State Farm cites the wave of litigation and legal uncertainties the company has faced since Katrina as two reasons why it's suspending new business.
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 current policyholders in the state. He said the company is still assessing how many policies in Mississippi will be renewed this year.
As president of the Gulf Coast Business Council, Brian Sanderson has talked to a lot of people about State Farm's decision.
"It's gotten a lot busier in the past few hours after folks started hearing that announcement," says Sanderson. "So yeah, they're wanting to learn more about it."
He says there's no doubt their decision will slow the rebuilding process in South Mississippi. But he also suspects State Farm won't be gone for long.
"If we can get the lawsuits settled and if we can pass meaningful legislation, which we think will pass at the state level, we think that will start to create an environment that insurers are comfortable in writing," says Sanderson.
That's a sentiment shared by Gulfport insurance executive Tom Sawyer.
"If we get this wind pool act passed, State Farm will probably reassess the situation and come back," says Sawyer.
What both agree will likely bring State Farm back, and keep other insurers from leaving, is aggressive legislative action on the state and even federal level.
"State Farm probably threw gasoline on the Gene Taylor and Trent Lott effort to expand the federal flood act to cover wind and other perils," says Sawyer.
How far those legislative initiatives go, they say, will help reshape the insurance industry to the harsh new realities of the post Katrina insurance market here and across the nation.
"State Farm, while they're certainly the largest insurer, there are others out there," says Sanderson. "They have not made a similar decision and that again, brings us a level of hope."
State Farm's decision does not impact State Farm's financial services, banking products or automobile coverage in the state.
http://www.wlox.com/Global/story.asp?S=6086847
I say buh-bye! I sure wish they would have continued the probe into how they handle claims, like all their doctored engineering reports to deny claims. If they would have been brought to justice they would have gone bankrupt. Mississippi allowed them to save face and pull out.
FWIW, State Farm quit writing new business after Georges.
I WAS with AIG.
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