Massachusetts, Connecticut Receive AIG Settlement Funds

More states are officially announcing that they have collected penalties and fines as part of a multi-state regulatory settlement with American International Group over workers’ compensation insurance.

On June 21, Massachusetts Insurance Commissioner Joseph Murphy announced that his state received over $3.44 million as its share. Massachusetts’ insurance division was one of eight states that led the investigation into AIG’s practices. All 50 states and the District of Columbia are receiving funds from the settlement with the insurer. And on June 18, Connecticut Insurance Commissioner Thomas Leonardi said his state received over $1 million in fines and penalties from AIG. Also last month, the Maryland Insurance Administration said the state collected over $2 million in penalties from AIG.

A multi-state examination, begun in 2008, determined that AIG hid at least $2.12 billion in workers’ comp premium by attributing it to other lines of insurance for the years 1985 to 1996 and thereby lowering its assessments and taxes. AIG agreed to pay $100 million in fines and $46.5 million in premium taxes and assessments to the states. Other Northeastern states that have already received funds include Pennsylvania, which got $16.8 million in late May.