As filed with the Securities and Exchange Commission on October 29, 1999
                                                       Registration No. 333-
                                                                            ----

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

                        PENN TREATY AMERICAN CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                  Pennsylvania                         23-1664166
                  ------------                         ----------
(STATE OR OTHER JURISDICTION OF INCORPORATION        (I.R.S. EMPLOYER
             OR ORGANIZATION)                       IDENTIFICATION NO.)

                 3440 Lehigh Street
              Allentown, Pennsylvania                     18103
              -----------------------                     -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP CODE)

                        Penn Treaty American Corporation
                    1987 Employee Incentive Stock Option Plan
                    -----------------------------------------
                            (FULL TITLE OF THE PLAN)

                             Irving Levit, President
                        Penn Treaty American Corporation
                               3440 Lehigh Street
                          Allentown, Pennsylvania 18103
                        ---------------------------------
                     (NAME AND ADDRESS OF AGENT FOR SERVICE)

                                 (610) 965-2222
                                 --------------
          (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                                 with a copy to:
                            Justin P. Klein, Esquire
                     Ballard Spahr Andrews & Ingersoll, LLP
                         1735 Market Street, 51st Floor
                      Philadelphia, Pennsylvania 19103-7599
                                 (215) 665-8500

                         CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
                                   Proposed       Proposed
Title of                           Maximum        Maximum
Securities         Amount          Offering       Aggregate      Amount of
to be              to be           Price Per      Offering       Registration
Registered         Registered      Share(1)       Price(1)       Fee
--------------------------------------------------------------------------------
Common Stock,
par value $.10
per share          282,269(2)      $18.4375       $5,204,335     $1,447


<PAGE>


(1)      Calculated in  accordance  with Rule 457(c) and (h) on the basis of the
         average of the high and low prices of Penn Treaty American  Corporation
         Common  Stock on October  28,  1999,  as reported on the New York Stock
         Exchange.

(2)      Such number  represents the number of shares of Common Stock  initially
         issuable  upon  exercise of all options  available  for grant under the
         1987 Employee Incentive Stock Option Plan.


<PAGE>

          PART I - INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS


     The  documents  containing  the  information  specified  in  Part I of this
Registration  Statement  will be given or sent to all  officers  and  other  key
employees of Penn Treaty American Corporation who participate in the Penn Treaty
American  Corporation 1987 Employee  Incentive Stock Option Plan as specified by
Rule 428 under the Securities Act.


          PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


ITEM 3.   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.

     The following  documents filed with the Securities and Exchange  Commission
pursuant to the Securities Exchange Act of 1934, as amended by Penn Treaty (File
No. 0-15972) are incorporated herein by reference:

     (i)  Penn  Treaty's  Annual  Report on Form 10-K for the fiscal  year ended
          December 31, 1998;

     (ii) Penn Treaty's  Quarterly  Reports on Form 10-Q for the quarters  ended
          March 31, 199 and June 30, 1999;

     (iii) Penn Treaty's Current Report on Form 8-K dated January 15, 1999;

     (iv) the  description  of Penn  Treaty=s  common  stock  contained  in Penn
          Treaty=s  Registration  Statement  on Form  8-A for  such  securities,
          including any  amendments or reports filed for the purpose of updating
          such description.

     All  documents  subsequently  filed by Penn  Treaty  after the date  hereof
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which  deregisters  all  securities  remaining  unsold,
shall be deemed to be incorporated by reference in this  Registration  Statement
and shall be part hereof from the date of filing of such documents.


ITEM 4.   DESCRIPTION OF SECURITIES.

          Not applicable.


ITEM 5.   INTERESTS OF NAMED EXPERTS AND COUNSEL.

          Not applicable.


<PAGE>

ITEM 6.   INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Amended and Restated Bylaws of Penn Treaty provide for  indemnification
of directors  and  officers of Penn Treaty in  accordance  with  indemnification
provisions  of the  Pennsylvania  Business  Corporation  Law of  1988.  Sections
1741-50 of the Pennsylvania  Business Corporation Law permit  indemnification of
directors,  officers,  employees  and  agents  of a  corporation  under  certain
conditions and subject to certain limitations.

     The Company has directors  and officers  liability  insurance  insuring its
directors  and  officers  against  liability  incurred  in their  capacities  as
directors and officers and providing for reimbursement of the registrant for any
indemnification payments made by it to directors and officers.


ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

          Not applicable.


ITEM 8.  EXHIBITS.

          4.1  Specimen  copy  of  Common  Stock  Certificate  (incorporated  by
               reference  to Exhibit 4 to  Registration  Statement  on Form S-1,
               Reg. No. 33-92690).

          5.1  Opinion of Ballard Spahr Andrews & Ingersoll, LLP

          23.1 Consent of PricewaterhouseCoopers LLP

          23.2 Consent of Ballard Spahr Andrews & Ingersoll,  LLP  (contained in
               Exhibit 5.1)

          24.1 Power of Attorney  (included  on signature  page of  Registration
               Statement)

          99.1 Penn Treaty American  Corporation  1987 Employee  Incentive Stock
               Option Plan



<PAGE>


ITEM 9.  UNDERTAKINGS.

          The undersigned registrant hereby undertakes:

          (1)  To file,  during  any  period in which  offers or sales are being
               made, a post-effective amendment to this registration statement;

               (i)  To include any  prospectus  required by section  10(a)(3) of
                    the Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
                    after the effective date of the  registration  statement (or
                    the most recent  post-effective  amendment  thereof)  which,
                    individually  or in the  aggregate,  represent a fundamental
                    change  in the  information  set  forth in the  registration
                    statement.  Notwithstanding  the foregoing,  any increase or
                    decrease  in  volume  of  securities  offered  (if the total
                    dollar  value of  securities  offered  would not exceed that
                    which was registered) and any deviation from the low or high
                    end of the estimated maximum offering range may be reflected
                    in the form of prospectus filed with the Commission pursuant
                    to Rule 424(b) if, in the  aggregate,  the changes in volume
                    and price represent no more than a 20% change in the maximum
                    aggregate  offering price set forth in the  "Calculation  of
                    Registration  Fee"  table  in  the  effective   registration
                    statement;

               (iii)To include  any  material  information  with  respect to the
                    plan  of  distribution  not  previously   disclosed  in  the
                    registration  statement  or  any  material  change  to  such
                    information in the registration statement;

                    Provided, however, that paragraphs (1)(i) and (1)(ii) do not
                    apply if the  registration  statement is on Form S-3 or Form
                    S-8,  and  the  information  required  to be  included  in a
                    post-effective amendment by those paragraphs is contained in
                    periodic reports filed by the registrant pursuant to section
                    13 or section 15(d) of the  Securities  Exchange Act of 1934
                    that  are  incorporated  by  reference  in the  registration
                    statement.

          (2)  That,  for the purpose of  determining  any  liability  under the
               Securities Act of 1933, each such post-effective  amendment shall
               be  deemed to be a new  registration  statement  relating  to the
               securities  offered therein,  and the offering of such securities
               at that time shall be deemed to be the initial bona fide offering
               thereof.

          (3)  To  remove  from   registration  by  means  of  a  post-effective
               amendment any of the  securities  being  registered  which remain
               unsold at the termination of the offering.

               The undersigned  registrant  hereby undertakes that, for purposes
               of  determining  any liability  under the Securities Act of 1933,
               each filing of the registrant's annual report pursuant to section
               13(a) or section  15(d) of the  Securities  Exchange  Act of 1934
               (and, where applicable, each filing of an employee benefit plan's
               annual  report  pursuant  to  section  15(d)  of  the  Securities
               Exchange  Act of 1934) that is  incorporated  by reference in the
               registration  statement shall be deemed to be a new  registration
               statement  relating to the securities  offered  therein,  and the
               offering  of such  securities  at that time shall be deemed to be
               the initial bona fide offering thereof.


