Allstate, Scruggs settle

GULFPORT, Miss. - The Scruggs Katrina Group, a team of lawyers led by prominent plaintiffs attorney Richard Scruggs, has reached an agreement with Allstate Insurance Co. to create a procedure for settling disputed claims stemming from Hurricane Katrina.

Scruggs, who may be facing criminal contempt charges over his handling of documents from a company that handled claims on behalf of State Farm, made the announcement Monday on behalf of the Mississippi policyholders he represents.

Terms of the agreement were not disclosed. Scruggs Katrina Group says the terms are subject to individual client consent and will shortly be introduced to the company's customers. Allstate is one of several insurance companies under fire for its handling of post-Katrina claims. Policyholders allege the companies misrepresented the amount of water damage, covered by the National Flood Insurance Program, on structures.

The group also said last month that it represents about 280 policyholders who sued the company, according to a report by The Associated Press.

Scruggs' group benefited earlier this year when Mississippi Attorney General Jim Hood reached a settlement with State Farm that ended 640 cases filed by it, earning it $26 million.

According to the AP report, SKG still has about 280 cases against State Farm, more than 40 against United Services Automobile Association and more than 60 against Mississippi Farm Bureau Insurance Co.