UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

UNIVERSAL AMERICAN FINANCIAL CORP.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction
applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(4) Date Filed:

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UNIVERSAL AMERICAN FINANCIAL CORP.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 29, 2002

TO THE STOCKHOLDERS OF
UNIVERSAL AMERICAN FINANCIAL CORP.

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
UNIVERSAL AMERICAN FINANCIAL CORP. will be held at The Penn Club, 30 West 44th
Street, New York, New York 10036, at 9:30 A.M. on Wednesday, May 29, 2002, or at
any adjournment thereof (the "Annual Meeting"), for the following purposes:

1. To elect nine directors to hold office until the next annual
election of directors or until their successors are elected
and qualified.

2. To consider and act upon such other business as may properly
come before the meeting or any adjournment thereof.

Only stockholders of record at the close of business on April 19, 2002
will be entitled to vote at the Annual Meeting.

WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE AS SOON AS
POSSIBLE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE YOUR SHARES IN PERSON,
EVEN THOUGH YOU HAVE PREVIOUSLY SIGNED AND RETURNED YOUR PROXY

By order of the Board of Directors

JOAN M. FERRARONE
Secretary

Dated: May 13, 2002
Rye Brook, New York

UNIVERSAL AMERICAN FINANCIAL CORP.

6 INTERNATIONAL DRIVE
RYE BROOK, NEW YORK 10573-1068

PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 2002

INFORMATION CONCERNING THE SOLICITATION

This statement is furnished in connection with the solicitation of
proxies to be used at the Annual Meeting of Stockholders, or at any and all
adjournments of such meeting, of UNIVERSAL AMERICAN FINANCIAL CORP. (the
"Company") to be held at The Penn Club, 30 West 44th Street, New York, New York
10036, at 9:30 A.M. on May 29, 2002.

The solicitation of proxies in the enclosed form is made on behalf of
our Board of Directors.

The cost of preparing, assembling, and mailing the proxy material and
of reimbursing brokers, nominees, and fiduciaries for the out-of-pocket and
clerical expenses of transmitting copies of the proxy material to the beneficial
owners of shares held of record by such persons will be borne by us. We do not
intend to solicit proxies otherwise than by use of the mail, but certain of our
officers and regular employees, without additional compensation, may use their
personal efforts, by telephone or otherwise, to obtain proxies. The proxy
materials are being mailed to stockholders of record at the close of business on
May 13, 2002.

A stockholder signing and returning a proxy on the enclosed form has
the power to revoke it at any time before the shares subject to it are voted by
notifying the Secretary of the Company in writing or by voting in person. If a
stockholder specifies how the proxy is to be voted with respect to any of the
proposals for which a choice is provided, the proxy will be voted in accordance
with such specifications. If a stockholder fails to so specify with respect to
such proposals, the proxy will be voted FOR the nominated directors.

STOCKHOLDERS' PROPOSALS FOR 2003 ANNUAL MEETING

Stockholders' proposals intended to be presented at the 2003 Annual
Meeting must be received by us no later than February 1, 2003, for inclusion in
our proxy statement and form of proxy for that meeting.

OUTSTANDING VOTING SECURITIES

Only stockholders of record at the close of business on April 19, 2002,
are entitled to vote at the Annual Meeting. On that day, there were issued and
outstanding 52,926,209 shares of Common Stock (after deducting an aggregate of
60,831 shares held in treasury). Each share has one vote. A simple majority of
the total shares outstanding is required to elect directors and ratify or
approve the other items being voted on at this time.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of April 19, 2002
as to the number of shares of common stock beneficially owned by (i) each person
known by us to own beneficially more than 5% of our common stock ("5% Holder"),
(ii) each person who is a director of the Company or a nominee for election as
such director, and (iii) all persons as a group who are directors or a nominee
for election as such director and officers of the Company, and as to the
percentage of outstanding shares held by them on that date. Unless otherwise
indicated, each such beneficial owner holds the sole voting and investment power
with respect to shares of our common stock outstanding. Our common stock is the
only class of voting securities outstanding.

AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
-----------------------------------
NAME AND ADDRESS ACQUIRABLE
OF CURRENTLY WITHIN PERCENT OF
BENEFICIAL OWNER STATUS OWNED (a) 60 DAYS (b) CLASS (c)
- ---------------------------------------------------------------------------------------------------------

Capital Z Financial Services 5% Holder 25,086,972 (e,f,h) 27,004 47.4%
Fund II, L.P. ("Capital Z")
54 Thompson Street
New York, New York 10012

Capital Z Financial Services 5% Holder 133,264 -- *
Private Fund II, L.P.
54 Thompson Street
New York, New York 10012

Richard A. Barasch 5% Holder, 2,515,849 (d) 550,500 5.7%
6 International Drive Director,
Rye Brook, New York 10573 Officer

Gary W. Bryant Officer 308,650 337,500 1.2%
600 Courtland Street
Orlando, Florida 32804

Bradley E. Cooper Director 34,216 (e) -- *
54 Thompson Street
New York, New York 10012

Susan S. Fleming Director 6,548 (f) -- *
54 Thompson Street
New York, New York 10012

Mark M. Harmeling Director 31,808 20,501 *
108 Chestnut Street
North Reading, Massachusetts 01864

Bertram Harnett Director 175,951 (g) 17,501 *
105 East Palmetto Park Road
Boca Raton, Florida 33432

Gary M. Jacobs Officer 47,133 13,000 *
3050 Universal Boulevard
Weston, Florida 33331

Patrick J. McLaughlin Director 39,500 18,501 *
100 Chetwynd Drive
Rosemont, Pennsylvania 19010

Robert A. Spass Director 68,433 (h) -- *
54 Thompson Street
New York, New York 10012

Robert A. Waegelein Officer 214,855 267,500 *
6 International Drive
Rye Brook, New York 10573

AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
-----------------------------
NAME AND ADDRESS ACQUIREABLE
OF CURRENTLY WITHIN PERCENT OF
BENEFICIAL OWNER STATUS OWNED (a) 60 DAYS (b) CLASS (c)
- ---------------------------------------------------------------------------------------------------

William E. Wehner Officer 579,610 247,500 1.6%
600 Courtland Street
Orlando, Florida 32804

Francis S. Wilson Director -- -- *
30 North LaSalle Street
Chicago, Illinois 60602

Robert F. Wright Director 380,574 16,501 *
57 West 57th Street
New York, New York 10019

Directors and Officers as a Group

(14 persons) 4,403,127 1,489,006 10.8%

* Percent of class is less than 1%

(a) The Securities and Exchange Commission has defined "beneficial owner"
of a security to include any person who has or shares voting power or
investment power with respect to any such security.

(b) Options to purchase shares that are presently or will become
exercisable within 60 days.

(c) The percentages are based on the 52,926,209 shares of common stock
outstanding as of April 19, 2002 plus common stock issuable with
respect to options held by the person whose percentage of ownership is
being calculated which are presently or will become exercisable within
60 days.

(d) Also includes the following shares of which Mr. Barasch disclaims
beneficial ownership: 1,021,730 shares of common stock which are held
directly by, or in trust for, members of his immediate family; and
409,561 shares of common stock which are held in an irrevocable trust
for the benefit of the family of Bertram Harnett (the "Barasch
Universal Trust") of which Richard Barasch is trustee.

(e) Mr. Cooper, who is a director of the Company, is a partner of Capital Z
Partners Ltd., the ultimate general partner of Capital Z. In addition,
Mr. Cooper owns 9.9% of the voting capital stock of Capital Z Partners,
Ltd. No person or entity owns 10% or more of the voting capital stock
of Capital Z Partners. Ltd. Mr. Cooper disclaims beneficial ownership
of all shares of the Company's common stock that are beneficially owned
by Capital Z.

(f) Ms. Fleming is a partner of Capital Z and disclaims beneficial
ownership of all shares of common stock beneficially owned by Capital
Z.

(g) Does not include shares held by the Barasch Universal Trust, of which
Mr. Harnett disclaims beneficial ownership.

(h) Mr. Spass, who is a director of the Company, is a partner of Capital Z
Partners Ltd., the ultimate general partner of Capital Z. In addition,
Mr. Spass owns 9.9% of the voting capital stock of Capital Z Partners,
Ltd. No person or entity owns 10% or more of the voting capital stock
of Capital Z Partners. Ltd. Mr. Spass disclaims beneficial ownership of
all shares of the Company's common stock that are beneficially owned by
Capital Z.

