Citizens wins court order in long-standing legal battle with policyholders
Louisiana’s Citizens Property Insurance, a state-run provider of insurance coverage for homeowners, has won a temporary court order that allows it to retain $105 million in assets that would have gone to policyholders. These policyholders are accusing the company of being late on adjusting claims relating to 2005’s Hurricanes Rita and Katrina. Citizens has long argued that adjustments were made appropriately, but this stance did not win the company favor with previous judgments that required the company to pay policyholders. Citizens has been working to overturn this prior judgment on the grounds that the company was not allotted due process or allowed to provide a defense.
Money to help bolster hurricane defense
Citizens officials claim that the company has enough capital to pay the $105 million to policyholders, but doing so would put the company and its policyholders at risk of serious losses when a new hurricane season begins. The company believes that this money would better serve consumers as a safety net in the event of a disastrous hurricane. This money would also serve as a safety net for the company itself in light of its recent financial troubles.
Judgment spurs controversy amongst lawyers
This week’s judgment has spawned controversy in the legal world, with many attorneys involved in the matter claiming that they had been summoned to the 19th Judicial District Court of Baton Rouge under the assumption that they would be participating in negotiations. According to attorneys, the Citizens board of executives entered into a private session with Judge Tim Kelley, who later signed the temporary court order. These attorneys are expected to petition Judge Kelley for the right to intervene in the case and look to cancel a temporary restraining order placed on them last week.
Attorneys consider ruling nothing more than a roadblock
Citizens will again appear in court on April 30, 2012 in order to extend the court order indefinitely. If successful, the company would not be required to pay the settlement to policyholders. Attorneys representing the plaintiffs in the case believe that they will ultimate be successful and call the latest court order nothing more than an “obstacle.”
Article: Louisiana Citizens Insurance awarded temporary court order concerning $105 million in assets
Article Source: Live Insurance News
Author: Stephen Vagus