Citizens Should Move Quickly to Refund $16 Million to Policy Holders
State Treasurer John Kennedy
State Treasurer John Kennedy is calling for the immediate implementation of a ruling by the Department of Insurance ordering the Louisiana Citizens Property Insurance Corporation (Citizens) to return $16 million in application fees to policy holders as quickly as possible.
"The bottom line is this money belongs to the policy holders of Citizens," said Treasurer Kennedy. "As a board member, I'm upset that we only found out about this problem at last month's meeting. I'm calling on Citizens to make it a top priority to return these funds to policy holders immediately. Citizens should pull down its appeal of the Department's ruling immediately."
La. R.S. 22:855 requires insurance companies operating in the state to disclose fees on policyholders' declaration statements. According to a petition filed with the Department of Insurance, Citizens failed to properly disclose a $65 application fee as required by statute.
The Department of Insurance agreed with the request of the petition and issued an order for Citizens to refund the $65 application fee received for all homeowner policies issued without the proper disclosure. Early estimates show that Citizens could owe $16 million to 246,000 applicants.
Citizens will have 30 days to issue the refunds referenced in the Department of Insurance order but is in the process of appealing the ruling to the 19th Judicial District Court.