A federal district court judge affirmed an earlier decision thata suit brought by Mississippi's attorney general against insurersfor flood losses stemming from Hurricane Katrina should be heard instate court, where carriers perceive they will be at adisadvantage.

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

The suit, brought by Mississippi Attorney General Jim Hoodagainst five insurers, seeks to force the carriers to cover lossesfrom Hurricane Katrina. The attorney general argues that despitethe flood exclusion in the policies, insurers should pay claimsbecause the water was wind-driven, which is a coveredoccurrence.

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