AIG to pay L.A. Schools $79 Million in Claims

Insurer had refused to pay for environmental and pollution hazard cleanup.

Insurance giant AIG will pay nearly $79 million to the Los Angeles Unified School District to settle a lawsuit over its failure to pay claims on properties with environmental and pollution hazards, The Times has learned.

Although AIG admitted no wrongdoing, the $78.8-million settlement, combined with earlier payments under the policy, approach the full value of $100 million in coverage the district purchased in 1999.

"This is a gold medal, not a bronze, in terms of success, a lot of money," said David Tokofsky, a former member of the Board of Education that voted to purchase the policy and later sued to enforce it. "Sometimes the huge L.A. Unified is the little guy against such giants as AIG."