Exhibit 10.6.4


                  BLUE CROSS LICENSE AGREEMENT

     This agreement by and between Blue Cross and Blue Shield
Association ("BCBSA") and The Blue Cross Plan, known as Blue
Cross and Blue Shield of Missouri (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.

     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.")  With respect to any HMO previously
sublicensed as provided in a License Addendum between BCBSA and
the Plan, the Plan shall have one (1) year from the date hereof
to obtain execution of the direct license required herein.  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:

          A.           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; or

          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; (b) 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; (c) at least
          equal control over the operations of the Controlled
          Affiliate; and (d) to concur before the Controlled
          Affiliate can:
                                 Amended as of November 20, 1997
                               -2-

                1.   Change its legal and/or trade name;

                2.   Change the geographic area in which it
                operates;

                3.   Change 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 Plan or BCBSA reasonably
                 believes will adversely affect the Licensed
                 Marks or Names.


                                    Amended as of November 20,
                                      1997





                                
                                
                              -2a-
                                       (The next page is page 3)
     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
Shield 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.


     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.
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                               -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 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 November 20, 1997
                                                                
                               -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-
                                       (The next page is page 6)
                                
                                                                
     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; or (c) until
termination of the aforesaid Ownership Agreement; or (d) 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 (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 November 20, 1997
                                
                               -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 as provided in the Ownership Agreement.

     (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, measured
                   as of the date of termination and
                   adjusted for the value of any
                   transactions not made in the ordinary
                   course of business.

                             (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).

                                   Amended as of September 19, 1996


                                                      -8a-



                             (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.

     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.


                                 Amended as of November 20, 1997
                              -8b-
                                
                                      (The next page is page 9)
     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/ Mark A. Orloff


Title Vice President


Date 3/23/98



BLUE CROSS AND BLUE SHIELD OF MISSOURI


By /s/ John A. O'Rourke


Title President


Date March 20, 1998

                                
                               -9-
                                
EXHIBIT 1
                           BLUE CROSS
             CONTROLLED AFFILIATE LICENSE AGREEMENT
                                
                                
     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 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 not
use the Licensed Marks and Name in its legal name and may use the
Licensed Marks and Name in its Trade Name only with the prior
consent of BCBSA.

     2.   QUALITY CONTROL

     A.   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.

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

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

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

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

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

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

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

          (iv)        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 Plan or BCBSA
            reasonably believes will adversely affect the
            Licensed Marks and Name.
          
(2)  If the Plan has more than 50 percent voting control of the
Controlled Affiliate:

     (a)  the Plan must have the legal ability to prevent any
change in                     the articles of incorporation,
bylaws or other establishing or                   governing
documents of the Controlled Affiliate with which it does not
concur;
     (b)  the Plan must have control over the policy and
operations of                 the 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.   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 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 Affiliates this provision shall apply
only if the change affects a person or entity that owns at least
5% of the 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.

     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, an 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.  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
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 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 measured as of the date of termination, and adjusted for
the value of any transactions not made in the ordinary course of
business.

     (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
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
Blue Cross Plans which are Regular Members of BCBSA and three-
fourths of the total then current weighted vote of all the Blue
Cross Plans which are Regular Member Plans of BCBSA.

     8.   DISPUTE RESOLUTION

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

     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.

     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.




                THIS PAGE IS INTENTIONALLY BLANK.
                                


     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 ASSOCIATION

By:______________________________________

Date:____________________________________



j:\brand\plans\project\delivery\affillic\agree\afflbc.doc

EXHIBIT A



CONTROLLED AFFILIATE LICENSE STANDARDS
November 1997

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?

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

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.)*

Conversion to the new license shall be:

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

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

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 surpasses fifteen
percent (15%) of the total contract enrollment of the Plan
and licensed Controlled Affiliates, the Controlled Affiliate
shall:


EXHIBIT A (continued)


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 Capital
  Benchmark and state-established minimum reserve)
  requirements of the larger Controlled Affiliate Financial
  Responsibility standard; and

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

EXHIBIT A (continued)

              STANDARDS FOR LICENSED CONTROLLED AFFILIATES

Each Controlled Affiliate seeking licensure must answer all 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%                             50%
                                                       
           Standard 1A, 4                       Standard 1B, 4

                              IN ADDITION,
2.   Is risk being assumed?
                   Yes                                   No
                                                           
Controlled    Controlled     Controlled     Controlled     Controlled
Affiliate     Affiliate      Affiliate      Affiliate      Affiliate
underwrites   comprises <    comprises >    comprises <    comprises >
any indemnity 15% of total   15% of total   15% of total   15% of total
portion of    contract       contract       contract       contract
workers'      enrollment of  enrollment of  enrollment of  enrollment of
compensation  Plan and its   Plan and its   Plan and its   Plan and its
insurance     licensed       licensed       licensed       licensed
              Controlled     Controlled     Controlled     Controlled
Standards 7A- Affiliates,    Affiliates,    Affiliates     Affiliates
7E            and does not   and does not                        
              underwrite     underwrite     Standard 2     Standard 6H
              the indemnity  the indemnity  (Guidelines
              portion of     portion of     2.1,2.3)
              workers'       workers'
              compensation   compensation
              insurance      insurance
                                    
