However, the report added, there is a lack of comprehensive data at the national and state levels on insurers' medical malpractice claims and the associated losses that prevented GAO from fully analyzing the composition and causes of those losses.

For example, the report said, data that would have allowed an analysis of claim severity on a state-by-state basis or determine how those losses were broken down between economic and non-economic damages were unavailable.

In addition to increased losses, a second factor leading to increased medical malpractice costs is a decline in insurer investment income, the report said.

While few insurers experienced net losses on their investment portfolios between 1998 and 2001, the report said, a decrease in investment income meant that income from insurance premiums had to cover a larger share of insurers' costs.

A third factor leading to increased costs was a decrease in competition, the report said. Several companies in the medical malpractice market became insolvent or left the market between 1998 and 2001, thus reducing downward competitive pressure on premium rates.

Finally, the report said, reinsurance rates for medical malpractice increased more rapidly beginning in 2001 than they had in the past, thus raising overall insurance company costs.

Insurance companies generally praised the GAO's report.

"We are encouraged by the findings of the GAO report and we hope it adds momentum to reform efforts already underway in Congress," said Ken Schloman, Washington counsel for the Downers Grove, Ill.-based Alliance of American Insurers.

The report, he said, debunks the widely disseminated myth that insurance companies caused the medical liability crisis.

David M. Golden, director of commercial lines for the Des Plaines, Ill.-based National Association of Independent Insurers, added that the report reinforces insurers' contentions that loss costs, not poor investment performance, are the most significant contributor to higher premiums.

"The insurance industry has always made it clear that although other factors have a marginal impact, rates are driven by losses, plain and simple," Mr. Golden said.

The GAO report was prepared at the behest of Congress, which is still in the midst of debating the issue of medical malpractice reform.

While a reform bill passed the House earlier this year, the issue is now stalled in the Senate.