Do you suppose that before Citizens CEO John Wortman went whining to the Legislature he gave so much as a thought to solving his problem by paying claims with the time period required by state law? The Shreveport Times has the story under the misleading headline, Citizens wants to discourage class actions.
Louisiana Citizens Property Insurance Corp. will push for a new law protecting it from being penalized for paying claims too slowly.
Now, headline aside, that’s the story. However, you can’t blame the misleading headline on the reporter when Citizens general counsel, Suzanne Dondeville, intentionally provided the misleading spin.
Such a law could remove a major incentive for class-action lawsuits, such as the ones that were filed against the property insurer of last resort following hurricanes Katrina and Rita.
Last year, a state district judge in Gretna ordered Citizens to pay $92.8 million to 15,573 policyholders whose Katrina claims were not adjusted within the time period required by state law.
The current law calls for a penalty of $5,000 per claim. Citizens general counsel, Suzanne Dondeville, told the insurer’s governing board Thursday that eliminating the penalty would mean lower fees for plaintiff attorneys, giving them less reason to file class actions.
No, no, no Ms. Dondeville, if you want to “lower fees for plaintiff attorneys”, just follow the law. Works every time.
Citizens CEO John Wortman said Rep. Patrick Connick, R-Harvey, has agreed to push the bill. The bill will offer Citizens the same kind of protection afforded the Louisiana Insurance Guaranty Association, which pays the claims of failed insurers, Wortman said.
Insurance Commissioner Jim Donelon said penalizing the state-backed Citizens forces taxpayers to bear an unnecessary burden. No other insurer was adjusting claims in a timely fashion after Katrina, Donelon said.
No, no, no, Commissioner Donelon, Citizens’ failure to promptly adjust the claims of taxpaying policyholders is “the unnecessary burden forced on taxpayers”.
Representative Connick is from, you guessed it, Jefferson Parish! No doubt, that gives him reason to be really interest in the changes “Citizens also hopes to make…to the state’s open meetings law, which does not allow audits to be discussed in sessions closed to the public, Wortman said.
At the same time, the Legislative Auditor’s Office says its audit results are confidential until released.
“So what it does is it precludes the board from looking at and discussing anything on audits until after they’re public,” Wortman said. “And we think we should have the opportunity to review audits with the board and committees prior to making them public.”
Board member Jim Napper said Citizens should be careful about trying to amend the open meetings law. “You will get beat up on the public meetings law,” he said. “I think it’s a mistake.”
Well, Mr. Napper, let the beating begin. Mr. Wortman deserves it!
Citizens spent months arguing with the legislative auditor over its 2008 audit results, as well as the $480,000 bill for the audit. The board voted Thursday to allow its audit committee to discuss lowering the bill with the auditor.
The auditor released the final version of the 2008 report in January. The review criticized the insurer for allowing too many people access to computer records and criticized accounting records and information systems. Citizens officials said most of the problems had already been fixed or that recommended changes were being implemented.
How long does it take Mr. Wortman to just say “no”?