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AIG tries to block workers comp competitors' class action

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CHICAGO—American International Group Inc. filed a court brief Friday asking a judge to deny competitors’ request for class action status in an ongoing legal battle involving alleged underreporting of workers compensation premiums.

U.S. District Court Judge Robert Gettleman has been presiding over the legal fight that began in 2007 when the National Workers Compensation Reinsurance Pool operated by Boca Raton, Fla.-based NCCI Holdings Inc. first sued New York-based AIG.

The pool argued it was excluded from a 2006 settlement with then-New York Attorney General Elliot Spitzer 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 to the states.

Since then, the Chicago federal judge dismissed the pool as plaintiff, but several AIG competitors continue to press the legal action while AIG also has sued competitors arguing that they also underreported workers compensation premiums.

In its Friday filing, among other arguments, AIG said class action status is designed for cases involving many plaintiffs, each seeking small recoveries. It is not meant for sophisticated insurance companies that are seeking $1 billion in total, and each has the means to bring an independent action, AIG argued.

AIG’s 55-page filing also stated that competitors such as ACE INA Holdings Inc., Liberty Mutual Group and Travelers Insurance Group also underreported workers comp premiums.

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