The Federal Trade Commission announced an investigation last week into charges that some insurance companies may unfairly discriminate against minorities by "redlining" when determining eligibility and rates for auto insurance.

Redlining is the practice of marking off a geographic area and treating those living within the boundaries differently than their neighbors for purposes of granting credit of writing insurance.

The FTC said it has received evidence suggesting that many insurance companies doing business in California may have drawn boundaries for auto rating territories along racial or ethnic lines and either refuse to write auto insurance or write only at high rates within those territories. Such redlining may not be justified on the basis of objective data, such as comparative accident rates, the commission said.

The agency's announcement was timed for release at an informal commission meeting with members of the United Neighborhood Organization (UNO), an organization representing primarily Mexican American in East Los Angeles.

At the meeting, UNO's Ralph Mungia complained that residents of East Los Angeles were assigned to a high risk category by most auto insurance companies by virtue of where they live, regardless of their driving records or other factors. A move to an address with a different zip code can cut an auto insurance bill in half and more, he said, and vice versa.

"One family paying $515 a year for their auto insurance in neighboring Westminster was charged $1,377 when they moved to East L.A.," he said. "Same drivers, same statistics; they only moved to our community."

The one insurance company that received plaudits during the meeting was Mercury Casualty Co., which has begun an insurance program in the area using a different rating system, Munguia said. Residents now getting their insurance from Mercury are finding substantial savings on the cost of their policies, as much as $1,461 in one case.

The FTC said the six-month investigation will not be confirmed to Los Angeles but will initially focus on practices by auto insurers there.

During the meeting, however, FTC Chairman Michael Pertschuk and member Paul Rand Dixon cautioned that the FTC is severely restricted in its ability to correct whatever unfair practices it finds in the insurance industry by the McCarran-Ferguson Act. The law generally grants states the right to regulate insurance.

"We have some serious concerns about the limits of our authority," Pertschuk told them, "but to the extent of our ability . . . the commission is determined to assist with an investigation of the facts."

There have been no complaints of discrimination by redlining in the District of Columbia, according to Maximilian Wallach, superintendant of insurance here. There is only one rate territory for the District, so neighborhoods are not split of for different rates, he said. "Given a certain set of circumstances, the rates are the same regardless of where you live in the District," Wallach said.

Some drivers have to pay more, considerably more, than others for auto insurance - those assigned to the assigned risk plan - but there haven't been any complaints of discrimination there, he said.

Representatives of UNO told the FTC some residents of East L.A. do not get auto insurance at all because of the cost; some others get insurance by using a relative's address outside East L.A.