AIG sells of reinsurer then faces arbitration demands
AIG’s former reinsurance unit Transatlantic Holdings filed a demand for arbitration against AIG over losses of more than $350m from securities lending, Bloomberg reports.
The demand, follows Transatlantic earlier this month starting arbitration proceedings against AIG’s mortgage guarantor seeking to nullify protection the reinsurer sold the unit tied to subprime mortgages.
AIG sold its majority stake in the reinsurer in the past year in two public offerings, raising more than $1.4bn as part of a plan to repay bailout obligations.
The reinsurance dispute is tied to “losses in excess of $350m suffered by Transatlantic and its subsidiaries arising from its participation in a securities lending program administered and managed by AIG during the period that Transatlantic was controlled by AIG,” according to the filing.