UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C.  20549
                             Form 10-KSB
 (Mark One)
[x]  ANNUAL REPORT under Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the fiscal year ended:      December 31, 1999
[ ]  TRANSITION REPORT under Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the transition period from ____________ to ____________

Commission file number 0-14451
                       Acap Corporation
              (Name of small business issuer in its charter)
State of Incorporation:                       IRS Employer Id.:
       Delaware                                    25-1489730

               Address of Principal Executive Office:
                   10555 Richmond Avenue, 2nd Floor
                       Houston, Texas  77042

Issuer's telephone number, including area code:  (713) 974-2242
Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:

              Common Stock, par value $.10 per share
                        (Title of Class)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
 x   Yes     No.

Check if disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  [x]

Revenues for the issuer for its most recent fiscal year were
$17,483,590.

As of March 28, 2000, 7,224 shares of the registrant's Common
Stock, excluding shares held in treasury, were issued and
outstanding, and the aggregate market value of such shares held
by non-affiliates of the registrant on such date, based on the
average of the closing bid and asked prices for such shares on
such date, was $2,242,500.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part II, Items 5 - 7 of Form 10-KSB
is incorporated by reference from the registrant's 1999 Annual
Report to Stockholders.  The information required by Part III,
Items 9 - 12 of Form 10-KSB is incorporated by reference from the
registrant's definitive information statement to be furnished in
connection with the Annual Meeting of Stockholders to be held on
or about May 8, 2000.

The Exhibit Index, Part IV, Item 13, is located on page 8 of this
Form 10-KSB.
This Form 10-KSB contains a total of 48 pages including any
exhibits.

Transitional Small Business Disclosure Format (check one):
        Yes    x   No
PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

Acap Corporation was incorporated under the laws of the State of
Delaware on March 18, 1985 by the management of American Capitol
Insurance Company ("American Capitol") to become the parent or
"holding company" of American Capitol.  Acap Corporation began
operating in that capacity on October 31, 1985.  American Capitol
is a Texas life insurance company licensed in 34 states and the
District of Columbia.  American Capitol began operations as a
life insurance company on June 1, 1954.

Unless the context otherwise requires, the term "Acap" refers to
the consolidated group of Acap Corporation and its wholly-owned
subsidiaries.

Acap primarily engages in the acquisition and servicing of
existing blocks of insurance policies.  Since September 1994, the
Company has marketed a small volume of final expense insurance
and prearranged funeral service contracts.  Starting May 1999,
the Company began marketing Medicare supplement policies.
Through its life insurance subsidiaries, Acap maintains
individual Medicare supplement health policies and a broad
portfolio of individual life insurance policies and annuity
contracts.

Fortune National Corporation ("Fortune Corp"), a Pennsylvania
corporation, acquired a majority interest in American Capitol in
1984.  In the 1985 reorganization that resulted in American
Capitol becoming a wholly owned subsidiary of Acap, Fortune
Corp's majority interest in American Capitol was exchanged for an
equivalent interest in Acap.  Fortune Corp was liquidated during
1996, leaving Fortune Corp's majority stockholder, InsCap
Corporation ("InsCap"), a Delaware corporation, with the
controlling interest in Acap, approximately 46% at December 31,
1999.

Acquisition Strategy

Acap's strategy for achieving growth and profits is based upon
the acquisition of blocks of existing insurance policies through
the direct purchase of such blocks or indirectly through the
acquisition of life insurance companies.  By acquiring blocks of
insurance directly or through the purchase of other life
insurance companies, Acap hopes to add "new" policies to its
books more economically than through marketing.

Generally, insurance companies can acquire policies in two ways;
either by "purchasing" them policy-by-policy through marketing,
or by buying an existing block of policies.  Purchasing an
existing block of business has the advantage that the policies
have an established "history."  That is, an existing block will
have an established pattern of mortality and lapse experience.
Also, the company selling the block of existing policies has
already absorbed the risks involved in marketing the insurance
products.  In purchasing an existing block of policies, Acap's
strategy is to set the purchase price at the sum of the expected
future profits of the block of policies discounted at a rate of
return in excess of Acap's cost of funds.  Acap then attempts to
improve upon the rate of return by maintaining the acquired
policies at a lower per policy cost than was used in the pricing
assumptions and by realizing a higher investment yield on the
acquired assets than was used in the pricing assumptions.

