UICI Announces Agreement With CHCS Services, Inc. to Serve as Administrator For UICI's Senior Age Insurance Products

SOURCE: UICI

DALLAS, Jan. 23 /PRNewswire-FirstCall/ -- UICI (NYSE: UCI - news) today announced that it has reached an agreement with CHCS Services, Inc. ("CHCS")to serve as administrator for UICI's senior age insurance products. CHCS, a subsidiary of Universal American Financial Corporation (Nasdaq: UHCO - news), is a full service Third Party Administrator specializing in providing administration, underwriting, claims payment and related services to the senior marketplace. CHCS will underwrite, bill, provide customer service and administer claims for all long-term care and Medicare supplement insurance products to be sold by UICI through its two insurance subsidiaries, The MEGA Life and Health Insurance Company and Mid-West National Life Insurance Company of Tennessee.

"CHCS is a proven leader in the field of geriatric underwriting and care management in the long-term care market," said Greg Mutz, President and CEO of UICI. "Proper risk management is the key to profitability in the senior age market. Through our partnership with CHCS, we are delighted to have the opportunity to combine our expertise in product development and career agency distribution with CHCS' best practices in underwriting and claims management."

"We are extremely pleased to be partnering with UICI, as they have a proven track record of sales success through career agency distribution," said Gary Jacobs, President of CHCS Services, Inc. "We believe that CHCS has experience and expertise in senior age product administration that can help assure achievement of UICI's established goal of being a leader in the senior age marketplace."

About UICI

UICI, headquartered in Dallas, Texas, offers insurance (primarily health and life) and selected financial services to niche consumer and institutional markets. UICI's insurance subsidiaries provide health insurance and related insurance products, which are distributed primarily through the Company's dedicated agency field forces, UGA-Association Field Services and Cornerstone Marketing of America; through its Student Insurance Division, UICI provides tailored health insurance programs for students enrolled in universities, colleges and kindergarten through grade twelve; UICI provides financial services and products for college undergraduates and graduate students, including providing federally-guaranteed student loans, through Academic Management Services Corp.; and UICI manages blocks of life insurance and life insurance products to select markets through its OKC Division. UICI also holds a 48% interest in Healthaxis, Inc., a leader in providing fully integrated end-to-end web-enabled solutions for health insurance distribution and administration.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those included in the forward-looking statements. These forward-looking statements involve risks and uncertainties including, but not limited to, the following: changes in general economic conditions, including the performance of financial markets, and interest rates; competitive, regulatory or tax changes that affect the cost of or demand for the Company's products; health care reform; the ability to predict and effectively manage claims related to health care costs; and reliance on key management and adequacy of claim liabilities.

The Company's future results will depend in large part on accurately predicting health care costs incurred on existing business and upon the Company's ability to control future health care costs through product and benefit design, underwriting criteria, utilization management and negotiation of favorable provider contracts. Changes in mandated benefits, utilization rates, demographic characteristics, health care practices, provider consolidation, inflation, new pharmaceuticals/technologies, clusters of high- cost cases, the regulatory environment and numerous other factors are beyond the control of any health plan provider and may adversely affect the Company's ability to predict and control health care costs and claims, as well as the Company's financial condition, results of operations or cash flows. Periodic renegotiations of hospital and other provider contracts coupled with continued consolidation of physician, hospital and other provider groups may result in increased health care costs and limit the Company's ability to negotiate favorable rates. Recently, large physician practice management companies have experienced extreme financial difficulties, including bankruptcy, which may subject the Company to increased credit risk related to provider groups and cause the Company to incur duplicative claims expense. In addition, the Company faces competitive pressure to contain premium prices. Fiscal concerns regarding the continued viability of government-sponsored programs such as Medicare and Medicaid may cause decreasing reimbursement rates for these programs. Any limitation on the Company's ability to increase or maintain its premium levels, design products, implement underwriting criteria or negotiate competitive provider contracts may adversely affect the Company's financial condition or results of operations.

The Company's Academic Management Services Corp. business could be adversely affected by changes in the Higher Education Act or other relevant federal or state laws, rules and regulations and the programs implemented thereunder may adversely impact the education credit market. In addition, existing legislation and future measures by the federal government may adversely affect the amount and nature of federal financial assistance available with respect to loans made through the U.S. Department of Education. Finally the level of competition currently in existence in the secondary market for loans made under the Federal Loan Programs could be reduced, resulting in fewer potential buyers of the Federal Loans and lower prices available in the secondary market for those loans.

UICI press releases and other company information are available at UICI's website located at www.uici.net.