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, 2008o

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
  Rule 12b-2
 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




---



##### 





Explanatory
    Note
  Form 10-K
  Item 1.
    Business.  General
       1




---



##### 



For the Year Ended December 31,2008


2007


2006% of





% of





% ofTotal





Total





Total(In thousands)Direct premiums written:Michigan

$
44,917



35.9%


$
47,583



35.1%


$
50,302



32.1%Illinois


33,704



27.0%



35,160



26.0%



48,421



30.9%Ohio


21,053



16.8%



25,751



19.0%



28,292



18.0%New Mexico


18,565



14.8%



19,061



14.1%



20,759



13.2%Kentucky


4,219



3.4%



5,053



3.7%



5,878



3.7%All Other


2,560



2.1%



2,807



2.1%



3,228



2.1%Total medical professional liability

$
125,018



100.0%



135,415



100.0%



156,880



100.0%Exited lines of business






0.0%







0.0%



(14
)


0.0%Total direct premiums written

$
125,018



100.0%


$
135,415



100.0%


$
156,866



100.0%Net premiums earned:Medical professional

$
124,275



77.1%


$
138,917



75.9%


$
149,790



75.2%Exited lines of business


(7
)


0.0%



6



0.0%



(102
)


−0.1%Total net premiums earned


124,268



77.1%



138,923



75.9%



149,688



75.1%Investment income


36,864



22.9%



43,506



23.8%



45,253



22.7%Realized (losses) gains


(658
)


−0.4%



(111
)


−0.1%



3,310



1.7%Other income


730



0.4%



815



0.4%



1,031



0.5%Total revenue

$
161,204



100.0%


$
183,133



100.0%


$
199,282



100.0%   Products and Services.
    Marketing.
 2




---



##### 



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




---



##### 



Reinsurance.
    % of 2008Amounts


2008 Total Ceded


AmountsA.M. Best

Recoverable From


Premiums


Recoverable FromReinsurer

Rating

Reinsurers


Written


Reinsurers(Dollars in thousands)Hannover Ruckversicherungs


A


$
30,479


$
1,357



34.5
%Munich Reins Amer


A+



17,397



32



19.7
%Transatlantic Reinsurance Company


A



8,406



5



9.5
%     Capital and Surplus.
 4




---



##### 



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




---



##### 



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




---



##### 



Guaranty Fund.
  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




---



##### 



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 current 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.
   8




---



##### 



If we
    are unable to obtain or collect on ceded reinsurance, our
    results of operations and financial condition may be adversely
    affected.
    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.
    The
    unpredictability of court decisions could have a material impact
    on our operations.
   9




---



##### 



Our
    business could be adversely affected by the loss of one or more
    key employees.
    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




---



##### 



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




---



##### 



PART II
  Item 5.
    Market
    For Registrants Common Equity, Related Stockholder Matters
    and issuer purchases of equity securities    Sale Price


DividendsHigh


Low


per Share2008October 1  December 31, 2008

$
50.23


$
28.93


$
0.10July 1  September 30, 2008


50.49



40.00



0.10April 1  June 30, 2008


49.90



44.15



0.10January 1  March 31, 2008


48.31



37.01



0.102007October 1  December 31, 2007

$
46.68


$
37.92


$
0.10July 1  September 30, 2007


42.00



31.25



0.10April 1  June 30, 2007


42.55



37.89



January 1  March 31, 2007


40.88



35.27



        12




---



##### 



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, 2008


230,570


$
38.37



230,570



21,409,312


$
17,642,955For the month ended November 30, 2008


334,600


$
36.68



334,600



21,409,312


$
5,368,855For the month ended December 31, 2008


223,200


$
38.34



223,200



21,409,312


$
26,811,583For the three months ended December 31, 2008


788,370


$
37.64



788,370



21,409,312


$
26,811,583For the year ended December 31, 2008


1,333,970


$
39.88



1,333,970



21,409,312


$
26,811,583     (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 October 29, 2007 the Board authorized the repurchase of
    an additional $20 million of the Companys commons
    shares pursuant to a
    Rule 10b5-1
    plan in 2008, as well as the rollover of any remaining unused
    dollars allocated to the 2007 plan. 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. 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 paln have been used or at
    December 31, 2009. The Company may terminate the
    Rule 10b5-1
    plan at any time. 13




---



##### 



Item 6.
    Selected
    Financial Data    For the Year Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share data)Revenue:Direct premiums written

$
125,018


$
135,415


$
156,866


$
185,511


$
213,945Net premiums written

$
120,117


$
130,808


$
146,723


$
157,382


$
186,431Net premiums earned

$
124,268


$
138,923


$
149,688


$
164,283


$
200,579Investment income


36,864



43,506



45,253



45,163



47,373Net realized (losses) gains


(658
)


(111
)


3,310



2,033



1,551Other income


730



815



1,031



1,387



1,177Total revenues and other income


161,204



183,133



199,282



212,866



250,680Losses and expenses:Losses and loss adjustment expenses


65,311



69,428



100,458



127,124



177,786Underwriting expenses


27,458



30,141



30,521



33,080



42,681Investment expenses


1,032



910



845



1,411



2,460Interest expense


2,196



3,139



3,057



2,518



1,895Amortization expense














625



915Other expenses


1,232



1,362



1,398



3,241



5,193Total losses and expenses


97,229



104,980



136,279



167,999



230,930Income before federal income tax (benefit) expense and minority
    interest


63,975



78,153



63,003



44,867



19,750Federal income tax expense (benefit)(a)


18,779



25,362



19,816



(27,952
)


(290
)Income before minority interest


45,196



52,791



43,187



72,819



20,040Minority interest in net loss of consolidated subsidiary














(453
)


(10
)Net income

$
45,196


$
52,791


$
43,187


$
72,366


$
20,030Net income per share  basic

$
4.69


$
4.82


$
3.59


$
5.65


$
1.58Weighted average shares outstanding  basic(b)


9,628



10,951



12,015



12,807



12,683Net income per share  diluted

$
4.60


$
4.73


$
3.52


$
5.53


$
1.53Weighted average shares outstanding  diluted(b)


9,820



11,163



12,274



13,094



13,082Cash dividends paid per share

$
0.40


$
0.20


$



$



$
     (a)
    
    Federal income tax expense (benefit) includes expense of
    ($44.1) million and ($6.6) million in 2005 and 2004,
    respectively, related to the reversal, change in or
    establishment of a deferred tax valuation allowance.(b)
    
