"Everyone's goal should be to get as much money as possible into the hands of as many people as possible so they can continue to rebuild. This agreement is another way to do that."

- Gov. Haley Barbour

The winds of post-Katrina insurance controversy shifted again Monday - we, hope favorably - when state Insurance Commissioner George Dale announced he had signed a regulatory agreement with State Farm to reopen negotiations potentially settling 35,000 property loss claims rising from the catastrophic 2005 hurricane.

The storm largely devastated Harrison, Hancock and Jackson counties on the Gulf Coast.

State Farm isn't the only insurance carrier involved in unsettled and disputed claims, and it isn't the only one facing lawsuits about denial of claims, but it is the largest. The recovery of thousands of property owners depends on outcomes with State Farm - one way or another.

Dale negotiated the reopening of what could lead to final settlements for many policy holders.

The root of the issue is this: State Farm seemingly dismissed as fiction the claims filed by thousands who believed they were covered for hurricane damage, only to be told their homes were leveled or virtually destroyed by a storm surge, not by wind, and that their policies did not cover the water damage.

A flood of lawsuits followed, including a class action lawsuit filed in the U.S. District Court for Southern Mississippi. A tentative settlement in that lawsuit ended in stalemate, which creates more momentum for the reopening of negotiations policy-by-policy.

We originally opposed state government involvement in suing State Farm and other insurers because of the potential for damaging business prospects and the writing of property coverage statewide. We continue to believe a fair non-court conclusion would be better - if the prospects for fairness remain strong.

Yet, it is impossible not to be sympathetic to thousands of families - tens of thousands of people collectively - who believe they have been intentionally wronged by a hugely profitable insurance company.

The reopening of negotiations in all 35,000 claims is the potentially best course of action for the largest number of people, including State Farm policy holders who live outside the three coastal counties.

State Farm spokesman Phil Supple said Monday that the company's agreement with Dale "generally follows" the same terms as the agreement that trial attorney Richard Scruggs presented to U.S. District L.T. Senter in January. The company has agreed to pay a minimum of $50 million, but "there's no ceiling" on the total amount paid, Supple said. Supple said Dale's mediation program would aim to resolve any lingering disputes between State Farm and policyholders. The proposed court settlement would settle those disputes through binding arbitration.

It is reasonable to ask why State Farm took so long to reach the conclusion that additional negotiations are needed.

We also hope State Farm reconsiders and reverses its decision suspending the writing of most new business in our state. Many Mississippians make their living selling State Farm insurance products, and their living is endangered by the company's action.

We agree with Gov. Barbour that the most important issue is getting as much money as possible into the hands of as many people as possible to financially empower recovery.

Every Mississippian should follow the outcome of this latest post-Katrina insurance development with intense interest.

To join an online discussion of this topic, log on to www.djournal.com, or respond at opinion@djournal.com for publication as a letter to the editor.

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