It also should be noted that the acquisition strategy has certain
risks and disadvantages.  Since the marketing of insurance
products generally involves greater risks than acquiring existing
blocks of insurance, the profit margins available through
marketing may be greater than the margins available with respect
to an acquired block of insurance.  Also, there are relatively
few companies or blocks of business meeting Acap's acquisition
criteria that become available for purchase each year.  Acap's
acquisition strategy requires Acap to maintain the personnel,
computer systems and physical properties necessary to accommodate
large growth phases without the guarantee that such growth will
occur.

Acquisitions to Date

Acap (i.e., its predecessor, American Capitol) switched from a
traditional marketing strategy to the current acquisition
strategy in 1984 in connection with the change in control and
associated change in management resulting from Fortune Corp's
purchase of a majority of the outstanding common stock.  Since
1984, Acap has acquired six companies and five blocks of
business.  Primarily as a result of this acquisition activity,
Acap's assets grew from approximately $64 million at December 31,
1984 to approximately $161 million at December 31, 1999.

Products and Markets

The policies serviced by Acap are primarily traditional whole
life policies, interest-sensitive whole life policies, term life
policies, stipulated premium whole life policies, flexible
premium annuity contracts, and Medicare supplement policies.

Traditional whole life policies are generally characterized by a
uniform death benefit and a level periodic premium throughout the
insured's lifetime.  These policies combine a savings element
with insurance protection.  The savings element, called the cash
value, builds at a fixed rate of interest and may be borrowed
against by the policyholder and, if the policy terminates other
than through the death of the insured, may be paid to the
policyholder.

Acap's interest-sensitive whole life policies also generally have
a uniform death benefit and a level periodic premium.  However,
with these policies, the interest rate credited to the savings
element of the policy may be varied at Acap's option above a
guaranteed minimum rate.  The interest-sensitive policies also
provide for a surrender charge in the event that the policyholder
surrenders the policy during the first ten years following the
issue date of the policy.  Further, Acap may vary below a
guaranteed maximum the amount charged against the policy for
expenses and mortality costs.

Term life policies generally offer pure insurance protection
(i.e., no savings element) for a specified period.  Such policies
typically offer a conversion privilege, a renewal privilege, or
both.  Premiums typically are adjusted upon the exercise of
either privilege.

Stipulated premium whole life policies are characterized by a
uniform death benefit and a level periodic premium throughout the
insured's lifetime.  However, unlike traditional whole life
policies, stipulated premium whole life policies have no cash
value.

Flexible premium annuity contracts permit the annuitant to make
deposits as the annuitant chooses, and allow the annuitant to
make withdrawals at his or her option, subject to deduction of
applicable surrender charges.  The annuity balance earns interest
on a tax-deferred basis at a rate that Acap may change annually.

Medicare supplement policies are health insurance policies that
cover specified benefits that are not covered by Medicare.
Premium rates may be changed on the policies within a state with
the advance approval of regulatory officials of that state.

From mid-1985 until September 1994, the Company relied
exclusively on its acquisition strategy and did not actively
market new business.  Since September 1994, the Company has
marketed a small volume of final expense insurance and
prearranged funeral service contracts in the State of Texas.
These policies are primarily written through independent funeral
homes.  Starting May 1999, the Company began marketing Medicare
supplement health insurance policies through independent brokers
in the States of Texas, Oklahoma, and Louisiana.

No single customer accounts for a meaningful percentage of the
Company's business in force or sales.

Competition

The life insurance industry is highly competitive.  There are
over 1,700 life insurance companies in the United States.
Although Acap's acquisition strategy is not the standard strategy
employed in the industry, Acap must compete with a significant
number of companies, both inside and outside the life insurance
industry, when looking for an acquisition.  Many of these
companies have substantially greater financial resources and
larger staffs than Acap.

