AIG systematically denies claims of injured US contractors


(RAW STORY)   Insurance giant AIG is already in trouble with the taxpayers from whom it has received billions in bailout money. Now an investigation by ABC News, the Los Angeles Times, and the non-profit Pro Publica has found that AIG has been ripping off its own insurance customers as well.

According to ABC’s Brian Ross, “AIG covers about 90% of the people who get hurt working overseas for American defense contractors.” Pro Publica analyzed 30,000 of those cases and found that, although minor injuries were covered without question, AIG had challenged an astonishing 43% of the more serious claims.

ABC reported on several of the most outrageous cases, including that of a blind amputee for whom AIG has refused to buy a new artificial leg. John Woodson, who was formerly a truck driver with Halliburton spin-off KBR, complained bitterly, “You have to ask a second time, a third time, a fourth time, and you’re still not getting it.”

AIG has refused to divulge how much it is making on insuring private defense contractors at the expense of US taxpayers, but according to Pro Publica, it is the major player in a system which Congressional investigators found has earned nearly $600 million in profits out of $1.5 billion in premiums. A military audit described AIG’s premiums as “unreasonably high.”

Houston attorney Toby Cole, who represents many of the injured contractors, told ABC, “It’s difficult for me to think it’s anything but a concentrated effort just to ignore these guys.”

Kevin Smith, another former KBR truck driver who was badly injured in Iraq, told ABC that AIG had refused to pay for surgery on his injured knee without even offering any explanation. At one point, AIG cut off all of his medical benefits until compelled by a federal judge to resume payments. “I can’t even begin to say how angry I am,” Smith told ABC. “They can’t pay my doctor $13,000?”

The full ABC story is available here. The Los Angeles Times story is available here. Pro Publica’s version can be read here.

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