Louisiana "Last Resort" Insurer Target of Numerous Complaints
Associated Press
October 20, 2005

Hailed as a means of saving Louisiana's foundering insurance industry when it was formed two years ago, a state-created insurance company is being slammed by policy holders and an advocacy group for its alleged unresponsiveness following Hurricane Katrina.

 "It seems like the policy holders are being kind of universally ignored and unable to get any response at all," said Joanne Doroshow, executive director of Americans for Insurance Reform.

The company is Louisiana Citizens Property Insurance Corporation, created in 2003 as a state-sanctioned "insurer of last resort" providing homeowners insurance to those who couldn't get it on the open market.

LCPI chief executive officer Terry Lisotta said a major reason for the problems has to do with a change in companies who run the program. Audubon Insurance was the initial administrator. But LCPI put the job up for bids earlier this year, eventually awarding the contract to three companies: MacNeill Group, Bankers Insurance Group and First Premium Insurance Group. But Audubon and another bidder challenged the decision in court.

"We won," Lisotta said. But the litigation resulted in a delay in the changeover at perhaps the worst possible time — after Katrina hit. Audubon had been gearing down in anticipation of ending its relationship with LCPI he said.

Margie Dotson, whose home in St. Bernard Parish was devastated by Katrina flood waters, said she tried 12 different telephone numbers in an attempt to get her claim taken care of and has been bounced from one number to another with conflicting information on who is to handle her business. "It's just basically the run-around," she said.

For a copy of the complete article, contact AIR.