##### Table of Contents





SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
  Form 10-K
   FOR ANNUAL AND TRANSITION
    REPORTS PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal
    Year Ended December 31, 2009o

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

38-3543910(State or other jurisdiction
    of

(IRS employerincorporation or
    organization)

identification
    number)   1301 North Hagadorn Road, East Lansing, Michigan 48823
 (Address of principal executive
    offices)(Zip Code)
  Registrants telephone number, including area code:(517) 351-1150
  Securities registered pursuant to Section 12(b) of the
    Act:
    Common Stock, no par value
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon stock, no par value

Nasdaq Global Select Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
   Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---





TABLE OF CONTENTS  Item 1. Business.Item 1A. Risk Factors.Item 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsPART IIItem 5. Market For Registrants Common Equity, Related Stockholder Matters and issuer purchases of equity securitiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8 Financial Statements and Supplementary DataREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMAMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2009 and 2008AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Years Ended December 31, 2009, 2008, and 2007AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME For the Years Ended December 31, 2009, 2008 and 2007AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIESAMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTSSCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)CONDENSED STATEMENTS OF OPERATIONS  Years Ended December 31, 2009, 2008 and 2007CONDENSED STATEMENTS OF CASH FLOWS Years Ended December 31, 2009, 2008 and 2007Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accounting Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT INDEXEX-10.56EX-10.57EX-10.58EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-99.1    Table of Contents   Explanatory
    Note
  Form 10-K four-for-three
 
  Item 1.
    Business.  General
       1




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##### Table of Contents



For the Year Ended December 31,2009


2008


2007% of





% of





% ofTotal





Total





Total(In thousands)Direct premiums written:Michigan

$
40,284



35.6%


$
44,917



35.9%


$
47,583



35.1%Illinois


33,769



29.8%



33,704



27.0%



35,160



26.0%Ohio


16,957



15.0%



21,053



16.8%



25,751



19.0%New Mexico


16,792



14.8%



18,565



14.8%



19,061



14.1%All Other


5,430



4.8%



6,779



5.5%



7,860



5.8%Total direct premiums written

$
113,232



100.0%


$
125,018



100.0%


$
135,415



100.0%Net premiums earned:Medical professional liability

$
115,345



79.0%


$
124,275



77.1%


$
138,917



75.9%Exited lines of business


(467
)


−0.3%



(7
)


0.0%



6



0.0%Total net premiums earned


114,878



78.7%



124,268



77.1%



138,923



75.9%Investment income


30,910



21.2%



36,864



22.9%



43,506



23.8%Realized (losses) gains


(543
)


−0.4%



(658
)


−0.4%



(111
)


−0.1%Other income


769



0.5%



730



0.4%



815



0.4%Total revenue

$
146,014



100.0%


$
161,204



100.0%


$
183,133



100.0%   Products and Services.
    Marketing.
   2




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Item 1-
      Underwriting and Pricing.
      Claims Management.
     3




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##### Table of Contents



Reinsurance.
    % of 2009Amounts

AmountsA.M. Best

Recoverable From

Recoverable FromReinsurer

Rating

Reinsurers

Reinsurers(Dollars in thousands)Hannover Ruckversicherungs


A


$
21,292



32.7
%Munich Reins Amer


A+



12,308



18.9
%Transatlantic Reinsurance Company


A



4,476



6.9
%Aspen Insurance


A



3,957



6.1
%     Capital and Surplus.
  Competition
   4




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##### Table of Contents



A.M. Best
    Company Rating
      Important
    Agency Relationship
        Insurance
    Regulatory Matters
  General.
 5




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##### Table of Contents



Holding Company Regulation.
    Change of Control.
  Risk-Based Capital Requirements.
    IRIS Requirements.
 6




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##### Table of Contents



Guaranty Fund.
  Employees
  As of December 31, 2009, we had
    145 employees.
  Uncertainties
    Relating To Forward-Looking Statements
       
  Item 1A.
    Risk
    Factors.    Increased
    competition could adversely affect our ability to sell our
    products at premium rates we deem adequate, which may result in
    a decrease in premium volume.
   7




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Our
    reserves for unpaid losses and loss adjustment expenses are
    based on estimates that may prove to be inadequate to cover our
    losses.
    Market
    illiquidity and volatility associated with the recent financial
    crisis makes the fair values of our investments increasingly
    difficult to estimate, and may have other unforeseen
    consequences that we are currently unable to
    predict.
      An
    interruption or change in current marketing and agency
    relationships could reduce the amount of premium we are able to
    write.
    If we
    are unable to obtain or collect on ceded reinsurance, our
    results of operations and financial condition may be adversely
    affected.
   8




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Our
    geographic concentration in certain Midwestern states and New
    Mexico ties our performance to the business, economic,
    regulatory and legislative conditions in those
    states.
    A
    downgrade in the A.M. Best Company rating of our primary
    insurance subsidiary could reduce the amount of business we are
    able to write.
    Changes
    in interest rates could adversely impact our results of
    operation, cash flows and financial condition.
  available-for-sale
  The
    unpredictability of court decisions could have a material impact
    on our operations.
    Our
    business could be adversely affected by the loss of one or more
    key employees.
   9




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##### Table of Contents



The
    insurance industry is subject to regulatory oversight that may
    impact the manner in which we operate our business, our ability
    to obtain future premium rate increases, the type and amount of
    our investments, the levels of capital and surplus deemed
    adequate to protect policyholder interests, or the ability of
    our insurance subsidiaries to pay dividends to the holding
    company .
    
    place limitations on the types and amounts of our investments,
    review and approve or deny premium rate increases,
    set standards of solvency to be met and maintained,
    review reserve levels,
    review change in control transactions,
    limit the ability to pay dividends,
    prescribe the form and content of, and to examine, our
    statutory-basis financial statements, and
    place limitations on our ability to transact business with and
    between our affiliated insurance companies.    Our
    status as an insurance holding company with no direct operations
    could adversely affect our ability to meet our debt obligations
    and fund future share repurchases.
    Legislative
    or judicial changes in the tort system may have adverse or
    unintended consequences that could materially and adversely
    affect our results of operations and financial
    condition.
   10




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Applicable
    law and various provisions in our articles and bylaws may
    prevent and discourage unsolicited attempts to acquire APCapital
    that you may believe are in your best interests or that might
    result in a substantial profit to you.
   
  Item 1B.
    Unresolved
    Staff Comments   
  Item 2.
    Properties   
  Item 3.
    Legal
    Proceedings    PART II
  Item 5.
    Market
    For Registrants Common Equity, Related Stockholder Matters
    and issuer purchases of equity securities    Sale Price

DividendsHigh

Low

per Share2009October 1  December 31, 2009

$
30.80


$
26.09


$
0.0900July 1  September 30, 2009


35.74



27.65



0.0825April 1  June 30, 2009


32.41



26.51



0.0825January 1  March 31, 2009


37.01



27.44



0.08252008October 1  December 31, 2008

$
37.87


$
20.08


$
0.0750July 1  September 30, 2008


38.25



29.01



0.0750April 1  June 30, 2008


37.27



32.31



0.0750January 1  March 31, 2008


36.04



26.51



0.0750  11




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##### Table of Contents



Total NumberTotal



of Shares

Maximum Number (or Approximate DollarNumber of

Average

Repurchased as

Value) of Shares that May Yet BeShares

Price Paid

Part of Publicly

Repurchased Under the Plans or ProgramsRepurchased

per Share

Announced Plans

Discretionary Plan (a)

Rule 10b5-1 Plan (b)For the month ended October 31, 2009


123,600


$
29.84



123,600


$
15,955,191


$
15,821,229For the month ended November 30, 2009


160,800



28.37



160,800



15,955,191



11,258,793For the month ended December 31, 2009


176,200



28.82



176,200



15,955,191



26,181,231For the three months ended December 31, 2009


460,600



28.94



460,600



15,955,191



26,181,231For the year ended December 31, 2009


1,863,833



30.09



1,863,833



15,955,191



26,181,231     (a)
    
    On February 7, 2008, the Board of Directors authorized the
    repurchase of additional common shares with a cost of up to
    $25 million at managements discretion. The timing of
    the repurchases and the number of shares to be bought at any
    time depend on market conditions and the Companys capital
    resources and requirements. The discretionary plan has no
    expiration date and may be terminated or discontinued at any
    time or from time to time.(b)
    
    On December 4 and 11, 2008, the Board authorized the repurchase
    of an additional $10 million and $20 million of the
    Companys common shares pursuant to the
    Rule 10b5-1
    plan in 2008, as well as the rollover of any unused
    authorization into 2009. On June 23, October 2 and
    December 3, 2009 the Board authorized the repurchase of an
    additional $20 million, $10 million and
    $20 million of the Companys common shares pursuant to
    the
    Rule 10b5-1
    plan in 2009, as well as the rollover of any unused
    authorization into 2010. The
    Rule 10b5-1
    plan share repurchases will continue to be made pursuant to a
    formula in the plan, and the plan will expire when all of the
    allocated dollars in the plan have been used. The Company may
    terminate the
    Rule 10b5-1
    plan at any time. 12




