Consumer advocates who had fought the bill are celebrating the reworked version they helped negotiate.

"The bill has been extremely watered-down from its original version and is very good for consumers compared to what might have been," said Hana Williamson, an attorney with the state Department of Consumer Affairs, who helped negotiate many of the changes.

"The Department of Insurance was truly helpful in pushing the changes we wanted to see. It's an excellent compromise between the concerns of the industry and the need for consumer protections," she said.

The Property and Casualty Insurance Personal Lines Modernization Act, backed by the Department of Insurance, roused controversy late last year because it aimed to give the insurance industry broad discretion in setting rates and significantly limit the role of the Consumer Affairs office.

In response, Williamson and other consumer advocates criticized the Insurance Department for pandering to industry wishes at the expense of consumers.

More than 100 state and national consumer advocacy entities joined the chorus and accused South Carolina's insurance chief, Ernie Csiszar, of using his position as president of the National Association of Insurance Commissioners as a lobbying platform for loosening insurance regulations nationwide.

Csiszar, a self-described free-marketer, at one point called insurance regulation the "last bastion of socialism."

As initially crafted, the bill would have allowed home, auto and fire insurance providers to raise rates as much as 10 percent without any state approval, a so-called flex-band system.

The bill also would have completely eliminated price controls on home and auto insurers as early as 2007, enabling such companies to set rates at will.

Critics of the original bill, including the Consumer Affairs office, noted that it was based on model legislation developed by pro-industry groups such as the National Council of Insurance Legislators and the American Legislative Exchange Council.

The changes negotiated by Consumer Affairs include several provisions aimed at beefing up consumer protections and strengthening the role of consumer advocates in setting rates and other terms that affect consumers.

Csiszar was unavailable for comment Friday. But Dean Kruger, chief actuary with the Department of Insurance, said the agency adopted most of the changes to satisfy such concerns.

Boiled down, the changes effectively:

-- reduce the proposed flex-band for home and auto insurers from 10 to 7 percent;

-- limit the removal of price controls to specific lines of insurance that have proven to be competitive;

-- require the Insurance Department to prove a specific line of insurance meets a seven-point competitive checklist before allowing for any deregulation;

-- require the Insurance Department to fully disclose all plans to declare any line of insurance competitive;

-- grant any party the right to challenge a decision by the department to declare any line of insurance competitive.

Despite its having been significantly amended, industry groups applaud the bill for establishing a flex-rating system for all personal lines insurers including home and fire. Auto insurers have already been operating under a 7 percent flex-band.

"It is hoped that by removing unnecessary regulatory barriers in the rate review process, more insurers will be encouraged to write business in South Carolina," said Robert Herlong, vice president and regional manager of the Property Casualty Insurers Association of America, who testified in Senate hearings last week before the bill won Senate approval.

The bill is set to go before the House Committee on Labor, Commerce and Industry later this month before reaching the full floor. If it passes, it will still require a vote of concurrence in the Senate.

Rep. Robert W. "Bob" Leach, R-Greeneville, who sits on the Labor, Commerce and Industry committee, said he broadly supports the bill but would like to see a few more consumer protection provisions added before voting to approve it.

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