AIG Reaches Settlement with PA Insurance Department
A settlement was reached last week between American International Group Inc (AIG) and the Pennsylvania Insurance Department over financial misreporting involving its alleged reinsurance deal with General Re Corp. The insurer agreed to pay $13.5 million, including a $6.6 million fine. Additionally, according the the PA Insurance Department, the settlement resolves client-steering and bid-rigging allegations and has AIG providing annual reinsurance reports as well as maintaining certain producer compensation disclosure and ongoing compliance initiatives.
On Monday, in a statement by AIG, it said it has already paid $4.4 million of the settlement amount and neither admits nor denies the allegations made by the Pennsylvania Insurance Department.
Last month, five former executives of Gen Re and AIG were convicted of fraud for helping AIG inflate its loss reserves with an allegedly bogus loss portfolio reinsurance deal.
Pennsylvania regulators say AIG unlawfully deceived them and other authorities by providing false and misleading information and responses, including misrepresentations involving the loss portfolio deal.
“Financial reporting must be accurate for us to protect insurance consumers and be certain that companies are solvent,” acting Insurance Commissioner Joel Ario said in a statement. “When there is any indication of problems with a company’s financial reporting, we investigate, take action and hold insurers accountable.”
Published on March 18, 2008
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