<PAGE>
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1996
                                                    Registration No. 33-
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               _________________
                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                               _________________

                    AMERICAN PHYSICIANS SERVICE GROUP, INC.
             (Exact name of registrant as specified in its charter)

          TEXAS                                        75-1458323
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification No.)

                         1301 CAPITAL OF TEXAS HIGHWAY
                              AUSTIN, TEXAS 78746
                                 (512) 328-0888
          (Address of principal executive offices, including zip code)
                              ____________________

                    AMERICAN PHYSICIANS SERVICE GROUP, INC.
               1995 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN

                           (Full title of the plans)

                                  W. H. HAYES
                  SENIOR VICE PRESIDENT-FINANCE AND SECRETARY
                         1301 CAPITAL OF TEXAS HIGHWAY
                              AUSTIN, TEXAS 78746
                                 (512) 328-0888
           (Name, address and telephone number of agent for service)

                                    copy to:

                                 JIM A. WATSON
                              HAROLD J. HERMAN II
                             VINSON & ELKINS L.L.P.
                           3700 TRAMMELL CROW CENTER
                                2001 ROSS AVENUE
                            DALLAS, TEXAS 75201-2975
                                 (214) 220-7700

                        CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
           TITLE OF                             PROPOSED MAXIMUM  PROPOSED MAXIMUM
       SECURITIES TO BE          AMOUNT TO BE    OFFERING PRICE      AGGREGATE         AMOUNT OF
          REGISTERED              REGISTERED       PER SHARE*     OFFERING PRICE*   REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------
<S>                             <C>             <C>               <C>               <C>
Common Stock, $.10 par value
 per share...................   800,000 shares      $9.75           $7,800,000            $2,690
- ----------------------------------------------------------------------------------------------------
</TABLE>

  *  Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933, as amended, and
based on the average of the high and low prices of the Common Stock reported on
The Nasdaq National Market on June 27, 1996.

================================================================================
<PAGE>
 
                                    PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE.
         --------------------------------------- 

  The following documents have been filed with the Securities and Exchange
Commission (the "Commission") by American Physicians Service Group, Inc., a
Texas corporation (the "Company'), and are incorporated herein by reference and
made a part hereof:

 (a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
     December 31, 1995;

 (b) The Company's Quarterly Report on Form 10-QSB for the quarter ended March
     31, 1996;

 (c) The description of the Common Stock contained in the Company's Form 8-A,
     dated January 6, 1984, for registration of the Common Stock pursuant to
     Section 12(g) of the Exchange Act, including any amendment or report filed
     for the purpose of updating such description.

  All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), subsequent to
the effective date hereof and prior to the filing of a post-effective amendment
hereto that indicates that all securities offered hereby have been sold or that
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of filing
of such documents.  Any statement contained herein or in any document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.  Any such statement so modified or
superseded shall not be deemed to constitute a part of this Registration
Statement, except as so modified or superseded.

ITEM 4.  DESCRIPTION OF SECURITIES.
         ------------------------- 

         Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.
         -------------------------------------- 

         Not applicable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.
         ----------------------------------------- 

  Article 2.02-1 of the Texas Business Corporation Act (the "TBCA") provides
that a Texas corporation shall have the power to indemnify anyone who was, is,
or is threatened to be made a named defendant or respondent to any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, or any appeal in such an action,
suit or proceeding, and any inquiry or investigation that could lead to such an
action, suit, or proceeding, because such person is or was a director of the
corporation, provided that (i) such person conducted himself in good faith, (ii)
such person reasonably believed (A) that in the case of conduct in his official
capacity as a director of the corporation that his conduct was in the
corporation's best interests, and (B) in all other cases, that his conduct was
at least not opposed to the corporation's best interests, and (iii) in the case
of a criminal proceeding, such person has no reasonable cause to believe his
conduct was unlawful.  The termination of a proceeding by judgment, order,
settlement, or conviction, or on a plea of nolo contendere or its equivalent, is
not of itself determinative that a director is not eligible for indemnification
by a corporation.  Instead, a person shall be deemed to have been found liable
in respect of any claim, issue or matter only after the person shall have been
so adjudged by a court of competent jurisdiction after exhaustion of all appeals
therefrom.  A director may not be indemnified as described above for obligations
resulting from a proceeding:  (i) in which such person is found liable on the
basis that he improperly received personal benefit, whether or not the benefit
resulted from an action taken in his official capacity, or (ii) in which such
person is found liable to the corporation (except that in such cases such
director may be indemnified against reasonable expenses actually incurred by the
director in connection with the proceeding unless the director's misconduct was
willful, in which case no such indemnification shall be paid).

