SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OR
[ ] Transition Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange
Act Of 1934 For the transition period from _______________ to ______________
Commission File Number 1-13154
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
AMERICAN MEDICAL SECURITY
RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
AMERICAN MEDICAL SECURITY GROUP, INC.
3100 AMS Boulevard
Green Bay, WI 54313
American Medical Security Retirement Savings Plan
Annual Report on Form 11-K
For the Fiscal Year Ended December 31, 2000
TABLE OF CONTENTS
PAGE
Financial Statements and Supplemental Schedule
Years ended December 31, 2000 and 1999
Report of Independent Auditors........................................3
Financial Statements
Statements of Net Assets Available for Benefits.......................4
Statements of Changes in Net Assets Available for Benefits............5
Notes to Financial Statements.........................................6
Supplemental Schedule
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)........10
Signatures....................................................................11
Exhibit 23 - Consent of Independent Auditors..................................12
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ERNST & YOUNG Ernst & Young, LLP Phone:(414) 273-5900
111 East Kilbourn Avenue Fax: (414) 223-7200
Milwaukee, Wisconsin 53202 www.ey.com
Report of Independent Auditors
The Administrative Committee
American Medical Security
Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of American Medical Security Retirement Savings Plan as of December 31, 2000 and
1999, and the related statement of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2000 and 1999, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2000, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ ERNST & YOUNG LLP
March 2, 2001
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
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American Medical Security Retirement Savings Plan
Statement of Net Assets Available for Benefits
DECEMBER 31
2000 1999
-------------------------------------
ASSETS
Investments, at fair value (NOTE 3):
Mutual funds $45,034,467 $45,444,071
Common stock of American Medical Security Group, Inc. 254,806 148,412
Participant loans receivable 984,340 694,086
-------------------------------------
Net assets available for benefits $46,273,613 $46,286,569
=====================================
SEE ACCOMPANYING NOTES.
4
American Medical Security Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31
2000 1999
--------------------------------------
Investment income (loss):
Net realized and unrealized appreciation (depreciation) in
fair value of investments (NOTE 3) $ (2,471,486) $ 2,819,876
Interest and dividends 49,824 3,359,109
--------------------------------------
(2,421,662) 6,178,985
Less investment expense 149,435 130,128
--------------------------------------
(2,571,097) 6,048,857
Contributions:
Employers' 1,934,006 2,498,761
Employees' 5,028,871 6,684,527
--------------------------------------
6,962,877 9,183,288
Other 8,375 -
--------------------------------------
Total additions 4,400,155 15,232,145
Benefits paid 4,413,111 5,906,055
--------------------------------------
Net increase (decrease) (12,956) 9,326,090
Net assets available for benefits at beginning of year 46,286,569 36,960,479
--------------------------------------
Net assets available for benefits at end of year $46,273,613 $46,286,569
======================================
SEE ACCOMPANYING NOTES.
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American Medical Security Retirement Savings Plan
Notes to Financial Statements
December 31, 2000
1. DESCRIPTION OF THE PLAN
The following description of the American Medical Security Retirement Savings
Plan (the Plan) provides only general information. Participants should refer to
the Plan document for a complete description of the Plan's provisions.
GENERAL
The Plan is a contributory defined contribution plan covering all full-time and
part-time employees of American Medical Security Group, Inc. (AMSG) and its
subsidiaries, American Medical Security, Inc. and Nurse Healthline, Inc.
(collectively AMSG, the Company or Employer). The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
PLAN CHANGES
On May 1, 1999, the Plan introduced an option to allow participants to invest in
the common stock of AMSG.
PARTICIPATION AND VESTING
Employees are eligible to become contributing participants in the Plan and
receive matching contributions on the first of the following month after
reaching the age of eighteen and after 30 days of eligible service. Participants
are eligible for Company profit-sharing contributions after six months of
service. Participants must have worked 1,000 hours in a Plan year to receive a
profit-sharing contribution. Effective January 1, 2001, employees with 30 days
of service that are employed on the last day of the Plan year will be entitled
to receive profit-sharing contributions for the Plan year.
Participants are immediately vested in their contributions plus actual earnings
thereon. Effective January 1, 2000, new participants do not vest in Company
contributions until three years of service, at which time they become fully
vested. Participants in the Plan prior to January 1, 2000, vest in Company
contributions according to the following schedule (1,000 hours of service are
required to constitute a year of vesting service):
Years of Vesting Service Vesting Percentage
----------------------------------- -------------------------
1 0%
2 30
3 100
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American Medical Security Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
The nonvested portion of the Company's profit sharing and matching contributions
are forfeited when a participant terminates employment. Profit-sharing
forfeitures are allocated to the remaining Plan participants, while matching
contribution forfeitures are used to reduce future matching contributions.
During 2000 and 1999, the Company utilized forfeited amounts of $75,000 and
$77,000, respectively, to offset the required matching contribution.
CONTRIBUTIONS, WITHDRAWALS AND LOANS
Plan participants are permitted to make contributions on a before-tax basis each
payroll period of 2% to 18% of base compensation and subject to a maximum amount
allowed by the Internal Revenue Code (IRC). Participants can change their
before-tax contribution percentage each quarter.
Effective January 1, 2000, the Company contributes 60% of the first 6% of
compensation that a participant contributes to the Plan. Prior to January 1,
2000, the Company matched contributions at 50% of the first 6% of compensation
that a participant contributed to the Plan. Additional amounts may be
contributed at the option of the Company.
