Chartis to Trim Workforce; AIG Settlement Approved

American International Group said its property/casualty carrier Chartis will eliminate some jobs, with the reduction affecting less than 1 percent of its workforce, or roughly 400 or fewer positions.

“As part of Chartis’ review of its personnel needs, we have re-sized our staffing levels to reflect our business objectives,” AIG spokesman Mark Herr told Insurance Journal. “We continue to hire where we see the best potential for growth. Overall, the reductions amount to less than 1 percent of Chartis’ employees.”

Chartis currently has 40,000 employees who serve more than 70 million clients around the world.

Since the 2008 fnancial crisis, AIG has been selling off business assets and almost halved its workforce. AIG had roughly 63,000 employees in 2010, down from 116,000 in 2008 according to its annual reports.

In other AIG news, New York federal court gave a preliminary approval to AIG’s $725 settlement deal with Ohio public pension funds. It’s another forward step in AIG’s effort to resolve ongoing legal dispute with investors in the consolidated 2004 securities litigation.

AIG and the parties involved in the lawsuit reached the settlement in July 2010. The next step is a “fairness hearing,” scheduled for Jan. 31, 2012. It will determine whether the settlement is fair and reasonable.

The settlement involves the consolidated 2004 securities litigation. AIG’s 2010 Form 10-K regulatory filing explains that beginning in Oct. 2004, a number of putative securities fraud class action suits were filed in the Southern District of New York against AIG. These became the consolidated 2004 securities litigation.

The lead plaintiff in the litigation is a group of public retirement systems and pension funds benefiting Ohio state employees, suing on behalf of themselves and all purchasers of AIG’s publicly traded securities between Oct. 28, 1999 and April 1, 2005.

The lead plaintiff alleged that from 1999 and 2005, AIG: concealed that it engaged in anti-competitive conduct through alleged payment of contingent commissions to brokers and participation in illegal bid-rigging; and concealed that it used “income smoothing” products and other techniques to inflate its earnings.