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EXHIBIT 99.2
UICI
NEWS RELEASE:
Contact: Warren B. Idsal, Vice President
UICI
4001 McEwen, Suite 200
Dallas, Texas 75244
Phone: (972) 392-6700
(For Immediate Release)
UICI ANNOUNCES MERGER OF INSURDATA WITH HEALTHAXIS.COM TO FORM THE INTERNET'S
FIRST FULLY INTEGRATED E-COMMERCE INSURANCE PLATFORM.
THE MERGER OF INSURDATA WITH HEALTHAXIS.COM WILL FORM AN INTERNET COMPANY
PROVIDING END-TO-END, DIGITAL INSURANCE SALES, MARKETING, AND ADMINISTRATION
SERVICES.
Dallas, TX, December 9, 1999 --- UICI (the "Company") (NYSE: Symbol "UCI")
announced today that it has signed a definitive merger agreement with Provident
American Corporation (NASDAQ: Symbol "PAMC") providing for the merger of
Insurdata, a UICI subsidiary and one of the largest providers of healthcare
administration software solutions, with HealthAxis.com, one of the Internet's
leading online health insurance e-commerce providers. The combined entity, which
will retain the "HealthAxis" name, will be one of the largest players in the
web-enabled health insurance space, with estimated pro forma 1999 revenues of
$42 million.
In the merger, UICI will in effect transfer its majority interest in
Insurdata for a 44% interest in the new, combined HealthAxis. UICI anticipates
that, for financial reporting purposes, upon closing of the merger UICI will
record in the first quarter of 2000 a one-time gain in the amount of
approximately $140 million. Thereafter, HealthAxis will be reflected upon the
books of UICI as an unconsolidated subsidiary accounted for under the equity
method, with UICI recording its proportionate share of HealthAxis' income and
loss. In connection with the merger, the new HealthAxis expects to record
goodwill and other intangibles in excess of $300 million, which is expected to
be ratably amortized over a 3-5 year period. In particular, UICI's share of the
non-cash charges associated with amortization of this goodwill is currently
expected to be approximately $45 million (assuming a three year amortization
period) in each of 2000, 2001 and 2002.
UICI also announced that HealthAxis had completed, concurrently with
the signing of the definitive merger agreement with Insurdata, a $57 million
equity financing with institutional investors, led by Brown Simpson Asset
Management and including Lehman Brothers International, Royal Bank of Canada,
LBI Group, Inc. and Tudor Investment Corporation. Several of the funding parties
are currently investors in either Provident American Corporation or
HealthAxis.com.
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Michael Ashker, currently Chief Executive Officer of HealthAxis.com,
will become CEO of the combined entity. Dennis Maloney, currently Chief
Executive Officer of Insurdata, will become Chief Operating Officer of the new
HealthAxis. Gregory Mutz, UICI President and CEO, Ronald Jensen, UICI Chairman,
and Dennis Maloney will join the new 9 person HealthAxis Board of Directors,
along with 3 representatives from Provident American and 3 independent Directors
selected jointly by UICI and Provident American. HealthAxis will maintain its
headquarters in the Philadelphia area, and will maintain a significant
operational and management presence in Dallas. HealthAxis will also have eight
other technology or operational locations in the United States as well as
abroad. The new combined HealthAxis will employ over 350 information technology
professionals with significant experience in developing sophisticated technology
solutions both for e-commerce health insurance sales as well as in the claims
and administration areas. Although the combined company's consumer and
business-to-business e-commerce services will be marketed separately, all other
corporate functions will be consolidated, including technology, sales,
finance/accounting, human resources, and legal.
Insurdata's proprietary software group, to be designated as HealthAxis'
Application Solutions Group, provides web-enabled, integrated proprietary
software applications to healthcare payors -- insurance companies, third-party
administrators, and large, self-funded groups -- that address the workflow and
processing inefficiencies embedded in the healthcare insurance industry. The
Application Solutions Group, through its proprietary applications, provides
Internet enrollment and online access to health insurance plan and claims data.
These software applications increase the efficiency of a client's interaction
with other participants by eliminating paper-based processes and improving the
client's ability to share data with plan members and other industry
participants. Additional information may be found on Insurdata's website at
www.insurdata.com.