<PAGE>

               Insofar as  indemnification  for  liabilities  arising  under the
               Securities  Act of 1933 may be permitted to  directors,  officers
               and  controlling  persons  of  the  registrant  pursuant  to  the
               foregoing  provisions,  or  otherwise,  the  registrant  has been
               advised  that  in the  opinion  of the  Securities  and  Exchange
               Commission  such  indemnification  is  against  public  policy as
               expressed  in the Act and is,  therefore,  unenforceable.  In the
               event that a claim for  indemnification  against such liabilities
               (other than the payment by the registrant of expenses incurred or
               paid  by  a  director,  officer  or  controlling  person  of  the
               registrant  in the  successful  defense  of any  action,  suit or
               proceeding) is asserted by such director,  officer or controlling
               person in connection with the securities  being  registered,  the
               registrant will,  unless in the opinion of its counsel the matter
               has been settled by controlling  precedent,  submit to a court of
               appropriate    jurisdiction    the    question    whether    such
               indemnification  by it is against  public  policy as expressed in
               the Act and will be  governed by the final  adjudication  of such
               issue.


<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the City of Allentown,  Commonwealth  of Pennsylvania on October
29, 1999.


                                          Penn Treaty American Corporation


                                          By :  /s/ Irving Levit
                                                    -----------------------
                                                    Irving Levit, President


     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been signed below by the  following  persons in the
capacities and on the dates indicated.

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears below  constitutes and appoints Irving Levit and A.J. Carden and each or
any one of them,  his true and lawful  attorneys-in-fact  and agents,  with full
power of substitution  and  resubstitution,  for him and in his name,  place and
stead,  in any and all  capacities,  to sign any and all  amendments  (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange  Commission,  granting unto said  attorneys-in-fact  and
agents, and each of them, full power and authority to perform each and every act
and thing requisite and necessary to be done in connection  therewith,  as fully
to all intents and purposes as he might or could do in person,  hereby ratifying
and confirming all that said  attorneys-in-fact  and agents,  or any of them, or
his or their  substitute or substitutes,  may lawfully do or cause to be done by
virtue hereof.


     Signature                Title                             Date
     ---------                -----                             ----

/s/ Irving Levit              Chairman of the Board, President  October 29, 1999
    -----------               and Chief Executive Officer
    Irving Levit              (Principal Executive Officer)

<PAGE>

/s/ Michael F. Grill          Treasurer, Controller and         October 29, 1999
    ----------------          Director (Principal Accounting
    Michael F. Grill          Officer)


/s/ A.J. Carden               Executive Vice President and      October 29, 1999
    -----------               Director
    A.J. Carden


/s/ Domenic P. Stangherlin    Secretary and Director            October 29, 1999
    ----------------------
    Domenic P. Stangherlin


/s/ Jack D. Baum              Vice President, Marketing and     October 29, 1999
    ------------              Director
    Jack D. Baum


/s/ Glen A. Levit             Vice President, Sales and         October 29, 1999
    ------------              Director
    Glen A. Levit


/s/ Cameron Waite             Chief Financial Officer           October 29, 1999
    -------------             (Principal Financial Officer)
    Cameron Waite


/s/ Emile G. Ilchuk           Director                          October 29, 1999
    ---------------
    Emile G. Ilchuk


/s/ C. Mitchell Goldman       Director                          October 29, 1999
    -------------------
    C. Mitchell Goldman


/s/ David B. Trindle          Director                          October 29, 1999
    ----------------
    David B. Trindle


<PAGE>

                                  EXHIBIT INDEX

EXHIBIT
NUMBER            DESCRIPTION
------            -----------

4.1               Specimen copy  of Common Stock  Certificate  (incorporated  by
                  reference  to  Exhibit 4  to  Registration  Statement on  Form
                  S-1, Reg. No. 333-10777).

5.1               Opinion of Ballard Spahr Andrews & Ingersoll, LLP

23.1              Consent of PricewaterhouseCoopers, LLP

23.2              Consent of Ballard Spahr  Andrews & Ingersoll, LLP  (contained
                  in Exhibit 5.1)

24.1              Power of Attorney (included on signature page of  Registration
                  Statement)

99.1              Penn Treaty American Corporation 1998 Employee Incentive Stock
                  Option Plan


<PAGE>


                                   EXHIBIT 5.1

               [Ballard Spahr Andrews & Ingersoll, LLP Letterhead]




October 29, 1999


Penn Treaty American Corporation
3440 Lehigh Street
Allentown, PA  18103

Re: Registration Statement on Form S-8

Gentlemen:

We have  acted as special  counsel  to Penn  Treaty  American  Corporation  (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of 282,269 shares of Common Stock of the Company, par value $.10 per
share (the  "Shares"),  issuable upon the exercise of options  granted under the
Penn Treaty American  Corporation 1987 Employee Incentive Stock Option Plan (the
"Plan").

In  rendering  our  opinion,  we have  reviewed  such  certificates,  documents,
corporate  records and other  instruments  as in our judgment  are  necessary or
appropriate to enable us to render the opinion  expressed  below. In giving this
opinion, we are assuming the authenticity of all instruments  presented to us as
originals,  the conformity with the originals of all instruments presented to us
as copies and the genuineness of all signatures.

Based on the foregoing,  we are of the opinion that the Shares, when issued upon
exercise  of  options  granted  under the  Plan,  in  accordance  with the terms
thereof, will be legally issued, fully paid and nonassessable.

We  consent to the filing of this  opinion  as Exhibit  5.1 to the  Registration
Statement on Form S-8 being filed with respect to the offering of the Shares.

Yours truly,

/s/ Ballard Spahr Andrews & Ingersoll, LLP
    --------------------------------------
    Ballard Spahr Andrews & Ingersoll, LLP



<PAGE>

                                  EXHIBIT 23.1


                       CONSENT OF INDEPENDENT ACCOUNTANTS



We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement  on Form  S-8 of our  report  dated  March  8,  1999  relating  to the
financial  statements and financial  statement schedules of Penn Treaty American
Corporation which appears in Penn Treaty American Corporation's Annual Report on
Form 10-K for the year ended December 31, 1998.


/s/ PricewaterhouseCoopers LLP
    --------------------------
    PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
October 29, 1999


<PAGE>


                                  EXHIBIT 99.1

                        PENN TREATY AMERICAN CORPORATION
                      EMPLOYEE INCENTIVE STOCK OPTION PLAN



1.   PURPOSE

     This Employee Incentive Stock Option Plan (the "Plan") is intended to be an
incentive and to encourage stock ownership by certain officers and key executive
employees of Penn Treaty American  Corporation (the ACorporation@) or any of its
subsidiary  corporations  as that term is defined in Section 425 of the Internal
Revenue Code of 1985 (the  ASubsidiaries@) so that such employees may acquire or
increase  their  proprietary  interest  in the  success of the  Corporation  and
Subsidiaries,  and so that they may be encouraged to remain in the employ of the
Corporation  or its  Subsidiaries.  It is further  intended that options  issued
pursuant to the Plan shall constitute incentive stock options within the meaning
of Section 422A of the Internal Revenue Code of 1986.

2.   ADMINISTRATION

     The Plan shall be  administered  by a committee  appointed  by the Board of
Directors of the Corporation (the  "Committee").  The Committee shall consist of
not  less  than  three  persons  who may be,  but need  not be,  members  of the
Corporation's  Board of Directors.  The Board of Directors may from time to time
remove  members  from,  or add  members  to,  the  Committee.  Vacancies  on the
Committee,  howsoever  caused,  shall be filled by the Board of  Directors.  The
Committee shall select one of its members as Chairman and shall hold meetings at
such times and places as it may  determine.  Acts by a majority of the Committee

<PAGE>

at a meeting at which a quorum is  present,  or acts  reduced to or  approved in
writing by a majority of the members of the  Committee,  shall be the valid acts
of the Committee. No person while a member of the Committee shall participate in
any  decision  affecting  his right to  receive  an option  under the Plan.  The
Committee shall from time to time in its discretion make  recommendations to the
Board of Directors  with respect to the employees  who shall be granted  options
and the amount of stock to be optioned  to each.  The Board of  Directors  shall
have the final  authority to determine  these matters.  The  interpretation  and
construction  by the  Committee of any  provisions  of the Plan or of any option
granted  under it shall be final  unless  otherwise  determined  by the Board of
Directors.  No member of the Board of Directors or the Committee shall be liable
for any action or  determination  made in good faith with respect to the Plan or
any option granted under it.

3    ELIGIBILITY

     The  persons  who shall be  eligible  to receive  options  shall be the key
employees  (including  officers  whether  or  not  they  are  directors)  of the
Corporation or its  Subsidiaries.  An optionee may hold more than one option but
only on the terms and subject to the restrictions hereinafter set forth.

