlled Affiliate seeking its
dissolution or liquidation of its assets or seeking appointment of a trustee,
interim trustee, receiver or other custodian for any of its property or
business or seeking the declaration or establishment of a trust for any of its
property or business, unless this Controlled Affiliate License Agreement has
been earlier terminated under paragraph 7(e); or (6) failure by a Controlled
Affiliate that meets the standards of 2E(1) but not 2E(2) above to obtain
BCBSAs written consent to a change in the identity of any owner, in the extent
of ownership, or in the identity of any person or entity with the authority to
select or appoint members or board members, provided that as to publicly traded
Controlled Affiliates this provision shall apply only if the change affects a
person or entity that owns at least 5% of the Controlled Affiliates stock
before or after the change; or (7) 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 Controlled Affiliate and/or the
Licensed Marks and Name.  D.           Except as otherwise provided in
Paragraphs 7(B), 7(C) or 7(E) herein, should Controlled 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 Controlled
Affiliate is in a state of noncompliance.  
If a state of noncompliance as aforesaid is undisputed by the Controlled
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 Controlled 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.  6 
   E.             This Agreement and all of Controlled Affiliates rights
hereunder shall immediately terminate without any further action by any party
or entity in the event that:  (1)           Controlled Affiliate shall no longer
comply with item 2(E) above;  (2)           Appropriate dues, royalties and other
payments for Controlled 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 Controlled 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 Controlled
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 Controlled 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 Controlled Affiliate, or (iii) an
order for relief is entered against Controlled Affiliate in any case under the
bankruptcy laws of the United States, or Controlled Affiliate is adjudged
bankrupt or insolvent as those terms are defined in the Uniform Commercial Code
as enacted in the State of Illinois by any court of competent jurisdiction, or
(iv) Controlled 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 Controlled Affiliate or delinquency proceedings
(voluntary or involuntary) are instituted, or (vi) an action is brought by
Controlled 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
by any governmental entity or officer against Controlled 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 Controlled
Affiliate or is not dismissed within one hundred thirty (130) days of the date
upon which the pleading or other document commencing the action is served upon
the Controlled Affiliate, provided that if the action is stayed or its
prosecution is enjoined, the one hundred thirty (130) day period is tolled for
the duration of the stay or injunction, and provided further, that the
Associations Board of Directors may toll or extend the 130 day period at any
time prior to its expiration, or (viii) a trustee, interim trustee, receiver or
other custodian for any of Controlled Affiliates property or business is
appointed or the Controlled Affiliate is ordered dissolved or liquidated.  Notwithstanding any other provision of this
Agreement,  7 
   a declaration or a request for declaration of the existence of a trust
over any of the Controlled Affiliates property or business shall not in itself
be deemed to constitute or seek appointment of a trustee, interim trustee,
receiver or other custodian for purposes of subparagraphs 7(e)(3)(vii) and
(viii) of this Agreement.  F.             Upon termination of this Agreement for cause or
otherwise, Controlled 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, Controlled 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.  H.            In the event this Agreement terminates pursuant to 7(b)
hereof, or in the event the Controlled Affiliate is a Larger Controlled
Affiliate (as defined in Exhibit A), upon termination of this Agreement, the
provisions of Paragraph 7.G. shall not apply and the following provisions shall
apply:  (1)           The Controlled Affiliate shall send a
notice through the U.S. mails, with first class postage affixed, to all
individual and group customers, providers, brokers and agents of products or
services sold, marketed, underwritten or administered by the Controlled
Affiliate under the Licensed Marks and Name. 
The form and content of the notice shall be specified by BCBSA and
shall, at a minimum, notify the recipient of the termination of the license,
the consequences thereof, and instructions for obtaining alternate products or
services licensed by BCBSA.  This notice
shall be mailed within 15 days after termination.  (2)           The Controlled Affiliate shall
deliver to BCBSA within five days of a request by BCBSA a listing of national
accounts in which the Controlled Affiliate is involved (in a control,
participating or servicing capacity), identifying the national account and the
Controlled Affiliates role therein.  (3)           Unless the cause of termination is an
event respecting BCBSA stated in paragraph 15(a) or (b) of the Plans license
agreement with BCBSA to use the Licensed Marks and Name, the Controlled
Affiliate, the Plan, and any other Licensed Controlled Affiliates of the Plan
shall be jointly liable for payment to BCBSA of an amount equal to $25
multiplied by the number of Licensed Enrollees of the Controlled Affiliate;
provided that if any other Plan is permitted by BCBSA to use marks or names
licensed by BCBSA in the Service Area  8 
   established by this Agreement, the payment shall be multiplied by a
fraction, the numerator of which is the number of Licensed Enrollees of the
Controlled Affiliate, the Plan, and any other Licensed Controlled Affiliates
and the denominator of which is the total number of Licensed Enrollees in the
Service Area.  Licensed Enrollee means
each and every person and covered dependent who is enrolled as an individual or
member of a group receiving products or services sold, marketed or administered
under marks or names licensed by BCBSA as determined at the earlier of (i) the
end of the last fiscal year of the terminated entity which ended prior to
termination or (ii) the fiscal year which ended before any transactions causing
the termination began.  Notwithstanding
the foregoing, the amount payable pursuant to this subparagraph H. (3) shall be
due only to the extent that, in BCBSAs opinion, it does not cause the net
worth of the Controlled Affiliate, the Plan or any other Licensed Controlled
Affiliates of the Plan to fall below 100% of the capital benchmark formula, or
its equivalent under any successor formula, as set forth in the applicable
financial responsibility standards established by BCBSA (provided such
equivalent is approved for purposes of this sub paragraph by the affirmative
vote of three-fourths of the Plans and three-fourths of the total then current
weighted vote of all the Plans); measured as of the date of termination, and
adjusted for the value of any transactions not made in the ordinary course of
business.  This payment shall not be due
in connection with transactions exclusively by or among Plans or their
affiliates, including reorganizations, combinations or mergers, where the BCBSA
Board of Directors determines that the license termination does not result in a
material diminution in the number of Licensed Enrollees or the extent of their
coverage.  (4)           BCBSA shall have the right to audit
the books and records of the Controlled Affiliate, the Plan, and any other
Licensed Controlled Affiliates of the Plan to verify compliance with this
paragraph 7.H.  (5)           As to a breach of 7.H.(1), (2), (3)
or (4), the parties agree that the obligations are immediately enforceable in a
court of competent jurisdiction.  As to
a breach of 7.H.(1), (2) or (4) by the Controlled Affiliate, the parties agree
there is no adequate remedy at law and BCBSA is entitled to obtain specific
performance.  I.              In the event the Controlled Affiliate is a Smaller
Controlled Affiliate (as defined in Exhibit A), the Controlled Affiliate agrees
to be jointly liable for the amount described in H.3. hereof upon termination
of the BCBSA license agreement of any Larger Controlled Affiliate of the Plan.  J.             BCBSA shall be entitled to enjoin the Controlled
Affiliate or any related party in a court of competent jurisdiction from entry
into any transaction which would result in a termination of this Agreement
unless the Plans license from BCBSA to use the Licensed Marks and Names has
been terminated  9 
   pursuant to 10(d) of the Plans license agreement upon the required 6
month written notice.  K.            BCBSA acknowledges that it is not the owner of assets of
the Controlled Affiliate.  L.             In the event that the Plan has more than 50 percent
voting control of the Controlled Affiliate under Paragraph 2(E)(2)above and is
a Larger Controlled 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 Plans and three-fourths of the total then current weighted
vote of all the Plans.  8.             DISPUTE
RESOLUTION  The parties agree
that any disputes between them or between or among either of them and one or
more Plans or Controlled Affiliates of Plans that use in any manner the Blue
Cross and Blue Cross 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.  9.             LICENSE
FEE  Controlled 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 Controlled Affiliate or between
either and BCBSA.  Amended
as of March 11, 1999  10 
   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 the affirmative vote of three-fourths of the Plans and three-fourths
of the total then current weighted vote of all the Plans as officially recorded
by the BCBSA Corporate Secretary.  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 Controlled 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.  14A.       VOTING  For all provisions
of this Agreement referring to voting, the term Plans shall mean all entities
licensed under the Blue Cross License Agreement and/or the Blue Shield License
Agreement, and in all votes of the Plans under this Agreement the Plans shall
vote together.  For weighted votes of
the Plans, the Plan shall have a number of votes equal to the number of
weighted votes (if any) that it holds as a Blue Cross Plan plus the number of
weighted votes (if any) that it holds as a Blue Shield Plan.  For all other votes of the Plans, the Plan
shall have one vote.  For all questions
requiring an affirmative three-fourths weighted vote of the Plans, the
requirement shall be deemed satisfied with a lesser weighted vote unless six
(6) or more Plans fail to cast weighted votes in favor of the question.  Amended
as of  June 16, 2000  11 
   THIS PAGE IS
INTENTIONALLY BLANK.  12 
   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.   Controlled
  Affiliate:By:Date   Plan:By:Date   BLUE
  CROSS AND BLUE SHIELD ASSOCIATIONBy:Date  13 
   EXHIBIT A  CONTROLLED
AFFILIATE LICENSE STANDARDS November 2001 PREAMBLE  The standards for licensing Controlled 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 Controlled Affiliate license form provided by BCBSA and to
cooperate fully in assuring that the licensed Controlled Affiliate maintains
compliance with the license standards.  The Controlled Affiliate License provides a flexible vehicle to
accommodate the potential range of health and workers compensation related
products and services Plan Controlled Affiliates provide.  The Controlled Affiliate License collapses
former health Controlled 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 Controlled Affiliate controlled
by parent:  Greater than 50 percent or
50 percent?  Risk assumption:  yes or no?  Medical care delivery:  yes or no?  Size
of the Controlled Affiliate: If the Controlled Affiliate has health or workers
compensation administration business, does such business constitute 15 percent
or more of the parents and other licensed health subsidiaries contract
enrollment?  14 
   For purposes of definition:  A
smaller Controlled Affiliate:  (1)
comprises less than fifteen percent (15%) of Plans and its licensed Controlled
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 Controlled Affiliate comprises fifteen percent (15%) or more of Plans
and its licensed Controlled 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.)*  Changes in Controlled Affiliate status:  If any Controlled Affiliates status changes regarding: its Plan
ownership level, its risk acceptance or direct delivery of medical care, the
Controlled 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 Controlled Affiliates health and workers compensation
administration business reaches or surpasses fifteen percent (15%) of the total
contract enrollment of the Plan and licensed Controlled Affiliates, the
Controlled Affiliate shall:  15 
   1.Within thirty
(30) days, notify BCBSA of this fact in writing, including evidence that the
Controlled Affiliate meets the minimum liquidity and capital (BCBSA Health Risk-Based Capital (HRBC) as
defined by the NAIC and state-established minimum reserve)
requirements of the larger Controlled Affiliate Financial Responsibility
standard; and  2.Within six (6)
months after reaching or surpassing the fifteen percent (15%) threshold,
demonstrate compliance with all license requirements for a larger Controlled
Affiliate.  If a Controlled Affiliate that underwrites the indemnity portion of
workers compensation insurance receives a change in rating or proposed change
in rating, the Controlled Affiliate shall notify BCBSA within 30 days of
notification by the external rating agency.  * For purposes of this calculation,  The numerator equals:  Applicant Controlled 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 Controlled Affiliates
contract enrollment, as reported in BCBSAs Quarterly Enrollment Report
(excluding rider and freestanding coverage).   Amended November 15, 2001  16 
   STANDARDS
FOR LICENSED CONTROLLED AFFILIATES As
described in Preamble section of Exhibit A to the Affiliate License Agreement,
each controlled affiliate seeking licensure must answer four questions.  Depending on the controlled affiliates
answers, certain standards apply: 1.             What
percent of the controlled affiliate is controlled by the parent Plan? More than 50%
  Standard 1A, 4
  
