If State Farm indeed is on the verge of settling a ton ofwater-related Hurricane Katrina claims with Mississippi governmentofficials (click here for the story), I would expect others to fall in linefairly quickly rather than face a hostile state jury over thecoverage dispute. Yet despite all the controversy, MississippiInsurance Commissioner George Dale–stuck between a rock and a hardplace in his storm-ravaged state–was anything but hostile towardsinsurers at an industry meeting yesterday in New York.

Indeed, Mr. Dale was, for my money, the star of the show at theindustry's annual family reunion–the P-C Joint Industry Forum–whererepresentatives from all the major carriers and associations gatherto talk about the challenges ahead. No issue loomed largeryesterday than the Mississippi suit by state Attorney General JimHood over insurer contentions that Hurricane Katrina-related waterdamage in the state was caused by uncovered flood issues, ratherthan wind-driven conditions.

Mr. Dale was a breath of free air at the otherwise stuffy event,where most of the panelists watched their words carefully and triedto be as uncontroversial as possible. Mr. Dale, on the other hand,was a straight shooter, with self-deprecating humor and an easySouthern style muting the real trouble his state finds itself ingoing forward, rather than looking back.

While denying any settlement with insurers was imminent, callingsuch reports “jumping the gun,” Mr. Dale had some fascinatingthings to say about the issue.

“My concern is that policyholders don't get stuck with a couponwhile the lawyers walk off with all the money,” he said.

He also lamented the fact that “while I want claims paid if thecoverage warrants it, I also want a market afterwards,” noting that“the plaintiffs' bar doesn't have to carry thatresponsibility.”

“This is not my first rodeo. I have been through this kind ofsituation before,” he said. “Everyone wants to live near the water,but nobody wants to pay the price to live there [in terms ofrisk-based insurance premiums].”

He confessed that “the biggest political mistake I made was whenI faced the media after the storm and said some claims won't becovered because insurers don't cover flood. I was hammered like Ihad spoken out against motherhood; slammed for taking the side ofthe industry, as if there is a 'side' to the facts.”

He observed that “the public wants a demagogue–someone who willtell them what they want to hear, not what the facts are. Theindustry took a terrible black eye in our state.”

He dismissed recent attacks on the industry's profitability asuninformed and unfair. “People complain about all the money theindustry is making, but I try to explain that while they are doingwell collectively, every line in each state has to stand on itsown. The fact is the industry paid out more in Katrina claims thanthey took in from our state over a five-year period.”

The political temptation to pile on the industry was great, butwould have been short-sighted and self-defeating, he admitted.

“I would have loved to be up on the podium on TV swearing at theindustry and showing off for the voters, but if I did that, how canI then go to carriers with my hat in my hand and ask them for amarket?” he said.

He implored industry officials assembled at the meeting to workwith his state to restore Mississippi's property insurance market.“What can regulators do to get carriers to take another look at ourexposures?” he asked, acknowledging that better building codes andgreater rate flexibility would be a start, but a tough sellnevertheless.

“A lot of people don't want to bite the bullet and do what hasto be done to get carriers back,” he sighed, conceding suchresistance will make his job of securing affordable markets for hisfellow Mississippians very difficult indeed.

If we had more commissioners with the insights and candor of Mr.Dale, things would go a lot smoother not only for the industry, butfor policyholders as well.

Perhaps there is some hope for reason and sanity in states withelected commissioners. After all, Mr. Dale noted, “I have beenelected [commissioner] eight times, and only once with less than 70percent of the vote.”

I wonder if that will change the next time around, however,given Mr. Dale's unpopular “support” for the industry during andafter the Katrina crisis–prime fodder for a “demagague” of anopponent, indeed.