American International Group has paid the Commonwealth of Massachusetts $3.44 million after admitting it undereported workers compensation premiums over several years, the commissioner of the Division of Insurance, Joseph G. Murphy, said Thursday.
Massachusetts was one of eight states that led an investigation into AIG’s practices. Under a settlement agreement, AIG acknowledges its previous financial reports were inaccurate about its workers compensation insurance line, underreporting workers compensation premium dollars by $2.1 billion nationwide. As part of the settlement, AIG has paid a $100 million penalty and more than $46.5 million in additional premium taxes and assessments to all 50 states and the District of Columbia.
The $3.44 million AIG paid to Massachusetts is one of the largest workers compensation premium settlements with the Division of Insurance. The last big settlement was in 2009, when Health Markets Inc. paid $2 million.