1. ELECTION OF DIRECTORS

Our Restated Certificate of Incorporation and our By-Laws provide for a
Board of Directors of not less than three members, with the number of members to
be as set by our Board of Directors. Each director is elected for a term of one
year, ending at the next annual meeting of our Shareholders, and until his or
her successor is elected and qualifies, subject to earlier removal. Our Board of
Directors has fixed the number of directors at nine. All of our present
directors are nominees for election by the holders of our common stock.

The following table sets forth certain information concerning our
directors, all of whom are nominees for election as such directors:

POSITION WITH THE COMPANY, PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AGE AND THE PAST FIVE-YEAR EMPLOYMENT HISTORY
- -----------------------------------------------------------------------------------------------------------------

Richard A. Barasch(4) 48 Mr. Barasch has served as a Director since July 1988, as Chairman since
December 1997, as President since April 1991 and as Chief Executive
Officer since June 1995. He has served as a Director and the President
of American Progressive since 1991, and he is Chairman of the Board of
all of our subsidiaries. Mr. Barasch has held positions with our
subsidiaries since their acquisition or organization.

Bradley E. Cooper(3)(4) 35 Mr. Cooper has served as a Director since July 1999. Mr. Cooper is a
Partner and co-founder of Capital Z which owns 47.8% of our outstanding
stock. Prior to joining Capital Z, Mr. Cooper served in similar roles
at Insurance Partners, L.P. and International Insurance Investors, L.P.
Prior to that, Mr. Cooper was an investment banker in the Financial
Institutions Group at Salomon Brothers, Inc. Mr. Cooper currently
serves on the board of directors of SNTL Group, Highlands Insurance
Group, CERES Group, Inc. and PXRE Group, Ltd.

Susan S. Fleming(2) 32 Ms. Fleming has served as a Director since July 1999. She is a Partner
of Capital Z which owns 47.8% of our outstanding stock. Prior to
joining Capital Z, Ms. Fleming served as Vice President of Insurance
Partners, L.P. and was an investment banker in the Mergers and
Acquisitions Financial Institutions Group at Morgan Stanley & Co. Ms.
Fleming currently serves on the Board of Directors of CERES Group, Inc
and PXRE Group, Ltd.

Mark M. Harmeling(2) 49 Mr. Harmeling has served as a Director since July 1990. He has also
served as Director of American Progressive from 1992 to 1999. Mr.
Harmeling is a Managing Director of TA Associates Realty, a pension fund
advisory firm. He was previously President of Bay State Realty
Advisors, a real estate management and development company. Mr.
Harmeling is also a Director of Rochester Shoetree Corporation (since
1988) and Applied Extrusion Technologies, Inc. (since 1987).

Bertram Harnett(3)(4) 78 Mr. Harnett has served as a Director since 1996. Mr. Harnett has been a
practicing lawyer since 1948 and has been President of the law firm of
Harnett Lesnick & Ripps P.A., Boca Raton, Florida and its predecessors
since 1988. He is the author of treatises on insurance law and is a
retired Justice of New York State Supreme Court.

Patrick J. McLaughlin(1)(3)(4) 43 Mr. McLaughlin has served as a Director since January 1995. Mr.
McLaughlin has been a Managing Director of Emerald Capital Group, Ltd.,
an asset management and consulting firm specializing in the insurance
industry, since April 1993. Prior to that he was an Executive Vice
President and Chief Investment Officer of Life Partners Group, Inc.,
Managing Director of Conning & Company and Senior Vice President and
Chief Investment Officer of ICH Corporation.

Robert A. Spass(4) 46 Mr. Spass has served as a Director since July 1999. Mr. Spass is a
Partner and co-founder of Capital Z which owns 47.8% of our outstanding
stock. Prior to founding Capital Z, Mr. Spass was the Managing Partner
and co-founder of Insurance Partners, L.P. Prior to the formation of
Insurance Partners, Mr. Spass was President and CEO of International
Insurance Advisors Inc. Prior to that, Mr. Spass was a Director of
Investment Banking at Salomon Brothers and a Senior Manager for Peat
Marwick Main & Co. Mr. Spass serves on the board of directors of
Highlands Insurance Group, Inc., SNTL Group, Inc., CERES Group, Inc.,
Kinexus Corporation, Aames Financial Corp. and USI Insurance Services
Corp.