  50% 
  Standard 1B, 4
  
  100% and Primary
  Business is
  Government Non-Risk
  Standard 4*,10A  
 *              Applicable
only if using the names and marks. IN ADDITION, 2.             Is
risk being assumed? Yes
  
  
  
  
  
  NoControlled Affiliate underwrites any indemnity
  portion of workers compensation insurance                
  Standards 7A-7E
  
  Controlled Affiliate comprises < 15% of total
  contract enrollment of Plan and its licensed affiliates, and does not
  underwrite the indemnity portion of workers compensation insurance                
  Standard 2 (Guidelines 1.1,1.2) and Standard 11
  
  Controlled Affiliate comprises > 15% of
  total contract enrollment of Plan and its licensed affiliates, and does not
  underwrite the indemnity portion of workers compensation insurance                
  Standard 6H
  
  Controlled Affiliate comprises < 15% of total
  contract enrollment of Plan and its licensed affiliates                 
  Standard 2 (Guidelines 1.1,1.3) and Standard 11
  
  Controlled Affiliate comprises > 15% of
  total contract enrollment of Plan and its licensed affiliates                
  Standard 6H
  
  Controlled Affiliates Primary Business is
  Government Non-Risk                
  Standard 10B IN ADDITION, 3.             Is
medical care being directly provided? Yes
  Standard 3A
  
  No
  Standard 3B IN ADDITION, 4.             If
the controlled 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 controlled affiliates? Yes
  
  
  
