Miss. AG Seeks Legislation on State Farm

The Associated Press
Saturday, February 17, 2007; 7:51 AM

JACKSON, Miss. -- Mississippi Attorney General Jim Hood said Friday he will seek legislation aimed at blocking State Farm Insurance Cos. from refusing to write new homeowners and commercial policies in the hurricane-battered state.

Hood's plan would require any company that writes automobile insurance in Mississippi and also writes homeowners policies in other states to offer homeowners and commercial properties throughout Mississippi.

Hood said his plan is modeled after actions taken by Florida. Florida's legislation primarily deals with preventing policy cancelations and non-renewals, but Hood said a model could be crafted to force companies to write new policies.

"We're looking at a robber baron in the face that is trying to make an example of Mississippi," Hood said of State Farm.

State Farm, Mississippi's largest homeowner insurer, said Wednesday it has had enough of the "untenable" legal and political climate in the state and is suspending writing new homeowners and commercial policies. The company said the suspension would begin Friday and continue until the business climate in the state is more palatable.

In a statement Friday, U.S. Rep. Bennie Thompson, D-Miss., said he was "deeply disturbed" by the decision and said Congress would hold hearings on the insurer's conduct.

State Farm spokesman Phil Supple said Friday that Hood's rhetoric, including his comparison of State Farm to a "robber baron," is a "remarkable response to what was purely a business decision."

"It does underscore the legal and political challenges we face in Mississippi," Supple added. "We're not trying to pick a fight. We're trying to serve our existing customers."

Hood also said he his urging Gov. Haley Barbour to issue an executive order that would force the insurer to continue writing new policies until the Mississippi Legislature can deal with the issue.

"Having considered my statutory and constitutional emergency powers including the statute you cited in your letter, I have no authority to force a private company to sell its products in the State of Mississippi," Barbour responded in a letter to Hood.

Hood is a Democrat and Barbour is a Republican, and both are seeking re-election this year.

Barbour has criticized Hood for suing insurance companies since Katrina. State Farm's announcement about not writing new policies comes two weeks before candidates' qualifying deadline in Mississippi.

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