<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q

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

For Quarter Ended:  March 31, 1997

Commission file number:  0-16332

                            NATIONAL INSURANCE GROUP
             (Exact name of registrant as specified in its charter)

       CALIFORNIA                      94-3031790
(State of Incorporation)    (IRS Employer Identification No.)

395 OYSTER POINT BOULEVARD, SUITE 500, SOUTH SAN FRANCISCO, CA         94080
          (Address of principal executive office)                    (Zip Code)

                                 (415) 872-6772
                         (Registrant's telephone number)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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  [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 3,916,103 shares as
of May 12, 1997.











<PAGE>   2
                            NATIONAL INSURANCE GROUP
                               INDEX TO FORM 10-Q

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                                            PAGE
<S>      <C>                                                                                             <C>
Item 1 - Financial Statements:

         Consolidated Balance Sheets as of March 31, 1997 and
         December 31, 1996                                                                                   1

         Consolidated Statements of Earnings for the three-
           month period ended March 31, 1997
         and 1996                                                                                            2

         Consolidated Statements of Shareholders' Equity
         for three months ended March 31, 1997 and 1996                                                      3

         Consolidated Statements of Cash Flows for the
         three months ended March 31, 1997 and 1996.                                                         4

         Notes to Consolidated Financial Statements                                                          5

Item 2 - Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                                                       6-10

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings                                                                                  11

Item 2 - Changes in Securities                                                                              11

Item 3 - Defaults Upon Senior Securities                                                                    11

Item 4 - Submission of Matters to a Vote of Security Holders                                                11

Item 5 - Other Information                                                                                  11

Item 6 - Exhibits and Reports on Form 8-K                                                                   11

SIGNATURES                                                                                                  12

Exhibit 11.1 - Computation of Weighted Average Shares Outstanding
                  and Earnings per Share                                                                    13

Exhibit 27.1 - Financial Data Schedule
</TABLE>




<PAGE>   3
                    NATIONAL INSURANCE GROUP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  As of March 31, 1997 and December 31, 1996
               (in thousands of dollars, except share amounts)

<TABLE>
<CAPTION>
                                                                                March 31,                December 31,
                                                                                 1997                       1996
                                                                              -----------                -----------
                                                                              (unaudited)

<S>                                                                            <C>                        <C>      
ASSETS:
 Fixed maturities                                                              $  14,842                  $  18,538
 Equity securities                                                                 2,196                      2,051
 Short-term investments                                                           14,463                     10,005
                                                                               ---------                  ---------

  Total investments                                                               31,501                     30,594
                                                                               ---------                  ---------

Cash and cash equivalents                                                          3,255                      3,183
Net Premiums and accounts receivable                                               6,241                      5,181
Accrued interest receivable                                                          383                        377
Property and equipment, net                                                        3,613                      3,484
Deferred acquisition costs                                                         2,403                      2,186
Deferred federal income taxes                                                        423                        421
Other assets                                                                       1,226                      1,686
                                                                               ---------                  ----------

  Total assets                                                                 $  49,045                  $  47,112
                                                                               =========                  =========

LIABILITIES:

Reserve for losses and LAE                                                    $    2,450                 $    2,198
Unearned premiums                                                                  5,223                      4,753
Commissions payable                                                                  617                        584
Accrued expenses and other liabilities                                             4,423                      4,247
Drafts payable                                                                       469                        295
Notes payable                                                                      1,083                      1,333
Reserve for return premiums                                                        2,661                      2,382
Reserve for Proposition 103                                                        2,264                      2,268
Deferred revenue                                                                     500                        500
                                                                               ---------                 ----------

  Total liabilities                                                            $  19,690                 $   18,560
                                                                               ---------                 ----------

SHAREHOLDERS' EQUITY:

Common Stock, no par value; authorized, 15,000,000 shares;
  issued and outstanding 3,896,937 in 1997 and in 1996                            17,592                     17,592
Retained earnings                                                                 11,763                     10,960
                                                                               ---------                  ---------

  Total shareholders' equity                                                   $  29,355                  $  28,552
                                                                               ---------                  ---------
  Total liabilities and shareholders' equity                                   $  49,045                  $  47,112
                                                                               =========                  =========
</TABLE>


     The accompanying notes are an integral part of these financial statements.