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##### Table of Contents



Item 6.
    Selected
    Financial Data    For the Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share data)Revenue:Direct premiums written

$
113,232


$
125,018


$
135,415


$
156,866


$
185,511Net premiums written

$
109,713


$
120,117


$
130,808


$
146,723


$
157,382Net premiums earned

$
114,878


$
124,268


$
138,923


$
149,688


$
164,283Investment and other income


31,136



36,936



44,210



49,594



48,583Total revenues and other income


146,014



161,204



183,133



199,282



212,866Losses and expenses:Losses and loss adjustment expenses


57,562



65,311



69,428



100,458



127,124Underwriting expenses


28,515



27,458



30,141



30,521



33,080Other expenses


3,437



4,460



5,411



5,300



7,795Total losses and expenses


89,514



97,229



104,980



136,279



167,999Income before federal income tax (benefit) expense and minority
    interest


56,500



63,975



78,153



63,003



44,867Federal income tax expense (benefit)


15,940



18,779



25,362



19,816



(27,952
)Income before minority interest


40,560



45,196



52,791



43,187



72,819Non-controlling interest in net gain of consolidated subsidiary


















(453
)Net income(a)

$
40,560


$
45,196


$
52,791


$
43,187


$
72,366Net income per share  diluted

$
3.67


$
3.45


$
3.55


$
2.64


$
4.15Weighted average shares outstanding  diluted(b)


11,061



13,094



14,884



16,365



17,458Cash dividends paid per share

$
0.3375


$
0.3000


$
0.1500


$



$
     (a)
    
    Net income in 2005 includes a $44.1 million tax benefit
    related to the reversal of a deferred tax valuation allowance.(b)
    
    Weighted average shares outstanding and the associated earnings
    and dividends per share have been retroactively adjusted to
    reflect a
    four-for-three
    stock split effective July 31, 2009.  13




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##### Table of Contents



At or For the Year Ended December 31,2009

2008

2007

2006

2005(Dollars in thousands)Balance Sheet Data:Total cash and investments

$
799,389


$
830,648


$
858,947


$
875,276


$
854,359Total assets


944,514



1,005,823



1,057,462



1,095,815



1,109,328Total liabilities


707,474



751,786



793,905



827,005



845,475Total GAAP shareholders equity


237,040



254,037



263,557



268,810



261,212GAAP Ratios:Loss ratio


50.1
%


52.6
%


50.0
%


67.1
%


77.4
%Underwriting expense ratio(a)


24.8



22.1



21.7



20.4



20.1Combined ratio


74.9



74.7



71.7



87.5



97.5Statutory DataLoss ratio


50.6
%


53.3
%


49.2
%


67.5
%


77.6
%Underwriting expense ratio(a)


27.9



24.2



23.7



22.3



22.7Combined ratio


78.5



77.5



72.9



89.8



100.3Surplus

$
208,718


$
204,975


$
221,595


$
248,929


$
240,135Ratio of statutory net premiums written to surplus


0.53 to 1



0.59 to 1



0.59 to 1



0.59 to 1



0.66 to 1     (a)
    
    The statutory underwriting expense ratio shown in the table is
    calculated by dividing statutory underwriting expenses, which
    may differ from GAAP, by net premiums written. The GAAP
    underwriting expense ratio is calculated by dividing
    underwriting expenses, determined in accordance with GAAP, by
    net premiums earned. 
  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations      Critical
    Accounting Policies
    Unpaid
    Losses and Loss Adjustment Expenses
   14




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15




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##### Table of Contents




    paid development;
    incurred development;
    average loss; and
    Bornhuetter-Ferguson.         16




---



##### Table of Contents



Investments
  held-to-maturity available-for-sale available-for-sale held-to-maturity. available-for-sale held-to-maturity
  Available-for-sale available-for-sale Held-to-maturity held-to-maturity held-to-maturity yield-to-maturity
    available-for-sale
     17




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##### Table of Contents



security-by-security
  
    Few recent transactions;
    Price quotations that are not based on current information;
    Significant increases in implied liquidity risk premiums and
    yields;
    Wide bid-ask spreads or a significant increase in bid-ask
    spreads;
    Significant decline or absence of a market for new
    issuances; and
    Little publicly released information        
    The remaining payment terms of the security;
    Prepayment risk and speeds;
    The financial condition of the issuer;
    Expected defaults; and
    The value of any underlying collateral.  available-for-sale held-to-maturity held-to-maturity
 18




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##### Table of Contents




    Our ability and intent to retain the investment for a period of
    time sufficient to allow for an anticipated recovery in value;
    The duration and extent to which the fair value has been less
    than cost;
    The financial condition, near-term and long-term earnings and
    cash flow prospects of the issuer, including relevant industry
    conditions and trends, and implications of rating agency
    actions; and
    The specific reasons that a security is in a significant
    unrealized loss position, including market conditions that could
    affect access to liquidity.  available-for-sale held-to-maturity held-to-maturity
  .
  Reserve
    for Extended Reporting Period Claims
    Revenue
    Recognition
   19




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##### Table of Contents



Reinsurance
              Income
    Taxes
   20




---



##### Table of Contents



Deferred
    Policy Acquisition Costs
      Overview
    of APCapital
   21




---



##### Table of Contents



Description
    of Ratios and Other Metrics Analyzed
    Underwriting Gain or Loss:
  Loss Ratio:
  Underwriting Expense Ratio:
  Combined Ratio:
  Investment Yield:
  Return on Equity:
 22




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##### Table of Contents



Book Value per Share:
      Non-GAAP Financial
    Measures
  Accident Year Loss Ratio:
 23




---



##### Table of Contents



Results
    of Operations
    2009 vs. 2008


Percentage





2008 vs. 2007


Percentage2009


2008


Change


Change (2)


2007


Change


Change (2)(Dollars in thousands)Direct premiums written

$
113,232


$
125,018


$
(11,786
)


−9.4
%

$
135,415


$
(10,397
)


−7.7
%Net premiums written

$
109,713


$
120,117


$
(10,404
)


−8.7
%

$
130,808


$
(10,691
)


−8.2
%Net premiums earned

$
114,878


$
124,268


$
(9,390
)


−7.6
%

$
138,923


$
(14,655
)


−10.5
%Losses and loss adjustment expensesCurrent year losses


94,121



97,490



(3,369
)


3.5
%


103,673



(6,183
)


6.0
%Prior year development


(36,559
)


(32,179
)


(4,380
)


13.6
%


(34,245
)


2,066



−6.0
%Total


57,562



65,311



(7,749
)


11.9
%


69,428



(4,117
)


5.9
%Underwriting expenses


28,515



27,458



1,057



−3.8
%


30,141



(2,683
)


8.9
%Total underwriting gain


28,801



31,499



(2,698
)


−8.6
%


39,354



(7,855
)


−20.0
%Investment income


30,910



36,864



(5,954
)


−16.2
%


43,506



(6,642
)


−15.3
%Net realized (losses) gains


(543
)


(658
)


115



17.5
%


(111
)


(547
)


−492.8
%Other income


769



730



39



5.3
%


815



(85
)


−10.4
%Other expenses(1)


(3,437
)


(4,460
)


1,023



22.9
%


(5,411
)


951



17.6
%Income before taxes and minority interest


56,500



63,975



(7,475
)


−11.7
%


78,153



(14,178
)


−18.1
%Federal income tax expense


15,940



18,779



(2,839
)


15.1
%


25,362



(6,583
)


26.0
%Net income

$
40,560


$
45,196


$
(4,636
)


−10.3
%

$
52,791


$
(7,595
)


−14.4
%Loss Ratio:Accident year


81.9
%


78.5
%


−3.4
%






74.6
%


−3.9
%Prior years


31.8
%


−25.9
%


5.9
%






−24.6
%


1.3
%Calendar year


50.1
%


52.6
%


2.5
%






50.0
%


−2.6
%Underwriting expense ratio


24.8
%


22.1
%


−2.7
%






21.7
%


−0.4
%Combined ratio


74.9
%


74.7
%


−0.2
%






71.7
%


−3.0
%Beginning GAAP Equity

$
254,037


$
263,557


$
(9,520
)





$
268,810


$
(5,253
)Return on Equity


16.0
%


17.1
%


−1.1
%






19.6
%


−2.5
%     (1)
    
    Other expenses includes investment expenses, interest expense,
    amortization expense, general and administrative expenses and
    other expenses as reported in the Consolidated Statements of
    Income included elsewhere in this report.(2)
    
    The percentage change represents the items change relative to
    its impact on net income. A positive percentage change indicates
    a change in that line item representing an increase to net
    income, while a negative percentage change represents a decrease
    to net income.  2009 Compared to 2008.
 24




