Bloomberg News

AIG May Pay at Least $45 Million in Transatlantic Dispute

February 01, 2012

(Updates with AIG spokesman in the fourth paragraph.)

Feb. 1 (Bloomberg) -- American International Group Inc., the bailed-out U.S. insurer, will pay reinsurer Transatlantic Holdings Inc. at least $45 million to settle a dispute tied to losses in securities lending.

AIG may pay as much as $125 million, New York-based Transatlantic said today in a statement distributed by Business Wire. The two companies are still in talks and will allow a mediator to set the payment if an agreement isn’t reached.

The range is lower than the $350 million that Transatlantic originally demanded in 2010. Transatlantic, previously controlled by New York-based AIG, raised its claim to $500 million last year. AIG, which received a government rescue valued at $182.3 billion, managed a securities lending program that produced losses for Transatlantic, the reinsurer has said.

“We continue to close the books on crisis-era litigation on fair and reasonable terms for our shareholders, including U.S. taxpayers,” Mark Herr, a spokesman for AIG, said in an e- mailed statement. “Resolving these cases allows AIG to continue to focus on becoming the world’s most valuable insurance company and allowing the taxpayers to recoup their investment in AIG at a profit.”

For Relates News and Information: AIG’s results by sector: {AIG US <Equity> PGEO <GO>} AIG litigation summary: {AIG US <Equity> LITI <GO>} Transatlantic relative value: {TRH US <Equity> RVH <GO>} Bailout menu: {RESQ <GO>} Biggest insurance stories: {TINS <GO>}

--Editors: Dan Reichl, Dan Kraut

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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