Judge Rules Against AIG Unit in Lawsuit Over $5.9 Million in Online Losses
February 4, 2020 by A.M. Best
NEW YORK – A federal judge has sided against AIG Specialty Insurance Co., a unit of American International Group Inc., ruling the carrier has to cover $5.9 million in losses incurred by a policyholder attacked by suspected Chinese fraudsters.
Judge Jed S. Rakoff, of the U.S. District Court for the Southern District of New York, issued a summary judgment in favor of SS&C Technologies Holdings Inc. in a dispute with the AIG unit. The judge agreed with the tech company the AIG special professional liability insurance policy covered losses it suffered when employees mistakenly transferred money to the fraudsters via fake transfer requests.
In March 2016, hackers used stolen credentials to send forged fund transfer requests to SS&C Technologies, draining $5.9 million from a bank account it administered for Tillage Commodities Fund L.P. over a three-week period, court documents said. After the loss was discovered, Tillage sued SS&C, seeking to recover the money.
Although Rakoff ruled the losses suffered by SS&C Technologies were covered, he also found AIG’s conduct in denying SS&C’s claims did not constitute bad faith.