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##### Table of Contents



Premiums
    Change2009


2008


Dollar


Percentage(Dollars in thousands)Medical professional liability:Michigan

$
40,284


$
44,917


$
(4,633
)


−10.3
%Illinois


33,769



33,704



65



0.2
%Ohio


16,957



21,053



(4,096
)


−19.5
%New Mexico


16,792



18,565



(1,773
)


−9.6
%All Other


5,430



6,779



(1,349
)


−19.9
%Total direct premiums written

$
113,232


$
125,018


$
(11,786
)


−9.4
%Net premiums written

$
109,713


$
120,117


$
(10,404
)


−8.7
%% net to direct premiums written


96.9
%


96.1
%






0.8
%Net premiums earned

$
114,878


$
124,268


$
(9,390
)


−7.6
%            25




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##### Table of Contents



Loss
    and Loss Adjustment Expenses
          AverageReported

Average

Net CaseClaim

Net Paid

Reserve perFrequency

Loss

Open Claim2005


1,513


$
75,900


$
122,4002006


1,168



59,100



137,9002007


952



67,500



144,8002008


908



72,500



166,5002009


919



86,200



183,100        26




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##### Table of Contents



Underwriting
    Expenses
      Investment
    Income
     27




---



##### Table of Contents



Other
    Expenses
    Change2009


2008


Dollar


Percentage(Dollars in thousands)Other expensesInvestment expenses

$
1,045


$
1,032


$
13



1.3
%Interest expense


1,344



2,196



(852
)


−38.8
%General and administrative expenses


1,069



1,185



(116
)


−9.8
%Other


(21
)


47



(68
)


−144.7
%Total

$
3,437


$
4,460


$
(1,023
)


−22.9
%     Federal
    Income Taxes
    2008 Compared to 2007.
 28




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##### Table of Contents



Premiums
    Change2008


2007


Dollar


Percentage(Dollars in thousands)Medical professional liability:Michigan

$
44,917


$
47,583


$
(2,666)



−5.6%Illinois


33,704



35,160



(1,456)



−4.1%Ohio


21,053



25,751



(4,698)



−18.2%New Mexico


18,565



19,061



(496)



−2.6%All Other


6,779



7,860



(1,081)



−13.8%Total direct premiums written

$
125,018


$
135,415


$
(10,397)



−7.7%Net premiums written

$
120,117


$
130,808


$
(10,691)



−8.2%% net to direct premiums written


96.1%



96.6%







−0.5%Net premiums earned

$
124,268


$
138,923


$
(14,655)



−10.5%       Loss
    and Loss Adjustment Expense
     29




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##### Table of Contents



Underwriting
    Expenses
    Investment
    Income
      Other
    Expenses
    Change2008


2007


Dollar


Percentage(Dollars in thousands)Other expensesInvestment expenses

$
1,032


$
910


$
122



13.4%Interest expense


2,196



3,139



(943)



−30.0%General and administrative expenses


1,185



1,410



(225)



−15.9%Other


47



(48)



95



−198.0%Total

$
4,460


$
5,411


$
(951)



−17.6%     Federal
    Income Taxes
   30




---



##### Table of Contents



Liquidity
    and Capital Resources
      Parent
    Company
           31




---



##### Table of Contents



Consolidated
    available-for-sale available-for-sale held-to-maturity
    Financial
    Condition
    Statutory
    Capital and Surplus
   32




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##### Table of Contents



Reserves
    for Unpaid Losses and Loss Adjustment Expenses
    At or For the Year Ended December 31,

% Change

% Change2009

2008

2007

2009 vs. 2008

2008 vs. 2007Medical professional liability:Number of reported claims


919



908



952



1.2%



−4.6%Number of open claims


1,290



1,418



1,741



−9.0%



−18.6%Number of IBNR claims(1)


1,382



1,482



1,584



−6.7%



−6.4%Average net case reserve per open claim

$
183,100


$
166,500


$
144,800



10.0%



15.0%Average net total reserve per open plus IBNR claim


195,200



186,200



160,400



4.8%



16.1%Average net paid loss per claim closed with payment


86,200



72,500



67,500



18.9%



7.4%     (1)
    
    IBNR claim counts are estimates based on actuarial projections.      % Change


% Change2009


2008


2007


2009 vs. 2008


2008 vs. 2007(In thousands)Medical professional liability:Net case reserves

$
236,244


$
236,093


$
252,017



0.1%



−6.3%Net IBNR reserves


285,373



303,856



281,310



−6.1%



8.0%Total net reserves


521,617



539,949



533,327



−3.4%



1.2%Other lines total net reserves


24,875



22,901



26,142



8.6%



−12.4%Total net reserves  all lines

$
546,492


$
562,850


$
559,469



−2.9%



0.6%Medical professional liability as a percentage of total


95.4
%


95.9
%


95.3
%    33




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##### Table of Contents



1999


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009Liability for unpaid losses and loss adjustment expenses net of
    reinsurance recoverable

$
393,582


$
413,954


$
505,555


$
542,026


$
574,281


$
590,342


$
579,747


$
580,066


$
559,469


$
562,850


$
546,492Cumulative net paid as of:End of year


95,471



124,479



161,770



181,658



142,633



130,793



96,971



87,326



58,918



70,187Two years later


182,541



236,653



293,852



295,350



260,178



219,013



176,778



140,198



121,783Three Years later


251,448



322,226



367,289



381,057



327,830



285,292



225,513



192,802Four years later


292,766



363,871



420,662



426,928



377,435



329,887



267,963Five Years later


312,968



390,450



443,256



455,880



409,304



356,645Six years later


326,266



402,808



458,853



476,278



428,401Seven Years later


333,843



411,337



470,469



488,392Eight years later


338,799



417,556



477,420Nine Years later


342,818



420,999Ten Years later


344,448Re-estimated Net Liability as of:End of year


383,004



435,069



511,185



585,469



580,466



585,019



566,867



545,821



527,291



526,290Two years later


373,400



449,871



538,980



590,665



583,246



572,569



538,466



515,836



489,964Three Years later


374,729



458,846



540,239



592,617



575,222



551,067



515,035



479,707Four years later


366,818



456,519



541,887



586,472



562,630



531,787



485,289Five Years later


359,753



455,208



538,483



576,292



555,111



509,231Six years later


359,400



458,062



534,753



577,099



537,190Seven Years later


363,802



456,751



532,240



563,069Eight years later


362,648



454,836



524,532Nine Years later


361,014



451,803Ten Years later


360,167Net cumulative (deficiency) redundancy


33,415



(37,849
)


(18,977
)


(21,043
)


37,091



81,111



94,458



100,359



69,505



36,560Gross liability  end of year


457,072



483,273



597,046



637,494



672,495



690,825



685,714



688,031



664,118



644,396



608,807Reinsurance Recoverables


63,490



69,319



91,491



95,468



98,214



100,483



105,967



107,965



104,649



81,546



62,315Net Liability  end of year


393,582



413,954



505,555



542,026



574,281



590,342



579,747



580,066



559,469



562,850



546,492Gross re-estimated liability   latest


439,677



534,233



619,514



656,086



623,563



586,316



561,980



564,020



570,778



590,024Re-estimated reinsurance recoverables  latest


79,510



82,430



94,982



93,017



86,373



77,085



76,691



84,313



80,814



63,734Net re-estimated liability  latest


360,167



451,803



524,532



563,069



537,190



509,231



485,289



479,707



489,964



526,290Gross cumulative (deficiency) redundancy


17,395



(50,960
)


(22,468
)


(18,592
)


48,932



104,509



123,734



124,011



93,340



54,372      34




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##### Table of Contents



Net Loss and LAE ReservesLow End

Recorded

High Endof Range

Reserves

of Range(In thousands)$
506,221


$
546,492


$
579,433       Increase(Decrease) inPre-tax Income(In thousands)Low end of range

$
40,271High end of range

$
(32,941
)   Investments
      December 31, 2009


December 31, 2008Carrying


% of


Carrying


% ofValue(1)


Portfolio


Value(1)


PortfolioU.S. government obligations

$




0.0
%

$
64,458



9.1
%Tax-exempt municipal securities


385,111



67.1
%


384,607



54.6
%Corporate securities


79,414



13.8
%


104,764



14.9
%Mortgage-backed securities


109,399



19.1
%


150,862



21.4
%Total fixed-income securities

$
573,924



100.0
%

$
704,691



100.0
%     (1)
    
    Carrying value for
    available-for-sale
    securities is fair value, whereas
    held-to-maturity
    securities are carried at amortized cost.   35




---



##### Table of Contents



December 31, 2009


December 31, 2008Carrying


% of


Carrying


% ofRating

Value(1)


Total


Value(1)


