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Miss. AG Hood picks fight with State Farm over pullback

Mississippi Attorney General Jim Hood said 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.

“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 it has had enough of the “untenable” legal and political climate in the state and is suspending writing new homeowners and commercial policies until the business climate in the state improves.

State Farm spokesman Phil Supple said 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 urged Gov. Haley Barbour to issue an executive order forcing the insurer to continue writing new policies until the Mississippi Legislature can deal with the issue.

Barbour said he would not. “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 wrote to Hood.

Hood’s plan, which he said is based on a Florida law, drew criticism from others. “Florida did something similar and we’re seeing companies leave Florida daily,” said Lee Harrell, deputy insurance commissioner.

Bob Lotane, spokesman for the Florida Office of Insurance Regulation, said the Florida legislation that Hood cited will have a “very limited effect” 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 for the industry’s Insurance Information Institute in New York, said 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, Hartwig said.