<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 MARCH 31, 1998                 COMMISSION FILE NO. 1-12449


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


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



       9441 WEST OLYMPIC BOULEVARD                           90212
        BEVERLY HILLS, CALIFORNIA                          (ZIP CODE)
     (ADDRESS OF PRINCIPAL EXECUTIVE
                 OFFICE)


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


        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
                                   ---            ---

       Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
                  Class                                        Outstanding at May 14, 1998
                  -----                                        ---------------------------
       <S>                                                     <C>
       Common stock, $.0001 par value                                12,705,191 shares
</TABLE>


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

<PAGE>   2
                         PART I -- FINANCIAL INFORMATION

    ITEM 1.  FINANCIAL STATEMENTS

                      SCPIE HOLDINGS INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                        MARCH 31,      DECEMBER 31,
                                                                          1998            1997
                                                                      -----------      -----------
                                                                      (UNAUDITED)
                  <S>                                                 <C>              <C>
                       ASSETS
                  Securities available-for-sale:
                    Fixed-maturity investments, at fair value
                       (amortized cost 1998-- $721,958;  1997--         $737,429         $708,860
                  $692,811)
                    Equity investments, at fair value
                      (cost 1998-- $17,678; 1997-- $17,052)               23,671           23,523
                                                                        --------         --------
                            Total securities available-for-sale          761,100          732,383
                  Short-term investments                                  25,825           53,281
                                                                        --------         --------
                            Total investments                            786,925          785,664
                  Cash                                                    16,025           13,252
                  Accrued investment income                               11,064           12,202
                  Reinsurance recoverables                                22,344           21,531
                  Deferred federal income taxes                           15,149           16,158
                  Deferred policy acquisition costs                       10,267              520
                  Property and equipment, net                             19,598           19,534
                  Other assets                                            20,917           19,588
                                                                        --------         --------
                            Total assets                                $902,289         $888,449
                                                                        ========         ========

                       LIABILITIES
                  Reserves:
                    Losses and loss adjustment expenses                 $489,166         $454,971
                    Unearned premiums                                     26,124           22,072
                                                                        --------         --------
                            Total reserves                               515,290          477,043
                  Other liabilities                                       19,814           50,291
                                                                        --------         --------
                            Total liabilities                            535,104          527,334

                  Commitments and contingencies

                      STOCKHOLDERS' EQUITY
                  Preferred stock, par value $1.00, 5,000,000 shares
                    authorized, no shares issued or outstanding
                                                                              --               --
                  Common stock, par value $0.0001, 30,000,000
                    shares authorized, 12,792,091 shares issued    
                    shares outstanding 1998 - 12,220,891 and 1997 -            1                1
                    12,276,691
                  Additional paid-in capital                              36,386           36,386
                  Retained earnings                                      318,797          310,506
                  Treasury stock, at cost (71,200 shares)                 (1,950)            (416)
                  Accumulated other comprehensive income                  13,951           14,638
                                                                        --------         --------
                      Total stockholders' equity                         367,185          361,115
                                                                        --------         --------
                      Total liabilities and stockholders' equity        $902,289         $888,449
                                                                        ========         ========
</TABLE>


                             See accompanying notes.


                                       2

<PAGE>   3
                        CONSOLIDATED STATEMENTS OF INCOME
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED
                                                                                  MARCH 31,
                                                                                  ---------
                                                                           1998              1997
                                                                         --------          --------
                  <S>                                                    <C>               <C>
                  Revenues:                                            
                    Premiums earned                                      $ 39,686          $ 36,424
                    Net investment income                                  10,503            10,572
                    Realized investment gains                               2,320             1,212
                    Other revenue                                              38               139
                                                                         --------          --------
                            Total revenues                                 52,547            48,347

                  Expenses:                                            
                    Losses and loss adjustment expenses                    33,431            33,543
                    Other operating expenses                                7,099             4,195
                                                                         --------          --------
                            Total expenses                                 40,530           37,738
                                                                         --------          --------

                  Income before federal income taxes                       12,017            10,609
                  Federal income taxes                                      2,993             2,488
                                                                         --------          --------
                            Net income                                   $  9,024          $  8,121
                                                                         ========          ========
                                                                       
                  Basic earnings per share of common stock               $ 0.74            $ 0.70
                                                                         ======            ======
                                                                       
                  Diluted earnings per share of common stock             $ 0.74               N/A
                                                                          ======

                  Cash dividend declared per share of common stock       $ 0.06            $ 0.05
</TABLE>



            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                  ACCUMULATED
                                                        ADDITIONAL                                   OTHER             TOTAL
                                            COMMON        PAID-IN       RETAINED    TREASURY     COMPREHENSIVE     STOCKHOLDERS'
                                             STOCK        CAPITAL       EARNINGS      STOCK         INCOME            EQUITY
                                            ------      ----------      --------    --------     -------------     -------------
       <S>                                  <C>         <C>             <C>         <C>          <C>               <C>
       BALANCE AT JANUARY 1, 1998            $  1        $ 36,386       $310,506     $  (416)        $ 14,638        $ 361,115

