BILOXI, Mississippi (AP) — State Farm Insurance Co. will be the first of several major insurers to be investigated by Mississippi’s insurance commissioner over their handling of policyholders’ claims after Hurricane Katrina.Insurance Commissioner George Dale said yesterday that the probe will begin with State Farm because the Bloomington, Illinois-based company has written more policies on Mississippi’s Gulf Coast than any other insurer.

Dale said the insurance department’s reviews are designed to detect any “inappropriate practices,” as well as gauge whether companies broke any insurance laws and met their “contractual obligations” to policyholders following last year’s storm.

“Who knows what we’ll find?” Dale said. “I really don’t want to be presumptuous either way.”

While Dale’s office has the authority to revoke a company’s licence to conduct business in the state, impose fines or order an insurer to readjust a claim, one analyst said that, if history is any guide, significant sanctions were unlikely.

State Farm spokesman Phil Supple said the review, which started about three weeks ago, “was not unexpected” in the wake of a disaster as destructive as Katrina, which destroyed tens of thousands of homes. Dale’s office also conducted market conduct exams of insurance companies after Hurricane Georges hit the coast in 1998.

“We welcome the opportunity to work with (Dale’s office) and show him the job that we’re proud we have done,” Supple said, adding that State Farm has paid more than $1.2 billion in claims since the storm.

Hundreds of homeowners have filed lawsuits challenging State Farm and other insurers for refusing to cover billions of dollars in damage from Katrina’s rising water.