Business Insurance posts a Reuters report on State Farm's decision to withdraw substantially from the Mississippi property insurance market in light of its recent legal woes in that state. The first two paragraphs sum things up:
State Farm Mutual Automobile Insurance Co. said it will stop writing new homeowners and commercial insurance in Mississippi following a legal battle with state homeowners resulting from Hurricane Katrina.
'It is no longer prudent for us to take on additional risk in a legal and business environment that is becoming more unpredictable,' said Bob Trippel, senior vp of the largest home insurer in the United States.
There you have it: when an insurer cannot confidently predict how its policies will be interpreted, issuing new ones is little more than a gamble. For that, Mississippi has, or had, casinos.
No doubt David Rossmiller and Martin Grace, each of whom has been doing excellent work on the Mississippi morass these past months, will be weighing in with more insightful commentary shortly.
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