AIG Sued Over Real Estate Developer Directors’ Defense Costs

An American International Group Inc. unit improperly tried to control the defense of real estate developer directors named in a securities suit even though the insurer’s directors and officers liability policy was issued on a “duty to advance” basis, two former directors alleged.

National Union Fire Insurance Co. of Pittsburgh, Pa.'s “attempt to proverbially have its cake and eat it too is unenforceable on its face,” the former board members said in a complaint filed Tuesday in the US District Court for the Western District of Washington.

The former board members were included as defendants in suit brought in Washington ...