Francis S. Wilson(1)(2) 53 Mr. Wilson has served as a Director since October 2001. Mr. Wilson has
been a managing partner of AAM Investment Banking Group, Ltd. since
October 1993. Prior to that, Mr. Wilson was the chairman of Highland
Development Corp. Prior to that, Mr. Wilson held various positions in
the field of investment banking with the firms Prescott Ball & Turben,
Inc., Dean Witter Reynolds, Inc. and Halsey, Stuary & Co., Inc. Mr.
Wilson is a director of INFOCUS Financial Group, Inc. and Wasatch Crest
Group, Inc.

Robert F. Wright(1) 76 Mr. Wright has served as a Director since June 1998. Mr. Wright has
been President of Robert F. Wright Associates, Inc. since 1988. Prior
to that, Mr. Wright was a senior partner of the public accounting firm
of Arthur Andersen LLP. Mr. Wright is Director of Reliance Standard
Life Insurance Company (and its affiliates), GVA Williams, The
Navigators Group, Inc., U.S. Timberlands Company, L.P and CDG Technology.

- ---------------
(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

(3) Member of the Investment Committee.

(4) Member of the Executive Committee.

All of our officers and directors are elected annually for one-year
terms. All officers and directors hold office until their successors are duly
elected and qualified.

SHAREHOLDERS' AGREEMENT

The Company, Capital Z, UAFC L.P. ("AAM") (an unaffiliated investment
firm), Richard Barasch (the Chairman and Chief Executive Officer of the Company)
and several other shareholders of Universal American entered into a
shareholders' agreement on July 30, 1999 (the "Shareholders' Agreement"). The
Shareholders' Agreement requires that all proposed sales/transfers by the other
shareholders who are party to the Shareholders' Agreement must first be offered
to Richard Barasch and Capital Z, including its affiliates. However, pledges and
some other transfers by any party to the Shareholders' Agreement of less than 1%
of Universal American's outstanding common stock at any one time, or 2.5% when
aggregated with the other transfers by the shareholder and his, her or its
permitted transferees of Universal American's outstanding common stock, are
permitted. In addition, Richard Barasch is not permitted to sell more than 3% of
his holdings, annually, for a three-year period beginning July 30, 1999. The
Shareholders' Agreement provides for tag-along and drag-along rights under some
circumstances. "Tag-along rights" allow the holder of stock to include his, her
or its stock in a sale of common stock initiated by another party to the
Shareholders' Agreement. "Drag-along rights" permit a selling party to the
Shareholders' Agreement to force the other parties to the Shareholders'
Agreement to sell a proportion of the other holder's shares in a sale arranged
by the selling shareholder.

Under the terms of the Shareholders' Agreement, of the nine members of
Universal American's Board of Directors, certain shareholders are permitted to
nominate directors as follows: Capital Z: four, Richard Barasch: two, AAM: one
and the stockholders of Universal American: two. Capital Z, Richard Barasch and
AAM are each required to vote for the director(s) nominated by the others. The
right of Richard Barasch to nominate directors is conditioned upon his continued
employment with Universal American. In addition, the right to nominate directors
is not transferable, except that Capital Z may transfer its right to a
third-party buyer who acquires 10% or more of the outstanding common stock of
Universal American from Capital Z.

DIRECTOR COMPENSATION

Directors who are not our employees receive a fee of $1,000 for each
meeting of the board or committee meeting attended, unless the committee meeting
is held immediately prior to or after a board meeting. In addition, they will
receive a retainer of $5,000 per year, payable quarterly. The Chairman of our
Audit Committee and the Chairman of our Investment Committee each receive an
additional fee of $15,000. In addition, directors are reimbursed for their
travel and related expenses in connection with serving as our board members.

In 2001, each of our directors was eligible to be granted options under
our 1998 Incentive Compensation Plan, and on May 24, 2001, each eligible
director was granted options to purchase 4,500 shares of common stock at an
exercise price of $5.75, for a total of 36,000 options granted.

BOARD OF DIRECTOR AFFILIATIONS

Bertram Harnett, a director of the Company, is a shareholder in
Harnett, Lesnick & Ripps P.A. of Boca Raton, Florida, which was paid $849,926 in
2001 on account of its legal services to, and reimbursement for disbursements
made on behalf of, the Company.

