A mediation program developed by Mississippi's insurance department to help settle damage claims for residential property damaged in Hurricane Katrina is being dismissed by high-powered plaintiff lawyer Richard Scruggs as a "band-aid" rigged against policyholders who were shortchanged by carriers citing a flood exclusion to deny coverage.

"This is non-binding–just another avenue to give insureds help in settling their claims," Mississippi Insurance Commissioner George Dale said in disclosing the new program.

However, Mr. Scruggs–who previously has taken on cigarette and asbestos manufacturers before suing insurers this year–was critical because while the program "sounds warm and fuzzy," the results reached in mediation conferences are not binding on insurance companies, and the mediators will be paid by the insurers.

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