Insurance: February 2007 Archives

Mississippi AG seeks legislation on State Farm

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.



He said the plan was modeled after actions taken by Florida and would require any company that writes automobile insurance to write homeowners policies as well.



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

So the Mississippi Attorney general wants to make it tougher and more expensive to buy auto insurance as well as homeowner's insurance?



State Farm is not a "robber baron." Nor is any other insurance company. At least here in California, they have to defend their rates to actuaries working for the state.



But when you make them pay for things which were explicitly not insured, don't you think they're entitled to second thoughts about whether to do business in that state? State Farm is not a charitable organization. They are entitled to charge enough to make a profit - otherwise there is no reason to be in business. If they decide they cannot do that within the environment in a given state, they are entitled to decide to leave. If they can't do it at all, the correct decision is to go out of business.



Add hefty punitive fines for not wanting to pay out claims for things which weren't insured, and it's a miracle that anyone is willing to issue homeowner's insurance in Mississippi. Make them write homeowner's insurance in order to write automobile insurance, and some insurers might do it - but others will cancel their policies of automobile insurance. Exactly how bad does the state of Mississippi want their insurance situation to get?



Now there is a solution. It's not a good solution, but it is a solution. Suppose the state of Mississippi decides to step up to the plate and insure its citizens? It certainly has the assets and the ability. Of course, then they might discover exactly how hostile the environment they have been fostering for insurers is.



The course they are on is on a collision course with this rather elegant piece of prose:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

We throw one part out, the whole thing goes. So much for one of the biggest checks upon the advance of the statists. Not to mention that if they decide to take the property of the wealthy, politically powerful insurance agency, what is there to stop them from taking yours?