<PAGE>   1
================================================================================



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------


                                    FORM 10-Q



                QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


FOR THE QUARTER ENDED JUNE 30, 1997                  COMMISSION FILE NO. 1-12449


                               SCPIE HOLDINGS INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


<TABLE>
     <S>                                                <C>
                  DELAWARE                                   95-4457980
        (STATE OR OTHER JURISDICTION                      (I.R.S. EMPLOYER
     OF INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)
</TABLE>



<TABLE>
     <S>                                                <C>
       9441 WEST OLYMPIC BOULEVARD,                      90213
        BEVERLY HILLS, CALIFORNIA                      (ZIP CODE)
     (ADDRESS OF PRINCIPAL EXECUTIVE
                 OFFICES)
</TABLE>


               REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
                                 (310) 551-5900


        Indicate by check mark whether the Registrant (1) has filed all reports
    required to be filed by Section 13 or 15(d) of the Securities Exchange Act
    of 1934 during the preceding 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.


                             Yes   X         No
                                  ---           ---

    At August 8, 1997, the Registrant had issued and outstanding an aggregate of
12,794,652 shares of its Common Stock.



================================================================================

<PAGE>   2

                         PART I -- FINANCIAL INFORMATION

    ITEM 1.  FINANCIAL STATEMENTS

                               SCPIE HOLDINGS INC.

                                 BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                   JUNE  30,        DECEMBER 31,
                                                     1997               1996
                                                 -----------       -------------
                                                 (UNAUDITED)
<S>                                                <C>                <C>     
     ASSETS
Securities available-for-sale:
  Fixed maturity investments, at fair value
     (amortized cost 1997-- $686,480;          
     1996-- $660,820)..........................    $687,530           $668,367
  Equity investments, at fair value
    (cost 1997-- $15,793; 1996-- $15,555)......      20,440             19,977
                                                   --------           --------
          Total securities available for sale..     707,970            688,344
Short-term investments.........................      32,139             29,566
                                                   --------           --------
          Total investments....................     740,109            717,910
Cash...........................................       9,534              4,212
Accrued investment income......................      13,165             11,198
Reinsurance recoverables.......................      16,738             19,266
Deferred federal income taxes..................      22,687             20,221
Deferred policy acquisition costs..............         581                591
Property and equipment, net....................      19,450             19,084
Other assets...................................      17,135             12,673
                                                   --------           --------
          Total assets.........................    $839,399           $805,155
                                                   ========           ========

     LIABILITIES
Reserves:
  Losses and loss adjustment expenses..........    $461,309           $459,567
  Unearned premiums............................      24,751             25,297
                                                   --------           --------
          Total reserves.......................     486,060            484,864
Policyholders' dividends payable...............       2,944              7,723
Other liabilities..............................      14,622             24,001
                                                   --------           --------
          Total liabilities....................     503,626            516,588

Commitments and contingencies

    STOCKHOLDERS' EQUITY
Common stock, par value $.0001, 30,000,000
shares authorized, 12,794,652 shares issued,
12,294,652 shares outstanding..................           1                 --
Additional paid-in capital.....................      36,386                 --
Retained earnings..............................     295,683            280,788
Unrealized appreciation on securities
  available-for-sale, net of deferred taxes....       3,703              7,779
                                                   --------           --------

          Total stockholders' equity...........     335,773            288,567
                                                   --------           --------
          Total liabilities and                
            stockholders' equity...............    $839,399           $805,155
                                                   ========           ========

</TABLE>


                             See accompanying notes.



                                       2
<PAGE>   3

                               SCPIE HOLDINGS INC.

                              STATEMENTS OF INCOME
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED            SIX MONTHS ENDED
                                                       JUNE 30,                     JUNE 30,
                                                ----------------------       ----------------------
                                                   1997         1996           1997          1996
                                                --------      --------       --------      --------
<S>                                             <C>           <C>            <C>           <C>     
Revenues:
  Premiums earned ........................      $ 32,687      $ 29,623       $ 69,111      $ 61,128
  Net investment income ..................        10,637        10,378         21,209        20,939
  Realized investment gains (losses) .....         1,975        (1,308)         3,187        11,496
  Other revenue ..........................           150           124            289           124
                                                --------      --------       --------      --------
          Total revenues .................        45,449        38,817         93,796        93,687
Expenses:
  Losses and loss adjustment expenses ....        30,201        27,146         63,744        58,247
  Other operating expenses ...............         4,388         3,166          8,583         6,764
                                                --------      --------       --------      --------
          Total expenses .................        34,589        30,312         72,327        65,011
                                                --------      --------       --------      --------
Income before policyholders' dividends and
  federal income taxes (benefit) .........        10,860         8,505         21,469        28,676
Policyholders' dividends .................            --         9,000             --         9,000
Federal income taxes (benefit) ...........         2,856          (828)         5,344         5,599
                                                --------      --------       --------      --------
          Net income .....................      $  8,004      $    333       $ 16,125      $ 14,077
                                                ========      ========       ========      ========

