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Member, Beacon International Group, Ltd.
CHICAGO—American International Group Inc. can proceed with certain allegations in a lawsuit alleging several of its competitors underreported workers compensation premiums, a federal judge in Chicago ruled Thursday.
The judge said New York-based AIG has a strong enough case to proceed with allegations that its competitors, as members of a reinsurance pool, violated the Racketeer Influenced and Corrupt Organizations Act, among other assertions, AIG said.
The judge is hearing two related lawsuits that grew from a May 2007 complaint against AIG. That suit originally was filed by the National Workers Compensation Reinsurance Pool made up of AIG competitors and operated by Boca Raton, Fla.-based NCCI Holdings Inc.
That suit alleged RICO violations by AIG.
The pool argued it was excluded from a 2006 AIG settlement with New York in which AIG agreed to pay states more than $343 million to settle allegations that it underreported workers comp premiums over several decades to avoid paying its full share of residual market assessments.
But last year, the federal judge hearing the case dismissed the pool as a plaintiff, and AIG became a plaintiff in the suit, alleging that several competitors such as Liberty Mutual Group Inc., ACE INA Holdings Inc. and Hartford Financial Services Group Inc. also underpaid residual market assessments to states.
After the judge dismissed the pool as a plaintiff, Liberty Mutual business units continued to pursue litigation.
On Thursday, the judge hearing AIG’s and Liberty Mutual’s lawsuits said AIG could move ahead with RICO allegations against its competitors as pool members, according to AIG’s attorneys.
“AIG’s competitors have tried to evade accountability for their own underreporting of workers compensation premium, so we are pleased that the court has upheld in full AIG’s RICO and fraud claims against those companies,” said Michael Carlinsky, an attorney at Quinn Emanuel Urquhart Oliver & Hedges L.L.P. representing AIG.
CHICAGO--American International Group Inc. can proceed with its retaliatory lawsuit alleging fraud against NCCI Holdings Inc. pool members, a federal judge ruled.