##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
   Form 10-Q
   þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2007o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to    Commission File Number:
    000-32057
  American Physicians Capital,
    Inc.
 (Exact name of registrant as
    specified in its charter)
   Michigan(State or other jurisdiction
    of
    incorporation or organization)

38-3543910(IRS employer
    identification number)    1301
    North Hagadorn Road, East Lansing, Michigan 48823
 (Address of principal executive
    offices, including zip code)
   Registrants telephone number, including area code:
 (517) 351-1150
  þ o
  Rule 12b-2
  o þ o
  Rule 12b-2 o þ




---



##### 



TABLE OF
    CONTENTS
  PART I.  FINANCIAL
    INFORMATIONItem 1
.

Financial StatementsCondensed Consolidated Balance Sheets


3Condensed Consolidated Statements of Income


4Condensed Consolidated Statements of
    Shareholders Equity


5Condensed Consolidated Statements of
    Comprehensive Income


6Condensed Consolidated Statements of Cash
    Flows


7Notes to Condensed Consolidated Financial
    Statements


8Item 2
.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


11Item 3
.

Quantitative and Qualitative Disclosures About
    Market Risk


22Item 4
.

Controls and Procedures


23PART II.  OTHER INFORMATIONItem 1A
.

Risk Factors


24Item 2
.

Unregistered Sales of Equity Securities and Use
    of Proceeds


24Item 5
.

Other Information


25Item 6
.

Exhibits


25Signatures


26Exhibit Index


27Amendment No.2 to Stock Compensation Plan, dated October 25, 2007Form of Amendment No.1 to Form of Executive Employment AgreementAmendment No.1 to Incentive Compensation PlanCertification of Chief Executive Officer pursuant to Rule 13a-14(a)Certification of Chief Financial Officer pursuant to Rule 13a-14(a)Certification of Chief Executive Officer and Chief Financial Officer pusuant to U.S.C. Section 1350   2




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION
  ITEM 1.
    FINANCIAL
    STATEMENTS  AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed
    Consolidated Balance Sheets
  September 30,


December 31,2007


2006(Unaudited)(In thousands, exceptshare data)ASSETSInvestments:Fixed-income securitiesAvailable-for-sale, at fair value

$
279,066


$
255,001Held-to-maturity, at amortized cost


498,940



505,572Other investments


12,180



6,476Total investments


790,186



767,049Cash and cash equivalents


81,525



108,227Premiums receivable


41,342



43,068Reinsurance recoverable


111,573



109,013Deferred federal income taxes


26,643



32,795Property and equipment, net of accumulated depreciation


11,950



9,775Other assets


24,327



25,888Total assets

$
1,087,546


$
1,095,815LIABILITIESUnpaid losses and loss adjustment expenses

$
680,096


$
688,031Unearned premiums


68,744



70,744Long-term debt


30,928



30,928Federal income taxes payable


2,737



189Other liabilities


34,202



37,113Total liabilities


816,707



827,005Commitments & ContingenciesShareholders EquityCommon stock, no par value, 50,000,000 shares authorized:
    10,575,799 and 11,556,575 shares outstanding at
    September 30, 2007 and December 31, 2006, respectively






Additional
    paid-in-capital


4,348



41,106Retained earnings


261,992



222,935Accumulated other comprehensive income:Net unrealized appreciation on investments, net of deferred
    federal income taxes


4,499



4,769Total shareholders equity


270,839



268,810Total liabilities and shareholders equity

$
1,087,546


$
1,095,815    3




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed Consolidated Statements of Income
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(Unaudited)(In thousands, except per share data)Net premiums written

$
43,626


$
48,304


$
105,487


$
117,351Change in net unearned premiums


(8,110
)


(10,532
)


(43
)


(4,716
)Net premiums earned


35,516



37,772



105,444



112,635Investment income


10,737



11,338



33,066



34,010Net realized (losses) gains


(73
)


100



(139
)