    Weighted average shares outstanding and the associated earnings
    per share amounts, both basic and diluted, have been
    retroactively adjusted to reflect a three-for-two stock split
    effective November 1, 2006.  14




---



##### 



At or For the Year Ended December 31,2008


2007


2006


2005


2004(Dollars in thousands)Balance Sheet Data:Total cash and investments

$
830,648


$
858,947


$
875,276


$
854,359


$
858,098Total assets


1,005,823



1,057,462



1,095,815



1,109,328



1,069,899Total liabilities


751,786



793,905



827,005



845,475



865,575Total GAAP


254,037



263,557



268,810



261,212



202,124shareholders equityGAAP Ratios:Loss ratio


52.6
%


50.0
%


67.1
%


77.4
%


88.6
%Underwriting expense ratio(a)


22.1



21.7



20.4



20.1



21.3Combined ratio


74.7



71.7



87.5



97.5



109.9Statutory DataLoss ratio


53.3
%


49.2
%


67.5
%


77.6
%


88.6
%Underwriting expense ratio(a)


24.2



23.7



22.3



22.7



23.8Combined ratio


77.5



72.9



89.8



100.3



112.4Surplus

$
204,975


$
221,595


$
248,929


$
240,135


$
210,874Ratio of statutory net premiums written to surplus


0.59 to 1



0.59 to 1



0.59 to 1



0.66 to 1



0.88 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
   15




---



##### 



Unpaid
    Losses and Loss Adjustment Expenses
           16




---



##### 




    paid development;
    incurred development;
    average loss; and
    Bornhuetter-Ferguson.         17




---



##### 



Investments
           18




---



##### 




    Our ability and intent to retain the investment for a period of
    time sufficient to allow for an anticipated recovery in value;
    The recoverability of principal and interest related to the
    security;
    The duration and extent to which the fair value has been less
    than cost for equity securities, or amortized cost for fixed
    maturity securities;
    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.      Reserve
    for Extended Reporting Period Claims
    Revenue
    Recognition
    Reinsurance
   19




---



##### 



Income
    Taxes
     20




---



##### 



Accounting for Uncertainty in
    Income Taxes  an interpretation of FASB Statement
    No. 109, Accounting for Income Taxes
  Deferred
    Policy Acquisition Costs
      Overview
    of APCapital
     21




---



##### 



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




---



##### 



Results
    of Operations
    2008 vs. 2007


Percentage





2007 vs. 2006


Percentage2008


2007


Change


Change (2)


2006


Change


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

$
125,018


$
135,415


$
(10,397
)


−7.7
%

$
156,866


$
(21,451
)


−13.7
%Net premiums written

$
120,117


$
130,808


$
(10,691
)


−8.2
%

$
146,723


$
(15,915
)


−10.8
%Net premiums earned

$
124,268


$
138,923


$
(14,655
)


−10.5
%

$
149,688


$
(10,765
)


−7.2
%Losses and loss adjustment expenses Current year losses


97,490



103,673



(6,183
)


6.0
%


113,338



(9,665
)


8.5
%Prior year development


(32,179
)


(34,245
)


2,066



−6.0
%


(12,880
)


(21,365
)


165.9
%Total


65,311



69,428



(4,117
)


5.9
%


100,458



(31,030
)


30.9
%Underwriting expenses


27,458



30,141



(2,683
)


8.9
%


30,521



(380
)


1.2
%Total underwriting gain


31,499



39,354



(7,855
)


−20.0
%


18,709



20,645



110.3
%Investment income


36,864



43,506



(6,642
)


−15.3
%


45,253



(1,747
)


−3.9
%Net realized (losses) gains


(658
)


(111
)


(547
)


−492.8
%


3,310



(3,421
)


−103.4
%Other income


730



815



(85
)


−10.4
%


1,031



(216
)


−21.0
%Other expenses(1)


(4,460
)


(5,411
)


951



17.6
%


(5,300
)


(111
)


−2.1
%Income before taxes and minority interest


63,975



78,153



(14,178
)


−18.1
%


63,003



15,150



24.0
%Federal income tax expense


18,779



25,362



(6,583
)


26.0
%


19,816



5,546



−28.0
%Net income

$
45,196


$
52,791


$
(7,595
)


−14.4
%

$
43,187


$
9,604



22.2
%Loss Ratio:Accident year


78.5
%


74.6
%


−3.9
%






75.7
%


1.1
%Prior years


−25.9
%


−24.6
%


1.3
%






−8.6
%


16.0
%Calendar year


52.6
%


50.0
%


−2.6
%






67.1
%


17.1
%Underwriting expense ratio


22.1
%


21.7
%


−0.4
%






20.4
%


−1.3
%Combined ratio


74.7
%


71.7
%


−3.0
%






87.5
%


15.8
%Beginning GAAP Equity

$
263,557


$
268,810


$
(5,253
)





$
261,212


$
7,598Return on Equity


17.1
%


19.6
%


−2.5
%






16.5
%


3.1
%     (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. 23




---



##### 



2008 Compared to 2007.
  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
%Kentucky


4,219



5,053



(834
)


−16.5
%All Other


2,560



2,807



(247
)


−8.8
%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
%          24




---



##### 



Loss
    and Loss Adjustment Expenses
    Change2008


2007


Dollar


Percentage (1)(Dollars in thousands)Losses and loss adjustment expensesCurrent year losses

$
97,490


$
103,673


$
(6,183
)


6.0
%Prior year development


(31,546
)


(34,245
)


2,699



−7.9
%Subtotal


65,944



69,428



(3,484
)


5.0
%Commutation impact on prior year losses


(633
)






(633
)Total net incurred loss and LAE

$
65,311


$
69,428


$
(4,117
)


5.9
%Loss Ratio:Accident year


78.5
%


74.6
%






3.9
%Prior years


−25.9
%


−24.6
%






−1.3
%Calendar year


52.6
%


50.0
%






2.6
%     (1)
    
    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.       25




---



##### 



AverageReported


Average


Net CaseClaim


Net Paid


Reserve perFrequency


Loss


Open Claim2004


1,786


$
59,300


$
117,0002005


1,513



75,900



122,4002006


1,168



59,100



137,9002007


952



67,500



144,8002008


908



72,500



166,500       Underwriting
    Expenses
     26




---



##### 



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
%    27




---



##### 



Federal
    Income Taxes
    2007 Compared to 2006.
  Premiums
    Change2007


2006


Dollar


Percentage(Dollars in thousands)Medical professional liability:Michigan

$
47,583


$
50,302


$
(2,719
)


