Editor’s Note: Bullies and barons

State Farm has been in a fight since Hurricane Katrina and, to be fair, Hood didn’t start it. The insurer threw the first punch when it took a hard-line stance on wind and water claims from Katrina.

We’re looking a robber baron in the face. State Farm is not a responsible corporate citizen.”

That’s Mississippi Attorney General Jim Hood attacking State Farm after the insurer, still reeling from lawsuits and criticism of its handling of Hurricane Katrina claims, said it would stop writing new home and business property coverage in the state.

Hood’s use of the term “robber baron” conjures images of 19th century businessmen building their power and wealth at the expense of the little guy, often unfairly. No wonder State Farm took offense. “This is a remarkable response to a business decision. Today’s actions show just how unpredictable and untenable the current environment can be,” commented Fraser Engerman of State Farm’s corporate media relations department.

“We never intended to pick a fight,” he added.

Well, State Farm has been in a fight since Hurricane Katrina and, to be fair, Hood didn’t start it. The insurer threw the first punch when it took a hard-line stance on wind and water claims from Katrina.

Hood’s statement and his proposal that the government take action to block State Farm’s pullback seemed to further convince State Farm that its decision to curtail its writings was the right one.

Meanwhile, Insurance Commissioner George Dale, who has been trying to maintain insurance markets ever since Katrina struck, prefers to keep open lines of communication.

“This has been a concern of mine since the day Katrina made landfall. State Farm’s decision is a stark reminder that the issues brought about by Hurricane Katrina affect not only the coast, but policyholders all across the state,” Dale said. “I regret that State Farm has chosen to make this decision at a time in the state’s Hurricane Katrina recovery process when it is becoming more vital than ever that policyholders in Mississippi have a viable and affordable insurance market.”

Dale, who recently announced he will run for reelection, remains hopeful that State Farm will reverse its decision “some time in the future.”

Hood wants to keep State Farm from “cherry picking” the lines of insurance it writes. His legislation that would require State Farm to continue writing new homeowners and commercial property policies in Mississippi if it wants to write other risks. From his bully pulpit, the fiery attorney general also requested that Gov. Haley Barbour issue emergency executive orders requiring insurers to continue writing until the Legislature has had time to take up his legislation.

But Gov. Barbour, a Republican, dismissed Hood’s emergency rule idea, arguing that he has “no authority” to force a company to sell its products in the state. Probably no desire, either.

In his own quiet way, Dale has hammered away at a real solution. He has urged state lawmakers to fix the state’s wind pool as the best way to keep other insurers from leaving because of its rising assessments. This, more than Hood’s populist prohibition, would do more to bring back markets for consumers and businesses.