A signed legal settlement with American International Group (AIG) will net the State of Kansas general fund $500,000, according to Sandy Praeger, Commissioner of Insurance.
“The AIG settlement for Kansas was part of a nationwide $146 million agreement over alleged misreporting of workers’ compensation insurance premiums,” Commissioner Praeger said. “This is a good example of how insurance departments work together to find company errors through required market conduct examinations.”
Money from insurance settlements coordinated by the Kansas Insurance Department regularly goes into the state’s general fund.
The settlement comes after a three-year market conduct examination of the company and its workers compensation insurance affiliates. The examiners concluded that AIG misreported $2.12 billion of workers’ compensation premium, which caused workers’ compensation premiums to increase.
AIG is paying a fine to each state and the District of Columbia. The fines were calculated by actuaries hired by the National Association of Insurance Commissioners. AIG is also paying premium taxes and assessments and is setting up a new compliance plan for rates, forms and financial reporting.
Source: Kansas Insurance Department
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