Adjuster faces sanctions in Ohio Indemnity investigation.

SAN FRANCISCO--(BUSINESS WIRE)--May 9, 1996--In a rare case of an adjuster facing regulatory sanctions, the Department of Insurance is seeking to revoke the license of a claims adjuster who allegedly stalled auto insurance settlements for Ohio Indemnity Insurance.

Thomas Cindric, owner of Alamo Claims Service of Alamo, Calif., slowed settlements by delaying auto inspections, requiring unnecessary paperwork and miscalculating vehicle appraisals in order to encourage claimants to settle their claims for substantially lower amounts than they were entitled to, according to the 29-page accusation issued by the department's Compliance Bureau.

Last May, the department fined Ohio Indemnity $325,000 and banned it from selling auto insurance in California for three years for multiple violations of the Unfair Claims Settlement Practices Act. The company, which sold automobile collision and comprehensive coverage, engaged in claims-handling tactics that caused it to postpone and avoid payment of claims.

Cindric, under contract with Ohio Indemnity, was paid $110 per claim as an independent adjuster. Like Ohio Indemnity, he is accused of low-balling settlements and stalling the claims-handling process.

Department investigators found that Cindric often required completion of inappropriate and unnecessary forms or refused to settle claims until police reports were filed, even if a police report was not required or necessary in order to settle the claim. Motor vehicle reports were sometimes required for no apparent reason other than to delay payment.

Cindric is also accused of delaying the assignment of appraisers to estimate the damage on the insured automobile, driving up storage costs for damaged vehicles -- charges he later refused to authorize payment for despite terms of the insurance policy requiring him to do so.

The investigation also revealed that Cindric often used the wrong formula for calculating insurance settlements and used the lowest possible vehicle valuation figure.

``Our investigation revealed that this was all calculated to lower his cost of processing claims and to increase Ohio Indemnity's profits,'' said Insurance Commissioner Chuck Quackenbush. ``It's our job to restore the confidence of consumers in the insurance policies they buy and one way to do that is to weed the bad apples out of our state.''

The department's investigation was based on more than 250 complaints received against Ohio Indemnity over a two-year period. The number of complaints represents what is believed to be only a fraction of the number of claims unfairly handled by Cindric for the company between 1992 and 1995.

During the department's investigation, Cindric also refused to supply subpoenaed files, claiming he no longer possessed them when he actually still had them in his offices. Regulations required him to maintain claim files for several years after their closure.

It was also discovered that Cindric had sent the files to Ohio Indemnity's attorneys 10 days after he claims he no longer had them. When finally turned over to investigators for review, several of the files were missing.

The accusation seeks to revoke Cindric's license and bar him from working as an adjuster in California for five years. It also seeks to revoke the licenses of any insurance adjustment firms under his management.

CONTACT: California Department of Insurance 

Candysse Miller, 213/346-6367

Richard Wiebe, 916/324-2515

Sheri Inouye, 213/346-6370