Net  earnings per share of common stock ..      $   0.65      $   0.03       $   1.35      $   1.41
                                                ========      ========       ========      ========
Cash dividend declared per
  share of common stock ..................      $   0.05      $     --       $   0.10      $     --
</TABLE>



                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               UNREALIZED
                                                 ADDITIONAL                   APPRECIATION         TOTAL
                                     COMMON        PAID-IN      RETAINED      (DEPRECIATION)    STOCKHOLDERS'
                                     STOCK        CAPITAL       EARNINGS      OF INVESTMENTS       EQUITY
                                   ---------     ---------     ---------      --------------    ------------
<S>                                <C>           <C>           <C>            <C>               <C>
BALANCE AT JANUARY 1, 1997 ......        $--     $      --     $ 280,788         $   7,779       $ 288,567  
   Net income ...................         --            --        16,125                --          16,125  
   Issuance of common stock .....          1        36,386            --                --          36,387  
   Cash dividend ................         --            --        (1,230)               --          (1,230) 
   Net unrealized depreciation ..         --            --            --            (4,076)         (4,076) 
                                   ---------     ---------     ---------         ---------       ---------  
BALANCE AT JUNE 30, 1997 ........  $       1     $  36,386     $ 295,683         $   3,703       $ 335,773  
                                   =========     =========     =========         =========       =========  
</TABLE>

                             See accompanying notes.



                                       3
<PAGE>   4

                               SCPIE HOLDINGS INC.

                            STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED                SIX MONTHS ENDED
                                                                         JUNE 30,                         JUNE 30,
                                                                 -------------------------        -------------------------
                                                                   1997             1996            1997             1996
                                                                 --------        ---------        --------        ---------
       <S>                                                       <C>             <C>              <C>             <C>      
      OPERATING ACTIVITIES
      Net income............................................     $  8,004        $     333        $ 16,125        $  14,077
      Adjustments  to reconcile  net income to net cash
      provided by (used in) operating  activities:
        Unpaid losses and loss adjustment expenses, and
          reinsurance recoverables..........................        1,481            3,299           4,268            5,689
        Accrued investment income...........................       (3,078)            (662)         (1,967)          (1,135)
        Provision for deferred federal income taxes.........          (21)            (261)           (134)            (446)
        Unearned premiums...................................         (275)           2,473            (546)           2,713
        Policyholders' dividends payable....................       (2,377)           6,651          (4,779)           4,305
        Realized investments (gains) losses.................       (1,975)           1,308          (3,187)         (11,496)
        Provisions for amortization and depreciation........          857              (55)          1,452              933
        Changes in other liabilities........................         (685)         (15,758)         (3,551)            (970)
        Changes in other assets.............................        2,489           (6,454)         (4,587)           5,780
                                                                 --------        ----------       --------        ---------
                Net cash provided by (used in)  operating   
                  Activities................................        4,420           (9,126)          3,094           19,450

      INVESTING ACTIVITIES
         Purchases-- fixed maturities.......................     (101,288)        (139,765)       (198,483)        (298,305)
         Sales-- fixed maturities...........................       80,666          137,732         161,285          211,974
         Maturities-- fixed maturities......................        3,006            8,244           4,224            9,476
         Purchases-- equities...............................       (1,648)          (1,672)         (4,340)            (569)
         Sales-- equities...................................        5,085            1,545           6,958           47,421
         Change in short-term investments, net..............       11,794            4,566          (2,573)          14,048
                                                                 --------        ---------        --------        ---------
                Net cash provided by (used in) investing    
                  Activities................................       (2,385)          10,650         (32,929)         (15,955)
                                                                 --------        ---------        --------        ---------