1,448Other income


186



198



574



825Total revenues and other income


46,366



49,408



138,945



148,918Losses and loss adjustment expenses


18,233



24,547



53,511



77,220Underwriting expenses


7,275



7,373



22,202



22,784Investment expenses


231



205



648



602Interest expense


796



786



2,351



2,258General and administrative expenses


333



302



1,028



988Other expenses


1



8



3



90Total expenses


26,869



33,221



79,743



103,942Income before federal income taxes


19,497



16,187



59,202



44,976Federal income tax expense


6,216



5,162



19,083



14,376Net income

$
13,281


$
11,025


$
40,119


$
30,600Net income  per common shareBasic

$
1.23


$
0.93


$
3.61


$
2.52Diluted

$
1.21


$
0.91


$
3.54


$
2.47Cash dividends declared per common share

$
0.10


$



$
0.10


$
    4




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed
    Consolidated Statements of Shareholders Equity
  AccumulatedAdditional





OtherShares


Paid-in


Retained


ComprehensiveOutstanding


Capital


Earnings


Income


Total(Unaudited)(In thousands, except share data)Balance, December 31, 2006


11,556,575


$
41,106


$
222,935


$
4,769


$
268,810Comprehensive income:Net income










40,119







40,119Other comprehensive loss














(270
)


(270
)Total comprehensive income, net of taxes


















39,849Options exercised


18,025



215











215Shares tendered/netted in connection with option exercise


(3,201
)


(122
)










(122
)Cash dividends to shareholders, $0.10 per share










(1,062
)






(1,062
)Excess tax benefits from share-based awards






320











320Fair value compensation of share-based awards






142











142Purchase and retirement of common stock


(995,600
)


(37,313
)










(37,313
)Balance, September 30, 2007


10,575,799


$
4,348


$
261,992


$
4,499


$
270,839   AccumulatedAdditional





OtherShares


Paid-in


Retained


ComprehensiveOutstanding(1)


Capital


Earnings


Income


Total(Unaudited)(In thousands, except share data)Balance, December 31, 2005


12,500,126


$
74,360


$
179,748


$
7,104


$
261,212Comprehensive income:Net income










30,600







30,600Other comprehensive income














68



68Total comprehensive income, net of taxes


















30,668Options exercised


78,600



760











760Shares tendered/netted in connection with option exercise


(8,289
)


(270
)










(270
)Excess tax benefits from share-based awards






700











700SFAS No. 123R adoption






(46
)










(46
)Fair value compensation of share-based awards






459











459Purchase and retirement of common stock


(884,700
)


(27,701
)










(27,701
)Forfeiture of restricted stock


(764
)














Balance, September 30, 2006


11,684,973


$
48,262


$
210,348


$
7,172


$
265,782     (1)
    
    Share amounts have been retroactively adjusted to reflect a
    three-for-two stock split effective November 1, 2006. See
    Note 2.   5




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed
    Consolidated Statements of Comprehensive Income
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(Unaudited)(In thousands)Net income

$
13,281


$
11,025


$
40,119


$
30,600Other comprehensive income (loss):Unrealized appreciation on available-for-sale investment
    securities arising during the period


2,920



5,826



361



1,082Amortization of net unrealized appreciation on held-to-maturity
    investment securities since the date of transfer from the
    available-for-sale category


(234
)


(272
)


(716
)


(829
)Adjustment for realized losses on investment securities included
    in net income










(60
)


(148
)Other comprehensive income (loss) before tax


2,686



5,554



(415
)


105Deferred federal income tax expense (benefit)


941



1,944



(145
)


37Other comprehensive income (loss)


1,745



3,610



(270
)


68Comprehensive income

$
15,026


$
14,635


$
39,849


$
30,668    6




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed Consolidated Statements of Cash
    Flows
  Nine Months EndedSeptember 30,2007


2006(Unaudited)(In thousands)Cash flows from (for) operating activitiesNet income

$
40,119


$
30,600Adjustments to reconcile net income to net cash from operating
    activities:Depreciation and amortization


2,256



2,240Net realized losses (gains)


139



(1,448
)Deferred federal income taxes


6,297



9,259Excess tax benefits from share-based awards


(320
)


(700
)Share-based compensation


142



459Income on equity method investees


(101
)


(1,001
)Changes in:Unpaid loss and loss adjustment expenses


(7,935
)


3,412Unearned premiums


(2,000
)


1,909Other assets and liabilities


836



(3,585
)Net cash from operating activities


39,433



41,145Cash flows from (for) investing activitiesPurchasesAvailable-for-sale  fixed income


