Top 10 South Central Insurance Journal Stories of 2022

December 29, 2022 by

Nuclear verdicts, insurer insolvencies, rate hikes, and lawsuits were some of the most popular subjects among readers of Insurance Journal’s South Central region.

The following were the South Central region’s top 10 articles for the year that interested readers.

The most read South Central story this year was about a verdict handed to Charter Spectrum for systemic safety failures that led to the robbery and stabbing death of an 83-year-old woman in Texas by a cable repairman and for using forged documents to try to keep a jury from hearing the lawsuit.

Jurors agreed that Charter Spectrum’s actions were the “proximate cause” of the woman’s death, and found Charter Spectrum 90% responsible for the death, given Charter Spectrum’s continued refusal to correct its negligent safety practices despite a repeated pattern of violence against innocent customers by its field techs over a period of years.

In the weeks before a Charter repairman robbed and murdered the woman, Betty Thomas, inside her Irving home, supervisors ignored a series of red flags, including Mr. Holden’s own written pleas to upper management for help because of severe distress over financial and family problems.

The $7.3 billion award was one of the year’s largest nuclear verdicts. Analysts expect such verdicts to continue in 2023.

Another of the top read stories in the region involved the liquidation of Lighthouse Property Insurance Co., the troubled homeowners insurer who held policies in Louisiana, Florida, Texas, North Carolina and South Carolina.

Founded in 2008, Lighthouse Property Insurance Co. was inundated with approximately 16,000 Hurricane Ida claims, which followed three major hurricanes in 2020. The carrier possessed $204 million in assets, $160 million in liabilities, and $44 million in capital and surplus in 2020 but reported three straight years of net losses.

Lighthouse and its subsidiary Lighthouse Excalibur had approximately 30,000 policies in Louisiana, covering 3.27% of the state’s homeowners insurance market.

The fallout from Winter Storm Uri led to more than 100 insurance companies suing the Texas power grid operator and several power-generating companies (PGCs) over losses suffered from the 2021 storm, which resulted in more than 500,000 insurance claims and approximately $10.3 billion in insured Texas losses.

The carriers allege ERCOT failed to commit resources needed to maintain reliability to the power grid. The carriers also say PGCs failed to adequately winterize their generating equipment and facilities.

In April, Louisiana Insurance Commissioner Jim Donelon proposed fining five homeowners insurance companies a combined $764,750 following targeted market conduct examinations of their insurance activities between August 27, 2020, and June 30, 2021, a period in which hurricanes Laura, Delta and Zeta made landfall in Louisiana.

The five examinations found 44 instances of improper activities and/or business practices that were noncompliant with the Louisiana Insurance Code. Violations were found in the areas of claims handling, complaint handling, and operations and management.

This story on the alleged nefarious actions of a Houston-based accused of filing duplicate or baseless lawsuits was a hit among readers.

US District Court Judge James D. Cain Jr. on Oct. 21 ordered McClenny, Moseley and Associates to submit hard copies of retention or engagement contracts with each of the named plaintiffs in lawsuits that the law firm filed seeking to recover damages allegedly caused by Hurricanes Laura and Delta, which both struck Louisiana in 2020.

The order states that the court had already determined that the McClenny Moseley firm has filed duplicate lawsuits, lawsuits for claims that were already settled and lawsuits for damage to properties that were outside of the geographical area where the hurricanes were known to cause damage.

After voters in Maryland and Missouri legalized recreational marijuana this election cycle, cannabis enthusiasts are turning their attention toward Oklahoma, where the next vote on legalizing recreational marijuana for adults will occur in March 2023.

Oklahoma already has one of the nation’s most robust medical marijuana programs, with about 2,500 licensed dispensaries. About 380,000 people, nearly 10% of all residents, have state-issued medical cards allowing them to buy, grow and consume marijuana.

In another widely-read verdict article, a former Southwest Airlines flight attendant who was fired after sparring with her union president over abortion and other issues won a $5.1 million jury verdict in Texas against the airline and the union.

The former flight attendant alleged she was fired in March 2017 after complaining to the union president about flight attendants going to a march in Washington, D.C., where more than 500,000 people protested President Donald Trump’s positions on abortion and other issues. Carter, who had clashed with the union for years over other issues, believed dues were paying for an anti-abortion protest.

Louisiana Insurance Commissioner Jim Donelon allowed for a 63% rate hike to the Louisiana Citizens residential property insurance policies, a move the insurance department blamed on rising costs of reinsurance.

“There’s no sugarcoating it — this increase is extremely painful but required by law to make sure Citizens can handle a potential future disaster for its many policyholders,” said Donelon.

Louisiana law requires Citizens’ rate for each of its policy types in each parish to be at least 10% over the highest qualifying market rate or 10% over the actuarial rate, whichever is higher.

In a controversial ruling, A Louisiana judge ruled in July that the state’s insurance commissioner’s directive ordering insurers to pay policyholders’ Hurricane Ida evacuation expenses is invalid and unenforceable.

State Farm and Dover Bay Specialty were among companies who refused to waive mandatory evacuation requirements to cover evacuation expenses. Most homeowner’s insurance policies only require insurers to cover living expenses if policyholder is under a mandatory evacuation order.

This well-read story looked at a data breach at the Texas Department of Insurance (TDI) early in 2022 that affected approximately 1,800,000 Texans, according to the Data Security Breach Reports from the Office of the Attorney General.

TDI said it was working with a forensic company to investigate the nature and scope of the event, reviewing and enhancing policies, procedures, and security efforts, offering 12 months of credit monitoring and identity protection services at no cost to those who may have been affected. These services include fraud consultation and identity theft restoration.

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