                                       1
<PAGE>   4
                    NATIONAL INSURANCE GROUP AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                  For the periods ended March 31, 1997 and 1996
                 (in thousands of dollars, except share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                           First Quarter
                                                                                -----------------------------------

                                                                                    1997                       1996
                                                                                    ----                       ----

<S>                                                                             <C>                        <C>     
Net premiums written                                                             $ 4,647                    $ 2,770
Change in unearned premiums                                                         (470)                     1,016
                                                                                 -------                    -------

Net premiums earned                                                                4,177                      3,786
Flood inquiry fees                                                                 4,306                      4,431
Tracking fees                                                                      1,760                      1,217
Net commission income                                                                217                        477
Net investment income                                                                454                        512
                                                                                 -------                    -------

   TOTAL REVENUES                                                                 10,914                     10,423
                                                                                 -------                    -------


Loss and LAE incurred                                                              1,213                      1,107
Commissions to non-affiliates                                                        415                        692
Personnel expenses                                                                 4,951                      5,142
All other expenses                                                                 3,156                      3,248
                                                                                 -------                    -------

   TOTAL EXPENSES                                                                  9,735                     10,189
                                                                                 -------                    -------

Income before provision for income taxes                                           1,179                        234

Provision for income taxes                                                           377                         85
                                                                                 -------                    -------

   NET INCOME                                                                    $   802                    $   149
                                                                                 =======                    =======

Weighted average common and common equivalent
 shares outstanding                                                            3,915,000                  4,703,000
                                                                               =========                  =========


Per share results:

Net income per share                                                             $   .20                    $   .03
                                                                                 =======                    =======
</TABLE>


     The accompanying notes are an integral part of these financial statements.





                                       2
<PAGE>   5
                    NATIONAL INSURANCE GROUP AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
               For the three months ended March 31, 1997 and 1996
                 (in thousands of dollars, except share amounts)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                     Total
                                   Common Stock                                      Share-
                              ----------------------             Retained            holders'
                              Shares           Amount            Earnings            Equity
                              ------           ------            --------            ------

<S>                          <C>               <C>               <C>                <C>      
Balance at
Dec. 31, 1995                4,679,697         $  23,071         $   9,810          $  32,881

Net Income                          --                --               148                148

Unrealized loss, net
of deferred tax                     --                --               (31)               (31)
                             ---------         ---------         ---------          ---------

Balance at
March 31, 1996               4,679,697         $  23,071         $   9,927          $  32,998
                             =========         =========         =========          =========





Balance at
Dec. 31, 1996                3,896,937         $  17,592         $  10,960          $  28,552

Net income                          --                --               802                802

Unrealized gain,
net of deferred tax                 --                --                 1                  1
                             ---------         ---------         ---------          ---------

Balance at
March 31, 1997               3,896,937         $  17,592         $  11,763          $  29,355
                             =========         =========         =========          =========
</TABLE>

     The accompanying notes are an integral part of these financial statements.



                                       3
<PAGE>   6

                    NATIONAL INSURANCE GROUP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the periods ending March 31, 1997 and 1996
                 (in thousands of dollars, except share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                           March 31,          March 31,
                                                                             1997               1996
                                                                           --------           ---------
<S>                                                                        <C>                <C>    
CASH FLOWS FROM OPERATING ACTIVITIES
         Net Income                                                        $   802            $   149
         Adjustments to reconcile net income to net cash
           provided by operating activities:
           Depreciation and amortization                                       291                536
           Change in assets and liabilities:
              Decrease in net premiums and accounts
              receivable and accrued interest receivable                     1,054                210
              (Increase) Decrease in deferred acquisition costs               (216)               467
              Increase in insurance liabilities                              1,130              2,101
              Decrease in reserve for Prop. 103                                 (4)            (1,486)
              (Increase) Decrease in tax assets                                393               (318)
              Other, net                                                    (1,773)            (2,948)
                                                                           -------            -------
                Net cash provided (used) by operating activities             1,677             (1,289)
                                                                           -------            -------

CASH FLOWS FROM INVESTING ACTIVITIES
              Purchase of investments                                       (1,594)            (1,100)
              Maturity of investments                                          652              1,377
              Purchase of equipment                                           (413)              (190)
                                                                           -------            -------
                Net cash provided (used) by investing activities            (1,355)                87
                                                                           -------            -------

