Louisiana Insurance of Last Resort Settles Class Action LawsuitsSeptember 27, 2012
According to reports, a Louisiana state operated insurance company of last resort, Louisiana Citizens Property Insurance, has agreed to settle two remaining class actions lawsuits related to its handling of claims after Hurricanes Katrina and Rita. Sources say the board unanimously voted to settle the lawsuits for 61 million dollars. However, the board also authorized company CEO to place caps of $4,500 per claim, $150,000 for court costs and $750,000 for administrative expenses.
Sources say Citizens has recently paid a $104 million judgment that will benefit over 18 thousands policy holders. This more recent settlements were meant to cover policy holders who did not recover under the previous one.
Reportedly, the U.S. Supreme Court decided they would not review rulings requiring Citizens to pay an estimated $110 million to the claimants. The company had appealed, alleging that the state agency was denied due process throughout the ongoing state court litigation. Sources say Citizens was granted permission in May to secure a $75 million cash line of credit to cover hurricane damages in the state because board members expected the pending legal judgment to drain the company's bank account. Citizens had set about $140 million aside to cover the settlement made in July.