The medical-malpractice insurance line, which has performeddismally over the past few years, will become profitable again in2006, a new study predicts.

The analysis by Conning Research and Consulting Inc. titled"Medical Malpractice: New Opportunities Emerging? Or the Eye of theHurricane?" identified several favorable developments for itsoptimistic forecast. They include: declining frequency, risinginvestment income, and the progress in state reforms, particularlyin states designated by the American Medical Association as "crisisstates."

"While there are certainly reasons for concern, especially long-term, overall the news is good," commented Stephan Christiansen,director of research at Hartford, Conn.-based Conning Research& Consulting.

Mr. Christiansen observed: "While we have certainly been in theloss-and-crisis segment of the cycle for the past few years, we seeclear indications of progress towards profitability."

The medical-malpractice insurance has been the focus of severalrecent studies that have argued that huge jury awards andsettlements in med-mal cases around the country are not linked torising malpractice coverage costs for doctors.

One new study, from Dartmouth College economics professorAmitabh Chandra, also found that over the past decade, malpracticepremiums have only risen in step with increases in overall healthcare costs. Many physicians claim that overly-generous awards toplaintiffs in med-mal suits have been the main reason behindsoaring malpractice premiums.