−5.4
%Illinois


35,160



48,421



(13,261
)


−27.4
%Ohio


25,751



28,292



(2,541
)


−9.0
%New Mexico


19,061



20,759



(1,698
)


−8.2
%Kentucky


5,053



5,878



(825
)


−14.0
%All Other


2,807



3,228



(421
)


−13.0
%Subtotal


135,415



156,880



(21,465
)


−13.7
%Exited lines of business






(14
)


14



−100.0
%Total direct premiums written

$
135,415


$
156,866


$
(21,451
)


−13.7
%Net premiums written

$
130,808


$
146,723


$
(15,915
)


−10.8
%% net to direct premiums written


96.6
%


93.5
%






3.1
%Net premiums earned

$
138,923


$
149,688


$
(10,765
)


−7.2
%        28




---



##### 



Loss
    and Loss Adjustment Expenses
      Underwriting
    Expenses
    Investment
    Income
     29




---



##### 



Other
    Expenses
    Change2007


2006


Dollar


Percentage(Dollars in thousands)Other expenses Investment expenses

$
910


$
845


$
65



7.7%Interest expense


3,139



3,057



82



2.7%General and administrative expenses


1,410



1,298



112



8.6%Other


(48
)


100



(148
)


−148.0%Total

$
5,411


$
5,300


$
111



2.1%     Federal
    Income Taxes
    Liquidity
    and Capital Resources
      Parent
    Company
   30




---



##### 



31




---



##### 



Consolidated
    2008


2007


2006(Dollars in thousands)Cash from (for):Premiums received

$
125,294


$
143,175


$
162,841Investment income collected


40,384



46,138



43,334Loss and loss adjustment expenses paid


(73,293
)


(85,373
)


(95,690
)Commissions and other acquisition costs


(11,451
)


(12,134
)


(13,915
)Net reinsurance impact


6,159



2,172



(4,381
)Income taxes paid


(15,360
)


(16,852
)


(7,917
)Salaries and other employee costs


(18,642
)


(18,448
)


(17,586
)Other


(11,689
)


(12,685
)


(10,702
)Net cash flows from operations

$
41,401


$
45,993


$
55,984        32




---



##### 



Financial
    Condition
    Statutory
    Capital and Surplus
    Reserves
    for Unpaid Losses and Loss Adjustment Expenses
    At or For The Year Ended December 31,


% Change


% Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006Medical professional liability:Number of reported claims


908



952



1,168



−4.6%



−18.5%Number of open claims


1,418



1,741



2,256



−18.6%



−22.8%Number of IBNR claims(1)


1,482



1,584



1,882



−6.4%



−15.8%Average net case reserve per open claim

$
166,500


$
144,800


$
137,900



15.0%



5.0%Average net total reserve per open plus IBNR claim


186,200



160,400



133,400



16.1%



20.2%Average net paid loss per claim closed with payment


72,500



67,500



59,100



16.7%



14.3%     (1)
    
    IBNR claim counts are estimates based on actuarial projections.   33




---



##### 



% Change


% Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006(In thousands)Medical professional liability:Net case reserves

$
236,093


$
252,017


$
311,142



−6.3%



−19.0%Net IBNR reserves


303,856



281,310



241,069



8.0%



16.7%Total net reserves


539,949



533,327



552,211



1.2%



−3.4%Other lines total net reserves


22,901



26,142



27,855



−12.4%



−6.1%Total net reserves  all lines

$
562,850


$
559,469


$
580,066



0.6%



−3.6%Medical professional liability as a percentage of total


95.9
%


95.3
%


95.2
%    34




---



##### 



1998


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008Liability for unpaid losses and loss adjustment expenses net of
    reinsurance recoverable

$
371,982


$
393,582


$
413,954


$
505,555


$
542,026


$
574,281


$
590,342


$
579,747


$
580,066


$
559,469


$
562,850Cumulative net paid as of:End of year


85,290



95,471



124,479



161,770



181,658



142,633



130,793



96,971



87,326



58,918Two years later


146,497



182,541



236,653



293,852



295,350



260,178



219,013



176,778



140,198Three Years later


198,774



251,448



322,226



367,289



381,057



327,830



285,292



225,513Four years later


231,748



292,766



363,871



420,662



426,928



377,435



329,887Five Years later


251,810



312,968



390,450



443,256



455,880



409,304Six years later


262,260



326,266



402,808



458,853



476,278Seven Years later


271,563



333,843



411,337



470,469Eight years later


275,451



338,799



417,556Nine Years later


278,918



342,818Ten Years later


281,836Re-estimated Net Liability as of:End of year


350,114



383,004



435,069



511,185



585,469



580,466



585,019



566,867



545,821



527,291Two years later


334,827



373,400



449,871



538,980



590,665



583,246



572,569



538,466



515,836Three Years later


313,248



374,729



458,846



540,239



592,617



575,222



551,067



515,035Four years later


303,540



366,818



456,519



541,887



586,472



562,630



531,787Five Years later


296,834



359,753



455,208



538,483



576,292



555,111Six years later


291,144



359,400



458,062



534,753



577,099Seven Years later


292,253



363,802



456,751



532,240Eight years later


294,327



362,648



454,836Nine Years later


293,238



361,014Ten Years later


292,841Net cumulative (deficiency) redundancy


79,141



32,568



(40,882
)


(26,685
)


(35,073
)


19,170



58,555



64,712



64,230



32,178Gross liability  end of year


422,987



457,072



483,273



597,046



637,494



672,495



690,825



685,714



688,031



664,118



644,396Reinsurance Recoverables


51,005



63,490



69,319



91,491



95,468



98,214



100,483



105,967



107,965



104,649



81,546Net Liability  end of year


371,982



393,582



413,954



505,555



542,026



574,281



590,342



579,747



580,066



559,469



562,850Gross re-estimated liability   latest


373,323



440,354



537,739



631,125



676,364



654,667



626,056



611,403



619,793



628,250Re-estimated reinsurance recoverables  latest


80,482



79,340



82,903



98,885



99,265



99,556



94,269



96,368



103,957



100,959Net re-estimated liability   latest


292,841



361,014



454,836



532,240



577,099



555,111



531,787



515,035



515,836



527,291Gross cumulative (deficiency) redundancy


49,664



16,718



(54,466
)


