American International Group has said that it believes a lawsuit by two policyholders seeking recoveries of moneys they claim to have lost to convicted Ponzi-scheme operator Bernard Madoff is without merit. The insurer said it will cover, under some product lines, losses that are a result of a fraud, but only if the policyholder suffered an actual net loss and has done so for claims related to the Madoff scandal, according to The Wall Street Journal. “In fact, our Private Client Group has paid hundreds of eligible policyholders who suffered Madoff-related losses pursuant to this coverage,” an AIG spokeswoman said. “However, in this case, we declined the plaintiffs’ claim because they received more money from Madoff through withdrawals from their account than they had deposited.” Robert and Harlene Horowitz have sued AIG in U.S. District Court in Manhattan, claiming AIG has refused to pay for amounts beyond any initial investments with Madoff and has denied claims related to “any alleged gains, growth or appreciation.” The Los Angeles couple had a homeowners insurance policy with AIG Fraud SafeGuard coverage. The lawsuit is seeking class-action status on behalf of all AIG policyholders who lost money in the Madoff scam and held AIG homeowner’s policies with the fraud protection.
AIG Says Madoff Suit Without Merit
AIG accuses two policyholders of falsely claiming to have lost funds to Bernard Madoff’s Ponzi scheme.
August 21, 2009