AIG affiliate life insurance dispute is finally settled

Lavastone Capital, an affiliate of American International Group (AIG), has entered into an agreement with Coventry First to resolve several disputes.

Coventry First buys life insurance policies from individuals wanting to cash them out early, known as “life settlements”.

AIG had sought about $2 billion from Coventry First for overcharging it for life insurance policies acquired from elderly people.

Among the terms of the confidential settlement, Lavastone will transfer Coventry’s servicing of AIG’s life settlements portfolio to another party and Lavastone will be able to freely market or sell policies that were originated by Coventry.

Lavastone and Coventry said they are pleased to have achieved a satisfactory resolution of their dispute.