"Overall rates are still pretty good," noted Mr. Ario. "We rank as one of the cheapest states for homeowners' insurance in the country. But what we are seeing, increasingly, is people suffering large rate increases over claims that don't have any cost to them, such as an inquiry on a claim or a small claim that drives to a very large rate increase."

He said complaints about premium increases to the division during the three-year period 2000 to 2003 have gone up 55 percent. Over that same period, complaints about non-renewals and cancellations have tripled. The state's FAIR plan, or residual market for homeowners who cannot obtain insurance on the open market, has seen sharp increases in the number of applications it has received, he added.

There were three areas of major concern expressed at the hearing, Mr. Ario noted. One was the practice by some insurers to look back over an extended period of time at a risk and underwrite that risk based on long-past claims. Second, increasing premiums based on a homeowner's inquiry about coverage that did not result in a claim. Third, increasing premium based on damage from a single weather event.

Besides listening to narratives from 11 homeowners, Mr. Ario said the division heard from realtors who are concerned that a tightening homeowners insurance market in Oregon would hurt new home sales.

"We are looking to put more fairness back into the system," said Mr. Ario. "There are a lot of people suffering for reasons that do not seem fair to them."

Speaking on behalf of the insurance industry, Sam Sorich, vice president for the Property Casualty Insurers Association of America and Western region manager for the Des Plaines, Ill.-based association, said the most important message he delivered at the hearing was that nothing should be done to "ruin the competitive nature" of the homeowners insurance market in Oregon.

He said that there are 138 companies competing for business in the state, which translates into the fourth-lowest homeowners insurance premiums in the country.

Addressing some of the consumer concerns, Mr. Sorich said that typically, underwriters use three-to-five years of data on a risk in their underwriting, and only a few go back further. Also, he agreed that a simple inquiry about policy terms should not result in increased premiums, but actual damage, whether a claim is filed or not, should be reflected in the underwriting.

Overall, he said the hearings did reflect some confusion on the part of consumers about insurance and that companies should do a better job of explaining their position and reasons for actions. He added that he hoped that company representatives who attended the hearing "would learn something from people's comments, and I think that is positive."

"I hope there is not an overreaction to any particular, individual complaints," said Mr. Sorich. "There are going to be people who are unhappy with any product or service. That is not a reason for significant restrictions. We do not want to see that happen."

"These are fact-finding hearings," Mr. Ario emphasized, noting that the findings of this and possibly a second hearing would be presented to the legislature when it meets in the spring of 2005. "The next step is to find practical solutions that provide more fairness to individual consumers but also protect a strong, competitive market."