AIG, Other Insurers Sued for Refusing to Cover Kaiser FCA Deal

An American International Group Inc. unit and other insurers were sued for refusing to cover a $556 million False Claims Act settlement involving affiliates of Kaiser Permanente that were accused of submitting invalid diagnosis codes while billing Medicare patients in order to receive higher payments.

Kaiser held $95 million in directors and officers liability insurance through a primary policy with AIG and excess policies with eight other insurers, including units of Berkshire Hathaway Inc., Chubb Ltd., and Allianz SE, according to the affiliates’ complaint Friday in the US District Court for the Northern District of California.

AIG ...