AIG Says Insureds Can't Sue It For Targeting Wrongdoers

Law360, New York (October 10, 2013, 5:35 PM EDT) -- Attorneys for American International Group Inc. and its reinsurer told a New York state judge on Thursday that the "made whole" doctrine bars a couple's class action, stemming from a faulty water cooler, that accuses the insurers of taking money from third-party wrongdoers before reimbursing policyholders' losses.

The lawsuit, brought by Brooklyn homeowners Nusyn and Chaya Erlich, accuses AIG insurer New Hampshire Insurance Co. and Everest Reinsurance Co. of shortchanging them and other policyholders by going after third-party tortfeasors in a process called “subrogation” without first...
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