Policyholders Claim AIG Not Covering Madoff Fraud

Law360, New York (August 20, 2009, 4:09 PM EDT) -- American International Group Inc. is facing a class action from policyholders who claim the humbled insurance giant wrongly has denied them coverage for millions of dollars in losses to notorious Ponzi schemer Bernard L. Madoff.

In a complaint filed Aug. 19 in the U.S. District Court for the Southern District of New York, the plaintiffs say AIG has engaged in a “calculated, ad hoc effort” to deny coverage to policyholders who bought AIG homeowners policies with Fraud SafeGuard Events coverage. They allege breach of contract, breach...
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