The American International Group will be paying the penalty to the New York industry regulator.
The American International Group insurance company is now required to pay a $35 million penalty for the violations of its former subsidiaries that had been selling coverage without a license in New York.
This, according to a statement issued by the New York State Department of Financial Services.
According to the statement from the department, former units of AIG had not only been selling within the state without proper licensing, but they had also been misrepresenting those activities to the state regulators. The dispute between the insurance company and the department is the result of activities from certain units of the company that have now been sold off. Both American Life Insurance Co. (ALICO), as well as DelAm, which is another former unit of AIG, were purchased from that insurer by another provider, MetLife Inc., in 2010.
That life insurance company, MetLife, has already been paying millions of dollars in fines due to the subsidiaries’ activities.
Back in March, MetLife found itself facing $10 million in fines to the Manhattan District Attorney’s office, as well as a much larger $50 million to the New York State Department of Financial Services, due to the activities of the subsidiaries that it purchased from AIG back in 2010.
At the start of April, AIG filed a lawsuit against the regulators in the state in an attempt to stop them from being able to enforce proceedings with respect to the activities of ALICO. Since that time, the insurer had been working to attempt to protect itself from the prospective outcomes of the efforts of the department to apply fines as a result of the activities of the two subsidiary companies that it had sold off. Many of those efforts came to an abrupt halt, last Friday, when the official announcement of these penalties was first made.
Following the announcement that was made by the department which announced the fines that AIG was required to pay, that insurance company will also be obliged to withdraw that suit. This, according to a consent order.