Oregon to Net $3.6 Million From AIG Settlement

March 10, 2011

Oregon will receive about $3.6 million as part of a multi-state settlement with the American International Group (AIG) over misreporting of workers’ compensation insurance premiums.

A two-year examination of AIG and its Chartis insurance companies found the companies misreported $2.12 billion in workers’ compensation premium nationwide as general or commercial automobile liability premium.

In Oregon, AIG’s misreporting led to an underpayment of $2.4 million into the workers’ compensation premium assessment, which funds the state’s workplace safety and workers’ compensation programs. In the settlement, AIG agreed to pay $2.4 million to the Department of Consumer and Business Services (DCBS) for the underpayment, as well as a $1.2 million penalty, which will be deposited into Oregon’s General Fund.

In total nationwide, AIG’s settlement consisted of an agreement to pay $100 million in fines and payment of an additional $46.5 million in premium taxes and assessments. In addition to the monetary penalties, the settlement includes the following:

  • Adoption of a compliance plan ensuring the company’s compliance with workers’ compensation rates, forms, and financial reporting requirement.
  • Monitoring the company’s compliance with the plan for a 24-month perio.
  • An additional fine of up to $150 million if an examination at the end of the 24-month period demonstrates non-compliance by the company.

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