APA, a subsidiary of American Physicians Capital, Inc. based in East Lansing, Mich., said it has provided the Florida Department of Insurance with notice of its intent to discontinue writing medical professional liability insurance.

A representative for the department, Tammi Torres, said the company is not among the state's top 10 writers of medical liability.

APA President and Chief Executive Officer R. Kevin Clinton said that Florida's "unpredictable and unfavorable legal climate has become an impediment to our ability to write business profitably in Florida. Therefore, we believe it is in our best interest to exit Florida, and to use our capital resources in more profitable markets."

The company reported an underwriting loss of $18.8 million in Florida in 2001.

"We have determined that a continued presence in Florida does not fit with our stated strategy of increasing our professional liability presence in our core markets and becoming profitable in all territories," said Mr. Clinton.

He said APA "will work with our agents to help secure alternative coverage for our insureds."

Once the Florida Department of Insurance's notice requirement has been satisfied, the company said it intends to begin the process of non-renewal of policies at expiration, in accordance with applicable regulatory requirements.

APA currently writes approximately 2,200 medical professional liability insurance policies in the state, which generated $26.7 million of direct written premiums in 2001. The company said this represents approximately 18 percent of the company's total professional liability direct written premiums.

Ms. Torres said that Florida's Joint Underwriting Association, which acts as insurer of last resort for physicians, had seen a tripling over the last year in the number of policies it issues.

Insurers have requested rate increases of between 20 and 40 percent, she said.

"There is increasing concern about not only rates but availability," said Ms. Torres. She said that last year St. Paul Companies and American International Group stopped writing malpractice in the state, and PHICO had gone bankrupt.

Ms. Torres said the state legislature was investigating solutions to the problem.