(56,234
)


(126,979
)Held-to-maturity  fixed income


(5,312
)


(188,188
)Other investments


(5,901
)


(386
)Property and equipment


(2,981
)


(216
)Proceeds from sales and maturitiesAvailable-for-sale  fixed income


31,685



50,938Held-to-maturity  fixed income


10,325



22,514Other investments


375



2,485Property and equipment


22



6Deconsolidation of PIC-Florida






(2,941
)Pending securities transactions






5,285Net cash for investing activities


(28,021
)


(237,482
)Cash flows from (for) financing activitiesCommon stock repurchased


(37,313
)


(27,701
)Excess tax benefits from share-based awards


320



700Change in payable for shares repurchased


(152
)


295Cash dividends paid


(1,062
)


Proceeds from stock options exercised


93



490Net cash for financing activities


(38,114
)


(26,216
)Net decrease in cash and cash equivalents


(26,702
)


(222,553
)Cash and cash equivalents, beginning of period


108,227



272,988Cash and cash equivalents, end of period

$
81,525


$
50,435    7




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)
  1.
    Significant
    Accounting Policies  Basis
    of Consolidation and Reporting
    Form 10-Q Rule 10-01 Regulation S-X Form 10-Q
  Form 10-K
  Use of
    Estimates
      Software
    for Internal Use
  No. 98-1 (SOP 98-1), Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use. SOP 98-1,
 8




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  Nature
    of Business
    Reclassification
    2.
    Stock
    Split    3.
    Effects
    of New Accounting Pronouncements       9




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Notes to
    Condensed Consolidated Financial
    Statements  (Continued)
  4.
    Income
    Per Share    Three Months Ended September 30,


Nine Months Ended September 30,2007


2006


2007


2006(In thousands, except per share data)Numerator for basic and diluted income per common share:Net income

$
13,281


$
11,025


$
40,119


$
30,600Denominator:Denominator for basic income per common share 
    weighted average shares outstanding


10,801



11,796



11,124



12,123Effect of dilutive stock options and awards


214



266



215



267Denominator for diluted income per common share 
    adjusted weighted average shares outstanding


11,015



12,062



11,339



12,390Net income  basic

$
1.23


$
0.93


$
3.61


$
2.52Net income  diluted

$
1.21


$
0.91


$
3.54


$
2.47    10




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K
    Form 10-K
  
    Increased competition could adversely affect our ability to sell
    our products at premium rates we deem adequate, which may result
    in a decrease in premium volume, a decrease in our
    profitability, or both.
    Our reserves for unpaid losses and loss adjustment expenses are
    based on estimates that may prove to be inadequate to cover our
    losses.
    An interruption or change in current marketing and agency
    relationships could reduce the amount of premium we are able to
    write.
    If we are unable to obtain or collect on ceded reinsurance, our
    results of operations and financial condition may be adversely
    affected.
    Our geographic concentration in certain Midwestern states and
    New Mexico ties our performance to the business, economic,
    regulatory and legislative conditions in those states.
    A downgrade in the A.M. Best Company rating of our primary
    insurance subsidiaries could reduce the amount of business we
    are able to write.
    Changes in interest rates could adversely impact our results of
    operation, cash flows and financial condition.
    The unpredictability of court decisions could have a material
    impact on our operations.
    Our business could be adversely affected by the loss of one or
    more key employees.
    The insurance industry is subject to regulatory oversight that
    may impact the manner in which we operate our business, our
    ability to obtain future premium rate increases, the type and
    amount of our investments, the levels of capital and surplus
    deemed adequate to protect policyholder interests, or the
    ability of our insurance subsidiaries to pay dividends to the
    holding company.
    Our status as an insurance holding company with no direct
    operations could adversely affect our ability to meet our debt
    obligations and fund future share repurchases.
    Legislative or judicial changes in the tort system may have
    adverse or unintended consequences that could materially and
    adversely affect our results of operations and financial
    condition.
    Applicable law and various provisions in our articles and bylaws
    may prevent and discourage unsolicited attempts to acquire
    APCapital that you may believe are in your best interests or
    that might result in a substantial profit to you. 11