                                       2
<PAGE>
 
  A corporation may provide indemnification as described above only if a
determination of indemnification is made by (a) a majority vote of a quorum of
directors who at the time of voting are not named defendants or respondents in
such proceeding; (b) if such quorum cannot be obtained, by majority vote of a
committee of directors, consisting solely of two or more directors who are not
named as defendants or respondents in the relevant proceeding, and designated to
act in the matter by a majority vote of all directors; (c) by special legal
counsel selected by the board acting as described in (a), or selected by a
committee established as described in (b), or, if such quorum cannot be obtained
and such committee is not established, by a majority vote of all named
defendants or respondents in the proceeding; or (d) by the shareholders in a
vote that excludes the shares held by directors who are named defendants or
respondents in the proceeding.  A court may order indemnification even though
certain of these conditions are not met if the court deems indemnification
proper and equitable; provided, however, that the court-ordered indemnification
shall be limited to reasonable expenses actually incurred by such person in
connection with the proceeding if the person is found to be liable to the
corporation or on the basis that he improperly received a personal benefit.

  A person may be indemnified by a corporation as previously described against
judgments, penalties (including excise and similar taxes), fines, settlements,
and reasonable expenses actually incurred by the person in connection with the
proceeding, provided, that if such a person is found liable to the corporation
or is liable on the basis that personal benefit was improperly received by the
person, the indemnification shall be limited to reasonable expenses actually
incurred by the person in connection with the proceeding and shall not be made
in respect of any proceeding in which the person shall have been found liable
for willful or intentional misconduct in the performance of his duty to the
corporation.

  A corporation shall indemnify a director against reasonable expenses incurred
by him in connection with the proceeding in which he is a named defendant or
respondent because he is or was a director if he has been wholly successful, on
the merits or otherwise, in the defense of the proceeding.  In addition, if a
director sues a corporation to recover indemnification in such a case, the
court, upon ordering the corporation to pay indemnification, shall also award
the director his expenses incurred in securing the indemnification.

  A corporation may pay, or reimburse a director for, the director's reasonable
expenses incurred because he was, is, or is threatened to be made a named
defendant or respondent in a proceeding, in advance of any final disposition of
the proceeding and without any determination that the director is entitled to
such payment or reimbursement under the above-described standards if the
director gives the corporation a written affirmation by the director that in
good faith he believes that he is eligible for indemnification under Article
2.02-1 of the TBCA and a written undertaking by or on behalf of the director
(which must be an unlimited general obligation but that need not be secured, and
that may be accepted without reference to the director's financial ability to
pay) to repay the amount paid or reimbursed if it is ultimately determined that
indemnification for such expenses is prohibited under the standards enumerated
above.

  Notwithstanding the above, a corporation may pay or reimburse a director for
expenses incurred in connection with the director's appearance as a witness or
other participation in a proceeding at a time when the director is not a named
defendant or respondent in the proceeding.

  Article 2.02-1 of the TBCA permits the purchase and maintenance of insurance
or another arrangement on behalf of directors, officers, employees and agents of
the corporation against any liability asserted against or incurred by them in
any such capacity or arising out of the person's status as such, whether or not
the corporation itself would have the power to indemnify any such officer or
director against such liability; provided, that if the insurance or other
arrangement is with a person or entity that is not regularly engaged in the
business of providing insurance coverage, the insurance or arrangement may
provide for payment of a liability with respect to which the corporation would
not have the power to indemnify the person only if including coverage for the
additional liability has been approved by the shareholders of the corporation.

