AIG Sued For Tapping 3rd Party Before Making Insured Whole

Law360, New York (August 2, 2012, 8:00 PM EDT) -- A Brooklyn couple filed a putative class action against American International Group Inc. and subsidiary New Hampshire Insurance Co. in New York state court Wednesday, claiming the companies violated state insurance law by taking money from third-party wrongdoers before making their policyholders whole.

Wednesday’s lawsuit by homeowners Nusyn and Chaya Erlich alleges that the two insurers shorted customers by going after third-party tortfeasors in a process called “subrogation” without first fully compensating their own clients — sometimes making a profit on their customers’ misfortune in the...
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