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Showing posts with label AIG. Show all posts
Showing posts with label AIG. Show all posts

Friday, October 11, 2013

AIG Facing Lawsuit for Fraud

Today's post is shared from Courthousenews.com.
American International Group for nearly 40 years has been underreporting workers' compensation premiums, causing insured employers to pay improperly inflated state insurance surcharges, three federal classes claim.
     The coordinated suits were filed this week in San FranciscoManhattan and Newarkagainst AIG and its subsidiaries and affiliates. AIG is accused of unfair business practices, fraud, unjust enrichment and violations of federal anti-racketeering law.
     The California complaint, filed by Franjo Inc. and DMS Facility Services Inc., says it all began in the 1970s when AIG "devised, implemented, participated in, and carried out nationwide schemes - later characterized by AIG's own general counsel as 'permeated with illegality' - to miscategorize, falsely report, and falsely book the AIG companies' [workers' compensation] premium as other premium (for example, as 'general liability' premium), in order to reduce defendants' expenses, inflate their profits, and unjustly enrich themselves at the expense of plaintiffs and the class." (Parentheses in original.)
     AIG allegedly falsified certified annual financial reports that underreported workers' compensation (WC) figures to evade its equitable shares of financial responsibility for state-levied taxes and assessments. It caused state insurance regulators, through no fault of their own, to assess artificially inflated fees on insured employers, according to the complaint.
Click here to read the entire article.


Tuesday, June 5, 2012

AIG settles workers compensation insurance complaint with all 50 states, DC for $146.5M

Florida Insurance Commissioner Kevin McCarty today announced that asettlement agreement between the American International Group, Inc. (AIG) and its affiliates with all 50 states and the District of Columbia has become fully effective. The settlement is a result of AIG misreporting $2.12 billion of workers’ compensation premium as other lines of insurance. As part of the settlement agreement, AIG agreed to pay a national penalty of $100 million, and $46.5 million in additional premium taxes and assessments.

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

"AIG systematically underreported workers' compensation insurance premium by putting this premium into the general liability or commercial automobile liability categories,” stated Commissioner McCarty. "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 multi-state investigative effort that will yield millions of dollars in unpaid taxes owed to the states."

The lead states issued their multi-state examination report in December 2010 and entered into a related regulatory settlement agreement. The agreement was subject to several conditions, all of which have now been resolved. One of those was a $450 million residual market settlement that was approved by the U.S. District Court in February 2012. The remaining open condition, a settlement with insurance guaranty associations, was satisfied on May 30, 2012 when a $25 million settlement agreement was signed.

Florida was one of the lead states in this multistate examination along with Delaware, Indiana, Massachusetts, Minnesota, New York, Pennsylvania, and Rhode Island. As part of the agreement, AIG entered into a compliance plan concerning the financial reporting of its workers’ compensation premium, and going forward agreed to be monitored and subject to a follow-up examination by the lead states in two years.