  Any indemnification of, or advance of expenses to, a director must be reported
in writing to shareholders prior to the notice or waiver of notice of the next
shareholders' meeting or other action, and, in any case, within the 12-month
period immediately following such indemnification or advance.

  A corporation may indemnify officers and others who are not officers,
employees, or agents of the corporation, but who are serving at the
corporation's request as a director, officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary for another entity, to the same
extent that the corporation indemnifies

                                       3
<PAGE>
 
directors.   A corporation may indemnify and advance expenses to such officers
and other persons to the same extent that it may indemnify, or advance expenses
to, directors.

  Article IX of the Registrant's Restated Articles of Incorporation (the
"Articles") provides that, to the extent permitted by applicable law and by
resolution or other proper action of the Board of Directors of the Registrant,
the Registrant will indemnify its present and former directors and officers, its
employees and agents and any other person serving at the request of the
Registrant as a director, trustee, officer, employee or agent of another
corporation, partnership, joint venture, association, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with any
threatened, pending or completed action, suit or proceeding to which any such
person is, or is threatened to be made, a party and which may arise by reason of
the fact he is or was a person occupying any such office or position.  In
addition, the Registrant currently maintains directors and officers liability
insurance.

  Article XVI of the Articles provides that the Registrant's directors shall not
be liable to the Registrants or its shareholders for monetary damages for an act
or omission in the director's capacity as a director except for liability based
upon (i) a breach of duty of loyalty to the Registrant or its shareholders, (ii)
an act or omission not in good faith or that involves intentional misconduct or
a knowing violation of law, (iii) a transaction from which a director received
an improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office, or (iv) an act related to an unlawful
stock repurchase or payment of a dividend.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.
         ----------------------------------- 

  Not applicable.

ITEM 8.  EXHIBITS.
         -------- 

  Unless otherwise indicated below as being incorporated by reference to another
filing of the Company with the Commission, each of the following exhibits is
filed herewith:
 
 4.1*  --    American Physicians Service Group, Inc. 1995 Incentive and Non-
             Qualified Stock Option Plan
 4.2*  --    Stock Option Agreement (ISO)
 4.3*  --    Stock Option Agreement (non-qualified)
 4.4   --    Specimen of Common Stock Certificate (incorporated by reference to
             the Company's Registration Statement on Form S-1, File No. 2-85321)
   5*  --    Opinion of Vinson & Elkins L.L.P.
23.1*        Consent of KPMG Peat Marwick LLP
23.2*  --    Consent of Vinson & Elkins L.L.P. (included in its opinion filed as
             Exhibit 5 hereto)
24.1*  --    Power of Attorney (see signature pages hereto)

- ----------------
*Filed Herewith

ITEM 9.      UNDERTAKINGS.
             ------------ 

   The Company 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;

                                       4
<PAGE>
 
     (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) ((S) 230.424(b) of this chapter) 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; and

     (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 ((S) 239.13 of this chapter) or Form S-8
((S) 239.16b of this chapter), 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 purposes of determining any liability under the Securities
Act, 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.

   (4) That, for purposes of determining any liability under the Securities Act,
each filing of the Company's annual report pursuant to section 13(a) or section
15(d) of the Exchange Act (and, where applicable, each filing on an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)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.

   (5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company 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 Securities Act and will be governed by the final adjudication
of such issue.

                                       5
<PAGE>
 
                                   SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company 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 Austin, State of Texas, on the 28th day of June,
1996.

                                      AMERICAN PHYSICIANS SERVICE GROUP, INC.


                                      By:  /s/ W. H. Hayes
                                         --------------------------------------
                                           W. H. Hayes,
                                           Senior Vice President-Finance,
                                           Secretary and Chief Financial Officer

   Each person whose signature appears below authorizes W. H. Hayes and Kenneth
S. Shifrin, and each of them, each of whom may act without joinder of the other,
to execute in the name of each such person who is then an officer or director of
the Company and to file any amendments to this Registration Statement necessary
or advisable to enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration of
the securities which are the subject of this Registration Statement, which
amendments may make such changes in the Registration Statement as such attorney
may deem appropriate.  Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the following person in the
capacities and on the date indicated.
 
