BATON ROUGE, La. (AP) — A state-run insurance company of last resort agreed Thursday to settle two remaining class-action lawsuits tied to claims handled after hurricanes Katrina and Rita.
The board for the Louisiana Citizens Property Insurance Corp. voted unanimously to settle the long-running lawsuits for $61 million. Policyholders sued the company over the slow handling of claims after the hurricanes struck in 2005.
The board also authorized company CEO Richard Robertson to place caps of $4,500 per claim, $150,000 for court costs and $750,000 for administrative expenses.
The settlement comes after Citizens paid a $104 million judgment in July that will benefit more than 18,500 policyholders who sued over slow adjustment claims after the hurricanes. Thursday's offer, which was voted on publicly after a 90-minute closed door session, is meant to cover plaintiffs who weren't initially covered in July's settlement.
Citizens CEO Richard Robertson has said one lawsuit involves 7,800 claimants and up to 12,000 in the other.
One of the last hurdles claimants faced was cleared in June when the U.S. Supreme Court decided they wouldn't review rulings requiring Citizens to pay an estimated $110 million to the claimants. The company appealed to the nation's highest court in April, alleging that the state agency was denied due process throughout the ongoing state court litigation.
Citizens was granted permission in May to secure a $75 million cash line of credit to cover hurricane damages in the state because board members expected the pending legal judgment to drain the company's bank account. Citizens had set about $140 million aside to cover the settlement made in July.
Board members expect claims from Hurricane Isaac to cost the company between $50 million and $80 million. They also anticipate having to either issue additional bonds to raise money or declare a 2012 deficit and collect a regular assessment from the insurance industry to cover an estimated $141 million cash shortfall.