AIG Wins Battle against NCCI in Billion Dollar Suit That Could Hold Implications for North Carolina Workers' Compensation Matters

September 7, 2009, by Michael A. DeMayo

On August 21, Reuter’s news agency reported that the American Insurance Group (AIG) won a significant battle against the National Council on Compensation Insurance (NCCI) regarding allegations that the insurer had defrauded workers’ compensation pools to the tune of over a billion dollars. The high stakes imbroglio between AIG and NCCI should ultimately have trickle down impacts on North Carolina workers’ compensation policy and process.

US District Court Judge Robert Gettleman ruled that the NCCI did not have standing to file the federal lawsuit against AIG. However, the judge did acknowledge that “there is no dispute that … the participating companies have standing to bring claim separately against AIG.”

The lawsuit alleged that AIG had deliberately understated its workers’ comp premiums so that it could keep costs down and that, as a result of doing this, the company could garner an unfair competitive advantage. AIG has been raked over the coals many times over the past months due to its widely criticized handling of $180 billion in federal bailout money. While Judge Gettleman’s ruling does not necessarily clear AIG of fallout from this workers’ compensation case – in North Carolina or elsewhere – it has bought AIG a bit of a temporary reprieve. And the ruling sent AIG’s stock price up by over 6%.

Reuters, AIG wins dismissal of $1 billion workers comp lawsuit, August 21, 2009

Bloomberg, AIG Wins Dismissal of Lawsuit Seeking $1 Billion, August 21, 2009

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