CASH FLOWS FROM FINANCING ACTIVITIES
              Principal payments on notes payable                             (250)                --
                                                                           -------            -------
                Net cash (used) by financing activities                       (250)                --
                                                                           -------            -------

         Net Increase (decrease) in cash                                        72             (1,202)
         Cash at beginning of period                                         3,183              5,523
                                                                           -------            -------
         Cash at end of period                                             $ 3,255            $ 4,321
                                                                           =======            =======
</TABLE>










     The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>   7
                    NATIONAL INSURANCE GROUP AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  Financial Information

                  In the opinion of management, the financial information
         reflects all adjustments (consisting only of normal recurring
         adjustments) which are necessary to a fair presentation of financial
         position and results of operations for the interim periods. The results
         for the three month periods ended March 31, 1997 and March 31, 1996,
         are not necessarily indicative of the results to be expected in the
         future.

2.  Reclassification

                  For comparative purposes, certain prior year amounts have been
         reclassified to conform to the current year presentation. Such
         reclassifications had no impact on the net income or shareholders'
         equity.

3.  Earnings per share

                  In February 1997, the Financial Accounting Standards Board
         issued Statement of Financial Accounting Standards (SFAS) No. 128. SFAS
         No. 128 is designed to improve the earnings per share (EPS) information
         provided in the financial statements by simplifying the existing
         computational guidelines, revising the disclosure requirements, and
         increasing the comparability of EPS data on an international basis.
         SFAS No. 128 is required to be adopted on December 31, 1997. The
         Company has not yet determined the impact that SFAS No. 128 may have on
         its financial statements.

4.  Subsequent events

                  On April 24, 1997, the Company's Board of Directors declared a
         special dividend of $1.08 per share. The dividend was paid on May 9,
         1997 to shareholders of record on May 5, 1997. The aggregate amount of
         the dividend was $4,229,391.









           These quarterly interim financial statements are unaudited.

                                       5
<PAGE>   8
ITEM 2: Management's Discussion and Analysis of Financial Condition and Results
        of Operations

         The following discussion should be read in conjunction with the interim
financial statements and the notes thereto, which are set forth elsewhere in
this Report.

RESULTS OF OPERATIONS
FIRST QUARTER OF 1997 COMPARED WITH FIRST QUARTER OF 1996:

   Revenue

         Total revenue of National Insurance Group (the "Company" or "National")
for the first quarter increased from $10.4 million in 1996 to $10.9 million in
1997, an increase of $500,000, or 4.8%.

         Net premiums written for the first quarter increased from $2.8 million
in 1996 to $4.6 million in 1997, an increase of $1.8 million, or 64.3%. The
increase in net premiums written was primarily due to an increase in the volume
of business from existing mortgage tracking customers.

         Net premiums earned by the Company's wholly owned subsidiary, Great
Pacific Insurance Company (the "Insurance Subsidiary"), for the first quarter
increased from $3.8 million in 1996 to $4.2 million in 1997, an increase of
$400,000, or 10.5%. Premium revenue is generally earned ratably over a twelve
month period and is affected by policies written over the prior twelve months
and by policies canceled during the quarter. Such cancellations would be
applicable to premiums written in all prior periods. The combined effect of
changes in premiums written, earned and canceled within any period is measured
in terms of the change in unearned premiums. For the three months ended March
31, 1997, unearned premiums increased by $470,000, compared to a decrease in
unearned premiums of $1.0 million for the same three months of 1996.

         Flood inquiry fees for the first quarter decreased from $4.4 million in
1996 to $4.3 million in 1997, a decrease of $100,000, or 2.3%. However, revenue
for the first quarter of 1996 included a one-time minimum payment from one
customer of approximately $250,000. Excluding this one-time fee, flood inquiry
fees in the first quarter of 1997 increased approximately $150,000, or 3.4% from
the same quarter in 1996. This increase is primarily a result of higher volume
of inquires from existing customers.

         Tracking fees for the first quarter increased from $1.2 million in 1996
to $1.8 million in 1997, an increase of $600,000, or 50.0%. The increase was due
primarily to the addition of new customers.


   Expenses

         Loss and loss adjustment expenses (LAE) incurred for the first quarter
increased from $1.1 million (29.2% of net premiums earned) in 1996 to $1.2
million (29.0% of net premiums earned) in 1997, an increase of $100,000, or
9.1%. The average loss and loss adjustment expense per new claim reported in the
first quarter of 1997 was approximately $6,800, compared to $4,700 for the same
period in 1996. The number of losses decreased from 233 in 1996 to 176 in 1997.

