NU Online News Service, Feb. 8, 3:16 p.m. EST
The board of directors of Louisiana Citizens Property Insurance Corp. is scheduled to meet tomorrow to discuss a proposed settlement in a case involving payments to thousands of policyholders.
According to Richard Robertson, chief executive officer of Citizens, the board will discuss a settlement agreement submitted by the plaintiffs of a class-action lawsuit that accuses the state-run insurer of failing to start the claims-adjusting process within the time frame set by law following hurricanes Katrina and Rita in 2005.
The state Supreme Court reinstated what is now a judgment of more than $100 million against Citizens in December 2011, paving the way for about 18,575 Citizens policyholders to collect $5,000 each.
It was a decision Insurance Commissioner Jim Donelon called a "potentially devastating event," because although Citizens has the money to pay the judgment, the insurer of mostly coastal properties could be in a dire situation if a storm hits this year. And the state's policyholders would ultimately bear the cost, since Citizens has the ability to levy assessments.
In an email, Robertson says the board will also consider other options, including asking the U.S. Supreme Court to review the decision of the state high court.
On Feb. 8 Citizens lost its bid to keep from having to pay the judgment. A motion to enforce an earlier order that would allow Citizens to suspend payment was denied.
Wiley Beevers, who serves as class counsel, says Citizens has "passed on a number of opportunities to settle, so it would be no surprise to us if they still do not settle it now."
"They said at [the hearing Feb. 8] that they will press their case to the Supreme Court of the United States. We are ready for whatever comes next," Beevers says.
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