Signature                             Capacity                       Date
 
  /s/ Kenneth S. Shifrin       Chairman of the Board             June 28, 1996
- -----------------------------  and Chief Executive Officer
Kenneth S. Shifrin             (Principal Executive Officer)

     /s/ W. H. Hayes           Senior Vice President - Finance,  June 28, 1996
- -----------------------------  Secretary and Chief Chief 
W. H. Hayes                    Officer
                               (Principal Financial Officer)

    /s/ Thomas R. Solimine     Controller                        June 28, 1996
- -----------------------------  (Principal Accounting Officer)
Thomas R. Solimine

     /s/ Jack R. Chandler      Vice Chairman of the Board and    June 29, 1996
- -----------------------------  Director         
Jack R. Chandler, M.D.

     /s/ Richard J. Clark      Director                          June 29, 1996
- -----------------------------
Richard J. Clark

                               Director                          June __, 1996
- -----------------------------
Jack Murphy

   /s/ William A. Searles      Director                          June 28, 1996
- -----------------------------
William A. Searles

   /s/ Robert L. Myer          Director                          June 28, 1996
- -----------------------------
Robert L. Myer

                                       6
<PAGE>
 
                                 EXHIBIT INDEX
 
                                                                     SEQUENTIAL
EXHIBIT                     DESCRIPTION OF EXHIBIT                    PAGE NO.
- -------                     ----------------------                   ----------
   4.1*  --   American Physicians Service Group, Inc. 1995 Incentive 
              and Non-Qualified Stock Option Plan
   4.2*  --   Stock Option Agreement (ISO)
   4.3*  --   Stock Option Agreement (non-qualified)
   4.4   --   Specimen of Common Stock Certificate (incorporated by 
              reference to the Company's Registration Statement on 
              Form S-1, File No. 2-85321)
     5*  --   Opinion of Vinson & Elkins L.L.P.
  23.1*       Consent of KPMG Peat Marwick LLP
  23.2*  --   Consent of Vinson & Elkins L.L.P. (included in its 
              opinion filed as Exhibit 5 hereto)
  24.1*  --   Power of Attorney (see signature pages hereto)
 
- ------------------------------
*Filed Herewith

                                       7
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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1996
                                                    Registration No. 33-
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               _________________
                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                               _________________

                    AMERICAN PHYSICIANS SERVICE GROUP, INC.
             (Exact name of registrant as specified in its charter)

          TEXAS                                        75-1458323
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification No.)

                         1301 CAPITAL OF TEXAS HIGHWAY
                              AUSTIN, TEXAS 78746
                                 (512) 328-0888
          (Address of principal executive offices, including zip code)
                              ____________________

                    AMERICAN PHYSICIANS SERVICE GROUP, INC.
               1995 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN

                           (Full title of the plans)

                                  W. H. HAYES
                  SENIOR VICE PRESIDENT-FINANCE AND SECRETARY
                         1301 CAPITAL OF TEXAS HIGHWAY
                              AUSTIN, TEXAS 78746
                                 (512) 328-0888
           (Name, address and telephone number of agent for service)

                                    copy to:

                                 JIM A. WATSON
                              HAROLD J. HERMAN II
                             VINSON & ELKINS L.L.P.
                           3700 TRAMMELL CROW CENTER
                                2001 ROSS AVENUE
                            DALLAS, TEXAS 75201-2975
                                 (214) 220-7700

                        CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------
           TITLE OF                             PROPOSED MAXIMUM  PROPOSED MAXIMUM
       SECURITIES TO BE          AMOUNT TO BE    OFFERING PRICE      AGGREGATE         AMOUNT OF
          REGISTERED              REGISTERED       PER SHARE*     OFFERING PRICE*   REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------
Common Stock, $.10 par value
 per share...................   800,000 shares      $9.75           $7,800,000            $2,690
- ----------------------------------------------------------------------------------------------------
*  Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933, as amended, and
based on the average of the high and low prices of the Common Stock reported on
The Nasdaq National Market on June 27, 1996.

