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Florida to pocket $14 million from AIG settlement

By Palm Beach Business.com

TALLAHASSEE — Insurance giant American International Group, better known by it’s initials, AIG, has agreed to pay nearly $150 million in penalties and additional taxes to settle charges that it underreported the amount of workers’ compensation business it wrote by $2.12 billion.

The money will be split between the 50 states and the District of Columbia. Florida’s take will total $14.3 million, which will be split among the Office of Insurance Regulation and three other agencies.

The investigation into the allegations dates back before the January 2008 federal bailout of AIG. Regulators said the idea of the scheme was to reduce the fees and taxes that AIG owed by reporting workers comp premiums under other, less costly, lines of business.

"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 said.  "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."

Florida and seven other states led the examination of AIG’s books. Under the deal, AIG also agreed to have its workers’ comp premiums monitored and a follow-up investigation in two years.