      FINANCING ACTIVITIES
         Issuance of common stock, net of expenses..........           --               --          36,387               --
         Cash dividends.....................................         (615)              --          (1,230)              --
                                                                 --------        ---------        --------        ---------
                Net cash provided by (used in) financing             (615)              --          35,157               --
                                                                 ---------       ---------        --------        ---------
      activities............................................
      Increase in cash......................................        1,420            1,524           5,322            3,495

      Cash at beginning of period...........................        8,114            5,024           4,212            3,053
                                                                 --------        ---------        --------        ---------
      Cash at end of period.................................     $  9,534        $   6,548        $  9,534        $   6,548
                                                                 ========        =========        ========        =========
</TABLE>

                             See accompanying notes.



                                       4
<PAGE>   5

                               SCPIE HOLDINGS INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                  JUNE 30, 1997

1. BASIS OF PRESENTATION AND REORGANIZATION

Basis of Presentation

    The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six-month period ended June 30, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to the financial
statements and footnotes thereto included in SCPIE Holdings Inc.'s annual report
on Form 10-K for the year ended December 31, 1996.

    The accompanying June 30, 1997 consolidated financial statements include the
accounts and operations, after intercompany eliminations, of SCPIE Holdings Inc.
(SCPIE Holdings) and its wholly-owned subsidiaries, principally SCPIE Indemnity
Company (SCPIE Indemnity), American Healthcare Indemnity Company (AHI), American
Healthcare Specialty Insurance Company (AHSIC) and SCPIE Management Company
(SMC), collectively, the Company.

    The June 30, 1996 financial statements have been combined using the
consolidated balance sheets and results of operations of the Southern California
Physicians Insurance Exchange (the Exchange) and the Organization of Southern
California Physicians, Inc. (OSCAP). All transactions between the Exchange and
OSCAP have been eliminated in the preparation of the combined financial
statements.

    Financial statements for December 31, 1996 represent the consolidated
financial statements of the Exchange and its wholly-owned subsidiaries, SCPIE
Holdings, SCPIE Indemnity, AHI, AHSIC and SMC. All material intercompany
transactions have been eliminated.

    On March 21, 1996, the Board of Governors of the Exchange adopted a Plan and
Agreement of Merger (the Merger Agreement) for the Exchange to reorganize from a
reciprocal insurer to a stock insurance company and become a wholly owned
subsidiary of SCPIE Holdings (the Reorganization). On January 29, 1997, the
Exchange consummated the Reorganization. Pursuant to the Reorganization, the
Exchange merged with and into SCPIE Indemnity, a newly organized California
stock insurer that was the surviving corporation of the Reorganization. The
assets and liabilities of the Exchange were merged into SCPIE Indemnity and
accounted for at historical cost in a manner similar to that in a pooling of
interests. SCPIE Indemnity is licensed to write property and casualty insurance
lines in the state of California, but did not conduct business prior to the
Reorganization. On July 12, 1996, OSCAP was liquidated into the Exchange and SMC
and its subsidiaries became subsidiaries of the Exchange.

    The principal purpose of the Reorganization was to improve SCPIE's access to
the capital markets and to raise capital to permit the growth of existing
business and develop new business opportunities in the professional liability
insurance industry. The Reorganization also provided members of the Exchange
with shares of common stock in exchange for their membership interests in the
Exchange.

    Concurrent with the Reorganization, SCPIE Holdings completed an initial
public offering which generated net proceeds to SCPIE Holdings of approximately
$36.4 million.

2. EARNINGS PER SHARE

    Earnings per share for the three and six month periods ended June 30, 1997
is computed using the weighted average number of common shares outstanding
during the period of 12,294,652 and 11,927,001, respectively. Earnings per share
for the three and six month periods ended June 30, 1996 gives effect to the
Reorganization and the allocation of 10,000,000 common shares to eligible
members of the Exchange.

3. NEW ACCOUNTING STANDARD

    In February 1997, the Financial Accounting Standards Board issued Statement
No. 128 (FASB 128) "Earnings Per Share" which is effective for periods ending
after December 15, 1997. Under FASB 128, primary earnings per share will be
replaced by basic earnings per share. Fully diluted shares would not change
significantly but would be renamed diluted earnings per share. All previously
recorded earnings per share amounts will be required to be restated to conform
to the new standard. The Company does not expect that the adoption of this
accounting standard will have any impact on its 1997 earnings per share amounts.