TotalAAA

$
250,783



43.7
%

$
377,392



53.6
%AA


227,576



39.7
%


234,543



33.3
%A


67,672



11.8
%


63,723



9.0
%BBB


15,650



2.6
%


22,812



3.2
%BB


6,117



1.1
%






0.0
%567,798



98.9
%


698,470



99.1
%Private Placement


6,126



1.1
%


6,221



0.9
%Total

$
573,924



100.0
%

$
704,691



100.0
%Average Rating


AA+







AA+     (1)
    
    Carrying value is fair value for
    available-for-sale
    securities and amortized cost for
    held-to-maturity
    securities.       36




---



##### Table of Contents



Other
    Significant Balance Sheet Items
        Off-Balance
    Sheet Arrangements
    Contractual
    Obligations
    Payments Due by PeriodLess Than


1 - 3


3 - 5


More ThanContractual Obligations

Total


1 Year


Years


Years


5 Years(In thousands)Reserves for unpaid loss andloss adjustment expenses(1)

$
608,807


$
89,040


$
162,427


$
119,820


$
237,520Operating leases


3,124



882



1,564



678



Real estate assessments


1,121



249



376



380



116Long-term debt(2)


71,375



1,375



3,500



5,500



61,000Total

$
684,427


$
91,546


$
167,867


$
126,378


$
298,636  37




---



##### Table of Contents



(1)
    
    The Companys reserves for unpaid loss and loss adjustment
    expenses are an estimate of future cash flows necessary to
    fulfill insurance obligations based on insured events that have
    already occurred, but the amount and timing of the cash outflow
    is uncertain.(2)
    
    The long-term debt is more fully described in Note 9 of the
    Notes to Consolidated Financial Statements. Amounts included
    herein assume annual interest payments based on a 5.5% interest
    rate for the first year, 7% for the next 4 years and 8%
    thereafter. The principal is all assumed to be due at its
    original maturity date in 2033.    Effects
    of New Accounting Pronouncements
   
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  General
    available-for-sale held-to-maturity,
    Qualitative
    Information About Market Risk
  available-for-sale
  available-for-sale held-to-maturity
   38




---



##### Table of Contents



held-to-maturity held-to-maturity
    Quantitative
    Information About Market Risk
  Interest
    Rate Risk
  available-for-sale available-for-sale
  December 31, 2009

December 31, 2008Portfolio

Change in

Modified

Portfolio

Change in

ModifiedChange in Rates

Value

Value

Duration

Value

Value

Duration(dollars in thousands)

(dollars in thousands)+2%

$
195,468


$
(9,605
)


2.31


$
209,579


$
(13,362
)


3.22+1%


200,063



(5,010
)


2.30



216,320



(6,621
)


3.160


205,073







2.61



222,941







3.43-1%


210,490



5,417



2.63



231,609



8,668



3.50-2%


214,889



9,816



2.69



239,957



17,016



3.57   Equity
    Price Risk
  available-for-sale
   39




---



##### Table of Contents



Item 8
    Financial
    Statements and Supplementary Data  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
    FIRM
          ,
    Internal Control 
    Integrated Framework
      40




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 December
    31, 2009 and 2008
  December 31,2009


2008In thousands, except share dataAssetsInvestments:Fixed-income securitiesAvailable-for-sale,
    at fair value

$
205,073


$
222,941Held-to-maturity,
    at amortized cost


368,851



481,750Other investments


53,303



24,320Total investments


627,227



729,011Cash and cash equivalents


172,162



101,637Premiums receivable


29,662



34,024Reinsurance recoverable


63,283



86,397Deferred federal income taxes


17,328



18,573Federal income tax recoverable


2,884



550Property and equipment, net


8,090



8,677Other assets


23,878



26,954Total assets

$
944,514


$
1,005,823LiabilitiesUnpaid losses and loss adjustment expenses

$
608,807


$
644,396Unearned premiums


50,670



55,984Long-term debt


25,928



25,928Accrued expenses and other liabilities


22,069



25,478Total liabilities


707,474



751,786Shareholders EquityCommon stock, no par value, 50,000,000 shares authorized:
    9,986,187 and 11,749,069 shares outstanding at
    December 31, 2009 and 2008, respectively






Additional
    paid-in-capital






Retained earnings


226,952



246,173Accumulated other comprehensive income:Net unrealized gains on investments, net of deferred federal
    income taxes


10,088



7,864Total shareholders equity


237,040



254,037Total liabilities and shareholders equity

$
944,514


$
1,005,823    41




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
 For the
    Years Ended December 31, 2009, 2008, and 2007
  Year Ended December 31,2009


2008


2007(In thousands, except per share data)Revenues and Other IncomeNet premiums written

$
109,713


$
120,117


$
130,808Change in unearned premiums


5,165



4,151



8,115Net premiums earned


114,878



124,268



138,923Investment income


30,910



36,864



43,506Net realized losses


(543
)


(658
)


(111
)Other income


769



730



815Total revenues and other income


146,014



161,204



183,133ExpensesLosses and loss adjustment expenses


57,562



65,311



69,428Underwriting expenses


28,515



27,458



30,141Investment expenses


1,045



1,032



910Interest expense


1,344



2,196



3,139General and administrative expenses


1,069



1,185



1,410Other (revenue) expense


(21
)


47



(48
)Total expenses


89,514



97,229



104,980Income before income taxes


56,500



63,975



78,153Federal income tax expense


15,940



18,779



25,362Net income

$
40,560


$
45,196


$
52,791Earnings Per Share:Net incomeBasic

$
3.73


$
3.52


$
3.62Diluted

$
3.67


$
3.45


$
3.55Weighted Average Shares Outstanding:Basic


10,888



12,838



14,601Diluted


11,061



13,094



14,884    42




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS
    EQUITY
    AND COMPREHENSIVE INCOME
    For the Years Ended December 31, 2009, 2008 and 2007
  AccumulatedAdditional





OtherShares


Paid-in


Retained


ComprehensiveOutstanding (1)


Capital


Earnings


Income


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


15,408,767


$
41,106


$
222,935


$
4,769


$
268,810Comprehensive incomeNet income










52,791







52,791Other comprehensive income (Note 5)














1,286



1,286Total comprehensive income, net of taxes


















54,077Options exercised


108,027



976











976Shares tendered/netted in connection with option exercise


(50,312
)


(1,654
)










(1,654
)Excess tax benefits from share-based awards






1,031











1,031Cash dividends to shareholders, $0.15 per share










(2,097
)






(2,097
)Fair value compensation of share-based awards






160











160Purchase and retirement of common stock


(1,962,828
)


(41,619
)


(16,127
)






(57,746
)Balance, December 31, 2007


13,503,653


$



$
257,502


$
6,055


$
263,557Comprehensive incomeNet income










45,196







45,196Other comprehensive income (Note 5)














1,809



1,809Total comprehensive income, net of taxes


















47,005Options exercised


25,973







344







344Shares tendered/netted in connection with option exercise


(1,931
)






(63
)






(63
)Excess tax benefits from share-based awards










164







164Cash dividends to shareholders, $0.30 per share










(3,813
)






(3,813
)Fair value compensation of share-based awards










44







44Purchase and retirement of common stock


(1,778,627
)






(53,201
)






(53,201
)Balance, December 31, 2008


11,749,069


$



$
246,173


$
7,864


$
254,037Comprehensive incomeNet income










40,560







40,560Other comprehensive income (Note 5)














2,224



2,224Total comprehensive income, net of taxes


















42,784Options exercised


235,310







2,635







2,635Shares tendered/netted in connection with option exercise


(134,315
)






(4,463
)






(4,463
)Excess tax benefits from share-based awards










1,764







1,764Cash dividends to shareholders, $0.34 per share










(3,633
)






(3,633
)Purchase and retirement of common stock


(1,863,833
)






(56,084
)






(56,084
)Shares retired in connection with stock split


(44
)














Balance, December 31, 2009


9,986,187


$



$
226,952


$
10,088


$
237,040     (1)
    
    Share amounts have been retroactively adjusted to reflect a
    four-for-three
    stock split effective July 31, 2009. See Note 1.   43




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
    For the Years Ended December 31, 2009, 2008, and 2007
  Year Ended December 31,2009


2008


2007(In thousands)Cash flows from (for) operating activitiesNet income

$
40,560


$
45,196


$
52,791Adjustments to reconcile net income to net cash from operating
    activities:Depreciation and amortization


5,612



4,328



3,128Net realized losses


543



658



111(Income) loss on equity method investees


140



144



(51
)Deferred federal income taxes


47



2,893



9,669Federal income taxes recoverable/payable


(570
)


691



(235
)Excess tax benefits from share-based awards


(1,764
)


(164
)


(1,031
)Share based compensation






44



160Changes in:Premiums receivable


4,362



1,519



7,526Reinsurance recoverable


23,113



20,565



2,052Unpaid losses and loss adjustment expenses


(35,589
)


(19,722
)


(23,914
)Unearned premiums


(5,314
)


(4,096
)


(10,664
)Accrued expenses and other liabilities


(3,806
)


(10,588
)


