Louisiana Attorney General Charles C. Foti Jr. has filed a lawsuit against property-casualty insurers in the state alleging they collaborated in a price-fixing scheme for repairs in the wake of Hurricane Katrina.

The suit filed Wednesday in New Orleans Civil District Court names six major insurers in the state as well as the companies that provided claims-processing software or offered advice or data collection services.

“This alleged scheme gave insurers an unjust advantage over policyholders, which they used before, during and after one of the greatest disasters this country has ever suffered, by reaping huge profits from the misfortunes of persons whom they pledged to protect from the risk of loss,” said Mr. Foti in a statement. “I believe this unjust advantage resulted in the unjust enrichment of themselves to the detriment of the state, policyholders and commerce in Louisiana.”

Among the insurers named were the state's two largest homeowners' insurers, State Farm Fire and Casualty Co. and Allstate Insurance Co., as well as Farmers Insurance Exchange, Standard Fire Insurance Co., USAA Casualty Insurance Co. and Lafayette Insurance Co., a division of United Fire Group.

The suit alleges the companies violated the state's Monopolies Act “by rigging the value of policyholder claims and raiding the premiums held in trust by their companies.”

Furthermore, the suit contends that companies “coerced their policyholders into settling their claims of damages for less than their value by editing engineering reports, by delaying payment and by forcing policyholders to litigate claims to receive full value.”

Additionally, the suit alleges that by using the same consulting firm, the insurers were able to create a plan for reducing claims and that it was able to make those tactics standard practice through the use of claims processing software and the data filed with the Jersey City, N.J.-based Insurance Services Office, which is also named in the suit. Also named were Xactware Inc., Marshall & Swift/Boeckh LLC and the McKinsey Co.

Speaking to the Associated Press, Insurance Information Institute President Robert P. Hartwig said it was “ludicrous” that insurers would be involved in such a scheme.

“Insurers operate independently from one another,” he said. “They do not act in concert with each other under any circumstances.”

Fraser Engerman, a spokesman with Bloomington, Ill.-based State Farm, said the company “believes the attorney general's law suit is misdirected” and that competition remains an important component of the company's business model.

He dismissed any notion that the company does not work in its customer's best interests. “Customer service has always been at the heart of State Farm,” he added, noting the company has the fewest number of complaints per 1,000 of any insurer in the state.

An Allstate spokesman Mike Siemienas said, “This complaint is a hodge-podge of recycled and unfounded allegations. It appears to be the latest in a string of failed attempts to get traction for some previously discredited assertions. Allstate will vigorously fight this complaint.”

A federal lawsuit claiming insurers conspired to have their claims moved into the National Flood Insurance Program through the work of adjusters was recently thrown out in Louisiana. However, a federal grand jury in Mississippi is examining the issue.

A preliminary report from the Department of Homeland Security examining this same issue found no wrongdoing.

(This story was updated at 4:37 p.m.)