[$tinkle]

first, some background from coyote blog:

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.

Miss. AG Seeks Legislation on State Farm:

JACKSON, Miss. -- 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.

2007, at his Jackson, Miss., office, that 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 action is in response to State Farm, Mississippi's largest homeowner insurer, saying Wednesday it has had enough of the "untenable" legal and political climate in the state and is suspending writing new homeowners and commercial policies.

Hood said his plan is modeled after actions taken by Florida. Florida's legislation primarily deals with preventing policy cancelations and non-renewals, but Hood said a model could be crafted to force companies to write new policies.

"We're looking at a robber baron in the face that is trying to make an example of Mississippi," Hood said of State Farm.

State Farm, Mississippi's largest homeowner insurer, said Wednesday it has had enough of the "untenable" legal and political climate in the state and is suspending writing new homeowners and commercial policies. The company said the suspension would begin Friday and continue until the business climate in the state is more palatable.​

for comparison, let's take a trip south of the border:

CARACAS, Venezuela, Feb. 16 — Faced with an accelerating inflation rate and shortages of basic foods like beef, chicken and milk, President Hugo Chávez has threatened to jail grocery store owners and nationalize their businesses if they violate the country’s expanding price controls.

i never thought i'd break out my pom-poms for the insurance industry

 

[fluff]

Some figures on just how impossible it is to make money would be relevent.

 

[$tinkle]

Some figures on just how impossible it is to make money would be relevent.

not even close, gareth.

we got our capitalism on, which is supposed to let the markets - not the gov't - stipulate rewards & punishments by law-abiding companies. making case-specific law sets a rather dangerous precedent, to say nothing about plumbing new depths of hypocrisy.

but, this is mississippi, which is almost as backwater as surrey.

 

[fluff]

not even close, gareth.

we got our capitalism on, which is supposed to let the markets - not the gov't - stipulate rewards & punishments by law-abiding companies. making case-specific law sets a rather dangerous precedent, to say nothing about plumbing new depths of hypocrisy.

but, this is mississippi, which is almost as backwater as surrey.

You don't have (and nor should you have) a free market, so pony up with some data on how hard done by State Farm are. Or are they simply running away and leaving their customers high and dry (nice pun eh?) after racking in massive profits in the good times?

 

[fluff]

More big businesses getting shafted:

http://news.bbc.co.uk/1/hi/business/6383913.stm

The European Union (EU) has imposed a record fine of 992m euros ($1.3bn; £666.8m) on four lift and escalator manufacturers for price-fixing.

 

[$tinkle]

You don't have (and nor should you have) a free market, so pony up with some data on how hard done by State Farm are. Or are they simply running away and leaving their customers high and dry (nice pun eh?) after racking in massive profits in the good times?

seems to me they met the letter of the contract & the state doesn't want to pony up the cash, so they're going to try & make state farm do it.

would you have me believe you see nothing wrong w/ the state of mississippi effectively legislating morality (care for the poor)?

 

[$tinkle]

More big businesses getting shafted:

The European Union (EU) has imposed a record fine of 992m euros ($1.3bn; £666.8m) on four lift manufacturers for price-fixing.

** groan **

 

[fluff]

seems to me they met the letter of the contract & the state doesn't want to pony up the cash, so they're going to try & make state farm do it.

Well, without examing the contract neither of us knows whether they met it.

Some further info:
From http://www.msnbc.msn.com/id/17150886/

Like the rest of the insurance industry, State Farm has been highly profitable over the past few years, despite hurricane payouts. State Farm recorded a net profit of $3.24 billion in 2005 on revenue of about $60 billion, down 39 percent from the $5.31 billion in net income for 2004. Last fall, Hartwig estimated that the industry would see record profits of $55 billion to $60 billion for 2006 when results are available later this year. Even in 2005, the year of Katrina, the industry made $43 billion.

The industry's performance in the wake of Katrina and other hurricanes, and the use of hurricane payouts as an excuse to jack up premiums and stop doing business in some areas has drawn fire from consumer groups. A report released last month by Americans for Insurance Reform blasted the industry’s "poor response to Hurricane Katrina" and found "a significant pattern of callousness, unfairness, and generally inept performance by many companies. In some cases, insurers’ conduct worsened the suffering of policyholders, many of whom were left hungry and homeless by the hurricane."

