AIG Reaches $146.5 Million Settlement with Florida, Others

American International Group (AIG) will pay $14.3 million to a number of Florida agencies as part of a $146.5 million multistate settlement over a dispute involving workers compensation insurance.

AIG systematically underreported workers compensation insurance premium by putting this premium into the general liability or commercial automobile liability categories, Florida Insurance Commissioner Kevin McCarty stated in a release.

The practical effect of this misreporting was to report premium in lines of business with lower residual market obligations or premium tax rates and assessments. I am pleased by the collaborative multistate investigative effort that will yield millions of dollars in unpaid taxes owed to the states.

The Florida Office of Insurance Regulation will receive $5.6 million in fines and penalties with an additional $8.7 million split between the Department of Financial Services Division of Workers Compensation, Department of Revenue and the Florida Workers Compensation Insurance Guaranty Association.

In addition to the $100 million national penalty, the agreement includes $46.5 million in premium taxes and assessments.

Florida was one of the lead states in this multistate examination, along with Delaware, Indiana, Massachusetts, Minnesota, New York, Pennsylvania, and Rhode Island.