AIG Must Pay $87M In Coverage Dispute, Panel Says

Law360, New York (May 3, 2011, 10:42 PM EDT) -- American International Group Inc. must pay $86.7 million to a subsidiary of Belgium's KBC Group NV, an arbitration panel has said, finding that AIG broke a deal to provide KBC with coverage related to purchases of so-called life-settlements.

An American Arbitration Association panel ruled 2-1 in mid-April that AIG reneged on an insurance contract the Belgian bank took out to cover risks of investing in the life-settlement market, in which investors trade life-insurance policies.

The win is a major one for Lonsdale LLC, the U.S.-based KBC...
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