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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
   
                             ---------------------
   
                                  FORM 10-K/A
                          AMENDMENT NO. 1 TO FORM 10-K
     

     [X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
 
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
 
                                       OR
 
     [ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
 
             FOR THE TRANSITION PERIOD FROM ......... TO .........
 
                         COMMISSION FILE NUMBER 0-8636
 
                    AMERICAN INDEMNITY FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)
 
<TABLE>
<S>                                              <C>
                    DELAWARE                                        510119643
        (State or other jurisdiction of                          (I.R.S. Employer
         incorporation or organization)                        Identification No.)
 
          ONE AMERICAN INDEMNITY PLAZA
                GALVESTON, TEXAS                                      77550
    (Address of principal executive offices)                        (Zip Code)
</TABLE>
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (409) 766-4600
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 
<TABLE>
<CAPTION>
                                                              NAME OF EACH EXCHANGE
              TITLE OF EACH CLASS                              ON WHICH REGISTERED
              -------------------                             ---------------------
<S>                                              <C>
                      None                                             None
</TABLE>
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                       Common Stock ($3.33 1/3 par value)
                                (TITLE OF CLASS)
 
     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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]
 
     The aggregate market value of the voting stock of the Registrant held by
non-affiliates as of March 14, 1997 was $16,980,522 based upon the closing price
as of such date.
 
     As of March 14, 1997, there were outstanding 1,962,410 shares of Common
Stock, $3.33 1/3 par value, of the Registrant.
 
                      DOCUMENTS INCORPORATED BY REFERENCE:
 
     (1) Annual Report to Stockholders for the fiscal year ended December 31,
1996 (portions of which are incorporated into Parts II and IV hereof).
 
     (2) The Registrant's definitive Proxy Statement with respect to the
Registrant's Annual Meeting of Stockholders proposed to be held April 28, 1997
(portions of which are incorporated into Part III hereof).
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                                  FORM 10-K/A

                    AMERICAN INDEMNITY FINANCIAL CORPORATION

                          Amendment No. 1 to Form 10-K
                      for the Year Ended December 31, 1996

        This Amendment No. 1 to the annual report on Form 10-K of American
Indemnity Financial Corporation for the year ended December 31, 1996 is being
filed to correct an inadvertent omission from the cover page of such Form
10-K.  The Registrant omitted to check a box in response to the following item
on such cover page:

        "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."

The Registrant hereby amends such cover page to check the box marked "Yes".
    
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                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
 
                                            AMERICAN INDEMNITY FINANCIAL
                                            CORPORATION
 
                                            By      /s/ PHILLIP E. APGAR
                                             -----------------------------------
                                                      Phillip E. Apgar
                                             Vice President, Treasurer and Chief
                                                       Financial Officer
 
   
Dated April 16, 1997