GIC investigates AM Re’s $115 million US lawsuit
The Indian government-owned General Insurance Corporation of India Ltd (GIC) said it was currently investigating AM Re Syndicate Inc’s claim and quantifying in detail its claim of $115 million to determine the next steps.
American reinsurance provider AM Re has filed a $115 million lawsuit against GIC for voiding its deal and non-payment of commissions for business it brought to the Indian reinsurer.
According to AM Re, it made considerable efforts to negotiate reinsurance agreements on behalf of GIC Re for the year 2022, but the latter terminated the agreement and did not pay the commission according to the agreement.
According to reports, AM Re said it had secured a substantial premium for GIC in 2021. The US company said the gross premium for 2021 under the deal for GIC was around $600 million.
Meanwhile, in a regulatory filing late Thursday, GIC said it is currently reviewing the complaint and quantification in detail to determine next steps.
According to GIC, it had signed liaison authority agreements with AM RE Syndicate Inc. USA for automotive and marine activities effective for a period of 24 months from January 1, 2021 and December 31, 2022 respectively.
“Notice of termination of these agreements was sent on October 28, 2021 (Motor) and November 12, 2021 (Marine) with a notice period of 90 days, and on the date that the termination is effective,” said the GIC.
The reinsurer did not disclose the reason for the termination.
GIC has become aware of a lawsuit filed by AM RE in the United States District Court – Southern District Court of New York in February 2022, alleging various monetary claims allegedly arising from the termination of authority agreements of Binder, the company said.
“In the complaint, AM RE requested amounts to be determined at trial, but which AM RE claims would not be less than US$115 million. No further details or basis have been provided at this time, in particular to explain why AM RE alleges that the amounts would be at least 115 million dollars”, added GIC.
Disputing the claims in the complaint as well as the quantification of those claims, GIC said it would address both aspects at the appropriate time in litigation.