Information on the Conversion of
Blue Cross & Blue Shield United of Wisconsin

Blue Cross & Blue Shield United of Wisconsin filed an Application for a Plan of Conversion with the Office of the Commissioner of Insurance on June 14, 1999. The application proposes to convert Blue Cross from a nonprofit service insurance corporation to a stock insurance corporation. Blue Cross would become a wholly-owned subsidiary of United Heartland Group, Inc., a yet-to-be-formed stock holding company. Initially, all of the issued and outstanding capital stock of United Heartland Group, Inc., would be owned by a charitable public health foundation to be known as Blue Cross & Blue Shield United of Wisconsin Public Health Foundation, Inc.

The plan of conversion provides for a charitable public health foundation organized for the purpose of promoting the general health, welfare, and common good of the residents of Wisconsin. If that aspect of the Application for Conversion were approved, the foundation would assure that funds now used to support a nonprofit health insurer would continue to be applied to health care challenges and initiatives. In order to achieve the public interest, the foundation's stock in United Heartland Group, Inc., would be converted to working capital for the foundation pursuant to one or more alternatives including public offerings, private placements, a merger with United Wisconsin Services, Inc., or any combination of such alternatives.

By law, OCI must hold one or more public hearings about the Application for Conversion. Hearing dates and sites have been determined. (Note: you will need an Adobe Acrobat Reader to view or print the Notice of Hearing and Invitation for Public Comment, which you can download at no cost from Adobe .) During the one or more hearings, members of the public will have an opportunity to present their views on the plan of conversion.

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Correspondence on OCI's Review of the Application for Conversion

Note: You will need an Adobe Acrobat Reader to view or print the correspondence listed below, which you can download at no cost from Adobe .

OCI Letter of July 6, 1999

Response of August 6, 1999
Response of August 17, 1999
Response of September 7, 1999

OCI Letter of October 26, 1999

Response of November 15, 1999
Response of November 15, 1999

OCI Letter of November 10, 1999

OCI Letter of November 23, 1999

Response of December 7, 1999

OCI Letter of December 7, 1999

Response of December 17, 1999 and Debt Schedule attachment

Blue Cross & Blue Shield United Letters of December 13, 1999

December 13, 1999, Cover Letter
December 13, 1999, Letter

Deutsch Banc Letter of December 21, 1999, to Blue Cross & Blue Shield United and Document/Data Request List

OCI Letter of December 23, 1999

Response of December 29, 1999
Response of January 4, 2000 and Attachments

OCI Letter of February 24, 2000

Response of March 1, 2000
Response of March 8, 2000

Extension Request Letter of September 20, 2000

OCI Response of September 27, 2000, to Extension Request

OCI Letter of September 28, 2000, Reactivating Investment Banker

OCI Letter of October 17, 2000, Concerning Activation of the Public Health Foundation

Blue Cross Request of December 19, 2000, Concerning Foundation Name

OCI Response of December 19, 2000, to Blue Cross Request

OCI Letter of December 28, 2000, Concerning the Status of the Foundation's Activation

Response of January 8, 2001
Response of January 10, 2001
    Attachment: Sample Letter to Foundation Board Members
    Attachment: Amended and Restated Articles of Incorporation
    Attachment: Amended and Restated Bylaws

Blue Cross Correspondence of January 16, 2001, Requesting Final Approval for the Conversion

Attachments:
Amended and Restated Articles of Incorporation of Wisc. United for Health Foundation, Inc.
Amended and Restated Bylaws of Wisconsin United for Health Foundation, Inc.
Amended and Restated Articles of Incorporation of Cobalt Corporation
Amended and Restated Bylaws of Cobalt Corporation
Voting Trust and Divestiture Agreement
Registration Rights Agreement

OCI Response to Blue Cross January 16, 2001, Filing

Blue Cross Letter of March 1, 2001, Concerning the Granting of Share Options to Certain Directors of the Future Cobalt, Inc.

OCI March 19, 2001, Response to Blue Cross March 1, 2001, Letter

March 9, 2001, Letter from Foley and Lardner

OCI Letter of March 12, 2001, in Response to Correspondence from Foley and Lardner
Blue Cross Response to OCI Letter of March 12, 2001

Foley and Lardner Letter of March 16, 2001, Concerning the Approval of the Blue Cross Conversion by the BlueCross BlueShield Association

Blue Cross Letter of March 16, 2001, with Attachments

Letter from Michael, Best and Friedrich Regarding the Registration Rights Agreement
Revised Loan Agreement
Revised Promissory Note
Letter from Mr. Mark Sabin

Response from Foley and Lardner Concerning Cobalt Bylaw Issues

Amended and Restated Bylaws of Cobalt Corporation
Blacklined Version Illustrating Changes

Please contact OCI for any attachments to the letters. You will be charged a fee for copying the information.

Blue Cross & Blue Shield United of Wisconsin Appraisal Committee

State law allows for the Commissioner to appoint an Appraisal Committee to assist her in evaluating certain aspects of the conversion application.

On August 20, 1999, Commissioner O'Connell appointed an Appraisal Committee. The members of the Appraisal Committee are Mark Femal, Executive Director of the Wisconsin Insurance Security Fund, Patricia Lipton, Executive Director of the State of Wisconsin Investment Board, and Randy Blumer, Deputy Insurance Commissioner. Gary Strohm, who was listed in the August 20, 1999, press release as a member of the Committee resigned prior to its first meeting and was replaced by Mr. Femal. Mr. Femal was elected the chairperson of the Appraisal Committee at its November 5 meeting. (August 20, 1999, press release)

Following are the meeting notices, agenda, and minutes of the meetings held by the committee along with the final report of the committee:

Note: You will need an Adobe Acrobat Reader to view or print the correspondence listed below, which you can download at no cost from Adobe .

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Meeting Notices

Agenda

Minutes

Report

Blue Cross & Blue Shield United of Wisconsin Hearings

OCI held hearings on the conversion of Blue Cross & Blue Shield United of Wisconsin. The administrative hearing was held on the morning of November 29, 1999, in Milwaukee, Wisconsin, and on February 25, 2000, and March 10, 2000, in Madison, Wisconsin. The public hearing was held on November 29, 1999, in Milwaukee, Wisconsin, and was continued in Stevens Point, Wisconsin, on November 30, 1999.

Note: You will need an Adobe Acrobat Reader to view or print the correspondence listed below, which you can download at no cost from Adobe .

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Open Meeting Notices for the Administrative Hearing

Decision and Order

Commissioner's Statement on the Conversion of Blue Cross & Blue Shield United of Wisconsin

Consumer Group's Appeal

Commissioner's Answer to the Consumer Group's Appeal

News Release: Commissioner Gives Final Approval to Blue Cross Conversion

Letter of March 19, 2001, Regarding Final Approval

Attachments:

Fairness Opinion of Deutsche Banc Alex. Brown Dated March 19, 2001