(730
)Other assets


1,544



(67
)


7,181Net cash from operating activities


28,878



41,401



45,993Cash flows from (for) investing activitiesPurchasesAvailable-for-sale 
    fixed maturities


(14,884
)


(31,305
)


(56,234
)Held-to-maturity 
    fixed maturities






(96,766
)


(5,312
)Other investments


(34,084
)


(10,857
)


(6,848
)Property and equipment


(247
)


(4,172
)


(5,070
)Sales and maturitiesAvailable-for-sale 
    fixed maturities


40,158



69,941



50,339Held-to-maturity 
    fixed maturities


110,051



110,028



11,049Other investments


28



150



2,425Property and equipment


9



2



22Net cash from (for) investing activities


101,031



37,021



(9,629
)Cash flows from (for) financing activitiesCommon stock repurchased


(56,084
)


(53,201
)


(57,746
)Excess tax benefits from share-based awards


1,764



164



1,031Taxes paid in connection with net option exercise


(1,947
)






(785
)Repayment of long-term debt






(5,000
)


Cash dividends paid


(3,633
)


(3,813
)


(2,097
)Proceeds from stock options exercised


119



281



107Other


397



(2,714
)


2,397Net cash for financing activities


(59,384
)


(64,283
)


(57,093
)Net increase (decrease) in cash and cash equivalents


70,525



14,139



(20,729
)Cash and cash equivalents, beginning of period


101,637



87,498



108,227Cash and cash equivalents, end of period

$
172,162


$
101,637


$
87,498Supplemental disclosures of cash flow informationFederal income taxes of $16,463,000, $15,196,000,
    and $15,821,000, net, were paid during 2009, 2008
      and 2007, respectively.Interest payments of $1,348,000, $2,219,000, and
    $2,906,000 were made during 2009, 2008 and 
      2007, respectively.    44




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Significant
    Accounting Policies  Basis
    of consolidation and reporting
      Stock
    split
  four-for-three
  Reclassifications
    Use of
    estimates
      Nature
    of business and segment reporting
   45




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)        Cash
    and Investments
  Fixed-Income
    Investment Securities
  held-to-maturity available-for-sale Available-for-sale available-for-sale Held-to-maturity
  yield-to-maturity available-for-sale held-to-maturity
     46




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)  available-for-sale held-to-maturity held-to-maturity
  Other
    Investments
  available-for-sale
       47




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)      Cash
    and cash equivalents
    Fair
    Values
    Premiums
    written and receivable and related credit risk
    Deferred
    policy acquisition costs
    Property,
    equipment and depreciation
    Other
    assets
   48




---



##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)    2010

2011

2012

2013

2014(In thousands)$
1,684


$
1,684


$
1,684


$
1,495


$
102   Unpaid
    losses and loss adjustment expense reserves
        Reserve
    for extended reporting period claims
   49




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)  Revenue
    recognition
    Reinsurance
        Income
    taxes
           50




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)  Share-based
    awards
    Subsequent
    events
    2.
    Effects
    of New Accounting Pronouncements      Consolidation
    of Variable Interest Entities (ASC Update
    No. 2009-17)
    No. 2010-10,
 51




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2.
    Effects
    of New Accounting Pronouncements (continued)  Transfers
    and Servicing  Accounting for Transfers of Financial
    Assets (ASC Update No.
    2009-16)
    Fair
    Value Measurements (ASC Update
    No. 2010-06)
    Subsequent
    Events (ASC Update
    2010-09)
    3.
    Investments  available-for-sale
  2009Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost/Cost


Gains


Losses


Fair Value(In thousands)Available-for-saleStates and political subdivisions

$
150,488


$
10,629


$



$
161,117Corporate securities


42,173



2,117



(418
)


43,872Mortgage-backed securities


82



2







84Total fixed-income securities


192,743



12,748



(418
)


205,073Equity securities(1)


15,607



2,377







17,984Total
    available-for-sale
    securities

$
208,350


$
15,125


$
(418
)

$
223,057     (1)
    
    Equity securities are included in other investments in the
    accompanying consolidated balance sheets.  52




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investments
    (continued)  2008Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost/Cost


Gains


Losses


Fair Value(In thousands)Available-for-saleStates and political subdivisions

$
150,098


$
5,844


$
(20
)

$
155,922Corporate securities


65,381



2,898



(1,339
)


66,940Mortgage-backed securities


99







(20
)


79Total fixed-income securities


215,578



8,742



(1,379
)


222,941Equity securities(1)


16,515



2,885







19,400Total
    available-for-sale
    securities

$
232,093


$
11,627


$
(1,379
)

$
242,341     (1)
    
    Equity securities are included in other investments in the
    accompanying consolidated balance sheets.  held-to-maturity available-for-sale held-to-maturity
  2009Gross


GrossUnrecognized


UnrecognizedCarrying


Holding


Holding


EstimatedValue


Gains


Losses


Fair Value(In thousands)Held-to-maturityStates and political subdivisions

$
225,069


$
12,808


$



$
237,877Corporate securities


34,467



646



(150
)


34,963Mortgage-backed securities


109,315



2,219



(8
)


111,526Total
    held-to-maturity
    fixed-income securities

$
368,851


$
15,673


$
(158
)

$
384,366   2008Gross


GrossUnrecognized


UnrecognizedCarrying


Holding


Holding


EstimatedValue


Gains


Losses


Fair Value(In thousands)Held-to-maturityU.S. government obligations

$
64,458


$
676


$



$
65,134States and political subdivisions


228,685



4,567



(291
)


232,961Corporate securities


37,824



369



(409
)


37,784Mortgage-backed securities


150,783



1,435



(755
)


151,463Total
    held-to-maturity
    fixed-income securities

$
481,750


$
7,047


$
(1,455
)

$
487,342  53




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investments
    (continued)  held-to-maturity
  December 31, 2009Less Than 12 Months


12 Months or More


TotalUnrealized or





Unrealized or





Unrealized orFair


Unrecognized


Fair


Unrecognized


Fair


UnrecognizedDescription of Securities

Value


Losses


Value


Losses


Value


Losses(In thousands)Available-for-saleCorporate securities

$



$



$
10,082


$
(418
)

$
10,082


$
(418
)Subtotal
    available-for-sale










10,082



(418
)


10,082



(418
)Held-to-maturityCorporate securities

$



$



$
5,890


$
(150
)

$
5,890


$
(150
)Mortgage-backed securities


4,564



(8
)










4,564



(8
)Subtotal
    held-to-maturity


4,564



(8
)


5,890



(150
)


10,454



(158
)Total temporarilyimpaired securities

$
4,564


$
(8
)

$
15,972


$
(568
)

$
20,536


$
(576
)   December 31, 2008Less Than 12 Months


12 Months or More


TotalUnrealized or





Unrealized or





Unrealized orFair


Unrecognized


Fair


Unrecognized


Fair


UnrecognizedDescription of Securities

Value


Losses


Value


Losses


Value


Losses(In thousands)Available-for-saleStates and political subdivisions

$
3,168


$
(20
)

$



$



$
3,168


$
(20
)Corporate securities


9,241



(1,359
)










9,241



(1,359
)Subtotal
    available-for-sale


12,409



(1,379
)










12,409



(1,379
)Held-to-maturityStates and political subdivisions

$
56,445


$
(291
)

$



$



$
56,445


$
(291
)Corporate securities


14,244



(409
)










14,244



(409
)Mortgage-backed securities


27,763



(558
)


10,480



(197
)


38,243



(755
)Subtotal
    held-to-maturity


98,452



(1,258
)


10,480



(197
)


108,932



(1,455
)Total temporarilyimpaired securities

$
110,861


$
(2,637
)

$
10,480


$
(197
)

$
121,341


$
(2,834
)    54




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investments
    (continued)         55




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investments
    (continued)    2009


2008


2007(In thousands)Interest income

$
30,805


$
36,782


$
43,275Dividend income


230



200



5Equity method investees


(140
)


(144
)


51Other investment income


15



26



175Total investment income


30,910



36,864



43,506Investment expenses


(1,045
)


(1,032
)


(910
)Net investment income

$
29,865


$
35,832


$
42,596Gross realized gains on disposalFixed-income

$
3,878


$
200


$
118Equity securities


28







Total gross realized gains


3,906



200



118Gross realized losses on disposalFixed-income






(2
)


(134
)Equity securities










(90
)Property and equipment


4



2



(5
)Total gross realized losses


4







(229
)Other than temporary impairments


(4,453
)


(858
)


Net realized losses

$
(543
)

$
(658
)

$
(111
)   available-for-sale held-to-maturity
  Fair Value(In thousands)Available-for-saleLess than one year

$
7,851One to five years


173,606Five to ten years


16,086More than ten years


7,446Mortgage-backed securities


84Total
    available-for-sale

$
205,073   56




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investments
    (continued)  Carrying