  NoStandards 6A-6I
  
  Controlled Affiliate is a former primary licensee
  
  Standards 5,8,9,11
  
  Controlled Affiliate is not a former primary
  licensee
  
  Standards 5,8
  
  Controlled Affiliates Primary Business is
  Government 
  Non-Risk
  
  Standards 8, 10(C)  17 
   Standard
1 - Organization and Governance  1A.)        The Standard for more than 50% Plan
control is:  A Controlled Affiliate
shall be organized and operated in such a manner that a licensed Plan or Plans
authorized to use the Licensed Marks in the Service Area of the Controlled
Affiliate pursuant to separate License Agreement(s) with BCBSA, other than such
Controlled Affiliates License Agreement(s), (the Controlling Plan(s)), have
the legal authority, directly or indirectly through wholly-owned subsidiaries:
1) to select members of the Controlled Affiliates governing body having more
than 50% voting control thereof; and 2) to prevent any change in the articles
of incorporation, bylaws or other establishing or governing documents of the
Controlled Affiliate with which the Controlling Plan(s) do(es) not concur; and
3) to exercise control over the policy and operations of the Controlled
Affiliate. In addition, a Plan or Plans directly or indirectly through
wholly-owned subsidiaries shall own more than 50% of any for-profit Controlled
Affiliate.  1B.)The
Standard for 50% Plan control is:  A Controlled Affiliate
shall be organized and operated in such a manner that a licensed Plan or Plans
authorized to use the Licensed Marks in the Service Area of the Controlled
Affiliate pursuant to separate License Agreement(s) with BCBSA, other than such
Controlled Affiliates License Agreement(s), (the Controlling Plan(s)), have
the legal authority, directly or indirectly through wholly-owned subsidiaries:  1)to
select members of the Controlled Affiliates governing body having not less
than 50%  voting control thereof ; and  2)to
prevent any change in the articles of incorporation, bylaws or other
establishing or governing documents of the Controlled Affiliate with which the
Controlling Plan(s) do(es)  not concur;
and  3)to
exercise control over the policy and operations of the Controlled Affiliate at
least equal to that exercised by persons or entities (jointly or individually)
other than the Controlling Plan(s).  18 
   Notwithstanding anything
to the contrary in 1) through 3) hereof, the Controlled Affiliates
establishing or governing documents must also require written approval by the
Controlling Plan(s) before the Controlled Affiliate can:  change
the geographic area in which it operates  change
its legal and/or trade names  change
any of the types of businesses in which it engages  create,
or become liable for by way of guarantee, any indebtedness, other than
indebtedness arising in the ordinary course of business  sell
any assets, except for sales in the ordinary course of business or sales of
equipment no longer useful or being replaced  make
any loans or advances except in the ordinary course of business  enter
into any arrangement or agreement with any party directly or indirectly
affiliated with any of the owners or persons or entities with the authority to
select or appoint members or board members of the Controlled Affiliate, other
than the Plan or Plans (excluding owners of stock holdings of under 5% in a
publicly traded Controlled Affiliate)  conduct
any business other than under the Licensed Marks and Name  take
any action that any Controlling Plan or BCBSA reasonably believes will
adversely affect the Licensed Marks and Name.  In addition, a Plan or
Plans directly or indirectly through wholly-owned subsidiaries shall own at
least 50% of any for-profit Controlled Affiliate.  19 
   Standard 2 - Financial Responsibility  A Controlled 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 Controlled Affiliate
ceases operations for any reason, Blue Cross and/or Blue Cross Plan coverage
will be offered to all Controlled Affiliate subscribers without exclusions,
limitations or conditions based on health status.  If a nonrisk-assuming Controlled 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 a Controlled Affiliate that employs, owns or contracts on a
substantially exclusive basis for medical services is:  A Controlled Affiliate
shall maintain unimpaired licensure or certification for its medical care
providers to operate under applicable state laws.   3B.)The
Standard for a Controlled Affiliate that does not employ, own or contract on a
substantially exclusive basis for medical services is:  A Controlled Affiliate
shall maintain unimpaired licensure or certification to operate under
applicable state laws.  Standard 4 - Certain Disclosures  A Controlled 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
Controlled Affiliates financial condition.  Standard 5 - Reports and Records for Certain Smaller
Controlled Affiliates  For a smaller Controlled
Affiliate that does not underwrite the indemnity portion of workers
compensation insurance, the Standard is:  20 
   A Controlled 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 Controlled Affiliate.  Standard 6 - Other Standards for Larger Controlled Affiliates  Standards 6(A) - (I) that
follow apply to larger Controlled Affiliates.  Standard 6(A):      Board
of Directors  A Controlled Affiliate
Governing Board shall act in the interest of its Corporation in providing
cost-effective health care services to its customers.  A Controlled Affiliate shall maintain a governing Board, which
shall control the Controlled 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  A Controlled Affiliate
shall be operated in a manner responsive to customer needs and requirements.  Standard 6(C):       Participation
in National Programs  A Controlled 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 Controlled Affiliates Service
Area.  Such programs are
applicable to licensees, and include:  1.Transfer Program;  2.BlueCard Program;  21 
   3.Inter-Plan
Teleprocessing System (ITS)  4.Electronic Claims
Routing Process; and  5.National Account
Programs, effective January 1, 2002.  Standard 6(D):      Financial Performance Requirements  In addition to
requirements under the national programs listed in Standard 6C:  Participation in National Programs, a
Controlled 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  A Controlled 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 Controlled Affiliate performance problems
identified thereunder.  Standard 6(F):       Independent Financial Rating  A Controlled 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, a
Controlled 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  A Controlled Affiliate
shall be operated in a manner that provides reasonable financial assurance that
it can fulfill all of its contractual obligations to its customers.  Amended November 15, 2001  22 
   Standard 6(I):        Reports and Records  A Controlled 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 Controlled Affiliate.  Such
reports and records are the following:  A)BCBSA
Controlled 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 Controlled Affiliate, including changes
in its charter, articles of incorporation, or bylaws, changes in a Controlled
Affiliates Board composition, or changes in the identity of the Controlled
Affiliates Principal Officers, and changes in risk acceptance, contract
growth, or direct delivery of medical care; and  D)Quarterly
Financial Report, Semi-annual Health Risk-Based Capital (HRBC) Reportas
defined by the NAIC, Annual Financial Forecast, Annual Certified Audit Report,
Insurance Department Examination Report, Annual Statement filed with State
Insurance Department (with all attachments), and  E)Quarterly
Enrollment Report, Semi-Annual Benefit Cost Management Report.  Amended
November 15, 2000  23 
   Standard 6(J):        Control by Unlicensed Entities
Prohibited  No Controlled Affiliate
shall cause or permit an entity other than a Plan or a Licensed Controlled
Affiliate thereof to obtain control of the Controlled Affiliate or to acquire a
substantial portion of its assets related to licensable services.  Standard 7 - Other Standards for Risk-Assuming Workers
Compensation Controlled Affiliates  Standards 7(A) - (E) that
follow apply to Controlled Affiliates that underwrite the indemnity portion of
workers compensation insurance.  Standard 7 (A):  Financial Responsibility  A Controlled Affiliate
shall be operated in a manner that provides reasonable financial assurance that
it can fulfill all of its contractual obligations to its customers.  Standard 7(B):  Reports and Records  A Controlled 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 Controlled Affiliate.  Such reports
and records are the following:  A.BCBSA Controlled
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,  Annual
Financial Forecast; and  Amended June 16, 2000  24 
   Quarterly
Financial Report, Quarterly Estimated Risk-Based Capital for Property and
Casualty Insurers, Insurance Department Examination Report.  D.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  E.Changes in the
ownership and governance of the Controlled Affiliate including changes in its
charter, articles of incorporation, or bylaws, changes in a Controlled
Affiliates Board composition, Plan control, state license status, operating
area, the Controlled Affiliates Principal Officers or direct delivery of
medical care.  Standard 7(C):       Loss Prevention  A Controlled Affiliate
shall apply loss prevention protocol to both new and existing business.  Standard 7(D):      Claims Administration  A Controlled 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  A Controlled 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.  Amended
November 16, 2000  25 
   Standard 8 - Cooperation with Controlled Affiliate License
Performance Response Process Protocol  A Controlled 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 Controlled Affiliate License
Performance Response Process Protocol (ALPRPP) and in addressing Controlled
Affiliate compliance problems identified thereunder.  Standard
9 - Participation in National Programs by Smaller Controlled Affiliates  A smaller Controlled Affiliate for which this standard applies pursuant
to the Preamble section of Exhibit A of the Controlled 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 Controlled Affiliates
service area and be subject to certain relevant financial and reporting
requirements.  A.National
program requirements include:  BlueCard
Program;  Inter-Plan
Teleprocessing System (ITS);  Transfer
Program;  Electronic
Claims Routing Process, effective until the mandated date for implementation of
the HIPAA standard transaction; and  National
Account Programs, effective January 1, 2002.  B.Financial
Requirements include:  Standard
6(D): Financial Performance Requirements and Standard 6(H): Financial
Responsibility; or  A
financial guarantee covering the Controlled Affiliates BlueCard Program
obligations in a form, and from a guarantor, acceptable to BCBSA.  26 
   Standard
9 - Participation in National Programs by Smaller Controlled Affiliates  C.Reporting
requirements include:  The
Semi-annual Health Risk-Based Captial (HRBC) Report. Amended
November 15, 2001  27 
   Standard
10 - Other Standards for Controlled Affiliates Whose Primary Business is
Government Non-Risk  Standards 10(A) -
(C) that follow apply to Controlled Affiliates whose primary business is
government non-risk.  Standard 10(A) - Organization and Governance  A Controlled Affiliate shall be organized and operated in such a manner
that it is 1) wholly owned by a licensed Plan or Plans and 2) the sponsoring
licensed Plan or Plans have the legal ability to prevent any change in the
articles of incorporation, bylaws or other establishing or governing documents
of the Controlled Affiliate with which it does not concur.  28 
   Standard 10(B) - Financial Responsibility  A Controlled Affiliate shall be operated in a manner that provides
reasonable financial assurance that it can fulfill all of its contractual
obligations to its customers.  Standard 10(C):- Reports and Records  A Controlled 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 Controlled 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 material; and  C.Annual
Certified Audit Report, Annual Statement (if required) as filed with the State
Insurance Department (with all attachments), Annual NAIC Risk-Based Capital
Worksheets (if required) as filed with the State Insurance Department (with all
attachments), and Insurance Department Examination Report (if applicable)*; and  DChanges
in the ownership and governance of the Controlled Affiliate, including changes
in its charter, articles of incorporation, or bylaws, changes in the Controlled
Affiliates Board composition, Plan control, state license status, operating
area, the Controlled Affiliates Principal Officers or direct delivery of
medical care.  29 
   Standard
11: Participation in Electronic Claims Routing Process  The Standard is:  A smaller controlled affiliate for which this standard applies pursuant
to the Preamble section of Exihibit A of the Controlled 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 controlled affiliates service area.  National program requirements include:  A.     Electronic
Claims Routing Process effective upon the mandated date for implementation of
the HIPAA standard transaction.  Amended November 15 2001  30 
   EXHIBIT B ROYALTY FORMULA FOR
SECTION 9 OF THE
CONTROLLED AFFILIATE LICENSE AGREEMENT  Controlled Affiliate will
pay BCBSA a fee for this license in accordance with the following formula:  FOR RISK AND GOVERNMENT NON-RISK
PRODUCTS:  For Controlled 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 Controlled 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 Controlled Affiliates
underwriting the indemnity portion of workers compensation insurance:  An amount equal to 0.35
percent of the gross revenue per annum of Controlled Affiliate arising from
products using the marks; plus, an annual fee of $5,000 per license for a
Controlled Affiliate subject to Standard 7.  For Controlled Affiliates
whose primary business is government non-risk:  An amount equal to its
pro-rata share of each sponsoring Plans dues payable to BCBSA computed with
the addition of the Controlled Affiliates government non-risk beneficiaries.  
   FOR NONRISK PRODUCTS:  An amount equal to 0.24
percent of the gross revenue per annum of Controlled Affiliate arising from
products using the marks; plus:  1)      An annual
fee of $5,000 per license for a Controlled Affiliate subject to Standard 6 D.  2)      An annual
