The board of directors from the Louisiana Citizens Property Insurance Corp. has offered a settlement worth $102.8 million to the 25,000 policyholders in the state, who have been arguing that the agency took too long in their claims adjustment process following 2005’s Hurricanes Katrina and Rita.
The offer was made following the board’s 12-0 vote at a public meeting, following a 2 and a half hour discussion that addressed the litigation.
The settlement included an offer to pay $92.8 million to the 18,563 people who took part in the Geraldine Oubre et al., v. Louisiana Citizens Fair Plan class action lawsuit. The remaining approximately 7,500 claimants who were not a part of that lawsuit would receive $10 million.
Citizens board member and chairman of the litigation committee, Senator Eric LaFleur (D-Ville Platte), said that there would be an almost immediate payment of $70 million, and that the remainder of the payments would be made before the end of November 2012. He did say that if there are one or more named storms that will require Citizens to make at least $50 million in new claims payments, then a delay may result on the remainder of the payments for the settlement.
LaFleur also expressed that the settlement offer also includes the $6 million that has already been paid to policyholders by Citizens instead of having posted an appeal bond. He said that there is a $25 million cap with the insurer for the amount of money that will be paid to the attorneys who have handled the class action lawsuit. According to Jim Donelon, the Louisiana insurance commissioner, that particular term may end up being a deal-breaker.
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