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Insurer Sues Over Mississippi Inquiry


NEW ORLEANS, Nov. 2 (AP) — State Farm Insurance is suing Mississippi’s attorney general, accusing him of violating an agreement to end a criminal investigation of the insurer’s handling of claims on the Gulf Coast after Hurricane Katrina, according to court papers unsealed Friday.

State Farm’s lawsuit claims that the attorney general, Jim Hood, reopened a criminal investigation of the company and its employees “for the purpose of harassment” and to coerce the insurer into settling civil litigation spawned by the Aug. 29, 2005, hurricane.

State Farm says Mr. Hood agreed in January to end his office’s criminal inquiry as part of a settlement agreement that called for the company to reopen and possibly pay thousands of policyholder claims.

A state grand jury was hearing evidence when State Farm reached its agreement with Mr. Hood and lawyers for hundreds of State Farm policyholders. That deal later fell apart after a federal judge refused to endorse it. State Farm later reached a separate agreement with Mississippi’s insurance commissioner to reopen and pay claims.

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