Pennsylvania General Insurance Co. Denies Breach of Contract Allegations

BOSTON — Pennsylvania General Insurance Co. has denied SPARTA Insurance Co.’s allegations that it breached stock purchase and reinsurance agreements by failing to pay claims made under policies generating from SPARTA’s acquisition of American Employers Insurance Co.

In its March 14 answer to SPARTA’s second amended complaint, PGIC also asserted several affirmative defenses, arguing that SPARTA lacks Article III standing, the SAC does not state a claim upon which relief can be granted, and that PGIC did not breach the contracts.

In June 2005, PGIC and AEIC entered into a reinsurance agreement, under which AEIC’s liabilities were transferred and assumed …