AIG sues former executives and new E&S insurer | Insurance business America
The insurance giant accuses former executives of “unlawful embezzlement.”
Insurance News
By Ryan Smith
American International Group is suing the newly formed Dellwood Insurance Group to stop what the insurance giant calls the “misappropriation” of trade secrets by former AIG executives who left the company to join the newly formed Excess and Surplus Lines -establishing an insurance company.
According to a report by AM Best, the lawsuit was filed against Dellwood and former AIG executives Thomas Connolly, Kean Driscoll and Michael Price. The lawsuit alleges that Price and Driscoll, who left AIG on June 30, 2023 and March 3, 2024, respectively, violated non-compete agreements in effect at the time Dellwood was formed.
Price’s non-compete agreement prohibited him from competing with AIG or interfering in its customer relationships until September 30, 2023, according to AM Best. The agreement also prohibited Price from recruiting AIG employees until June 30, 2024, the lawsuit says.
The agreement also included a permanent ban on advertising to AIG clients in cases where doing so would require the use or disclosure of the company’s confidential information or disparage AIG, AM Best reported.
Driscoll’s agreement with AIG reportedly prohibited him from competing with the company, breaching his fiduciary duty of loyalty, or recruiting AIG employees until March 3, 2024. It also included a permanent ban on soliciting AIG clients using confidential information, disparaging AIG or disclosing confidential information, AM Best reported.
AIG said in the lawsuit that Price and Driscoll entered into the non-compete agreements in exchange for “significant consideration,” including the grant of long-term incentive plans.
“Upon information and belief, Price and Driscoll breached their obligations to AIG long before their non-compete agreement expired,” the lawsuit says. “In fact, Dellwood’s own publicly filed documents indicate that the Dellwood entity was incorporated in Delaware no later than December 28, 2023 and registered for business in New Jersey no later than January 30, 2024.”
According to AM Best, Dellwood announced its launch earlier this month.
AIG alleged that Price and Driscoll violated their noncompete agreements by hiring Connolly, the North American property insurance giant’s former chief financial officer and now CFO at Dellwood. The lawsuit also alleges that during his final month at AIG, Connolly forwarded confidential information to his personal email address and asked AIG employees to join Dellwood, AM Best reported.
“As senior AIG executives, each of the defendants had access to confidential information proprietary to AIG relating to virtually every aspect of AIG’s general insurance business in North America, including strategy, finance, accounting and underwriting,” the lawsuit says. “Defendants use AIG’s confidential information to conduct Dellwood’s business.”
An AIG spokesperson told AM Best that the company “will not tolerate” the use of its assets for “unfair competition.”
“AIG seeks to stop what it believes are defendants’ unlawful misappropriation of AIG’s trade secrets and confidential information, breaches of contract, breach of fiduciary duty and unfair competition,” the spokesman said.
The lawsuit alleges that AIG suffered damages including “losses in revenue, valuable business, profits, future profits, and employee morale and goodwill,” a Reuters report said.
Dellwood told AM Best that it does not comment on active litigation.
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2024-04-04 15:27:41
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