FILED PURSUANT TO RULE 424 (B) (3)
                                                    OF THE RULES AND REGULATIONS
                                                UNDER THE SECURITIES ACT OF 1933

                                            REGISTRATION STATEMENT NO. 333-29425


AMERICAN MEDICAL SECURITY GROUP, INC.
3100 AMS BOULEVARD
GREEN BAY, WISCONSIN 54313

TO PARTICIPANTS IN THE DIVIDEND REINVESTMENT AND DIRECT STOCK PURCHASE PLAN:


                  Prospectus Supplement date September 30, 1998
               to Prospectus dated July 9, 1997 (the "Prospectus")
                    of American Medical Security Group, Inc.
           (formerly United Wisconsin Services, Inc.) (the "Company")
                            Relating to the Company's
              Dividend Reinvestment and Direct Stock Purchase Plan


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     The  Dividend  Reinvestment  and Direct  Stock  Purchase  Plan (the "Plan")
provides each Record Owner and  Beneficial  Owner (as those terms are defined in
the Prospectus and the Plan, respectively) of the Company's common stock, no par
value per share  ("Common  Stock"),  with a  convenient  and  economical  way of
purchasing additional shares of Common Stock through the automatic  reinvestment
of cash  dividends on Common Stock and/or through  optional cash  payments.  The
Plan also permits an investor who is not a Record Owner or  Beneficial  Owner to
become a  participant  in the Plan  through  the Plan's  direct  stock  purchase
feature  by making a cash  payment of not less than $100 for shares in the Plan.
AS A RESULT OF THE CHANGE IN THE  COMPANY'S  DIVIDEND  POLICY  DESCRIBED  BELOW,
WHEREBY THE COMPANY HAS  DISCONTINUED  THE PAYMENT OF CASH  DIVIDENDS,  ONLY THE
OPTIONAL  CASH  PAYMENT AND DIRECT STOCK  PURCHASE  FEATURES OF THE PLAN WILL BE
OPERATIONAL UNLESS AND UNTIL THE PAYMENT OF CASH DIVIDENDS IS RESUMED.


                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     Reference is made to  "Incorporation  of Certain Documents by Reference" in
the  Prospectus.  As of the date of this  Prospectus  Supplement,  the documents
incorporated by reference herein include (a) the Company's Annual Report on Form
10-K for the year ended December 31, 1997, (b) the Company's  Quarterly  Reports
on Form 10-Q for  quarters  ended March 31,  1998,  and June 30,  1998,  (c) the
Company's Current Report on Form 8-K dated as of September 25, 1998, and (d) the
description of the Common Stock included in the Company's Registration Statement
on Form 8-A filed pursuant to Section 12 of the Securities  Exchange Act of 1934
and declared effective October 24, 1991, including any amendment or report filed
for the purpose of updating such description.


          SPIN-OFF AND CHANGE OF THE COMPANY'S NAME AND DIVIDEND POLICY

     On September 25, 1998 (the  "Distribution  Date"),  the Company completed a
spin-off  transaction  (the  "Distribution")   pursuant  to  which  all  of  the
outstanding shares of common stock of Newco/UWS,  Inc., a Wisconsin  corporation
("Newco") which was a wholly owned  subsidiary of the Company,  were distributed
on a pro rata basis to the  shareholders of the Company.  In connection with the
Distribution,  Newco became a separate company with publicly traded  securities,
the Company was renamed  American  Medical  Security Group,  Inc., and Newco was
renamed United Wisconsin  Services,  Inc. ("New UWS"). As a result of the change
in the Company's name to American Medical Security Group,  Inc., the outstanding
shares of Common Stock,  and additional  shares offered by this  Prospectus will
be, listed on the New York Stock Exchange under the symbol "AMZ".

     As a  result  of the  transactions  entered  into in  connection  with  the
Distribution,  New UWS owns the businesses and assets of, and is responsible for
the liabilities  associated with, the managed care (HMO) and specialty  products
businesses and management  business that had been conducted by the Company prior
to the  Distribution,  and the Company will continue to own the  businesses  and
assets of, and be responsible  for the  liabilities  associated  with, the small
group business that had been conducted by the Company prior to the Distribution.

     The Company does not expect to pay any cash  dividends  in the  foreseeable
future after the Distribution. The Company intends to employ its earnings in the
continued development of its business. The future dividend policy will depend on
the Company's  earnings,  capital  requirements,  financial  condition and other
factors  considered  relevant  by  the  Board  of  Directors.  Accordingly,  the
provisions  of the Plan  providing  for  reinvestment  of dividends  will not be
operational unless and until the payment of cash dividends is resumed.

     Under the terms of the Distribution, participants in the Plan will continue
to own the shares of Company Common Stock that they owned through the Plan prior
to the Distribution. In the Distribution, participants received one share of New
UWS  common  stock  for  each  share  of  Company  Common  Stock  owned  on  the
Distribution Date through the Plan. New UWS is establishing a plan comparable to
the Company Plan,  under which accounts will be established for  participants in
the Company Plan at the time of the Distribution. Shares of New UWS common stock
credited as a result of the  Distribution  to  participants  in the Company Plan
will be transferred to participants' accounts in the New UWS plan.


           CHANGE OF REINVESTMENT AGENT'S ADDRESS AND TELEPHONE NUMBER

     Firstar Trust Company, the Reinvestment Agent for the Plan, has changed its
name, address and telephone number to the following:

                           Firstar Bank Milwaukee, N.A.
                           1555 North RiverCenter Drive; Suite 301
                           P.O. Box 2077
                           Milwaukee, Wisconsin 53201-2077
                           Telephone: (414) 905-5000


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THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE  COMMISSION OR ANY STATE  SECURITIES  COMMISSION NOR HAS THE SECURITIES
AND  EXCHANGE  COMMISSION  OR ANY STATE  SECURITIES  COMMISSION  PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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