COMMITTEES OF THE BOARD OF DIRECTORS

Our Board of Directors has an Audit Committee, which also acts as a
Transactions Committee, a Compensation Committee, an Investment Committee and an
Executive Committee. Our Audit Committee has adopted a charter which, among
other things, empowers it to consult with our independent auditors with respect
to their audit plans and to review their audit report and the accompanying
management letters and, as our Transactions Committee, reviews and makes
recommendations to our Board on certain capital transactions entertained by us.
Our Compensation Committee reviews and recommends compensation, including
incentive stock option grants, of our officers. The Investment Committee reviews
the Company's investment policy and

guidelines, reviews portfolio performance and reviews and approves all
investment transactions. The Executive Committee has the authority to act
between Board meetings on behalf of our Board, on all matters allowed by law.

During the fiscal year ended December 31, 2001, there were six meetings
of our Board of Directors, six meetings of our investment committee, five
meetings of our audit committee and one meeting of our compensation committee.
Each of our incumbent directors attended more than 75% of the aggregate of the
total number of meetings of our Board of Directors and of the meetings of each
of our committees of which he was a member.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee of the Board oversees the financial reporting
process, the system of internal controls, the audit process and the process for
monitoring compliance with laws and regulations. Each of the Audit Committee
members satisfies the definition of independent director as established in the
The Nasdaq National Market Listing Standards. The Board adopted a written
charter for the Audit Committee on June 7, 2000.

In fulfilling its oversight responsibilities, the Committee reviewed
the audited financial statements in the Annual Report with management including
a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant adjustments and the clarity of
disclosures in the financial statements. The Committee reviewed with Ernst &
Young LLP, its independent auditors who are responsible for expressing an
opinion on the conformity of those audited financial statements with generally
accepted accounting principles, their judgment as to the quality, not just the
acceptability, of the Company's accounting principles. The Committee also
discussed with Ernst & Young LLP other matters required to be discussed by
Statement of Auditing Standards No. 61 (Communications with Audit Committees, as
amended).

The Committee received from Ernst & Young LLP the written disclosures
required by Independence Standards Board No. 1 and discussed with them their
independence from management and the Company, and considered the compatibility
of nonaudit services with the auditors' independence.

The Committee discussed with Ernst & Young LLP the overall scope and
plans for the respective audit. The Committee meets with Ernst & Young LLP, with
and without management present, to discuss the results of their examinations,
their evaluations of the Company's internal controls, and the overall quality of
the Company's financial reporting. The Committee held four meetings during
fiscal year 2001.

In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2001, and be filed with the U.S. Securities and
Exchange Commission.

This report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Act of 1934, as amended, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.

Submitted by:

The Audit Committee of Universal American Financial Corp.

Robert F. Wright, Chairman
Patrick J. McLaughlin
Francis S. Wilson

EXECUTIVE COMPENSATION

The following table shows the total compensation paid pursuant to
employment agreements by the Company and its subsidiaries to our Chief Executive
Officer and our four most highly compensated executive officers for services
rendered in all capacities to the Company and its subsidiaries for the fiscal
years ended December 31, 2001, 2000 and 1999:

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------- ----------------------------------
RESTRICTED STOCK ALL OTHER
NAME, AGE AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK $(1) OPTIONS COMPENSATION(2)
- -------------------------------- ---- ------ ----- ---------- ------- ---------------

Richard A. Barasch(48) 2001 $513,760 $718,200 $307,800 25,000 $ 3,400
Chairman & Chief Executive Officer 2000 494,000 296,400 197,600 37,500 3,400
1999 475,000 172,800 115,200 637,500 3,200

Gary W. Bryant(52) 2001 $286,000 $135,100 $ 57,900 45,000 $ 3,400
Executive Vice President & Chief Operating 2000 275,000 68,750 68,750 37,500 3,400
Officer 1999 250,000 47,000 47,000 307,500 3,200

Robert A. Waegelein(41) 2001 $216,320 $110,600 $ 47,400 45,000 $ 3,400
Executive Vice President & Chief Financial 2000 208,000 62,400 41,600 37,500 3,400
Officer 1999 200,000 92,600 28,400 262,500 3,200

William E. Wehner(58) 2001 $200,200 $ 70,070 $ 30,030 30,000 $ 3,400
President of Pennsylvania Life 2000 192,500 48,125 48,125 37,500 3,400
1999 175,000 29,500 29,500 217,500 3,200

Gary M. Jacobs(51)(3) 2001 $185,000 $ 28,000 $ 12,000 20,000 $ 3,400
President of CHCS, Inc. 2000 175,000 10,000 10,000 10,000 --
1999 -- -- -- -- --

- ---------------
(1) Our executive officers were awarded restricted shares of our stock on
various dates. These shares are shown at the fair market value of our
common stock on the date of the award.

