JACKSON, Miss. - A day after State Farm Insurance Co. announced it will no longer offer policies to new Mississippi consumers, Attorney General Jim Hood announced he will introduce legislation designed to keep the company modeled after recently passed measures in Florida.

The plan would require any insurance company that writes automobile policies to offer commercial and homeowners policies.

During the press conference, Hood compared State Farm to a "cult," indicated that it is attempting to intimidate U.S. District Judge L.T. Senter, called the company's practices "decadent" and again requested Congress create national insurance reform.

"I have a couple observations," said David Rossmiller, a partner at Dunn Carney in Portland, Ore., who listened in on Hood's press conference and has been analyzing the Gulf Coast's insurance situation for Legal NewsLine. "One is, why is the Attorney General of a state so concerned with insurance legislation?

"This is something for the governor, or the speaker of the house, or the insurance commissioner. To me, this looks like a prime example of political rhetoric that totally clouds any reference to fact. The facts he is citing are flat-out wrong."

Thursday, State Farm, the largest homeowners insurer in the state, said that the Mississippi's unpredictable legal and political climates make practicing in the state too troublesome and that it planned to stop writing new policies.

State Farm is the main target in Hood's Hurricane Katrina-related class action lawsuit filed against it and four other insurers that claimed they weren't responsible for flood or storm surge damage, only wind damage. The case was filed just weeks after the hurricane, and the attorneys general of the other states affected by it have not filed similar suits.

Recently, Hood and State Farm reached a settlement that would provide an estimated $500 million to policyholders who claimed damages incurred during Katrina were covered by State Farm. Part of the settlement was rejected by Senter, who worried that State Farm had too much control of the arbitration process in which policyholders and State Farm would participate if the policyholder rejected State Farm's initial offering, an automatic 50 percent of the structure's value according to the policy.

The proposed settlement separated policyholders into two groups -- those who have already filed suit against State Farm, and those who haven't but will.

Senter's rejection of the settlement did not stop 640 of those who had already attached their names to the suit from being given their money by State Farm. Checks have already been sent to several.

But the second group, estimated at 35,000 policyholders who will make claims, was more problematic to Senter. He did not feel it could be certified as a class because policyholders' homes were affected in different ways by the hurricane.

A meeting between the sides is scheduled for Feb. 28. Hood said that reopening a criminal investigation against the company will be a possibility if a settlement is not reached.

"Frankly, it just seems like he came unhinged. His rhetoric is divorced from reality," said Rossmiller, managing editor of the Insurance Coverage Law Blog and a former reporter at the now-defunct Phoenix Gazette. "You don't have to be a fan of State Farm to feel the way he is talking here is completely inappropriate."

Rossmiller also said that there are significant differences between the legislation Hood proposed to Mississippi and the measures passed in Florida.

One is the anti-cherry picking part of Hood's plan that would require any company offering any type of policy to offer all types. Florida Gov. Charlie Crist campaigned for it, but it was deleted prior to passage for fear that many insurers would withdraw totally from the market.

Another is that the Florida freeze, created by a 90-day order and the legislation to prohibit any policyholder from being dropped until November, is only on rate increases or non-renewals. Hood wants to force State Farm to sell new policies.

"The tone of his rhetoric with his apparent inability to connect with any facts, you have to wonder if this was anything more than grandstanding," Rossmiller said. "It was an amazing, amazing display.

"You can pass anti-cherry picking legislation, but one thing you can't do is make insurance companies sell policies in your state. State Farm could legally withdraw from the state's market completely."

Hood, a Democrat, also reiterated several times that Florida's legislation was created and passed by Republicans. Rossmiller said this was an effort to get on the good side of Gov. Haley Barbour (R) and the state's Legislature -- despite the fact that the Wall Street Journal called Florida's legislation "one of the more un-Republican reforms on the books in Florida."

According to a report by The Associated Press, Pete Smith, a spokesman for Barbour, said "the attorney general has not talked to the governor about this" and had no additional comment.

In the same report, State Farm spokesman Phil Supple called Hood's decision a "remarkable response to what was purely a business decision."

Hood also repeatedly mentioned that State Farm increased its profits by $3.9 billion in 2005. However, in 2006, senior vice president of the American Insurance Association Julie Rochman told the Business Media Institute that the insurance industry paid out the equivalent of 20 years' worth of profits in Mississippi and Louisiana.

"An insurance company does not leave a market to spite a politician," Rossmiller said. "State Farm is in business to make profit. These are sophisticated people -- they're not like little kids who are going to go home and cry if you hurt their feelings.

"Mississippi residents will receive the best deal because if money is to be made, and State Farm withdraws from the market (out of spite), then somebody else will come in and offer the same or a better deal. If that doesn't happen, there's something wrong with the market."

Rossmiller was also confused with Hood's desire to keep State Farm in Mississippi while pondering a criminal investigation and displaying such open hostility toward it. Hood said that he sought to have a portion of the proposed settlement require the company to keep business as usual in the state.

"If Hood is correct and State Farm is withdrawing out of spite and State Farm is abandoning its consumers, then (consumers) will get a better deal or the same deal when somebody rushes in to make the profit," he added.

"But he wouldn't be holding the press conference if that were true. What he's admitting by holding it is State Farm may be correct that the risk of how their policies are being interpreted in the area is greater than they can bear."