(34,079
)


(38,870
)


17,828



64,769



74,311



68,238



35,868      35




---



##### 



Net Loss and LAE ReservesLow End


Recorded


High Endof Range


Reserves


of Range(In thousands)$
518,725


$
562,850


$
595,004       Increase(Decrease) inPre-tax Income(In thousands)Low end of range

$
44,125High end of range

$
(32,154
)   Investments
    December 31, 2008


December 31, 2007Carrying


% of


Carrying


% ofValue(1)


Portfolio


Value(1)


PortfolioU.S. government obligations

$
64,458



9.1
%

$
145,021



19.1
%Tax-exempt municipal securities


384,607



54.6
%


269,013



35.4
%Corporate securities


104,764



14.9
%


193,037



25.4
%Mortgage-backed securities


150,862



21.4
%


152,892



20.1
%Total fixed-income securities

$
704,691



100.0
%

$
759,963



100.0
%     (1)
    
    Carrying value for
    available-for-sale
    securities is fair value, whereas
    held-to-maturity
    securities are carried at amortized cost.   36




---



##### 



December 31, 2008


December 31, 2007Carrying


% of


Carrying


% ofRating

Value(1)


Total


Value(1)


TotalAAA

$
377,392



53.6
%

$
506,774



66.7
%AA


234,543



33.3
%


115,818



15.2
%A


63,723



9.0
%


94,078



12.4
%BBB


22,812



3.2
%


30,046



4.0
%698,470



99.1
%


746,716



98.3
%Private Placement


6,221



0.9
%


13,247



1.7
%Total

$
704,691



100.0
%

$
759,963



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.    available-for-sale
  Other
    Significant Balance Sheet Items
     37




---



##### 



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 and loss adjustment expenses(1)

$
644,396


$
104,570


$
179,854


$
124,443


$
235,529Operating leases


3,743



876



1,611



1,256



Real estate assessments


1,418



262



494



281



380Long-term debt(2)


74,673



1,815



5,445



6,223



61,190Total

$
724,230


$
107,523


$
187,404


$
132,203


$
297,099     (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 7% interest
    rate for the first four years and 8% thereafter. The principal
    is all assumed to be due at its original maturity date in 2033.   38




---



##### 



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
    held-to-maturity held-to-maturity
   39




---



##### 



Quantitative
    Information About Market Risk
  Interest
    Rate Risk
  available-for-sale available-for-sale
  December 31, 2008


December 31, 2007Portfolio


Change in


Modified


Portfolio


Change in


ModifiedChange in Rates

Value


Value


Duration


Value


Value


Duration(Dollars in thousands)


(Dollars in thousands)+2%

$
209,579


$
(13,362
)


3.22


$
248,140


$
(14,161
)


2.74+1%


216,320



(6,621
)


3.16



255,182



(7,119
)


2.820


222,941







3.43



262,301







3.06−1%


231,609



8,668



3.50



270,958



8,657



3.13−2%


239,957



17,016



3.57



279,652



17,351



3.20   Equity
    Price Risk
  available-for-sale
 40




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            Internal Control 
    Integrated Framework
      41




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
    December 31, 2008 and 2007
 December 31,2008


2007In thousands, except share dataASSETSInvestments:Fixed-income securitiesAvailable-for-sale,
    at fair value

$
222,941


$
262,301Held-to-maturity,
    at amortized cost


481,750



497,662Other investments


24,320



11,487Total investments


729,011



771,450Cash and cash equivalents


101,637



87,498Premiums receivable


34,024



35,542Reinsurance recoverable


86,397



106,961Deferred federal income taxes


18,573



22,439Federal income tax recoverable


550



1,076Property and equipment, net


13,270



13,789Other assets


22,361



18,707Total assets

$
1,005,823


$
1,057,462LIABILITIESUnpaid losses and loss adjustment expenses

$
644,396


$
664,117Unearned premiums


55,984



60,080Long-term debt


25,928



30,928Accrued expenses and other liabilities


25,478



38,780Total liabilities


751,786



793,905Shareholders EquityCommon stock, no par value, 50,000,000 shares authorized:8,811,802 and 10,127,740 shares outstanding at
    December 31, 2008
    and 2007, respectively






Additional
    paid-in-capital






Retained earnings


246,173



257,502Accumulated other comprehensive income:Net unrealized gains on investments, net of deferred federal
    income taxes


7,864



6,055Total shareholders equity


254,037



263,557Total liabilities and shareholders equity

$
1,005,823


$
1,057,462    42




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
    For the Years Ended December 31, 2008, 2007, and 2006
  Year Ended December 31,2008


2007


2006(In thousands, except per share data)Revenues and Other IncomeNet premiums written

$
120,117


$
130,808


$
146,723Change in unearned premiums


4,151



8,115



2,965Net premiums earned


124,268



138,923



149,688Investment income


36,864



43,506



45,253Net realized (losses) gains


(658
)


(111
)


3,310Other income


730



815



1,031Total revenues and other income


161,204



183,133



199,282ExpensesLosses and loss adjustment expenses


65,311



69,428



100,458Underwriting expenses


27,458



30,141



30,521Investment expenses


1,032



910



845Interest expense


2,196



3,139



3,057General and administrative expenses


1,185



1,410



1,298Other expense (revenue)


47



(48
)


100Total expenses


97,229



104,980



136,279Income before income taxes


63,975



78,153



63,003Federal income tax expense


18,779



25,362



19,816Net income

$
45,196


$
52,791


$
43,187Earnings Per Share:Net incomeBasic

$
4.69


$
4.82


$
3.59Diluted

$
4.60


$
4.73


$
3.52Weighted Average Shares Outstanding:Basic


9,628



10,951



12,015Diluted


9,820



11,163



12,274    43




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
    AND COMPREHENSIVE INCOME
    For the Years Ended December 31, 2008, 2007 and 2006
  AccumulatedAdditional





OtherShares


Paid-in


Retained


ComprehensiveOutstanding(1)


Capital


Earnings


Income


Total(In thousands, except share and per share data)Balance, December 31, 2005


12,500,126


$
74,360


$
179,748


$
7,104


$
261,212Comprehensive incomeNet income










43,187







43,187Other comprehensive loss (Note 5)