(2) The amounts in this column represent the value of our common stock
contributed by us under the 401(k) plan to match contributions to the
plan on behalf of the executive officer.

(3) Mr. Jacobs joined the Company in August, 2000, in connection with our
acquisition of Capitated HealthCare Services, Inc.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information about options to purchase
common stock granted to the executive officers named in the summary compensation
table during 2001:

NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO GRANT DATE
OPTIONS GRANTED EMPLOYEES EXERCISE PRICE EXPIRATION PRESENT
NAME (#) IN 2001 ($/SHARE) DATES VALUE ($)(1)
- ---- --- ------- --------- ----- ------------

Richard A. Barasch 25,000 7.1% $ 6.45 3/28/12 $ 100,505
Gary W. Bryant 45,000 12.8% 6.45 3/28/12 180,909
Robert A. Waegelein 45,000 12.8% 6.45 3/28/12 180,909
William E. Wehner 30,000 8.5% 6.45 3/28/12 120,606
Gary M. Jacobs 20,000 5.7% 6.45 3/28/12 80,404

- ---------------
(1) Option values reflect Black-Scholes model output for options. The
assumptions used in the model were expected volatility of .46,
risk-free rate of return of 5.4%, dividend yield of 0%, and time to
exercise of nine years.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth information about options to purchase
common stock exercised by the executive officers named in the summary
compensation table and the number and value of options each of those officers
held on December 31, 2001:

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END(#) FISCAL YEAR-END ($) (1)
SHARES ----------------------------- -----------------------------
ACQUIRED ON VALUE
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------

Richard A. Barasch - - 525,500 477,500 $ 2,050,385 $ 1,495,525
Gary W. Bryant - - 310,000 270,000 1,239,990 778,725
Robert A. Waegelein - - 242,500 242,500 965,300 683,325
William E. Wehner - - 225,000 200,000 903,950 582,825
Gary M. Jacobs - - 8,000 42,000 23,920 71,780

- ---------------
(1) Calculated using the closing bid price on December 31, 2001 of $6.79
per share and exercise prices ranging between $2.00 and $4.09 for
exercisable options and ranging between $3.15 and $6.45 for
unexercisable options.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION AS OF DECEMBER
31, 2001

The compensation committee of the Board of Directors reviews and
approves the compensation of the Company's executive officers (including the
executive officers named in the management section below). The committee is made
up of four independent, non-employee members of the board. The objective of the
Company's compensation program is to provide a total compensation package that
will enable the Company to:

- - attract, motivate and retain outstanding individuals;

- - align the financial interests of those individuals with the interests
of the Company's shareholders;

- - reward those individuals for increasing levels of profit and
shareholder value; and

- - encourage management's stake in the long-term performance and success
of the Company

In order to achieve these goals, the committee establishes a
competitive and appropriate total compensation package for each executive
officer, consisting primarily of four components - base salary, annual bonus,
stock options and restricted stock awards. The committee conducts an annual
review of compensation relative to other life insurance companies and companies
of similar size in the financial industry.

Base Salaries

The committee establishes base salaries each year at a level intended
to be within the competitive market range of comparable companies. Other factors
considered in determining base salary include the responsibilities of the
executive officer, experience, length of service and individual performance.
During fiscal year 2001, base salaries of the named executive officer group
increased an average of 4.2% over 2000. The committee believes that the base
salaries of the current executive officers are within the competitive market
range of comparable companies.

Cash Bonuses

The committee awards cash bonuses to the executive officers. The
criteria used to determine cash bonus levels include operating profits, new
business production and expenses relative to pre-determined budgets. The named
executive officer group's fiscal year 2001 cash bonus was 75.8% of the group's
annual base salary for 2001.

