AIG Owes Coverage for Huntington Fraudulent Transfer Settlement

AIG Specialty Insurance Co. is liable for covering part of a $32 million settlement paid by Huntington National Bank to resolve a fraudulent transfer suit related to the bank’s Ponzi scheming former customer.

Huntington’s claim for $15 million to cover part of its settlement with the trustees liquidating a dual company Ponzi scheme is insurable under Ohio state law because the settlement payment “was not tied to any malicious act or intent to injure,” the US Court of Appeals for the Sixth Circuit ruled Thursday, reversing an earlier decision by an Ohio federal judge.

Huntington unwittingly became the bank and ...