Chennai, Mar 4 (IANS): The Indian government-owned General Insurance Corporation of India Ltd (GIC) has said it is currently in the process of studying the AM Re Syndicate Inc's complaint and quantification of its $115 million damage claim in detail to determine the next steps.
The US-based AM Re, a reinsurance provider, has filed a suit for $115 million against GIC for cancelling its agreement and non-payment of commissions for business it brought for the Indian reinsurer.
According to AM Re, it had spent significant effort in negotiating reinsurance agreements on behalf of GIC Re for the year 2022, but the latter terminated the agreement and has not paid the commission as per the agreement.
According to reports, the AM Re had said that it had fetched a substantial premium for GIC in 2021. The US company said the gross premium for 2021 under the agreement for GIC was about $600 million.
Meanwhile in a regulatory filing late Thursday GIC said it is currently in the process of studying the complaint and quantification in detail in order to determine the next steps.
According to GIC, it had executed Binder Authority Agreements with AM RE Syndicate Inc. USA for Motor and Marine business effective for a 24 month period from January 1, 2021 and December 31, 2022 respectively.
"Notice of Termination for these Agreements were sent on October 28, 2021 (Motor) and November 12, 2021 (Marine) with a notice period of 90 days, and as on date the termination is final," the GIC said.
The reinsurer has not disclosed the reason for the termination.
GIC became aware of a lawsuit filed by AM RE in the United States District Court - Southern District Court of New York in February 2022, making various monetary claims purportedly arising from the termination of the Binder Authority Agreements, the company said.
"In the complaint, AM RE has sought amounts which are to be determined at trial, but which as per AM RE would not be less than US$115 million. No further detail or basis has been provided at this time inter alia as to why AM RE alleges that the amounts would be at least US$115 million," GIC added.
Disputing the allegations of the complaint as well as the quantification of these claims GIC said it will address both aspects at the appropriate time in the litigation.