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##### Table of Contents



Overview
    of the Companys Operations
        Critical
    Accounting Policies
    Form 10-K
  Software
    for Internal Use
  No. 98-1 (SOP 98-1), Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use. SOP 98-1,
   12




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##### Table of Contents



Description
    of Ratios Analyzed
    GAAP Ratios
    and Other GAAP Financial Measures
    Accident
    Year Loss Ratio
   13




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##### Table of Contents



Results
    of Operations  Three and Nine Months Ended
    September 30, 2007 Compared to Three and Nine Months Ended
    September 30, 2006
      For the Three Months Ended September 30,Change2007


2006


Dollar


Percentage(Dollars in thousands)Direct premiums written

$
45,213


$
51,819


$
(6,606
)


(12.7
)%Net premiums written

$
43,626


$
48,304


$
(4,678
)


(9.7
)%Net premiums earned

$
35,516


$
37,772


$
(2,256
)


(6.0
)%Losses and loss adjustment expensesCurrent year losses


26,191



27,693



(1,502
)


(5.4
)%Prior year losses


(7,958
)


(3,146
)


(4,812
)


153.0
%Total


18,233



24,547



(6,314
)


(25.7
)%Underwriting expenses


7,275



7,373



(98
)


(1.3
)%Total underwriting gain


10,008



5,852



4,156



71.0
%Other revenue (expense) itemsInvestment income


10,737



11,338



(601
)


(5.3
)%Net realized (losses) gains


(73
)


100



(173
)


(173.0
)%Other income


186



198



(12
)


(6.1
)%Other expenses(1)


(1,361
)


(1,301
)


(60
)


4.6
%Total other revenue and expense items


9,489



10,335



(846
)


(8.2
)%Income before federal income taxes


19,497



16,187



3,310



20.4
%Federal income tax expense


6,216



5,162



1,054



20.4
%Net income

$
13,281


$
11,025


$
2,256



20.5
%Loss Ratio:Accident year


73.7
%


73.3
%






0.4
%Prior years


(22.4
)%


(8.3
)%






(14.1
)%Calendar year


51.3
%


65.0
%






(13.7
)%Underwriting expense ratio


20.5
%


19.5
%






1.0
%Combined ratio


71.8
%


84.5
%






(12.7
)%     (1)
    
    Other expenses includes investment expenses, interest expense,
    general and administrative expenses and other expenses as
    reported in the unaudited Condensed Consolidated Statements of
    Income included elsewhere in this report.  14




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##### Table of Contents



For the Nine Months Ended September 30,Change2007


2006


Dollar


Percentage(Dollars in thousands)Direct premiums written

$
109,362


$
125,742


$
(16,380
)


(13.0
)%Net premiums written

$
105,487


$
117,351


$
(11,864
)


(10.1
)%Net premiums earned

$
105,444


$
112,635


$
(7,191
)


(6.4
)%Losses and loss adjustment expensesCurrent year losses


78,632



85,352



(6,720
)


(7.9
)%Prior year losses


(25,121
)


(8,132
)


(16,989
)


208.9
%Total


53,511



77,220



(23,709
)


(30.7
)%Underwriting expenses


22,202



22,784



(582
)


(2.6
)%Total underwriting gain


29,731



12,631



17,100



135.4
%Other revenue (expense) itemsInvestment income


33,066



34,010



(944
)


(2.8
)%Net realized (losses) gains


(139
)


1,448



(1,587
)


(109.6
)%Other income


574



825



(251
)


(30.4
)%Other expenses(1)


(4,030
)


(3,938
)


(92
)


2.3
%Total other revenue and expense items


29,471



32,345



(2,874
)


(8.9
)%Income before federal income taxes


59,202



44,976



14,226



31.6
%Federal income tax expense


19,083



14,376



4,707



32.7
%Net income

$
40,119


$
30,600


$
9,519



31.1
%Loss Ratio:Accident year


74.5
%


75.8
%






(1.3
)%Prior years


(23.8
)%


(7.2
)%






(16.6
)%Calendar year


50.7
%


68.6
%






(17.9
)%Underwriting expense ratio


21.1
%


20.2
%






0.9
%Combined ratio


71.8
%


88.8
%






(17.0
)%     (1)
    
    Other expenses includes investment expenses, interest expense,
    general and administrative expenses and other expenses as
    reported in the unaudited Condensed Consolidated Statements of
    Income included elsewhere in this report.   15




