Pension Fund Asks for $1B AIG Payment

May 19, 2005 ( - A Louisiana teachers pension fund has asked a Delaware court to give American International Group (AIG) as much as $1 billion from a private insurance agency historically run by AIG executives.

A win by the pension fund in Delaware Chancery Court could complicate efforts to sell the insurance agencies of C.V. Starr & Co. to AIG, the Wall Street Journal reported. Both companies hope to resolve potential conflicts of interest because the closely held C.V. Starr has historically been run and owned by AIG executives, the newspaper said.

C.V. Starr and another closely held entity have drawn scrutiny from government authorities in recent months as they probe AIG’s accounting. The pension-fund complaint, amending a 2002 lawsuit, was filed earlier this week.

The pension fund, represented by attorneys Grant & Eisenhofer, charged that C.V. Starr’s role in delivering insurance business to AIG amounted to “self-dealing” and was designed to boost C.V. Starr’s profits and benefit the AIG executives who also owned C.V. Starr. Not only that, but the lawyers charged that AIG paid C.V. Starr above-market commissions even though key C.V. Starr experts also worked for AIG, the Journal reported.