                                       5
<PAGE>   6

4. INVESTMENTS

    The Company's investments in available-for-sale securities at June 30, 1997
are summarized as follows:

<TABLE>
<CAPTION>
                                                 COST OR        GROSS           GROSS
                                                AMORTIZED    UNREALIZED      UNREALIZED
                                                  COST          GAINS          LOSSES       FAIR VALUE
                                                ---------    ---------       ----------     ----------
                                                                   (IN THOUSANDS)
    <S>                                         <C>            <C>             <C>           <C>     
    Fixed-maturity securities:
       Bonds:
          U. S. Government and Agencies ......  $266,327       $ 3,159         $ 2,604       $266,882
          State, Municipalities and
            Political Subdivisions ...........   320,281         3,206           2,486        321,001
         Mortgage-backed securities,     
          U.S. Government ....................    89,765           624             849         89,540
          Corporate ..........................    10,007            --              --         10,007
          Other ..............................       100            --              --            100
                                                --------       -------         -------       --------
    Total fixed-maturity securities ..........   686,480         6,989           5,939        687,530
    Equity securities ........................    15,793         4,963             316         20,440
                                                --------       -------         -------       --------
    Total ....................................  $702,273       $11,952         $ 6,255       $707,970
                                                ========       =======         =======       ========
</TABLE>


5. FEDERAL INCOME TAXES

    The components of the federal income tax provision in the accompanying
statements of income are summarized as follows:

<TABLE>
<CAPTION>
                                           SIX MONTHS ENDED
                                               JUNE 30,
                                        ----------------------
                                         1997            1996
                                        ------           -----
                                           (IN THOUSANDS)
<S>                                     <C>              <C>   
Current .............................   $5,478           $6,045
Deferred ............................     (134)            (446)
                                        ------           ------
Total ...............................   $5,344           $5,599
                                        ======           ======
</TABLE>

    A reconciliation of income tax computed at the federal statutory tax rate to
total income tax expense is as follows:

<TABLE>
<CAPTION>
                                                    SIX MONTHS ENDED
                                                        JUNE 30,
                                                   1997           1996
                                                  -------        ------
                                                     (IN THOUSANDS)
         <S>                                      <C>            <C>   
         Federal income tax at 35% ...........    $ 7,514        $6,887
         Increase (decrease) in taxes
          resulting from:
            Tax-exempt interest ..............     (2,241)       (1,276)
            Dividends received deduction .....        (63)          (96)
            Goodwill .........................         98            --
            Other ............................         36            84
                                                  -------        ------
         Total ...............................    $ 5,344        $5,599
                                                  =======        ======
</TABLE>

6. COMMITMENTS AND CONTINGENCIES

    The Company is a defendant in an action brought by the bankruptcy estate of
an uninsured physician. The bankruptcy estate alleged that the Company had an
undisclosed conflict of interest when it provided the physician with a free
courtesy defense by an attorney who had represented the interests of the
Company's insureds in other cases. The punitive damages rendered by the jury
were reduced to $14,000,000 by the trial judge. The Company believes that the
action is entirely without merit and plans to aggressively pursue its rights on
appeal. However, the ultimate resolution of this matter cannot be determined at
this time and could result in a loss to the Company.

    Since 1981, the Company has purchased annuities from life insurance
companies to fund obligations under structured settlement agreements with
certain medical malpractice claimants. Annuities having an aggregate purchase
price of approximately $12,294,000 were purchased from Executive Life Insurance
Company (ELIC) which was placed in conservatorship during 1991 by the California
Insurance Commissioner. Substantially all of the assets of ELIC have been
transferred to another insurer, which has assumed the restructured annuities and
is obligated to pay varying percentages of the original annuity benefits as they
become due. The Company has determined that it is contractually obligated for
the shortfall amounts under certain of these annuities. At December 31, 1996, a
reserve of $4,000,000 (net of expected reinsurance recoveries of $3,036,000) has
been recorded to cover these expected shortfall payments. The Company believes
that the amount of its obligations in excess of the existing reserves, if any,
is not material to its financial position or results of operations.

    The Company is named as defendant in various legal actions primarily arising
from claims made under insurance policies and contracts. These actions are
considered by the Company in estimating the loss and loss adjustment expense
reserves. The Company's management believes that the resolution of these actions
will not have a material adverse effect on the Company's financial position or
results of operations.



