A third insurance company will offer lower premiums to Mississippi policyholders, indicating the continued stabilization of a shaky post-Hurricane Katrina market, Insurance Commissioner George Dale announced Monday.

Dale approved rate reductions for Mississippi Farm Bureau Casualty Company. The company will decrease rates in its homeowner program by 3 percent, and up to 4.3 percent in a scaled-down version of that program, a news release said. Both reductions are effective Nov. 1 and will affect areas north of the six lower counties of Jackson, Harrison, Hancock, George, Stone and Pearl River.

Barring another hurricane, Dale predicted "a lot of rate reductions over the next year."

But, he added, "Unfortunately, (reductions) will not happen as quickly on the Coast as in other parts of the state."

Farm Bureau will continue to allow wind coverage to be added to existing business in George and Stone counties "if certain underwriting criteria are met," the news release said. Dale said customers who had been forced into the wind pool, the insurer of last resort, will likely notice a "substantial reduction," because premiums in the state's insurer of last resort are more expensive.

Farm Bureau is the third company in the last four months to reduce premiums. Brierfield Insurance Co. decreased commercial policies statewide, and Shelter Insurance Co. cut some homeowners' policies.

Although no hurricanes have devastated Mississippi since Katrina, insurers remain skittish at the peak of this season, said Dave Treutel, an independent insurance agent and wind pool vice chairman.

Two Category 5 hurricanes have slammed into Mexico and Central America this year.

But a half-dozen companies are considering writing wind policies in Mississippi, and a few already have begun, he added. Treutel spoke by telephone from Seattle, where he is trying to entice more companies to begin writing coverage.

"We'd love to bring in companies that haven't been here before," he said. "The idea is to increase the number of companies that are writing, and that way we've got more competition."

Some of the fastest growth in the wind pool has come from George, Stone and Pearl River counties, Treutel said.

Lucedale Mayor Dayton White said he was unsure how many of his city's residents have been forced into the wind pool.

"I've heard people say that, going into the wind pool, it costs almost as much to insure the house as it did totally prior to Katrina," he said.

Dale said he still hasn't approved State Farm's rate increase request. The company is the state's largest insurer and wants to raise rates by an average of 13.6 percent statewide, and almost 50 percent on the immediate Coast.

Dale has said the proposed hike is on hold until company officials explain their plans. State Farm announced in February it would suspend writing new commercial and homeowner policies in Mississippi because of an "untenable legal and political environment."

--------------------------------------------------------------------------------------------

By Natalie Chandler

©2007 The Clarion-Ledger

Presented by InsuranceHeadlines.com