Regions Bank, the bank for Louisiana Citizens Property Insurance Corp., must reveal to a group of policyholders where it holding the company’s money, under a decision handed down April 9 by the Louisiana Supreme Court.
It appears the decision is likely to exhaust Citizens’ last remaining legal avenues to contest a more than $100 million judgment over the state insurer’s failure to adjust claims in a timely manner following 2005’s Hurricane Katrina and Hurricane Rita. Citizens originally was ordered to pay $92.8 million to a group of 18,500 policyholders, but that figure has since grown to $105 million due to judicial interest and another 6,500 policyholders still have claims pending.
Citizens has been considering a possible appeal to the U.S. Supreme Court, and state lawmakers have introduced bills that would make it illegal to recover penalties in class action suits brought against Citizens. However, with the state court’s ruling, the policyholders’ claims would become immediately executable.
Louisiana Insurance Commissioner Jim Donelon told OutOfTheStormNews last week that a judgment to pay the $100 million now would effectively end the company’s fight, as “the money would have been spread to the four winds by then.”
However, The (Baton Rouge, La.) Advocate newspaper reported that the state fund still could have one shot remaining in its chamber:
“Our lawyers are urging us to continue the appeal to the U.S. Supreme Court, and we have another state court initiative in mind, as well,” Donelon said.
Donelon said he could not discuss the details of that plan.