Insurance payout judgment faces another delay

Insurance NewsLouisiana Citizens Property Insurance Corp. policyholders have faced another block from a state of appeals court, which has halted their ability to collect over $100 million from the insurer’s failure to process the 2005 hurricane claims within a reasonable time frame.

According to the chief executive officer at Citizens, Richard Robertson, a temporary order was issued by the 5th Circuit Court of Appeal, prohibiting the attorneys of the plaintiff from being able to perform a funds seizure from the insurance company’s accounts. There will be a later decision by the appeals court as to whether or not a full appeal will be heard.

The primary concern is whether or not the Citizens appeals bond of $6 million is adequate to cover a potential U.S. Supreme Court appeal. The plaintiffs have said that this payment has been enough to pay only the court actions in the state.

The state Insurance Commissioner, Jim Donelon, also explained that as it is a state agency, any payment that is made as a result of a court judgment made against it will need to be Legislature appropriated.

Until now, Citizens has lost every state appeal for a judgment of $92.8 million in favor of the policyholders (of which there are approximately 18,500), that claim that the insurer didn’t start their claims adjustment for the 2005 hurricanes – primarily Katrina and Rita – within the state required 30 days. There are still pending claims among 6,500 of the policyholders at Citizens.

Since the time that the original judgment was made, the total – including judicial interest – has grown to $105 million.

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