                                       6
<PAGE>   7

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

    For purposes of this Quarterly Report on Form 10-Q, the terms "SCPIE" and
the "Company" refer, at all times prior to January 29, 1997, to Southern
California Physicians Insurance Exchange (the "Exchange") and its subsidiaries,
collectively, and at all times on or after such date, to SCPIE Holdings Inc. and
its subsidiaries, collectively; and the term "SCPIE Holdings" refers at all
times to SCPIE Holdings Inc., excluding its subsidiaries. The offering of the
common stock of SCPIE Holdings is referred to herein as the "Offering" and was
consummated on January 29, 1997.

GENERAL

    On January 29, 1997, SCPIE consummated its reorganization from a reciprocal
insurance company to a stock insurance company by merging with and into SCPIE
Indemnity Company (the "Reorganization"). In connection with the Reorganization,
9,994,652 shares of the Company's common stock were issued to members of the
Exchange in exchange for their membership interests in SCPIE, and 500,000 shares
of common stock were issued to SCPIE Indemnity Company.

    On January 30, 1997, the Company engaged in an initial public offering of
2,300,000 shares of its Common Stock. $.0001 par value, pursuant to a
Registration Statement on Form S-1 declared effective by the Securities and
Exchange Commission ("SEC") on January 29, 1997. The principal purpose of the
Offering was to improve the Company's access to the capital markets and to raise
capital to permit the growth of existing business and develop new business
opportunities in the professional liability insurance industry. The net proceeds
of the Offering are being used to capitalize the Company's insurance company
subsidiaries to facilitate geographic expansion, and for general corporate
purposes.

    Certain statements in this report on Form 10-Q that are not historical fact
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results of the Company to be materially different from historical
results or from any results expressed or implied by such forward-looking
statements. Such risks, uncertainties and other factors include, but are not
limited to, the Company's concentration of business in a single line in a single
state; the Company's current reliance on a single broker for hospital business
and termination of this relationship as of October 1, 1997; competition and
other industry factors, including uncertainties inherent in the estimate of loss
and loss adjustment expense reserves, reinsurance, importance of ratings,
regulatory matters, and changes in health care; and certain structural matters,
including the Company's holding company structure and anti-takeover measures.
These risks and uncertainties are discussed in more detail under "Business --
Risk Factors," and "Management's Discussion and Analysis -- General" in the
Company's registration statement on Form 10-K for the fiscal year 1996, filed
with the SEC on March 28, 1997.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996

    Premiums Earned. Premiums earned increased approximately $3.1 million, or
10.3%, to $32.7 million for the three months ended June 30, 1997 from $29.6
million for the same period in 1996. The increase was principally due to a $3.0
million increase in hospital medical malpractice insurance premiums. Medical
malpractice premiums from physicians and medical groups were approximately $27.3
million for the three months ended June 30, 1997 compared to $28.0 million for
the same period in 1996. An average 5.0% increase in premium rates in effect
during the 1997 period was offset by a 5.2% decrease in the average number of
policies in force during the 1997 period as compared to the 1996 period.
Hospital medical malpractice premiums were approximately $3.6 million for the
three months ended June 30, 1997 compared to $0.6 million for the same period in
1996. Assumed reinsurance premiums were approximately $1.6 million for the three
months ended June 30, 1997 compared to $0.9 million for the same period in 1996.

    Net Investment Income. Net investment income increased approximately $0.2
million, or 2.5%, to $10.6 million for the three months ended June 30, 1997 from
$10.4 million for the same period in 1996. Average invested assets increased to
$735.1 million during the three months ended June 30, 1997 compared to $696.7
million for the same period in 1996.

    Realized Investment Gains and Other Revenue. Realized investment gains were
approximately $2.0 million for the three months ended June 30, 1997 compared to
a realized loss of $1.3 million for the same period in 1996.

    Losses and LAE. Losses and LAE increased $3.1 million, or 11.3%, to $30.2
million for the three months ended June 30, 1997 from $27.1 million for the same
period in 1996. As a percentage of premiums earned, losses and LAE increased to
92.4% for the three months ended June 30, 1997 from 91.6% for the same period in
1996. For the three months ended June 30, 1997, the Company reduced loss and LAE
reserves incurred in prior policy years approximately $12.0 million as compared
to a reserve reduction of $13.7 million for the same period in 1996 for claims
incurred in prior policy years.

