NEW YORK (Reuters) – American International Group Inc. does not have to cover insurance claims from two former Bernard Madoff clients who sought compensation for their losses under their homeowner's policy, a federal appeals court ruled on Wednesday.
The 2nd U.S. Circuit Court of Appeals rejected an appeal from Robert and Harlene Horowitz, who had sought up to $30,000 in coverage under a fraud safeguard provision in their homeowner's policy with AIG. The two California residents had sought to make their lawsuit a class action on behalf of other AIG policyholders.
The Horowitzes said they lost $8.5 million from their Madoff account when the money manager's Ponzi scheme was uncovered in 2008, reflecting the amount on their final account statement. But AIG denied they suffered any direct loss under the terms of their insurance policy.
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