American Unified Life and Health Insurance Company Placed in Liquidation

CHICAGO - The Circuit Court of Cook County has granted Illinois Insurance Director Nat Shapo's request for an Order of Liquidation with a finding of insolvency against American Unified Life and Health Insurance Company (AULH). The liquidation is effective June 27, 2000.

AULH is a wholly owned subsidiary of the First American Group of Companies, Inc., an Illinois holding company with offices located in Richton Park, Illinois. The company was incorporated and licensed in January 1996. AULH is an affiliate of American Health Care Providers, Inc., HMO (AHCP) which was placed into liquidation on May 11, 2000.

The Agreed Order of Liquidation was based on the Insurance Department's finding that the company's policyholder surplus was impaired by an amount in excess of $1 million. AULH's most recent financial statements reflect approximately $2.4 million in direct premium as of December 31, 1999. The company provides out-of-network medical coverage for point of service (POS) and preferred provider organization (PPO) contracts marketed by its affiliate AHCP. Since February 2, 2000, AULH has been under an Order of Conservation which placed the company under the Director's control to preserve its records and assets for the benefit of its policyholders and creditors. The company will continue under the Director's control as Liquidator for the purposes of marshaling the company's assets, identifying its creditors, and discharging its obligations.

Subject to statutory limitations, the Illinois Life and Health Insurance Guaranty Association will be responsible for the covered health claims of all Illinois policyholders up to $300,000 per person. The Guaranty Association and Liquidator will cooperate in an effort to ensure that services to policyholders are provided in accordance with the Association's powers and duties.

The liquidation order prohibits health care service providers (doctors, hospitals, clinics, etc.) from seeking to recover directly from any policyholder amounts owed by AULH. Policyholders are, however, responsible for applicable co-payments or deductibles for covered services, as well as fees for services not covered by AULH.

Director Shapo emphasized that any policyholder being directly billed by a provider or a collection agency should contact a member of the Liquidator's staff on-site at AULH/AHCP at (708) 503-5000 or the Liquidator's Office at (312) 836-9500. Policyholders who have questions about whether their claims will be covered by the Guaranty Association should call the association's claims office at (847) 940-1930.

AULH provided coverage in northern and central Illinois to commercial groups and State of Illinois employees.

The liquidation proceedings are being handled on behalf of the Director of Insurance by the Office of the Special Deputy Receiver, 222 Merchandise Mart Plaza, Suite 1450, Chicago, Illinois 60654; (312) 836-9500.