"They sort of split the baby," said Jim Taylor southeastern regional manager for the National Association of Independent insurers.

Trade groups responded favorably to the portion of the bill, which gives rate regulation to an appointed official.

Florida's insurance reorganization was drawn up in response to voters' 1998 approval of a constitutional change cutting the number of cabinet officers from six to three.

Without spelling out his duties, the amendment created a chief financial officer, due to be elected this November. The bill that was approved spells out that he will have some insurance functions within his Department of Financial Services.

Under the bill that passed, however, rulemaking and rate approvals, is placed in the hands of an insurance director, who will be appointed by the governor and cabinet.

The CFO retains responsibilities for agent licensing, administration of the workers' compensation system, consumer services and insurance fraud. The CFO will also supervise state fire marshals.

Sam Miller spokesman for the Florida Insurance Council said compromise legislation was hammered out by Governor Bush, legislative leaders, Insurance Commissioner Tom Gallagher and Comptroller Robert Milligan.

Mr. Miller said the issue was deadlocked for quite some time because Mr. Gallagher, who is a leading candidate for CFO, had sought to bring all the insurance functions within that office and while the Senate supported him the House thought otherwise.

The compromise bill was applauded by the Washington-based American Insurance Association.

"Approval of the Cabinet reorganization plan, giving key responsibilities to an appointed official, is a positive development for the insurance regulatory environment in Florida," said Cecil D. "Dick" Dorsey, AIA vice president, southeast region.

"AIA's experience in other states has convinced us that with an appointed regulator, regulation is more likely to be fair, consistent and predictable. Appointed regulators are more likely to deal with issues promptly and in a straightforward manner, which benefits both policyholders and insurers," said Mr. Dorsey.

AIA noted the Florida split regulatory scheme would leave only 11 other states with elected insurance commissioners.

In addition to an appointed director for the Office of Insurance Regulation, there will be a second appointed director to regulate the banking and securities industries under the Office of Financial Institutions and Securities Regulation.

Once the governor receives the bill he will have 15 days to study it.

Under the bill, regulation of the residual market will be split. The CFO will appoint its board and staff, but the appointed director will establish its rates and its forms.

Mr. Miller noted with approval that requirements for the insurance director list a minimum of five years of private sector experience or five years with a state or federal agency that regulates insurance.

He said he expected transition activity on the reorganization will begin as soon as the bill is signed.