AIG 2010 Annual Report Download - page 340

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On March 17, 2008, AIG filed an amended answer, counterclaims and third-party claims against NCCI (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
NCCI 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 NCCI, 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.
On April 1, 2009, Safeco Insurance Company of America and Ohio Casualty Insurance Company filed a
complaint in the Northern District of Illinois, on behalf of a purported class of all NWCRP participant members,
against AIG and certain of its subsidiaries with respect to the underpayment by AIG of its residual market
assessments for workers’ compensation insurance. The complaint was styled as an ‘‘alternative complaint,’’ should
the Court grant AIG’s motion to dismiss the NCCI lawsuit for lack of subject-matter jurisdiction. The allegations
in the class action complaint are substantially similar to those filed by the NWCRP, but the complaint names
former AIG executives as defendants and asserts a RICO claim against those executives. On August 28, 2009, the
class action plaintiffs filed an amended complaint, removing the AIG executives as defendants. On October 30,
2009, AIG filed a motion to dismiss the amended complaint. On July 16, 2010, Safeco Insurance Company and
Ohio Casualty Insurance Company filed their motion for class certification, which AIG opposed on October 8,
2010.
On July 1, 2010, the Court ruled on the pending motions to dismiss that were directed at all parties’ claims.
With respect to the underreporting NWCRP companies’ and board members’ motion to dismiss AIG’s first
amended complaint, the Court denied the motion to dismiss all counts except AIG’s claim for unjust enrichment,
which it found to be precluded by the surviving claims for breach of contract. With respect to NCCI and the
NWCRP’s motion to dismiss AIG’s first amended complaint, the Court denied the NCCI and the NWCRP’s
motions to dismiss AIG’s claims for an equitable accounting and an action on an open, mutual, and current
account. With respect to AIG’s motions to dismiss Liberty’s counterclaims and the class action complaint, the
Court denied both motions, except that it dismissed the class claim for promissory estoppel. On July 30, 2010 the
NWCRP filed a motion for reconsideration of the Court’s ruling denying its motion to dismiss AIG’s claims for an
equitable accounting and an action on an open, mutual, and current account. The Court denied the NWCRP’s
motion for reconsideration on September 16, 2010. The plaintiffs filed a motion for class certification on July 16,
2010. AIG opposed the motion.
On January 5, 2011, AIG executed a term sheet with a group of intervening plaintiffs, made up of seven
participating members of the NWCRP that filed a motion to intervene in the class action for the purpose of
settling the claims at issue on behalf of a settlement class. The proposed class-action settlement would require
AIG to pay $450 million to satisfy all liabilities to the class members arising out of the workers’ compensation
premium reporting issues, a portion of which would be funded out of the remaining amount held in the Workers’
324 AIG 2010 Form 10-K