Senate Minority Whip Trent Lott, R-Miss., intends to introduce legislation shortly to remove insurers' antitrust immunity, along with Senate Judiciary Committee Chairman Patrick Leahy, D-Vt. In the House, Rep. Gene Taylor, D-Bay St. Louis, is working with Rep. Pete DeFazio, D-Ore., on a similar bill.

"I don't know what this means for me personally," Taylor, a litigant in the suit, said in an interview. "Given my experience with State Farm, I'll believe it when a certified check is deposited in my checking account."

Taylor said his campaign to eliminate the insurance industry's antitrust immunity, push for all-perils insurance and secure federal oversight of the state-regulated industry will continue. "I can assure you that effort does not go away. They have hurt too many of my friends."

Taylor said he was motivated by what he believes is the insurance industry's ability to fix rates and settle claims. "I'm convinced the big guys did call each other and say 'don't pay claims.' It's perfectly legal to do so."

Lott spokesman Lee Youngblood said, "We expect to have hearings early this year." Lott, who is also a litigant against State Farm, "was surprised to learn they were exempt and he would like to see them subject to laws like everybody else."

The legislation would repeal the exemption in the McCarran-Ferguson Act of 1945 and bring the property/casualty insurance industry under federal oversight of the Federal Trade Commission.

Leahy, who has sponsored repeal legislation in other sessions of Congress, "is going to introduce it soon," said Senate Judiciary Committee spokeswoman Tracy Schmaler. The panel will hold a hearing, she said.

Last week State Farm announced a mass settlement with more than 600 Mississippi homeowners who sued the company for refusing to pay damages from Hurricane Katrina in August 2005. The company also made an agreement with Mississippi Attorney General Jim Hood to reopen and pay other disputed claims.

However, today a U.S. District Judge slashed the jury's award of $2.5 million in punitive damages down to $1 million. Michael Kunzelman of the Associated Press reports,

U.S. District Judge L.T. Senter Jr. in Gulfport, Miss., reduced the award to $1 million even though the judge said State Farm acted in a "grossly negligent way" by denying the claim filed by policyholders Norman and Genevieve Broussard, whose Biloxi home was destroyed by the August 2005 storm.

Louisiana has been facing another insurance crisis. After it became clear that the state's largest commercial insurer was planning to drop all commercial property coverage in the New Orleans, Lafayette and Lake Charles areas, Louisiana Governor Kathleen Blanco took action. She and state Insurance Commissioner Jim Donelon intervened. The two Louisiana officials briefed St. Paul Travelers Cos. Inc. on levee improvements and coastal restoration efforts, and Travelers modified its plans.

But this week high-level executives of the insurance industry invited the Louisiana governor to California for an intervention of their own. Governor Blanco addressed the quarterly board meeting of the Property and Casualty Insurers Association of America, asking them to come to Louisiana to write policies. And the insurers are interested in working with Louisiana.

Why the change of attitude? Rebecca Mowbray wrote in the New Orleans Times-Picayune (January 29, 2007),

In a special legislative session on insurance this month in the nation's most hurricane-prone state, newly elected Republican Gov. Charlie Crist and the Republican-controlled legislature did a 180-degree turn away from the pro-business efforts to help the insurance industry that have dominated since Hurricane Andrew in 1992. They approved a spate of consumer-oriented reforms that one Florida newspaper described as "Ralph Nader-esque."

Insurers say Florida destroyed its insurance market by rolling back rate increases for the state's insurer of last resort and increasing the obligations of the state-run catastrophe reinsurance pool without adequate financing, essentially putting the state in competition with the private market. Insurers say the state's credit rating is now in jeopardy, and that the experiment will have dire consequences and ultimately will prove anticonsumer.

The insurance industry didn't see it coming, and rattled insurers want to make sure the revolt doesn't spread to other states.

Hence, a sudden interest in the insurance needs of Louisiana.