Acap also must compete with a significant number of other life
insurance companies to retain Acap's existing block of policies.
Many of these companies have broader and more diverse product
lines together with active agency forces, and therefore, certain
of Acap's policyholders may be induced to replace their existing
policies with those provided by Acap's competitors.

Regulation

The insurance subsidiaries of the Company are subject to
regulation by the supervisory insurance agency of each state or
other jurisdiction in which the insurance subsidiaries are
licensed to do business.  These supervisory agencies have broad
administrative powers relating to the granting and revocation of
licenses to transact business, the approval of policy forms, the
approval of premium rates on Medicare supplement policies, the
form and content of mandatory financial statements, capital,
surplus, reserve requirements and the types of investments that
may be made.  The insurance subsidiaries are required to file
detailed reports with each supervisory agency, and its books and
records are subject to examination by each.  In accordance with
the insurance laws of the State of Texas (the insurance
subsidiaries' state of domicile) and the rules and practices of
the National Association of Insurance Commissioners (the "NAIC"),
the insurance subsidiaries are examined periodically by examiners
from Texas.

Most states have enacted legislation or adopted administrative
regulations covering such matters as the acquisition of control
of insurance companies and transactions between insurance
companies and the persons controlling them.  The NAIC has
recommended model legislation on these subjects that has been
adopted, with variations, by many states.  The nature and extent
of the legislation and administrative regulations now in effect
vary from state to state, and in most states prior administrative
approval of the acquisition of control of an insurance company
incorporated in the state, whether by tender offer, exchange of
securities, merger or otherwise, is required, which process
involves the filing of detailed information regarding the
acquiring parties and the plan of acquisition.

The insurance subsidiaries are members of an "insurance holding
company system" and are required to register as such with the
State of Texas and file periodic reports concerning their
relationships with the insurance holding company and other
affiliates of the holding company.  Material transactions between
members of the holding company system are required to be "fair
and reasonable" and in some cases are subject to administrative
approval, and the books, accounts and records of each party are
required to be so maintained as to clearly and accurately
disclose the precise nature and details of the transactions.
Notice to or approval by the State of Texas is required for
dividends paid by the insurance subsidiaries.

General

The Company does not hold any patents, trademarks, licenses,
franchises or concessions in connection with its business, except
for the insurance licenses of its insurance subsidiaries.

The Company expended no money on research and development during
the past two years.

Employees

At December 31, 1999, Acap had a total of 105 employees, of which
98 are full time employees.  None of these employees is covered
by a collective bargaining agreement.  Acap believes that it has
excellent relations with its employees.

ITEM 2.  DESCRIPTION OF PROPERTIES.

The principal offices of the Company are located at 10555
Richmond Avenue, Houston, Texas 77042.  The Company leases 30,634
square feet of office space.  The lease runs through November 20,
2002.  The Company has the option to extend the lease at then-
current market rates for an additional five years.  The Company's
offices are suitable for the conduct of its business and the
Company has an option to lease additional space in the same
building to provide room for future growth.

The Company's investment policy prohibits making investments in
real estate without the prior approval of the Board of Directors.
There are no plans to make any real estate investments in the
foreseeable future.  If the Company were interested in making a
real estate investment, regulatory restrictions applicable to
Texas life insurance companies would prohibit the life insurance
subsidiaries from investing in real estate outside of the United
States, in residential real estate, or in any property, other
than home office property, that exceeds 5% of the insurer's
statutory assets.

