THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Sierra Health Services, Inc. (SIE)

4/13/2006 Proxy Information

Jeannine A. Zeller, the adult daughter of Dr. Marlon, our CEO, was an employee of the Company, serving as Director, Health Services, of Sierra Military Health Services, LLC (ŌSMHSĶ). During 2005, she earned an aggregate annual compensation of $217,829, which included a severance payment consistent with other employees of SMHS. Dr. MarlonÕs adult son, Robert Marlon, is an employee of the Company, serving as Project Manager, Customer Service Operations. During 2005, he earned an aggregate annual compensation of $84,755.

From time to time, the Company places a portion of its available cash reserves in various investments. These investments have included equity participation and high yield trust deeds for commercial acquisition and/or development of land by unrelated third party developers and entities formed to invest in land that may be resold to developers. Licensed mortgage brokers are the source of proposals for such transactions and make proposals not only to the Company but to other investors. A committee of the Chief Financial Officer and other executives reviews and considers the terms based upon internally-developed guidelines and recommends whether to make the investments, or not, based on its view of the merits of the project and developer. The Company generally attempts to invest slightly more than a majority in each loan that the committee determines is appropriate. The notes are secured by deeds of trusts and generally by the personal guarantee of the developer. Dr. Marlon, Mr. Collins, Mr. Palmer, Ms. MacDonald, Mr. Bunker, and certain other senior executives and employees of the Company, along with other unrelated third-party investors, also invest their personal funds in some of the same trust deeds. At December 31, 2005, the Company had approximately $45.0 million invested in trust deed mortgage notes. The CompanyÕs investments in trust deed mortgage notes are with numerous independent borrowers and are secured by real estate in several states. During 2005, the Company invested a total of $39.4 million in new trust deed investments, some of which were repaid during the year. Through the first three months of 2006, the Company has invested an additional $29.4 million in new trust deed investments.

Mr. Raggio, who is not a member of the subcommittee, is a stockholder of Jones-Vargas, a Nevada law firm which during 2005 rendered legal services to the Company for which it was paid approximately $212,000. The legal fees paid to Jones-Vargas for services rendered in 2005 increased because a law firm that the Company had previously engaged merged with Jones-Vargas in late 2004.

4/15/2005 Proxy Information

Mr. Raggio, who is not a member of the subcommittee, is a stockholder of Jones-Vargas, a Nevada law firm which during 2004 rendered legal services to the Company for which it was paid approximately $7,000.

During 2004, the Company and three of its subsidiaries made a total donation of $2,500 to the Committee to Re-Elect William Raggio as Senator of the Nevada State Legislature.

Jeannine A. Zeller, the adult daughter of Dr. Marlon, our Chief Executive Officer, was an employee of the Company, serving as Director, Health Services, of Sierra Military Health Services, LLC. During 2004, she earned an aggregate annual compensation of $188,391. Dr. MarlonÕs adult son, Robert Marlon, is an employee of the Company, serving as Project Manager, Customer Service Operations. During 2004, he earned an aggregate annual compensation of $78,651.

The Company invests a portion of its available cash reserves in high yield trust deeds for commercial development of land by unrelated third party developers. Licensed mortgage brokers are the source of proposals to finance such loans and make such proposals not only to the Company but to other investors. A committee of the Chief Financial Officer and other executives review and consider the terms based upon internally-developed guidelines and recommend whether to make the investments, or not, based on their view of the merits of the project and developer. Sierra generally attempts to invest slightly more than a majority in each loan that the committee determines is appropriate. The notes are secured by deeds of trusts and generally the personal guarantee of the developer. Dr. Marlon, Frank Collins, Paul Palmer, Erin MacDonald, Jonathon Bunker, and certain other senior executives and employees of the Company, along with other unrelated third-party investors, also invest their personal funds in some of the same loans.

4/16/2004 Proxy Information

William J. Raggio is a stockholder of Jones-Vargas, a Nevada law firm which during 2003 rendered legal services to the Company for which it was paid approximately $25,000.

The Board of Directors authorized the Company to make certain personal loans to Dr. Marlon, our Chairman of the Board and Chief Executive Officer, prior to July 30, 2002. During 2003, the largest aggregate principal amount outstanding of these borrowings and accrued interest was approximately $4.3 million. During 2003, Dr. Marlon paid the entire outstanding balance including accrued interest.

Dr. Marlon's adult daughter, Jeannine A. Zeller, is an employee of the company, serving as Director, Health Services, of Sierra Military Health Services, Inc. During 2003, she earned an aggregate annual compensation of $136,238, and was granted 5,000 options exercisable at $12.61 (the fair market value of shares at the date of grant). Dr. Marlon's adult son, Robert Marlon, is an employee of the Company, serving as Project Manager, Customer Service Operations. During 2003, he earned an aggregate annual compensation of $74,844 and was granted 150 options exercisable at $12.21 (the fair market value of shares at the date of grant).

On February 11, 2004, the Company purchased 500,000 shares of Common Stock from the AMM & RM Family Limited Partnership (the "ARFLP") for an aggregate purchase price of $16,000,000. Dr. Marlon, Chairman of the Board and Chief Executive Officer and President of the Company, and his spouse and a trust for the benefit of Jeannine A. Zeller, his daughter, are general and/or limited partners in ARFLP. The Company's purchase of shares was part of its previously announced program to repurchase 3 million shares of Common Stock, and was not initiated by Dr. Marlon or ARFLP. The Board of Directors approved the Company's purchase of shares in this transaction in advance, including the purchase price of $32.00 per share. The closing sale price of the Common Stock on February 11, 2004 was $32.35

4/18/2003 Proxy Information

The Board of Directors authorized the Company to make certain personal loans to Dr. Marlon, our Chairman of the Board and Chief Executive Officer. During 2002, the largest aggregate principal amount outstanding of these borrowings and accrued interest was approximately $5.2 million. During 2002 and 2001, Dr. Marlon made payments of $1.0 million and $898,000, respectively, towards these loans. At March 31, 2003 the outstanding principal and accrued interest on these loans was approximately $4.3 million. The outstanding balance is due December 31, 2003. All borrowed amounts bear interest at a rate equal to the Company's current borrowing rate under its revolving credit facility plus 10 basis points. The amounts outstanding are collateralized by certain of Dr. Marlon's assets and rights to compensation from the Company.

Mr. Raggio, who is not a member of either subcommittee, is a shareholder of Jones-Vargas, a Nevada law firm which during 2002 rendered legal services to the Company.

During 2002, Mr. Ruthe also received $5,700 as Director's fees for his service as Chairman of the Board of HPN.