Dec. 27 (Bloomberg) -- A $450 million settlement by American International Group Inc. to resolve claims that it cheated a workers’ compensation program was granted final approval by a federal judge.
U.S. District Judge Robert Gettleman in Chicago said the settlement is “fair, reasonable and adequate,” according to an order filed Dec. 21. He said the ruling won’t take effect until he issues a written opinion.
AIG was accused of underreporting the premiums it collected on workers’ compensation policies to reduce payments to an industry fund.
The settlement reached in January is less than a third of what Liberty Mutual Holding Co. requested. Preliminary approval was granted in July. Safeco Insurance Co. of America and other insurers sued in April 2009. Liberty Mutual, an intervening plaintiff, filed objections to approval of the settlement in October.
“Liberty Mutual is disappointed -- but not surprised -- with the judge’s order approving the settlement,” John Cusolito, a spokesman for the Boston-based insurer, said in an e-mail. “Liberty Mutual will review the judge’s final written order, and anticipates an appeal.”
AIG fell 37 cents, or 1.5 percent, to $23.83 at 4:15 p.m. in New York Stock Exchange composite trading. The stock has fallen 51 percent this year.
The case is Safeco Insurance Co. v. American International Group, 09-cv-02026, U.S. District Court, Northern District of Illinois (Chicago).
--Editors: Mary Romano, Peter Blumberg
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