Insurance Lawsuit Headed Back to State Court

GULFPORT, Miss. -- Mississippi Attorney General Jim Hood's lawsuit against insurance companies over Hurricane Katrina damages is heading back to state court after a federal judge ruled that's where it belongs.

U-S District Judge L-T Senter Junior decided the state court transfer today. The lawsuit was originally filed in state court but the insurance companies successfully fought to move it to federal court. The case now goes to Hinds County Chancery Court. Senter 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 filed a civil suit in September 2005 against five major insurance companies for refusing to cover at least 2 (b) billion dollars in estimated damage from Katrina's storm surge.

The companies named as defendants in Hood's suit are State Farm Fire and Casualty Company, Allstate Property and Casualty Insurance Company, Mississippi Farm Bureau Insurance Company, United Services Automobile Association and Nationwide Mutual Insurance Company.