The Company owns and services first mortgage loans with aggregate
principal balances at December 31, 1999 of $1,027,790.  The
investment in mortgage loans was made primarily for income as
opposed to capital gain.  Residential mortgages represent 83% of
the mortgage loan balances at December 31, 1999, with commercial
mortgages constituting the balance.  In addition to the real
estate collateral, approximately $860,000 of the mortgage loans
at December 31, 1999 are guaranteed by an individual that the
Company has reason to believe has a net worth well in excess of
the balance of the guaranteed loans.  The Company's investment
policy prohibits making new investments in mortgage loans without
the prior approval of the Board of Directors.  There are no plans
to make any mortgage loan investments in the foreseeable future.
If the Company were interested in making a mortgage loan
investment, regulatory restrictions applicable to Texas life
insurance companies would prohibit the life insurance
subsidiaries from investing in mortgage loans on real estate
outside of the United States, in other than first liens, or in
any loan that exceeds 25% of the insurer's statutory capital and
surplus.

ITEM 3.  LEGAL PROCEEDINGS.

On May 5, 1999, a civil action (the "Action") was filed by Martin
L. Skeen and William F. Skeen ("Plaintiffs") in the Court of
Chancery of the State of Delaware (the "Court") against Acap and
Acap's directors ("Defendants").  The facts and circumstances
giving rise to the action are described below.

On December 16, 1998, Texas Imperial acquired (the "Statesman
Transaction") the stock of Statesman National Life Insurance
Company ("Statesman").  Statesman was owned by the brother of the
majority shareholder of Acap, and, as a result, this qualified as
a related party transaction.  Texas Imperial issued a promissory
note of $100 to the sellers of the Statesman stock ("Sellers").
At the time of the acquisition of the Statesman stock by Texas
Imperial, Statesman had approximately $1.8 million in surplus
debentures issued to the Sellers.  The Sellers' debentures backed
the Sellers' representations and warranties and were to be
adjusted based upon the outcome of certain post-closing price
adjustments.  In connection with closing, Texas Imperial
purchased an $800,000 surplus debenture from Statesman to bring
Statesman's statutory equity to the level required by the Texas
Department of Insurance (the "Department") as a condition of the
Department's approval of Texas Imperial's acquisition of
Statesman.  In January 1999, it was discovered that Statesman's
claim liabilities were significantly understated.  The liability
understatement exceeded the amount of the Sellers' debentures.
Given the mutual mistake of fact upon which the stock purchase,
the surplus debenture purchase, and the Department's approval of
same, were based, Texas Imperial, the Sellers, and Statesman
agreed to rescind the purchase of the stock and the surplus
debenture.  However, the rescission required the approval of the
Department.  The Department did not grant its approval.  As a
result, Texas Imperial determined that the $800,000 Statesman
surplus debenture was uncollectible and recorded the realized
investment loss on the debenture and wrote off its investment in
Statesman of $100.

On June 10, 1999, the Court approved a Liquidation Plan Regarding
the Insolvency and Liquidation of The Statesman National Life
Insurance Company (the "Liquidation Plan") executed by American
Capitol, Texas Imperial, Statesman, the Department and the
National Organization of Life and Health Insurance Guaranty
Associations.  Pursuant to the Liquidation Plan, American Capitol
and Texas Imperial assumed all life insurance policies issued by
Statesman since September 30, 1998 as well as all of the Medicare
supplement and hospital indemnity health insurance policies in
force in Statesman.  Participating guaranty associations funded
the transaction with a combination of cash and promissory notes.
In determining the funding amount, among other things, the
Company received credit in an amount equal to the $800,000
surplus debenture Texas Imperial purchased from Statesman during
1998 and which Texas Imperial wrote off at December 31, 1998, and
recorded it as a realized gain in 1999.

In the Action, the Plaintiffs asked the Court (1) to direct the
Defendants to pay Acap the $800,000 lost as a result of the write-
off of the surplus debenture purchased from Statesman in
connection with the Statesman Transaction, (2) to direct the
Defendants to account for all of the transactions related to the
Statesman Transaction, (3) to require a new election of directors
after full disclosure with respect to the Statesman Transaction,
and (4) to award such other damages and relief as may be
appropriate, including the costs of the Action.  Plaintiffs also
questioned the compensation of the Company's President in respect
to the employee benefit "Split Dollar" insurance arrangement.
The Action was filed without advance demand or notification to
the Defendants.

