Reinsurance Pool Representative Says It’s Not Proper Party In Suit

Reinsurance Pool Representative Says It’s Not Proper Party In Suit

An organization representing members of a workers’ compensation reinsurance pool recently moved to dismiss fraud and accounting counterclaims made directly against it, noting that it is not a proper party but that it had merely filed the original suit on behalf of the members of the pool

In an eight-count complaint alleging two RICO counts and six supplemental state law claims the organization says the insurers fraudulently schemed to avoid paying their proportional share of the insurance costs in the residual market for workers’ compensation insurance.

The insurers filed counterclaims, charging the same or similar practices to understate the workers’ compensation premiums.

The organization then moved to dismiss the counterclaims, holding that the counterclaims were "designed to misuse the concept of an accounting action and bury [the] case in improper and fruitless discovery for years."

This case, National Council on Compensation Insurance Inc. v. American International Group Inc., et al., No. 07-cv-2898, N.D. Ill., was reported in the June 20, 2008 issue of Mealey’s Litigation Report: Reinsurance.