According to National Underwriter's Highline Data Service, the company ranks third in commercial policies with more than 8 percent of the market. It also handles 26 percent of the private passenger automobile marketplace--the top insurer there, too.

Mr. Hood called on the state's governor and Insurance Commissioner George Dale to take emergency measures to prevent State Farm from taking action.

He called State Farm's action a "bullying tactic" to intimidate the state into writing wind pool legislation. Mr. Hood said this is a tactic the company has used successfully in other states to get its way.

Mr. Hood said the company's action only underscores the need for a national catastrophe plan and federal reform of the industry, which he plans to address to Congress.

A recent settlement agreement, he continued, was an effort to stabilize the market, but State Farm's action is a "shot over the legislative bow to force it to write wind pool legislation." He said the legislature should now look these "robber barons in the face" and not let the company take advantage of the situation.

"They have used this threat effectively and it is high time we set up legislation to stop this," he said.

For its part, a State Farm spokesman read a statement saying: "We feel this is a remarkable response to what was just purely a business decision, but it does underscore the legal and political challenge we face in Mississippi. State Farm is not trying to pick a fight. We are just trying to service our current customers and do not want to accept the additional risks new policies would pose in the current environment."

State Farm continued: "We didn't come to our decision this week lightly, and we thought we struck the right balance between serving the interest of our current customers and not taking on additional risks in a state intent on re-writing contracts after the fact. We hope that, over time, the political and legal environment in Mississippi will improve so that we can return to writing new business on the homeowners and commercial side, but today's action showed just how unpredictable and untenable the current environment in Mississippi can be."

Commenting for the state's insurance department, Lee Harrell, deputy commissioner, said the department has not seen Mr. Hood's proposal. He added that while it welcomes any plan to help stabilize the market, the department is not confident Florida's law is in Mississippi's best interest.

"We must proceed cautiously and not jeopardize an already fragile insurance market," he said, adding that the commissioner will meet with Mississippi Gov. Haley Barbour, a Republican, to see what action can be taken to protect policyholders.

In reaction to Mr. Hood's plan, Neil Alldredge, vice president of state and regulatory affairs for the National Association of Mutual Insurance Companies, based in Indianapolis, Ind., said, "Our initial reaction is spreading a bad idea that Florida has adopted will not solve what is happening in Mississippi."

He said having the state dictate market decisions to insurers will make it increasingly difficult to bring new insurers into the marketplace--which is the ultimate answer to the problem.

"They should be getting more companies into the states and not bullying the ones who are there," he said.

Mr. Alldredge said he also is concerned that overpoliticization of the issues by the attorney general is not in the best interest of the state's consumers. "Consumers will ultimately be the losers in this," he noted.