AIG faces Madoff action

BATTERED insurer AIG has been hit with a class action lawsuit in connection with Bernard Madoff&rsquo;s $60bn (&pound;36bn) Ponzi fraud.<br /><br />A wealthy couple who lost out in the scandal are accusing AIG of &ldquo;calculated efforts&rdquo; to redefine the terms of insurance contracts to get out of coughing up to cover their losses.<br /><br />The couple, Robert and Harlene Horowitz, are suing for profits they had expected to make from their investment with Madoff, which they claim are covered under the homeowner policy they took out with AIG.<br /><br />They say AIG has only paid out to cover their initial investments.<br /><br />Their holdings with Madoff were valued at $8.5m at the end of November last year.<br /><br />If the Los Angeles couple, which controls a giant family trust, is successful, it could pave the way for a wave of similar actions from AIG policyholders.