State Farm settles with Mississippi officials

NEW YORK, Jan 23 (Reuters) - State Farm Mutual Automobile Insurance Co. and Mississippi Attorney General Jim Hood reached a settlement to resolve about one thousand claims arising from Hurricane Katrina, both sides said on Tuesday.

The settlement offers policyholders in three Mississippi counties on the Gulf Coast the opportunity for binding arbitration after having their claims reviewed again by State Farm.

State Farm did not say what the court-supervised settlement would cost. Robert Hartwig, head of the Insurance Information Institute, said the settlement will cost State Farm "hundreds of millions of dollars," but eliminates expensive litigation and the threat of a criminal probe by Hood.