Although the Company believed that the claims by the Plaintiffs
were without merit, the parties have reached a settlement
agreement in principle providing for the parties to jointly
petition the Court to enter an order (1) dismissing without
prejudice all of Planitiffs' claims against all of the
Defendants, and (2) to include in the order an agreement by Acap
to have any related party transaction approved by a committee or
board of directors consisting of a majority of outside directors.
While Acap's board of directors from inception has always
consisted of a majority of outside directors, which was the case
at the time of the Statesman Transaction, Acap consented to have
this agreement by Acap included in the Court's order. Acap also
agreed to pay Plaintiffs' costs incurred in connection with the
Action.  The Company expects that the settlement agreement will
be accepted by the Court and entered as its order.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matter was submitted to a vote of security holders during the
quarter ended December 31, 1999.

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

The required information regarding the market for the common
equity of the Company and related stockholder matters is
incorporated herein by reference from "Stockholder Information"
on page 32 of Acap's 1999 Annual Report to Stockholders.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.

Management's Discussion and Analysis of Financial Condition and
Results of Operations is incorporated herein by reference from
"Management's Financial Analysis" on pages 3 - 8 of Acap's 1999
Annual Report to Stockholders.

ITEM 7.  FINANCIAL STATEMENTS.

Financial statements and supplementary data are incorporated
herein by reference from pages 9-31 of Acap's 1999 Annual Report
to Stockholders.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

None.

PART III

The information required by Items 9-12 is incorporated by
reference from Acap's definitive information statement, which is
to be filed pursuant to Regulation 14C.

ITEM 13.EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits:

 Exhibits             Description        Location or Incorporation
                                              by Reference

 3(a)(1)  Certificate of Incorporation of the     *Form 10 effective June 22,
          Registrant dated March 12, 1985         1986, pages 58-61

 3(a)(2)  Certificate of Amendment to the         *Form 10 effective June 22,
          Certificate of Incorporation of the     1986, pages 62-65
          Registrant dated October 25, 1985

 3(a)(3)  Certificate of Amendment to the         *Form 10K dated December 31,
          Certificate of Incorporation of the     1988, pages 51-53
          Registrant dated August 22, 1986

 3(a)(4)  Certificate of Amendment to the         *Form S4, Registration No. 33-
          Certificate of Incorporation of the     27874
          Registrant dated March 20, 1989

 3(a)(5)  Certificate of Amendment to the         *Form 10KSB dated December 31,
          Certificate of Incorporation of the     1994, pages 273- 276
          Registrant dated May 9, 1994

 3(b)(1)  Bylaws of the Registrant,as amended     *Form 10K dated December 31,
                                                  1988, pages 54-68

 3(b)(2)  Amendment to the Bylaws of the          *Form 10Q dated March 31,
          Registrant                              1990, page 11

4         Certificate of Designations of the      *Form 8K dated December 31,
          Preferred Stock of the Registrant       1986, pages 23-31

10(a)(1)  1997 American Capitol Insurance         *Form 10KSB dated
          Company Key Employee Incentive Stock    December 31, 1997,pages 11-19
          Option Plan

10(a)(2)  Form of Grant of Stock Option used      *Form 10KSB dated
          in 1997 American Capitol Insurance      December 31, 1997 pages 20-25
          Company Key Employee Incentive Stock
          Option Plan

10(b)(1) Employment Contract between American     *Form 10QSB dated March 31,
          Capitol Insurance Company and John      1997, pages 13-26
          D. Cornett

10(b)(2)  Stock Purchase Agreement between        *Form 10QSB dated March 31,
          American Capitol Insurance Company      1997, pages 27-36
          and John D. Cornett

10(c)     Disability Income Agreement between     *Form 10KSB dated
          American Capitol Insurance Company      December 31, 1997,pages 26-29
          and William F. Guest

10(d)(1)  Reinsurance Agreement between           *Form 10KSB dated
          American Capitol Insurance Company      December 31,1993, pages 10-66
          and Crown Life Insurance Company
          effective December 31, 1992, as
          amended