                                       6
<PAGE>   9
         Commissions to non-affiliates in the first quarter decreased from
$692,000 (18.3% of net premiums earned) in 1996 to $415,000 (9.9% of net
premiums earned) in 1997, a decrease of $277,000, or 40.0%. The percentage of
commissions paid to net premiums earned varies depending upon customer mix. The
decrease is due primarily to the fact that a larger percentage of the Insurance
Subsidiary's business has transferred to customers who earn lower commission
rates.

         Personnel expenses in the first quarter decreased from $5.1 million in
1996 to $4.9 million in 1997, a decrease of $200,000, or 3.9%. Personnel
expenses as a percent of total revenue decreased from 49.3% in 1996 to 45.4% in
1997. The reduction was primarily due to continued productivity improvements in
the motor vehicle and mortgage insurance tracking business.

         All other expenses in the first quarter were unchanged at $3.2 million
in both 1996 and 1997. For the first quarter of 1997, this expense category
included a $300,000 credit in connection with the full recovery of a note
previously written-off in the fourth quarter of 1996. Notwithstanding this item,
the increase in all other expenses was a result of an increase in marketing and
sales costs.

         As a result of the above factors, income before provision for income
taxes for the first quarter increased from $234,000 in 1996 to $1.2 million in
1997, an increase of $966,000. Net income for the first quarter of 1996 was
$149,000, or $.03 per share compared with $802,000, or $.20 in 1997. The
weighted average number of shares outstanding for the first quarter of 1996 and
1997 were 4,702,934 and 3,915,147, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         National is a holding company with no operations and no sources of
income itself except interest or investment income. The principal assets of
National are the stock of its subsidiaries. National is, and for the foreseeable
future will continue to be, dependent on the dividends from its subsidiaries to
meet its liquidity requirements. Dividends payable to National by the Insurance
Subsidiary are subject to certain regulatory restrictions described below.

         The Insurance Subsidiary collects and invests premiums written in
advance of the payments for associated claims. In the absence of a catastrophic
loss, this timing difference between premium collection and claims payment,
combined with investment income, normally provides short-term funds in excess of
normal operating demands for cash. As of March 31, 1997, the Company had cash
and short-term investments aggregating $17.7 million compared to $13.2 million
at December 31, 1996.

         Of the Company's cash and short-term investments as of March 31, 1997,
$12.8 million is held by the Insurance Subsidiary compared to $8.3 million at
December 31, 1996. Insurance companies, including the Insurance Subsidiary, are
subject to laws and regulations which restrict their ability to pay dividends to
parent companies or other shareholders. Under California law, the maximum amount
of dividends that the Insurance Subsidiary may pay the Company in any twelve
(12) month period without prior regulatory approval is the greater of (i) net
income for the preceding calendar year, or (ii) 10% of policyholders' surplus
(shareholders' equity adjusted to a statutory basis) as of the previous December
31. For the year ended December 31, 1996, the Insurance Subsidiary had net
income of $2.8 million and as of December 31, 1996, statutory policyholders'
surplus of $26.8 million. For the year ended December 31, 1996, the maximum
dividend permitted to be paid by the Insurance Subsidiary to National was
approximately $2.8 million. On April 10, 1997, the Insurance Subsidiary made a
dividend payment

                                       7
<PAGE>   10

to National in the amount of $2.5 million.

         Consolidated stockholders' equity at March 31, 1997, totaled $29.4
million, or $7.53 per share compared to $28.6 million, or $7.33 per share, at
December 31, 1996.

         Industry and regulatory guidelines suggest that a property and casualty
insurers' annual statutory net written premium should not exceed approximately
three times its policyholder's surplus. The Company's surplus ratio is
significantly lower than such guidelines. For the year ended December 31, 1996,
the Company's net written premium to policyholder surplus ratio was .50 to 1.
Management believes that as of March 31, 1997, that ratio has not materially
changed.

         The Company is not aware of any trends, requirements, commitments, or
events that will or are reasonably likely to have a negative impact on the
Company's liquidity during 1997. This paragraph contains forward-looking
statements reflecting the Company's current expectations. There can be no
assurance that the Company's actual future performance will meet the Company's
current expectations. Investors should review the section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations-Factors
Affecting Future Operating Results" for a discussion of factors that could
affect future performance.

