Nevada, AIG subsidiary reach agreement after insurance dispute

By Mark Iandolo | Oct 19, 2016

CARSON CITY, Nev. (Legal Newsline) — Nevada Attorney General Adam Paul Laxalt announced this week that his office has settled with the Insurance Company of the State of Pennsylvania (ICSOP), a subsidiary of AIG.

In 2013, Nevada dealt with a lawsuit from the city and county of San Francisco. The city alleged individuals discharged from the Rawson-Neal Psychiatric Hospital received transportation subsidies enabling them to travel to cities in California, including San Francisco. Nevada denied all allegations in the claim, but settled it after determining the costs of defending the lawsuit would outweigh the settlement amount.

Nevada then placed an insurance claim with ICSOP, which allegedly denied coverage. In July, Nevada brought a lawsuit against the company to recoup settlement costs and attorney fees beyond the $2 million deductible.

ICSOP’s settlement resolves the dispute. As per the settlement agreement, AIG did not admit wrongdoing, but paid Nevada $300,000.

"The Attorney General's Office reached a thoughtful and mutually favorable resolution of this matter through an amicable settlement with AIG without being embroiled in costly and time-consuming litigation," Laxalt said.

"From my first day in office, I am incredibly impressed by how my team of in-house lawyers, including my Solicitor General's Office and Complex Litigation Department, handled the San Francisco matter and this related insurance dispute.”

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