| News News Archive  Email A Friend
April 22, 2024
Sullivan on Comp Launches ChatSOC. It's an Innovative Chatbot for California Workers' Compensation Professionals Integrated with an Authoritative Legal Treatise April 19, 2024
Workers Compensation Bill 2024: One percent of employee’s salary to contribute to workers’ compensation fund in Kenya. April 15, 2024
Colorado Worker Shows Head Injury Happened as a Consequence of a Knock on the Head at Work April 4, 2024
Callfornia Division of Workers' Compensation Pharmacy and Therapeutics Committee Meeting Scheduled for April 17, 2024
| | Liberty Mutual Opposes Settlement Proposal From AIG Over Underreporting Of Work Comp Premiums. But Judge Gives Approval.
By Lonce LaMon - August 4, 2011
The battle between AIG and several rivals in the work comp insurance market, including the most aggressive member of the team, Liberty Mutual, in the class action against AIG was moving towards resolution the last week in July when a judge indicated he would grant preliminary approval to a 450 million dollar settlement offer from AIG.
But on Monday in Chicago, U.S. District Court Judge Robert Gettleman did grant preliminary approval to that settlement offer, but Liberty Mutual opposed the proposed settlement as being inadequate.
“We’re evaluating our options and in all likelihood will be filing an appeal,” a representative from Liberty said following the judge’s ruling.
The allegations against New York based AIG began to be heard in 2006 when the then New York Attorney General, Eliot Spitzer, announced that AIG underreported workers’ comp premiums over several decades to avoid paying its fair share of residual market assessments. In May of 2007, the National Workers’ Compensation Reinsurance Pool, operated by NCCI Holdings, sued AIG alleging it violated the Racketeer Influenced and Corrupt Organizations Act. The pool argued it was excluded from the 2006 settlement negotiations and alleged that its members paid states more than their appropriate share of residual market assessments because AIG was assigned too small a share of high-risk workers’ comp policies.
AIG countered with a lawsuit of its own, and alleged among other things that its competitors also underreported workers’ compensation premiums.
Judge Gettleman dismissed the National Workers’ Compensation Reinsurance Pool (NWCRP) as the lead Plaintiff, but the litigation continued when Liberty Mutual’s Safeco Insurance and Ohio Casualty Insurance sued in 2009 and asserted to replace the National Workers’ Compensation Reinsurance Pool and have the suit certified as a class action. Monday Judge Gettleman certified the settlement class as consisting of all members of the NWCRP.
But Liberty Mutual clearly does not want to give up its dispute over AIG’s underreporting. In his decision, Gettleman noted previous court opinions “describe AIG’s alleged decades-long, multibillion-dollar fraudulent underreporting of workers’ compensation premiums for the purpose of reducing its share of the residual workers’ compensation market – and consequently increasing the residual market costs of the other members of the National Workers’ Compensation Reimbursement Pool.”
“Given the complex nature of the claims, legal fees are astronomical, and recovery is far from certain. No more detail is required for the court to find at this stage that, compared to the strength of the case, the settlement figure is fair, adequate and reasonable,” Gettleman said.
He noted the NWCRP has spent an average of 2 million dollars per month over the past year on this case.
The written decision follows Gettleman speaking from the bench in the U.S. District Court for the Northern District of Illinois on July 25th to give preliminary approval of the settlement and certification of the class (BestWire, July 25, 2011).
This action was supported by AIG and seven insurers: Ace Ina Holdings Inc., Auto-Owners Insurance Co., Companion Property & Casualty Insurance Co., Firstcomp Insurance, Hartford Financial Services Group, Technology Insurance Co., and Travelers Indemnity Co.
Only Liberty Mutual Group’s subsidiaries, Ohio Casualty and Safeco have opposed the settlement.
|
__May11th2017.gif)
.gif)