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##### Table of Contents



Premiums
    Written and Earned
    For the Three Months Ended September 30,


For the Nine Months Ended September 30,Change








Change2007


2006


Dollar


Percentage


2007


2006


Dollar


Percentage(Dollars in thousands)


(Dollars in thousands)Direct premiums writtenMichigan

$
16,898


$
17,411


$
(513
)


(2.9
)%

$
36,312


$
36,739


$
(427
)


(1.2
)%Illinois


12,944



17,379



(4,435
)


(25.5
)%


30,281



42,190



(11,909
)


(28.2
)%Ohio


7,087



7,887



(800
)


(10.1
)%


21,138



22,965



(1,827
)


(8.0
)%New Mexico


5,842



6,124



(282
)


(4.6
)%


14,794



15,903



(1,109
)


(7.0
)%Kentucky


987



1,306



(319
)


(24.4
)%


4,343



5,091



(748
)


(14.7
)%Other


1,455



1,712



(257
)


(15.0
)%


2,494



2,868



(374
)


(13.0
)%Subtotal


45,213



51,819



(6,606
)


(12.7
)%


109,362



125,756



(16,394
)


(13.0
)%Exited lines of business






















(14
)


14



(100.0
)%Total

$
45,213


$
51,819


$
(6,606
)


(12.7
)%

$
109,362


$
125,742


$
(16,380
)


(13.0
)%            16




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##### Table of Contents



Loss
    and Loss Adjustment Expenses
          Underwriting
    Expenses
    Investment
    Income
   17




---



##### Table of Contents



Income
    Taxes
    Liquidity
    and Capital Resources
               18




---



##### Table of Contents



Financial
    Condition
    Statutory
    Capital and Surplus
    Reserves
    for Unpaid Losses and Loss Adjustment Expenses
   19




---



##### Table of Contents



September 30, 2007 versus


September 30, 2007 versusSeptember 30,


December 31,


September 30,


December 31, 2006


September 30, 20062007


2006


2006


Change


% Change


Change


% Change(In thousands, except claim and per claim data)Net case reserves

$
275,836


$
311,142


$
325,708


$
(35,306
)


(11.3
)%

$
(49,872
)


(15.3
)%Number of open claims


1,913



2,256



2,347



(343
)


(15.2
)%


(434
)


(18.5
)%Average net case reserve per open claim

$
144,190


$
137,918


$
138,776


$
6,272



4.5
%

$
5,414



3.9
%Net IBNR reserves

$
268,945


$
241,068


$
228,298


$
27,877



11.6
%

$
40,647



17.8
%Total net reserves

$
544,781


$
552,210


$
554,006


$
(7,429
)


(1.3
)%

$
(9,225
)


(1.7
)%            20




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##### Table of Contents



Nine Months Ended


Year EndedSeptember 30,


December 31, 2006Beginning balance, gross

$
688,031


$
689,857Less, reinsurance recoverables


107,965



107,692Net reserves, beginning balance


580,066



582,165Deconsolidation of PIC-FL






(2,418
)Incurred related toCurrent year


78,632



113,338Prior years


(25,121
)


(12,880
)53,511



100,458Paid related toCurrent year


1,474



3,168Prior years


62,345



96,97163,819



100,139Net reserves, ending balance


569,758



580,066Plus, reinsurance recoverables


110,338



107,965Ending balance, gross

$
680,096


$
688,031Development as a% of beginning net reserves


(4.3
)%


(2.2
)%   Other
    Significant Balance Sheet Items
     21




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##### Table of Contents



Contractual
    Obligations and Off-Balance Sheet Arrangements
  Form 10-K Form 10-Q,
    Effects
    of New Accounting Pronouncements
    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk  General
        Qualitative
    Information About Market Risk
   22




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##### Table of Contents



Quantitative
    Information About Market Risk
    September 30, 2007


December 31, 2006Portfolio


Change in


Modified


Portfolio


Change in


ModifiedChange in Rates

Value


Value


Duration


Value


Value


Duration(Dollars in thousands)


(Dollars in thousands)+2%

$
264,118


$
(14,948
)


2.78


$
239,943


$
(15,058
)


2.88+1%


271,525



(7,541
)


