A federal district court judge affirmed an earlier decision that a suit brought by Mississippi's attorney general against insurers for flood losses stemming from Hurricane Katrina should be heard in state court, where carriers perceive they will be at a disadvantage.

U.S. District Court Judge for the Southern District of Mississippi, L.T. Senter Jr., sitting in Jackson, Miss., ruled on Tuesday that a March decision by U.S. District Court Judge Tom S. Lee was correct in ordering that a suit brought on flood claims is a state issue and belongs in the state court.

The suit, brought by Mississippi Attorney General Jim Hood against five insurers, seeks to force the carriers to cover losses from Hurricane Katrina. The attorney general argues that despite the flood exclusion in the policies, insurers should pay claims because the water was wind-driven, which is a covered occurrence.