The modest decline in annual payouts reported to the National Practitioner Data Bank was the second in a row _ from $424 million in 2001 to $402.8 million in 2002 to $394.5 million last year.

Last year's reports to the data bank include a blend of underwriters' payments actually made in 2003 and 2002 on behalf of hospitals and physicians, and follow a decade during which the annual total doubled.

The total could change if an underwriter corrects an error in a report made last year, but any change would probably be slight, according to the federal Health Resources and Services Administration, which administers the data bank.

Citing reports that the number of medical-malpractice lawsuits filed in Pennsylvania also dropped last year, Randy Rohrbaugh, a deputy commissioner in the state Department of Insurance, said Wednesday that rising medical-malpractice premiums may be reaching their high point.

"It appears to be that ... the hardest of the market has hit its peak and we're starting to plateau," Rohrbaugh said in an interview. "How long will we plateau? Who knows. What comes after the plateau? Who knows."

Following similar peaks in the 1970s and 1980s, insurers lowered premiums significantly, analysts say. Rohrbaugh said that terrorism, the economy and the securities markets would dictate developments in the insurance markets.

Despite the developments, the state's largest medical malpractice insurer will again raise its rates July 1, this time by 25 percent, Rohrbaugh said. The insurer, Medical Protective Co., of Fort Wayne, Ind., increased its rates 15 percent last July 1 and 45 percent in 2002.

Rohrbaugh attributed the company's need for another rate increase to its rapid expansion in Pennsylvania during the last several years as other major companies exited or shut down.