Nevada Officials Sue AIG Unit For Bad Faith

Nevada officials filed a lawsuit this week against an insurance company that they say wrongly refused to help pay legal defense and settlement costs in a psychiatric patient busing case brought by San Francisco. The Nevada Attorney General’s Office filed the lawsuit in Las Vegas against The Insurance Company of the State of Pennsylvania, a subsidiary of the multinational insurance company AIG that received government bailout funds during the financial crisis. Nevada spent about $2.5 million defending itself and paying out a settlement, and the state argues its insurance carrier should help out with legal costs above a $2 million deductible.