The Illinois Department of Insurance (DOI) has announced that it collected over $10.3 million in fines for improper market conduct in 2012. The Department said that the amount of fines collected has increased due to its greater enforcement efforts and participation in multi-state examinations. DOI collected $322,000 in fines in 2011, $217,000 in 2010 and $363,630 in 2009.
The enforcement includes settlements announced in 2012 with Prudential Company of America and MetLife Inc., as well as a multi-state investigation of American International Group Inc. (AIG) and its workers’ compensation affiliates for under-reporting of premiums. The state of Illinois received a settlement of $3.7 million from AIG.
The AIG settlement was part of a multi-state effort that resulted in payments to state regulators across the country totaling $146.4 million. The amount included fines of $100 million and premium taxes and assessments of another $46.4 million. The 2008 investigation discovered that AIG had allegedly attributed at least $2.12 billion in workers’ compensation premiums to other types of insurance, thus lowering its taxes. The misreporting took place from 1985 to 1996.
Fines collected by DOI are placed in the Insurance Administration Producers Fund and go toward DOI appropriations.
The companies above have agreed to introduce reforms to aid in the identification of and payment to beneficiaries of life insurance policies.