The insurer has now sued the top financial regulator in New York to block a fine.
American International Group Inc. (AIG) has filed a lawsuit against Benjamin Lawsky, the top financial regulator in New York, in order to block it from being able to fine the insurer over its insurance marketing efforts that it has been conducting without a state license.
The claim from AIG is that it would be unconstitutional to have to pay this fine.
AIG has called the insurance marketing fine an interpretation that is “flawed and unconstitutional” of the law in New York State. They have requested that a federal court judge in Manhattan block Lawsky (the New York State Department of Financial Services superintendent) from being able to issue this fine, and to stop the Department of Financial Services in the state from being able to go after the insurer with regards to the marketing of its products by a former unit to multinational companies.
The issue, according to AIG, is that the state doesn’t have the authority to regulate insurance marketing outside N.Y.
The complaint that was filed by AIG said that when it comes to the business of insurance that has been marketed or sold to consumers outside of New York, the state doesn’t have the authority to impose regulations. This specific filing has to do with American Life Insurance Co. (also known as Alico, which is a former unit of AIG.
Within the complaint, the insurer explained that state officials had indicated that they would start administrative proceedings in order to set fines in place. Lawsky signed a consent order on March 31, with MetLife Inc., and determined that Alico and DelAm (Delaware American Life Insurance Co.) were in violation of insurance marketing regulations by promoting without a state license, from New York group medical, disability, and life policies to companies that have operations overseas. Alico and DelAm were sold by AIG in 2010 to MetLife.
According to Benjamin Lawsky’s spokesperson, Matthew Anderson, “AIG may not want to cooperate with our probe, but they are not above the law -– no matter how big or powerful they may be.” He also went on to add that “We will respond in court.”