State Attorney General Proposes Legislation to Require
Insurers to Sell Homeowner Policies if they Sell Auto Insurance
Response Triggered by State Farm's Decision Not to
Sell New Policies on the Coast
by Keith Burton 2/16/07
State Attorney General Jim Hood is proposing legislation that would
require insurers selling auto insurance in Mississippi to offer homeowner
and commercial policies statewide, if they sell those policies in other
Hood has also asked Gov. Haley Barbour and Insurance
Commissioner George Dale to order State Farm
Insurance Company to continue writing policies in Mississippi.
Hood says he patterned his proposal after similar legislation in Florida.
He says that State Farm and the insurance industry is acting as "just a
ploy" to intimidate the state.
Hood's action follow an announcement from State Farm earlier this week
that the company would stop issuing new homeowner and commercial policies
"We are looking at a robber baron in the face that
is trying to make an example of Mississippi," Hood said in his news
conference on his proposal.
Hood said that State Farm's profits did not suffer
unduly from claims stemming from Katrina. He said State Farm's reserves
were never touched.
Hood said that State Farm is also trying to "intimidate a federal judge
down on the Coast," in reference to recent rulings against State Farm by
US District Judge LT Senter. Hood also said that the company is also
damaging its own insurance agents in the state.
But Governor Haley Barbour is not taking up Hood's
gauntlet. In a news release sent to GCN, Governor Barbour said:
"Dear Attorney General
Thank you for your letter and request for me to order State Farm and
other insurers to sell homeowners and commercial property insurance in
our state. 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."
Insurance Commission George Dale has also responded
to Hood. Dale's statement, sent to GCN, expressed concerns that the
Florida legislation may not be the way the state should proceed:
Insurance George Dale releases the
following statement on Attorney General Jim Hood's insurance
proposals. The statement reads as follows:
"We welcome any solutions to ways to ensure all Mississippians have
available a stable, affordable and viable insurance market. I have not
heard from General Hood regarding his proposals. However, we must
proceed cautiously and carefully to make sure whatever actions we take
do not jeopardize our already fragile insurance market.
I am not sure if we want to pattern our actions after our friends in
Florida. We are seeing companies leave Florida and rate increases that
supposedly are up to 1100% in many areas of that state. In addition, the
state of Florida put approximately $700 million of taxpayer money into
their insurance problem. Plus, it is my understanding that they also
issued $2 billion in state backed bonds.
I will be meeting with Governor Barbour to see what actions we can
take. Again, I want to emphasize that we need to proceed carefully to
ensure that we don't make matters worse for all Mississippians."
Hood says that he believes other states are likely
to take up the issue of insurance industry reform. He said that it will
take Congress, state legislatures and citizens to bring about reforms in
the insurance industry.
Attorney General Jim Hood's Press Conference (.wma file)
State Farm to No Longer Sell New Homeowner Policies in Mississippi -
Industry Exemption from Anti-Trust Regulations Under Scrutiny - Sun Herald