The problem is that Citizens does not know exactly how many homeowners will come forward looking for a piece of a proposed settlement.

The state-run insurer is already locked into paying a nearly $105 million judgment from a long-fought battle in a case involving more than 18,500 policyholders who say Citizens did not begin adjusting their claims within a 30-day time limit after hurricane Katrina and Rita. The original judgment was for $92.8 million, but the amount has grown to about $105 with interest as Citizens fought the court decision.

More policyholders can join the class, and this additional group is being targeted for a possible settlement. Robertson says plaintiffs' attorneys say an additional 7,500 could be standing in line for a payout.

The other class-action suit alleges Citizens did not timely pay undisputed losses to homeowners after the hurricanes. Citizens had been trying to decertify the class in this suit and could have tried to take its case to the state Supreme Court. But with recent history in mind, the board has chosen it would "be more prudent to settle," says Robertson.

Two law firms representing Citizens are expected to bring a "framework of proposed settlements" to the board by its next meeting in September, says Robertson, who adds that Citizens has access to the funds needed to pay the judgment already levied against it as well as settlements to resolve the remaining claims.

He says payments from the $105 million judgment likely won't be doled out until the end of the year since a distribution plan needs to be laid out first.

But state Insurance Commissioner Jim Donelon has called the award to policyholders a "potentially devastating event" because it puts the last-resort insurer of coastal properties at a disadvantage, especially if the state is hit with a hurricane.