State Says AIG Meddling in Takeover
Elevating its highly public dispute with the nation’s largest insurance company, the state Department of Insurance on Friday accused American International Group of making “false statements” and attempting to scuttle the takeover of Golden Eagle Insurance by Liberty Mutual.
On May 30, AIG was the losing bidder in a court-supervised auction of San Diego-based Golden Eagle--one of the state’s largest workers’ compensation insurers--to Liberty Mutual of Boston, which agreed to pay more than $420 million. The deal made Liberty Mutual the state’s second-largest workers’ comp underwriter.
AIG has since disputed San Francisco Superior Court Judge William Cahill’s decision, filing an appeal and running a number of advertisements touting its fitness as a workers’ comp insurer. Calls to AIG’s Los Angeles regional office late Friday went unanswered.
In a statement, the Department of Insurance said New York-based AIG, with $140 billion in assets, was trying to “disrupt the economic relations between the rehabilitated Golden Eagle and its new owner, Liberty Mutual.” The department also said it would hold a hearing on AIG’s “business practices,” but set no date.
The agency said Friday that the hearing would center on AIG’s “effort to create anxiety and start problems for the new Golden Eagle company.” In a telephone interview, the department’s enforcement chief, Mark Lowder, declined to offer specific examples of AIG transgressions.
Golden Eagle was seized by the Department of Insurance on Jan. 31, with Insurance Commissioner Chuck Quackenbush accusing owner John Mabee of making improper self-loans and falsifying documents. Mabee insisted the takeover was politically motivated and vowed to win back his company, but he settled all claims before the May 30 auction.
