updated 12/27/2006 4:09:24 PM ET 2006-12-27T21:09:24

Mississippi Attorney General Jim Hood said Wednesday he is trying to settle out of court with the insurance companies he sued last year for refusing to cover billions of dollars in damage from Hurricane Katrina’s storm surge.

Hood said he has negotiated with several companies to resolve his suit “without the expense and time of litigation,” but they haven’t reached a settlement. Hood, who declined to say which companies have participated in the negotiations, also urged other companies to join the talks.

“Certainly there are no guarantees in going to court. A settlement is often preferable,” Hood told The Associated Press in a telephone interview.

Hood said he hopes to negotiate a settlement that would secure an unspecified amount of money for the thousands of Gulf Coast homeowners whose claims were denied by insurance companies after Katrina. But if the talks break down, Hood vowed to take his fight against insurers to court.

“We’re working diligently to resolve all the issues and hope the other companies will join the negotiations so we can resolve this quickly,” he said.

Hood filed a civil suit in September 2005 against State Farm Fire & Casualty Co., Allstate Property & Casualty Insurance Co., Mississippi Farm Bureau Insurance Co., United Services Automobile Association and Nationwide Mutual Insurance Co.

Hood’s office also is investigating companies for fraudulently denying claims after Katrina. On Wednesday, however, Hood refused to say whether his criminal probe is part of the settlement talks for his civil suit.

State Farm spokesman Phil Supple said the company has had “periodic communication” with Hood’s office since he filed the suit, but Supple wouldn’t comment on any settlement negotiations. Allstate spokesman Raleigh Floyd also wouldn’t say whether the company has had any settlement talks with Hood’s office.

Hundreds of individual policyholders in Mississippi also have sued insurers for denying their claims and refusing to cover at least $2 billion in estimated damage from Katrina’s storm surge.

Hood’s remarks Wednesday came a day after a federal judge agreed to transfer his lawsuit against insurers from federal to state court.

U.S. District Judge L.T. Senter Jr. ruled Tuesday that Hood’s lawsuit belongs in state court because interpreting the terms of private insurance policies is traditionally a function of state law.

Senter, who transferred the case to Hinds County Chancery Court, rejected arguments by insurers that Hood’s suit should be heard in federal court because the companies write flood insurance policies that are funded and administered by the federal government.

Hood originally filed his suit in state court, but the companies successfully fought to move it to federal court earlier this year.

Hood praised Senter’s ruling and chided insurers for “trying to delay the case in federal court.” He also said he expects a congressional panel next year to probe the insurance companies’ handling of Katrina claims.

“Unless the insurance companies come forward and help us forge a settlement quickly, I believe that this spring the American people will see through a congressional investigation the curtain peeled back on some of their antics,” Hood said in a statement.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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