4    STOCK

     The stock  subject  to the  options  shall be  shares of the  Corporation's
authorized but unissued or reacquired common stock (hereinafter sometimes called
"Common  Stock").  The  aggregate  number  of shares  which may be issued  under
options  shall  not  exceed  100,000  shares  of Common  Stock.  The  limitation
established by the preceding sentence shall be subject to adjustment as provided
in Article 5(g) of the Plan.


<PAGE>


     In the event  that any  outstanding  option  under the Plan for any  reason
expires  or  is  terminated,  the  shares  of  Common  Stock  allocable  to  the
unexercised  portion of such option may again be subject to an option  under the
Plan.

5    TERMS AND CONDITIONS OF OPTIONS

     When the Board of Directors  shall have granted stock options to employees,
Notices of Grant of Stock Option  shall be given to such  employees in such form
as the  Committee  shall from time to time  approve,  which Notices shall comply
with and be subject to the following terms and conditions:

     a    Number of Shares.

          Each Notice of Grant of Stock  Option shall state the number of shares
     to which it pertains.

     b    Option Price.

          Each Notice of Grant of Stock  Option  shall  state the option  price,
     which shall not be less than 100% of the fair market value of the shares of
     Common Stock of the  Corporation on the date of the granting of the option.
     During  such time as such stock is not  listed  upon an  established  stock
     exchange or traded in the  over-the-counter  market,  the fair market value
     per share shall be determined by the Committee at least annually by relying
     upon whatever evidence it deems appropriate which may include, but need not
     be limited to, recent sales of the Common Stock,  opinions of  professional
     appraisers and recent sales of comparable shares of other companies. If the
     stock is traded in the  over-the-counter  market,  such fair  market  value
     shall be the mean  between the dealer  "bid" and "ask" prices of the Common
     Stock in the New York  over-the-counter  market  on the day the  option  is

<PAGE>

     granted,  as reported by the National  Association  of Securities  Dealers,
     Inc. If the stock is listed upon an established stock exchange or exchanges
     such fair market value shall be deemed to be the highest  closing  price of
     the Common Stock on such stock  exchange or exchanges on the day the option
     is granted or if no sale of the Corporation's  Common Stock shall have been
     made on any stock  exchange on that day, on the next preceding day on which
     there was a sale of such stock. Subject to the foregoing,  the Committee in
     fixing the option price shall have full authority and discretion.

     c    Medium and Time of Payment.

          Unless  otherwise  specified in the option grant pursuant to Section 8
     hereof, the option price shall be payable in United States dollars upon the
     exercise of the option and may be paid in cash or by check.

     d    Term and Exercise of Options.

          No option shall be exercisable  either in whole or in part prior to 12
     months  from the date it is granted.  Each Notice of Grant of Stock  Option
     shall state the date on which the option shall  expire.  No option shall be
     exercisable  after ten years from the date on which it is granted.  Options
     may only be  exercised  by an optionee for so long as he is employed by the
     Corporation  except as otherwise  provided in Articles 5(e) and 5(f) of the
     Plan.

          The Notice of Grant of Stock  Option may provide that the option shall
     be exercisable in installments rather than exercisable immediately in full.
     In such  case,  subject  to the  right of  emulation  provided  in the last
     sentence of this subdivision, during each twelve-month period commencing 12
     months from the date of the  granting of the option,  each option  shall be
     exercisable  as to not more than  that  percentage  of the total  number of
     shares  covered  thereby as the  Committee  shall  specify in the Notice of
     Grant of Stock  Option,  until all shares  covered by the option shall have
     been  purchased.  The  Committee  may  provide in the case of an option not
     immediately  exercisable in full, for the acceleration of the time at which
     the option may be exercised.


<PAGE>

          Not less than 100 shares may be  purchased  at any one time unless the
     number  purchased  is the total  number at the time  purchasable  under the
     option.  During  the  lifetime  of  the  optionee,   the  option  shall  be
     exercisable  only by him and shall not be assignable or transferable by him
     and no other person  shall  acquire any rights  therein.  To the extent not
     exercised, installments shall accumulate and be exercisable, in whole or in
     part, in any  subsequent  period but not later than ten years from the date
     the option is  granted.

     e    Termination of Employment Except By Death or Disability.

          In the event that the employment of an optionee by the  Corporation or
     Subsidiaries  shall  terminate  for any  reason  other  than  his  death or
     disability,   then  as  of  the  date  the  optionee  has  notice  of  such
     termination,  such  optionee  shall have no further  right to exercise  any
     option.  Whether  authorized  leave of absence or absence  for  military or
     governmental  service shall constitute  termination of employment,  for the
     purposes  of  the  Plan,  shall  be  determined  by  the  Committee,  which
     determination,  unless overruled by the Board of Directors,  shall be final
     and conclusive.

     f    Death or Disability of Optionee and Transfer of Option.

          If the optionee  shall die or become  disabled  while in the employ of
     the  Corporation  or a  Subsidiary,  and shall not have fully  exercised an
     option,  the option may be  exercised,  subject  to the  condition  that no
     option shall be exercisable after the expiration of ten years from the date
     it is granted,  to the extent that the  optionee's  right to exercise  such
     option had accrued  pursuant to Article 5(d) of the Plan at the time of his
     death and had not previously  been  exercised,  at any time within 3 months
     after the optionee=s death or disability,  by the optionee,  or in the case
     of death,  by the  executors  or  administrators  of the optionee or by any
     person or persons  who shall have  acquired  the option  directly  from the
     optionee by bequest or inheritance.  No option shall be transferable by the
     optionee otherwise than by will or the laws of descent and distribution.

<PAGE>

     g    Recapitalization.

          Subject  to any  required  action by the  stockholders,  the number of
     shares of Common Stock covered by each  outstanding  option,  and the price
     per share thereof in each such option,  shall be  proportionately  adjusted
     for any increase or decrease in the number of issued shares of Common Stock
     of the Corporation  resulting from a subdivision or consolidation of shares
     or the payment of a stock  dividend  (but only on the Common  Stock) or any
     other  increase or decrease in the number of such shares  effected  without
     receipt of consideration by the Corporation.

          Subject to any required action by the stockholders, if the Corporation
     shall be the surviving  corporation  in any merger or  consolidation,  each
     outstanding  option shall pertain to and apply to the securities to which a
     holder of the number of shares of Common Stock  subject to the option would
     have been entitled.  A dissolution  or liquidation of the  Corporation or a
     merger or  consolidation  in which  the  Corporation  is not the  surviving
     corporation,  shall cause each  outstanding  option to terminate,  provided
     that each optionee  shall, in such event, if a period of 12 months from the
     date of the  granting  of the  option  shall have  expired,  have the right
     immediately  prior  to  such  dissolution  or  liquidation,  or  merger  or
     consolidation in which the Corporation is not the surviving corporation, to
     exercise his option in whole or in part without  regard to the  installment
     provisions  of  Article  5(d)  of  the  Plan.   Notwithstanding  the  above
     provisions,  an option will not  terminate  if assumed by the  surviving or
     acquiring corporation,  or its parent, upon a merger or consolidation under
     circumstances  which are not deemed a modification of the option within the
     meaning of Sections 425(a) and 425(h)(3)(A) of the Internal Revenue Code.


<PAGE>

          In the event of a change in the  Common  Stock of the  Corporation  as
     presently  constituted,  which  is  limited  to a  change  of  all  of  its
     authorized  shares  with par value  into the same  number of shares  with a
     different  par value or without par value,  the shares  resulting  from any
     such change  shall be deemed to be the Common  Stock  within the meaning of
     the Plan.

          To the  extent  that  the  foregoing  adjustments  relate  to stock or
     securities  of the  Corporation,  such  adjustments  shall  be  made by the
     Committee,  whose determination in that respect shall be final, binding and
     conclusive,  provided that each option granted  pursuant to this Plan shall
     not be  adjusted  in a manner that causes the option to fail to continue to
     qualify as an incentive  stock option within the meaning of Section 422A of
     the 1954 Internal Revenue Code.

          Except as  hereinbefore  expressly  provided in this Article 5(g), the
     optionee shall have no rights by reason of any subdivision or consolidation
     of shares of stock of any class or the payment of any stock dividend or any
     other  increase  or  decrease  in the  number  of shares of any class or by
     reason of any dissolution, liquidation, merger or consolidation or spin-off
     of assets or stock of another corporation, and any issue by the Corporation
     of shares of stock of any class, or securities  convertible  into shares of
     stock of any class,  shall not affect,  and no adjustment by reason thereof
     shall be made  with  respect  to,  the  number or price of shares of Common
     Stock subject to the option.