EstimatedValue


Fair Value(In thousands)Held-to-maturityLess than one year

$
9,867


$
9,942One to five years


74,537



77,811Five to ten years


157,021



165,723More than ten years


18,111



19,365Mortgage-backed securities


109,315



111,525Total
    held-to-maturity

$
368,851


$
384,366         4.
    Fair
    Value Measurements    
    Level 1:  Quoted prices (unadjusted) for
    identical assets or liabilities in active markets that the
    entity has the ability to access as of the measurement date.
    Level 2:  Significant observable inputs
    other than Level 1 prices such as quoted prices for similar
    assets or liabilities in active markets; quoted prices for
    identical or similar assets or liabilities in markets that are
    not active; or other inputs that are observable or can be
    derived from or corroborated by observable market data by
    correlation or other means.
    Level 3:  Significant unobservable inputs
    that reflect a reporting entitys own assumptions about the
    assumptions that market participants would use in pricing an
    asset or liability.    Valuation
    of Investments
   57




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Fair
    Value Measurements (continued)    Investments
    Measured at Fair Value on a Recurring Basis
  Available-for-sale
    fixed-income securities
        
    How are other sources, such as Bloomberg, pricing this security?
    What have been the historic prices of the security?
    Is there any news which would affect the price of the security?
    How are similar securities being priced?   58




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Fair
    Value Measurements (continued)          Available-for-sale
    equity securities available-for-sale
    December 31, 2009Total


Level 1


Level 2


Level 3(In thousands)Available-for-sale
    investments:Fixed-income securities

$
205,073


$



$
198,947


$
6,126Equity securities (1)


17,984



17,984







Total

$
223,057


$
17,984


$
198,947


$
6,126   December 31, 2008Total


Level 1


Level 2


Level 3(In thousands)Available-for-sale
    investments:Fixed-income securities

$
222,941


$



$
216,722


$
6,219Equity securities (1)


19,400



19,400







Total

$
242,341


$
19,400


$
216,722


$
6,219     (1)
    
    Included in other investments on the accompanying Consolidated
    Balance Sheets.   59




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Fair
    Value Measurements (continued)    December 31,2009


2008(In thousands)Available-for-sale
    fixed-income securitiesBeginning balance

$
6,219


$
6,911Principal paydowns


(100
)


(539
)Net unrealized appreciation (depreciation) include in other
    comprehensive income


7



(153
)Ending balance

$
6,126


$
6,219   Investment
    Measured at Fair Value on a Nonrecurring Basis
  Held-to-maturity
    fixed-income securities held-to-maturity other-than-temporarily held-to-maturity held-to-maturity available-for-sale other-than-temporarily held-to-maturity other-than-temporarily
  Other
    Assets and Liabilities Measured at Fair Value on a Nonrecurring
    Basis
  and/or
  Fair
    Value of Financial Instruments
  held-to-maturity, held-to-maturity
  60




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Other
    Comprehensive Income  available-for-sale held-to-maturity
    December 31,2009


2008(In thousands)Net unrealized gains on
    available-for-sale
    securities

$
14,707


$
10,248Net unamortized unrealized gains on
    held-to-maturity
    securities


813



1,850Deferred federal income taxes


(5,432
)


(4,234
)Total net unrealized gains, net of deferred federal income taxes

$
10,088


$
7,864   available-for-sale held-to-maturity
  2009


2008


2007(In thousands)Unrealized gains (losses) arising during the period:Available-for-sale:Fixed maturities

$
8,845


$
663


$
2,350Equity securities


(4,933
)


2,270



615Held-to-maturity
    amortization


(1,038
)


(986
)


(945
)Reclassification adjustments


548



835



(58
)Other comprehensive income before taxesequity method investees


3,422



2,782



1,962Deferred federal income taxes


(1,198
)


(973
)


(687
)Equity method investees, net of deferred taxes










11Other comprehensive income

$
2,224


$
1,809


$
1,286    6.
    Deferred
    Acquisition Costs    2009


2008


2007(In thousands)Balance, January 1

$
6,074


$
6,526


$
7,644Additions


13,619



13,658



14,708Amortization


(13,598
)


(14,110
)


(15,826
)Balance, December 31

$
6,095


$
6,074


$
6,526     61




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Property
    and Equipment, Net    December 31,2009


2008(In thousands)Land

$
571


$
571Building (occupied by the Company)


10,499



10,499Computer equipment and software


12,180



12,108Furniture and leasehold improvements


3,731



3,72726,981



26,905Accumulated depreciation


(18,891
)


(18,228
)$
8,090


$
8,677      8.
    Unpaid
    Losses and Loss Adjustment Expenses    2009


2008


2007(In thousands)Balance, beginning of year

$
644,396


$
664,117


$
688,031Less, reinsurance recoverables


(81,546
)


(104,648
)


(107,965
)Net balance, beginning of year


562,850



559,469



580,066Incurred related toCurrent year


94,121



97,490



103,673Prior years


(36,559
)


(32,179
)


(34,245
)Total incurred


57,562



65,311



69,428Paid related toCurrent year


3,733



3,012



2,699Prior years


70,187



58,918



87,326Total paid


73,920



61,930



90,025Net balance, end of year


546,492



562,850



559,469Plus, reinsurance recoverables


62,315



81,546



104,648Balance, end of period

$
608,807


$
644,396


$
664,117Prior year development as a percentage ofbeginning of the year net reserves


6.5
%


5.8
%


5.9
%    62




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Unpaid
    Losses and Loss Adjustment Expenses (continued)           9.
    Long-Term
    Debt        63




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   10.
    Reinsurance    2009


2008


2007Written


Earned


Written


Earned


Written


Earned(In thousands)Direct

$
113,232


$
118,546


$
125,018


$
129,114


$
135,415


$
146,078Ceded


(3,546
)


(3,695
)


(4,894
)


(4,839
)


(4,619
)


(7,167
)Assumed


27



27



(7
)


(7
)


12



12Net

$
109,713


$
114,878


$
120,117


$
124,268


$
130,808


$
138,923         December 31,2009


2008(In thousands)Hannover Ruckversicherungs

$
21,292


$
30,479Munich Reins Amer


12,308



17,397Transatlantic Reinsurance Company


4,476



8,406Aspen Re


3,957



3,684Lloyds of London


3,386



3,878General Reinsurance Corporation


2,025



2,597Others


17,634



21,900$
65,078


$
88,341     December 31,2009


2008(In thousands)Reinsurance recoverable

$
63,283


$
86,397Prepaid reinsurance premium (included in other assets)


1,795



1,944Amounts recoverable from reinsurers

$
65,078


$
88,341  64




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   10.
    Reinsurance
    (continued)     11.
    Income
    Taxes    2009


2008


2007Current provision

$
15,893


$
15,887


$
15,963Deferred provision


47



2,892



9,669Total provision

$
15,940


$
18,779


$
25,632     2009


2008


2007(In thousands)Income before income taxes

$
56,500






$
63,975






$
78,153Tax at statutory rate


19,775



35.0
%


22,391



35.0
%


27,354



35.0
%Tax effect of:Tax exempt interest


(4,334
)


−7.7
%


(3,952
)


−6.2
%


(2,773
)


−3.5
%Other items, net


499



0.9
%


340



0.5
%


781



1.0
%$
15,940



28.2
%

$
18,779



29.4
%

$
25,362



32.5
%     2009


2008(In thousands)Deferred tax assets arising from:Losses and loss adjustment expenses

$
18,210


$
18,628Net operating loss carryforwards


249



569Unearned and advanced premiums


4,535



4,971Realized losses on investments


2,178



971Goodwill


2,378



2,872Other


790



1,021Total deferred tax assets


28,340



29,032Deferred tax liabilities arising from:Deferred policy acquisition costs


2,133



2,126Net unrealized gains on securities


5,432



4,234Other


3,447



4,099Total deferred tax liabilities


11,012



10,459Net deferred tax asset

$
17,328


$
18,573  65




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Income
    Taxes (continued)     12.
    Shareholders
    Equity    Discretionary PlanInception

For the Year Ended December 31,to Date Totals

2009

2008

2007(Dollars in thousands, except per share amounts)Number of shares repurchased


9,495,913



179,145



323,200



1,299,095Cost of shares repurchased

$
143,415


$
5,454


$
10,609


$
38,795Average cost per share repurchased

$
15.10


$
30.45


$
32.82


$
29.86   Rule 10b5-1 Rule 10b5-1 Rule 10b5-1 Rule 10b5-1
  Rule 10b5-1 PlanInception

For the Year Ended December 31,to Date Totals

2009

2008

2007(Dollars in thousands, except per share amounts)Number of shares repurchased


4,804,315



1,684,688



1,455,427



663,733Cost of shares repurchased

$
135,819


$
50,630


$
42,592


$
18,952Average cost per share repurchased

$
28.27


$
30.05


$
29.26


$
28.55    13.
    Related
    Party   66




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   13.
    Related
    Party (continued)          14.
    Restructuring
    Charges and Exit Costs  Contract
    Termination Costs
      2009


