Mich. Med-Mal Insurer Withdraws Bid on PIC Wisconsin

September 6, 2005

American Physicians Capital Inc., a Michigan provider of malpractice insurance, has withdrawn its hostile bid to buy 24 percent of Physicians Insurance Co. of Wisconsin Inc. and opted to purchase a lesser share of the Madison medical liability insurer.

In a Sept. 1 filing with the U.S. Securities & Exchange Commission, American Physicians said it terminated the stock purchase agreement through which its American Physicians Assurance Corp. affiliate would have purchased 4,780 shares of PIC Wisconsin for about $3,800 per share, or nearly $18.2 million. The firm said it instead acquired 1,942 shares, or about 9.9 percent of PIC Wisconsin’s outstanding shares, at the same per-share price for about $7.4 million from shareholders.

American Physicians said the previous bid required the approval of the Wisconsin Office of the Commissioner of Insurance. The purchase of the smaller stake did not require regulatory approval.

PIC Wisconsin had opposed the earier bid, claiming the takeover by American Physicians, based in East Lansing, Mich., could increase the cost of medical liability insurance, or malpractice insurance, in Wisconsin and destabilize the malpractice insurance market in the state.

Physicians Insurance Co., which is physician-owned, is the largest provider of medical professional liability insurance in Wisconsin. It was founded in 1986, in cooperation with the Wisconsin Medical Society, to create a stable market for medical liability insurance and to serve the interests of Wisconsin physicians.

American Physicians (NASDAQ: ACAP) is a former physician-owned insurer that became a public company in December 2000. It serves Illinois, Indiana, Kentucky, Michigan, New Mexico and Ohio.

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