Filed Under:Markets, Regulation/Legislation

Attorneys Reject Settlement Offer from Louisiana Last-Resort Insurer

NU Online News Service, Feb. 27, 3:11 p.m. EST

Attorneys representing a group of homeowners that sued the Louisiana insurer of last resort have rejected a settlement offer, calling it “fatally flawed.”

Wiley Beevers, who serves as class counsel, says several provisions in the $103 million settlement offered by Citizens Property Insurance Corp. “could never be approved and will be subject to attack as unethical and contrary to law.”

Any settlement between Citizens and the thousands of homeowners that make up the class would have to be approved by a state district judge.

Courts have ruled Citizens did not begin the claims adjusting process within a timeframe set by law following hurricanes in 2005. The Louisiana Supreme Court upheld a judgment against the company that has grown to nearly $104 million with interest.

Each policyholder in the class, which could grow, is entitled to $5,000.

Citizens could be paying much more than the initial court ruling—upwards of $150 million or more, by some estimates.

Richard Robertson, Citizens CEO, says the board has not received a written rejection so he could not speculate as to what portions of the offer are considered “flawed.”

 “Depending on what [an official response] says, we may need to convene another board meeting to discuss, or take it up at the regularly scheduled meeting on March 9th,” says Robertson in an email.

Reports from Louisiana indicated Insurance Commissioner Jim Donelon believes the attorneys would never accept the $25 million cap on their fees, which is a provision of the offer.

“To the extent that the offer is linked to any attorney’s fee, the proposal is unacceptable,” says the statement from Beevers. “This would be true had the proposed cap been double the amount offered by Citizens.”

Beevers called Donelon’s insinuation a “political ploy.”

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