fee of $2,000 per license for all other Controlled Affiliates.  The foregoing shall be reduced by one-half where both a BLUE CROSS® and
BLUE SHIELD® License are issued to the same Controlled 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.  
   EXHIBIT 1A CONTROLLED AFFILIATE LICENSE
AGREEMENT
APPLICABLE TO LIFE INSURANCE COMPANIES (Includes revisions adopted by Member
Plans through their Novmeber 15, 2001 meeting) This agreement by
and among Blue Cross and Blue Shield Association (BCBSA)                                           
(Controlled Affiliate), a Controlled Affiliate of the Blue Cross Plan(s),
known as                                                                           
(Plan).  WHEREAS, BCBSA is
the owner of the BLUE CROSS and BLUE CROSS Design service marks;  WHEREAS, the Plan
and the Controlled 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 the Controlled Affiliate
the exclusive right to use the licensed Marks and Names in connection with and
only in connection with those life insurance and related services authorized by
applicable state law, other than health care plans and related services (as
defined in the Plans License Agreements with BCBSA) which services are not
separately licensed to Controlled Affiliate by BCBSA, in the Service Area
served by the Plan, except that BCBSA reserves the right to use the Licensed
Marks and Name in said Service Area, and except to the extent that said Service
Area may overlap the area or areas served by one or more other licensed Blue
Cross Plans as of the date of this License as to which overlapping areas the
rights hereby granted are non-exclusive as to such other Plan or Plans and
their respective Licensed Controlled Affiliates only.  Controlled Affiliate cannot use the Licensed Marks or Name
outside the Service Area or, anything in any other license to Controlled
Affiliate notwithstanding, in its legal or trade name.  2. QUALITY CONTROL  A.        Controlled Affiliate agrees to use the Licensed Marks and
Name only in relation to the sale, marketing and rendering of authorized
products and further agrees to be bound by the conditions regarding quality
control shown in Exhibit A as it may be amended by BCBSA from timetotime. Amended as of November 17, 1994  1 
   B.            Controlled Affiliate agrees that Plan and/or BCBSA may,
from timetotime, upon reasonable notice, review and inspect the
manner and method of Controlled Affiliates rendering of service and use of the
Licensed Marks and Name.  C.            Controlled Affiliate agrees that it will provide on an
annual basis (or more often if reasonably required by Plan or by BCBSA) a
report to Plan and BCBSA demonstrating Controlled Affiliates compliance with
the requirements of this Agreement including but not limited to the quality
control provisions of Exhibit A.  D.            As used herein, a Controlled Affiliate is defined as an
entity organized and operated in such a manner that it is subject to the bona
fide control of a Plan or Plans.  Absent
written approval by BCBSA of an alternative method of control, bona fide
control shall mean the legal authority, directly or indirectly through whollyowned
subsidiaries: (a) to select members of the Controlled Affiliates governing
body having not less than 51% voting control thereof; (b) to exercise
operational control with respect to the governance thereof; and (c) to prevent
any change in its articles of incorporation, bylaws or other governing
documents deemed inappropriate.  In
addition, a Plan or Plans shall own at least 51% of any forprofit
Controlled Affiliate.  If the Controlled
Affiliate is a mutual company, the Plan or its designee(s) shall have and
maintain, in lieu of the requirements of items (a) and (c) above, proxies
representing 51% of the votes at any meeting of the policyholders and shall
demonstrate that there is no reason to believe this such proxies shall be
revoked by sufficient policyholders to reduce such percentage below 51%.  3.             SERVICE
MARK USE  Controlled Affiliate
shall at all times make proper service mark use of the Licensed Marks,
including but not limited to use of such symbols or words as BCBSA shall
specify to protect the Licensed Marks, and shall comply with such rules
(applicable to all Controlled Affiliates licensed to use the Marks) relative to
service mark use, as are issued from timetotime by BCBSA.  If there is any public reference to the
affiliation between the Plan and the Controlled Affiliate, all of the
Controlled Affiliates licensed services in the Service Area of the Plan shall
be rendered under the Licensed Marks. 
Controlled Affiliate recognizes and agrees that all use of the Licensed
Marks by Controlled Affiliate shall inure to the benefit of BCBSA.  4.             SUBLICENSING
AND ASSIGNMENT  Controlled Affiliate
shall not sublicense, transfer, hypothecate, sell, encumber or mortgage, by
operation of law or otherwise, the rights granted  2 
   hereunder and any such act shall be voidable at the
option of Plan or BCBSA.  This Agreement
and all rights and duties hereunder are personal to Controlled Affiliate.  5.             INFRINGEMENTS  Controlled Affiliate
shall promptly notify Plan and BCBSA of any suspected acts of infringement,
unfair competition or passing off which may occur in relation to the Licensed
Marks.  Controlled Affiliate shall not
be entitled to require Plan or BCBSA to take any actions or institute any
proceedings to prevent infringement, unfair competition or passing off by third
parties.  Controlled Affiliate agrees to
render to Plan and BCBSA, free of charge, all reasonable assistance in
connection with any matter pertaining to the protection of the Licensed Marks
by BCBSA.  6.             LIABILITY
INDEMNIFICATION  Controlled Affiliate
hereby agrees to save, defend, indemnify and hold Plan and BCBSA harmless from
and against all claims, damages, liabilities and costs of every kind, nature
and description which may arise as a result of Controlled Affiliates rendering
of health care services under the Licensed Marks.  7.             LICENSE
TERM  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 upon evidence
satisfactory to the Plan and BCBSA that Controlled Affiliate meets the then
applicable quality control standards, unless one of the parties hereto notifies
the other party of the termination hereof at least sixty (60) days prior to
expiration of any license period.  This Agreement may be
terminated by the Plan or by BCBSA for cause at any time provided that
Controlled Affiliate has been given a reasonable opportunity to cure and shall
not effect such a cure within thirty (30) days of receiving written notice of
the intent to terminate (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). 
By way of example and not for purposes of limitation, Controlled
Affiliates failure to abide by the quality control provisions of Paragraph 2,
above, shall be considered a proper ground for cancellation of this Agreement.  This Agreement and all
off Controlled Affiliate's rights hereunder shall immediately terminate without
any further action by any party or entity in the event that:  3 
   A.            Controlled Affiliate shall no longer comply with Standard
No. 1 (Organization and Governance) of Exhibit A or, following an opportunity
to cure, with the remaining quality control provisions of Exhibit A, as it may
be amended from timetotime; or  B.            Plan ceases to be authorized to use the Licensed Marks;
or  C.            Appropriate dues for Controlled Affiliate pursuant to
item 8 hereof, which are the royalties for this License Agreement are more than
sixty (60) days in arrears to BCBSA.  Upon termination of this
Agreement for cause or otherwise, Controlled Affiliate agrees that it shall
immediately discontinue all use of the Licensed Marks including any use in its
trade name.  In the event of any
disagreement between Plan and BCBSA as to whether grounds exist for termination
or as to any other term or condition hereof, the decision of BCBSA shall
control, subject to provisions for mediation or mandatory dispute resolution in
effect between the parties.  Upon termination of this
Agreement, Licensed Controlled Affiliate shall immediately notify all of its customers
that it is no longer a licensee of the Blue Cross and Blue Shield Association
and provide instruction on how the customer can contact the Blue Cross and Blue
Shield Association or a designated licensee to obtain further information on
securing coverage. The written notification required by this paragraph shall be
in writing and in a form approved by the Association. The Association shall
have the right to audit the terminated entitys books and records to verify
compliance with this paragraph.  8. DUES  Controlled Affiliate will
pay to BCBSA a fee for this license in accordance with the following formula:  An annual fee of five thousand dollars ($5,000) per
license, plus  .05% of gross revenue per year from branded group
products, plus  .5% of gross revenue per year from branded individual
products plus  .14% of gross revenue per year from branded individual
annuity products.  Amended
as of November 20, 1997  4 
   The foregoing
percentages shall be reduced by one-half where both a BLUE CROSS® and BLUE
SHIELD® license are issued to the same entity. 
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.  Plan will promptly
and timely transmit to BCBSA all dues owed by Controlled Affiliate as
determined by the above formula and if Plan shall fail to do so, Controlled
Affiliate shall pay such dues directly.  9. JOINT VENTURE  Nothing contained in this
Agreement shall be construed as creating a joint venture, partnership, agency
or employment relationship between Plan and Controlled Affiliate or between
either and BCBSA.  9A. VOTING  For all provisions of
this Agreement referring to voting, the term Plans shall mean all entities
licensed under the Blue Cross License Agreement and/or the Blue Shield License
Agreement, and in all votes of the Plans under this Agreement the Plans shall
vote together.  For weighted votes of the
Plans, the Plan shall have a number of votes equal to the number of weighted
votes (if any) that it holds as a Blue Cross Plan plus the number of weighted
votes (if any) that it holds as a Blue Shield Plan.  For all other votes of the Plans, the Plan shall have one vote.
For all questions requiring an affirmative three-fourths weighted vote of the
Plans, the requirement shall be deemed satisfied with a lesser weighted vote
unless six (6) or more Plans fail to cast weighted votes in favor of the question.  10.          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.  Amended as of June 16, 2000  4a 
   11.          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.  12.          SEVERABILITY  If any term of
this Agreement is held to be unlawful by a court of competent jurisdiction,
such finding shall in no way effect 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.  13.          NONWAIVER  No waiver by BCBSA
of any breach or default in performance on the part of the Controlled 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.  14.          GOVERNING
LAW  This Agreement
shall be governed by, and construed and interpreted in accordance with, the
laws of the State of Illinois.  5 
   IN WITNESS
WHEREOF, the parties have caused this License Agreement to be executed,
effective as of the date of last signature written below.  BLUE CROSS AND BLUE SHIELD
ASSOCIATION  By:Date:   Controlled Affiliate:By:Date:   Plan:By:Date:  6 
   EXHIBIT A CONTROLLED
AFFILIATE LICENSE STANDARDS
LIFE INSURANCE COMPANIES  PREAMBLE  The standards for
licensing Life Insurance Companies (Life and Health Insurance companies, as
defined by state statute) 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 of all Plans.  Each Licensed Plan is required to use a
standard controlled affiliate license form provided by BCBSA and to cooperate
fully in assuring that the licensed Life Insurance Company maintains compliance
with the license standards.  An organization
meeting the following standards shall be eligible for a license to use the
Licensed Marks within the service area of its sponsoring Licensed Plan to the
extent and the manner authorized under the Controlled Affiliate License
applicable to Life Insurance Companies and the principal license to the Plan.  Standard 1 - Organization and
Governance  The LIC 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) not less than 51% of the
voting control of the LIC; and 2) the legal ability to prevent any change in
the articles of incorporation, bylaws or other establishing or governing
documents of the LIC with which it does not concur; and 3) operational control
of the LIC.  If the LIC is a
mutual company, the Plan or its designee(s) shall have and maintain, in lieu of
the requirements of items 1 and 2 above, proxies representing at least 51% of
the votes at any policyholder meeting and shall demonstrate that there is no
reason to believe such proxies shall be revoked by sufficient policyholders to
reduce such percentage below 51%.  Standard 2 - State Licensure  The LIC must
maintain unimpaired licensure or certificate of authority to operate under
applicable state laws as a life and health insurance company in each state in
which the LIC does business.  1 
   Standard 3 - Records and Examination  The LIC and its
sponsoring licensed Plan(s) shall maintain and furnish, on a timely and
accurate basis, such records and reports regarding the LIC as may be required
in order to establish compliance with the license agreement.The LIC and its
sponsoring licensed Plan(s) shall permit BCBSA to examine the affairs of the
LIC and shall agree that BCBSAs board may submit a written report to the chief
executive officer(s) and the board(s) of directors of the sponsoring Plan(s).  Standard 4 - Mediation  The LIC and its
sponsoring Plan(s) shall agree to use the then-current BCBSA mediation and
mandatory dispute resolution processes, in lieu of a legal action between or among
another licensed controlled affiliate, a licensed Plan or BCBSA.  Standard 5 - Financial Responsibility  The
LIC shall maintain adequate financial resources to protect its customers and
meet its business obligations.  Standard 6 - Cooperation with Affiliate License Performance
Response Process Protocol  The
LIC 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 LIC compliance problems identified thereunder.  2 
   EXHIBIT 2  Membership Standards  Preamble  The Membership