         Inflation generally affects the rate of investment return in the
securities and financial markets, and increases and decreases in such investment
return rates have a corresponding effect on the Company's investment income.


FACTORS AFFECTING FUTURE FINANCIAL CONDITION AND OPERATING RESULTS

         These factors, together with statements regarding certain risks and
uncertainties contained in other parts of this Report, may affect the Company's
operating results. Investors should read this section in connection with any
forward-looking statement made in this Report, including statements preceded or
followed by the words "believes", "anticipates", "expects", "aware" or similar
expressions as they relate to the Company or its management.
 
   Flood Zone Determinations

         The Company derives a substantial portion of its total revenues from
fees for Flood Zone Determination Services. These services are primarily
provided to assist lenders in complying with federal laws which in many
instances require lenders to determine whether property being financed is
located in a federally designated Special Flood Hazard Area ("SFHA") and
require borrowers to obtain flood insurance. Any change in federal legislation
or secondary market requirements changing these requirements on lenders or
borrowers, or the development by competitors of  enhanced service or delivery
systems could have a material adverse effect on the Company's business or
operating results.

   Earnings Volatility

         The Company's financial results can be significantly affected by a
number of factors. Those factors include, but are not limited to, the volume of
force-placed insurance and the rate of cancellation of



                                       8
<PAGE>   11
insurance policies, the addition or loss of customers, changes in the number 
of loans or personal property leases being tracked for major customers,
increases or decreases in interest rates, increased losses and loss adjustment
expenses (LAE), catastrophic loss or a series of loss events, and assessments
from mandatory insurance pools or associations. In addition, revenues from the
Company's Flood Zone Determination Services are directly related to the volume
of mortgage loan originations, both new and refinanced, and any change in the
level of such activity could have a material impact on the Company's
performance.

   The Insurance Industry

         The Company derives a significant amount of its revenues from insurance
premiums and investment income. In the event that, for whatever reason, the
Insurance Subsidiary experiences abnormally high losses, purchases reinsurance
from reinsurers who will not or cannot pay losses submitted, or other adverse
developments occur, then any such event or combination of events could have a
material adverse impact on the Company. In addition, insurance companies and
others have often been sued under certain legal theories, such as bad faith
handling or settlement of claims, which could subject the Insurance Subsidiary
to liability in excess of policy limits. An adverse outcome of any such lawsuit
could have a material negative impact on the Company.


  Reserve Adequacy

         The Insurance Subsidiary is required to maintain reserves to cover its
estimated ultimate liability for loss and loss adjustment expenses with respect
to reported losses and incurred but not reported claims. These reserves are
estimates of what the Insurance Subsidiary expects the ultimate settlement and
administration of claims will cost, and are based on known facts and
circumstances, predictions of future events, estimates of future trends in
claims severity and other variable, subjective factors. No assurances can be
given that such estimates will be adequate to cover actual losses incurred by
the Insurance Subsidiary. Any significant changes in the Insurance Subsidiary's
estimate of ultimate losses on reported claims may materially adversely affect
the results of the Insurance Subsidiary's operations in the period reported. The
Insurance Subsidiary has at times in the past experienced adverse developments
in its loss reserves. The Insurance Subsidiary's loss and loss adjustment
expense reserves are reviewed on an annual basis by unaffiliated actuaries. The
Insurance Subsidiary's most recent actuarial review of such reserves as of
December 31, 1996 concluded that the reserves (i) met the requirements of the
insurance laws of California, (ii) were computed in accordance with accepted
loss reserving standards and principles and (iii) make a reasonable provision
for all unpaid loss and loss expense obligations of the Insurance Subsidiary
under the terms of its policies and agreements.

         The Insurance Subsidiary also maintains a reserve for return premiums
which is based upon the Insurance Subsidiary's historical experience. As is
prevalent in the force-placed insurance industry, a substantial amount of the
Insurance Subsidiary's premiums written are refunded to policyholders. The
amount of such refunds can be affected by, among other things, inaccurate or
untimely data submitted by customers, which the Insurance Subsidiary uses as a
basis for recording written premiums or the loss of a significant customer. No
assurance can be given that the reserve for return premiums will be adequate to
cover actual refunded premiums paid by the Insurance Subsidiary in the future.



