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Attorney General Moves to Re-Instate State's Lawsuit Against State Farm
Says Insurance Company is not in Compliance to Settlement Agreement

by Keith Burton - GCN      Filed 2/23/07

More intrigue and perhaps outright brinkmanship is unfolding in the closely-watched State Farm Katrina lawsuits case. Attorney General Jim Hood has filed court papers saying that State Farm is not in compliance with a  settlement agreement that was reached last month.

That settlement, which came on January 23 when it appeared that State Farm was going to settle all the claims against the company stemming from Hurricane Katrina, was a separate issue stemming from an overall settlement that was later blocked by the federal judge hearing the case. U.S. District Judge L.T. Senter, Jr later determined that the settlement proposal did not adequately and fairly meet the needs of all of the plaintiffs in the lawsuit.

Since the settlement did not occur, this left Hood appearing to have acted prematurely by settling his case prior to the judge's final decision on the settlement proposal. Hood now wants to be included in the process again and re-introduce the state's case back into the fray.

Documents sent to GCN from the Hood's office, copied from the files submitted to the court the Attorney General say that State Farm has failed to comply with the settlement agreement it had reached with the office. Among the issues cited was that State Farm had not "establish an orderly, fair and prompt resolutions of claims as required in the State Farm Settlement Agreement with the Attorney General."

Late last week, Hood went on the offensive with State Farm shortly after the company announced that it would no longer sell new homeowner and business policies in Mississippi.

"We are looking at a robber baron in the face that is trying to make an example of Mississippi," Hood said last week.

State Farm, which holds the majority of policies affected by homeowners in the Hurricane Disaster Zone on the Mississippi Coast, has been under fire for not paying on claims on properties that were inundated by the Hurricane's storm surge. The argument is that the storm's surge was a "flood" and not covered. The counter argument is that a storm surge is wind driven water and not a "flood." Homeowners also say that even if the surge damaged the property, no coverage for wind damages were paid.

You can read the files submitted by the State Attorney General by clicking on the links below. All the links are .pdf files and will require your computer to have a .pdf viewer.

Motion to Intervene
Motion to Intervene Memo
Exhibit A
Exhibit B

Related Information:

State Attorney General Goes on Offensive Over State Farm's Plan to Not Sell New Policies - GCN

State Farm Announces Settlement on Thousands of Katrina Lawsuits - GCN

Judge L.T. Senter's Ruling on State Farm Settlement Proposal (.pdf) - GCN

State Farm Agrees to Settle Thousands of Lawsuits - MSNBC

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