State to receive $1M in AIG settlement
Connecticut's tax coffers are $1 million to the good after a multi-state settlement with the American International Group Inc. was announced Monday by the state Insurance Department.
Connecticut's compensation, part of a $146.5 million multi-state settlement over allegations that AIG under-reported workers compensation insurance premiums to illegally avoid taxation and assessments, will be placed in the state's general fund, said state Insurance Commissioner Thomas B. Leonardi.
"The settlement is the result of close coordination with state insurance regulators from around the country," Leonardi said in a statement.
Leonardi said that AIG, which received a federal government bailout of $182 billion during the nation's 2008 financial crisis, had under-reported more than $2.1 billion in workers' compensation premiums nationwide. The insurance giant substituted other insurance lines in its financial reports, according to an investigation undertaken four years ago, thereby reducing its tax obligation and other assessments.
The under-reporting dates back more than a quarter of a century, according to the settlement agreement available online at http://www.catalog.state.ct.us/cid/portalApps/images/reports/005378826-5378826.pdf.
AIG agreed to pay all 50 states a total of $46.5 million in taxes and assessments, plus a $100 million fine.
Just last week, the Federal Reserve announced that AIG and Bear Stearns had repaid all of the billions of dollars in loans the government offered as part of the 2008 bailout package. Bloomberg news service reported that the U.S. Treasury Department still owns 61 percent of AIG.
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