              Standard 2     Standard 6H
              (Guidelines
              2.1,2.2)
                                    
                              IN ADDITION,
3.   Is medical care being directly provided?
                Yes                                   No
                                                       
            Standard 3A                          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                                   No
                                                        
          Standards 6A-6I            Controlled         Controlled
                                     Affiliate is a     Affiliate is not
                                     former primary     a former primary
                                     licensee           licensee
                                                                
                                     Standards 5,8,9    Standards 5,8


EXHIBIT A (continued)


Standard 1 - Organization and Governance

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

A Controlled Affiliate shall be organized and operated in
such a manner that it is Controlled by a licensed Plan or
Plans which have, directly or indirectly: 1) more than 50%
of the voting control of the Controlled Affiliate; and 2)
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; and 3) operational control of the Controlled
Affiliate.

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

A Controlled Affiliate shall be organized and operated in
such a manner that a licensed Plan or Plans have directly or
indirectly:

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

2)   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; and

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

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

          o    geographic operating area of the Controlled
          Affiliate

          o    the legal and trade names of the Controlled
          Affiliate

          o    the types of activity in which the Controlled
          Affiliate engages

          o    any action which would cause the Controlled
          Affiliate to be in violation of the Standards
          applicable to Licensure by BCBSA.
EXHIBIT A (continued)


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 Shield 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:

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.

EXHIBIT A (continued)


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:

          A.   Transfer Program;

          B.   BlueCard Program;

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

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


EXHIBIT A (continued)


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.


EXHIBIT A (continued)


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

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

Standard 6(J):  Control by Unlicensed Entities
Prohibited

No Controlled Affiliate shall cause or permit an
unlicensed entity 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.
EXHIBIT A (continued)


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

E.   Notification of all changes and proposed changes to
  independent ratings within 30 days of receipt and submission
  of  a copy of all rating reports; and
  
F.   Changes in the ownership and governance of the
  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.



EXHIBIT A (continued)


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.

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.
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 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 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.

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
CROSSr and BLUE SHIELDr 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


     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 Shield 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 hereunder and any such act shall
be

                                
                                
                                
                                
                                
                                
                                
                               -2-
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 of 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.

     The foregoing percentages shall be reduced by one-half
     where both a BLUE CROSSr and BLUE SHIELDr 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.
                                 Amended as of November 20, 1997
                                
                               -4-

     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.

                                
                                
                              -4a-

                                       (The next page is page 5)
     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.

     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.

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:

                                
                               -5-
EXHIBIT A
CONTROLLED AFFILIATE LICENSE STANDARDS
LIFE INSURANCE COMPANIES
Page 1 of 2

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.

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).

                                
                               -1-
CONTROLLED AFFILIATE LICENSE STANDARDS
LIFE INSURANCE COMPANIES
Page 2 of 2



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.

                                
                               -2-
EXHIBIT 2

Membership Standards
Page 1 of 3

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.

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.

 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;
   
                                 Amended as of November 21, 1996
                                                                
EXHIBIT 2

Membership Standards
Page 2 of 3


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

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


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 Data Reporting (IPDR)  Program;

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

       D.       BlueCard Program.
                                                                


                                     Amended as of June 12, 1997



EXHIBIT 2

Membership Standards
Page 3 of 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 unlicensed
                entity 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 November 20, 1997


                                                                
EXHIBIT 3

GUIDELINES WITH RESPECT TO USE OF
LICENSED NAME AND MARKS IN CONNECTION WITH NATIONAL ACCOUNTS

Page 1 of 3


1. The strength of the Blue Cross/Blue Shield 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. 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.

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.
EXHIBIT 3

Page 2 of 3


6. The Control Plan may use the BlueCard Program (as defined by
IPOC) 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.

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

                                         Amended as of June 14,
1996
EXHIBIT 3

Page 3 of 3


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.
EXHIBIT 4

GOVERNMENT PROGRAMS AND CERTAIN OTHER USES

Page 1 of 2


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 for administrative purposes which do not solicit
          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;

EXHIBIT 4

Page 2 of 2


                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.
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.
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 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
            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.

     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 fifty-one (51)
percent of the Plans and fifty-one (51) percent of the total then
current weighted vote of all the Plans.

     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.

     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.

     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 CROSSr or
            BLUE SHIELDr 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 CROSSr or BLUE SHIELDr 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.

     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.

          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.

     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.

     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.
          
          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.
          
            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
            
     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.

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.

     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.

     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.   Amendments

     These MMDR Rules may be altered or amended from time to time
by the affirmative vote of fifty-one (51) percent of the Plans
and fifty-one (51) percent of the total then current weighted
vote of all the Plans.

     H.   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.

     I.   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.

     J.   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.

     K.   Neutral Evaluation

     The parties can voluntarily agree at any time to have an
independent party render a neutral evaluation of the parties'
respective positions.

                                
                                                     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