insurer, said it filed suit against INA Holdings and its former parent company, CIGNA Corp., demanding that they honour policies INA sold to cover pollution and asbestos exposure that were moved to a separate company.

The Insurance Co. of North America (INA) now is a wholly-owned unit of Bermuda-based insurer ACE Ltd.

CIGNA, a giant insurer based in Philadelphia, referred calls to ACE, which bought its property and casualty business in July this year.

An ACE spokesperson said it had not seen the suit yet so could not comment.

Its purchase of the property and casualty business was approved by regulators.

New York-based AIG said it filed the suit in San Francisco alleging INA policies were transferred to another unit of CIGNA in an alleged attempt to absolve INA of responsibility for paying claims under those policies.

The insurer did not have policyholders' permission to do this, as required by California law, AIG alleged.

The policies also were transferred so INA could have a higher credit rating, AIG alleged.

The suit does not seek any damages and alleges no harm to AIG units or their customers, the insurer said.

It said it filed the suit to protect California consumers who bought policies and those with claims against policies issued by INA.

CIGNA allegedly selected the policies it wanted INA to keep and those it wanted to transfer to another unit, the suit claims.

The unit, Century Indemnity Co., which does not sell insurance policies, allegedly received a finite pool of money from CIGNA to pay the INA claims.

CIGNA underestimated the costs of these insurance policies by billions of dollars in the years leading up to its transfer of them, AIG alleged.

In its suit, AIG has asked the court to find that INA remains liable for the transferred policies because it did not ask policyholders' permission first.

As corrective action, AIG said it wants INA to issue a statement to its California policyholders acknowledging INA's liabilities under the policies it sold, and publication of notices saying that in newspapers, on the Internet and in other media.

COURTS CTS