AXA To Pay FIFA For Cancelled World Cup

NU Online News Service, Jan. 2, 11:55 a.m.EST?A German court has ruled that French insurer AXA'scancellation of its 2002 World Cup policy was unlawful and hasordered the company to pay compensation to F?d?rationInternationale de Football Association, world soccer's governingbody.[@@]

In a statement, FIFA explained that it began its legal actionagainst AXA after the Paris, France-based insurance giantterminated its $1.12 billion policy for the World Cup in SouthKorea and Japan following the Sept. 11, 2001 terror attacks.

After AXA canceled its World Cup policy, FIFA signed a newcoverage with National Indemnity Company, a subsidiary of BerkshireHathaway in Omaha, Neb.

In its ruling, the German court said that AXA, as leader of aconsortium of 63 insurers, was liable to pay FIFA compensationamounting to its own participation quota of more than 20percent.

FIFA President Sepp Blatter said in a statement that "FIFA ishappy with this judgment."

"The unilateral and, according to the court pronouncement,unlawful termination of insurance by AXA had far-reachingconsequences for FIFA, especially from the financial and logisticalpoint of view, for which AXA will therefore be payingcompensation," Mr. Blatter commented.