<PAGE>

          The grant of an option  pursuant  to the Plan  shall not affect in any
     way  the  right  or  power  of  the   Corporation   to  make   adjustments,
     reclassifications,  reorganizations  or changes of its  capital or business
     structure or to merge or to consolidate or to dissolve,  liquidate or sell,
     or transfer all or any part of its business or assets.

     h    Rights as a Stockholder.

          An optionee  or a  transferee  of an option  shall have no rights as a
     stockholder with respect to any shares covered by his option until the date
     of  the  issuance  of a  stock  certificate  to him  for  such  shares.  No
     adjustment shall be made for dividends (ordinary or extraordinary;  whether
     in cash, securities or other property) or distributions or other rights for
     which  the  record  date is prior to the date  such  stock  certificate  is
     issued, except as provided in Article 5(g) hereof

     i    Modification, Extension and Renewal of Options.

          Subject to the terms and conditions and within the  limitations of the
     Plan,  the Board of  Directors  may  modify,  extend  or renew  outstanding
     options  granted  under the Plan,  or accept the  surrender of  outstanding
     options (to the extent not theretofore  exercised).  The Board of Directors
     shall not, however, modify any outstanding options so as to specify a lower
     price or accept the  surrender of  outstanding  options and  authorize  the
     granting of new options in substitution  therefor specifying a lower price.
     Notwithstanding the foregoing, however, no modification of an option shall,
     without  the  consent  of the  optionee,  alter or  impair  any  rights  or
     obligations under any option theretofore granted under the Plan.

     j    Investment Purpose.

          Each option under the Plan shall be granted on the condition  that the
     purchases of stock thereunder shall be for investment purposes and not with
     a view to  resale  or  distribution,  except  that in the  event  the stock
     subject to such option is registered  under the  Securities Act of 1933, as
     amended,  or in the event a resale of such stock without such  registration
     would otherwise be permissible,  such condition shall be inoperative if, in
     the opinion of counsel for the Corporation,  such condition is not required
     under the Securities Act of 1933 or any other applicable law, regulation or
     rule of any governmental agency.


<PAGE>

     k    Optionee's Stockholder Agreement.

          Each optionee shall agree,  as a condition of his right to exercise an
     option granted to him pursuant to the Plan, that all shares received by him
     pursuant to any and every exercise of such option will be subject to all of
     the  provisions  of the  Corporation=s  Stockholder  Agreement,  if any, in
     effect  at the  time of any  exercise  of such  option.  Accordingly,  each
     optionee  shall at the time of  exercise of any option  granted  hereunder,
     execute and agree to be bound by the  Corporation=s  Stockholder  Agreement
     then in effect.

     l    Covenant Not to Compete.

          The Notice of Grant of Stock Option may provide  that,  as a condition
     of the employee's  acceptance of the option, the employee shall agree to be
     bound by a covenant not to compete  with the  Corporation  containing  such
     terms as the Committee and Board of Directors shall deem advisable.

     m    Other Provisions.

          The  Notice  of  Grant  of  Stock  Option  shall  contain  such  other
     provisions,  including, without limitation,  restrictions upon the exercise
     of the option or the transfer of the shares  received upon an exercise,  as
     the Committee  and the Board of Directors  shall deem  advisable.  Any such
     Notice shall contain such limitations and restrictions upon the exercise of
     the  option as shall be  necessary  in order  that such  option  will be an
     "incentive stock option" as defined in Section 422A of the Internal Revenue
     Code of 1986 or to conform to any change in the law.

<PAGE>

6    OPTIONS TO CERTAIN STOCKHOLDERS

     Notwithstanding  any other  provision  herein,  in any option granted to an
individual  who,  at the time the  option  is  granted,  possesses  more than 10
percent  of the  total  combined  voting  power of all  classes  of stock of the
Corporation  or of its parent or any  subsidiary  corporation,  the option price
must be at least 110  percent of the fair market  value of the stock  subject to
the  option  and such  option by its  terms  must not be  exercisable  after the
expiration of 5 years from the date such option is granted.

7    ANNUAL LIMITATION PER EMPLOYEE

     The aggregate  fair market value  (determined  as of the time the option is
granted  under the Plan) of the stock  for  which any  employee  may be  granted
incentive stock options which are first  exercisable in any calendar year (under
all such plans of his  employer  corporation  and its parent and all  subsidiary
corporations) shall not exceed $100,000.

8    PERMISSIBLE PROVISIONS

     In addition to the other powers  granted to the  Committee and the Board of
Directors  under this Plan, the Committee and the Board of Directors  shall have
the  discretion  to include in any option grant the right of the optionee (i) to
pay for the stock with stock of the corporation  granting the option and/or (ii)
to receive  property  at the time of  exercise  of the option if, in the case of
property  other  than  cash,  Section 83 of the  Internal  Revenue  Code of 1986
applies to such property, and/or (iii) to receive a loan from the Corporation to
pay for the  stock,  with such  terms as shall  not  cause the  option to become
disqualified  as an  Aincentive  stock option@ as defined in Section 422A of the
Internal Revenue Code of 1986 or amendments thereto, and/or (iv) to receive such
assistance from the Corporation in obtaining a loan from a financial institution
as is  necessary  in the  sole  discretion  of the  Committee  and the  Board of
Directors.

<PAGE>

9    TERM OF PLAN

     Options  may be  granted  pursuant  to the Plan from time to time  within a
period of ten years from the date the Plan is  adopted,  or the date the Plan is
approved by the Stockholders, whichever is earlier.

10   INDEMNIFICATION OF COMMITTEE

     In addition  to such other  rights of  indemnification  as they may have as
directors or as members of the Committee,  the members of the Committee shall be
indemnified  by the  Corporation  against  the  reasonable  expenses,  including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding,  or in connection with any appeal therein, to
which  they or any of them  may be a party  by  reason  of any  action  taken or
failure  to act  under or in  connection  with the  Plan or any  option  granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such  settlement  is  approved  by  independent  legal  counsel  selected by the
Corporation)  or paid by them in  satisfaction of a judgment in any such action,
suit or  proceeding  except  in  relation  to  matters  as to  which it shall be
adjudged in such action, suit or proceeding that such Committee member is liable
for  negligence or misconduct in the  performance  of his duties;  provided that
within 60 days after  institution  of any such action,  suit or  proceeding  the
Committee member shall in writing offer the Corporation the opportunity,  as its
own expense, to handle and defend the same.


<PAGE>

11   AMENDMENT OF THE PLAN

     The Board of Directors of the Corporation may, insofar as permitted by law,
from  time to time,  with  respect  to any  shares  at the time not  subject  to
options,  suspend or  discontinue  the Plan or revise or amend it in any respect
whatsoever except that,  without approval of the stockholders,  no such revision
or amendment  shall change the number of shares subject to the Plan,  change the
designation of the class of employees eligible to receive options,  decrease the
price at which options may be granted,  or remove the administration of the Plan
from the Committee.  Furthermore,  the Plan may not, without the approval of the
stockholders,  be amended in any manner that will cause options  issued under it
to fail to meet the  requirements  of  incentive  stock  options  as  defined in
Section 422A of the 1954 Internal Revenue Code.

12   APPLICATION OF FUNDS

     The  proceeds  received by the  Corporation  from the sale of Common  Stock
pursuant to options will be used for general corporate purposes.

13   NO OBLIGATION TO EXERCISE OPTION

     The granting of an option shall impose no  obligation  upon the optionee to
exercise such option.

14   APPROVAL OF STOCKHOLDERS

     The Plan shall not take effect until  approved by the holders of a majority
of the  outstanding  shares of Common Stock of the  Corporation,  which approval
must occur within the period  beginning  twelve  months before and ending twelve
months after the date the Plan is adopted by the Board of Directors.

