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State Farm Agrees to Re-examine Cases in Mississippi

State Farm Fire & Casualty has agreed to re-examine more than 35,000 policyholder claims filed following Hurricane Katrina and to "make millions of dollars available" for additional payments, Mississippi Insurance Commissioner George Dale said Monday.

Dale said the agreement would cover homeowners, renters and commercial claims in Harrison, Hancock and Jackson counties, including those that are in mediation and those that are the subject of pending litigation.

He said that based on his agency's examination of State Farm's handling of Katrina claims and the recent withdrawal of a proposed class action settlement involving the insurer, he had convinced the company to agree to the 'accelerated process to reopen and readjust all Hurricane Katrina claims upon request in the Mississippi coastal counties.'

On March 12, a team of lawyers who helped negotiate the proposed settlement withdrew their request for approval by U.S. District Judge L.T. Senter Jr. The attorneys cited a legal "stalemate" and Senter's apparent reluctance to sign off on the deal.

Senter had been asked to approve a settlement calling for State Farm to pay at least $50 million to policyholders who haven't sued the company. That deal, reached in January, called for the insurer to reopen, review and possibly pay up to 36,000 claims.

"When I learned that the proposed class action settlement had stalled, I felt it presented an opportunity to negotiate with State Farm to bring closure for coastal policyholders," Dale said Monday.

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