Article ID: 31a8743409e21f61be9503d997857400ba370eb9d52d19fdffd9e1105dcccdd4
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AIG unit must cover portion of $26 million SEC settlement - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers AIG unit must cover portion of $26 million SEC settlement by Richard Sine D&O , Risk Management AIG Apr 29, 2026 An American International Group unit has lost its bid to avoid covering a portion of a $26 million settlement to cover an outdoor advertising company’s settlement with federal securities regulators. In Clear Channel Outdoor Holdings v. Illinois National Insurance Co. , decided Tuesday by the Delaware Superior Court, Judge Patricia A. Winston ordered Illinois National Insurance Company to indemnify Clear Channel Outdoor Holdings for $16.4 million in “disgorgement” and $3.8 million in prejudgment interest stemming from a 2023 Securities and Exchange Commission enforcement action. Clear Channel, headquartered in San Antonio, Texas, settled SEC allegations that a Chinese subsidiary bribed government officials and maintained inadequate internal accounting controls. The SEC claims the subsidiary received $16.4 million in benefits from this corruption, in violation of the federal Foreign Corrupt Practices Act, and ordered Clear Channel to “disgorge” those benefits to the SEC. AIG, whose unit provided directors and officers liability insurance coverage for Clear Channel’s parent, argued that the disgorgement payment was effectively a penalty and therefore excluded under the policy’s civil penalties provision. The court disagreed, finding that the policy’s plain language drew a clear distinction between civil monetary penalties — which everyone agreed were uninsured — and disgorgement. “Read as a whole, the Policy covers SEC settlements for disgorgement and excludes them only for civil monetary penalties,” Judge Winston wrote. AIG also argued that insuring disgorgement violated Delaware public policy because it would allow a wrongdoer to profit from its misconduct. The court rejected that argument as well, relying on prior Delaware Supreme Court precedent that courts “will only interfere upon a strong showing that dishonoring the contract is required to vindicate a public policy interest even stronger than freedom of contract.” The ruling does not require AIG to pay anything beyond the policy limit, which the disgorgement and interest amounts will exhaust. A separate coverage dispute over Clear Channel’s defense costs was dismissed as moot. The court also dismissed Clear Channel’s bad faith claim, finding that while AIG’s coverage positions ultimately failed, they were not “clearly without any reasonable justification.” The excess insurers named in the case — Starr Indemnity, QBE Insurance, and ACE American — had previously settled with Clear Channel. 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