<PAGE>

15   CONTINUED EMPLOYMENT

     The grant of an option pursuant to the Plan shall not be construed to imply
or to constitute  evidence of any agreement,  express or implied, on the part of
the  Corporation or any subsidiary to continue to employ an employee or to alter
the responsibilities, duties or authority of any employee.
[{"type": "S-8", "sequence": "1", "description": "PTA 1987 STOCK OPTION PLAN REGISTRATION STATEMENT", "secsgml_size_bytes": 42461}]
{"company-data": {"conformed-name": "PENN TREATY AMERICAN CORP", "cik": "0000814181", "assigned-sic": "6311", "irs-number": "231664166", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-89929", "film-number": "99737283"}, "business-address": {"street1": "3440 LEHIGH ST", "city": "ALLENTOWN", "state": "PA", "zip": "18103", "phone": "6109652222"}, "mail-address": {"street1": "3440 LEHIGH ST", "street2": "3440 LEHIGH ST", "city": "ALLENTOWN", "state": "PA", "zip": "18103"}}
As filed with the Securities and Exchange Commission on October 29, 1999
                                                       Registration No. 333-
                                                                            ----

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

                        PENN TREATY AMERICAN CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                  Pennsylvania                         23-1664166
                  ------------                         ----------
(STATE OR OTHER JURISDICTION OF INCORPORATION        (I.R.S. EMPLOYER
             OR ORGANIZATION)                       IDENTIFICATION NO.)

                 3440 Lehigh Street
              Allentown, Pennsylvania                     18103
              -----------------------                     -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP CODE)

                        Penn Treaty American Corporation
                    1987 Employee Incentive Stock Option Plan
                    -----------------------------------------
                            (FULL TITLE OF THE PLAN)

                             Irving Levit, President
                        Penn Treaty American Corporation
                               3440 Lehigh Street
                          Allentown, Pennsylvania 18103
                        ---------------------------------
                     (NAME AND ADDRESS OF AGENT FOR SERVICE)

                                 (610) 965-2222
                                 --------------
          (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                                 with a copy to:
                            Justin P. Klein, Esquire
                     Ballard Spahr Andrews & Ingersoll, LLP
                         1735 Market Street, 51st Floor
                      Philadelphia, Pennsylvania 19103-7599
                                 (215) 665-8500

                         CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
                                   Proposed       Proposed
Title of                           Maximum        Maximum
Securities         Amount          Offering       Aggregate      Amount of
to be              to be           Price Per      Offering       Registration
Registered         Registered      Share(1)       Price(1)       Fee
--------------------------------------------------------------------------------
Common Stock,
par value $.10
per share          282,269(2)      $18.4375       $5,204,335     $1,447
(1)      Calculated in  accordance  with Rule 457(c) and (h) on the basis of the
         average of the high and low prices of Penn Treaty American  Corporation
         Common  Stock on October  28,  1999,  as reported on the New York Stock
         Exchange.

(2)      Such number  represents the number of shares of Common Stock  initially
         issuable  upon  exercise of all options  available  for grant under the
         1987 Employee Incentive Stock Option Plan.
PART I - INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

     The  documents  containing  the  information  specified  in  Part I of this
Registration  Statement  will be given or sent to all  officers  and  other  key
employees of Penn Treaty American Corporation who participate in the Penn Treaty
American  Corporation 1987 Employee  Incentive Stock Option Plan as specified by
Rule 428 under the Securities Act.

          PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.

     The following  documents filed with the Securities and Exchange  Commission
pursuant to the Securities Exchange Act of 1934, as amended by Penn Treaty (File
No. 0-15972) are incorporated herein by reference:

     (i)  Penn  Treaty's  Annual  Report on Form 10-K for the fiscal  year ended
          December 31, 1998;

     (ii) Penn Treaty's  Quarterly  Reports on Form 10-Q for the quarters  ended
          March 31, 199 and June 30, 1999;

     (iii) Penn Treaty's Current Report on Form 8-K dated January 15, 1999;

     (iv) the  description  of Penn  Treaty=s  common  stock  contained  in Penn
          Treaty=s  Registration  Statement  on Form  8-A for  such  securities,
          including any  amendments or reports filed for the purpose of updating
          such description.

     All  documents  subsequently  filed by Penn  Treaty  after the date  hereof
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which  deregisters  all  securities  remaining  unsold,
shall be deemed to be incorporated by reference in this  Registration  Statement
and shall be part hereof from the date of filing of such documents.

ITEM 4.   DESCRIPTION OF SECURITIES.

          Not applicable.

ITEM 5.   INTERESTS OF NAMED EXPERTS AND COUNSEL.

          Not applicable.
ITEM 6.   INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Amended and Restated Bylaws of Penn Treaty provide for  indemnification
of directors  and  officers of Penn Treaty in  accordance  with  indemnification
provisions  of the  Pennsylvania  Business  Corporation  Law of  1988.  Sections
1741-50 of the Pennsylvania  Business Corporation Law permit  indemnification of
directors,  officers,  employees  and  agents  of a  corporation  under  certain
conditions and subject to certain limitations.

     The Company has directors  and officers  liability  insurance  insuring its
directors  and  officers  against  liability  incurred  in their  capacities  as
directors and officers and providing for reimbursement of the registrant for any
indemnification payments made by it to directors and officers.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

          Not applicable.

ITEM 8.  EXHIBITS.

          4.1  Specimen  copy  of  Common  Stock  Certificate  (incorporated  by
               reference  to Exhibit 4 to  Registration  Statement  on Form S-1,
               Reg. No. 33-92690).

          5.1  Opinion of Ballard Spahr Andrews & Ingersoll, LLP

          23.1 Consent of PricewaterhouseCoopers LLP

          23.2 Consent of Ballard Spahr Andrews & Ingersoll,  LLP  (contained in
               Exhibit 5.1)

          24.1 Power of Attorney  (included  on signature  page of  Registration
               Statement)

          99.1 Penn Treaty American  Corporation  1987 Employee  Incentive Stock
               Option Plan
ITEM 9.  UNDERTAKINGS.

          The undersigned registrant hereby undertakes:

          (1)  To file,  during  any  period in which  offers or sales are being
               made, a post-effective amendment to this registration statement;

               (i)  To include any  prospectus  required by section  10(a)(3) of
                    the Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
                    after the effective date of the  registration  statement (or
                    the most recent  post-effective  amendment  thereof)  which,
                    individually  or in the  aggregate,  represent a fundamental
                    change  in the  information  set  forth in the  registration
                    statement.  Notwithstanding  the foregoing,  any increase or
                    decrease  in  volume  of  securities  offered  (if the total
                    dollar  value of  securities  offered  would not exceed that
                    which was registered) and any deviation from the low or high
                    end of the estimated maximum offering range may be reflected
                    in the form of prospectus filed with the Commission pursuant
                    to Rule 424(b) if, in the  aggregate,  the changes in volume
                    and price represent no more than a 20% change in the maximum
                    aggregate  offering price set forth in the  "Calculation  of
                    Registration  Fee"  table  in  the  effective   registration
                    statement;

               (iii)To include  any  material  information  with  respect to the
                    plan  of  distribution  not  previously   disclosed  in  the
                    registration  statement  or  any  material  change  to  such
                    information in the registration statement;

                    Provided, however, that paragraphs (1)(i) and (1)(ii) do not
                    apply if the  registration  statement is on Form S-3 or Form
                    S-8,  and  the  information  required  to be  included  in a
                    post-effective amendment by those paragraphs is contained in
                    periodic reports filed by the registrant pursuant to section
                    13 or section 15(d) of the  Securities  Exchange Act of 1934
                    that  are  incorporated  by  reference  in the  registration
                    statement.

          (2)  That,  for the purpose of  determining  any  liability  under the
               Securities Act of 1933, each such post-effective  amendment shall
               be  deemed to be a new  registration  statement  relating  to the
               securities  offered therein,  and the offering of such securities
               at that time shall be deemed to be the initial bona fide offering
               thereof.

          (3)  To  remove  from   registration  by  means  of  a  post-effective
               amendment any of the  securities  being  registered  which remain
               unsold at the termination of the offering.

