Insurance Firm’s Accounts to Stay Frozen : Simi Valley: State officials have accused Physicians Benefit Plan of selling coverage without a license. A judge is reviewing the case.

A Los Angeles Superior Court judge ruled Monday that the accounts of a Simi Valley health insurance company, accused of selling policies illegally, will remain frozen while he continues to review the case.

Judge Robert H. O’Brien issued a temporary restraining order May 12 against Physicians Benefit Plan after California Department of Insurance officials alleged that the company had sold insurance without a license, engaged in misleading advertising and violated an earlier order to stop selling policies under the name Physicians Choice.

On Monday, state officials sought a preliminary injunction to keep the company from selling insurance for an extended period.

But O’Brien said that, because some defendants had not been notified promptly, he would not issue an immediate ruling on the request.

O’Brien said the temporary order will stay in effect until another hearing May 27.

Attorneys for Physicians Benefit Plan and its officers declined to comment on the complaint Monday.

The company’s office at 970 Enchanted Way remained open, but a receptionist said Physicians Benefit Plan no longer exists.

Michael R. Botwin, a deputy state attorney general, said investigators found that Physicians Choice sold about 1,100 individual and family health plans during the first half of 1991 without being licensed by the state.

A large percentage of the premiums were used to pay sales commissions, and the firm may not have enough funds to pay subscribers’ medical bills, the prosecutor said.

Late last year, state regulators ordered the company to stop doing business, but the firm resumed selling insurance this year under the name Physicians Benefit Plan, Botwin said.

The company has said it became affiliated with a national labor union and was exempt from state regulation, but Botwin said the labor tie was not valid.