Expansive Verdicts Turn Insurers Out of Mississippi.

Recent multimillion-dollar jury awards are making insurers leery of doing business in Mississippi, Insurance Commissioner George Dale said.

In recent weeks, 44 companies have said they're reducing business, stopping new business or exiting lines altogether, Dale said. Others want large price increases.

"The companies that I've spoken to are somewhat leery of Mississippi because of the legal climate, either the reality of it or the perception of it. It might be a little of both...but sometimes perception does more harm than reality," Dale said.

Some insurers in Mississippi are requesting large rate increases due to the threat of litigation, Dale said. For instance, St. Paul Cos. is asking for a 73% increase in its medical malpractice line in the state, he said.

Kevin Rehnberg, president of St. Paul's global health-care operations, said Mississippi isn't the only state struggling with med mal.

"There is no question that medical malpractice across all fronts is in great difficulty, with a 135 combined ratio," Rehnberg said. Driving the need to raise rates are increasing loss costs, increasing severity of claims and certain larger cases and judicial inflation. (See "A Downward Spiral," page 65.)

St. Paul has raised its medmal rates between 5% and 65% across 22 states so far. The company is seeking rate increases in 28 states.

State Farm Group said it hasn't backed away from doing business in Mississippi, but it is keeping an eye on the litigation.

"Courts continue to have more liberal reading of our policies. Juries are awarding significant amounts... that gives us concern," said Greg Geren, a State Farm spokesman.

Nationwide Group also has concern. "There is an unfavorable legal climate in Mississippi, and when we do have excessive judgments, those costs have to be passed on to the policyholders through the rates," said Bob Sohovich, a Nationwide spokesman.