               The undersigned  registrant  hereby undertakes that, for purposes
               of  determining  any liability  under the Securities Act of 1933,
               each filing of the registrant's annual report pursuant to section
               13(a) or section  15(d) of the  Securities  Exchange  Act of 1934
               (and, where applicable, each filing of an employee benefit plan's
               annual  report  pursuant  to  section  15(d)  of  the  Securities
               Exchange  Act of 1934) that is  incorporated  by reference in the
               registration  statement shall be deemed to be a new  registration
               statement  relating to the securities  offered  therein,  and the
               offering  of such  securities  at that time shall be deemed to be
               the initial bona fide offering thereof.
Insofar as  indemnification  for  liabilities  arising  under the
               Securities  Act of 1933 may be permitted to  directors,  officers
               and  controlling  persons  of  the  registrant  pursuant  to  the
               foregoing  provisions,  or  otherwise,  the  registrant  has been
               advised  that  in the  opinion  of the  Securities  and  Exchange
               Commission  such  indemnification  is  against  public  policy as
               expressed  in the Act and is,  therefore,  unenforceable.  In the
               event that a claim for  indemnification  against such liabilities
               (other than the payment by the registrant of expenses incurred or
               paid  by  a  director,  officer  or  controlling  person  of  the
               registrant  in the  successful  defense  of any  action,  suit or
               proceeding) is asserted by such director,  officer or controlling
               person in connection with the securities  being  registered,  the
               registrant will,  unless in the opinion of its counsel the matter
               has been settled by controlling  precedent,  submit to a court of
               appropriate    jurisdiction    the    question    whether    such
               indemnification  by it is against  public  policy as expressed in
               the Act and will be  governed by the final  adjudication  of such
               issue.
SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the City of Allentown,  Commonwealth  of Pennsylvania on October
29, 1999.

                                          Penn Treaty American Corporation

                                          By :  /s/ Irving Levit
                                                    -----------------------
                                                    Irving Levit, President

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been signed below by the  following  persons in the
capacities and on the dates indicated.

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears below  constitutes and appoints Irving Levit and A.J. Carden and each or
any one of them,  his true and lawful  attorneys-in-fact  and agents,  with full
power of substitution  and  resubstitution,  for him and in his name,  place and
stead,  in any and all  capacities,  to sign any and all  amendments  (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange  Commission,  granting unto said  attorneys-in-fact  and
agents, and each of them, full power and authority to perform each and every act
and thing requisite and necessary to be done in connection  therewith,  as fully
to all intents and purposes as he might or could do in person,  hereby ratifying
and confirming all that said  attorneys-in-fact  and agents,  or any of them, or
his or their  substitute or substitutes,  may lawfully do or cause to be done by
virtue hereof.

     Signature                Title                             Date
     ---------                -----                             ----

/s/ Irving Levit              Chairman of the Board, President  October 29, 1999
    -----------               and Chief Executive Officer
    Irving Levit              (Principal Executive Officer)
/s/ Michael F. Grill          Treasurer, Controller and         October 29, 1999
    ----------------          Director (Principal Accounting
    Michael F. Grill          Officer)

/s/ A.J. Carden               Executive Vice President and      October 29, 1999
    -----------               Director
    A.J. Carden

/s/ Domenic P. Stangherlin    Secretary and Director            October 29, 1999
    ----------------------
    Domenic P. Stangherlin

/s/ Jack D. Baum              Vice President, Marketing and     October 29, 1999
    ------------              Director
    Jack D. Baum

/s/ Glen A. Levit             Vice President, Sales and         October 29, 1999
    ------------              Director
    Glen A. Levit

/s/ Cameron Waite             Chief Financial Officer           October 29, 1999
    -------------             (Principal Financial Officer)
    Cameron Waite

/s/ Emile G. Ilchuk           Director                          October 29, 1999
    ---------------
    Emile G. Ilchuk

/s/ C. Mitchell Goldman       Director                          October 29, 1999
    -------------------
    C. Mitchell Goldman

/s/ David B. Trindle          Director                          October 29, 1999
    ----------------
    David B. Trindle
EXHIBIT INDEX

EXHIBIT
NUMBER            DESCRIPTION
------            -----------

4.1               Specimen copy  of Common Stock  Certificate  (incorporated  by
                  reference  to  Exhibit 4  to  Registration  Statement on  Form
                  S-1, Reg. No. 333-10777).

5.1               Opinion of Ballard Spahr Andrews & Ingersoll, LLP

23.1              Consent of PricewaterhouseCoopers, LLP

23.2              Consent of Ballard Spahr  Andrews & Ingersoll, LLP  (contained
                  in Exhibit 5.1)

24.1              Power of Attorney (included on signature page of  Registration
                  Statement)

99.1              Penn Treaty American Corporation 1998 Employee Incentive Stock
                  Option Plan
EXHIBIT 5.1

               [Ballard Spahr Andrews & Ingersoll, LLP Letterhead]

October 29, 1999

Penn Treaty American Corporation
3440 Lehigh Street
Allentown, PA  18103

Re: Registration Statement on Form S-8

Gentlemen:

We have  acted as special  counsel  to Penn  Treaty  American  Corporation  (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of 282,269 shares of Common Stock of the Company, par value $.10 per
share (the  "Shares"),  issuable upon the exercise of options  granted under the
Penn Treaty American  Corporation 1987 Employee Incentive Stock Option Plan (the
"Plan").

In  rendering  our  opinion,  we have  reviewed  such  certificates,  documents,
corporate  records and other  instruments  as in our judgment  are  necessary or
appropriate to enable us to render the opinion  expressed  below. In giving this
opinion, we are assuming the authenticity of all instruments  presented to us as
originals,  the conformity with the originals of all instruments presented to us
as copies and the genuineness of all signatures.

Based on the foregoing,  we are of the opinion that the Shares, when issued upon
exercise  of  options  granted  under the  Plan,  in  accordance  with the terms
thereof, will be legally issued, fully paid and nonassessable.

We  consent to the filing of this  opinion  as Exhibit  5.1 to the  Registration
Statement on Form S-8 being filed with respect to the offering of the Shares.

Yours truly,

/s/ Ballard Spahr Andrews & Ingersoll, LLP
    --------------------------------------
    Ballard Spahr Andrews & Ingersoll, LLP
EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement  on Form  S-8 of our  report  dated  March  8,  1999  relating  to the
financial  statements and financial  statement schedules of Penn Treaty American
Corporation which appears in Penn Treaty American Corporation's Annual Report on
Form 10-K for the year ended December 31, 1998.

/s/ PricewaterhouseCoopers LLP
    --------------------------
    PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
October 29, 1999
EXHIBIT 99.1

                        PENN TREATY AMERICAN CORPORATION
                      EMPLOYEE INCENTIVE STOCK OPTION PLAN

1.   PURPOSE

     This Employee Incentive Stock Option Plan (the "Plan") is intended to be an
incentive and to encourage stock ownership by certain officers and key executive
employees of Penn Treaty American  Corporation (the ACorporation@) or any of its
subsidiary  corporations  as that term is defined in Section 425 of the Internal
Revenue Code of 1985 (the  ASubsidiaries@) so that such employees may acquire or
increase  their  proprietary  interest  in the  success of the  Corporation  and
Subsidiaries,  and so that they may be encouraged to remain in the employ of the
Corporation  or its  Subsidiaries.  It is further  intended that options  issued
pursuant to the Plan shall constitute incentive stock options within the meaning
of Section 422A of the Internal Revenue Code of 1986.

2.   ADMINISTRATION

     The Plan shall be  administered  by a committee  appointed  by the Board of
Directors of the Corporation (the  "Committee").  The Committee shall consist of
not  less  than  three  persons  who may be,  but need  not be,  members  of the
Corporation's  Board of Directors.  The Board of Directors may from time to time
remove  members  from,  or add  members  to,  the  Committee.  Vacancies  on the
Committee,  howsoever  caused,  shall be filled by the Board of  Directors.  The
Committee shall select one of its members as Chairman and shall hold meetings at
such times and places as it may  determine.  Acts by a majority of the Committee
at a meeting at which a quorum is  present,  or acts  reduced to or  approved in
writing by a majority of the members of the  Committee,  shall be the valid acts
of the Committee. No person while a member of the Committee shall participate in
any  decision  affecting  his right to  receive  an option  under the Plan.  The
Committee shall from time to time in its discretion make  recommendations to the
Board of Directors  with respect to the employees  who shall be granted  options
and the amount of stock to be optioned  to each.  The Board of  Directors  shall
have the final  authority to determine  these matters.  The  interpretation  and
construction  by the  Committee of any  provisions  of the Plan or of any option
granted  under it shall be final  unless  otherwise  determined  by the Board of
Directors.  No member of the Board of Directors or the Committee shall be liable
for any action or  determination  made in good faith with respect to the Plan or
any option granted under it.

