The UK subsidiary of Bermuda-based mutual insurer Associated Electric & Gas Insurance Services (AEGIS) has entered the reinsurance treaty business with the arrival if underwriter Chris White from Odyssey Re. AEGIS London Syndicate 1225 has a capacity of £310m ($479m) for 2010. Aegis London active underwriter David Croom-Johnson said that "a strong theme of Aegis London over recent years has been the addition of new, complementary lines of business to create a balanced and diversified portfolio". He said that a move into reinsurance treaty business was a continuation of this strategy. Mr White will report to Aegis London deputy active underwriter and head of specialty lines, John Chambers.

US District Judge Deborah Batts on Monday granted class-action status to a lawsuit that a group of AIG shareholders filed against the now US government-controlled insurer in the wake of its 2005 restatement of more than four years of earnings. The class certification applies to purchasers of AIG shares from October 28, 1999 to April 1, 2005. Plaintiffs in the lawsuit are led by the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio and the Ohio Police & Fire Pension Fund. While granting the class certification to AIG shareholders, Judge Batts denied such certification for bondholders and so-called "in-and-out" traders. The year after the restatement, AIG agreed to pay $1.6bn to settle an accounting-fraud investigation by the US Securities and Exchange Commission and the New York attorney general's office. As part of its deal with the SEC, AIG also paid $800m into a restitution fund for AIG shareholders. "Although we continue to believe that no class (action) should be certified, we are pleased that that the court refused to certify any bondholder claims and significantly limited the equityholder claims", AIG said, noting that "any additional payments from AIG would not only come at the expense of taxpayers, but would greatly benefit the plaintiffs' lawyers who would undoubtedly see millions in fees from any judgement or settlement". At the time of the restatement, AIG had said, without naming names, that former executives had been able to "circumvent internal controls over financial reporting". Last August, former AIG boss Maurice "Hank" Greenberg to pay $15m to settle SEC civil allegations in connection with the accounting scandal that led to his ejection as AIG boss, just months before the restatement.

The conflict between the existing management of Omega Insurance Holdings and its potential new leaders intensified yesterday as chairman-in-waiting John Coldman expressed himself amused and bemused in equal measure at an Omega statement appearing to blame him for the negative outlook placed on Omega by rating agency AM Best. The agency put Omega's ratings under review with negative implications "due to uncertainty regarding Omega's board composition, operational management and future strategy". Omega responded, stating that AM Best had requested a meeting with Mr Coldman "in order to seek clarification on the background to the proposed changes to the Board and Mr Coldman's plans for the management team and future strategy". Omega said that Mr Coldman had declined this request. CEO Richard Tolliday claimed that AM Best's rating outlook decision had nothing to do with Omega's current trading or financial strength. Mr Coldman was said by Insurance Day to have been surprised by Omega's decision to name him. An aide told the paper that "if you don't work for a company and not a member of its board, how can you be expected to have a meeting with a rating agency to discuss that company's plans? It makes no sense". AM Best confirmed that it would have "no requirement" to talk to anyone not associated with the firm in question. The actions of the beleaguered Omega board appear to be wearying the investors led by Invesco, with a majority of shareholders apparently in favour of a new regime. Last week Omega claimed that ex-chief underwriter John Robinson, who departed suddenly in October last year (IIN24, October 29 2009) and who remains a significant stakeholder in Omega, would not be welcomed back by Lloyd's, which had expressed concerns at the slow pace in which Omega was moving towards new regulatory and risk management requirements. Lloyd's would not comment publicly on the matter, but insiders are understood to have said that Mr Robinson was never stated by Lloyd's to be a barrier to Omega's progress, and that the decision to remove Mr Robinson was Omega's alone. A special general meeting is being held on March 12 to decide the future make-up of the company's senior echelons.

US-based Liberty Mutual has asked a Federal judge to award it $12.1m of a settlement paid by Berkshire Hathaway-owned reinsurer General Re to the Securities & Exchange Commission (SEC). On January 20 General Re agreed to pay a total of $92.2m to AIG shareholders, the US Postal Inspection Services and the SEC. Liberty Mutual is asking for the money that General Re paid to the SEC. The fines related to General Re assisted Prudential Financial and AIG to massage their annual figures. Liberty Mutual said in a court document filed last Friday that it had been unaware when it bought some non-life units of Prudential Financial in 2003 that those units had been involved in what Liberty Mutual claimed was a fraudulent scheme. In the court filing, Liberty Mutual said that General Re had paid it $29.2m out of the $41.3m owed, but that the remainder had been deposited with the SEC. Liberty Mutual further asserted that the SEC had refused its request for the sum to be placed into escrow until it was decided in court or buy an arbitration panel who legally owned it. Liberty said in the filing that General Re could not be expected to pay the same money twice, and that therefore the settlement should be amended.