================================================================================
PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE.
         --------------------------------------- 

  The following documents have been filed with the Securities and Exchange
Commission (the "Commission") by American Physicians Service Group, Inc., a
Texas corporation (the "Company'), and are incorporated herein by reference and
made a part hereof:

 (a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
     December 31, 1995;

 (b) The Company's Quarterly Report on Form 10-QSB for the quarter ended March
     31, 1996;

 (c) The description of the Common Stock contained in the Company's Form 8-A,
     dated January 6, 1984, for registration of the Common Stock pursuant to
     Section 12(g) of the Exchange Act, including any amendment or report filed
     for the purpose of updating such description.

  All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), subsequent to
the effective date hereof and prior to the filing of a post-effective amendment
hereto that indicates that all securities offered hereby have been sold or that
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of filing
of such documents.  Any statement contained herein or in any document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.  Any such statement so modified or
superseded shall not be deemed to constitute a part of this Registration
Statement, except as so modified or superseded.

ITEM 4.  DESCRIPTION OF SECURITIES.
         ------------------------- 

         Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.
         -------------------------------------- 

         Not applicable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.
         ----------------------------------------- 

  Article 2.02-1 of the Texas Business Corporation Act (the "TBCA") provides
that a Texas corporation shall have the power to indemnify anyone who was, is,
or is threatened to be made a named defendant or respondent to any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, or any appeal in such an action,
suit or proceeding, and any inquiry or investigation that could lead to such an
action, suit, or proceeding, because such person is or was a director of the
corporation, provided that (i) such person conducted himself in good faith, (ii)
such person reasonably believed (A) that in the case of conduct in his official
capacity as a director of the corporation that his conduct was in the
corporation's best interests, and (B) in all other cases, that his conduct was
at least not opposed to the corporation's best interests, and (iii) in the case
of a criminal proceeding, such person has no reasonable cause to believe his
conduct was unlawful.  The termination of a proceeding by judgment, order,
settlement, or conviction, or on a plea of nolo contendere or its equivalent, is
not of itself determinative that a director is not eligible for indemnification
by a corporation.  Instead, a person shall be deemed to have been found liable
in respect of any claim, issue or matter only after the person shall have been
so adjudged by a court of competent jurisdiction after exhaustion of all appeals
therefrom.  A director may not be indemnified as described above for obligations
resulting from a proceeding:  (i) in which such person is found liable on the
basis that he improperly received personal benefit, whether or not the benefit
resulted from an action taken in his official capacity, or (ii) in which such
person is found liable to the corporation (except that in such cases such
director may be indemnified against reasonable expenses actually incurred by the
director in connection with the proceeding unless the director's misconduct was
willful, in which case no such indemnification shall be paid).

                                       2
A corporation may provide indemnification as described above only if a
determination of indemnification is made by (a) a majority vote of a quorum of
directors who at the time of voting are not named defendants or respondents in
such proceeding; (b) if such quorum cannot be obtained, by majority vote of a
committee of directors, consisting solely of two or more directors who are not
named as defendants or respondents in the relevant proceeding, and designated to
act in the matter by a majority vote of all directors; (c) by special legal
counsel selected by the board acting as described in (a), or selected by a
committee established as described in (b), or, if such quorum cannot be obtained
and such committee is not established, by a majority vote of all named
defendants or respondents in the proceeding; or (d) by the shareholders in a
vote that excludes the shares held by directors who are named defendants or
respondents in the proceeding.  A court may order indemnification even though
certain of these conditions are not met if the court deems indemnification
proper and equitable; provided, however, that the court-ordered indemnification
shall be limited to reasonable expenses actually incurred by such person in
connection with the proceeding if the person is found to be liable to the
corporation or on the basis that he improperly received a personal benefit.

  A person may be indemnified by a corporation as previously described against
judgments, penalties (including excise and similar taxes), fines, settlements,
and reasonable expenses actually incurred by the person in connection with the
proceeding, provided, that if such a person is found liable to the corporation
or is liable on the basis that personal benefit was improperly received by the
person, the indemnification shall be limited to reasonable expenses actually
incurred by the person in connection with the proceeding and shall not be made
in respect of any proceeding in which the person shall have been found liable
for willful or intentional misconduct in the performance of his duty to the
corporation.

