NU Online News Service, March 20, 12:51 p.m. EST

Today Louisiana lawmakers are considering legislation that could make a battle between policyholders and Citizens Property Insurance Corp. over more than $100 million moot.

Citizens, the state's last-resort insurer, is currently on the hook to pay a class of policyholders about $104 million.

State courts have ruled Citizens did not begin the claims adjusting process within 90 days following hurricanes in 2005.

The Louisiana Supreme Court upheld a judgment against the insurer and decided not to reconsider its opinion. Since then, Citizens and attorneys for the class of plaintiffs have engaged in settlement talks, which have not been fruitful. Citizens has also sought other options, such as a plea before the U.S. Supreme Court.

But the issue could be put to rest much sooner. Legislation proposed by lawmakers could retroactively make it impossible for the more than 18,500 policyholders in the class to collect a dime. Bills introduced would make it unlawful to recover penalties in class-action suits against Citizens.

Plaintiffs' attorneys say Citizens has been stalling and avoiding payment in order to get legislation passed to make payment impossible.

The insurer is “just trying to get out of paying [the judgment] even though they know they owe it,” says plaintiffs' attorney Fred Herman.

“If this bill passes, we will need the legislature's commitment that this will not affect the premium-paying policyholders' ability to get the money they have been fighting for these past few years,” says Herman.

Citizens filed a request with the state's 5th Circuit of Appeal to halt collection of the judgment. The court has granted a temporary stay until it decides whether to hear a full appeal.

The delaying tactics are only hurting policyholders more, says plaintiffs' attorney Wiley Beevers, who claims Insurance Commissioner Jim Donelon is “determined to cover up the inadequate response” by Citizens.

In an interview with NU Online News Service, Donelon hinted at a legislative fix and described his determination to stop the judgment against Citizens.

Donelon says he does not dispute the fact Citizens delayed the start of the adjusting process after Katrina. However, the commissioner has difficulty accepting the ruling that each class member receives the maximum penalty, $5,000, regardless of how many days the adjusting process was delayed.

Additionally, Donelon points out that policyholders of private insurers had attempted to form a class and sue, but were told by judges that they were not deemed applicable for class-action status.