(2,335
)


(2,335
)Total comprehensive income, net of taxes


















40,852Options exercised


232,280



2,759











2,759Shares tendered/netted in connection with option exercise


(99,698
)


(3,913
)










(3,913
)Excess tax benefits from share-based awards






2,137











2,137SFAS No. 123R adoption






(46
)










(46
)Fair value compensation of share-based awards






571











571Purchase and retirement of common stock


(1,075,350
)


(34,762
)










(34,762
)Forfeiture of restricted stock


(764
)














Shares retired in connection with stock split


(19
)














Balance, December 31, 2006


11,556,575


$
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


81,020



976











976Shares tendered/netted in connection with option exercise


(37,734
)


(1,654
)










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






1,031











1,031Cash dividends to shareholders, $0.20 per share










(2,097
)






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






160











160Purchase and retirement of common stock


(1,472,121
)


(41,619
)


(16,127
)






(57,746
)Balance, December 31, 2007


10,127,740


$



$
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


19,480



344











344Shares tendered/netted in connection with option exercise


(1,448
)


(63
)










(63
)Excess tax benefits from share-based awards






164











164Cash dividends to shareholders, $0.40 per share










(3,813
)






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






44











44Purchase and retirement of common stock


(1,333,970
)


(489
)


(52,712
)






(53,201
)Balance, December 31, 2008


8,811,802


$



$
246,173


$
7,864


$
254,037     (1)
    
    Share amounts have been retroactively adjusted to reflect a
    three-for-two
    stock split effective November 1, 2006. See Note 1.   44




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
    For the Years Ended December 31, 2008, 2007, and 2006
  Year Ended December 31,2008


2007


2006(In thousands)Cash flows from (for) operating activitiesNet income

$
45,196


$
52,791


$
43,187Adjustments to reconcile net income to net cash from by
    operating activities Depreciation and amortization


4,328



3,128



3,010Net realized losses (gains)


658



111



(3,310
)Loss (Income) on equity method investees


144



(51
)


(788
)Deferred federal income taxes


2,893



9,669



12,202Federal income taxes recoverable/payable


691



(235
)


1,834Excess tax benefits from share-based awards


(164
)


(1,031
)


(2,137
)Share based compensation


44



160



571Changes in:Premiums receivable


1,519



7,526



4,736Reinsurance recoverable


20,565



2,052



(1,460
)Unpaid losses and loss adjustment expenses


(19,722
)


(23,914
)


2,317Unearned premiums


(4,096
)


(10,664
)


(6,890
)Accrued expenses and other liabilities


(10,588
)


(730
)


(3,055
)Other assets


(67
)


7,181



5,767Net cash from operating activities


41,401



45,993



55,984Cash flows from (for) investing activitiesPurchasesAvailable-for-sale 
    fixed maturities


(31,305
)


(56,234
)


(126,979
)Held-to-maturity 
    fixed maturities


(96,766
)


(5,312
)


(188,188
)Other investments


(10,857
)


(6,848
)


(386
)Property and equipment


(4,172
)


(5,070
)


(306
)Sales and maturitiesAvailable-for-sale 
    fixed maturities


69,941



50,339



87,457Held-to-maturity 
    fixed maturities


110,028



11,049



26,314Other investments


150



2,425



12,268Property and equipment


2



22



6Deconsolidation of PIC-Florida










(2,941
)Pending securities transactions










5,383Net cash from (for)investing activities


37,021



(9,629
)


(187,372
)Cash flows from (for) financing activitiesCommon stock repurchased


(53,201
)


(57,746
)


(34,762
)Excess tax benefits from share-based awards


164



1,031



2,137Taxes paid in connection with net option exercise






(785
)


(1,714
)Repayment of long-term debt


(5,000
)






Cash dividends paid


(3,813
)


(2,097
)


Proceeds from stock options exercised


281



107



560Other


(2,714
)


2,397



406Net cash for financing activities


(64,283
)


(57,093
)


(33,373
)Net increase (decrease) in cash and cash equivalents


14,139



(20,729
)


(164,761
)Cash and cash equivalents, beginning of period


87,498



108,227



272,988Cash and cash equivalents, end of period

$
101,637


$
87,498


$
108,227Supplemental disclosures of cash flow informationFederal income taxes of $15,196,000, $15,821,000,
    and $5,780,000, net, were paid during 2008, 2007 
      and 2006, respectively.Interest payments of $2,219,000, $2,906,000, and
    $2,855,000 were made during 2008, 2007 
      and 2006, respectively.    45




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Significant
    Accounting Policies  Basis
    of consolidation and reporting
    Stock
    split
  three-for-two
  Use of
    estimates
      Nature
    of business and segment reporting
  Disclosures about
    Segments of an Enterprise and Related Information,
   46




---



##### 



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
  available-for-sale held-to-maturity
   47




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)  Other
    Investments
  available-for-sale
  Cash
    and cash equivalents
    Fair
    Values
  Fair Value Measurements
  Premiums
    written and receivable and related credit risk
    Deferred
    policy acquisition costs
   48




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)  Property,
    equipment and depreciation
    No. 98-1 (SOP 98-1), Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use. SOP 98-1 post-implementation
  2009


2010


2011


2012


2013(In thousands)$
755


$
755


$
755


$
755


$
567     Unpaid
    losses and loss adjustment expense reserves
     49




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)      Reserve
    for extended reporting period claims
    Revenue
    recognition
    Reinsurance
  Accounting and Reporting for
    Reinsurance.
     50




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Significant
    Accounting Policies (continued)  Income
    taxes
          Share-based
    awards
  Share-Based Payment
  2.
    Effects
    of New Accounting Pronouncements  EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue
    No. 99-20. FSP 99-20-1 No. 99-20, Recognition of Interest Income and Impairment on Purchased
    Beneficial Interests and Beneficial Interests That Continue to
    Be Held by a Transferor in Securitized Financial Assets other-than-temporary EITF 99-20-1 other-than-temporary EITF 99-20 Accounting for
    Certain Investments in Debt and Equity Securities other-than-temporary EITF 99-20-1 EITF 99-20
  Accounting for Financial Guarantee Insurance Contracts,
    an interpretation of FASB Statement No. 60
 51