          Comprehensive Income:
             Net income                        --              --          9,024          --               --            9,024
             Unrealized comprehensive
               income, net of                                                                            (687)            (687)
               reclassification                                                                                      ---------
               adjustment of $831 for
               realized gains included
               in net income of $1,518
           Comprehensive income                                                                                          8,337
                                                                                                                     =========

          Purchase of treasury stock           --              --             --      (1,534)              --           (1,534)
          Cash dividend                        --              --           (733)         --               --             (733)
                                             ----        --------       --------     --------        --------        ---------
       BALANCE AT MARCH 31, 1998             $  1        $ 36,386       $318,797     $(1,950)        $ 13,951        $ 367,185
                                             ====        ========       ========     ========        ========        =========
</TABLE>


                             See accompanying notes.


                                       3

<PAGE>   4
                      SCPIE HOLDINGS INC. AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED
                                                                                  MARCH 31,
                                                                                  ---------
                                                                          1998                1997
                                                                        --------            -------
<S>                                                                     <C>                 <C>    
      OPERATING ACTIVITIES
      Net income                                                        $  9,024            $ 8,121
      Adjustments to reconcile net income to net cash
        provided by (used in) operating activities:
         Unpaid losses and loss adjustment expenses, and
           reinsurance recoverables                                       33,382              2,787
         Accrued investment income                                         1,138              1,111
         Policy acquisition costs                                         (9,747)                (3)
         Provision for deferred federal income taxes                       1,379               (250)
         Unearned premiums                                                 4,052               (271)
         Policyholders' dividends payable                                     --             (2,402)
         Realized investments gains                                       (2,320)            (1,212)
         Provisions for amortization and depreciation                     (1,447)               595
         Accrued expenses and other liabilities                          (26,854)            (2,866)
         Changes in other assets                                          (1,329)            (6,936)
                                                                        --------            -------
                Net cash provided by (used in) operating activities        7,278             (1,326)
                                                                        --------            -------

      INVESTING ACTIVITIES
         Purchases--fixed maturities                                    (109,602)           (97,195)
         Sales - fixed maturities                                         62,943             80,619
         Maturities-- fixed maturities                                    15,862              1,218
         Purchases -- equities                                            (1,915)            (2,692)
         Sales - equities                                                  3,018              1,873
         Changes in short-term investments                                27,456            (14,367)
                                                                        --------            -------
                Net cash used in investing activities                     (2,238)           (30,544)
                                                                        --------            -------

      FINANCING ACTIVITIES
         Issuance of common stock, net of expenses                            --             36,387
         Purchase of treasury stock                                       (1,534)
         Cash dividends                                                     (733)              (615)
                                                                        --------            -------
                Net cash provided by (used in) financing activities       (2,267)            35,772
                                                                        --------            -------

      Increase in cash                                                     2,773             3,902

      Cash at beginning of period                                         13,252              4,212
                                                                        --------            -------
      Cash at end of period                                             $ 16,025            $ 8,114
                                                                        ========            =======
</TABLE>

                             See accompanying notes.


                                       4

<PAGE>   5
                      SCPIE HOLDINGS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 1998

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 three-month period ended March 31, 1998
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1998. For further information, refer to the consolidated
financial statements and notes thereto included in SCPIE Holdings Inc.'s annual
report on Form 10-K for the year ended December 31, 1997.

    The accompanying March 31, 1998 and 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.

    On January 29, 1997, the Southern California Physicians Insurance Exchange
(the Exchange) consummated its plan and agreement of merger whereby the Exchange
reorganized from a reciprocal insurer to a stock insurance company and became a
wholly-owned subsidiary of SCPIE Holdings. Pursuant to the Reorganization, the
Exchange merged with and into SCPIE Indemnity, a California stock company and a
wholly-owned subsidiary of SCPIE Holdings, the surviving corporation of the
Reorganization. The assets and liabilities of the Exchange that were merged into
SCPIE Indemnity were accounted for at historical cost in a manner similar to
that in a pooling of interests.

    The principal purpose of the Reorganization 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 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.

    Certain 1997 amounts have been reclassified to conform to the 1998
presentation.

2. EARNINGS PER SHARE

    Basic earnings per share for the periods ended March 31, 1998 and 1997 are
computed using the weighted average number of common shares outstanding during
the period of 12,228,331 and 11,555,264, respectively. At March 31, 1998, no
incremental shares related to stock options are included in the diluted average
number of shares outstanding as the impact would have been antidilutive.

