Starr Accuses Claims Administrator of Scheming to Divert Funds Through Unreasonable Charges

NEW YORK — Starr Indemnity & Liability Co. is accusing its former third-party claims administrator of scheming to divert funds by billing Starr for unreasonable “subrogation” charges for reimbursements collected from the Michigan Catastrophic Claims Association.

According to a proposed amended complaint filed Jan. 16 in the U.S. District Court for the Southern District of New York, American Claims Management and its affiliates also billed Starr unreasonable “settlement charges” on funds that outside counsel recovered in cases brought against Starr by insureds.

In January 2010, Starr entered into an agreement with American Claims Management under which ACM acted as …