State Insurance Dept. Handicapped by Fire, Consumer Group Says

The ability of the state Department of Insurance to regulate the insurance industry and process consumer complaints has been handicapped as the result of a recent fire at its mid-Wilshire District headquarters, consumer advocates said Thursday.

State officials acknowledged that the displacement caused by the fire has resulted in some problems, including the temporary shutdown of the department’s computer system. But they said the disruption of services has been “minimal.”

About 500 state office workers from six agencies were displaced by the March 2 fire on the 15th floor of the 19-story CNA Building at 600 S. Commonwealth Ave.

State inspectors discovered asbestos fibers in the building and ordered some of the workers to leave in mid-March. The remainder of the workers were told to leave April 3.

The results of a test of asbestos levels conducted by the state Department of General Services will be released Monday, said department spokeswoman Anne Garbeff.

Los Angeles City fire officials said Thursday that the blaze, which started in a computer workroom of the state Department of Savings and Loan, was the work of an arsonist. A Fire Department spokesman said there were no suspects.

Four of the displaced agencies, including the Department of Insurance, moved to a Wilshire Boulevard high-rise. But workers in other departments--including the Department of Corporations--are still working out of their homes.

Steven Miller, executive director of the Insurance Consumer Action Network, said that because of the Insurance Department’s displacement, many department records were no longer available to the public. Some insurance customers have complained to his organization because they were unable to reach the department’s offices, he said.

“The fact that this has been going on for so long and that the governor has not ordered General Services to treat this as a crisis and a high priority is inexcusable,” Miller said.

Miller said that when his group asked the department for public documents relating to a recent request by State Farm for a rate increase, the department said the documents could not be found. Eventually, the department asked State Farm to provide the consumer advocates with copies of the documents, he said.

“This kind of disruption is going to disable the department’s statutory regulating functions and their mandate to protect consumers,” Miller said.

Carey Fletcher, a spokeswoman for the Insurance Department in San Francisco, said, however, that the Los Angeles office is operating at “nearly 100% capacity.”

‘Up and Running’

“People are doing the absolute best they can under the circumstances,” she said. “We are up and running.”

Fletcher said the department’s computer system has been disconnected since April 6. She said the system would be removed from the Commonwealth Avenue building and reconnected at the department’s new offices in “the next day or two.” The department will rent a second computer system to handle the “minimal backlog of cases,” she added.

One employee in the department’s Los Angeles office who did not wish to be identified said the office’s temporary shutdown came at an especially bad time because of the confusion caused by Proposition 103, the recently passed insurance initiative

“It’s like the Department of Defense shutting down in the middle of World War III,” the employee said.

Many workers in the department have spent five weeks without typewriters or computer processors, the employee said.

“We still don’t have the capability to send a letter to someone,” he said. “All of this mail is stacking up waiting to be answered.”

On Thursday afternoon, calls to numbers listed for the Insurance Department’s Los Angeles office were either unanswered, or answered with recorded messages. Calls to the department’s consumer hot line were unanswered.