Last Friday I dialed the conference call number for Mississippi Attorney General Jim Hood’s press conference and listened in amazement as an elected state official called State Farm "a cult," "decadent" and "robber barons." All this because of State Farm’s decision not to underwrite new homeowners and commercial insurance in the state because of the legal and business climate there. Then Hood proposed legislation to, in essence, make them stay. If what Hood said is true, wouldn’t the state be better off without them? I mean, who wants to buy insurance from a decadent cult of robber barons? Let’s also note that this guy is the attorney general, not the governor or the insurance commissioner. Why is he sticking his nose into matters of insurance policy that, judging by the words that came out of his mouth, are clearly beyond his pay grade?
Here are a couple stories about the press conference. This one is by the Associated Press, and here is one by reporter John O’Brien of LegalNewsline, who interviewed me for his story. What amazed me even more than the rhetoric was that virtually every "fact" Hood cited was just plain wrong. He proposed that Mississippi follow Florida’s lead and pass so-called "anti-cherry picking" legislation that prohibits insurers from selling only auto insurance, for example, and not their entire line of insurance products, including homeowners policies. One slight problem: Florida didn’t pass an anti-cherry picking statute in its recent insurance legislation. True, it was discussed, but it was removed from the legislation for this reason: 85 insurers who are qualified and approved to sell homeowners insurance in Florida sell other lines of insurance but not homeowners. Legislators rightly feared a cherry picking statute would merely hurt consumer choice in other insurance lines by driving out those 85.
Likewise, Hood whiffed on recounting events that happened in his own state. For instance, he claimed recent cases in federal court established that flood or "storm surge" was covered under State Farm’s homeowners policies. For anyone who has been paying attention, you know this is not only wrong but offensively ignorant of the basic facts. Remember, this is the guy who was conducting a criminal probe of State Farm’s claims adjusting practices, and he apparently has absolutely no idea of what is going on! There were a lot of other examples, too many to go into here. But I tell you what, if facts were baseballs, you wouldn’t have had to be Walter Johnson or Bob Feller to throw one by ol’ Jim Hood on Friday.
UPDATE: My description of Florida’s legislation got muddled between my head and my keyboard. As a reader reminded me, Florida did pass an anti-cherry picking statute, which I knew from listening to a January 30 A.M. Best podcast with Florida Senate Minority Leader Steve Geller. What I should have said is that the Florida statute was the milder House version rather than the stricter Senate version. The House version requires insurers that offer homeowners insurance in other states and auto insurance in Florida to sell homeowners insurance in Florida, unless the insurer has a Florida affiliate that writes homeowners policies in Florida. It does not begin until next January. The Senate version made it an unfair trade practice for an insurer to fail to offer in Florida any kind of insurance that all insurers offer in another jurisdiction, did not state the insurance could be offered through a state affiliate that limits the insurer’s national exposure, and would have begun on July 1. You can compare the two approaches here in this document from the Florida House (see page 2) , and here is another document showing that the final bill reflected the House’s version. As Geller said in the podcast interview, insurers said they couldn’t live with the Senate version. In any event, I could have picked a better example of Hood’s trouble with the facts.