Aug. 7, 2015—Mississippi Attorney General Jim Hood has started an investigation of possible “steering” by insurers, according to a report by the Mississippi Business Journal.
Hood sent 12 letters to insurance companies on July 9 and gave them one week to respond. All of the companies responded by the deadline. According to the report, the companies are: Alfa Insurance, Allstate, Direct General, CT Corporation System of Mississippi, Mississippi Farm Bureau, Nationwide, Progressive, Safeco, Shelter, Travelers and USAA.
Absent from the list is State Farm. Hood sent a request in March to then-U.S. Attorney General Holder for the Department of Justice to investigate the issue. State Farm spokesman Justin Tomczak told the Business Journal in an email on Tuesday that “in early July, Attorney General Hood requested a meeting with State Farm and we immediately notified him that we would meet with him as his schedule allowed. Attorney General Hood’s office recently offered two dates for such a meeting and we are in the midst of finalizing arrangements.”
According to the report, Hood made reference to State Farm’s PartsTrader mandate.
“Body shops have reported to my office that they are pressured into accepting bid from Parts Trader for after-market or re-manufactured parts that are unsafe and far below the quality of the original equipment manufacturer,” Hood said in reference to State Farm’s Parts Trader Program, according to Weatherly.
Hood also cited the 1963 Consent Decree, which prohibits such practices. If proven, insurers will be in violation of the Sherman Antitrust Act.
The department has not committed to an investigation.
Lawsuits against insurers in numerous states are being tried in the U.S. District Court for Middle Florida because of their similarities