"They have overestimated their losses and vastly overpriced," J. Robert Hunter, the director of insurance at the Consumer Federation of American, told the New York Times.

Mississippi Insurance Commissioner George Dale said State Farm’s decision comes at a time in the recovery process when “it is becoming more vital than ever that policyholders in Mississippi have a viable and affordable insurance market.”

“State Farm’s decision is a stark reminder that the issues brought about by Hurricane Katrina affect not only the coast, but policyholders all across the state,” Dale said in a statement.

“It is my hope that by continuing to work with State Farm, they will at some time in the future reverse the decision,” Dale said.

Bob Trippel, State Farm senior vice president, said in a statement that the company would reassess the situation “when there’s more certainty” in the state’s business climate.

State Farm, the largest homeowners insurer in Mississippi with more than 30 percent of the market, has 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.

The company had written roughly 29,000 new homeowner policies in the Mississippi in 2006, while other companies were writing a smaller percentage of claims, Fernandez said.

The decision does not impact State Farm’s financial services, banking products or automobile coverage in the state. And Fernandez said Mississippi is the only state where his company has suspended writing new policies.

“The political and regulatory and legal environment in the other two states (hit by Katrina) — Louisiana and Alabama — is not the situation in Mississippi,” he said.

State Farm and other insurers say their homeowner policies cover damage from wind but not from water — and exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm’s rising water. Hundreds of policyholders have challenged that claim, saying they are entitled to damages from storm surge.

would you have me believe you see nothing wrong w/ the state of mississippi effectively legislating morality (care for the poor)?

I fail to see the relevance of that question. Furthermore what are laws but legislated morality, in which case who else is going to do it?

 

[$tinkle]

here's my take on this: if State Farm had not been a well-run company (i.e., profitable), the state of MS would not think to seek redress.

effectively, State Farm is being punished for being something the gov't cannot be: successful.

and yet, i still hate insurance companies

 

[valve bouncer]

You'd think governments and insurance companies would get on like a house on fire, they're both in the business of f***ing people over. Maybe neither of them like the competition.

 

[fluff]

here's my take on this: if State Farm had not been a well-run company (i.e., profitable), the state of MS would not think to seek redress.

effectively, State Farm is being punished for being something the gov't cannot be: successful.

and yet, i still hate insurance companies

I was looking at it a different way: State Farm have been making money out of insuring people for many years. Due to unforeseen circumstance their profits took a hit this year. Rather than offset that against past, future or even present profits their reaction is to hike premiums dramatically. If they were unable to do so then they want to cherry-pick business. The government probably feel that they are simply forcing State Farm to face up to their obligations.

No doubt there is more to the story than I know. But still the original blog quote seems misleading at best.

Hating insurance companies seems to me to be a perfectly healthy reaction to their methods of operation.

 

[Kihaji]

here's my take on this: if State Farm had not been a well-run company (i.e., profitable), the state of MS would not think to seek redress.

effectively, State Farm is being punished for being something the gov't cannot be: successful.

and yet, i still hate insurance companies

Try working for one.

 

[$tinkle]

update and a flip-flop

Elizabeth Lynch, 91, a postmaster of Pearlington for more than 40 years, always paid her State Farm insurance policy a year in advance and followed suggested guidelines for coverage.

When Hurricane Katrina struck, her roof collapsed, and she looked to her policy for help.

Her claim was denied.

Instead, the insurance company sent over a small teddy bear wearing a red and white State Farm shirt, saying it would be comforting to "hug the little fellow" in her time of need.

The back of the shirt read "Good Neigh Bear."

"Now there are words to describe my feelings at that moment, but being a lady, I don't use that kind of language," Patricia Cole Wilson, who had power of attorney for Lynch, wrote in a letter. Lynch died in November 2005.

i guess they were trying to keep their jingle alive: "like a good neighbor, state farm is there"

way to go, jackasses.

 

[Changleen]

Try working for one.

This explains a lot.