AIG to Pay Illinois $3.7 Million in Workers’ Comp Settlement

American International Group (AIG), the multinational insurance company, will pay state regulators millions of dollars in a settlement based on the corporation’s misreporting of workers’ compensation premiums. The company will pay $146 million, with the state of Illinois receiving $3.7 million of the total.

Every state and the District of Columbia participated in a probe that was launched in 2008. The investigation revealed that AIG hid $2.12 billion or more in workers’ comp premiums by assigning them to other aspects of its business, in an effort to lower taxes and assessments. The misreporting took place from 1985 to 1996.

In the settlement, AIG agreed to pay $100 million in fines, plus $46.4 million in taxes and assessments.

Although the settlement was reached in December of 2010, several other conditions had to be met before the payments could be made. AIG had to resolve a $450 million settlement in a case involving some of the company’s competitors and pay $25 million in another case involving insurance guaranty associations.

Other states will benefit greatly from the settlement. Florida, which was one of the lead states involved in the probe, will receive $14.3 million, with some money going to several state agencies, including the state’s Workers’ Compensation Insurance Fund and the Division of Workers’ Compensation. Pennsylvania will collect $16.8 million, and California will receive $15.6 million.

The multi-state investigation built on a 2006 probe by New York’s attorney general and efforts by officials in Minnesota, Rhode Island and Indiana.

Robert Briskman is a Chicago workers compensation attorney and Chicago workers compensation lawyer with Briskman Briskman & Greenberg. To learn more call 1.877.595.4878 or visit

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