2008


2007(In thousands)Balance, January 1

$
827


$
899


$
1,068Payments


(181
)


(169
)


(177
)Changes in estimated cash flows


(21
)


47



(52
)Discount accretion


42



50



60Balance, December 31

$
667


$
827


$
899       67




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    Employee
    Benefit Plans     16.
    Share-Based
    Compensation  Equity
    Compensation Plans
          WeightedNumber


Weighted


Average


Aggregateof


Average


Remaining


IntrinsicOptions


Exercise Price


Term


Value(In years)


(In thousands)Options outstanding at January 1, 2009


583,996


$
12.97Granted during the period






Exercised during the period


(235,310
)

$
11.20Canceled during the period





$
Options outstanding at December 31, 2009


348,687


$
14.17



3.25


$
5,632Options exercisable at December 31, 2009


348,687


$
14.17



3.25


$
5,632   in-the-money
     68




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AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   16.
    Share-Based
    Compensation (continued)         17.
    Earnings
    Per Share    2009


2008


2007(In thousands, exceptper share amounts)Numerator for basic and diluted income per common share:Net income

$
40,560


$
45,196


$
52,791Denominator:Denominator for basic income per common share 
    weighted average shares outstanding


10,888



12,838



14,601Effect of dilutive stock options and awards


173



256



283Denominator for diluted income per common share 
    adjusted weighted average shares outstanding


11,061



13,094



14,884Income per common share:Net incomeBasic

$
3.73


$
3.52


$
3.62Diluted

$
3.67


$
3.45


$
3.55      18.
    Commitments
    and Contingencies   69




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   18.
    Commitments
    and Contingencies (continued)             19.
    GAAP and
    Statutory Reporting    
    Deferred policy acquisition costs are charged against operations
    as incurred for statutory accounting purposes.
    Assets designated as nonadmitted assets are charged
    directly to surplus for statutory accounting purposes.
    Bonds and U.S. government securities are generally carried
    at amortized cost for statutory accounting purposes. 70




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    GAAP and
    Statutory Reporting (continued)   
    Unpaid losses and loss adjustment expenses and unearned premiums
    are reported net of the impact of reinsurance for statutory
    accounting purposes.
    Deferred federal income taxes applicable to operations are
    recorded in income for GAAP, whereas deferred federal income
    taxes are recorded in surplus for statutory accounting purposes.
    Deferred tax assets reported in the statutory balance sheet are
    not only limited by the more likely than not
    realization standard as are GAAP deferred tax assets, but are
    also limited as to the amount that can be admitted based on
    certain other criteria. This additional admissibility
    test under statutory accounting often result in differing
    amounts of deferred tax assets being carried for GAAP and
    statutory accounting purposes.
    The reserve associated with DDR coverage benefits is included as
    a component of unpaid loss and loss adjustment expense reserves
    for GAAP. Any change in the estimate of the liability associated
    with such coverage is charged or credited to the incurred loss
    and loss adjustment expenses in the GAAP Statement of
    Income. Statutory accounting principles require that the reserve
    for DDR benefits be included as a component of unearned premium
    reserves, with any change in the estimated reserve treated as an
    adjustment to earned premium in the period of change.
    Subsidiaries that would be required to be consolidated in
    accordance with GAAP, are accounted for using the equity method
    with the equity in the earnings of such subsidiaries being
    credited directly to surplus for statutory accounting purposes.    2009


2008


2007(In thousands)Statutory surplus, December 31

$
208,718


$
204,975


$
221,595Statutory net income for the year ended December 31

$
41,154


$
49,135


$
63,725   12-month
  71




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Quarterly
    Financial Data (Unaudited)    Net IncomeIncome





Per CommonTotal


Before Federal


Net


Share AssumingRevenues


Income Taxes


Income


Dilution(In thousands, except per share data)20091st Quarter

$
37,719


$
14,003


$
10,087


$
0.852nd Quarter


36,622



15,344



10,990



0.973rd Quarter


35,801



13,623



9,751



0.914th Quarter


35,872



13,530



9,732



0.94$
146,014


$
56,500


$
40,56020081st Quarter

$
41,011


$
16,580


$
11,374


$
0.852nd Quarter


40,935



15,530



11,043



0.833rd Quarter


39,563



15,670



11,168



0.854th Quarter


39,695



16,195



11,611



0.93$
161,204


$
63,975


$
45,196   72




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##### Table of Contents



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
  CONDENSED
    BALANCE SHEETS
    December 31, 2009 and 2008
  December 31,2009


2008(In thousands)ASSETSInvestments in subsidiaries

$
239,026


$
238,832Equity securities


778



778Cash and cash equivalents


21,428



39,266Deferred federal income taxes


248



216Federal income taxes recoverable from affiliates


2,580



1,156Other assets


363



462Total assets

$
264,423


$
280,710LIABILITIESLong-term debt

$
25,928


$
25,928Accrued expenses and other liabilities


1,455



745Total liabilities


27,383



26,673Shareholders EquityCommon stock, no par value, 50,000,000 shares
    authorized,9,986,187 and11,749,069 shares outstanding at December 31, 2009 and
    2008, respectivelyRetained earnings


226,952



246,173Accumulated other comprehensive income, net of deferred federal
    income taxes


10,088



7,864Total shareholders equity


237,040



254,037Total liabilities and shareholders equity

$
264,423


$
280,710    73




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##### Table of Contents



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
 
  CONDENSED
    STATEMENTS OF OPERATIONS
    Years Ended December 31, 2009, 2008 and 2007
  Year Ended December 31,2009


2008


2007(In thousands)RevenuesInvestment income

$
49


$
603


$
1,619Other income


7







31Total revenues


56



603



1,650ExpensesInvestment expense


9



9



15Interest expense


1,294



2,137



3,073General and administrative expenses


1,069



1,185



1,410Total expenses


2,372



3,331



4,498Loss before income taxes and equity innet income of subsidiaries


(2,316
)


(2,728
)


(2,848
)Federal income tax benefit


(807
)


(959
)


(1,017
)Loss before equity in net income of subisidiaries


(1,509
)


(1,769
)


(1,831
)Equity in net income of subsidiaries


42,069



46,965



54,622Net income

$
40,560


$
45,196


$
52,791    74




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##### Table of Contents



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
 
  CONDENSED
    STATEMENTS OF CASH FLOWS
    Years Ended December 31, 2009, 2008 and 2007
  Year Ended December 31,2009


2008


2007(In thousands)Cash flows from (for) operating activitiesNet income

$
40,560


$
45,196


$
52,791Adjustments to reconcile net income to net cash used inoperating activities:Equity in undistributed income of subsidiaries


(42,069
)


(46,965
)


(54,622
)Dividends from subsidiaries


45,000



63,000



81,950Stock based compensation






44



160Excess tax benefits from share-based awards


(1,764
)


(164
)


(1,031
)Deferred federal income taxes


(32
)


34



(53
)Changes in:Federal or intercompany income taxes recoverable/payable


340



1,000



3,356Accrued expenses and other liabilities


313



(308
)


(1,177
)Other assets


98



128



(344
)Net cash from operating activities


42,446



61,965



81,030Cash flows from (for) investing activitiesCapital Contribution to Alpha Advisors


(900
)






Other investments






150



Net cash from investing activities


(900
)


150



Cash flows from (for) financing activitiesCommon stock repurchased


(56,084
)


(53,201
)


(57,746
)Cash dividends paid


(3,633
)


(3,813
)


(2,097
)Taxes paid in connection with net option exercise


(1,947
)






(785
)Repayment of long-term debt






(5,000
)


Proceeds from stock options exercised


119



281



107Excess tax benefits from share-based awards


1,764



164



1,031Other


397



(2,714
)


2,397Net cash for financing activities


(59,384
)


(64,283
)


(57,093
)Net (decrease) increase in cash and cash equivalents


(17,838
)


(2,168
)


23,937Cash and cash equivalents, beginning of year


39,266



41,434



17,497Cash and cash equivalents, end of year

$
21,428


$
39,266


$
41,434    75




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##### Table of Contents



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
  NOTES TO
    CONDENSED FINANCIAL INFORMATION OF REGISTRANT
  (1)
    Basis of
    Presentation                  (2)
    Long Term
    Debt    (3)
    Federal
    Income Taxes    American Physicians

APSpecialty

Alpha Advisors, Inc.    76




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##### Table of Contents



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
  NOTES TO
    CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT  (Continued)
  (4)
    Dividends
    Received        Subsequent
    event
    (5)
    Stock
    Split  four-for-three
  (6)
    Share
    Repurchases  Rule 10b5-1
 77




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Rule 13a-15(b).
  Managements
    Report on Internal Control Over Financial Reporting
    Internal Control 
    Integrated Framework Internal
    Control  Integrated Framework
 78