Standards apply to all organizations seeking to become or to continue as
Regular Members of the Blue Cross and Blue Shield Association.  Any organization seeking to become a Regular
Member must be found to be in substantial compliance with all Membership Standards
at the time membership is granted and the organization must be found to be in
substantial compliance with all Membership Standards for a period of two (2)
years preceding the date of its application. 
If Membership is sought by an entity which controls or is controlled by
one or more Plans, such compliance shall be determined on the basis of
compliance by such Plan or Plans.  The Regular Member
Plans shall have authority to interpret these Standards.  Compliance with any Membership Standard may
be excused, at the Plans discretion, if the Plans agree that compliance with
such Standard would require the Plan to violate a law or governmental
regulation governing its operation or activities.  A Regular Member Plan
that operates as a Shell Holding Company is defined as an entity that assumes
no underwriting risk and has less than 1% of the consolidated enterprise assets
(excludes investments in subsidiaries) and less than 5% of the consolidated
enterprise general and administrative expenses.  A Regular Member Plan
that operates as a Hybrid Holding Company is defined as an entity that
assumes no underwriting risk and has either more than 1% of the consolidated
enterprise assets (excludes investments in subsidiaries) or more than 5% of the
consolidated enterprise general and administrative expenses.  Standard 1:A
Plans Board shall not be controlled by any special interest group, and shall
act in the interest of its Corporation in providing cost-effective health care
services to its customers.  A Plan shall
maintain a governing Board, which shall control the Plan, 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.  Amended
as of November 19, 1998  1 
    Standard 2:A
Plan shall furnish to the Association on a timely and accurate basis reports
and records relating to compliance with these Standards and the License
Agreements between the Association and the Plans.  Such reports and records are the following:  A.BCBSA
Membership Information Request;  B.Biennial
trade name and service mark usage material, including disclosure material under
Standard 7;  C.Changes in
the governance of the Plan, including changes in a Plans Charter, Articles of
Incorporation, or Bylaws, changes in a Plans Board composition, or changes in
the identity of the Plans Principal Officers;  D.Quarterly
Financial Report, Semi-annual Health Risk-Based Capital (HRBC) Report as
defined by the NAIC, Annual Financial Forecast, Annual Certified Audit Report,
Insurance Department Examination Report, Annual Statement filed with State
Insurance Department (with all attachments), Plan, Subsidiary and Affiliate
Report; and  Plans
that are a Shell Holding Company as defined in the Preamble hereto are required
to furnish only a calendar year-end Health Risk-Based Capital (HRBC) Report
as defined by the NAIC.  Amended as of November 15, 2001  2 
    E.Quarterly
Enrollment Report, Semi-Annual Benefit Cost Management Report and Member
Touchpoint Measures Index (MTM) starting 12/31/00 and semi-annually thereafter;
and  Plans
that are a Shell Holding Company as defined in the Preamble hereto are not
required to furnish any items identified in Paragraph E.  Standard 3:A
Plan shall be operated in a manner that provides reasonable financial assurance
that it can fulfill its contractual obligations to its customers.  Standard 4:A
Plan shall be operated in a manner responsive to customer needs and
requirements.  Standard 5:A
Plan 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 Plans and ease of claims
processing for customers receiving benefits outside of the Plans Service Area.  Such programs are
applicable to Blue Cross and Blue Shield Plans, and include:  A.Transfer
Program; B.Inter-Plan
Teleprocessing System (ITS); C.BlueCard
Program; D.Electronic
Claims Routing Process; and E.National
Account Programs, effective January 1, 2002  Amended as of November 15, 2001  3 
   Standard 6:In
addition to requirements under the national programs listed in Standard 5:
Participation in National Programs, a Plan shall take such action as required
to ensure its financial performance in programs and contracts of an inter-Plan
nature or where the Association is a party.  Standard 7:A
Plan shall make adequate disclosure in contracting with third parties and in
disseminating public statements of (i) the structure of the Blue Cross and Blue
Shield System, (ii) the independent nature of every Plan, and (iii) the Plans
financial condition.  Standard 8:A
Plan shall cooperate with the Associations Board of Directors and its Plan
Performance and Financial Standards Committee in the administration of the Plan
Performance Response Process and in addressing Plan performance problems
identified thereunder.  Standard 9:A
Plan shall obtain a rating of its financial strength from an independent rating
agency approved by the Associations Board of Directors for such purpose.  Standard 10:During
each year, a Plan and its Controlled Affiliate(s) engaged in providing
licensable services (excluding Life Insurance and Charitable Foundation
Services) shall use their best efforts in the designated Service Area to
promote and build the value of the Blue Cross and Blue Shield Marks.  Standard 11:Neither
a Plan nor any Larger Controlled Affiliate shall cause or permit an entity
other than a Plan or a Licensed Controlled Affiliate thereof to obtain control
of the Plan or Larger Controlled Affiliate or to acquire a substantial portion
of its assets related to licensable services.  Amended as of June 18, 1999  4 
   EXHIBIT
3  GUIDELINES WITH RESPECT TO USE OF
LICENSED NAME AND MARKS IN CONNECTION WITH NATIONAL ACCOUNTS  1.             The
strength of the Blue Cross/Blue Cross National Accounts mechanism, and the
continued provision of cost effective, quality health care benefits to National
Accounts, are predicated on locally managed provider networks coordinated on a
national scale in a manner consistent with effective service to National
Account customers and consistent with the preservation of the integrity of the
Blue Cross/Blue Shield system and the Licensed Marks. These guidelines shall be
interpreted in keeping with such ends.  2.             A
National Account is an entity with employee and/or retiree locations in more
than one Plans Service Area. Unless otherwise agreed, a National Account is
deemed located in the Service Area in which the corporate headquarters of the
National Account is located. A local plant, office or division headquarters of
an entity may be deemed a separate National Account when that local plant,
office or division headquarters 1) has employee locations in more than one
Service Area, and 2) has independent health benefit decision-making authority
for the employees working at such local plant, office or division headquarters
and for employees working at other locations outside the Service Area.  In such a case, the local plant, office or
division headquarters is a National Account that is deemed located in the
Service Area in which such local plant, office or division headquarters is
located.  The Control Plan of a National
Account is the Plan in whose Service Area the National Account is located. A
participating (Par) Plan is a Plan in whose Service Area the National Account
has employee and/or retiree locations, but in which the National Account is not
located.  3.             The
National Account Guidelines enunciated herein below shall be applicable only
with respect to the business of new National Accounts acquired after January 1,
1991.  4.             Control
Plans shall utilize National Account identification cards complying with then
currently effective BCBSA graphic standards in connection with all National
Accounts business to facilitate administration thereof, to minimize subscriber
and provider confusion, and to reflect a commitment to cooperation among Plans.  Amended June 15, 2001  1 
    5.             Disputes
among Plans and/or BCBSA as to the interpretation or implementation of these
Guidelines or as to other National Accounts issues shall be submitted to
mediation and mandatory dispute resolution as provided in the License
Agreement. For two years from the effective date of the License Agreement,
however, such disputes shall be subject to mediation only, with the results of
such mediation to be collected and reported in order to establish more
definitive operating parameters for National Accounts business and to serve as
ground rules for future binding dispute resolution.  6.             The
Control Plan may use the BlueCard Program (as defined by IPPC) to deliver
benefits to employees and non-Medicare eligible retirees in a Participating
Plans service area if an alternative arrangement with the Participating Plan
cannot be negotiated.  The Participating
Plans minimum servicing requirement for those employees and non-Medicare
retirees in its service area is to deliver benefits using the BlueCard Program.  Account delivery is subject to the policies,
provisions and procedures of the BlueCard Program.  7.             For
provider payments in a Participating Plans area (on non-BlueCard claims),
payment to the provider may be made by the Participating Plan or the Control
Plan at the Participating Plans option. If the Participating Plan elects to
pay the provider, it may not withhold payment of a claim verified by the
Control Plan or its designated processor, and payment must be in conformity
with service criteria established by the Board of Directors of BCBSA (or an
authorized committee thereof) to assure prompt payment, good service and
minimum confusion with providers and subscribers. The Control Plan, at the
Participating Plans request, will also assure that measures are taken to
protect the confidentiality of the data pertaining to provider reimbursement
levels and profiles.  Amended as of June 14, 1996  2 
    8.             For
claim payments in a Participating Plans area (on non-BlueCard claims),
Participating Plans are strongly encouraged, but not required, to pass along to
the Control Plan part or all of local provider discounts and differentials for
use by the Control Plan in negotiating financial arrangements with National
Accounts. However, since the size, basis, form and use of local differentials
can vary substantially among Plans and also by individual National Account
characteristics, the degree and form of any discount or differential passed
along to the Control Plan shall be strictly a matter of negotiated contractual
agreement between a Participating Plan and the Control Plan and may also vary
from one National Account to another. In order to facilitate the quotation of
national account pricing and the offering of a variety of National Account
delivery systems, all Plans are strongly encouraged to periodically publish to
other Plans and the BCBSA their National Account contracting policies with
respect to the handling of differentials.  The Control Plan,
in its financial agreements with a National Account, is expected to reasonably
reflect the aggregate amount of differentials passed along to the Control Plan
by all Participating Plans in a National Account. The exact form and substance
of this may vary from one National Account to another and shall be a matter of
explicit negotiation and contractual relationship between the National Account
and the Control Plan. The specifics in an agreement between the Control Plan
and the National Account may vary in form (e.g., a guaranteed offset against
retentions, or a direct pass through, or a guaranteed aggregate percentage
discount, or no pass back at all, etc.), and the Control Plan has the
responsibility and the Authority to negotiate precise arrangements. However,
irrespective of the final arrangements between the Control Plan and the
National Account, a Participating Plans liability for passing along
differentials shall be limited to the contractual agreement the Participating
Plan has with the Control Plan on a specific National Account.  9.             Other
than in contracting with health care providers or soliciting such contracts in
areas contiguous to a Plans Service Area in order to serve its subscribers or
those of its licensed Controlled Affiliate residing or working in its Service
Area, a Control Plan may not use the Licensed Marks and/or Name, as a tag line
or otherwise, to negotiate directly with providers outside its Service Area.  3 
   EXHIBIT 4 GOVERNMENT PROGRAMS AND CERTAIN OTHER
USES  1.             A
Plan and its licensed Controlled Affiliate may use the Licensed Marks and Name
in bidding on and executing a contract to serve a Government Program, and in
thereafter communicating with the Government concerning the Program. With respect,
however, to such contracts entered into after the 1st day of January, 1991, the
Licensed Marks and Name will not be used in communications or transactions with
beneficiaries or providers in the Government Program located outside a Plans
Service Area, unless the Plan can demonstrate to the satisfaction of BCBSAs
governing body that such a restriction on use of the Licensed Marks and Name
will jeopardize its ability to procure the contract for the Government Program.
As to both existing and future contracts for Government Programs, Plans will
discontinue use of the Licensed Marks and Name as to beneficiaries and
Providers outside their Service Area as expenditiously as circumstances
reasonably permit. Effective January 1, 1995, except as provided in the first
sentence above, all use by a Plan of the Licensed Marks and Name in Government
Programs outside of the Plans Service Area shall be discontinued. Incidental
communications outside a Plans Service Area with resident or former resident
beneficiaries of the Plan, and other categories of necessary incidental
communications approved by BCBSA, are not prohibited.  2.             In
connection with activity otherwise in furtherance of the License Agreement, a
Plan may use the Licensed Marks and Name outside its Service Area in the
following circumstances which are deemed legitimate and necessary and not
likely to cause consumer confusion:  a.sending
letterhead, envelopes, and similar items solely for administrative purposes
(e.g., not for purposes of marketing, advertising, promoting, selling or
soliciting the sale of health care plans and related services);  b.distributing