3    ELIGIBILITY

     The  persons  who shall be  eligible  to receive  options  shall be the key
employees  (including  officers  whether  or  not  they  are  directors)  of the
Corporation or its  Subsidiaries.  An optionee may hold more than one option but
only on the terms and subject to the restrictions hereinafter set forth.

4    STOCK

     The stock  subject  to the  options  shall be  shares of the  Corporation's
authorized but unissued or reacquired common stock (hereinafter sometimes called
"Common  Stock").  The  aggregate  number  of shares  which may be issued  under
options  shall  not  exceed  100,000  shares  of Common  Stock.  The  limitation
established by the preceding sentence shall be subject to adjustment as provided
in Article 5(g) of the Plan.
In the event  that any  outstanding  option  under the Plan for any  reason
expires  or  is  terminated,  the  shares  of  Common  Stock  allocable  to  the
unexercised  portion of such option may again be subject to an option  under the
Plan.

5    TERMS AND CONDITIONS OF OPTIONS

     When the Board of Directors  shall have granted stock options to employees,
Notices of Grant of Stock Option  shall be given to such  employees in such form
as the  Committee  shall from time to time  approve,  which Notices shall comply
with and be subject to the following terms and conditions:

     a    Number of Shares.

          Each Notice of Grant of Stock  Option shall state the number of shares
     to which it pertains.

     b    Option Price.

          Each Notice of Grant of Stock  Option  shall  state the option  price,
     which shall not be less than 100% of the fair market value of the shares of
     Common Stock of the  Corporation on the date of the granting of the option.
     During  such time as such stock is not  listed  upon an  established  stock
     exchange or traded in the  over-the-counter  market,  the fair market value
     per share shall be determined by the Committee at least annually by relying
     upon whatever evidence it deems appropriate which may include, but need not
     be limited to, recent sales of the Common Stock,  opinions of  professional
     appraisers and recent sales of comparable shares of other companies. If the
     stock is traded in the  over-the-counter  market,  such fair  market  value
     shall be the mean  between the dealer  "bid" and "ask" prices of the Common
     Stock in the New York  over-the-counter  market  on the day the  option  is
granted,  as reported by the National  Association  of Securities  Dealers,
     Inc. If the stock is listed upon an established stock exchange or exchanges
     such fair market value shall be deemed to be the highest  closing  price of
     the Common Stock on such stock  exchange or exchanges on the day the option
     is granted or if no sale of the Corporation's  Common Stock shall have been
     made on any stock  exchange on that day, on the next preceding day on which
     there was a sale of such stock. Subject to the foregoing,  the Committee in
     fixing the option price shall have full authority and discretion.

     c    Medium and Time of Payment.

          Unless  otherwise  specified in the option grant pursuant to Section 8
     hereof, the option price shall be payable in United States dollars upon the
     exercise of the option and may be paid in cash or by check.

     d    Term and Exercise of Options.

          No option shall be exercisable  either in whole or in part prior to 12
     months  from the date it is granted.  Each Notice of Grant of Stock  Option
     shall state the date on which the option shall  expire.  No option shall be
     exercisable  after ten years from the date on which it is granted.  Options
     may only be  exercised  by an optionee for so long as he is employed by the
     Corporation  except as otherwise  provided in Articles 5(e) and 5(f) of the
     Plan.

          The Notice of Grant of Stock  Option may provide that the option shall
     be exercisable in installments rather than exercisable immediately in full.
     In such  case,  subject  to the  right of  emulation  provided  in the last
     sentence of this subdivision, during each twelve-month period commencing 12
     months from the date of the  granting of the option,  each option  shall be
     exercisable  as to not more than  that  percentage  of the total  number of
     shares  covered  thereby as the  Committee  shall  specify in the Notice of
     Grant of Stock  Option,  until all shares  covered by the option shall have
     been  purchased.  The  Committee  may  provide in the case of an option not
     immediately  exercisable in full, for the acceleration of the time at which
     the option may be exercised.
Not less than 100 shares may be  purchased  at any one time unless the
     number  purchased  is the total  number at the time  purchasable  under the
     option.  During  the  lifetime  of  the  optionee,   the  option  shall  be
     exercisable  only by him and shall not be assignable or transferable by him
     and no other person  shall  acquire any rights  therein.  To the extent not
     exercised, installments shall accumulate and be exercisable, in whole or in
     part, in any  subsequent  period but not later than ten years from the date
     the option is  granted.

     e    Termination of Employment Except By Death or Disability.

          In the event that the employment of an optionee by the  Corporation or
     Subsidiaries  shall  terminate  for any  reason  other  than  his  death or
     disability,   then  as  of  the  date  the  optionee  has  notice  of  such
     termination,  such  optionee  shall have no further  right to exercise  any
     option.  Whether  authorized  leave of absence or absence  for  military or
     governmental  service shall constitute  termination of employment,  for the
     purposes  of  the  Plan,  shall  be  determined  by  the  Committee,  which
     determination,  unless overruled by the Board of Directors,  shall be final
     and conclusive.

     f    Death or Disability of Optionee and Transfer of Option.

          If the optionee  shall die or become  disabled  while in the employ of
     the  Corporation  or a  Subsidiary,  and shall not have fully  exercised an
     option,  the option may be  exercised,  subject  to the  condition  that no
     option shall be exercisable after the expiration of ten years from the date
     it is granted,  to the extent that the  optionee's  right to exercise  such
     option had accrued  pursuant to Article 5(d) of the Plan at the time of his
     death and had not previously  been  exercised,  at any time within 3 months
     after the optionee=s death or disability,  by the optionee,  or in the case
     of death,  by the  executors  or  administrators  of the optionee or by any
     person or persons  who shall have  acquired  the option  directly  from the
     optionee by bequest or inheritance.  No option shall be transferable by the
     optionee otherwise than by will or the laws of descent and distribution.
g    Recapitalization.

          Subject  to any  required  action by the  stockholders,  the number of
     shares of Common Stock covered by each  outstanding  option,  and the price
     per share thereof in each such option,  shall be  proportionately  adjusted
     for any increase or decrease in the number of issued shares of Common Stock
     of the Corporation  resulting from a subdivision or consolidation of shares
     or the payment of a stock  dividend  (but only on the Common  Stock) or any
     other  increase or decrease in the number of such shares  effected  without
     receipt of consideration by the Corporation.

          Subject to any required action by the stockholders, if the Corporation
     shall be the surviving  corporation  in any merger or  consolidation,  each
     outstanding  option shall pertain to and apply to the securities to which a
     holder of the number of shares of Common Stock  subject to the option would
     have been entitled.  A dissolution  or liquidation of the  Corporation or a
     merger or  consolidation  in which  the  Corporation  is not the  surviving
     corporation,  shall cause each  outstanding  option to terminate,  provided
     that each optionee  shall, in such event, if a period of 12 months from the
     date of the  granting  of the  option  shall have  expired,  have the right
     immediately  prior  to  such  dissolution  or  liquidation,  or  merger  or
     consolidation in which the Corporation is not the surviving corporation, to
     exercise his option in whole or in part without  regard to the  installment
     provisions  of  Article  5(d)  of  the  Plan.   Notwithstanding  the  above
     provisions,  an option will not  terminate  if assumed by the  surviving or
     acquiring corporation,  or its parent, upon a merger or consolidation under
     circumstances  which are not deemed a modification of the option within the
     meaning of Sections 425(a) and 425(h)(3)(A) of the Internal Revenue Code.
In the event of a change in the  Common  Stock of the  Corporation  as
     presently  constituted,  which  is  limited  to a  change  of  all  of  its
     authorized  shares  with par value  into the same  number of shares  with a
     different  par value or without par value,  the shares  resulting  from any
     such change  shall be deemed to be the Common  Stock  within the meaning of
     the Plan.

          To the  extent  that  the  foregoing  adjustments  relate  to stock or
     securities  of the  Corporation,  such  adjustments  shall  be  made by the
     Committee,  whose determination in that respect shall be final, binding and
     conclusive,  provided that each option granted  pursuant to this Plan shall
     not be  adjusted  in a manner that causes the option to fail to continue to
     qualify as an incentive  stock option within the meaning of Section 422A of
     the 1954 Internal Revenue Code.

