AIG’s former reinsurer, Transatlantic Re, seeks arbitration related to AIG’s subprime securities lending

American International Group (AIG)’s former reinsurer, Transatlantic Holdings Inc., has filed a demand for arbitration seeking $350 million related to AIG’s subprime mortgage securities lending prior to 2008 Q4.
“Transatlantic Holdings Inc. and its subsidiaries, Transatlantic Reinsurance Company and Trans Re Zurich Reinsurance Company Ltd. (collectively, ‘TRH’), filed a demand for arbitration against American International Group Inc., AIG Securities Lending Corp. and AIG Securities Lending (Ireland) Ltd. (collectively, ‘AIG’) for losses in excess of $350 million suffered by TRH and its subsidiaries arising from its participation in a securities lending program administered and managed by AIG during the period that TRH was controlled by AIG,” Transatlantic stated in a May 21 filing with the U.S. Securities and Exchange Commission.
The statement says TRH’s participation with the securities lending program ended in 2008 Q4.
TRH’s claim has not been proven. Business Insurance News published a report by Bloomberg, which quotes the following e-mailed statement from AIG on the matter: “We believe the claims have no merit and will defend ourselves vigorously.”
AIG announced its intention to sell its majority share of its Transatlantic Re stock in June 2009. It completed the sale in March 2010.