  A corporation shall indemnify a director against reasonable expenses incurred
by him in connection with the proceeding in which he is a named defendant or
respondent because he is or was a director if he has been wholly successful, on
the merits or otherwise, in the defense of the proceeding.  In addition, if a
director sues a corporation to recover indemnification in such a case, the
court, upon ordering the corporation to pay indemnification, shall also award
the director his expenses incurred in securing the indemnification.

  A corporation may pay, or reimburse a director for, the director's reasonable
expenses incurred because he was, is, or is threatened to be made a named
defendant or respondent in a proceeding, in advance of any final disposition of
the proceeding and without any determination that the director is entitled to
such payment or reimbursement under the above-described standards if the
director gives the corporation a written affirmation by the director that in
good faith he believes that he is eligible for indemnification under Article
2.02-1 of the TBCA and a written undertaking by or on behalf of the director
(which must be an unlimited general obligation but that need not be secured, and
that may be accepted without reference to the director's financial ability to
pay) to repay the amount paid or reimbursed if it is ultimately determined that
indemnification for such expenses is prohibited under the standards enumerated
above.

  Notwithstanding the above, a corporation may pay or reimburse a director for
expenses incurred in connection with the director's appearance as a witness or
other participation in a proceeding at a time when the director is not a named
defendant or respondent in the proceeding.

  Article 2.02-1 of the TBCA permits the purchase and maintenance of insurance
or another arrangement on behalf of directors, officers, employees and agents of
the corporation against any liability asserted against or incurred by them in
any such capacity or arising out of the person's status as such, whether or not
the corporation itself would have the power to indemnify any such officer or
director against such liability; provided, that if the insurance or other
arrangement is with a person or entity that is not regularly engaged in the
business of providing insurance coverage, the insurance or arrangement may
provide for payment of a liability with respect to which the corporation would
not have the power to indemnify the person only if including coverage for the
additional liability has been approved by the shareholders of the corporation.

  Any indemnification of, or advance of expenses to, a director must be reported
in writing to shareholders prior to the notice or waiver of notice of the next
shareholders' meeting or other action, and, in any case, within the 12-month
period immediately following such indemnification or advance.

  A corporation may indemnify officers and others who are not officers,
employees, or agents of the corporation, but who are serving at the
corporation's request as a director, officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary for another entity, to the same
extent that the corporation indemnifies

                                       3
directors.   A corporation may indemnify and advance expenses to such officers
and other persons to the same extent that it may indemnify, or advance expenses
to, directors.

  Article IX of the Registrant's Restated Articles of Incorporation (the
"Articles") provides that, to the extent permitted by applicable law and by
resolution or other proper action of the Board of Directors of the Registrant,
the Registrant will indemnify its present and former directors and officers, its
employees and agents and any other person serving at the request of the
Registrant as a director, trustee, officer, employee or agent of another
corporation, partnership, joint venture, association, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with any
threatened, pending or completed action, suit or proceeding to which any such
person is, or is threatened to be made, a party and which may arise by reason of
the fact he is or was a person occupying any such office or position.  In
addition, the Registrant currently maintains directors and officers liability
insurance.

  Article XVI of the Articles provides that the Registrant's directors shall not
be liable to the Registrants or its shareholders for monetary damages for an act
or omission in the director's capacity as a director except for liability based
upon (i) a breach of duty of loyalty to the Registrant or its shareholders, (ii)
an act or omission not in good faith or that involves intentional misconduct or
a knowing violation of law, (iii) a transaction from which a director received
an improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office, or (iv) an act related to an unlawful
stock repurchase or payment of a dividend.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.
         ----------------------------------- 

  Not applicable.

