Federal court to hear Nationwide’s Miss. storm surge appeal
A federal appeals court has set Aug. 6 as the date to hear arguments on whether Nationwide Mutual Insurance Co. should be forced to cover storm surge damage to a Mississippi’s couple’s home from Hurricane Katrina.
Oral arguments will be heard before 5th U.S. Circuit Court of Appeals only a few weeks before the second anniversary of the hurricane, which ravaged Louisiana and Mississippi on Aug. 29, 2005.
Nationwide, based in Columbus, Ohio, appealed a 2006 decision by U.S. District Judge L.T. Senter Jr. that Paul and Julie Leonard of Pascagoula cannot collect damages from storm surge caused by Katrina because Nationwide’s policies do not cover wind-driven water damage.
Senter said the Leonards could, however, be compensated for damage that they can prove was caused by high winds.
If Senter’s ruling stands, it could set a precedent for hundreds of other court challenges to the insurance industry for denying billions of dollars in claims after the hurricane.
W. Va.’s privatized Brickstreet makes first payment to state
West Virginia’s workers’ compensation insurer BrickStreet Mutual Insurance Co. has made its first scheduled payment of $5.8 million on its outstanding surplus note to the state of West Virginia.
“These payments will go directly to the benefit of the workers compensation Old Fund, helping to pay back the systems long-term deficit,” Gov. Joe Manchin said in a prepared statement.
“As privatization continues to flourish, this places West Virginia on a level playing field with surrounding states to compete for economic development opportunities. I can’t emphasize enough how important this process has been for our states future.”
BrickStreet’s surplus note balance now stands at $185 million. The company is scheduled to make its next principal payment of $40 million plus interest on June 30, 2008.
As part of 2005 legislation to privatize West Virginia’s 90-year-old workers’ compensation system, BrickStreet received a $200 million surplus note to establish its business practices and begin building adequate reserves to pay claims for injured workers.
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