IDEAS : Coping With Mother Nature, at Its Worst : Congress seeks to set up reinsurance plan for big disasters. But a study suggests any U.S. effort may not be sufficient.

Congress is deliberating the establishment of a federally guaranteed reinsurance plan for big disasters, but it is faced with a problem: Even the U.S. government may not be able to afford to cope with Mother Nature at its worst.

The recent study by Stanford University scientists projecting damages from a Los Angeles earthquake as high as $145 billion or a Bay Area quake as high as $115 billion has compounded the challenge facing lawmakers as they consider proposals to make the government an insurer of last resort if private insurers are overwhelmed and bankrupted by a disaster.

Damages of $115 billion or $145 billion are acknowledged by sponsors of the bills as so great that they would overwhelm any reinsurance plan the lawmakers could devise.

But the nation has never had a disaster even one-sixth as costly, and backers of the plan note that the Stanford study discussed worst-case scenarios.

Reinsurance occurs when an insurance company sells a policy and, in order to protect itself against heavy losses, buys its own secondary insurance policy to cover losses above a certain amount. But even the liability of the reinsurer for catastrophic losses may have ultimate limits.

With such disasters as the Loma Prieta and Northridge earthquakes and Hurricanes Hugo and Andrew hitting in recent years, American insurers have found the normal availability of reinsurance tightening and prices rising. Meanwhile, insured losses have soared beyond earlier expectations, as have special appropriations for federal disaster relief.

Through an industry-funded group known as the National Disaster Coalition, the insurers have been pressing for protection. They argue at the same time that a more secure industry may be better prepared to sell coverage, thus relieving the government of part of its burden when trouble strikes.

According to proposals pending in Congress that the coalition helped to draft, all companies would contribute a small percentage of premiums to an insurance pool and in any disaster that cost a specific company more than 20% of its operating surplus, or the industry as a whole more than 15% of its combined surpluses, the pool would pay the excess losses.

If the pool were to be exhausted, then the federal government would loan money to replenish it, enabling it to pay more losses.

Jack Weber, executive director of the coalition, said last week that some limit would be set as to how big the government exposure could get, but he said the amount had not yet been worked out.

Weber said that had the fund been in operation in the last year, it would have accrued about $1 billion--and spent $200 million of that to help bail out the 20th Century Insurance Co., which sold a high concentration of all its earthquake policies in the San Fernando Valley and lost about two-thirds of its operating surplus to claims from the Northridge quake.

Weber questioned how likely the losses envisioned as possible by the Stanford study actually were. “I’ve never heard of figures this high,” he remarked. “Everything would have to go wrong. The quake would have to be centrally located, at the busiest business times and, for such devastating fires to occur, it would have to be one of the windiest days of the year.”

The Stanford scientists did see wide swings in possible damage. Depending on how strong the winds were, it said, a magnitude 7 earthquake on the Newport-Inglewood fault could do between zero and $70 billion in fire damage.

The main bills pending in Washington are sponsored by Rep. Norman Y. Mineta (D-San Jose) and Sen. Daniel K. Inouye (D-Hawaii). The House bill has obtained more than 150 co-sponsors.

But several congressional staff members involved in the matter discounted any chance that such legislation would win approval this year.

Eric Federing, a spokesman for Mineta’s House Public Works and Transportation Committee, called this year’s hearings “basically a starting point” and said that prospects would be better next year.

But Heather Ingram, an aide to Rep. Howard P. (Buck) McKeon (R-Santa Clarita), said that the current bills ultimately might be folded into comprehensive disaster legislation now being developed for next year by a bipartisan congressional task force.

“There have been some concerns in the present bills over how the financing would work and who would have control over the reinsurance pool,” she said.

A serious question, too, is whether bills of this type would really save the federal government money or just widen its exposure to paying the losses of private insurance as well as providing general disaster relief.