Consumer advocates, lawmakers and even some former Department of Insurance officials say South Carolina's insurance regulators appear to favor industry interests over those of consumers.

Under the leadership of Director Ernst "Ernie" Csiszar, the Insurance Department has given companies more flexibility in setting prices and coverage terms than in years past. Csiszar thinks increased flexibility will draw more companies to the state and, as a result of the increased competition, help hold down costs.

Csiszar's viewpoint may soon be endorsed by the General Assembly, which is considering a bill that was crafted from model legislation written by industry interests and that eventually would allow insurers doing business in South Carolina to set their rates with no regulatory scrutiny at all.

"Finding insurance coverage on the coast is a problem, and one of the ways we can solve that problem is by providing insurance companies greater incentive to come and write business," said Sen. David Thomas, R-Greenville, sponsor of the bill and chairman of the Senate committee on banking and insurance.

The Insurance Department dismisses criticism that it sides with the industry and maintains that its efforts to improve competition are primarily consumer-driven.

Yet it's clear that South Carolinians now are paying more for insurance than ever. The state's four largest home insurers - which, combined, cover about 60 percent of South Carolina's roughly 1.1 million owner-occupied residences - each have raised rates at least three times since 2000, citing weather risks and other financial pressures.

In the past, home and auto insurance rates in South Carolina rose more slowly than the national average. But the average auto insurance expenditure grew by 5.8 percent between 1999 and 2001, outpacing the national average growth rate of 4.5 percent, according to the latest data from the National Association of Insurance Commissioners.

Rates at some of the bigger insurers have climbed even more steeply since then. For example, State Farm, which insures one in four homeowners in South Carolina, won state approval in 2001 to raise homeowners' rates by 6.2 percent. It followed in 2002 with a 15.5 percent increase and then a 19 percent increase last year.

None of the increases were contested by the state Insurance Department.

The state Department of Consumer Affairs trimmed State Farm's 2003 increase from a requested 27 percent to the 19 percent that was finally approved. It still was the steepest price increase by a home insurer doing business in South Carolina in more than a decade.

Allstate and Nationwide, South Carolina's second- and third-largest insurers, also imposed double-digit rate increases in recent years.

The rapid increase has galvanized state and national consumer advocates, who blame the insurance industry for what they see as unjustified price increases. The South Carolina Department of Insurance, they say, isn't helping.

Csiszar says the solution to South Carolina's insurance woes is less regulation, a philosophy he has been acting on since he was appointed by Gov. Jim Hodges in 1999. Csiszar says burdensome regulations serve only to drive insurers out of the state.

The way to woo insurers back to South Carolina, he says, is by promising to leave them alone. Companies eventually will return and drive down prices naturally through increased competition, he said.

The issue has come to a head in recent weeks in the Legislature, where a Senate bill to lift price controls on home and auto insurance has won favor among conservative lawmakers.

The bill would give home and auto insurance companies the right to raise rates as much as 10 percent without state approval and could eliminate price controls by 2007, enabling insurance companies to set rates at will.