California To Receive Millions in Nationwide AIG Settlement

SACRAMENTO (CBS SF) – Insurance Commissioner Dave Jones has announced that American International Group, Inc. (AIG) will pay California $15.6 million in penalties to settle allegations that its insurance companies under-reported workers’ compensation premiums over several decades – part of a nationwide settlement for under-reporting the taxable income.

The settlement covers a 25-year period of AIG reportedly “low balling” its income – complaints about this practice came from all 50 states.

KCBS’ Barbara Taylor Reports:

AIG did not acknowledge guilt as part of the settlement, but Jones maintained the company did engage in intentional wrongdoing.

“We believe that this wasn’t accidental behavior and I think the proof is in the pudding,” he said.

California received the largest share of the nationwide settlement that totaled more than $146 million.

“And that money will go to the state’s general fund at a time when the state continues to face very difficult challenges in terms of its deficit,” said Jones.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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