Louisiana Citizens Property Insurance Corp.’s governing board is set to meet Feb. 9 to weigh settling with nearly 19,000 policyholders who brought suit alleging the residual market property insurer did not settle 2005 hurricane claims in a timely manner, National Underwriter is reporting.
Louisiana Citizens CEO Richard Robertson told the insurance trade publication that the board of directors would consider its options in response to a roughly $100 million judgment against the insurer that was reinstated in December 2011 by the Louisiana Supreme Court. The board reportedly will discuss a settlement agreement offered by plaintiffs’ counsel, as well as other alternatives, including potentially appealing the case to the U.S. Supreme Court.
Last week, Supreme Court Justice Antonin Scalia denied Louisiana Citizens’ request for emergency order an staying payment of the judgment. Louisiana Insurance Commissioner Jim Donelon reportedly said a decision would be made this week on whether to file an appeal to the high court.
The judgment – originally for $93 million, although it has since grown to roughly $104 million due to accumulated interest – granted $5,000 each to 18,575 policyholders whose claims from hurricanes Katrina and Rita were not adjusted within the time period set by statute.
Donelon has called the judgment a “potentially devastating event” that could deplete the insurer’s resources and force it to levy assessments should Louisiana be hit with a particularly large storm in 2012.