American International Group Inc., the New York insurance giant embroiled in a scandal over padded earnings, is now under attack in Boston for allegedly inflating insurance claims.

AIG (NYSE: AIG) is being sued in Boston by 19 insurance companies alleging that the New York insurer, in collusion with Trenwick America Reinsurance Corp., tried to saddle them with $73 million of phony losses on workers’ compensation, occupational accident and industrial aid policies in 2004.

The companies, which include local players John Hancock Life Insurance Co. and Worcester’s First Allmerica Financial Life Insurance Co., were part of three syndicates set up to handle losses of insurers like AIG.

First Allmerica, a unit of Allmerica Financial Corp. (NYSE: AFC), alleges AIG wants to stick it with false claims totaling $20.5 million, while John Hancock, part of Manulife Financial Corp. (NYSE: MFC), says AIG is demanding $6.8 million. Other insurers in the suit include: American Reinsurance Co. of Princeton, N.J.; Simsbury, Conn.-based Hartford Life Insurance Co.; and Swiss Re Life & Health America Inc. of Armonk, N.Y.

The suit centers on whether the companies filing the suit should have to pay $73 million in reinsurance claims made by AIG, which the insurers in the syndicate claim were “grossly inflated.” Only $15 million in claims may be legitimate, they say.

Insurance companies like AIG purchase reinsurance—insurance on insurance—to hedge against the losses they might suffer from policies they underwrite. Syndicates of companies are formed to further spread the risk so that no single insurer gets hammered.

AIG, according to court documents, is pressing the companies in the syndicates to pay up for claims those companies say the New York insurer refuses to substantiate. It is part of a scheme by AIG, the insurers contend, that includes manipulating an arrangement between the three syndicates and Trenwick, a company hired by the syndicates to assess the legitimacy of the claims for payment.

Trenwick, based in Stamford, Conn., also was responsible for fashioning reinsurance contracts with companies like AIG. It also would assess the legitimacy of claims, paying on claims, then getting reimbursed by the syndicates.

In 2003, Trenwick, which is in bankruptcy, was pressed by AIG to force the syndicates to pay its claims, according to court documents. The companies said they were refused access to documents substantiating the losses on which AIG wanted to collect. The insurers insisted AIG refused because the claims were “grossly inflated,” although court documents do not explain how the companies knew they were being deceived.

AIG spokesman Joe Norton said the company would not comment on the pending litigation. Trenwick officials could not be reached. Neither had filed a response to the complaint in Suffolk Superior Court in time for this story.

The allegations of fraud in this civil suit come as AIG faces a probe into its past earnings reports by the U.S. Justice Department, the Securities and Exchange Commission and New York state officials.

AIG has acknowledged using reinsurance transactions to bolster its earnings by 10 percent going back to 2000. AIG bought reinsurance from Berkshire Hathaway’s General Re Corp. in 2000 and 2001. AIG used the reinsurance purchases to pump up reserves and inflate earnings.

In March, Chairman and CEO Maurice “Hank” Greenberg, who over 40 years helped build AIG into an industry powerhouse, quit both positions as pressure from probes into the company’s financial reports mounted.

AIG is being sued by New York Attorney General Eliot Spitzer. The company reportedly is in settlement talks.

A court date for the Suffolk Superior Court case has not been set.

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