Two civil suits have been filed against American International Group, including one where a California insurance broker alleges that the insurer used funds from its California insurance business to boost its troubled financial service operations.

In the other suit, an East Haven, Conn., company is seeking a refund from AIG for alleged overcharges for terrorism risk coverage in workers’ compensation policies by some of its companies, according to a report in the New Haven Register newspaper. The company has asked that the case be made a class action, which would allow 4,415 companies in Connecticut to benefit if the company wins the suit.

In the California case, Linda Harris, president of the Independent Financial Planning Group, filed suit in Los Angeles Superior Court alleging the unfair business practices, which she says included the company telling brokers and policyholders that losses in the financial derivatives market would not harm the company’s insurance losses, according to the San Jose Mercury News.

The derivatives market and credit default swaps performed by AIG’s Financial Products division have been at the root of the company’s fall, leading to more than $170 billion in federal bailout money since last September.

Harris and her company had more than $15 million in sales of AIG life insurance products, according to the report.

The other case, filed in Superior Court in Waterbury, Conn., on behalf of Viglione Heating and Cooling Inc. by John Wynne Jr., alleges that the company bought workers’ compensation coverage from an AIG company, Commerce and Industry Insurance Co., which charged up to 4% of gross premium on its workers’ compensation policies to cover terrorism risk. That approach differed from the National Council on Compensation Insurance system, used by most insurers.

Connecticut officials denied the AIG company’s request in 2003 to use the 4% charge, saying it was “unfairly discriminatory,” according to the report.

AIG allegedly charged the rate, arguing that since the Connecticut Insurance Department did not take action in its filing within the 30-days required by state law, it could charge the rate, the report said.

Viglione, which became aware of the situation in spring 2006 when a workers’ compensation consultant notified the company, said it and other companies paid excess premiums under the rating system for almost two years, alleging that it and other Connecticut business are “victims of AIG’s attempt to profit from the terrorist attacks of Sept. 11, 2001. AIG’s claims of havoc and uncertainty in the U.S. insurance industry do not give it license to overcharge the businesses of Connecticut,” according to the newspaper, citing the suit.