NU Online News Service, Aug. 14, 11:45 a.m.EDT

Louisiana Citizens Property Insurance Corp. is attempting tofully put the past behind it by authorizing its attorneys to beginsettlement talks with disgruntled policyholders from the 2005hurricane season.

After exhausting all avenues within multiple levels of the statecourt system, the state's last-resort insurance company seeks tosettle with separate groups from two class-action lawsuits.

"We thought we had the right to challenge these claimsindividually, but the courts have not agreed," says RichardRobertson, Citizens chief executive officer, to PC360. "Now the[Citizens] board has decided to start the process of trying to putall of these claims behind us by starting settlement talks for theremaining claims."

The problem is that Citizens does not know exactly how manyhomeowners will come forward looking for a piece of a proposedsettlement.

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

More policyholders can join the class, and this additional groupis being targeted for a possible settlement. Robertson saysplaintiffs' attorneys say an additional 7,500 could be standing inline for a payout.

The other class-action suit alleges Citizens did not timely payundisputed losses to homeowners after the hurricanes. Citizens hadbeen trying to decertify the class in this suit and could havetried to take its case to the state Supreme Court. But with recenthistory in mind, the board has chosen it would "be more prudent tosettle," says Robertson.

Two law firms representing Citizens are expected to bring a"framework of proposed settlements" to the board by its nextmeeting in September, says Robertson, who adds that Citizens hasaccess to the funds needed to pay the judgment already leviedagainst it as well as settlements to resolve the remainingclaims.

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

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