Distributions due to retirement, death, permanent disability and termination of
employment are provided for as defined within the Plan.
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum of the lesser of one-half of their vested account balance or $50,000.
The loan is secured by the balance in the participant's account and bears
interest at a rate commensurate with prevailing rates as determined by the Plan
administrator. Principal and interest are repaid through payroll deductions.
TERMINATION OF THE PLAN
The Company has established the Plan with the intention and expectation that the
Employer will be able to make contributions indefinitely, but the Employer
neither is nor shall be under any obligation or liability whatsoever to maintain
the Plan for any given length of time. The Company retains the right to modify
or terminate the Plan at any time, but may not retroactively reduce the share of
any participant or cause the Plan's assets to revert to the Company unless
required by law. In the event of termination, the balance of each participant's
account would become fully vested, and all assets would be distributed to the
participants and beneficiaries
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American Medical Security Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
EXPENSES
Administrative expenses of the Plan are paid from Plan assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION AND ACCOUNTING METHOD
The Plan's financial statements are prepared on the accrual basis of accounting.
The Plan's investments are stated at fair value. The fair value of mutual fund
shares and AMSG common stock are based on the quoted market values on the last
business day of the Plan year. Participant loans are stated at their unpaid
principal balance, which approximates fair value.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the Company to make estimates
that affect the amounts reported in the Plan's financial statements and
accompanying notes. Actual results could differ from these estimates.
3. INVESTMENTS
The following individual investments represent more than 5% of the Plan's net
assets available for benefits:
DECEMBER 31
2000 1999
---------------------------------
Investments at fair value as determined by quoted market price:
Hotchkis & Wiley International Fund $ - $ 3,130,074
MCM Stable Value Fund 5,114,719 5,029,845
Scudder Growth & Income Fund 8,369,765 9,103,267
Warburg Pincus Emerging Growth Fund 6,807,042 7,680,510
Lazard Small Cap Fund - 2,442,640
Lexington Worldwide Emerging Markets Fund - 2,534,491
Alleghany Montag & Caldwell Growth Fund 11,144,704 12,582,088
Mercury HW International Value 3,824,071 -
Neuberger Berman Genesis Trust 3,735,904 -
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American Medical Security Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Plan's investments, including gains and losses on investments bought, sold
and held during the year, appreciated (depreciated) in fair value as follows:
DECEMBER 31
2000 1999
------------------------------------
Mutual funds $(2,484,095) $2,866,445
Common stock of American Medical Security Group, Inc. 12,609 (46,569)
------------------------------------
$(2,471,486) $2,819,876
====================================
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 11, 2000 stating that the Plan is qualified under Section 401(a) of
the IRC and, therefore, the related trust is not subject to tax under present
income tax law. The Plan administrator is not aware of any course of action or
series of events that have occurred that might adversely affect the Plan's
qualified status. Subsequent amendments to the Plan have been structured to, and
are intended to maintain the Plan's qualified status.
5. TRANSACTIONS WITH PARTIES IN INTEREST
Investment fees incurred are paid by participants. In addition, certain services
are provided by the Plan sponsor at no cost to the Plan.
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American Medical Security Retirement Savings Plan
Employer Identification Number 39-1431799
Plan Number 001
Schedule H, Line 4I - Schedule of Assets (Held at End of Year)
December 31, 2000
IDENTITY OF ISSUER, BORROWER/ UNITS/ CURRENT
DESCRIPTION OF INVESTMENT SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
American Century - International Growth Investor 19,150 $ 209,309
Dreyfus Appreciation - 6
Dreyfus GNMA Fund 56,399 809,891
Dreyfus S&P 500 18,517 712,726
Gabelli Equity Income 3,787 56,466
Loomis Sayles Bond Fund Institutional 100,979 1,116,828
Mercury HW International Value 155,577 3,824,071
Alleghany Montag & Caldwell Growth Fund 400,456 11,144,704
Montgomery Emerging Markets 1 5
MCM Stable Value Advisory 439,939 5,114,719
INVESCO Small Company Growth 16,810 258,033
Janus Twenty Fund 10,106 553,807
Neuberger Berman Genesis Trust 139,660 3,735,904
Pilgrim Worldwide Emerging Markets 164,540 1,314,672
Scudder Growth & Income Fund 346,575 8,369,765
Warburg Pincus Emerging Growth Fund 189,611 6,807,042
Warburg Pincus Global Fixed Income 103,658 1,006,518
American Medical Security Group, Inc. common stock* 45,620 254,807
Participant loans receivable 984,340 984,340
---------------------
$46,273,613
=====================
*Represents a party in interest to the Plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee of the American Medical Security Retirement Savings
has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATE: June 8, 2001
AMERICAN MEDICAL SECURITY
RETIREMENT SAVINGS PLAN
/S/ GARY D. GUENGERICH
Gary D. Guengerich
American Medical Security Retirement Savings
Plan Administrative Committee Member
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Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-75477) pertaining to the American Medical Security Retirement
Savings Plan of American Medical Security Group, Inc. of our report dated March
2, 2001, with respect to the financial statements and schedules of the American
Medical Security Retirement Savings Plan included in the Annual Report (Form
11-K) for the year ended December 31, 2000.
/s/ ERNST & YOUNG LLP
Milwaukee, WI
June 8, 2001
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