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                      79




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##### Table of Contents



Changes
    in Internal Control over Financial Reporting
    Item 9B.
    Other
    Information   
  PART III
 
  Item 10.
    Directors,
    Executive Officers and Corporate Governance   
  Item 11.
    Executive
    Compensation   
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters      Equity Compensation PlansNumber of SharesRemaining Available forfuture issuance UnderNumber of shares to be

Weighted-Average

Equity Compensationissued Upon Exercise of

Exercise Price of

Plans (Excluding Sharesof outstanding options

Outstanding Options

Reflected in Column (a))Plan Category

(a)

(b)

(c)Equity compensation plans approved by shareholders:


348,687


$
14.17



13,800Equity compensation plans not approved by shareholders:










  
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence   
  Item 14.
    Principal
    Accounting Fees and Services   80




---



##### Table of Contents



PART IV
  Item 15.
    Exhibits and
    Financial Statement Schedules    Financial
    Statements:
              Financial
    Statement Schedules:
    Regulation S-X
   81




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##### Table of Contents



SIGNATURES
    AMERICAN PHYSICIANS
    CAPITAL, INC.
  By:
    /s/  R.
    Kevin Clinton   President and Chief Executive Officer
    Signature

Title/s/  R.
    Kevin ClintonR.
    Kevin Clinton

President, Chief Executive Officer and Director
    (principal executive officer)/s/  Frank
    H. FreundFrank
    H. Freund

Executive Vice President, Treasurer and Chief Financial Officer
    (principal accounting officer)/s/  AppaRao
    Mukkamala, M.D.AppaRao
    Mukkamala, M.D.

Director and Chairman of the Board/s/  Billy
    B. Baumann, M.D.Billy
    B. Baumann, M.D.

Director/s/  Spencer
    L. SchneiderSpencer
    L. Schneider, J.D.

Director/s/  Joseph
    StilwellJoseph
    Stilwell

Director/s/  Larry
    W. ThomasLarry
    W. Thomas

Director/s/  Stephen
    H. Haynes, M.D.Stephen
    H. Haynes, M.D.

Director/s/  Mitchell
    A. Rinek, M.D.Mitchell
    A. Rinek, M.D.

Director  82




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##### Table of Contents



EXHIBIT INDEX
  000-32057.
  ExhibitNumber

Description3
.1

Articles of Incorporation (APCapitals Registration
    Statement on
    Form S-1
    (no. 333-41136),
    as amended)3
.2

Amended and Restated Bylaws, as amended (APCapitals
    Current Report on
    Form 8-K
    dated November 5, 2009)4
.1

Indenture relating to Floating Rate Junior Subordinated
    Deferrable Interest Debentures Dated as of May 15, 2003
    (APCapitals Quarterly Report on
    Form 10-Q,
    as amended, for the quarterly period ended June 30, 2003)4
.2

Indenture relating to Floating Rate Junior Subordinated Debt
    Securities Dated as of May 22, 2003 (APCapitals
    Quarterly Report on
    Form 10-Q,
    as amended, for the quarterly period ended June 30, 2003)*10
.1

American Physicians Capital, Inc. Stock Compensation Plan
    (APCapitals Registration Statement on
    Form S-8
    (no. 333-56428))10
.14

MSMS/American Physicians Marketing Support Agreement, effective
    January 1, 2000, and American Physicians (APCapitals
    Registration Statement on
    Form S-1
    (no. 333-41136),
    as amended)*10
.18

Form of Nonqualified Stock Option Agreement (Directors Version),
    dated December 5, 2000 (APCapitals 2000 Annual Report
    on
    Form 10-K)*10
.19

Form of Nonqualified Stock Option Agreement (Employee Version),
    dated December 5, 2000 (APCapitals 2000 Annual Report
    on
    Form 10-K)10
.26

Amended And Restated Declaration of Trust dated as of
    May 15, 2003 by and among U.S. Bank National Association,
    American Physicians Capital, Inc., William B. Cheeseman and
    Frank H. Freund (APCapitals Quarterly Report on
    Form 10-Q,
    as amended, for the quarterly period ended June 30, 2003)10
.27

Amended And Restated Declaration of Trust dated as of
    May 22, 2003 of APCapital Trust II (APCapitals
    Quarterly Report on
    Form 10-Q,
    as amended, for the quarterly period ended June 30, 2003)10
.28

Placement Agreement, dated April 25, 2003 between the
    Company, American Physicians Capital Statutory Trust I, FTN
    Financial Capital Markets and Keefe Bruyette & Woods,
    Inc. (APCapitals Quarterly Report on
    Form 10-Q,
    as amended, for the quarterly period ended June 30, 2003)10
.29

Placement Agreement, dated as of May 13, 2003, with Sandler
    ONeill & Partners L.P. (APCapitals
    Quarterly Report on
    Form 10-Q,
    as amended, for the quarterly period ended June 30, 2003)10
.30

Guarantee Agreement dated as of May 15, 2003 by and between
    U.S. Bank National Association and American Physicians Capital,
    Inc. (APCapitals Quarterly Report on
    Form 10-Q,
    as amended, for the quarterly period ended June 30, 2003)10
.31

Guarantee Agreement dated as of May 22, 2003 by and between
    Wilmington Trust Company and American Physicians Capital,
    Inc. (APCapitals Quarterly Report on
    Form 10-Q,
    as amended, for the quarterly period ended June 30, 2003)**10
.35

Master Agency Agreement between American Physicians Assurance
    Corporation and SCW Agency Group, Inc., effective
    January 1, 2004 (APCapitals 2003 Annual Report on
    Form 10-K,
    as amended)*10
.42

Form of Executive Employment Agreement dated February 23,
    2005, by and between American Physicians Assurance Corporation
    and each of R. Kevin Clinton, Frank H. Freund and Annette E.
    Flood (APCapitals Current Report on
    Form 8-K
    dated February 28, 2005)*10
.47

Amendment No. 1 to American Physicians Capital, Inc. Stock
    Compensation Plan (APCapitals 2006 Annual Report on
    Form 10-K) 83




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##### Table of Contents



ExhibitNumber

Description*10
.48

Summary of Incentive Compensation Plan as of March 2007
    (APCapitals Current Report on
    Form 8-K
    dated March 14, 2007)*10
.49

Amendment No. 2, dated October 25, 2007 to American
    Physicians Capital, Inc. Stock Compensation Plan.
    (APCapitals Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007)*10
.50

Form of Amendment No. 1 to Form of Executive Employment
    Agreement dated February 23, 2005, by and between American
    Physicians Assurance Corporation and each of R. Kevin Clinton,
    Frank H. Freund and Annette E. Flood. (APCapitals
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007)*10
.51

Amendment No. 1, dated October 1, 2007, to the
    Incentive Compensation Plan as of March 2007. (APCapitals
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007)**10
.52

Amendment No. 1 Master Agency Agreement between American
    Physicians Assurance Corporation and SCW Agency Group, Inc.,
    effective October 1, 2007. (APCapitals 2007 Annual
    Report on
    Form 10-K)*10
.53

Summary Amendment No. 2, dated May 9, 2008, to the
    Incentive Compensation Plan as of March 2007 (APCapitals
    Current Report on
    Form 8-K
    filed on May 15, 2008).10
.54

Letters, dated July 16, 2008 and August 27, 2008,
    among American Physicians Assurance Corporation and SCW Agency
    Group, Inc. evidencing agreement to extend term of Master Agency
    Agreement between American Physicians Assurance Corporation and
    SCW Agency Group, Inc. (APCapitals Quarterly Report on
    Form 10-Q
    dated November 8, 2008).**10
.55

Adoption of Master Agency Agreement, effective as of
    November 1, 2008, between American Physicians Assurance
    Corporation and SCW Agency Group, Inc. amending Master Agency
    Agreement between American Physicians Assurance Corporation and
    SCW Agency Group, Inc. (APCapitals Quarterly Report on
    Form 10-Q
    dated November 8, 2008)10
.56

Limited Partnership Agreement of Stilwell Value Partners I,
    L.P. with American Physicians Assurance Corporation, executed
    November 30, 2009, as of October 1, 2008.10
.57

Limited Partnership Agreement of Stilwell Value Partners VI,
    L.P. with American Physicians Assurance Corporation, executed
    November 30, 2009, as of October 1, 200810
.58

Limited Partnership Agreement of Stilwell Associates, L.P. with
    American Physicians Assurance Corporation, executed
    November 30, 2009, as of January 1, 200721
.1

Subsidiaries of APCapital23
.1

Consent of BDO Seidman, LLP31
.1

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

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.32
.1

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350 and
    Rule 13a-14(b)
    under the Securities Exchange Act of 1934.99
.1

Detail of fixed income portfolio     *
    
    Current management contracts or compensatory plans or
    arrangements.**
    
    Portions of this exhibit have been omitted pursuant to
    APCapitals request to the Secretary of the Securities and
    Exchange Commission for confidential treatment pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934, as amended. 84