Workers' Compensation: American International Group

Showing posts with label American International Group. 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 Francisco, Manhattan 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.
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Thursday, September 26, 2013

AIG CEO: Anger over AIG bonuses ‘just as bad’ as lynchings

Today's post was shared by Steven Greenhouse and comes from m.washingtonpost.com

Robert Benmosche (Bloomberg News)

AIG's CEO Robert Benmosche -- who came in to rescue the company after the 2008 financial crisis -- told the Wall Street Journal that the outrage over the bonuses promised to AIG's members was just as bad as when white supremacists in the American South used to lynch African Americans:

The uproar over bonuses "was intended to stir public anger, to get everybody out there with their pitchforks and their hangman nooses, and all that -- sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong."

Yes, enduring some public criticism for receiving multimillion-dollar bonuses after helping crash the global economy is a lot like being hanged from a tree by your neck until you die.
These kinds of sentiments don't emerge in a vacuum. Benmosche is expressing a view that was pretty common back in 2010 and 2011, when it was kind of a thing for members of the besieged 1 percent to compare public anger over their compensation to the way Nazi Germany treated the weak. There was supermarket mogul John Catsimatidis:

"Taxes are going to go up regardless. What I'm afraid of is, we shouldn't punish any one group. Whether we're punishing people who are wealthy," he said. "New York is for everybody; it's for the poor, it's for the middle-class, it's for the wealthy. We can't punish any one group and chase them away. We - I mean, Hitler punished the Jews. We can't have punishing the '2 percent group' right now."

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Thursday, February 10, 2011

AIG Reaches For Its Wallet to Cover $4.1 Billion in Work Comp Claims and Asbestos Liabilities

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The American International Group (AIG), the huge insurance company that the US Government bailed out financially, is still hard pressed to raise funds to cover on going claims. AIG has announced that it will need to raise another $4.1 Billion dollars to cover such costs as primary and excess workers' compensation claims and asbestos liability claims.

AIG's long and troubled history was the subject of investigative reporting in the Academy Award nominated film, Inside Job. The Many factors have impact on an insurance company's solvency including the ability to collect premiums in a down economic cycle, the investment of the premiums collected and colateral bad investments the have a massive economic impact of the financial worth of the company in general.

Workers' compensation claims continue despite a low employment cycle. Latent diseases, such as asbestos related lung cancer, asbestosis and mesothelioma, may be dormant for decades before manifesting into a chronic and terminal medical condition.

The industry continues to struggle on how workers' compensation should be employed to insure industries and employers from these condition. Originally the workers' compensation acts did not cover occupational conditions such as silicosis or asbestosis. In the 1950s acts were amended, at industries insistence to bring these occupational conditions under the umbrella of coverage and shield employers from civil lawsuits. With the expansion of products liability claims, based on the intentional concealment of information of the hazards of these conditions, as well as low economic recoveries from struggling workers' compensation systems put the boat back into the bottle, "the longest running tort", asbestos litigation, was born.

Industry continues to try to put the genie back into the bottle, which is reflected in the latest attempt in Missouri to bar liability claims against employers and co-workers. One of the incentives of a workers' compensation program is to prevent industrial accidents, but the system continues to struggle both economically and procedurally in achieving that objective.

The need for AIG to raise additional cash to pay claims raises a concern as to whether premium dollars to pay claims are being adequately protected in the first place, and whether those premiums ared being directed to injured workers and victims of occupational illness. Instead of trying to figure how to further restrict the payment of benefits, perhaps more attention should be paid to making a safer workplace by banning asbestos use, and providing more convenience access through universal medical care.

Related articles

Saturday, October 9, 2010

Class Action Certification Sought in NCCI et al v AIG Premium Case

Class Action certification is being sought in a claim against AIG brought by NCCI Holdings Inc., Liberty Mutual and Travelers Insurance for underreporting of workers ' compensation premiums. See AIG tries to block workers comp competitors' class action.

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