On May 1, Mississippi Attorney General Jim Hood said that he planned to file a lawsuit charging State Farm Fire and Casualty Co. with failing to honor the terms of their agreement for a mass settlement of policyholder claims involving damages from Hurricane Katrina. In January Hood agreed to withdraw the civil lawsuit that his office filed against State Farm less than a month after the hurricane, but says that he is now completing the draft of a new complaint accusing State Farm of breach of contract.

Phil Supple, a spokesman for State Farm, expressed disappointment with Hood’s plan to file a lawsuit and said that the company had met its legal obligations under the proposed settlement.  Hood contends that State Farm has not complied with the terms of a deal that led him to drop the company from the lawsuit he filed against several insurers that refused to cover damage from the hurricane.  Hood said that State Farm’s recent, separate agreement with Mississippi Insurance Commissioner George Dale does not satisfy the deal he reached with the company. State Farm has agreed to pay at least $50 million to approximately 35,000 policyholders in the southern part of the state.

Miss. AG to Sue State Farm (Forbes 5/1/07)

May 8, 2007