3. COMPREHENSIVE INCOME

    As of January 1, 1998, the Company adopted Financial Accounting Standards
Board Statement No. 130 (FASB 130) "Reporting Comprehensive Income." FASB 130
establishes new rules for the reporting and display of comprehensive income and
its components; however, the adoption had no impact on the Company's net income
or stockholders' equity. FASB 130 requires unrealized gains or losses on the
Company's available-for-sale securities, which prior to adoption were reported
separately in stockholders' equity, to be included in other comprehensive
income. Prior year financial statements have been reclassified to conform to the
requirements of FASB 130.

    The components of comprehensive income net of related tax, for the
three-month periods ended March 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                                    1998             1997
                                                                  -------          -------
                  <S>                                             <C>              <C>
                  Net income                                      $ 9,024          $ 8,121
                  Other comprehensive income:
                    Change in unrealized losses on securities        (687)          (9,768)
                                                                  -------          -------
                  Comprehensive income (loss)                     $ 8,337          $(1,647)
                                                                  =======          =======
</TABLE>




                                        5

<PAGE>   6
4. INVESTMENTS

    The Company's investments in available-for-sale securities at March 31, 1998
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 investments:
                        U.S. Government and Agencies    $330,007         $ 8,933         $   651       $338,289
                        State, Municipalities and        336,531           8,689           1,373        343,847
                          Political Subdivisions
                        Mortgage-backed securities        50,077             149             276         49,950
                        Corporate                          5,343              --              --          5,343
                                                        --------         -------         -------       --------
                  Total fixed-maturity investments       721,958          17,771           2,300        737,429
                  Equity investments                      17,678           6,172             179         23,671
                                                        --------         -------         -------       --------
                  Total investments                     $739,636         $23,943         $ 2,479       $761,100
                                                        ========         =======         =======       ========
</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>
                                    THREE  MONTHS ENDED
                                         MARCH 31,
                                 -----------------------
                                   1998            1997
                                 -------         -------
                                      (IN THOUSANDS)
<S>                              <C>             <C>    
Current                          $ 1,614         $ 2,738
Deferred                           1,379            (250)
                                 -------         -------
Total                            $ 2,993         $ 2,488
                                 =======         =======
</TABLE>

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

<TABLE>
<CAPTION>
                                                      THREE  MONTHS ENDED
                                                           MARCH 31,
                                                   -----------------------
                                                     1998            1997
                                                   -------         -------
                                                        (IN THOUSANDS)
<S>                                                <C>             <C>    
Federal income tax at 35%                          $4,206          $3,713
Increase (decrease) in taxes resulting from:
   Tax-exempt interest                             (1,259)         (1,163)
   Dividends received deduction                       (39)            (27)
   Goodwill                                            30              49
   Other                                               55             (84)
                                                   ------          ------
Total                                              $2,993          $2,488
                                                   ======          ======
</TABLE>

6. COMMITMENTS AND CONTINGENCIES

    The Company is a defendant in a California 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. In 1995, a jury made a damage award against
the Company of $4.2 million in compensatory damages, and punitive damages which
were reduced to $14.0 million by the trial judge. The Company appealed these
awards to the California district court of appeal. On May 8, 1998, the appellate
court reversed the judgment against the Company in its entirety. The bankruptcy
estate may now petition the appellate court for a rehearing or petition the
California Supreme Court for a hearing. The petition to the California Supreme
Court must be filed by approximately June 18, 1998. The Company believes that
the action is entirely without merit and will continue to aggressively pursue
its rights on appeal.

    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 $12.3 million 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, 1997, a reserve of $4.0 million (net of expected reinsurance
recoveries of $3.0 million) was 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.

GENERAL

    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 entry into new markets; competition and other industry
factors, including uncertainties inherent in the estimate of loss and loss
adjustment expense (LAE) reserves, reinsurance, importance of ratings,
regulatory matters, and changes in healthcare; the availability of bank
financing; 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 Annual Report on Form 10-K
for the fiscal year ended December 31, 1997.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

    Premiums Earned. Premiums earned increased approximately $3.3 million, or
9.0%, to $39.7 million for the three months ended March 31, 1998 from $36.4
million for the same period in 1997. The increase was principally due to a $5.4
million increase in medical malpractice premiums of physicians and medical
groups to approximately $35.8 million for the three months ended March 31, 1998
compared to $30.4 million for the same period in 1997. This increase was the
result of the Company's acquisition of the medical malpractice book of business
of Fremont Indemnity Company (Fremont Indemnity) on January 1, 1998, and the
initial premiums attributable to an agency relationship with Poe & Brown, Inc.,
which commenced on January 1, 1998 principally in Florida, Connecticut and
Georgia. Hospital medical malpractice premiums were approximately $2.4 million
for the three months ended March 31,1998 compared to $4.4 million for the same
period in 1997. The decrease in 1998 hospital medical malpractice premiums was
due principally to the loss of one large integrated hospital account in Florida
in late 1997. Assumed reinsurance premiums were approximately $1.1 million for
the three months ended March 31, 1998 compared to $1.3 million for the same
period in 1997.