Stock Options and Restricted Stock

An important component of the Company's executive compensation program
is the award of stock options and restricted stock. Restricted stock is stock in
the Company which the executive officer must hold for a period of time before it
can be sold. The committee believes that stock options and restricted stock
motivate the executive officers to remain focused on the overall long-term
performance of the Company. Generally the award of a stock option creates no
financial benefit to the executive unless there is appreciation in the price of
the Company's stock after the award date. The financial benefit of an award of
restricted stock can not be realized by the executive officer until the
restriction can be lifted from the stock, generally a minimum of two years. The
total number of restricted stock and stock options awarded to the executive
officer group during fiscal year 2001 amounted to 70,563 and 165,000, or 0.1%
and 0.3% of the average outstanding shares of the Company during 2001.

The Compensation Committee
Mark M. Harmeling, Chairman
Susan S. Fleming
Francis S. Wilson

PERFORMANCE GRAPH

The Performance Graph compares the Company's cumulative total
shareholder return on its Common Stock for the five year period between December
31, 1996 to December 31, 2001, with the cumulative total returns of The Nasdaq
Stock Market ("NSM") and the Nasdaq Insurance Stocks ("NIS"). The comparison for
each period assumes that $100 was invested on December 31, 1996 in each of the
Company's Common Stock, the stocks included in The Nasdaq Stock Market Total
Return Index and the stocks included in the Nasdaq Insurance Stocks Total Return
Index.

COMPARISON OF CUMULATIVE TOTAL RETURN

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
Year UHCO NSM NIS
---- ---- --- ---

1996 100.0000 100.0000 100.0000
1997 132.3765 122.4766 146.7326
1998 123.5294 172.6805 130.7300
1999 217.6471 320.8940 101.4085
2000 185.2941 193.0125 127.3469
2001 319.5294 153.1529 136.2341

INCENTIVE STOCK OPTION PLAN

On May 28, 1998, the Company's shareholders approved its 1998 Incentive
Compensation Plan (the "1998 ICP"). The 1998 ICP superseded the Company's
Incentive Stock Option Plan, which had been approved by the shareholders in
April 1983 and amended in May 1987, June 1989, June 1994 and June 1995. Options
previously granted under the Company's Incentive Stock Option Plan will remain
outstanding in accordance with their terms and the terms of the respective
plans. The 1998 ICP provides for grants of stock options as well as stock
appreciation rights ("SARs"), restricted stock, deferred stock, other
stock-related awards, and performance or annual incentive awards that may be
settled in cash, stock, or other property ("Awards"). Executive officers,
directors, and other officers and employees of the Company or any subsidiary, as
well as other persons who provide services to the Company or any subsidiary, are
eligible to be granted Awards under the 1998 ICP. Under the 1998 ICP and the
previous Incentive Stock Option Plan, stock options ("Incentive Stock Options")
are granted to provide an additional means of providing incentive to executives
and other "key salaried employees" of the Company (which is defined under
section 422A of the Internal Revenue Code as employees of the Company and its
subsidiaries).

Within the limits of the 1998 ICP, the Company's Board of Directors, in
its discretion, determines the participants, the number of options to be granted
and the purchase price and terms of each option. The price for the shares
covered by each option is required to be not less than 100% of the fair market
value at the date of grant. Options expire ten years from the date of grant or
termination and become exercisable in installments as determined by the Board of
Directors commencing one year after date of grant.

For the year ended December 31, 2001, 334,000 Incentive Stock Options
were granted at exercise prices ranging from $3.88 to $6.45. Incentive Stock
Options to purchase 23,500 shares of Common Stock at exercise prices ranging
from $3.15 to $4.25 were canceled or expired. Incentive Stock Options to
purchase 83,000 shares of common stock were exercised at a prices ranging from
$2.20 to $3.33. As of April 19, 2002, Incentive Stock Options to purchase
1,927,700 shares were exercisable, at prices ranging from $2.00 to $4.25, none
of which have since been exercised.

401(K) PLAN

The executives named in the Summary Compensation Table, as well as
substantially all of our full-time employees, are eligible to participate in the
Universal American Financial Corp. 401(k) Savings Plan ("Savings Plan"). The
Savings Plan is a voluntary contributory plan under which employees may elect to
defer compensation for federal income tax purposes under Section 401(k) of the
Internal Revenue Code of 1986. The employee is entitled to participate in the
Savings Plan by contributing through payroll deductions up to 20% of the
employee's compensation. Currently, the Company matches the employee's
contribution up to 2% of the employee's compensation with Company common stock.
At December 31, 2001 and 2000, the Savings Plan held 468,943 and 426,000 shares,
respectively of the Company's common stock, which represents 34.4% of total plan
assets as of December 31, 2001 and 18.2% of total plan assets as of December 31,
2000.

