Attorney General Jim Hood and State Farm have reached a truce – in court, anyway.
Hood held a news conference at his Biloxi office Wednesday to announce State Farm has honored its obligation to re-evaluate Coast Katrina claims, leading to settlement of a lawsuit he filed against the company in Hinds County Chancery Court.
He credited the lawsuit with forcing State Farm to pay policyholders an additional $74 million. However, Hood filed the lawsuit in June 2007, after State Farm had begun the re-evaluation process under the Mississippi Insurance Department’s supervision. Hood’s lawsuit accused the company of violating an agreement with his office that called for federal court supervision of the re-evaluation.
“We find it perplexing Attorney General Hood would claim full credit for a process he opposed from day one and was the foundation for his lawsuit against us, which he now has settled,” State Farm spokesman Fraser Engerman said Wednesday.
Insurance Commissioner Mike Chaney, who was on the Coast to speak to two different groups Wednesday, said after hearing about Hood’s remarks: “I think he’s crazy to call a press conference on a lawsuit claiming credit for something he didn’t do.”
Chaney credited his predecessor, George Dale, for heading up the re-evaluation. Dale also directed Nationwide to re-examine its claims, leading to an additional $40 million in payments.
Hood said a spot check shows State Farm met or exceeded its obligation to pay each policyholder left with only pilings or a slab 50 percent of structural policy limits for all covered losses, including contents.
With federal court supervision, Hood believes policyholders would have been paid north of $400 million.
The settlement ends legal disputes between Hood and State Farm that began less than three weeks after Katrina – when Hood sued major insurance companies for refusing to cover hurricane damage.
He also launched a criminal investigation of State Farm that ended only after the insurance company sued to stop it.