NEW YORK (Bloomberg) - American International Group Inc. (AIG), recipient of a $182.3 billion US government rescue, agreed to pay $450 million to rivals to settle claims it shortchanged industry-funded pools that insure injured workers.Travelers Cos. and Hartford Financial Services Group are among the seven competitors that will receive the money, New York-based AIG said in a proposed settlement filed yesterday in Chicago. Liberty Mutual’s Safeco subsidiary filed a lawsuit in 2009 accusing AIG of “long-term fraudulent underreporting,” seeking more than $1 billion. Liberty Mutual, which was seeking class-action status for the case, was not included in the settlement.AIG, once the world’s largest insurer, agreed in December to pay $100 million in fines and $46.5 million in taxes and assessments to settle a probe by state regulators of workers’ compensation payments. CEO Robert Benmosche has been resolving legal disputes with investors and former CEO Maurice “Hank” Greenberg as he sells assets to repay the bailout and gain independence from government control.The settlements “give credence to the charge that AIG, even by the somewhat slippery standards that apply to big insurance companies, that AIG was really, really playing their own game here”, Edward Priz, president of Riverside, Illinois- based commercial insurance consultant Advanced Insurance Management, said before today’s announcement.“It is unfortunate that Liberty is refusing to participate in this fair and reasonable settlement,” said Mark Herr, a spokesman for AIG. “As the seven other settling insurers have recognised in seeking to intervene in the action, Liberty’s preference to continue litigating is not in the best interests of the class members.”Gary Elden, an attorney for Liberty Mutual, said in a statement that the settlement is “an act of self-interest and is detrimental to the 600-member class” because it ignores evidence of underreporting that occurred during the lawsuit.“The current discovery process, which will be substantially complete within the next 60 to 90 days, should be allowed to proceed uninterrupted so AIG is held to account for the true extent of its underreporting,” Elden said.A final settlement agreement must be approved by AIG’s board, the US Treasury Department and Federal Reserve, according to the documents.AIG was pushed to the brink of collapse in 2008 as investments tied to the housing market soured. The government rescued AIG with a $60 billion Federal Reserve credit facility, a Treasury Department investment of as much as $69.8 billion and up to $52.5 billion to buy mortgage-linked assets owned or backed by the insurer.The insurer advanced $1.06, or 1.8 percent, to $61.51 at 12.49pm in New York Stock Exchange composite trading.