A complex, last-minute plan to lure insurance companies back into the risky business of writing earthquake insurance in California faced skeptical questioning in its first legislative hearing.

With less than three weeks before the Legislature adjourns, Insurance Commissioner Chuck Quackenbush Tuesday presented his plan for a California Earthquake Authority at a joint hearing of Senate and Assembly insurance committees.The proposal would create a pool of money from insurers, investors and homeowners to underwrite the risk of a devastating earthquake. Mr. Quackenbush warned that unless some solution is reached before the Legislature adjourns Sept. 15, thousands of homeowners will find they cannot buy comprehensive insurance at any price.

"This is an extremely serious problem," said state Chamber of Commerce President Kirk West. "It affects all industry, all business. The ripple effects are enormous. To not solve it would send a very negative message."

But several legislators suggested the plan put too much burden of the risk on homeowners. In the event of an $8 billion quake, the state plans to raise $4 billion in debt, paying off half with an extra charge on all homeowners' policies. That would mean homeowners who live hundreds of miles from earthquake country could see their insurance premiums raised 30 percent.

"Why should the Legislature embrace a 'tax' plan now, before a disaster strikes, rather than simply put it in place and respond after the fact?" asked Sen. Steve Peace, D-Chula Vista. "This is a plan that gives the riskiest exposure to the homeowner."

More concerns were raised over the uncertainty of quake predictions, upon which Mr. Quackenbush based his assumptions for how much money would be needed in the fund, and how soon homeowners would be assessed.

Under both the Quackenbush and Consumers Union plans, coverage would include:

* A $400,000 cap on costs of damage to the structure of homes. Garages, swimming pools, fences and decks would not be covered. Mr. Quackenbush said 97 percent of the homes in California would cost less than that to rebuild.

* A $5,000 cap on the value of destroyed contents in a home, and a $2,000 cap on payments to policyholders for living expenses while waiting for homes to be rebuilt. That won't cover much more than major appliances, and a few weeks in a motel, waiting for the contractor to finish.

Insurance activist Harvey Rosenfield, director of the Proposition 103 Enforcement Project, called the Quackenbush proposal "corporate welfare."

"It is testament to the economic and political power and arrogance of the insurance industry that while reaching record profits the insurers are claiming they cannot afford to provide earthquake insurance protection," he said.

Since July, insurance companies representing 93 percent of the California market have stopped issuing homeowners policies because of a law that requires homeowners' insurers to also offer earthquake coverage.