"The governor wanted to open up the market," said Sanford spokesman Will Folks. "The bottom line is that the governor is going to sign legislation that enhances our state's business climate."

Sanford, Folks said, believes that the Property and Casualty Insurance Personal Lines Modernization Act had been reworked to deal with consumer groups' initial concerns that the legislation would have given insurers carte blanche to increase rates at will.

Among the initial bill's harshest critics was the state Department of Consumer Affairs, which helped change the legislation to better protect consumers. "It's an OK bill," Hana Williamson, an attorney with the consumer affairs department who helped negotiate many of the changes, said Monday.

"It changes the way we were doing things, which is not necessarily bad. It really is a very good compromise," she said.

Backers say the law, which Sanford signed last week, will attract insurers to South Carolina because it gets rid of the old approval process insurers must go through when raising rates.

The law changes that to a "flex-band" system, in which the insurer simply gives the state Department of Insurance notice of a rate change if it is under 7 percent. If the DOI doesn't respond within 30 days, the insurer can then institute the increase. Anything above 7 percent must go through an approval process.

The law also gives the department the ability to eliminate price controls if the department declares the market competitive, but Dean Kruger, the state's chief actuary, said that won't happen anytime soon, given problems with homeowners' insurance along the coast.

To declare a market competitive, the department must meet a seven-point checklist, and the consumer affairs department can challenge the decision before an administrative law judge.

The law includes some other consumer protections, such as one giving consumers access to insurers' underwriting decisions.

"Some people call it watered-down," said Bob Herlong, region-al vice president for the Proper- ty Casualty Insurers Association of America. "I don't accept thenegative connotations. It's a compromise bill."

The law is modeled after legislation the state passed for the auto insurance industry in the late 1990s. After that bill became law, Kruger said, the state attracted 150 new auto insurers and rates here went down.

Kruger said that by streamlin-ing the rate-change process, the state will attract more home insurers, giving consumers more choices.

In the current market, Kruger said, "the consumer is afraid to move. They're with a company they don't like because of what's out there. If we could just get a couple of companies, that would give them choices. It gives consumers tremendous satisfaction when they have choices."

Whether the new law will be effective in reducing rates may be difficult to determine, because rates are expected to stabilize in coming years anyway because there have been fewer hailstorms in the state and because the cost of reinsurance has been going down in recent months.

Still, come January, backers expect there to be more insurance companies doing business in South Carolina.

"I'd like to say they'd be here next Thursday," Herlong said. "It unfortunately takes time for these things to be implemented and for new companies to go through the licensing process."

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