SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  ------------

                                    FORM 8-K

                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                                 Date of Report:


                Date of Report (Date of earliest event reported:)
                        October 15, 2004 (October 12, 2004)

                     American Physicians Service Group, Inc.
             (Exact name of registrant as specified in its charter)


     Texas                        0-11453                         75-1458323
  (State of               (Commission File Number)              (IRS Employer
Incorporation)                                               Identification No.)



     1301 Capitol of Texas Highway
              Suite C-300
              Austin, Texas                                      78746
(Address of principal executive offices)                      (Zip Code)



                                 (512) 328-0888
                        (Registrant's telephone number,
                              including area code)







Section 2 - Financial Information

Item 2.06 Material Impairments

     On October 6, 2004 the Board of  Directors of American  Physicians  Service
     Group,  Inc. met to review the  valuation of our  investment  in the common
     stock of Financial  Industries  Corporation ("FIC") in conjunction with the
     preparation of our third quarter financial statements.  On October 12, 2004
     we  determined  that the decline in the market  price of FIC's common stock
     should be  considered  "other than  temporary"  as defined in  Statement of
     Financial  Accounting  Standards  (SFAS) No.  115,  Accounting  for Certain
     Investments in Debt and Equity Securities.  Consequently,  we will record a
     pretax  charge to  earnings  of  approximately  $2,400,000  in our  interim
     financial  statements for the quarter ended  September 30, 2004. The charge
     will reduce our cost basis in FIC from $5,647,000,  or $14.67 per share, to
     $3,273,000,  or $8.50 per share,  which is equal to the quoted market price
     of the FIC  shares  on  September  30,  2004.  This is a  non-cash  charge.
     Approximately  $2,100,000  ($1,400,000,  net of taxes) of this  amount  was
     reflected  in our  balance  sheet at June  30,  2004 in  Accumulated  Other
     Comprehensive Loss.

     As  disclosed  in our Form 10-Q for the three and six months ended June 30,
     2004,  we  believed  that the  decline in the market  price of FIC had been
     brought  about by its  failure  to file its  2003  10-K and its  subsequent
     de-listing  from the NASDAQ Stock Market.  We had expected FIC to bring its
     filings current and pursue  restoring its exchange listing by September 30,
     2004.  These events have not yet occurred.  While we currently  continue to
     have the ability and the intent to hold the stock  indefinitely,  the Board
     concluded that the additional  uncertainty  created by the late filings and
     lack of current financial  information  dictated that the decline should be
     viewed as other than temporary.





                                       2





                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                              American Physicians Service Group, Inc.



Date: October 15, 2004         By:  /s/ W.H. Hayes
                                ----------------------------------------------

                              Name:    W.H. Hayes
                                ----------------------------------------------

                              Title:   Sr VP - Finance
                                ----------------------------------------------



                                      3