Louisiana Citizens CEO John Wortman has “no class”

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”?

12 thoughts on “Louisiana Citizens CEO John Wortman has “no class””

  1. No. 1– I wish I lived in Harvey and could run against Pat Connick. What a no good, moron who obviously does not have his constituents’ best interests in mind. What happens Mr. Connick if a Hurricane rips the roof of one of your constitutent’s home or knocks a tree into the house and Citizens waits over a year to fully compensate your constituent? Your constitutent then stops paying property taxes and/or sells their home and moves out of your district because they cannot afford to wait years to repair their home. WHAT A FRIGGIN IDIOT AND INSULT TO DECENT LEGISLATORS EVERYWHERE!

    No. 2– The very taxpayers Donelon says are going to bear the burden of penalties claims are also the policyholders. What rational, sane person thinks its proper for the insurer to screw its insured and then have the Insurance Commissioner turn around and say “you are going to be paying your own penalties award”.

    No. 3– This is beyond absurd as Citizens IS NOT a political subdivision or arm of the state. Peek behind the curtain Dorothy and see who sits on Citizens’ board.

    This may be the most ridiculos piece of legislation I have ever seen proposed.

  2. A reader email pointed out my second reference to Representative Connick incorrectly referred to him as Representative Harvey — must have had my mind stuck on “rabbit” after getting the kids Easter baskets out. Reference corrected.

  3. You want to know what’s really wrong with this picture: Almost everyone involved is from Jefferson Parish.

    Jim Donelon; the 24th JDC Judge Sullivan; the Federal Magistrate Wilkinson; the plaintiffs’ lawyers, led by Beavers; the defense lawyer for ex-CEO Lisotta, Courcelle; the state representative Connick; the office of LCI is in Metairie; the former Legislative Auditor was Theriot.

    Think about it…..

  4. Whitmergate:

    If you know Henry Sullivan, and I’m sure you do, you should acknowledge that even despite his coming from the DA’s office and having many political connections with unethical individuals; Judge Sullivan is as fair, uncorrupt and “by the book” as they come. He does not belong in the same breath as the others you mention. Like it or not, Sullivan was right and he ruled in conformity with the clear wording of the statute (22:1973, formerly 22:1220).

  5. One other thing, Donelon’s comment “no insurance companies were adjusting claims timely after Katrina” as some sort of logic for awarding Citizens immunity is crazy.

    1. Since when did a request for immunity become reasonable based on the defense “everyone else is guilty so we aren’t because we were doing exactly what they were doing”?

    2. The other insurers are either settling claims that may include amounts for penalties or getting tagged at trial for penalties. Accordingly, why should Citizens be treated any differently? Same conduct = same penalty.

    3. A catastrophe is catastrophe for the insured and requires the insurer’s prompt and efficient handling of their claim more so than in non-catastrophic losses. Accordingly, why is the focus on Citizens and not on Citizens’ insureds and the impact the bad faith loss adjustment practices had on Citizens’ insureds?

    4. Why Jimbo Donelon not being questioned about his position since his position is contrary to the well being of the electorate who put him in office?

  6. It was not my intent to cast aspersions upon Judge Sullivan or his conduct as a Judge. In fact he recused himself dutifully when the public records case was filed by the media citing a potential conflict: That his wife, Judi Sullivan, is on the Board of WJMH.

    We also learn later that Judi Sullivan, along with her partner, Gretna City Councilwoman Belinda Constant, own a public-funded drug program “consulting firm” which is connected to the hospital in providing services. The specific details I am not privy to.

    And I do agree with his decisions, both to recuse himself as referenced above; and in his ruling in the La. Citizens case.

  7. This is what happens when an under-capitalized carrier is allowed to do business in a state. It is a sham, but minor league in comparison to the situation Citizens of FL is in.

  8. Being a dumb bunny, Nowdy , when it comes to insurance etc I have the following question: was Jim Donelin in charge of Citizen’s when the delays took place?

  9. Sup, after the post I’m working on about Florida publishes, we should pick up your comment and continue the conversation.

    Unslabbed, in light of Sock’s response, I might be the “dumb bunny” for thinking this answered your question:

    “Commissioner Wooley was also largely responsible for the creation of Louisiana Citizens Property Insurance Corporation…Commissioner Wooley ran the Department of Insurance until he announced that he would resign as of February 15, 2006.”


  10. Robert Wooley ! His tenure as La. Ins. Commisioner was like having a human hurricane within the physical Hurricane. He’s another example of a corrupt but un-indicted La. Public Official, who like Morial and Coulon spent time at that half-way house for “influence” peddlers, the Adams and Reese Law Firm.

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