The House of Delegates moved today to increase state regulation of the insurance industry, with bills that legislators said stemmed in part from the state's recent calamitous experience with savings and loan associations.

In one bill, the House, by a two-vote margin, refused to allow insurance companies to continue setting their own rates without prior approval by Insurance Commissioner Edward J. Muhl.

The measure -- written to extend the insurers' current practice of setting rates -- was written by the same legislative task force that drew up stricter bills.

It missed gaining a 71-vote constitutional majority with 69 delegates voting in favor and 58 delegates voting against, and is expected to be taken up again in the House Friday.

Del. Gary Alexander (D-Prince George's), led the protest against extending the law, which was enacted two years ago, arguing that in the wake of the state's savings and loan crisis, Maryland should be regulating its industries more, not less.

"Your constituents, the ratepayers in the state, the insurance-buying public, spend $4 billion a year to insurance companies in the state of Maryland," Alexander said in a speech on the House floor. "I think they are looking for regulations to protect them."

Alexander was joined in his opposition to the bill by the majority of the Baltimore city and Prince George's County delegations as well as most of a more narrowly divided Montgomery County delegation.

The House today also approved several measures giving the insurance commissioner greater regulatory authority.

One such bill is aimed at controlling the industry equivalent of insider-dealing and requires the commissioner to review transactions between different financial divisions of an insurance company.

The bill also bars insurance companies from investing in securities controlled by executives of the same company, and allows the commissioner to review changes in insurance company ownership.

Del. Michael Gordon (D-Montgomery) said that legislative concern over the savings and loan crisis was a "major factor" in today's vote.

"It was very important to emphasize the fact that what has happened with S&Ls is also happening with the insurance industry in this state," he said.

Del. Caspar R. Taylor Jr. (D-Cumberland), vice chairman of the House Economic Matters Committee, defended the legislation to allow insurers to set their own rates and said the competitive rating system, which is in effect in 25 states, is effective in keeping rates down.

However, even as the votes were being tallied in Annapolis, Muhl was holding hearings in Baltimore to determine whether sufficient competition actually exists in some types of insurance to give consumers adequate choices.

While representatives of some of the state's leading insurers argued that the so-called "open competition" system is working, consumers from a variety of fields disputed that view, saying that sources of insurance are drying up, leaving only a few companies dominating each market and charging rates many consider too high.

Voting to kill the competitive rating bill:

From Prince George's County: Gary Alexander (D), William Bevan (D), Dennis Donaldson (D), Timothy Maloney (D), William McCaffrey (D), Pauline Menes (D), Thomas Mooney (R) Richard Palumbo (D), Marian Patterson (D), Jerry Perry (D), Frank Pesci (D), Joan Pitkin (D), Joseph Vallario (D), Albert Wynn (D).

From Montgomery County: Mary Boergers (D), Jennie Forehand (D), Idamae Garrott (D), Michael Gordon (D), Nancy Kopp (D), Lucille Maurer (D), Donald Robertson (D), Judith Toth (D).

Voting for the competitive rating bill:

From Prince George's County: David Bird, Susan Buswell (D), Gerard Devlin (D), Nathaniel Exum (D), Christine Jones (D), Frederick Rummage (D), Charles Ryan (D).

From Montgomery County: Marilyn Goldwater (D), Sheila Hixson (D), Jerry Hyatt (D), Diane Kirchenbauer (D), Robert Kittleman (R) Joseph Owens (D), Patricia Sher D).

Not voting, from Prince George's: Francis Santangelo (D), Sylvania Woods (D); from Montgomery: Joel Chasnoff (D), Gene Counihan (D), Edward Kasemeyer (D), Helen Koss (D), Ida Ruben (D), Constance Morella (R).