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2.
    Effects
    of New Accounting Pronouncements (continued)    The Hierarchy of Generally Accepted Accounting
    Principles.
  Business Combinations, , Business Combinations
  Non-controlling Interests in Consolidated Financial
    Statements  an amendment of Accounting Research
    Bulletin No. 51
 52




---



##### 



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


GrossAmortized


Unrealized


Unrealized


EstimatedCost/Cost


Gains


Losses


Fair Value(In thousands)Available-for-saleU.S. government obligations

$



$



$



$
States 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   2007Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost/Cost


Gains


Losses


Fair Value(In thousands)Available-for-saleU.S. government obligations

$
2,500


$
11


$



$
2,511States and political subdivisions


132,223



2,938







135,161Corporate securities


121,594



3,084



(174
)


124,504Mortgage-backed securities


119



6







125Total fixed-income securities


256,436



6,039



(174
)


262,301Equity securities(1)


5,901



615







6,516Total
    available-for-sale
    securities

$
262,337


$
6,654


$
(174
)

$
268,817     (1)
    
    Equity securities are included in other investments in the
    accompanying consolidated balance sheets. 53




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investments
    (continued)   held-to-maturity available-for-sale held-to-maturity
  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   2007Gross


GrossUnrecognized


UnrecognizedCarrying


Holding


Holding


EstimatedValue


Gains


Losses


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

$
142,510


$
778


$
(14
)

$
143,274States and political subdivisions


133,851



2,160







136,011Corporate securities


68,534



713



(1,283
)


67,964Mortgage-backed securities


152,767



192



(3,597
)


149,362Total held-to-maturity fixed-income securities

$
497,662


$
3,843


$
(4,894
)

$
496,611  54




---



##### 



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

$
110,861


$
(2,637
)

$
10,480


$
(197
)

$
121,341


$
(2,834
)   55




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investments
    (continued)  December 31, 2007Less 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

$
11,781


$
(141
)

$
6,088


$
(33
)

$
17,869


$
(174
)Subtotal available-for-sale


11,781



(141
)


6,088



(33
)


17,869



(174
)Held-to-maturityU.S. government obligations










18,002



(14
)


18,002



(14
)Corporate securities


13,088



(51
)


18,615



(1,233
)


31,703



(1,284
)Mortgage-backed securities


13







80,252



(3,596
)


80,265



(3,596
)Subtotal held-to-maturity


13,101



(51
)


116,869



(4,843
)


129,970



(4,894
)Total temporarily impaired securities

$
24,882


$
(192
)

$
122,957


$
(4,876
)

$
147,839


$
(5,068
)      56




---



##### 



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


2007


2006(In thousands)Interest income

$
36,782


$
43,275


$
44,155Dividend income


200



8



428Other investment income


(118
)


223



670Total investment income


36,864



43,506



45,253Investment expenses


(1,032
)


(910
)


(845
)Net investment income

$
35,832


$
42,596


$
44,408Gross realized gains on disposalFixed-income

$
200


$
118


$
148Equity securities










2,166Other invested assets










1,474Total gross realized gains


200



118



3,788Gross realized losses on disposalFixed-income


(860
)


(134
)


(146
)Equity securities






(90
)


(7
)Other invested assets










(16
)Property and equipment


2



(5
)


(131
)Total gross realized losses


(858
)


(229
)


(300
)Other than temporary impairments










(178
)Net realized gains

$
(658
)

$
(111
)

$
3,310     EstimatedFair Value(In thousands)Available-for-saleLess than one year

$
375One to five years


124,797Five to ten years


90,398More than ten years


7,292Mortgage-backed securities


79Total available-for-sale

$
222,941   57




---



##### 



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

$
4,196


$
4,207One to five years


74,546



75,661Five to ten years


163,812



166,260More than ten years


88,413



89,750Mortgage-backed securities


150,783



151,464Total held-to-maturity

$
481,750


$
487,342         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. 58




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Fair
    Value Measurements (continued)     Valuation
    of Investments
    Investments
    Measured at Fair Value on a Recurring Basis
  Available-for-sale fixed-income securities
  Available-for-sale equity securities
    Available-for-sale investments:

Total


Level 1


Level 2


Level 3(In thousands)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




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Fair
    Value Measurements (continued)    Available-for-SaleFixed-IncomeSecurities(In thousands)Balance at January 1, 2008

$
6,911Principal paydowns


(539
)Net unrealized depreciation includedin other comprehensive income


(153
)Balance at December 31, 2008

$
6,219   Investment
    Measured at Fair Value on a Nonrecurring Basis
  Held-to-maturity fixed-income securities
  Other
    Assets and Liabilities Measured at Fair Value on a Nonrecurring
    Basis
  and/or
   5.
    Other
    Comprehensive Income   60




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Other
    Comprehensive Income (continued)    December 31,2008


2007(In thousands)Net unrealized gains on available-for-sale securities

$
10,248


$
6,480Net unamortized unrealized gains on held-to-maturity securities


1,850



2,836Deferred federal income taxes


(4,234
)


(3,261
)Total net unrealized gains, net of deferred federal income taxes

$
7,864


$
6,055     2008


2007


2006(In thousands)Unrealized gains (losses) arising during the period:Available-for-sale:Fixed maturities

$
663


$
2,350


$
(2,455
)Equity securities


2,270



615



1,950Held-to-maturity amortization


(986
)


(945
)


(1,084
)Reclassification adjustments


835



(58
)


(1,952
)Other comprehensive income (loss) before taxes, minority
    interests and equity method investees


2,782



1,962



(3,541
)Deferred federal income taxes


(973
)


(687
)


1,239Minority interests and equity method investees, net of deferred
    taxes






11



(33
)Other comprehensive income (loss)

$
1,809


$
1,286


$
(2,335
)    6.
    Deferred
    Acquisition Costs    2008


2007


2006(In thousands)Balance, January 1

$
6,526


$
7,644


$
7,877Additions


13,658



14,708



16,927Amortization


(14,110
)


(15,826
)


(17,160
)Balance, December 31

$
6,074


$
6,526


$
7,644    61




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Property
    and Equipment, Net    December 31,2008


2007(In thousands)Land

$
571


$
571Building (occupied by the Company)


10,499



10,499Computer equipment and software


12,108



11,865Software developed or obatined for internal use


4,593



4,539Furniture and leasehold improvements


3,727



3,72631,498



31,200Accumulated depreciation


(18,228
)


