UNIVERSAL AMERICAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Years Ended December 31, 2000
(In thousands)

                                                                 2000       1999       1998  
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . .    $ 22,885  $   9,813  $   2,608
Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
Deferred income taxes  . . . . . . . . . . . . . . . . . .       7,011        996      1,324
Change in reserves for future policy benefits
 (net of balances acquired)  . . . . . . . . . . . . . . .       3,142      5,136      6,928
Change in policy and contract claims
 (net of balances acquired)  . . . . . . . . . . . . . . .       7,185     (2,229)      (270)
Change in deferred policy acquisition costs  . . . . . . .     (15,925)    (6,253)    (3,530)
Change in deferred revenue (net of balances acquired)  . .         (32)       (45)       (63)
Amortization of present value of future profits  . . . . .       3,096        343        175
Amortization of goodwill . . . . . . . . . . . . . . . . .        (347)      (273)       154
Change in policy loans (net of balances acquired)  . . . .         563        264        (91)
Change in accrued investment income
 (net of balances acquired)  . . . . . . . . . . . . . . .        (410)      (336)      (181)
Change in reinsurance balances
 (net of balances acquired)  . . . . . . . . . . . . . . .       1,155     (5,571)    (5,320)
Change in due and unpaid premium
 (net of balances acquired)  . . . . . . . . . . . . . . .        (102)       187         22
Realized loss (gain) on investments  . . . . . . . . . . .        (146)       241       (256)
Change in restructuring liability  . . . . . . . . . . . .      (7,025)     9,980          -
Change in income taxes payable
 (net of balances acquired)  . . . . . . . . . . . . . . .       1,711     11,565          -
Other, net . . . . . . . . . . . . . . . . . . . . . . . .      (3,178)    (5,150)    (1,874)
Net cash provided by (used in) operating activities  . . .      19,583     18,668       (374)

Cash flows from investing activities:
Proceeds from sale of fixed maturities available for sale      104,046     41,039     26,887
Proceeds from redemption of
 fixed maturities available for sale . . . . . . . . . . .       9,131     12,405      7,941
Cost of fixed maturities purchased available for sale. . .    (127,255)  (182,843)   (45,886)
Change in amounts held in trust for reinsurer  . . . . . .      (3,105)    (2,403)    (5,182)
Proceeds from sale of equity securities  . . . . . . . . .       1,896        374        512
Cost of equity securities purchased  . . . . . . . . . . .        (534)      (144)      (591)
Change in mortgage loans . . . . . . . . . . . . . . . . .         462      2,870          -
Change in other invested assets  . . . . . . . . . . . . .         696      2,079       (108)
Purchase of business, net of cash acquired . . . . . . . .      (6,365)    (9,620)    (2,563)
Net cash used by investing activities  . . . . . . . . . .     (21,028)  (136,243)   (18,990)

Cash flows from financing activities:
Net proceeds from issuance of common stock . . . . . . . .         213     93,209        421
Cost of treasury stock purchases . . . . . . . . . . . . .        (711)         -          -
Proceeds from the issuance of Series D Preferred Stock . .           -      1,750      2,250
Increase (decrease) in policyholder account balances . . .     (16,210)      (974)     7,522
Increase in loan payable . . . . . . . . . . . . . . . . .       3,000     70,000      1,850
Principle repayment on loan payable  . . . . . . . . . . .      (3,350)    (4,750)      (600)
Net cash provided from financing activities  . . . . . . .     (17,058)   159,235     11,443 

Net (decrease) increase in cash and cash equivalents . . .     (18,503)    41,660     (7,921)

Cash and cash equivalents at beginning of year . . . . . .      58,753     17,093     25,014 
Cash and cash equivalents at end of year . . . . . . . . .   $  40,250  $  58,753  $  17,093 

Supplemental disclosure of cash flow information:
Cash paid (received) during the year for:
 Interest  . . . . . . . . . . . . . . . . . . . . . . . .   $   7,097  $   2,859  $     307 
 Income taxes  . . . . . . . . . . . . . . . . . . . . . .   $  (3,375) $   2,335  $       - 

See notes to consolidated financial statements.