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State Farm to stop writing new commercial and homeowner policies in Mississippi

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Doondoo Donating Member (843 posts) Send PM | Profile | Ignore Thu Feb-15-07 06:58 AM
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State Farm to stop writing new commercial and homeowner policies in Mississippi
State Farm Insurance Cos. is suspending sales of any new commercial or homeowner policies in Mississippi starting Friday, citing in part a wave of litigation it has faced since Hurricane Katrina, a company official said Wednesday.

Mike Fernandez, vice president of public affairs for State Farm, said Mississippi's "current legal and political environment is simply untenable. We're just not in a position to accept any additional risk in this homeowners' market."

Fernandez said the decision does not affect existing policies but the company is still assessing how many of the current policies in Mississippi will be renewed this year.

Fernandez said the action was not a direct response to any specific development in the litigation. That litigation has included a recent federal jury's $2.5 million punitive damage award to a couple who sued State Farm for refusing to cover the 2005 hurricane's storm surge damage to their Biloxi home.

U.S. District Judge L.T. Senter Jr. later reduced the award to $1 million, even though Senter said State Farm acted in a "grossly negligent way" by denying the claim filed by policyholders Norman and Genevieve Broussard.

"I view this decision as the inevitable outcome of the increased uncertainty and cost associated with the litigation that has developed post-Katrina," said Robert Hartwig, vice president and chief economist for the Insurance Information Institute in New York, an industry-funded group.



http://updates.blogs.nola.com/default.asp?item=491238
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