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EXHIBIT 99.1
UICI
Contact: Matthew R. Cassell
Vice President
UICI
NEWS RELEASE 4001 McEwen, Suite 200
Dallas, Texas 75244
Phone: (972) 392-6700
(For Immediate Release)
UICI ANNOUNCES COMPLETION OF SALE OF UNITED CREDITSERV CREDIT CARD BUSINESS
DALLAS, TX, September 29, 2000----UICI (the "Company" NYSE: UCI) today
announced that it has completed its previously announced sale of substantially
all of the non-cash assets associated with its United CreditServ credit card
business, including its credit card receivables portfolios and its Sioux Falls,
South Dakota servicing operations, for a cash sales price of approximately
$124.0 million.
While the sales price was less than originally projected, the shortfall
was offset by higher than projected cash collections on credit card receivables
made through the closing of the sale. In addition to the cash sales price
received at closing, the transaction contemplates an incentive cash payment
contingent upon the post-closing performance of the ACE credit card portfolio
over a one-year period. UICI continues to hold United CreditServ's building and
real estate in Sioux Falls, South Dakota, and has leased the facilities to the
purchaser pursuant to a long-term lease. UICI has also retained the right to
collect approximately $250 million face amount of previously written off credit
card receivables.
In connection with the sale, UICI or certain of its subsidiaries have
retained substantially all liabilities associated with its credit card business,
including liability for payment of all certificates of deposit issued by United
Credit National Bank (an indirect wholly-owned subsidiary of UICI), merchant
holdback liabilities, liabilities associated with pending litigation and other
contingencies. Following the sale, United Credit National Bank holds
approximately $96.0 million in available cash, cash equivalents and short term
U.S. Treasury securities and has approximately $79.0 million of certificates of
deposits outstanding. United Credit National Bank has initiated a program to
prepay all of its outstanding certificates of deposit and currently expects to
discharge all such deposit liabilities on or before October 31, 2000. United
Credit National Bank is in the process of preparing a formal voluntary plan of
liquidation to be filed with and approved by the Office of the Comptroller of
the Currency, and UICI currently anticipates that the voluntary liquidation of
United Credit National Bank, including the provision for all remaining
liabilities and distribution to UICI of all residual cash, will be complete on
or before year-end.
"We are very pleased to have successfully completed this critical step
in UICI's orderly withdrawal from the credit card business," commented Gregory
T. Mutz, UICI's chief executive officer. "We look forward to formally closing
United Credit National Bank by year-end and
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turning our full attention once again to the core businesses that have served
our shareholders so well in the past."
Separately, UICI has learned that the plaintiffs in previously
disclosed litigation have filed motions to compel UICI to, among other things,
deposit a significant portion of the proceeds of the sale of UICI's credit card
business in escrow under court supervision. UICI believes that the motions are
wholly without merit and intends to oppose them vigorously.
CORPORATE PROFILE:
UICI, headquartered in Dallas, Texas, is a diversified financial services
company offering financial services, health administrative services and
insurance through its various subsidiaries and divisions to niche consumer and
institutional markets. UICI provides health insurance through its insurance
subsidiaries, UGA-Association Field Services and Cornerstone Marketing of
America; enrollment, billing and collection claims administration and risk
management services for healthcare payors and providers through UICI
Administrators; financial services and products for college, undergraduates and
graduate students, including tuition installment plans and federally-guaranteed
student loans through Academic Management Services Corp. and manages blocks of
life insurance and life insurance products to select markets through its OKC
Division. UICI also holds a 39% interest in HealthAxis.com, Inc., a leading
web-based insurance retailer 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 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.