(17,411
)$
13,270


$
13,789     8.
    Unpaid
    Losses and Loss Adjustment Expenses    2008


2007


2006(In thousands)Balance, beginning of year

$
664,117


$
688,031


$
689,857Less, reinsurance recoverables


(104,648
)


(107,965
)


(107,692
)Net balance, beginning of year


559,469



580,066



582,165Deconsolidation of PIC-Florida










(2,418
)Incurred related toCurrent year


97,490



103,673



113,338Prior years


(32,179
)


(34,245
)


(12,880
)Total incurred


65,311



69,428



100,458Paid related toCurrent year


3,012



2,699



3,168Prior years


58,918



87,326



96,971Total paid


61,930



90,025



100,139Net balance, end of year


562,850



559,469



580,066Plus, reinsurance recoverables


81,546



104,648



107,965Balance, end of period

$
644,396


$
664,117


$
688,031Prior year development as a percentage of beginning of the year
    net reserves


5.8
%


5.9
%


2.2
%    62




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Unpaid
    Losses and Loss Adjustment Expenses (continued)       9.
    Long-Term
    Debt         10.
    Reinsurance    2008


2007


2006Written


Earned


Written


Earned


Written


Earned(In thousands)Direct

$
125,018


$
129,114


$
135,415


$
146,078


$
156,866


$
163,746Ceded


(4,894
)


(4,839
)


(4,619
)


(7,167
)


(10,097
)


(14,022
)Assumed


(7
)


(7
)


12



12



(46
)


(36
)Net

$
120,117


$
124,268


$
130,808


$
138,923


$
146,723


$
149,688  63




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   10.
    Reinsurance
    (continued)        December 31,2008


2007(In thousands)Hannover Ruckversicherungs

$
30,479


$
41,678Munich Reins Amer


17,397



26,023Transatlantic Reinsurance Company


8,406



8,986Aspen Re


3,684



6,137Lloyds of London


3,878



4,003General Reinsurance Corporation


2,597



2,243Montpelier






2,466Others


21,900



17,314$
88,341


$
108,850     December 31,2008


2007(In thousands)Reinsurance recoverable

$
86,397


$
106,961Prepaid reinsurance premium (included in other assets)


1,944



1,889Amounts recoverable from reinsurers

$
88,341


$
108,850     64




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Income
    Taxes    2008


2007


2006Current provision

$
15,887


$
15,963


$
7,614Deferred provision


2,892



9,669



12,202Total provision (benefit)

$
18,779


$
25,632


$
19,816     2008


2007


2006(In thousands)Income before income taxes

$
63,975






$
78,153






$
63,003Tax at statutory rate


22,391



35.0
%


27,354



35.0
%


22,051



35.0
%Tax effect of:Tax exempt interest


(3,952
)


6.2
%


(2,773
)


3.5
%


(2,091
)


3.3
%Other items, net


340



0.5
%


781



1.0
%


(144
)


0.2
%$
18,779



29.4
%

$
25,362



32.5
%

$
19,816



31.5
%     2008


2007(In thousands)Deferred tax assets arising from:Losses and loss adjustment expenses

$
18,628


$
19,548Net operating loss carryforwards


569



889Unearned and advanced premiums


4,971



5,472Realized losses on investments


971



724Goodwill


2,872



3,367Other


1,021



1,031Total deferred tax assets


29,032



31,031Deferred tax liabilities arising from:Deferred policy acquisition costs


2,126



2,284Net unrealized gains on securities


4,234



3,261Other


4,099



3,047Total deferred tax liabilities


10,459



8,592Net deferred tax asset

$
18,573


$
22,439      12.
    Shareholders
    Equity   65




---



##### 



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


For the Year Ended December 31,to Date Totals


2008


2007


2006(Dollars in thousands, except per share amounts)Number of shares repurchased


6,987,576



242,400



974,321



325,000Cost of shares repurchased

$
137,960


$
10,609


$
38,795


$
11,117Average cost per share repurchased

$
19.74


$
43.77


$
39.82


$
34.21   Rule 10b5-1 Rule 10b5-1 Rule 10b5-1 Rule 10b5-1 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


2008


2007


2006(Dollars in thousands, except per share amounts)Number of shares repurchased


2,339,720



1,091,570



497,800



750,350Cost of shares repurchased

$
85,188


$
42,592


$
18,952


$
23,645Average cost per share repurchased

$
36.41


$
39.02


$
38.07


$
31.51    13.
    Fair
    Value of Financial Instruments      66




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    Restructuring
    Charges and Exit Costs  Contract
    Termination Costs
      2008


2007


2006(In thousands)Balance, January 1

$
899


$
1,068


$
1,120Payments


(169
)


(177
)


(181
)Changes in estimated cash flows


47



(52
)


61Discount accretion


50



60



68Balance, December 31

$
827


$
899


$
1,068        15.
    Employee
    Benefit Plans     16.
    Share-Based
    Compensation  Equity
    Compensation Plans
     67




---



##### 



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


Weighted


Average


Aggregateof


Average


Remaining


IntrinsicOptions


Exercise Price


Term


Value(In years)


(In thousands)Options outstanding at January 1, 2008


458,255


$
17.33Granted during the period






Exercised during the period


(19,480
)

$
17.68Canceled during the period


(765
)

$
26.50Options outstanding at December 31, 2008


438,010


$
17.29



4.77


$
13,493Options exercisable at December 31, 2008


438,010


$
17.29



4.77


$
13,493         Transition Election Related to
    Accounting for the Tax Effects of Share-Based Payment Awards.
  Impact
    of the Adoption of SFAS No. 123(R)
    Valuation
    Assumptions
    68




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  17.
    Earnings
    Per Share    2008


2007


2006(In thousands, exceptper share amounts)Numerator for basic and diluted income per common share:Net income

$
45,196


$
52,791


$
43,187Denominator:Denominator for basic income per common share 
    weighted average shares outstanding


9,628



10,951



12,015Effect of dilutive stock options and awards


192



212



259Denominator for diluted income per common share - adjusted
    weighted average shares outstanding


9,820



11,163



12,274Income per common share:Net incomeBasic

$
4.69


$
4.82


$
3.59Diluted

$
4.60


$
4.73


$
3.52      18.
    Commitments
    and Contingencies  97-3,
   69




---



##### 



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.
    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.
    A valuation allowance is required under GAAP when it is
    determined that gross deferred tax assets cannot be realized, in
    whole or in part. For statutory accounting purposes, the
    valuation allowance is replaced with a more objective admitted
    asset test, which is intended to serve the same purpose as the
    GAAP valuation allowance. This more quantitative approach under
    statutory accounting can sometimes result in differing amounts
    of deferred tax assets being carried for GAAP and statutory
    accounting purposes. 70