    Other Operating Expenses. Other operating expenses increased $1.2 million,
or 38.6%, to $4.4 million for the three months ended June 30, 1997 from $3.2
million for the same period in 1996. This increase was principally attributable
to increases in policy acquisition expenses of $0.1 million, insurance
department licenses and fees of $0.1 million and legal and consulting expenses
of $0.5 million. The ratio of other operating expenses to premiums earned is
referred to as the expense ratio, which was 13.4% for the three months ended
June 30, 1997 and 10.7% for the same period in 1996.

    Policyholders' Dividends. In the second quarter of 1996, the Board of
Governors declared a final dividend of $9.0 million to members of the Exchange.
Such dividend will be paid principally in the form of premium credits during
1997. This dividend is reflected as an expense during the three months ended
June 30, 1996.

                                       7
<PAGE>   8

    Federal Income Taxes. Federal income tax expense increased $3.7 million, to
$2.9 million for the three months ended June 30, 1997 from a benefit of $.8
million for the same period in 1996. The effective tax rate is 26.3% for the
three months ended June 30, 1997. A benefit resulted during the three months
ended June 30, 1996 due to the final policyholders' dividend accrual that
reduced taxable income by $9.0 million.

SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

    Premiums Earned. Premiums earned increased approximately $8.0 million, or
13.1%, to $69.1 million for the six months ended June 30, 1997 from $61.1
million for the same period in 1996. The increase was principally due to a $7.3
million increase in hospital medical malpractice insurance premiums. Medical
malpractice premiums from physicians and medical groups were approximately $57.6
million for the six months ended June 30, 1997 compared to $58.3 million for the
same period in 1996. An average 5.0% increase in premium rates in effect during
the 1997 period was offset by a 4.6% decrease in the average number of policies
in force during the 1997 period as compared to the 1996 period. Hospital medical
malpractice premiums were approximately $8.1 million for the six months ended
June 30, 1997 compared to $0.8 million for the same period in 1996. Assumed
reinsurance premiums were approximately $2.9 million for the six months ended
June 30, 1997 compared to $1.6 million for the same period in 1996.

    Net Investment Income. Net investment income increased approximately $0.3
million, or 1.3%, to $21.2 million for the six months ended June 30, 1997 from
$20.9 million and for the same period in 1996. Average invested assets increased
to $724.7 million during the six months ended June 30, 1997 compared to $680.8
million for the same period in 1996. The average pre-tax yield on the investment
portfolio declined to 5.9% for the six months ended June 30, 1997 compared to
6.3% for the same period in 1996 due to a greater percentage of the portfolio
held in 1997 in lower yielding tax-exempt securities.

    Realized Investment Gains and Other Revenue. Realized investment gains were
approximately $3.2 million for the six months ended June 30, 1997 compared to
$11.5 million for the same period in 1996. Approximately $10.0 million of the
gains from 1996 resulted from the sale of equity securities in connection with
the Company's decision in the first quarter to increase the focus of its
investment portfolio on fixed maturity securities. The remainder was
attributable to sales made in the fixed maturity portion of the investment
portfolio to take advantage of more favorable yields or to reposition the
maturity of the portfolio.

    Losses and LAE. Losses and LAE increased $5.5 million, or 9.4%, to $63.7
million for the six months ended June 30, 1997 from $58.2 million for the same
period in 1996. As a percentage of premiums earned, losses and LAE decreased to
92.2% for the six months ended June 30, 1997 from 95.3% for the same period in
1996. For the six months ended June 30, 1997, the Company reduced loss and LAE
reserves incurred in prior policy years approximately $27.0 million as compared
to a reserve reduction of approximately $27.9 million in loss and LAE reserves
for the six months ended June 30, 1996 for claims incurred in prior policy
years.

    Other Operating Expenses. Other operating expenses increased $1.8 million,
or 26.9%, to $8.6 million for the six months ended June 30, 1997 from $6.8
million for the same period in 1996. This increase was principally attributable
to increases in policy acquisition expenses of $0.7 million, legal and
consulting expenses of $0.5 million and insurance department licenses and fees
of $0.1 million. The expense ratio was 12.4% for the six months ended June 30,
1997 and 11.1% for the same period in 1996.

    Policyholders' Dividends. During 1996, the Board of Governors declared a
final dividend of $9.0 million to members of the Exchange. Such dividend will be
paid principally in the form of premium credits during 1997. This dividend is
reflected as an expense for the six months ended June 30, 1996.

