My goodness, Mississippi AG Hood is full of “good” ideas. Via Overlawyered, I encountered this International Herald Tribune article on Hood’s response to State Farm’s shutting down new production:
Mississippi Attorney General Jim Hood said Friday he will seek legislation aimed at blocking State Farm Insurance Cos. from refusing to write new homeowners and commercial policies in the Hurricane Katrina-battered state.
He said the plan would require any company that writes automobile insurance to write homeowners policies as well.
“We’re looking at a robber baron in the face that is trying to make an example of Mississippi,” Hood said of State Farm. “Any company that writes automobile insurance and also writes homeowners in any other state would be required to write or make available insurance for homeowners and commercial properties in all parts of the state.”
Does anyone want to tell the AG that State Farm is still planning to write homeowners in Mississippi? They’re just not going to accept new business. Unless the law were worded carefully, State Farm would be permitted to continue to write Auto, by virtue of continuing to maintain existing Homeowners business.
Of course, if the intent is to require insurers to write new homeowners business without restriction…well, I can’t help but think that the state’s auto market is a bit too small to justify exposing a carrier to the legal ambiguities in the state.
Don’t get me wrong. I think there is plenty of reason for consumers and their advocates to feel grumpy towards State Farm and other insurers who perhaps were a little overaggressive in managing their Katrina losses. However, I don’t think that judicially rewriting contracts after the fact is exactly healthy for the market; nor is an escalating game of chicken.