SN2002kg is a type IIn supernova, detected in October 2002 in the nearby spiral galaxy NGC 2403. We show that the position of SN2002kg agrees within the errors with the position of the LBV V37. Ground based and HST ACS images however show that V37 is still present after the SN2002kg event. We compiled a lightcurve of V37 which underlines the variablity of the object, and shows that SN2002kg was the brightening of V37 and not a supernova. The recent brightening is not a giant eruption, but more likely part of an S Dor phase. V37 shows strong Halpha +[NII] emission in recent images and in the SN2002kg spectrum, which we interprete as the signature of the presence of an LBV nebula. A historic spectrum lacks emission, which may hint that we are witnessing the formation of an LBV nebula.