Mississippi Considering Directive 10-289
First, Mississippi regulated flood insurance rates down to a level that it was impossible to make money, so State Farm's property coverage on the coast did not cover flood/storm damage. Then, after Katrina, Dickie Scruggs and company sued State Farm, and others, forcing them to cover storm damage from Katrina that their policies explicitly did not cover and were not priced to cover. So, facing a state government that, by fiat, forces their fees lower and their coverage higher, State Farm is trying to exit the property insurance business in Mississippi, and the state legislature is considering legislation to prevent them from leaving.
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-battered state.Hood's plan would require any company
that writes automobile insurance in Mississippi and also writes
homeowners policies in other states to offer homeowners and commercial
properties throughout Mississippi....Hood also said he his urging Gov. Haley Barbour to issue an executive
order that would force the insurer to continue writing new policies
until the Mississippi Legislature can deal with the issue.
Quoting from directive 10-289 (Atlas Shrugged):
Point Two: All industrial, commercial, manufacturing, and business
establishments of any nature whatsoever shall henceforth remain in
operation, and the owners of such establishments shall not quit, nor
leave, nor retire, nor close, sell or transfer their business, under
penalty of the nationalization of their establishment and of any or all
their property.
So I ask you, is the following statement ridiculous over-the-top regulator-speak from Atlas Shrugged, or was it actually made by a US state AG?
"We're looking at a robber baron in the face that is trying to make an example of Mississippi," Hood said of State Farm.
OK, so lets see: The state government decides what rates you can charge. The state government decides what your policy has to cover. The state government decides if you will be allowed to go out of business. But State Farm is the robber baron. LOL.
Hat tip: Tom Kirkendall
mjh:
What's the difference between this and slave labor? Wouldn't Mississippi be forcing State Farm to provide a service that they do not wish to provide?
February 20, 2007, 1:31 pmnathan:
Sometimes I really hate the people that run the state of my birth. What's going to happen is State Farm is going to stop writing all insurance in MS. Given the choice of losing one amount of money by pulling out completely, or losing a greater amount by staying in, I know what I would pick.
February 20, 2007, 1:52 pmScott:
Ok, while I will agree the new law is absolutely over the top, you don't have any idea what you're talking about as far as State Farm and MS goes.
State Farm raped the victims of Katrina here on the coast. They denied claims on anything below the water line of the surge regardless of any other reason for damage.
Tree fell on your house before the waters came in?
Tough, it was caused by flood.
Four police officers witnessed a tornado tear your building apart before the water came up?
Sorry, it was all flood damage.
They took advantage of people who had paid them faithfully for decades.
State Farm is now using the threat of pulling out of the state as extortion because they know that the residents who are relying on FEMA loans to rebuild must have insurance.
I'm against this new law, but before you decide that the people of MS are all backwards pig farmers who are trying to screw the insurance company, you need to get some facts straight.
February 20, 2007, 10:45 pmMatt:
It's different from slavery only in that State Farm retains the option to escape this onerous law by ceasing to do any business whatsoever in Mississippi.
As much as I hate legislative interference in the economy, I can't bring myself to feel sorry for State Farm in this case. The insurance industry habitually cries out of both sides of its mouth...demanding that states _lock people up_ for declining to consume one of their product lines (car insurance), and yet whining about state interference with their other product lines.
When you lie down with dogs, you wake up with fleas.
February 21, 2007, 1:31 amAdam:
Best subject line/title. Ever.
February 22, 2007, 12:59 pmwowgolds104:
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