UNIVERSAL AMERICAN FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS:

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

a. Fixed maturities available for sale: For those securities available for sale, fair value equals quoted market price, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

b. Equity securities: For equity securities carried at fair value, fair value equals quoted market price.

c. Cash and cash equivalents: For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value.

d. Investment contract liabilities: For annuity and universal life type contracts, the carrying amount is the policyholder account value (see Note 2e); estimated fair value equals the policyholder account value less surrender charges.

e. Short term debt and loan payable: For short-term borrowings and loan payable, the carrying value is a reasonable estimate of fair value due to their short-term nature.

f. Accounts receivable and uncollected premiums: Accounts receivable and uncollected premiums are primarily insurance contract related receivables, which are determined based upon the underlying insurance liabilities and added reinsurance amounts.

The estimated fair values of the Company's financial instruments as of December 31, 2000 and 1999 are as follows: 

                                              2000          
                                     Carrying               
                                       Amount    Fair Value 
                                        (In thousands)
Financial assets:                  
Fixed maturities                   
   available for sale              $  751,738    $  751,738
 Equity securities                      3,547         3,547
 Policy loans (a)                      25,077
 Other invested assets (b)              2,037
 Mortgage loans (b)                     2,281
 Cash and cash equivalents             40,250        40,250

Financial liabilities:             
 Investment contract liabilities      223,681       207,697
 Loan payable                          69,650        69,650  



                                              1999           
                                     Carrying 
                                       Amount    Fair Value  
                                        (In thousands)                     
Financial assets:                  
Fixed maturities                   
   available for sale              $  717,560    $  717,560
Equity securities                       4,838         4,838
Policy loans (a)                       25,640
Other invested assets (b)               2,763
Mortgage loans (b)                      2,743
Cash and cash equivalents              58,753        58,753
Financial liabilities:             
  Investment contract liabilities     238,665       215,867
  Loan payable                         70,000        70,000
   (a)   It is not practicable to estimate the fair value of policy loans, as they have no stated maturity and their rates are set at a fixed spread to related policy liability rates. Policy loans are carried at the aggregate unpaid principal balances in the consolidated balance sheets, and earn interest at rates between 6% to 8%. Individual policy liabilities, in all cases, equal or exceed outstanding policy loan balances.
 
   (b)   Mortgage loans are carried at the aggregate unpaid balances and the fair market value was not determined as the amount involved was considered to be immaterial. Other invested assets consists mainly of collateralized loans which are carried at cost. The determination of fair value for these invested assets is not practical because there is no active trading market for such invested assets.