NU Online News Service, Jan. 24, 9:42 a.m. EST
Louisiana's last-resort insurer is considering going to the U.S. Supreme Court after the state's highest court chose not to reconsider its decision to reinstate a $92.7 million award in favor of policyholders.
Louisiana Citizens Property Insurance Corp. is "disappointed" the Louisiana Supreme Court "did not address the many issues submitted, and completely ignored the due process argument in its entirety," says Richard Robertson, chief executive officer of Citizens, in an email.
In attempting to get the state high court to reconsider, Citizens tried to raise constitutional issues, including questions about the ability to impose a penalty without any showing of bad faith or conduct on the part of the insurer.
Robertson says the state-run insurer is "still assessing our options."
Citizens was sued by a class of policyholders that alleged Citizens failed to start the claims-adjusting process with the timeframe set by law following hurricane Katrina and Rita in 2005. Each policyholder in the class could get $5,000 each plus interest. Citizens could be on the hook for more than $100 million, depending on how many policyholders come forward.
The state Supreme Court's 4-3 majority ruling reversed one made by the state appeals court in favor of Citizens.
Insurance Commissioner Jim Donelon called the ruling a "potentially devastating event" because the state's policyholders may foot the bill because Citizens has the ability to levy assessments.
Robertson says Citizens has "an agreement with the plaintiffs not to execute the judgment until all appeals are exhausted."
If Citizens choses to give up its fight, an administrator must be appointed to determine a policyholder's eligibility and amount of award, Robertson explains. That process could take 6 months or more, he adds.
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