DUMP QUACKENBUSH? NORTHRIDGE QUAKE VICTIMS SEEK IMPEACHMENT.

Byline: Dominic Berbeo Staff Writer

NORTHRIDGE - Victims of the Northridge Earthquake blamed state Insurance Commissioner Chuck Quackenbush on Thursday for their inability to collect on their 6-year-old damage claims and called for his impeachment from office.

Quackenbush, under fire for letting insurers avoid $3 billion in potential fines by donating $11.6 million to a foundation he set up, flew to Los Angeles for a hastily called news conference to respond.

``I'm very proud of my record,'' Quackenbush said. ``Let me emphatically say that I will not be run from office by my political opponents.''

Quackenbush's comments came just hours after a news conference outside Devonshire Village, a 127-unit Northridge condominium complex unrepaired from severe damage in the Jan. 17, 1994, quake. About a dozen victims described the hardships they have suffered because insurers low-balled settlements or tied them up in legal cases while the Department of Insurance did nothing on their behalf.

``We're still in devastation mode,'' said Rick Bennett, president of the complex's board of directors. ``While Quackenbush was in bed with the insurance companies, we were forced to get lawyers to try and get the insurance company to pay.''

Bennett said the complex is locked in a legal battle with Farmers Insurance, which has offered $931,000, while damage to the condos, he said, is between $5.5 million and $10 million.

The lushly landscaped block of units has twisted structural beams. Roofs leak and are covered by blue plastic sheeting. Water damage has caused warped siding, rot and termite problems, Bennett said. New roofing cannot be done because the condos lack money to deal with problems of asbestos in the ceilings, he said.

Quake victims and other critics claim Quackenbush's close ties with the insurance companies he is supposed to regulate led him to overrule his staff's recommendation to impose massive fines on the insurers and to instead set up the foundation with their contributions. The foundation was supposed to help quake victims but none of the money has been spent to assist them.

George Kehrer, executive director of the Community Assisting Recovery group established after the temblor to help homeowners file insurance claims, said instead of getting the help they needed from Quackenbush, victims got the ``Quacken-brushoff.''

``The problem with Quackenbush is that he favored the insurance companies over the insured,'' Kehrer said. ``So far, I have seen no effort by him to directly help the people in this area who were devastated by the earthquake.''

Kehrer said many policyholders who filed claims received letters from Quackenbush's office that did not address the problem of slow responses by insurance companies.

``People should not have to turn to lawyers or consumer rights groups to have their claims settled,'' he said. ``But, unfortunately, that was the case with many homeowners in the Valley.''

Consumer advocate Harvey Rosenfield, who helped draft the 1988 initiative that made the commissioner's post elective, estimates that of the 350,000 claims stemming from the quake, there are still ``tens of thousands'' of cases that have not been settled.

``Many of the claims that have been paid were only paid after policyholders got private lawyers and took the insurance companies to court,'' said Rosenfield. ``We need an insurance commissioner who will get people what they deserve, and we need stronger laws in Sacramento to crack down on companies that don't pay claims on time.''

The call for impeachment comes just a day after a Senate panel found that Quackenbush acted improperly by allowing companies to avoid $3 billion in fines for mishandling Northridge claims by contributing to the foundation.

The Senate Insurance Committee voted 8-0 Wednesday to send the full Senate a bill that would prohibit the commissioner from waiving or reducing unfair-practice fines in the future in exchange for donations to a nonprofit organization.

The committee will hold a public hearing in the San Fernando Valley on Wednesday to discuss the issue.

In defending his role of helping victims of the Northridge Quake, Quackenbush said he allowed insurance companies to avoid paying penalties by making contributions because it was ``common practice'' in other parts of the country, and he was merely following those precedents.

``Mistakes were made in foundation implementation,'' Quackenbush said. ``There is room for improvement, no doubt, and we are committed to achieving that goal.''

Quackenbush said a blue ribbon panel, to be headed by former state Auditor Kurt Sjoberg, will include members of the state Legislature to review the creation, oversight and accountability of the foundation.

The chairman of the Assembly Insurance Committee, Jack Scott, D-Pasadena, has asked the Legislature's attorneys whether lawmakers have the power to put a hold on the remaining $6 million to make sure it is used to help Northridge victims.

CAPTION(S):

2 photos

Photo: (1 -- color) Chuck Quackenbush

Insurance commissioner proud of his record

(2) Rick Bennett of the Devonshire Village Homeowners Association talks to reporters Thursday.

David R. Crane/Staff Photographer