business cards other than in marketing and selling;  c.contracting
with health care providers or soliciting such contracts in areas contiguous to
a Plans Service Area in order to serve its subscribers or those of its
licensed Controlled Affiliate residing or working in its service area;  d.issuing
a small sign containing the legal name or trade name of the Plan or its
licensed Controlled Affiliate for display by a provider to identify the latter
as a participating provider of the Plan or Controlled Affiliate;  Amended March 16, 2001  1 
   e.advertising
in publications or electronic media solely to persons for employment;  f.advertising
in print, electronic or other media which serve, as a substantial market, the
Service Area of the Plan or licensed Controlled Affiliate, provided that no
Plan may advertise outside its Service Area on the national broadcast and cable
networks and that advertisements in national print media are limited to the
smallest regional edition encompassing the Service Area;  g.advertising
by direct mail where the addressees zip code plus 4 includes, at least in
part, the Plans Service Area or that of a licensed Controlled Affiliate.  h.negotiating
rates with a health care provider for services to a specific member in case
management, provided that:  (1)  the health care provider does not contract
with the Licensee   (or any of the
Licensees in the case of overlapping Service Areas) in whose Service Area the
health care provider is located; and  (2)  the Licensee(s) in whose Service Area the
health care provider is located consent(s) in advance.  Amended November 15, 2001  2 
   EXHIBIT 5  MEDIATION AND MANDATORY DISPUTE
RESOLUTION (MMDR) RULES  The Blue Cross and Blue Shield Plans (Plans) and the
Blue Cross Blue Shield Association (BCBSA) recognize and acknowledge that the
Blue Cross and Blue Shield system is a unique nonprofit and for-profit system
offering cost effective health care financing and services.  The Plans and BCBSA desire to utilize
Mediation and Mandatory Dispute Resolution (MMDR) to avoid expensive and
time-consuming litigation that may otherwise occur in the federal and state
judicial systems.  Even MMDR should be
viewed, however, as methods of last resort, all other procedures for dispute
resolution having failed.  Except as
otherwise provided in the License Agreements, the Plans, their Controlled
Affiliates and BCBSA agree to submit all disputes to MMDR pursuant to these
Rules and in lieu of litigation.  1.             Initiation of Proceedings  A.            Pre-MMDR
Efforts  Before filing a Complaint to invoke the MMDR process,
the CEO of a complaining party, or his/her designated representative, shall
undertake good faith efforts with the other side(s) to try to resolve any
dispute.  B.            Complaint  To commence a proceeding, the complaining party (or
parties) shall provide by certified mail, return receipt requested, a written
Complaint to the BCBSA Corporate Secretary (which shall also constitute service
on BCBSA if it is a respondent) and to any Plan(s) and/or Controlled
Affiliate(s) named therein.  The
Complaint shall contain:  i.identification of the
complaining party (or parties) requesting the proceeding;  ii.identification of the
respondent(s);  iii.identification of any other
persons or entities who are interested in a resolution of the dispute;  iv.a full statement describing
the nature of the dispute;  v.identification of all of
the issues that are being submitted for resolution;  Amended as of November 21, 1996 
    vi.the remedy sought;  vii.a statement as to whether the
complaining party (or parties) elect(s) first to pursue Mediation;  viii.any request,
if applicable, that one or more members of the Mediation Committee be
disqualified from the proceeding and the grounds for such request;  ix.any request, if
applicable, that the matter be handled on an expedited basis and the reasons
therefor; and  x.a statement signed by
the CEO of the complaining party affirming that the CEO has undertaken efforts,
or has directed efforts to be undertaken, to resolve the dispute before
resorting to the MMDR process.  The complaining party (or parties) shall file and serve with the
Complaint copies of all documents which the party (or parties) intend(s) to
offer at the Arbitration Hearing and a statement identifying the witnesses the
party (or parties) intend(s) to present at the Hearing, along with a summary of
each witness expected testimony.  C.            Answer  Within twenty (20) days after receipt of the
Complaint, each respondent shall serve on the BCBSA and on the complaining
party (or parties) and on the Chairman of the Mediation Committee;  i.a full Answer to
the aforesaid Complaint;  ii.a statement of any
Counterclaims against the complaining party (or parties), providing with
respect thereto the information specified in Paragraph 1.B., above;  iii.a statement as to
whether the respondent elects to first pursue Mediation;  iv.any request, if
applicable, that one or more members of the Mediation Committee be disqualified
from the proceeding and the grounds for such request; and  v.any request, if
applicable, that the matter be handled on an expedited basis and the reasons
therefor.  2 
   The respondent(s) shall file and serve with the Answer or by the date
of the Initial Conference set forth in Paragraph 3.B., below, copies of all
documents which the respondent(s) intend(s) to offer at the Arbitration Hearing
and a statement identifying the witnesses the party (or parties) intend(s) to
present at the Hearing, along with a summary of each witness expected
testimony.  D.            Reply
To Counterclaim  Within ten (10) days after receipt of any
Counterclaim, the complaining party (or parties) shall serve on BCBSA and on
the responding party (or parties) and on the Chairman of the Mediation
Committee, a Reply to the Counterclaim. 
Such Reply must provide the same information required by Paragraph 1.C.  2.             Mediation  A.            Mediation
Committee  To facilitate the mediation of disputes between or
among BCBSA, the Plans and/or their Controlled Affiliates, the BCBSA Board has
established a Mediation Committee. 
Mediation may be pursued in lieu of or in an effort to obviate the
Mandatory Dispute Resolution process, and all parties are strongly urged to
exhaust the mediation procedure.  B.            Election
To Mediate  If any party elects first to pursue Mediation, and if
it appears to the Corporate Secretary that the dispute falls within the
jurisdiction of the Mediation Committee, as set forth in Exhibit 5-A hereto,
then the Corporate Secretary will promptly furnish the Mediation Committee with
copies of the Complaint, Answer, Counterclaim and Reply to Counterclaim, and
other documents referenced in Paragraph 1, above.  C.            Selection
of Mediators  The parties shall promptly attempt to agree upon: (i)
the number of mediators desired, not to exceed three mediators; and (ii) the
selection of the mediator(s) who may include members of the Mediation Committee
and/or experienced mediators from an independent entity to mediate all disputes
set forth in the Complaint and Answer (and Counterclaim and Reply, if any).  In the event the parties cannot agree upon
the number of mediators desired, that number shall default to three.  In the event the parties cannot agree upon
the selection of mediator(s), the Chairman will select the mediator(s), at
least one of which shall be an experienced mediator from an independent entity,
consistent with the provisions set forth in this Paragraph.  No member of the Mediation Committee who is
a representative of any party to the Mediation may be  3 
   selected to mediate the dispute. 
The Chairman shall also endeavor not to select as a mediator any member
of the Mediation Committee whom a party has requested to be disqualified.  If, after due regard for availability,
expertise, and such other considerations as may best promote an expeditious
Mediation, the Chairman believes that he or she must consider for selection a
member of the Mediation Committee whom a party has requested to be
disqualified, the other members of the Committee eligible to be selected to
mediate the dispute shall decide the request for disqualification.  By agreeing to participate in the Mediation
of a dispute, a member of the Mediation Committee represents to the party (or
parties) thereto that he or she knows of no grounds which would require his or
her disqualification.  D.            Binding
Decision  Before the date of the Mediation Hearing described
below, the Corporate Secretary will contact the party (or parties) to determine
whether they wish to be bound by any recommendation of the selected mediators
for resolution of the disputes.  If all
wish to be bound, the Corporate Secretary will send appropriate documentation
to them for their signatures before the Mediation Hearing begins.  E.             Mediation
Procedure  The Chairman shall promptly advise the parties of a
scheduled Mediation Hearing date. 
Unless a party requests an expedited procedure, or unless all parties to
the proceeding agree to one or more extensions of time, the Mediation Hearing
set forth below shall be completed within forty (40) days of BCBSAs receipt of
the Complaint.  The selected mediators,
unless the parties otherwise agree, shall adhere to the following procedure:  i.Each party must
be represented by its CEO or other representative who has been delegated full
authority to resolve the dispute. 
However, parties may send additional representatives as they see fit.  ii.By no later than
five (5) days prior to the date designated for the Mediation Hearing, each
party shall supply and serve a list of all persons who will be attending the
Mediation Hearing, and indicate who will have the authority to resolve the
dispute.  iii.Each party will be
given one-half hour to present its case, beginning with the complaining party
(or parties), followed by the other party or parties.   The parties are free to
structure their presentations as they see fit, using oral statements or direct
examination of witnesses.  However,
neither cross-examination nor questioning of opposing representatives will be  4 
   permitted.  At the close of each presentation, the
selected mediators will be given an opportunity to ask questions of the
presenters and witnesses.  All parties
must be present throughout the Mediation Hearing.  The selected mediators may extend the time allowed for each
partys presentation at the Mediation Hearing. 
The selected mediators may meet in executive session, outside the
presence of the parties, or may meet with the parties separately, to discuss
the controversy.  iv.After the close of the
presentations, the parties will attempt to negotiate a settlement of the
dispute.  If the parties desire, the
selected mediators, or any one or more of the selected mediators, will sit in
on the negotiations.  v.After the close of
the presentations, the selected mediators may meet privately to agree upon a
recommendation for resolution of the dispute which would be submitted to the
parties for their consideration and approval. 
If the parties have previously agreed to be bound by the results of this
procedure, this recommendation shall be binding upon the parties.  vi.The purpose of the
Mediation Hearing is to assist the parties to settle their grievances short of
mandatory dispute resolution.  As a
result, the Mediation Hearing has been designed to be as informal as
possible.  Rules of evidence shall not
apply.  There will be no transcript of
the proceedings, and no party may make a tape recording of the Mediation Hearing.  vii.In order to facilitate a
free and open discussion, the Mediation proceeding shall remain
confidential.  A Stipulation to
Confidentiality which prohibits future use of settlement offers, all position
papers or other statements furnished to the selected mediators, and decisions
or recommendations in any Mediation proceeding shall be executed by each party.  viii.Upon request of the selected
mediators, or one of the parties, BCBSA staff may also submit documentation at
any time during the proceedings.  5 
   F.             Notice
Of Termination Of Mediation  If the Mediation cannot be completed within the
prescribed or agreed time period due to the lack of cooperation of any party,
as determined by the selected mediators, or if the Mediation does not result in
a final resolution of all disputes at the Mediation Hearing or within forty
(40) days after the Complaint was served, whichever comes first, any party or
any one of the selected mediators may so notify the Corporate Secretary, who
shall promptly issue a Notice of termination of mediation to all parties, to
the selected mediators, and to the MDR Administrator, defined below.  Such notice shall serve to bring the
Mediation to an end and to initiate Mandatory Dispute Resolution.  Upon agreement of all parties and the
selected mediators, the Mediation process may continue at the same time the MDR
process is invoked.  The Notice
described above would serve to initiate the MDR proceeding and would not
terminate the proceedings.  3.             Mandatory
Dispute Resolution  (MDR)  If all parties elect not to first pursue Mediation, or
if a notice of termination of Mediation is issued as set forth in Paragraph
2.F., above, then the unresolved disputes set forth in any Complaint and Answer
(and Counterclaim and Reply, if any) shall be subject to MDR.  A.            MDR
Administrator  The Administrator shall be an independent entity such
as the Center for Public Resources, Inc. or Endispute, Inc., specializing in
alternative dispute resolution.  The
Administrator shall be designated initially, and may be changed from time to
time, by the affirmative vote of a majority of the Plans present and voting and
a majority of the total then current weighted vote of all the Plans present and
voting.  B.            Initial
Conference  Within five (5) days after a Notice of Termination has
issued, or within five (5) days after the time for filing and serving the Reply
to any Counterclaim if the parties elect first not to mediate, the parties
shall confer with the Administrator to discuss selecting a dispute resolution
panel (the Panel).  This Initial
Conference may be by telephone.  The
parties are encouraged to agree to the composition of the Panel and to present
that agreement to the Administrator at the Initial Conference.  If the parties do not agree on the
composition of the Panel by the time of the Initial Conference, or by any