10(d)(2)  Amendment dated June 30,1996 to         *Form 10KSB dated
          the Reinsurance Agreement between       December 31, 1996,pages 48-50
          American Capitol Insurance Company
          and Crown Life Insurance Company

10(e)(1)  Reinsurance Agreement effective         *Form 10KSB dated
          February 2, 1995 between Oakley-        December 31, 1994,
          Metcalf Insurance Company and           pages 213-260
          Alabama Reassurance Company

10(e)(2)  Amendment dated January 1, 1996         *Form 10KSB dated
          to the Reinsurance Agreement between    December 31, 1996,
          Oakley-Metcalf Insurance Company        pages 69-71
          and Alabama Reassurance Company

10(e)(3)  Amendment dated December 31, 1996       *Form 10KSB dated
          to the Reinsurance Agreement between    December 31, 1996, page 72
          Texas Imperial Life Insurance
          Company and Alabama Reassurance
          Company

10(f)     Loan Agreement and related documents    *Form 10KSB dated
          between Acap Corporation and Central    December 31, 1994,
          National Bank                           pages 261-272

10(g)     Liquidation Plan Regarding the          *Form 10QSB dated June 30,
          Insolvency and Liquidation of The       1999, pages 18-209
          Statesman National Life Insurance
          Company

10(h)     Coinsurance Agreement dated             *Form 10KSB dated
          January 1, 1998 between Universal       December 31 1997,
          Life Insurance Company and American     pages 75-128
          Capitol Insurance Company

10(i)     Amendments Letter dated February 27,    *Form 10KSB dated
          1998 amending the Coinsurance           December 31, 1997,
          Agreement between Universal Life        pages 129-132
          Insurance Company and American
          Capitol Insurance Company

10(j)     Closing Memorandum and Amendments       *Form 10KSB dated
          to the Coinsurance Agreement            December 31, 1997,
          between Universal Life Insurance        pages 133-135
          Company and American Capitol
          Insurance Company

10(k)     Coinsurance Agreement dated             *Form 10KSB dated
          January 1, 1998 between Republic-       December 31, 1997,
          Vanguard Life Insurance Company and     pages 154-176
          American Capitol Insurance Company

10(l)     Lease Agreement dated November 21,      *Form 10KSB dated
          1997 between Realtycorp International   December 31, 1997,
          Group LC and American Capitol           pages 177-227
          Insurance Company

11        Statement re computation of per         *1999 Annual Report to
          share earnings                          Stockholders, page 16

13        1999 Annual Report to Stockholders      Pages 11-46

22        Subsidiaries of the Registrant          Page 47

27        Financial Data Schedule                 Page 48

 _______________________________________________________
* Exhibit is incorporated by reference to the listed document.

(b)Reports on Form 8-K:

No reports on Form 8-K were filed in the last quarter of the year
ended December 31, 1999.


SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Acap Corporation

Date:  March 28, 2000

By:


      /s/ William F. Guest
     ---------------------
      William F. Guest
      Chairman of the Board


In accordance with the Exchange Act, this report has been signed
below by the
following persons on behalf of the registrant and in the
capacities and on the date
indicated.

Date:  March 28, 2000

By:


      /s/ William F. Guest                /s/ John D. Cornett
     --------------------------          ------------------------
     William F. Guest                    John D. Cornett
     Chairman of the Board, Director     Executive Vice President
        and President                         and Treasurer
     (Principal Executive Officer)      (Principal Financial and
                                              Accounting Officer)


     /s/ R. Wellington Daniels           /s/ C. Stratton Hill, Jr.
     ---------------------------         ---------------------------
     R. Wellington Daniels               C. Stratton Hill, Jr.
     Director                            Director


EXHIBIT 21


SUBSIDIARIES OF ACAP CORPORATION

Wholly owned subsidiary of Acap Corporation:

American Capitol Insurance Company (Texas)

Wholly owned subsidiaries of American Capitol Insurance Company:

Imperial Plan, Inc. (Texas)
Texas Imperial Life Insurance Company (Texas)