    Federal Income Taxes. Federal income taxes decreased $0.3 million, or 4.6%,
to $5.3 million for the six months ended June 30, 1997 from $5.6 million for the
same period in 1996. The effective tax rate decreased to 25.0% for the six
months ended June 30, 1997 from 28.5% for the same period in 1996, due primarily
to an increase in tax-exempt interest and lower realized investment gains for
the six months ended June 30, 1997.

LIQUIDITY AND CAPITAL RESOURCES

    The primary sources of the Company's liquidity are insurance premiums, net
investment income, recoveries from reinsurers and proceeds from the maturity or
sale of invested assets. Funds are used to pay claims, LAE, operating expenses,
reinsurance premiums and taxes. SCPIE has also paid significant dividends, in
the form of premium credits, to its members in each year since 1980. SCPIE paid
$9.9 million, $9.5 million and $11.2 million of such dividends during the years
ended December 31, 1996, 1995 and 1994, respectively, and $2.4 million during
the first six months of 1997. The Board of Governors declared a final dividend
in 1996 to members of the Exchange of $9.0 million, which will be paid
principally in the form of premium credits during 1997. Except for this final
dividend, after the Reorganization, the Company will cease paying such premium
credit dividends to its policyholders.

    The Company has consistently experienced positive cash flow from operations.
Because of uncertainty related to the timing of the payment of claims, cash from
operations for a property and casualty insurance company can vary substantially
from period to period. Cash provided by operating activities for the Company,
before the payment of dividends to policyholders, was $39.8 million in 1996, an
increase of $18.8 million compared to 1995. The higher amount of cash flow from
operations in 1996 was due to a refund of federal income tax and interest of
$25.9 million in settlement of a tax dispute for the 1985 through 1988 tax
years. During the first six months of 1997, the cash provided by operating
activities for the Company was $3.1 million.

    The Company invests its positive cash flow from operations in both fixed
maturity securities and equity securities. A change in SCPIE's investment
philosophy in 1993 resulted in an increase in the purchase of equity securities
and a reduction in the purchase of fixed maturity securities. The Company's
current policy is to limit its investment in equity securities and real estate
to no more than 8.0% of the total market value of its investments. Accordingly,

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SCPIE's portfolio of unaffiliated equity securities was reduced from $61.1
million at December 31, 1995 to $20.4 million at June 30, 1997. The Company
plans to continue this focus on fixed maturity securities investments for the
indefinite future. The Company has made limited investments in real estate,
which is used almost entirely in the Company's operating activities, with the
remainder leased to third parties.

    The Company maintains a portion of its investment portfolio in high quality,
short-term securities to meet short-term operating liquidity requirements,
including the payment of losses and LAE. Short-term investments totaled $32.1
million, or 4.3% of invested assets, at June 30, 1997. The Company believes that
all of its short-term and fixed maturity securities are readily marketable.

    SCPIE Holdings is an insurance holding company whose assets consist of all
of the capital stock of its insurance subsidiaries and approximately $36.4
million of net proceeds from its January 1997 common stock offering, after
payment of expenses of the Reorganization. Of the proceeds, SCPIE has
contributed $25.0 million to one of its insurance company subsidiaries and has
contributed another $8.0 million to another insurance company subsidiary. Its
principal sources of funds will be dividends from its subsidiaries and proceeds
from the issuance of debt and equity securities. The insurance company
subsidiaries are restricted by state regulation in the amount of dividends they
can pay in relation to earnings or surplus, without the consent of the
applicable state regulatory authority, principally the California Department of
Insurance. SCPIE Holdings' principal insurance subsidiary may pay dividends to
SCPIE Holdings in any year, without regulatory approval, to the extent such
dividends do not exceed the greater of (i) 10% of its statutory surplus at the
end of the preceding year or (ii) its net income for the preceding year.
Applicable regulations further require that an insurer's statutory surplus
following a dividend or other distribution be reasonable in relation to its
outstanding liabilities and adequate to meet its financial needs, and permit the
payment of dividends only out of statutory earned (unassigned) surplus unless
the payment out of other funds is approved by the Insurance Commissioner. The
amount of dividends the insurance subsidiaries are able to pay to SCPIE Holdings
during 1997 without prior regulatory approval is approximately $32.7 million.
Dividends of $20.0 million were paid during the first six months of 1997.

