Bad Tidings From Offshore Insurers : Autos: More than 100 checks issued by an unlicensed company in the British Virgin Islands have bounced, but the Wilson Administration has blocked efforts for stricter regulation of such firms.

Lorene Ferris saved $598 on her auto insurance in April by leaving Aetna, buying an assigned risk liability policy with a Wisconsin company and placing her collision and comprehensive coverage with an unlicensed company, Union Pacific Fire & Marine, Ltd., registered in the British Virgin Islands.

Her insurance bill went from $2,378 a year to $1,780.

But when the West Los Angeles woman had an accident in August and her Chevrolet Blazer required more than $3,000 in repairs, the foreign insurer’s check to the body shop bounced. It was returned marked “account closed.”

Ferris, who had to refinance her car to pay off the body shop, is not alone. According to an official of Advantage Insurance Services of Tustin, a wholesaler for UPF & M and other unlicensed companies, more than 100 of the company’s claims payments checks have bounced in the Los Angeles area in recent weeks.

The episode, only the latest in problems with so-called “offshore” companies, comes at a time when efforts by Insurance Commissioner John Garamendi to issue a regulation cutting off most sales of unlicensed offshore insurance have been stymied by the Wilson Administration.

Garamendi won approval for a regulation that requires unlicensed companies to keep claims payment reserves of at least $5.4 million, and he issued a formal prohibition in June against further purchases of UPF & M insurance, holding that the company was inadequately reserved.

But last week, Wilson’s new appointee as director of the state Office of Administrative Law, Marz Garcia, refused to allow a stronger general regulation banning most sales of offshore insurance. Garcia said it conflicted with an existing law and he suggested that Garamendi seek new legislation.

“So we’re frustrated in preventing this rather robust and shady business,” Deputy Insurance Commissioner Steven Miller said this week. “They are frustrating our efforts to prevent people from being victimized.”

In the meantime, efforts to reach Union Pacific Fire & Marine officials to ask when and if the company’s checks will be made good were largely unavailing.

Clifford Mapes, president of Advantage, the wholesaler, said the person to contact was Earl F. Gebel, chief of American operations for the insurer. Mapes supplied a number in Atlanta.

There, an office clerk who answered the telephone said Gebel had never actually been seen in the office and simply rented a telephone there.

When the clerk transferred the call to Gebel’s answering machine, a recorded voice said, “Please leave your message and it will be forwarded to the company’s offices in the British Virgin Islands for a response.” However, the voice mailbox was full, so no message could be left.

Inquiries with telephone information operators revealed there was no listed telephone number for the company in the British Virgin Islands.

Meanwhile, back at the Orange County offices of Advantage Insurance Services, executive Glenn Benveniste provided new phone numbers for Gebel in El Segundo. He also confided that Gebel has a superior who is actually in charge of UPF & M. However, Benveniste declined to identify the superior.

Calls to the El Segundo numbers were answered by another recorded voice that said the company’s name was American Capital Holding Corp. The recording promised that calls would be returned. They weren’t.

Finally, after several days passed and a fax was sent to yet another Los Angeles number for Gebel, he faxed a two-page response to The Times.

He blamed the insurer’s financial problems on a Los Angeles-area agent’s failure to remit $500,000 in premiums to the company. Gebel did not say when, or if, the customers’ bounced claim checks would be made good.

“Please be advised that UPF & M has, as of June, 1991, elected not to apply to continue to do business within the California . . . arena because of the arbitrary manner in which they are allowed to operate,” Gebel wrote.

At Advantage, officials said they could be of no further immediate help.

Insurance Department aides said the problems in reaching UPF & M are quite common with unlicensed offshore companies, to which many consumers are turning in hopes of saving money on their auto insurance.

Meanwhile, Paul Feldstein, owner of Barri Auto Works, the Studio City body shop that did the work on Ferris’ car, expressed outrage.

“I can’t understand it,” Feldstein said. “A private party gives me a bad check, I can put him in jail. An insurance company gives it to me and I can’t do anything. It’s a fraud.”

Ferris also was angry. “Why do these people get away with that? I just got stung for $3,000 and I have no recourse,” she said.

She and the body shop owner said they think the bills should be covered by the agents who sold the insurance policy. But the agents say that they had no way of knowing the payment check would bounce.

Garamendi, meanwhile, has issued an order that insurance sales agents make themselves more aware of a company’s financial condition before they peddle its policies.

“I know that these cut-rate schemes might look good to consumers who can barely afford legitimate insurance,” Garamendi said recently. “But they should not be fooled--paying less for insurance that doesn’t deliver when you need it is no bargain.”

Ferris, who is shopping for new coverage, said she learned her lesson: “I plead stupid here.”