Insurers off the hook in AIG case
A US court has dismissed a lawsuit that alleged several insurance companies helped AIG defraud investors.
Reinsurer Gen Re, broker Marsh & McLennan and insurer Ace were implicated in charges that alleged they helped AIG overstate its finances and engaged in price-fixing and bid-rigging.
Delaware Chancery Court Judge Leo Strine last week dismissed the claims, concluding that AIG’s role in the allegedly fraudulent deals prevented its investors from recovering compensation from the other insurance companies.
Former New York Attorney-General Eliot Spitzer uncovered the alleged bid-rigging in 2004. AIG and Gen Re executives have since been sentenced to jail terms over other transactions in 2000 and 2001 that were designed to help AIG boost its loss reserves.
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