    The Company is seeking to obtain a new bank facility in the principal amount
of approximately $50.0 million from a large lender. The Company expects that
this facility will be an unsecured revolving line of credit to be used by the
Company for general corporate purposes. There can be no assurance that the
Company will be able to obtain this new bank facility, or any bank facility, on
terms that are satisfactory to the Company.

    Based on historical trends, market conditions and its business plans, the
Company believes that its sources of funds will be sufficient to meet its
liquidity needs over the next 18 months and beyond. However, because economic,
market and regulatory conditions may change, there can be no assurance that the
Company's sources of funds will be sufficient to meet these liquidity needs. The
short- and long-term liquidity requirements of the Company may vary because of
the uncertainties regarding the settlement dates for unpaid claims.

    The Company has no planned material expenditures for property or equipment.

    During May 1997, the Board of Directors authorized the repurchase of up to
1,000,000 shares of its common stock in the open market. The repurchase may
begin at any time and continue until May 1998. No shares were repurchased during
the second quarter of 1997.


EFFECT OF INFLATION

    The primary effect of inflation on the Company is considered in pricing and
estimating reserves for unpaid losses and LAE for claims in which there is a
long period between reporting and settlement, such as medical malpractice
claims. The actual effect of inflation on the Company's results cannot be
accurately known until claims are ultimately settled. Based on actual results to
date, the Company believes that loss and LAE reserve levels and the Company's
ratemaking process adequately incorporate the effects of inflation.


                          PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

    For information regarding legal proceedings, see "Quarterly Report Under
Section 13 or 15(d) of the Securities Exchange Act of 1934 (Form 10-Q) for the
Quarter ended March 31, 1997," incorporated herein by this reference.

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

    At an Annual Meeting of Stockholders held on May 8, 1997, the following
individuals were reelected to the Board of Directors of the Company for a term
ending in 2000: Allan K. Briney, M.D. (7,286,647 votes for, 91,652 withheld
authority), Willis T. King, Jr. (7,287,269 votes for, 91,030 withheld
authority), Harriet M. Opfell, M.D. (7,284,479 votes for, 93,820 withheld
authority), and Reinhold A. Ullrich, M.D. (7,288,025 votes for, 90,274 withheld
authority).

    In addition, Ernst & Young LLP was reappointed as the independent accountant
of the Company for the fiscal year ending December 31, 1997. With respect to
this reappointment, 7,171,237 stockholders voted for ratification of this
appointment, 35,766 stockholders voted against, 171,296 stockholders abstained,
and no broker non-votes were received.

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<PAGE>   10

ITEM 5. OTHER INFORMATION

    In August 1995, SCPIE entered into a marketing agreement with Sullivan,
Kelly and Associates, Inc. ("SKA"), one of the leading insurance brokers of
hospital and large medical group coverages in the Western United States. Under
the agreement, SKA has the exclusive right to market SCPIE's malpractice
coverage for hospitals in all states, and SCPIE recognizes SKA as the exclusive
broker for medical group coverage in all states other than California.

    SKA and a large insurance group which terminated its relationship with SKA
last year are currently engaged in litigation in the California state court
regarding rights to certain insurance information and the ability to solicit
professional liability insurance from hospitals and medical groups currently
insured by the insurance group through SKA. On December 16, 1996, SKA filed for
bankruptcy in United States Bankruptcy Court, Central District of California,
resulting in an automatic stay of the suit between SKA and the large insurance
group. SKA and the large insurance group later stipulated to relief from the
automatic stay. The Company does not know what effect, if any, this litigation
or the termination of SKA by the insurance group will have on its efforts to
obtain hospital business currently underwritten by the insurance group.

    SCPIE has terminated its exclusive marketing agreement with SKA effective
October 1, 1997, and plans to actively market its hospital policies directly and
through others. In addition, SCPIE has submitted a bid to purchase certain
assets of SKA. A court decision regarding the transaction is expected in early
September 1997, at which time any other prospective purchasers will have the
opportunity to submit higher bids.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are included herewith.

27  Financial Data Schedule

(b) Not applicable.


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                                   SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                 SCPIE HOLDINGS INC.


Date:  August 13, 1997           By: /s/             PATRICK LO
                                     ------------------------------------------
                                                     Patrick Lo
                                     Vice President and Chief Financial Officer