          Except as  hereinbefore  expressly  provided in this Article 5(g), the
     optionee shall have no rights by reason of any subdivision or consolidation
     of shares of stock of any class or the payment of any stock dividend or any
     other  increase  or  decrease  in the  number  of shares of any class or by
     reason of any dissolution, liquidation, merger or consolidation or spin-off
     of assets or stock of another corporation, and any issue by the Corporation
     of shares of stock of any class, or securities  convertible  into shares of
     stock of any class,  shall not affect,  and no adjustment by reason thereof
     shall be made  with  respect  to,  the  number or price of shares of Common
     Stock subject to the option.
The grant of an option  pursuant  to the Plan  shall not affect in any
     way  the  right  or  power  of  the   Corporation   to  make   adjustments,
     reclassifications,  reorganizations  or changes of its  capital or business
     structure or to merge or to consolidate or to dissolve,  liquidate or sell,
     or transfer all or any part of its business or assets.

     h    Rights as a Stockholder.

          An optionee  or a  transferee  of an option  shall have no rights as a
     stockholder with respect to any shares covered by his option until the date
     of  the  issuance  of a  stock  certificate  to him  for  such  shares.  No
     adjustment shall be made for dividends (ordinary or extraordinary;  whether
     in cash, securities or other property) or distributions or other rights for
     which  the  record  date is prior to the date  such  stock  certificate  is
     issued, except as provided in Article 5(g) hereof

     i    Modification, Extension and Renewal of Options.

          Subject to the terms and conditions and within the  limitations of the
     Plan,  the Board of  Directors  may  modify,  extend  or renew  outstanding
     options  granted  under the Plan,  or accept the  surrender of  outstanding
     options (to the extent not theretofore  exercised).  The Board of Directors
     shall not, however, modify any outstanding options so as to specify a lower
     price or accept the  surrender of  outstanding  options and  authorize  the
     granting of new options in substitution  therefor specifying a lower price.
     Notwithstanding the foregoing, however, no modification of an option shall,
     without  the  consent  of the  optionee,  alter or  impair  any  rights  or
     obligations under any option theretofore granted under the Plan.

     j    Investment Purpose.

          Each option under the Plan shall be granted on the condition  that the
     purchases of stock thereunder shall be for investment purposes and not with
     a view to  resale  or  distribution,  except  that in the  event  the stock
     subject to such option is registered  under the  Securities Act of 1933, as
     amended,  or in the event a resale of such stock without such  registration
     would otherwise be permissible,  such condition shall be inoperative if, in
     the opinion of counsel for the Corporation,  such condition is not required
     under the Securities Act of 1933 or any other applicable law, regulation or
     rule of any governmental agency.
k    Optionee's Stockholder Agreement.

          Each optionee shall agree,  as a condition of his right to exercise an
     option granted to him pursuant to the Plan, that all shares received by him
     pursuant to any and every exercise of such option will be subject to all of
     the  provisions  of the  Corporation=s  Stockholder  Agreement,  if any, in
     effect  at the  time of any  exercise  of such  option.  Accordingly,  each
     optionee  shall at the time of  exercise of any option  granted  hereunder,
     execute and agree to be bound by the  Corporation=s  Stockholder  Agreement
     then in effect.

     l    Covenant Not to Compete.

          The Notice of Grant of Stock Option may provide  that,  as a condition
     of the employee's  acceptance of the option, the employee shall agree to be
     bound by a covenant not to compete  with the  Corporation  containing  such
     terms as the Committee and Board of Directors shall deem advisable.

     m    Other Provisions.

          The  Notice  of  Grant  of  Stock  Option  shall  contain  such  other
     provisions,  including, without limitation,  restrictions upon the exercise
     of the option or the transfer of the shares  received upon an exercise,  as
     the Committee  and the Board of Directors  shall deem  advisable.  Any such
     Notice shall contain such limitations and restrictions upon the exercise of
     the  option as shall be  necessary  in order  that such  option  will be an
     "incentive stock option" as defined in Section 422A of the Internal Revenue
     Code of 1986 or to conform to any change in the law.
6    OPTIONS TO CERTAIN STOCKHOLDERS

     Notwithstanding  any other  provision  herein,  in any option granted to an
individual  who,  at the time the  option  is  granted,  possesses  more than 10
percent  of the  total  combined  voting  power of all  classes  of stock of the
Corporation  or of its parent or any  subsidiary  corporation,  the option price
must be at least 110  percent of the fair market  value of the stock  subject to
the  option  and such  option by its  terms  must not be  exercisable  after the
expiration of 5 years from the date such option is granted.

7    ANNUAL LIMITATION PER EMPLOYEE

     The aggregate  fair market value  (determined  as of the time the option is
granted  under the Plan) of the stock  for  which any  employee  may be  granted
incentive stock options which are first  exercisable in any calendar year (under
all such plans of his  employer  corporation  and its parent and all  subsidiary
corporations) shall not exceed $100,000.

8    PERMISSIBLE PROVISIONS

     In addition to the other powers  granted to the  Committee and the Board of
Directors  under this Plan, the Committee and the Board of Directors  shall have
the  discretion  to include in any option grant the right of the optionee (i) to
pay for the stock with stock of the corporation  granting the option and/or (ii)
to receive  property  at the time of  exercise  of the option if, in the case of
property  other  than  cash,  Section 83 of the  Internal  Revenue  Code of 1986
applies to such property, and/or (iii) to receive a loan from the Corporation to
pay for the  stock,  with such  terms as shall  not  cause the  option to become
disqualified  as an  Aincentive  stock option@ as defined in Section 422A of the
Internal Revenue Code of 1986 or amendments thereto, and/or (iv) to receive such
assistance from the Corporation in obtaining a loan from a financial institution
as is  necessary  in the  sole  discretion  of the  Committee  and the  Board of
Directors.
9    TERM OF PLAN

     Options  may be  granted  pursuant  to the Plan from time to time  within a
period of ten years from the date the Plan is  adopted,  or the date the Plan is
approved by the Stockholders, whichever is earlier.

10   INDEMNIFICATION OF COMMITTEE

     In addition  to such other  rights of  indemnification  as they may have as
directors or as members of the Committee,  the members of the Committee shall be
indemnified  by the  Corporation  against  the  reasonable  expenses,  including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding,  or in connection with any appeal therein, to
which  they or any of them  may be a party  by  reason  of any  action  taken or
failure  to act  under or in  connection  with the  Plan or any  option  granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such  settlement  is  approved  by  independent  legal  counsel  selected by the
Corporation)  or paid by them in  satisfaction of a judgment in any such action,
suit or  proceeding  except  in  relation  to  matters  as to  which it shall be
adjudged in such action, suit or proceeding that such Committee member is liable
for  negligence or misconduct in the  performance  of his duties;  provided that
within 60 days after  institution  of any such action,  suit or  proceeding  the
Committee member shall in writing offer the Corporation the opportunity,  as its
own expense, to handle and defend the same.
11   AMENDMENT OF THE PLAN

     The Board of Directors of the Corporation may, insofar as permitted by law,
from  time to time,  with  respect  to any  shares  at the time not  subject  to
options,  suspend or  discontinue  the Plan or revise or amend it in any respect
whatsoever except that,  without approval of the stockholders,  no such revision
or amendment  shall change the number of shares subject to the Plan,  change the
designation of the class of employees eligible to receive options,  decrease the
price at which options may be granted,  or remove the administration of the Plan
from the Committee.  Furthermore,  the Plan may not, without the approval of the
stockholders,  be amended in any manner that will cause options  issued under it
to fail to meet the  requirements  of  incentive  stock  options  as  defined in
Section 422A of the 1954 Internal Revenue Code.

12   APPLICATION OF FUNDS

     The  proceeds  received by the  Corporation  from the sale of Common  Stock
pursuant to options will be used for general corporate purposes.

13   NO OBLIGATION TO EXERCISE OPTION

     The granting of an option shall impose no  obligation  upon the optionee to
exercise such option.

14   APPROVAL OF STOCKHOLDERS

     The Plan shall not take effect until  approved by the holders of a majority
of the  outstanding  shares of Common Stock of the  Corporation,  which approval
must occur within the period  beginning  twelve  months before and ending twelve
months after the date the Plan is adopted by the Board of Directors.
15   CONTINUED EMPLOYMENT

     The grant of an option pursuant to the Plan shall not be construed to imply
or to constitute  evidence of any agreement,  express or implied, on the part of
the  Corporation or any subsidiary to continue to employ an employee or to alter
the responsibilities, duties or authority of any employee.