extension thereof agreed to by all parties and the Administrator, then the
Panel Selection Process set forth in subparagraph C shall be followed.  Amended September 21, 2000  6 
   C.            Panel
Selection Process  The Administrator shall designate at least seven
potential arbitrators.  The exact number
designated shall be sufficient to give each party at least two peremptory
strikes.  Each party shall be permitted
to strike any designee for cause and the Administrator shall determine the
sufficiency thereof in its sole discretion. 
The Administrator will designate a replacement for any designee so
stricken.  Each party shall then be
permitted two peremptory strikes.  From
the remaining designees, the Administrator shall select a three member
Panel.  The Administrator shall set the
dates for exercising all strikes and shall complete the Panel Selection Process
within fifteen (15) days of the Initial Conference.  Each Arbitrator shall be compensated at his or her normal hourly
rate or, in the absence of an established rate, at a reasonable hourly rate to
be promptly fixed by the Administrator for all time spent in connection with
the proceedings and shall be reimbursed for any travel and other reasonable
expenses.  D.            Duties
Of The Arbitrators  The Panel shall promptly designate a Presiding
Arbitrator for the purposes reflected below, but shall retain the power to
review and modify any ruling or other action of said Presiding Arbitrator.  Each Arbitrator shall be an independent
Arbitrator, shall be governed by the Code of Ethics for Arbitrators in
Commercial Disputes, appended as Exhibit 5-B hereto, and shall at or prior to
the commencement of any Arbitration Hearing take an oath to that effect.  Each Arbitrator shall promptly disclose in
writing to the Panel and to the parties any circumstances, whenever arising,
that might cause doubt as to such Arbitrators compliance, or ability to
comply, with said Code of Ethics, and, absent resignation by such Arbitrator,
the remaining Arbitrators shall determine in their sole discretion whether the
circumstances so disclosed constitute grounds for disqualification and for
replacement.  With respect to such
circumstances arising or coming to the attention of a party after an
Arbitrators selection, a party may likewise request the Arbitrators
resignation or a determination as to disqualification by the remaining
Arbitrators.  With respect to a sole
Arbitrator, the determination as to disqualification shall be made by the
Administrator.  There shall be no ex  parte communication
between the parties or their counsel and any member of the Panel.  E.             Panels
Jurisdiction And Authority  The Panels jurisdiction and authority shall extend to
all disputes between or among the Plans, their Controlled Affiliates, and/or
BCBSA, except for those disputes excepted from these MMDR procedures as set
forth in the License Agreements.  7 
   With the exception of punitive or treble damages, the
Panel shall have full authority to award the relief it deems appropriate to
resolve the parties disputes, including monetary awards and injunctions,
mandatory or prohibitory.  The Panel has
no authority to award punitive or treble damages except that the Panel may
allocate or assess responsibility for punitive or treble damages assessed by
another tribunal.  Subject to the above
limitations, the Panel may, by way of example, but not of limitation:  i.interpret or
construe the meaning of any terms, phrase or provision in any license between
BCBSA and a  Plan or a Controlled
Affiliate relating to the use of the BLUE CROSS® or BLUE SHIELD® service marks.  ii.determine whether
BCBSA, a Plan or a Controlled Affiliate has violated the terms or conditions of
any license between the BCBSA and a Plan or a Controlled Affiliate relating to
the use of the BLUE CROSS® or BLUE CROSS® service marks.  iii.decide challenges as
to its own jurisdiction.  iv.issue such orders for
interim relief as it deems appropriate pending Hearing and Award in any
Arbitration.  It is understood that the Panel is expected to resolve
issues based on governing principles of law, preserving to the maximum extent
legally possible the continued integrity of the Licensed Marks and the BLUE
CROSS/BLUE SHIELD system.  The Panel
shall apply federal law to all issues which, if asserted in the United States
District Court, would give rise to federal question jurisdiction, 28 U.S.C. § 1331.  The Panel shall apply Illinois law to all
issues involving interpretation, performance or construction of any License
Agreement or Controlled Affiliate License Agreement unless the agreement
otherwise provides.  As to other issues,
the Panel shall choose the applicable law based on conflicts of law principles
of the State of Illinois.  8 
   F.             Administrative
Conference And Preliminary Arbitration Hearing  Within ten (10) days of the Panel being selected, the
Presiding Arbitrator will schedule an Administrative Conference to discuss
scheduling of the Arbitration Hearing and any other matter appropriate to be
considered including: any written discovery in the form of requests for
production of documents or requests to admit facts; the identity of any witness
whose deposition a party may desire and a showing of exceptional good cause for
the taking of any such deposition; the desirability of bifurcation or other
separation of the issues; the need for and the type of record of conferences
and hearings, including the need for transcripts; the need for expert witnesses
and how expert testimony should be presented; the appropriateness of motions to
dismiss and/or for full or partial summary judgment; consideration of
stipulations; the desirability of presenting any direct testimony in writing;
and the necessity for any on-site inspection by the Panel.  G.            Discovery  i.Requests for Production of Documents:  All requests for the production of documents
must be served as of the date of the Administrative Conference as set forth in
Paragraph 3.F., above. Within twenty (20) days after receipt of a request for
documents, a party shall produce all relevant and non-privileged documents to
the requesting party.  In his or her
discretion, the Presiding Arbitrator may require the parties to provide lists
in such detail as is deemed appropriate of all documents as to which privilege
is claimed and may further require in-camera inspection of the same.  ii.Requests for Admissions:  Requests for Admissions may be served up to
21 days prior to the Arbitration Hearing. 
A party served with Requests For Admissions must respond within twenty
(20) days of receipt of said request. The good faith use of and response to
Requests for Admissions is encouraged, and the Panel shall have full
discretion, with reference to the Federal Rules of Civil Procedure, in awarding
appropriate sanctions with respect to abuse of the procedure.  9 
   iii.Depositions  As a general rule, the parties will not be
permitted to take deposition testimony for discovery purposes.  The Presiding Arbitrator, in his or her sole
discretion, shall have the authority to permit a party to take such deposition
testimony upon a showing of exceptional good cause, provided that no
deposition, for discovery purposes or otherwise, shall exceed three (3) hours,
excluding objections and colloquy of counsel.  iv.Expert witness(es): If a party intends to
present the testimony of an expert witness during the oral hearing, it shall
provide all other parties with a written statement setting forth the
information required to be provided by Fed. R. Civ. P. 26(b)(4)(A)(i) prior to
the expiration of the discovery period.  v.Discovery cut-off: The Presiding Arbitrator
shall determine the date on which the discovery period will end, but the
discovery period shall not exceed forty-five (45) days from its commencement,
without the agreement of all parties.  vi.Additional discovery:  Any additional discovery will be at the
discretion of the Presiding Arbitrator. 
The Presiding Arbitrator is authorized to resolve all discovery
disputes, which resolution will be binding on the parties unless modified by
the Arbitration Panel.  If a party
refuses to comply with a decision resolving a discovery dispute, the Panel, in
keeping with Fed. R. Civ. P. 37, may refuse to allow that party to support or
oppose designated claims or defenses, prohibit that party from introducing
designated matters into evidence or, in extreme cases, decide an issue submitted
for resolution adversely to that party.  H.            Panel
Suggested Settlement/Mediation  At any point during the proceedings, the Panel at the
request of any party or on its own initiative, may suggest that the parties
explore settlement and that they do so at or before the conclusion of the
Arbitration Hearing, and the Panel shall give such assistance in settlement
negotiations as the parties may request and the Panel may deem
appropriate.  Alternatively, the Panel
may direct the parties to endeavor to mediate their disputes as provided above,
or to explore a mini-trial proceeding, or to have an independent party render a
neutral evaluation of the parties respective positions.  The Panel shall enter such sanctions as it
deems appropriate with respect to any party failing to pursue in good faith
such Mediation or other alternate dispute resolution methods.  10 
   I.              Subpoenas
On Third Parties  Pursuant to, and consistent with, the Federal
Arbitration Act, 9 U.S.C. § 9 et seq., a party may request the issuance
of a subpoena on a third party, to compel testimony or documents, and, if good
and sufficient cause is shown, the Panel shall issue such a subpoena.  J.             Arbitration
Hearing  An Arbitration Hearing will be held within thirty (30)
days after the Administrative Conference if no discovery is taken, or within
thirty (30) days after the close of discovery, unless all parties and the Panel
agree to extend the Arbitration Hearing date, or unless the parties agree in writing
to waive the Arbitration Hearing.  The
parties may mutually agree on the location of the Arbitration Hearing.  If the parties fail to agree, the
Arbitration Hearing shall be held in Chicago, Illinois, or at such other
location determined by the Presiding Arbitrator to be most convenient to the
participants.  The Panel will determine
the date(s) and time(s) of the Arbitration Hearing(s) after consultation with
all parties and shall provide reasonable notice thereof to all parties or their
representatives.  K.            Arbitration
Hearing Memoranda  Twenty (20) days prior to the Arbitration Hearing,
each party shall submit to the other party (or parties) and to the Panel an
Arbitration Hearing Memorandum which sets forth the applicable law and any
argument as to any relevant issue.  The
Arbitration Hearing Memorandum will supplement, and not repeat, the
allegations, information and documents contained in or with the Complaint,
Answer, Counterclaim and Reply, if any. 
Ten (10) days prior to the Arbitration Hearing, each party may submit to
the other party (or parties) and to the Panel a Response Arbitration Hearing
Memorandum which sets forth any response to another partys Arbitration Hearing
Memorandum.  11 
   L.             Notice
For Testimony  Ten (10) days prior to the Arbitration Hearing, any
party may serve a Notice on any other party (or parties) requesting the
attendance at the Arbitration Hearing of any officer, employee or director of
the other party (or parties) for the purpose of providing noncumulative
testimony.  If a party fails to produce
one of its officers, employees or directors whose noncumulative testimony
during the Arbitration Hearing is reasonably requested by an adverse party, the
Panel may refuse to allow that party to support or oppose designated claims or
defenses, prohibit that party from introducing designated matters into evidence
or, in extreme cases, decide an issue submitted for mandatory dispute
resolution adversely to that party. 
This Rule may not be used for the purpose of burdening or harassing any
party, and the Presiding Arbitrator may impose such orders as are appropriate
so as to prevent or remedy any such burden or harassment.  M.           Arbitration
Hearing Procedures  i.Attendance at Arbitration Hearing:  Any person having a direct interest in the
proceeding is entitled to attend the Arbitration Hearing.  The Presiding Arbitrator shall otherwise
have the power to require the exclusion of any witness, other than a party or
other essential person, during the testimony of any other witness.  It shall be discretionary with the Presiding
Arbitrator to determine the propriety of the attendance of any other person.  ii.Confidentiality:  The Panel and all parties shall maintain the
privacy of the Arbitration Proceeding. 
The parties and the Panel shall treat the Arbitration Hearing and any
discovery or other proceedings or events related thereto, including any award
resulting therefrom, as confidential except as otherwise necessary in
connection with a judicial challenge to or enforcement of an award or unless
otherwise required by law.  iii.Stenographic Record:  Any party, or if the parties do not object,
the Panel, may request that a stenographic or other record be made of any
Arbitration Hearing or portion thereof. 
The costs of the recording and/or of preparing the transcript shall be
borne by the requesting party and by any party who receives a copy
thereof.  If the Panel requests a
recording and/or a transcript, the costs thereof shall be borne equally by the
parties.  12 
   iv.Oaths: 
The Panel may require witnesses to testify under oath or affirmation
administered by any duly qualified person and, if requested by any party, shall
do so.  v.Order of Arbitration Hearing:  An Arbitration Hearing shall be opened by
the recording of the date, time, and place of the Arbitration Hearing, and the
presence of the Panel, the parties, and their representatives, if any.  The Panel may, at the beginning of the
Arbitration Hearing, ask for statements clarifying the issues involved.  Unless otherwise agreed,
the complaining party (or parties) shall then present evidence to support their
claim(s).  The respondent(s) shall then
present evidence supporting their defenses and Counterclaims, if any.  The complaining party (or parties) shall
then present evidence supporting defenses to the Counterclaims, if any, and
rebuttal.  Witnesses for each party
shall submit to questions by adverse parties and/or the Panel.  The Panel has the
