Gettleman had already told the insurers during a court hearing that he was going to grant a preliminary approval to the settlement.

AIG announced at the start of the year that it agreed to pay a group of companies—ACE, Auto Owners, Companion, FirstComp, Hartford, Technology and Travelers—$450 million to settle a lawsuit filed by Liberty Mutual’s Ohio Casualty and Safeco subsidiaries in April 2009 on behalf of a pool of insurers alleging that AIG underreported workers’ compensation premiums over at least a 20-year period.

Liberty Mutual has worked to stop the settlement, saying it comes nowhere near the true extent of AIG’s underreporting and that it was made because AIG also agrees to release the companies from a lawsuit it filed against them.

Gettleman says he only needs to determine if the proposed settlement “is within range of possible approval,” not to conduct a comprehensive inquiry.

“No more detail is required for the court to find at this stage that, compared to the strength of the case, the settlement figure is fair, adequate and reasonable,” Gettleman writes. The settlement has been approved by insurance commissioners in all 50 states and the District of Columbia, he adds.

The case history goes back to 2007, when the National Council on Compensation Insurance (NCCI) originally filed the suit on behalf of a pool of insurers, but the case was dismissed because NCCI lacked jurisdiction. Liberty Mutual then took up the case and filed another lawsuit alleging AIG had underreported workers’ compensation premiums to residual insurer National Workers’ Compensation Reinsurance Pool, which has spent an average of $2 million per month over the last year on legal fees.

AIG allegedly unreported to purposefully reduce its market share in the workers’ compensation market to skew tax obligations of other members of the pool.

Gettlement has requested another hearing Aug. 5 to work out details of a notice to be sent to all class members. Each company in the class can decide to opt out of the settlement.

Liberty Mutual stands to gain $99 million from the settlement if it decides to join, according to a source close to the case. If enough companies from the class chose to opt out of the settlement, AIG can withdraw its settlement offer.