---



##### 



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    GAAP and
    Statutory Reporting (continued)   
    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.    2008


2007


2006(In thousands)Statutory surplus, December 31

$
204,975


$
221,595


$
248,929Statutory net income for the year ended December 31

$
49,135


$
63,725


$
54,470   12-month
 71




---



##### 



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)20081st Quarter

$
41,011


$
16,580


$
11,374


$
1.132nd Quarter


40,935



15,530



11,043



1.113rd Quarter


39,563



15,670



11,168



1.134th Quarter


39,695



16,195



11,611



1.24$
161,204


$
63,975


$
45,19620071st Quarter

$
46,420


$
15,402


$
10,505


$
0.902nd Quarter


46,159



24,303



16,333



1.443rd Quarter


46,366



19,497



13,281



1.214th Quarter


44,188



18,951



12,672



1.19$
183,133


$
78,153


$
52,791   72




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Form 10-K
         73




---



##### 



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
  CONDENSED
    BALANCE SHEETS
    December 31, 2008 and 2007
  December 31,2008


2007(In thousands)ASSETSInvestments in subsidiaries

$
238,832


$
253,058Equity securities


778



928Cash and cash equivalents


39,266



41,434Deferred federal income taxes


216



250Federal income taxes recoverable from affiliates


1,156



1,991Other assets


462



591Total assets

$
280,710


$
298,252LIABILITIESLong-term debt

$
25,928


$
30,928Accrued expenses and other liabilities


745



3,767Total liabilities


26,673



34,695Shareholders EquityCommon stock, no par value, 50,000,000 shares authorized,
    8,811,802 and10,127,740 shares outstanding at December 31, 2008 and
    2007, respectivelyRetained earnings


246,173



257,502Accumulated other comprehensive income, net of deferred federal
    income taxes


7,864



6,055Total shareholders equity


254,037



263,557Total liabilities and shareholders equity

$
280,710


$
298,252    74




---



##### 



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
  CONDENSED
    STATEMENTS OF OPERATIONS
    Years Ended December 31, 2008, 2007 and 2006
  Year Ended December 31,2008


2007


2006(In thousands)RevenuesInvestment income

$
603


$
1,619


$
637Net realized losses










(212
)Other income






31



1,600Total revenues


603



1,650



2,025ExpensesInvestment expense


9



15



Interest expense


2,137



3,073



2,986General and administrative expenses


1,185



1,410



1,310Total expenses


3,331



4,498



4,296Loss before income taxes and equity innet income of subsidiaries


(2,728
)


(2,848
)


(2,271
)Federal income tax benefit


(959
)


(1,017
)


(635
)Loss before equity in net income of subisidiaries


(1,769
)


(1,831
)


(1,636
)Equity in net income of subsidiaries


46,965



54,622



44,823Net income

$
45,196


$
52,791


$
43,187  75




---



##### 



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
  CONDENSED
    STATEMENTS OF CASH FLOWS
    Years Ended December 31, 2008, 2007 AND 2006
  Year Ended December 31,2008


2007


2006(In thousands)Cash flows from (for) operating activitiesNet income

$
45,196


$
52,791


$
43,187Adjustments to reconcile net income to net cash used inoperating activities:Equity in undistributed income of subsidiaries


(46,965
)


(54,622
)


(44,823
)Dividends from subsidiaries


63,000



81,950



43,000Net realized losses










212Stock based compensation


44



160



571Excess tax benefits from share-based awards


(164
)


(1,031
)


(2,137
)Deferred federal income taxes


34



(53
)


1,545Changes in:Federal or intercompany income taxes recoverable/payable


1,000



3,356



1,068Accrued expenses and other liabilities


(308
)


(1,177
)


1,303Other assets


128



(344
)


608Net cash from operating activities


61,965



81,030



44,534Cash flows from (for) investing activitiesOther investments


150







Liquidation of APIndemnity










999Net cash from investing activities


150







999Cash flows from (for) financing activitiesCommon stock repurchased


(53,201
)


(57,746
)


(34,762
)Excess tax benefits from share-based awards


164



1,031



2,137Taxes paid in connection with net option exercise






(785
)


Repayment of long-term debt


(5,000
)






Cash dividends paid


(3,813
)


(2,097
)


560Proceeds from stock options exercised


281



107



(1,714
)Other


(2,714
)


2,397



406Net cash for financing activities


(64,283
)


(57,093
)


(33,373
)Net (decrease) increase in cash and cash equivalents


(2,168
)


23,937



12,160Cash and cash equivalents, beginning of year


41,434



17,497



5,337Cash and cash equivalents, end of year

$
39,266


$
41,434


$
17,497    76




---



##### 



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

ICAAPSpecialty

Alpha Advisors, Inc.     (4)
    Dividends
    Received   77




---



##### 



SCHEDULE I  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
    AMERICAN PHYSICIANS CAPITAL, INC. (REGISTRANT ONLY)
  NOTES TO
    CONDENSED FINANCIAL INFORMATION OF REGISTRANT
    (Continued)
      (5)
    Stock
    Split  three-for-two
  (6)
    Share
    Repurchases  Rule 10b5-1
 78




---



##### 



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
 79




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal Control  Integrated Framework
                80




---



##### 



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 SharesOutstanding Options


Outstanding Options


Reflected in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by shareholders:


438,010


$
17.29



10,350Equity compensation plans not approved by shareholders:










   Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   81




---



##### 



PART IV
  Item 15.
    Exhibits and
    Financial Statement Schedules    Financial
    Statements:
              Financial
    Statement Schedules:
    Regulation S-X
   82




---



##### 



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. Schneider, J.D.Spencer
    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  83




---



##### 



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 October 30, 2008
    (APCapitals Current Report on
    Form 8-K
    dated November 5, 2008)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) 84




---



##### 



ExhibitNumber

Description*10
.47

Amendment No. 1 to American Physicians Capital, Inc. Stock
    Compensation Plan (APCapitals 2006 Annual Report on
    Form 10-K)*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)21
.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 193431
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 193432
.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     *
    
    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. 85