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Hurricane Claims

Natchez, MS: (Feb-07-08) Mississippi Attorney General Jim Hood brought charges against State Farm Fire and Casualty Co., the nation's largest insurance company, following a criminal investigation of the insurer's Hurricane Katrina claims handling practices. State Farm had accused Hood of using the threat of prosecution to compel settlements of civil cases. Hood denied that claim and said his office kept the criminal and civil cases separate.

The two sides had reached a settlement, and the dispute had reached a conclusion. Records show that State Farm Fire and Casualty Co. agreed to withdraw a lawsuit that accused Hood of violating a January 2007 agreement to end his probe of allegations that the company fraudulently denied claims after the Aug. 29, 2005, hurricane. The settlement was approved by US District Judge David Bramlette, who refused to disclose its terms publicly. He claimed that the settlement effectively ended Hood's new criminal investigation of State Farm with a different focus than the earlier probe. Hood stated that as part of the deal, his office will get to keep $5 million paid by State Farm to cover the costs of the criminal investigation. That money was paid as part of the January 2007 agreement. [BUSINESS WEEK: HURRICANE CLAIMS]

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Published on Feb-9-08


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