American International Group has paid the Commonwealth of Massachusetts $3.44 million after admitting that it had undereported workers’ compensation premiums over several years, Massachusetts Division of Insurance commissioner Joseph G. Murphy said Thursday.
According to Murphy’s office, Massachusetts was one of eight states that led an investigation into AIG’s practices. Under the settlement agreement, AIG has agreed that its previous financial reports were inaccurate with regard to its workers’ compensation insurance line, underreporting workers’ compensation premium dollars by $2.1 billion nationwide. As part of the settlement, AIG has paid both 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 that AIG has paid to the Commonwealth represents one of the largest workers’ compensation premium settlements with the Division of Insurance; the money will be placed in the General Fund, Murphy’s office said. The last such big settlement came in 2009 when Health Markets Inc. paid $2 million, the office said.