2.83



247,111



(7,890
)


2.890


279,066







3.06



255,001







3.16-1%


288,246



9,180



3.14



263,350



8,349



3.23-2%


297,431



18,365



3.21



272,152



17,151



3.33   Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Rule 13a-15(b).
  Changes
    in Internal Control Over Financial Reporting
   23




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##### Table of Contents



PART II.
    OTHER INFORMATION
  Item 1A.
    Risk
    Factors  Form 10-K
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Total NumberTotal





of Shares


Maximum Number (or Approximate Dollar Value) of Shares That
    May Yet BeNumber of


Average


Purchased as


Purchased Under the Plans or ProgramsShares


Price Paid


Part of Publicly


Discretionary


Discretionary


Rule 10b5-1Purchased


per Share


Announced Plans


Plan(a)


Plan(b)


Plan(c)For the month ended July 31, 2007


100,300


$
38.26



100,300



604



15,000,000



26,793,663For the month ended August 31, 2007


360,100


$
36.69



360,100







25,458,932



23,146,059For the month ended September 30, 2007


46,000


$
38.02



46,000







25,458,932



21,397,077For the three months ended September 30, 2007


506,400


$
37.12



506,400







25,458,932



21,397,077     (a)
    
    In November 2005, the Board of Directors authorized the purchase
    of an additional five percent of the Companys outstanding
    common shares, which represented approximately
    637,500 shares, at the discretion of management as part of
    a repurchase program that began March 30, 2001. This
    authorization brought the total number of shares authorized to
    be repurchased under the discretionary plan to 6,060,659. The
    remaining shares to be purchased under this authorization were
    repurchased in July 2007.(b)
    
    On May 22, 2007, the Board of Directors authorized
    management to repurchase, at managements discretion,
    additional common shares with a cost of up to $15 million
    in the open market or in privately negotiated transactions
    during the Companys normal trading windows. On
    August 16, 2007, the Board of Directors authorized the
    repurchase of an additional $20 million under the
    discretionary plan. The timing of the purchases and the number
    of shares to be bought at any time depend on market conditions
    and the Companys capital resources and requirements. The
    discretionary plan has no expiration date and may be terminated
    or discontinued at any time or from time to time.(c)
    
    On October 27, 2006, the Companys Board of Directors
    adopted an additional stock repurchase plan for 2007 under
    Rule 10b5-1
    and authorized an additional share repurchase of
    $32 million of its common shares. In addition, the Board
    authorized the rollover into the 2007 plan of any unused dollars
    allocated to the 2006
    10b5-1 plan,
    which equaled $6.4 million at December 31, 2006. The
    2007
    Rule 10b5-1
    plan share repurchases are made pursuant to a formula in the
    plan and are expected to continue until the entire
    authorizations are utilized, subject to conditions specified in
    the plan, but not later than December 31, 2007. The Company
    may terminate the plan at any time. On October 29, 2007,
    the Companys Board of Directors authorized the repurchase
    of an additional $20 million of its common shares in 2008
    pursuant to a plan under
    Rule 10b5-1.
    In addition, the Board authorized the rollover into the 2008
    Rule 10b5-1
    plan of any unused dollars allocated to the 2007
    Rule 10b5-1
    plan adopted by the Board in October 2006. 24




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##### Table of Contents



Item 5.
    Other
    Information  Form 10-Q
  Item 6.
    Exhibits  Exhibits.
   25




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##### Table of Contents



SIGNATURES
      By:
    /s/  R.
    Kevin Clinton     By:
    /s/  Frank
    H. Freund       26




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##### Table of Contents



EXHIBIT INDEX
  Exhibit No.

Exhibit Description10
.49

Amendment No. 2, dated October 25, 2007 to American
    Physicians Capital, Inc. Stock Compensation Plan.10
.50

Form of Amendment No. 1 to Form of Executive Employment
    Agreement dated February 23, 2005, by and between American
    Physicians Assurance Corporation and each of R. Kevin Clinton,
    Frank H. Freund and Annette E. Flood.10
.51

Amendment No. 1, dated October 25, 2007, to the
    Incentive Compensation Plan as of March 2007.31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.32


Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350 and
    Rule 13a-14(b)
    under the Securities Exchange Act of 1934.  27