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Spitzer goes after AIG
FRESH FROM probing the insurance broking community in the United States, New York Attorney-General Eliot Spitzer has filed a civil lawsuit against American International Group (AIG).The suit…
Lawyers Weekly
FRESH FROM probing the insurance broking community in the United States, New York Attorney-General Eliot Spitzer has filed a civil lawsuit against American International Group (AIG).
While the suit is aimed directly at three of the firm’s top executives, it attributes the misconduct at AIG directly to Greenberg. AIG has been cooperating with authorities and several implicated staff have been removed. The firm has admitted that several of the transactions were improper and has announced plans to restate its earnings as a result.
AIG’s rap sheet
The suit alleges that AIG and top management:
• Engaged in false transactions with a reinsurance company to create insurance reserves where none existed.
• Hid underwriting losses from an auto warranty unit by transferring losses to an offshore firm it secretly controlled.
• Covered up losses from a Brazilian subsidiary by linking them to a Taiwanese subsidiary.
• Created false underwriting income from the purchase of life insurance policies.
• Repeatedly deceived state regulators regarding AIG’s ties to offshore entities.
Stuart Fagg is the Editor of Risk Management magazine,Lawyers Weekly’s sister publication.