    Net Investment Income. Net investment income was unchanged at approximately
$10.5 million for the three months ended March 31, 1998 and $10.6 million for
the same period in 1997. Average assets increased to $786.3 million during the
three months ended March 31, 1998 compared to $724.1 million for the same period
in 1997. The investment portfolio has a higher percentage of lower yielding tax
exempt bonds at March 31, 1998 than the corresponding period in the prior year.

    Realized Investment Gains. Realized investment gains were approximately $2.3
million for the three months ended March 31, 1998 compared to $1.2 million for
the same period in 1997.

    Losses and LAE. Losses and LAE were level at $33.4 million for the three
months ended March 31, 1998 from $33.5 million for the same period in 1997. As a
percentage of premiums earned, losses and LAE decreased to 84.2% for the three
months ended March 31, 1998 from 92.1% for the same period in 1997 due to
continued improvement in trends, such as a decrease in the frequency of claims
reporting. For the three months ended March 31, 1998, the Company reduced loss
and LAE reserves for claims incurred in prior policy years approximately $17.6
million as compared to a reserve reduction of $15.0 million for the same period
in 1997 for claims incurred in prior policy years.

    Other Operating Expenses. Other operating expenses increased $2.9 million,
or 69.2%, to $7.1 million for the three months ended March 31, 1998 from $4.2
million for the same period in 1997. The ratio of other operating expenses to
premiums earned was 17.9% for the three months ended March 31, 1998 and 11.5%
for the same period in 1997. The increase in the expense ratio is due primarily
to the amortization of costs of $1.3 million related to the Fremont Indemnity
acquisition. Additionally, other operating expenses includes certain one-time
charges related to the Fremont Indemnity acquisition and higher expenses
associated with the higher premium volume and general personnel increases.

    Federal Income Taxes. Federal income tax expense increased $0.5 million, to
$3.0 million for the three months ended March 31, 1998 from $2.5 million for the
same period in 1997. The effective tax rate is 24.9% for the three months ended
March 31, 1998 compared to 23.5% for the same period in 1997 due to higher
realized gains in 1998.


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 


                                       7
<PAGE>   8
dividends, in the form of premium credits, to its members in each year since
1980. In 1996 the Board of Governors declared a final dividend to members of the
Exchange of $9.0 million, which was paid principally in the form of premium
credits during 1997. Except for this final dividend, after the Reorganization,
the Company has ceased paying such premium credit dividends to its
policyholders.

    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. During the first three months of 1998, the
cash provided by operating activities for the Company was $7.3 million compared
to $1.1 million during the corresponding 1997 period prior to the payment of
policyholder dividends.

    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,
SCPIE's portfolio of unaffiliated equity securities has been reduced to $23.7
million at March 31, 1998. 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 $25.8
million, or 3.3% of invested assets, at March 31, 1998. 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. Along with
the proceeds from the January 1997 common stock offering and dividends from its
insurance subsidiaries, the Company has contributed $25.0 million to AHSIC and
has contributed another $23 million to AHI. SCPIE Holdings' 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 1998 without prior regulatory approval
is approximately $27.5 million. Dividends of $15 million were paid after March
31, 1998.

    The Company has received a commitment from a large lender for a bank
facility in the amount of $50.0 million. The commitment is subject to certain
terms and conditions as well as negotiation and completion of all documentation.
The Company expects to use this facility for general corporate purposes.

    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 is in the process of seeking leased space to replace its
existing facilities. The Company has no commitments for such space to date.

    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 until May 1998 and
purchased 86,900 shares pursuant to this program. The Board of Directors has
since extended the term of the stock repurchase program until the 1999 Annual
Meeting of Stockholders with respect to the remaining 913,100 shares of the
Company's common stock.


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 3. LEGAL PROCEEDINGS

    The Company is a defendant in a California 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. In 1995, a jury made a damage award against
the Company of $4.2 million in compensatory damages, and punitive damages which
were reduced to $14.0 million by the trial judge. The Company appealed these
awards to the California district court of appeal. On May 8,

                                       8

<PAGE>   9
1998, the appellate court reversed the judgment against the Company in its
entirety. The bankruptcy estate may now petition the appellate court for a
rehearing or petition the California Supreme Court for a hearing. The petition
to the California Supreme Court must be filed by approximately June 18, 1998.
The Company believes that the action is entirely without merit and will continue
to aggressively pursue its rights on appeal.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are included herewith.

27  Financial Data Schedule

(b)   Not applicable.

                                   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:  May 14, 1998                       By:
                                             -----------------------------------
                                                         Patrick T. Lo
                                                   Vice President and Chief
                                                       Financial Officer