Insurance battle looms

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 said his plan was modeled after actions taken by Florida. Florida’s legislation primarily deals with preventing policy cancelations and non-renewels, but Hood said the 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. “Any company that writes automobile insurance and also writes homeowners in any other state would be required to write or make available insurance for homeowners and commercial properties in all parts of the state.”

Hood also said he was 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 Barbour, said “the attorney general has not talked to the governor about this” and had no additional comment.

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, Mississippi’s largest home insurer, said Wednesday it had had enough of the “untenable” legal and political climate in the state and would not write new homeowners and commercial policies. The company said the suspension would begin Friday and continue until the business climate in the state became more palatable.

State Farm has more than 30 percent of the homeowners policies and 8.5 percent of the commercial policies in Mississippi.

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.”

He added: “It does underscore the legal and political challenges we face in Mississippi. We’re not trying to pick a fight. We’re trying to serve our existing customers.”

Robert Hartwig, vice president and chief economist for the Insurance Information Institute in New York, an industry-funded group, said Hood’s proposed legislation 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 like Mississippi’s Gulf Coast, Hartwig said.