discretion to vary these procedures, but shall afford a full and equal
opportunity to all parties for the presentation of any material and relevant
evidence.  vi.Evidence: 
The parties may offer such evidence as is relevant and material to the
dispute and shall produce such evidence as the Panel may deem necessary to an
understanding and resolution of the dispute. 
Unless good cause is shown, as determined by the Panel or agreed to by
all other parties, no party shall be permitted to offer evidence at the
Arbitration Hearing which was not disclosed prior to the Arbitration Hearing by
that party.  The Panel may receive and
consider the evidence of witnesses by affidavit upon such terms as the Panel
deems appropriate.  13 
   The Panel shall be the
judge of the relevance and materiality of the evidence offered, and conformity
to legal rules of evidence, other than enforcement of the attorney-client
privilege and the work product protection, shall not be necessary.  The Federal Rules of Evidence shall be
considered by the Panel in conducting the Arbitration Hearing but those rules
shall not be controlling.  All evidence
shall be taken in the presence of the Panel and all of the parties, except
where any party is in default or has waived the right to be present.  Settlement offers by any
party in connection with Mediation or MDR proceedings, decisions or
recommendations of the selected mediators, and a partys position papers or
statements furnished to the selected mediators shall not be admissible evidence
or considered by the Panel without the consent of all parties.  vii.Closing of Arbitration Hearing:  The Presiding Arbitrator shall specifically
inquire of all parties whether they have any further proofs to offer or
witnesses to be heard.  Upon receiving
negative replies or if he or she is satisfied that the record is complete, the
Presiding Arbitrator shall declare the Arbitration Hearing closed with an
appropriate notation made on the record. 
Subject to being reopened as provided below, the time within which the
Panel is required to make the award shall commence to run, in the absence of
contrary agreement by the parties, upon the closing of the Arbitration Hearing.  With respect to complex
disputes, the Panel may, in its sole discretion, defer the closing of the
Arbitration Hearing for a period of up to thirty (30) days after the
presentation of proofs in order to permit the parties to submit post-hearing
briefs and argument, as the Panel deems appropriate, prior to making an award.  For good cause, the
Arbitration Hearing may be reopened for up to thirty (30) days on the Panels
initiative, or upon application of a party, at any time before the award is
made  14 
   N.            Awards  An Award must be in writing and shall be made promptly
by the Panel and, unless otherwise agreed by the parties or specified by law,
no later than thirty (30) days from the date of closing the Arbitration
Hearing.  If all parties so request, the
Award shall contain findings of fact and conclusions of law.  The Award, and all other rulings and
determinations by the Panel, may be by a majority vote.  Parties shall accept as legal delivery of the Award
the placing of the Award or a true copy thereof in the mail addressed to a
party or its representative at its last known address or personal service of
the Award on a party or its representative.  Awards are binding only on the parties to the
Arbitration and are not binding on any non-parties to the Arbitration and may
not be used or cited as precedent in any other proceeding.  After the expiration of twenty (20) days from initial
delivery, the Award (with corrections, if any) shall be final and binding on
the parties, and the parties shall undertake to carry out the Award without
delay.  Proceedings to confirm, modify or vacate an Award
shall be conducted in conformity with and controlled by the Federal Arbitration
Act.  9 U.S.C. § 1, et seq.  O.            Return
Of Documents  Within sixty (60) days after the Award and the
conclusion of any judicial proceedings with respect thereto, each party and the
Panel shall return any documents produced by any other party, including all
copies thereof.  If a party receives a
discovery request in any other proceeding which would require it to produce any
documents produced to it by any other party in a proceeding hereunder, it shall
not produce such documents without first notifying the producing party and
giving said party reasonable time to respond, if appropriate, to the discovery
request.  15 
   4.             Miscellaneous  A.            Expedited
Procedures  Any party to a Mediation may direct a request for an
expedited Mediation Hearing to the Chairman of the Mediation Committee, to the
selected Mediators, and to all other parties at any time.  The Chairman of the Mediation Committee, or
at his or her direction, the then selected Mediators, shall grant any request
which is supported by good and sufficient reasons.  If such a request is granted, the Mediation shall be completed
within as short a period as practicable, as determined by the Chairman of the
Mediation Committee or, at his or her direction, the then selected Mediators.  Any party to an Arbitration may direct a request for
expedited proceedings to the Administrator, to the Panel, and to all other
parties at any time.  The Administrator,
or the Presiding Arbitrator if the Panel has been selected, shall grant any
such request which is supported by good and sufficient reasons.  If such a request is granted, the
Arbitration shall be completed within as short a time as practicable, as
determined by the Administrator and/or the Presiding Arbitrator.  B.            Temporary
Or Preliminary Injunctive Relief  Any party may seek temporary or preliminary injunctive
relief with the filing of a Complaint or at any time thereafter.  If such relief is sought prior to the time
that an Arbitration Panel has been selected, then the Administrator shall
select a single Arbitrator who is a lawyer who has no interest in the subject
matter of the dispute, and no connection to any of the parties, to hear and
determine the request for temporary or preliminary injunction.  If such relief is sought after the time that
an Arbitration Panel has been selected, then the Arbitration Panel will hear
and determine the request.  The request
for temporary or preliminary injunctive relief will be determined with
reference to the temporary or preliminary injunction standards set forth in
Fed. R. Civ. P. 65.  C.            Defaults
And Proceedings In The Absence Of A Party  Whenever a party fails to comply with the MDR Rules in
a manner deemed material by the Panel, the Panel shall fix a reasonable time
for compliance and, if the party does not comply within said period, the Panel
may enter an Order of default or afford such other relief as it deems
appropriate.  Arbitration may proceed in
the event of a default or in the absence of any party who, after due notice,
fails to be present or fails to obtain an extension.  An Award shall not be made solely on the default or absence of a
party, but the Panel shall require the party who is present to submit such
evidence as the Panel may require for the making of findings, determinations,
conclusions, and Awards.  16 
   D.            Notice  Each party shall
be deemed to have consented that any papers, notices, or process necessary or
proper for the initiation or continuation of a proceeding under these rules or
for any court action in connection therewith may be served on a party by mail
addressed to the party or its representative at its last known address or by
personal service, in or outside the state where the MDR proceeding is to be
held.  The Corporate Secretary and the parties may also use
facsimile transmission, telex, telegram, or other written forms of electronic
communication to give the notices required by these rules.  E.             Expenses  The expenses of witnesses shall be paid by the party
causing or requesting the appearance of such witnesses.  All expenses of the MDR proceeding,
including compensation, required travel and other reasonable expenses of the
Panel, and the cost of any proof produced at the direct request of the Panel,
shall be borne equally by the parties and shall be paid periodically on a
timely basis, unless they agree otherwise or unless the Panel in the Award
assesses such expenses, or any part thereof against any party (or
parties).  In exceptional cases, the
Panel may award reasonable attorneys fees as an item of expense, and the Panel
shall promptly determine the amount of such fees based on affidavits or such
other proofs as the Panel deems sufficient.  F.             Disqualification
Or Disability Of A Panel Member  In the event that any Arbitrator of a Panel with more
than one Arbitrator should become disqualified, resign, die, or refuse or be
unable to perform or discharge his or her duties after the commencement of MDR
but prior to the rendition of an Award, and the parties are unable to agree
upon a replacement, the remaining Panel member(s):  i.shall designate
a replacement, subject to the right of any party to challenge such replacement
for cause.  ii.shall decide the
extent to which previously held hearings shall be repeated.  17 
   If the remaining Panel members consider the
proceedings to have progressed to a stage as to make replacement impracticable,
the parties may agree, as an alternative to the recommencement of the Mandatory
Dispute Resolution process, to resolution of the dispute by the remaining Panel
members.  In the event that a single Arbitrator should become
disqualified, resign, die, or refuse or be unable to perform or discharge his
or her duties after the commencement of MDR but prior to the rendition of an
Award, and the parties are unable to agree upon a replacement, the
Administrator shall appoint a successor, subject to the right of any party to
challenge such successor for cause, and the successor shall decide the extent
to which previously held proceedings shall be repeated.  G.            Extensions of Time  Any time limit set forth in these Rules may be
extended upon agreement of the parties and approval of:   (i) the Chairman of the Mediation Committee
if the proceeding is then in Mediation; (ii) the Administrator if the
proceeding is in Arbitration, but no Arbitration Panel has been selected; or
(iii) the Arbitration Panel, if the proceeding is in Arbitration and the
Arbitration Panel has been selected.  H.            Intervention  The Plans, their Controlled Affiliates, and BCBSA, to
the extent subject to MMDR pursuant to their License Agreements, shall have the
right to move to intervene in any pending Arbitration.  A written motion for intervention shall be
made to:  (i) the Administrator, if the
proceeding is in Arbitration, but no Arbitration Panel has been selected; or
(ii) the Arbitration Panel, if the proceeding is in Arbitration and the
Arbitration Panel has been selected. 
The written motion for intervention shall be delivered to the BCBSA
Corporate Secretary (which shall also constitute service on the BCBSA if it is
a respondent) and to any Plan(s) and/or Controlled Affiliate(s) which are
parties to the proceeding.  Any party to
the proceeding can submit written objections to the motion to intervene.  The motion for intervention shall be granted
upon good cause shown.  Intervention
also may be allowed by stipulation of the parties to the Arbitration
proceeding.  Intervention shall be
allowed upon such terms as the Arbitration Panel decides.  I.              BCBSA
Assistance In Resolution of Disputes  The resources and personnel of the BCBSA may be
requested by any member Plan at any time to try to resolve disputes with
another Plan. Amended September 21, 2000  18 
   J.             Neutral
Evaluation  The parties can voluntarily agree at any time to have
an independent party render a neutral evaluation of the parties respective
positions.  K.            Recovery
of Attorney Fees and Expenses  Motions
to Compel  Nothwithstanding any other provisions of these Rules,
any Party subject to the License Agreements (for purposes of this Section K and
all of its sub-sections only hereinafter referred to collectively and
individually as a Party) that initiates a court action or administrative
proceeding solely to compel adherence to these Rules shall not be determined to
have violated these Rules by initiating such action or proceeding.  Recovery
of Fees, Expenses and Costs  The Arbitration Panel may, in its sole discretion,
award a Party its reasonable attorneys fees, expenses and costs associated
with a filing to compel adherence to these Rules and/or reasonable attorneys
fees, expenses and costs incurred in responding to an action filed in violation
of these Rules; provided, however, that neither fees, expenses, nor costs shall
be awarded by the Arbitration Panel if the Party from which the award is sought
can demonstrate to the Arbitration panel, in its sole discretion, that it did
not violate these Rules or that it had reasonable grounds for believing that
its action did not violate these Rules.  Requests
for Reimbursement  For purposes of this
Section K, any Party may request reimbursement of fees, expenses and/or costs
by submitting said request in writing to the Arbitration Panel at any time
before an award is delivered pursuant to Section 3-N hereof, with a copy to the
Party from which reimbursement is sought, explaining why it is entitled to such
reimbursement.  The Party from which
reimbursement is sought shall have 20 days to submit a response to such request
to the Arbitration Panel with a copy to the Party seeking reimbursement.  Amended
September 21, 2000  19 
   EXHIBIT
5-A  MEDIATION COMMITTEE  REPORTS TO:
Board of Directors  CHARGE:1.            Develop and implement processes for
resolving misunderstandings or disagreements between Plans or between Plans and
the Association under the following circumstances:  a.             Matters at issue regarding
relationships between Plans or between Plans and the Association.  b.             Matters at issue regarding
relationships between Plans or between Plans and the Association.  c.             Matters at issue under the
Inter-Plan Bank, Reciprocity, and Transfer Programs.  d.             Matters at issue regarding
contractor selection or performance under the Medicare Part A Program.  2.            Determination of equalization allowances and/or cost
allowances under FEP shall not be considered by this Committee.  MEMBERSHIP:Six to Eight  STAFF:Senior
Vice President and General Counsel