                                       9
<PAGE>   12
   Underwriting Risks

         Traditional insurance companies underwrite risks individually or by
class, following an in-depth analysis of such risks. Although the Insurance
Subsidiary applies underwriting techniques to a small portion of insured risks,
the immediate coverage required by purchasers of force-placed insurance
generally requires the Insurance Subsidiary to write specialized insurance
within pre-designated limits and geographic area, at a flat rate, without the
application of traditional underwriting criteria to individual risks.
Accordingly, the Insurance Subsidiary may be insuring individual risks that it
might not have insured had it applied traditional analysis to such risks. In
addition, the Insurance Subsidiary may not have adequate spread of risk in a
particular geographic area.

   Reinsurance Considerations

         The Insurance Subsidiary's business is partially dependent upon its
ability to cede to reinsurers risks insured by the Insurance Subsidiary. The
amount, availability and cost of reinsurance are subject to prevailing market
conditions, beyond the control of the Insurance Subsidiary, which can affect the
Insurance Subsidiary's level of business and profitability. The Insurance
Subsidiary is ultimately liable for the reinsured risk if for any reason the
reinsurers do not cover or will not pay the Insurance Subsidiary for the losses
of the insureds. As a result of the increased cost and more limited availability
of reinsurance, in the future, the Insurance Subsidiary may elect to retain a
higher portion of the risk historically ceded to reinsurers. If the Insurance
Subsidiary were to retain a higher proportion of insured risks, it would
increase its exposure to significant losses relating to properties insured by
the Insurance Subsidiary. This increased exposure could have a material adverse
effect on the Insurance Subsidiary's results of operation.

   Rapid Technological Change and New Products; Product Delays

         The markets for the Company's information services are highly
competitive and characterized by rapidly changing technology. The Company
believes that its future success will depend, in part, on its ability to
identify, develop, install and support new services in a timely fashion, and on
market acceptance of such services. No assurance can be given that the
introduction of new technologies will enable the Company to gain market share,
realize cost savings, increase revenues or retain customers.

  Shortage of Skilled Labor

         The Company's delivery and upgrade of products and services to its
customers is dependent upon, among other factors, the Company's ability to
attract and retain key analytical and management professionals, including
skilled computer programmers and systems analysts. Businesses located in San
Francisco, San Mateo, Contra Costa and Santa Clara counties of California are
experiencing a tightening of the local labor market for these professionals,
which may result in one or more of the following: an increase in personnel
costs, a delay in service installations, and a reduction in customer service.
The Company is unable to predict when the conditions in the local labor market
will change.



                                       10
<PAGE>   13
                    NATIONAL INSURANCE GROUP AND SUBSIDIARIES


PART II         OTHER INFORMATION


Item 1.  Legal Proceedings

         The Company is routinely a party to litigation incidental to its
business, as well as other litigation. While the ultimate results of such
litigation cannot presently be determined on the date of this Report, management
believes that no individual item of litigation or group of similar items of
litigation is likely to have a material adverse effect on the consolidated
financial position of the Company.

Item 2.  Changes in Securities

       None.

Item 3.  Defaults upon Senior Securities

       None.

Item 4.  Submission of Matters to a Vote of Security Holders

       None.

Item 5.  Other Information

       None.

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibit Index

         Exhibit 11.1 Computation of weighted average shares outstanding and
         earnings per share.

         Exhibit 27.1 Financial data schedule.

(b) Reports on Form 8-K

       None.


                                       11
<PAGE>   14
                                   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.

                                         NATIONAL INSURANCE GROUP
                                               (REGISTRANT)



                                         /S/ MARK A. SPEIZER
--------------------------               --------------------
DATE: MAY 13, 1997                             (SIGNATURE)
                                         Mark A. Speizer, Chairman
                                         of the Board and Chief
                                         Executive Officer




                                          /S/ GREGORY S. SAUNDERS
--------------------------               ------------------------
DATE: MAY 13, 1997                              (SIGNATURE)
                                         Gregory S. Saunders,
                                         Executive Vice President, Treasurer
                                         and Chief Financial Officer
                                         (Principal Financial Officer)



                                       12
<PAGE>   15
                                 EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit 
No.                                Description
---                                -----------

<S>                                <C>                                                             
11                                 Computation of Weighted Coverage
                                   Shows Outstanding and Earnings Per
                                   Share

27                                 Financial Data Schedule
</TABLE>