THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Independence Holding Company (IHC)

4/26/2006 Proxy Information

With Geneve

For more than the past five years, Mr. Netter has been Chairman and Chief Executive Officer of Geneve. The Company and Geneve operate under cost-sharing arrangements pursuant to which certain items are allocated between the companies. During 2005, the Company paid to Geneve or accrued for payment thereto approximately $341,500 under such arrangements, and paid or accrued approximately an additional $82,500 for the first quarter of 2006. Such cost-sharing arrangements include Geneve providing the Company the use of office space as its corporate headquarters for annual consideration of $141,215 in 2005. In addition, certain directors, officers and/or employees of the Company or its subsidiaries, who are also directors, officers and/or employees of Geneve, received compensation and benefits from Geneve for services rendered thereto since January 1, 2005. The foregoing is subject to the approval of the Audit Committee of the Board of Directors at least annually, and management of the Company believes that the terms thereof are no less favorable than could be obtained by the Company from unrelated parties on an arm’s length basis.

With Mr. Edward Netter

At December 31, 2005, the Company had a $10.5 million limited partnerhsip investment in Dolphin Limited Partnership-A (“DLP-A”). At December 31, 2004, the Company had a $4.6 million limited partnership investment in Dolphin Domestic Fund II L.P. (“DDF II”). Subsequently, the general partner of DDF II liquidated the net assets of DDF II, and made a distribution to the Company of its capital account balance. Mr. Donald Netter is the Chairman, Chief Executive Officer, and the indirect principal owner of the managing member of the general partner of DLP-A. He is also the Co-Chairman and Co-Chief Executive Officer of the managing member of DDF II. Mr. Donald Netter is the son of Mr. Edward Netter. Pursuant to the partnership agreements, all limited partners are charged quarterly management fees, an annual performance-based incentive allocation and other defined expenses, all of which the Company believes to be comparable to other similar investment management vehicles with which it is familiar.

With American Independence Corp. and Its Subsidiaries

AMIC is an insurance holding company engaged in the insurance and reinsurance business as a result of its acquisition of First Standard Holdings Corp. (“FSHC”) from the Company in November 2002. AMIC does business with the Company, including reinsurance treaties under which, in 2005, Standard Security and Madison Life ceded to Independence American an average of 22% of their medical stop-loss business, 10% of their fully insured health business and 20% of their New York statutory disability business. The Company owned 48% of AMIC’s outstanding common stock at December 31, 2005, which was purchased in various transactions beginning in 2002. See Note 2 of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2005.

With Mr. Jeffrey C. Smedsrud

In fiscal year 2006, CAM will continue to receive health insurance commissions and fees from IAC, and IAC will continue to administer group health and individual plans sold by CAM. Mr. Jeffrey C. Smedsrud is the sole owner and Chief Executive Officer of CAM. IAC become a wholly-owned subsidiary of the Company as of January 31, 2006. The described transaction is the continuation on unaltered terms of an arms-length business relationship between the parties that existed prior to either party becoming affiliated with the Company.

With Mr. Scott M. Wood

Concurrent with and in connection to the acquisition of IAC, Mr. Stephen A. Wood, Mr. Scott M. Wood’s father, entered into: (1) an employment agreement with IAC, pursuant to which he serves as Chairman of the Board of IAC and receives an annual base salary of $300,000 until September 20, 2007; (2) a consulting agreement with Standard Security, pursuant to which he provides consulting services to Standard Security and receives an annual fee of $250,000 until September 20, 2007; (3) a consulting agreement with IAC effective September 21, 2007 and terminating on September 20, 2022, pursuant to which he will provide consulting services to IAC and receive an annual fee of $300,000. Mr. Stephen A. Wood was the founder of IAC and its President and Chief Executive Officer before the acquisition. The aggregate compensation to him pursuant to these agreements is comparable to and consistent with that before the acquisition.

Concurrent with and in connection to the acquisition of IAC, Ms. Christy Wood, Mr. Scott M. Wood’s sister, entered into a revised salary continuation agreement with IAC, pursuant to which she will provide services to IAC as an employee and in a consultative capacity after retirement, and, subject to certain conditions therein, upon reaching the age of 65, will start to receive a monthly salary continuation payment of $12,500 for 10 years. Ms. Wood joined IAC in 1997 and is currently the Senior Vice President of Administration of IAC. The compensation to her pursuant to this agreement is comparable to and consistent with that before the acquisition.