ITEM 8.  EXHIBITS.
         -------- 

  Unless otherwise indicated below as being incorporated by reference to another
filing of the Company with the Commission, each of the following exhibits is
filed herewith:
 
 4.1*  --    American Physicians Service Group, Inc. 1995 Incentive and Non-
             Qualified Stock Option Plan
 4.2*  --    Stock Option Agreement (ISO)
 4.3*  --    Stock Option Agreement (non-qualified)
 4.4   --    Specimen of Common Stock Certificate (incorporated by reference to
             the Company's Registration Statement on Form S-1, File No. 2-85321)
   5*  --    Opinion of Vinson & Elkins L.L.P.
23.1*        Consent of KPMG Peat Marwick LLP
23.2*  --    Consent of Vinson & Elkins L.L.P. (included in its opinion filed as
             Exhibit 5 hereto)
24.1*  --    Power of Attorney (see signature pages hereto)

- ----------------
*Filed Herewith

ITEM 9.      UNDERTAKINGS.
             ------------ 

   The Company 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;

                                       4
(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) ((S) 230.424(b) of this chapter) 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; and

     (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 ((S) 239.13 of this chapter) or Form S-8
((S) 239.16b of this chapter), 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 purposes of determining any liability under the Securities
Act, 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.

   (4) That, for purposes of determining any liability under the Securities Act,
each filing of the Company's annual report pursuant to section 13(a) or section
15(d) of the Exchange Act (and, where applicable, each filing on an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)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.

   (5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company 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 Securities Act and will be governed by the final adjudication
of such issue.

                                       5
SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company 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 Austin, State of Texas, on the 28th day of June,
1996.

                                      AMERICAN PHYSICIANS SERVICE GROUP, INC.

                                      By:  /s/ W. H. Hayes
                                         --------------------------------------
                                           W. H. Hayes,
                                           Senior Vice President-Finance,
                                           Secretary and Chief Financial Officer

   Each person whose signature appears below authorizes W. H. Hayes and Kenneth
S. Shifrin, and each of them, each of whom may act without joinder of the other,
to execute in the name of each such person who is then an officer or director of
the Company and to file any amendments to this Registration Statement necessary
or advisable to enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission in respect thereof, in connection with the registration of
the securities which are the subject of this Registration Statement, which
amendments may make such changes in the Registration Statement as such attorney
may deem appropriate.  Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the following person in the
capacities and on the date indicated.
 
Signature                             Capacity                       Date
 
  /s/ Kenneth S. Shifrin       Chairman of the Board             June 28, 1996
- -----------------------------  and Chief Executive Officer
Kenneth S. Shifrin             (Principal Executive Officer)

     /s/ W. H. Hayes           Senior Vice President - Finance,  June 28, 1996
- -----------------------------  Secretary and Chief Chief 
W. H. Hayes                    Officer
                               (Principal Financial Officer)

    /s/ Thomas R. Solimine     Controller                        June 28, 1996
- -----------------------------  (Principal Accounting Officer)
Thomas R. Solimine

     /s/ Jack R. Chandler      Vice Chairman of the Board and    June 29, 1996
- -----------------------------  Director         
Jack R. Chandler, M.D.

     /s/ Richard J. Clark      Director                          June 29, 1996
- -----------------------------
Richard J. Clark

                               Director                          June __, 1996
- -----------------------------
Jack Murphy

   /s/ William A. Searles      Director                          June 28, 1996
- -----------------------------
William A. Searles

   /s/ Robert L. Myer          Director                          June 28, 1996
- -----------------------------
Robert L. Myer

                                       6
EXHIBIT INDEX
 
                                                                     SEQUENTIAL
EXHIBIT                     DESCRIPTION OF EXHIBIT                    PAGE NO.
- -------                     ----------------------                   ----------
   4.1*  --   American Physicians Service Group, Inc. 1995 Incentive 
              and Non-Qualified Stock Option Plan
   4.2*  --   Stock Option Agreement (ISO)
   4.3*  --   Stock Option Agreement (non-qualified)
   4.4   --   Specimen of Common Stock Certificate (incorporated by 
              reference to the Company's Registration Statement on 
              Form S-1, File No. 2-85321)
     5*  --   Opinion of Vinson & Elkins L.L.P.
  23.1*       Consent of KPMG Peat Marwick LLP
  23.2*  --   Consent of Vinson & Elkins L.L.P. (included in its 
              opinion filed as Exhibit 5 hereto)
  24.1*  --   Power of Attorney (see signature pages hereto)
 
- ------------------------------
*Filed Herewith

                                       7