- The Washington Times - Friday, February 16, 2007

JACKSON, Miss. (AP) — Mississippi Attorney General Jim Hood said yesterday 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.

Mr. 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.

He said his plan is modeled after actions taken by Florida. Florida’s legislation primarily deals with preventing policy cancellations and nonrenewals, but Mr. 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,” Mr. 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 stopping writing new homeowners and commercial policies. The company said the suspension would begin yesterday and continue until the business climate in the state is more palatable.

State Farm spokesman Phil Supple said yesterday that Mr. 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,” Mr. Supple added. “We’re not trying to pick a fight. We’re trying to serve our existing customers.”

Mr. 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.

Pete Smith, a spokesman for Mr. Barbour, said “the attorney general has not talked to the governor about this” and had no additional comment.

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

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

Mr. Hood’s plan prompted criticism from other Mississippi officials, who say the Florida legislation it’s based on is driving insurers out of that state.

“Florida did something similar and we’re seeing companies leave Florida daily,” said Lee Harrell, Mississippi’s deputy insurance commissioner.

Bob Lotane, spokesman for the Florida Office of Insurance Regulation, said the portion of the Florida legislation that Mr. Hood cited as a model for Mississippi takes effect Jan. 1.

It will have a “very limited effect” on insurers in Florida, Mr. Lotane said, because there are few companies that refuse to write homeowner polices in Florida while writing them in other states and selling a large number of auto policies.

Robert Hartwig, vice president and chief economist for the Insurance Information Institute in New York, an industry-funded group, said Mr. Hood’s proposal isn’t likely to succeed in compelling State Farm to continue writing new homeowner policies.

Automobile insurance isn’t profitable enough to offset losses in the sale of homeowner insurance in a hurricane-vulnerable region so the company may be inclined to stop selling auto policies if they also must sell homeowner policies there, Mr. Hartwig said.

“The only losers in this situation are consumers facing fewer options for automobile insurance,” Mr. Hartwig said.

A spokesman for State Farm Insurance Cos. said earlier that the decision to stop writing policies in Mississippi was due, in part, to the wave of litigation the company has encountered since Katrina, which struck on Aug. 29, 2005.

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