The participating employee is not taxed on these contributions until
they are distributed. Moreover, the employer's contributions vest at the rate of
25% per plan year. Employees are required to hold the employer contribution in
Company common stock until vested, at which point the employee has to option to
transfer the amount to any of the other investments available under the Savings
Plan. Amounts credited to employee's accounts under the Savings Plan are
invested by the employer-appointed investment committee. Generally, a
participating employee is entitled to distributions from the Savings Plan upon
termination of employment, retirement, death or disability. Savings Plan
participants who qualify for distributions may receive a single lump sum, have
the assets transferred to another qualified plan or individual retirement
account, or receive a series of specified installment payments.

INDEPENDENT AUDITORS

Annually, our Board of Directors appoints independent auditors to audit
our financial statements, based on the recommendation of the Audit Committee.
Our Board of Directors appointed Ernst & Young LLP as independent auditors to
audit our financial statements for the year ended December 31, 2001. Fees for
this audit were $892,000. All other fees for services provided by Ernst & Young
LLP to us for the year ended December 31, 2001 were $823,000, including audit
related services of $383,000 and non-audit services of $440,000. Audit related
services include fees for statutory audits of $148,000 and the S-3 registration
statement filed in July 2001 of $235,000. Non-audit related services include
fees for actuarial services of $237,000 and fees for tax services of $203,000.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting with the opportunity to make a statement if they desire and will be
available to respond to appropriate questions.

2. OTHER MATTERS

The Board of Directors does not intend to present to the meeting any
matters not referred to in the form of Proxy. If any proposal not set forth in
the Proxy Statement would be presented for action at the meeting, it is intended
that the shares represented by proxies will vote with respect to such matters in
accordance with the judgment of the persons voting them.

A copy of the Annual Report has been mailed to every stockholder as of
the Record Date. The Annual Report is not to be considered proxy-soliciting
material.

By order of the Board of Directors

JOAN M. FERRARONE
Secretary

Dated: May 13, 2002
Rye Brook, New York

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UNIVERSAL AMERICAN FINANCIAL CORP.

PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 29, 2002

The undersigned shareholder of Universal American Financial Corp.,
hereby appoints Richard Barasch and Robert Waegelein, and each of them, the
proxies of the undersigned with full power of substitution, to vote, as
indicated herein, all the shares of Common Stock of Universal American Financial
Corp. standing in the name of the undersigned at the close of business on April
19, 2002, at the Annual Meeting of Shareholders of the Company to be held at The
Penn Club, 30 West 44th Street, New York, New York 10036, at 9:30 a.m. on May
29, 2002, and at any and all adjournments thereof, with all the powers the
undersigned would possess if then and there personally present, as more fully
described in the Proxy Statement for the meeting.

THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AS SET FORTH ON
THE REVERSE SIDE, UNLESS OTHERWISE INDICATED THERE.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

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PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!

ANNUAL MEETING OF SHAREHOLDERS
UNIVERSAL AMERICAN FINANCIAL CORP.

MAY 29, 2002

- Please Detach and Mail in the Envelope Provided -

- --------------------------------------------------------------------------------

A [X] PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE.

FOR WITHHELD

1. Election
of [ ] [ ]
Directors:

FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEE(S):

________________________________________________________________________________

NOMINEES: (TO SERVE UNTIL THE NEXT ANNUAL
ELECTION OF DIRECTORS):
Richard A. Barasch
Bradley E. Cooper
Susan S. Fleming
Mark M. Harmeling
Bertram Harnett
Patrick J. McLaughlin
Robert A. Spass
Francis S. Wilson
Robert F. Wright

In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting, or any adjournment or adjournments
thereof.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED FOR ELECTION
OF DIRECTORS UNLESS OTHERWISE INDICATED.

SIGNATURE _________________ DATE ______ SIGNATURE _________________ DATE ______

NOTE: Signature(s) should be exactly as name or names appears on this proxy.
If stock is held jointly each holder should sign. If signing is by
attorney, trustee or guardian, please give full title.

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