Mississippi Asks for Suspension of Suit against Katrina Whistleblower Sisters

By Katie Hauser

Published on November 16, 2006

The officials say the lawsuit interferes with their criminal investigation into State Farm's actions.

The sisters resigned from their jobs with State Farm subsidiary E.A. Renfroe & Co. after they accused State Farm of attempting to tamper with records to avoid paying for damage to policyholders' homes in the wake of Hurricane Katrina.

Renfroe sued the sisters on the grounds that they violated confidentiality agreements by releasing company records to their new employer, attorney Richard "Dickie" Scruggs. Scruggs has filed suit against State Farm and other insurance companies on behalf of policyholders.

Under State Farm's policy, policyholders are eligible to collect on property damage that results from wind but not from water. The Rigsby sisters allege that a State Farm manager attempted to tamper with evidence to make it appear that most home damage was caused by water, so that the company could deny the claims of hundreds of homeowners.

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