AMERICAN INDEPENDENCE CORP.
                               485 Madison Avenue
                            New York, New York 10022

                                February 18, 2003

To the Stockholders of American Independence Corp.

      I am pleased to inform you that, at a special meeting of stockholders held
on February 13, 2003, the stockholders of American Independence Corp. (the
"Company") approved a one-for-three reverse stock split of the Company's common
stock. Each three shares of our common stock outstanding prior to 6:00 p.m., New
York City time, on February 13, 2003 (the "Old Common Stock") was automatically
combined and reclassified and continued, without any action on the part of the
holder thereof, as one share of new common stock (the "New Common Stock") at
that time. No fractional shares will be issued in connection with the reverse
stock split. Holders of shares of Old Common Stock who would otherwise be
entitled to a fraction of a share on account of the reverse stock split will
receive, upon surrender of the stock certificates formally representing shares
of Old Common Stock, cash in lieu of such fractional share.

      In order to exchange any certificates you hold representing Old Common
Stock for certificates representing New Common Stock, you must return the
accompanying GREEN Transmittal Form, signed and completed in accordance with the
instructions appearing on the GREEN Transmittal Form. Your present Old Common
Stock certificates, with the completed and signed GREEN Transmittal Form and any
other required documents, should be delivered to Mellon Investor Services LLC,
the exchange agent, at the appropriate address set forth in the GREEN
Transmittal Form. A return envelope addressed to the exchange agent is enclosed
for your convenience.

      In order to save on mailing costs, the Company has asked Madison Investors
Corporation to include the GREEN Transmittal Form with the materials
accompanying an Offer to Purchase and a BLUE Letter of Transmittal relating to
Madison Investors' cash tender offer for up to 1,000,000 shares of New Common
Stock. It is therefore important that you use the correct transmittal form,
depending on whether you wish to exchange your certificates (GREEN) or to
participate in the cash tender offer (BLUE). If you are a holder of record and
surrender your certificate with the GREEN Transmittal Form, the shares
represented by that certificate will not be regarded as having been tendered in
the cash tender offer.

      We look forward to your continued support of the Company.

                                                     Sincerely,


                                                     DAVID T. KETTIG
                                                     Secretary