Michael Bennett, business insurance underwriting supervisor for American Family Mutual Insurance Co., feels he has the answer to many of the issues that have been a problem for the insurance industry in urban areas.

Is this a new state or federal law mandating the industry to write policies for urban homeowners? A government subsidy program to make home policies for such owners more affordable?No. What Mr. Bennett is talking about is voluntary participation by his St. Louis-based company in special programs to bring underwriters and urban homeowners together so that both parties can better understand each other's needs.

American Family, through Neighborhood Housing Services of St. Louis, has been involved in educating its underwriters about the urban market since 1983. It's not about handouts or welfare. It's about "common sense" said Yvonne S. Sparks, executive director of NHS St. Louis. Or as Mr. Bennett added, "Making products that fit the market."

Common sense can be infectious. At its spring meeting this year, Namic, perhaps encouraged by the success of American Family amongst other mutuals involved in similar programs on their own initiative, decided to create an Urban Issues Task Force. Made up of 15-member company representatives, the UITF was established "to provide funds for insurance partnerships with community-based programs that work for the benefit of the residents," said Namic in an Aug. 22 announcement.

Well, it's also for the benefit of the underwriters. "We've talked about education on this subject before. It's always been a one-way street, insurer to insured," said Kirk Herath, chairman of the task force at Namic and director of legislative policy for the Nationwide Insurance Enterprise, based in Columbus, Ohio. "Now we recognize that it has to be a two-way street. We need to learn about them as much as they about us."

Namic held its first meeting on the new task force last June with another one scheduled for late September. According to Charles Chamness, Namic's vice president for public affairs, the financial commitment to the task force's goals is "substantial" although he declined to say precisely how much. Rather, he said, "We'd rather be measured by results."

So far the results include $1,500 given to Ms. Sparks' NHS for an 800 ''hot line" in Missouri for problem resolution. "It's a step below the department of insurance level," said Ms. Sparks.

She has also been invited to speak before the Namic membership on the issues of underwriting in urban markets. "I want these companies to open their minds and look at these markets as viable," said Ms. Sparks. "They won't have to fight regulations if they are proactive and realistic."

But not everyone should write in these markets, she maintained. Especially "not an unwilling agent." Still, any company who is seeing its ''idyllic" suburban market becoming increasingly urban, with all the problems of urban life emerging, will want to educate itself about the evolving needs of buyers.

For example, she said, 80 percent of the St. Louis urban home market has flat roofs. Some companies exclude such roofs from coverage. But if underwriters only went into these homes and saw how many people take good care of their roofs "they'd see that they should be insured," said Ms. Sparks. It's a matter of getting into the neighborhoods, slapping hands, and getting to know people.

Namic sees the logic of that approach. But as it investigates which urban groups around the country should receive money, and before it makes a funding decision, it also wants to see local community initiative. "This has to be driven from the bottom up," said Mr. Herath.

That could be harder to achieve than Namic thinks. According to Mr. Bennett, some urban residents who have existing policies, even though they're the wrong ones for their particular needs, are still afraid to switch. "They are even afraid to discuss the it," he said. Why the fear? "It's a trust thing," he added.

Much of the task force's early effort, then, is to get out into communities and make contact. For instance, last September eight Namic representatives will attend an NHS meeting in New Orleans, and encourage some 30 of the largest underwriters in the city and state to attend as well.

Long term, the task force will study whether it makes sense to establish a foundation that would function as a clearinghouse, which would inform the membership as to which nonprofit groups are out there for partnerships. Moreover, said Mr. Chamness, it will look at whether or not to form an urban mutual insurance company. After all, the mutual insurance industry was born in an affordability problem. It was a self-help response to a need for cost-effective coverage. "Maybe our own history is a model for urban communities to do the same in their communities," said Mr. Herath.