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State Farm suspends Miss. policy sales
2007-02-14
State Farm Insurance Cos. is suspending sales of any new commercial or homeowner policies in Mississippi effective Friday, citing in part a wave of litigation it has faced after 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 action was not a direct response to any specific development in the litigation, which has included a recent federal jury's $2.5 million punitive damage award to a policyholder who sued State Farm for refusing to cover the 2005 hurricane's storm surge damage. State Farm, the largest homeowners insurer in Mississippi with more than 30 percent of the market, agreed to settle hundreds of lawsuits by policyholders and reopen and pay thousands of other disputed claims. The landmark deal is potentially worth hundreds of millions of dollars for Mississippi homeowners devastated by Katrina.
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