AIG 2009 Annual Report Download - page 311

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
has recently commenced in one case pending in Kansas state Court. Plaintiffs in another case pending in Texas state
Court moved to reopen discovery, and a hearing on that motion was held on April 9, 2008. The Court subsequently
issued an order deferring a ruling on the motion until a hearing was held on defendants’ special exceptions, which was
held on April 3, 2009. At the April 3, 2009 hearing, the Court sustained defendants’ special exceptions and granted
plaintiff leave to replead. The Court also continued the discovery stay. On July 13, 2009, plaintiff filed an amended
petition. A hearing on plaintiff’s amended petition was held on November 11, 2009. AIG has settled several of the
various federal and state actions alleging claims similar to those in the Multi-district Litigation, including state Court
actions pending in Florida and in New Jersey in which discovery had been allowed to proceed.
Ohio Attorney General Action — Ohio Court of Common Pleas. On August 24, 2007, the Ohio Attorney General
filed a complaint in the Ohio Court of Common Pleas against AIG and a number of its subsidiaries, as well as several
other broker and insurer defendants, asserting violation of Ohio’s antitrust laws. The complaint, which is similar to the
Commercial Complaint, alleges that AIG and the other broker and insurer defendants conspired to allocate
customers, divide markets, and restrain competition in commercial lines of casualty insurance sold through the broker
defendant. The complaint seeks treble damages on behalf of Ohio public purchasers of commercial casualty
insurance, disgorgement on behalf of both public and private purchasers of commercial casualty insurance, and a
$500-per-day penalty for each day of conspiratorial conduct. AIG, along with other co-defendants, moved to dismiss
the complaint on November 16, 2007. On June 30, 2008, the Court denied defendants’ motion to dismiss. On
August 18, 2008, defendants filed their answers to the complaint. Discovery is ongoing. During a February 23, 2010
conference, the parties disclosed to the Court that AIG and the Ohio Attorney General have agreed in principle to
settle the Ohio Attorney General’s claims. Under the agreement in principle, AIG would make a payment and would
also continue to maintain certain producer compensation disclosure and ongoing compliance initiatives. AIG’s
payment obligation would not be material to AIG’s financial condition, results of operations or cash flows.
Actions Relating to Workers’ Compensation Premium Reporting — Northern District of Illinois. On May 24, 2007, the
National Workers’ Compensation Reinsurance Pool (the NWCRP), on behalf of its participant members, filed a
lawsuit in the United States District Court for the Northern District of Illinois against AIG with respect to the
underpayment by AIG of its residual market assessments for workers’ compensation insurance. The complaint alleged
claims for violations of RICO, breach of contract, fraud and related state law claims arising out of AIG’s alleged
underpayment of these assessments between 1970 and the present and sought damages purportedly in excess of
$1 billion. On August 6, 2007, the Court denied AIG’s motion seeking to dismiss or stay the complaint or, in the
alternative, to transfer to the Southern District of New York. On December 26, 2007, the Court denied AIG’s motion
to dismiss the complaint. On March 17, 2008, AIG filed an amended answer, counterclaims and third-party claims
against the National Council on Compensation Insurance (in its capacity as attorney-in-fact for the NWCRP), the
NWCRP, its board members, and certain of the other insurance companies that are members of the NWCRP alleging
violations of RICO, as well as claims for conspiracy, fraud, and other state law claims. The counterclaim-defendants
and third-party defendants filed motions to dismiss on June 9, 2008. On January 26, 2009, AIG filed a motion to
dismiss all claims in the complaint for lack of subject-matter jurisdiction. On February 23, 2009, the Court issued a
decision and order sustaining AIG’s counterclaims and sustaining, in part, AIG’s third-party claims. The Court also
dismissed certain of AIG’s third-party claims without prejudice. On April 13, 2009, third-party defendant Liberty
Mutual filed third-party counterclaims against AIG, certain of its subsidiaries, and former AIG executives. On
August 23, 2009, the Court granted AIG’s motion to dismiss the complaint for lack of standing. On September 25,
2009, AIG filed its First Amended Complaint, reasserting its RICO claims against certain insurance companies that
both underreported their workers’ compensation premium and served on the NWCRP Board, and repleading its fraud
and other state law claims. Defendants filed a motion to dismiss the First Amended Complaint on October 30, 2009.
On October 8, 2009, Liberty Mutual filed an amended counterclaim against AIG. The amended counterclaim is
substantially similar to the complaint initially filed by the NWCRP, but also seeks damages related to non-NWCRP
states, guaranty funds, and special assessments, in addition to asserting claims for other violations of state law. The
amended counterclaim also removes as defendants the former AIG executives. On October 30, 2009, AIG filed a
motion to dismiss the Liberty amended counterclaim. Discovery is proceeding and fact discovery is currently
scheduled to be completed by March 15, 2011.
303 AIG 2009 Form 10-K