HealthAxis will continue to market its fully transaction-enabled,
online insurance retail website to individuals and small businesses through
www.healthaxis.com. HealthAxis.com is a fully licensed online health insurance
agency representing leading carriers, including Aetna/US HealthCare, WellPoint
Networks, CIGNA, UICI, Blue Cross-Blue Shield Association and Aegon. The
HealthAxis web site offers product information, plan quotes, the ability to buy
insurance products online, and both pre- and post-sale customer service to
health insurance consumers. HealthAxis' retail platform combines the benefits of
a highly efficient, low-cost channel of distribution with a superior insurance
shopping experience. HealthAxis has exclusive marketing agreements for the sale
of health insurance products with America Online, Lycos, Snap.com and CNet.
UICI believes that the combination will open up significant new
business opportunities for HealthAxis. HealthAxis anticipates targeting
worksites through the Application Solution Group's client base of large,
self-funded employer health plans. In addition, HealthAxis' attractiveness to
prospective Carrier Partners is enhanced by its ability to provide not only
distribution services, but also a suite of efficiency tools across multiple
business activities. Moreover, Insurdata's 350 information technology
professionals will provide a significant advantage to HealthAxis in expediting
the carrier integration process, by which new carriers are added "live" to the
www.healthaxis.com e-commerce platform. Finally, the $55 million capital
infusion associated with the merger will enable HealthAxis to increase its
investment in new product development, sales, and customer service.
Gregory T. Mutz, President and CEO of UICI, commented: "UICI is
delighted to announce the merger of our Insurdata unit with HealthAxis. We view
this combination as a substantial step toward capitalizing upon the intellectual
and technology value of Insurdata by
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giving UICI a significant e-commerce platform as well as an enhanced capability
in our health care claim and administration operations. We believe that the
combined company will be uniquely positioned to serve, on an end-to-end basis,
both consumers and payors with an integrated web-based platform. For payors, the
new HealthAxis can now offer carriers a comprehensive suite of web-enabled
software solutions for marketing, sales, and plan administration. For consumers
and small businesses, the Company will be able to offer an enhanced set of
products and services utilizing its Internet-based platform to seamlessly
connect carriers and purchasers. We feel, too, that the funding of $57 million
of equity into HealthAxis is a significant vote of confidence in HealthAxis'
business plan."
Completion of the merger is subject to satisfaction of certain closing
conditions, including Hart-Scott Rodino antitrust clearance and receipt of
opinions that the merger will be tax-free to HealthAxis, Insurdata and their
respective shareholders. It is currently anticipated that the merger transaction
will close in early January 2000. Upon the closing of the merger, UICI will own
approximately 44% and Provident American will own approximately 35% of the new
HealthAxis, with the remaining shares held among Intel Corporation, America
Online, First Health Corporation, the Brown Simpson investment group, members of
management and other institutional investors.
UICI has previously announced its pending acquisition of HealthPlan
Services Corporation in a stock-for-stock merger transaction. HealthPlan
Services Corporation holds approximately 950,000 shares of HealthAxis.com, Inc,
which shares will represent approximately 2% of the new HealthAxis' outstanding
equity.
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, United Group Association and Cornerstone Marketing of America;
Internet-enabled software for health insurance and healthcare markets through
Insurdata; enrollment, billing and collection claims administration and risk
management services for healthcare payors and providers through UICI
Administrators; credit cards for individuals with no credit or troubled credit
histories through United CreditServ; financial services and products for
college, undergraduates and graduate students, including providing
federally-guaranteed student loans through the Educational Finance Group; and
manages blocks of life insurance and life insurance products to select markets
through its OKC Division.
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. Such risks, uncertainties and other factors
include, but are not limited to, changes in general economic conditions; changes
in the regulatory environment; levels of competition (including managed health
care competition in the health industry); availability of, and volatility of
interest rates associated with, funding sources to originate student loans and
credit card receivables; the ability of the Company and its third party vendors
to become Year 2000 Ready; and other factors described in detail in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998.
UICI press releases and other company information are available at UICI's
website located at www.uici.net.