Insurance experts say Eastern's troubles raise the question of whether state regulators have the ways, the means and the will to regulate insurance companies. Twenty-three insurance companies in the country were declared insolvent in 1985; 19 in 1984 and 15 in 1983. More are expected this year as a result of the continuing insurance crisis, which has been blamed on a combination of poor returns on investment, record claims payments and bad management.

Robert Hunter, president of the National Insurance Consumer Organization, a Washington-based advocacy group, said that state regulation is typically a "hopeless mishmash . . . . Even if regulators have the will, they don't have the resources, and many don't have the will."

In a 1981 study of regulator attitudes, Robert H. Miles, a Harvard Business School associate professor, found that only one-third of the 34 state insurance commissioners surveyed considered the public their primary constituency, while two-thirds saw themselves as arbiters between the public and industry.

The National Association of Insurance Commissioners, a professional organization of state commissioners, also is tilted toward industry interests, Miles said. At association meetings, where model state laws are developed, "the industry is very much present," Miles said.

State insurance departments are hard pressed to monitor insurance companies with more assets than some foreign countries, according to Hunter. "Aetna has twice as many actuaries as all of the state regulators combined," he said. "When I asked the insurance commissioner of Hawaii how he intended to regulate computerized insurance companies, he held up a pencil."

Hunter and Miles agree that some states, such as Minnesota, have a tradition of consumer advocacy in insurance regulation. Maryland, Virginia and the District tend to fall in a middle range, Hunter said, not as aggressive as some states but more aggressive than others.

Regulation of the insurance industry currently is a state's responsiblity. But some members of Congress, alarmed by the unavailability and unaffordability of several forms of insurance, are asking if some federal involvement may be necessary to restore order.

State insurance commissioners, including Maryland's Muhl, are resisting the idea of federal help. Testifying this year before one congressional committee, Muhl said, "State regulation of insurance is alive and well and quite capable of responding to the needs of the citizens."