AIG SETTLES PENNSYLVANIA DISPUTE FOR RECORD $16.8M

AIG is to pay $16.8m in fines and assessments to settle Pennsylvania regulators' investigation into the company's underpayments to workers' compensation pools, marking the largest penalty ever imposed by the Pennsylvania Insurance Department. The sum includes a fine of $8.6m, taxes and assessments of $4.6m and a payment of $3.6m to the Workers' Compensation Security Fund. The payment is part of a $146.5m settlement that the company agreed in 2010 to close a multi-state probe into the underpayments, an investigation that was led by Pennsylvania. The company "underestimated their liabilities under inter-company policyholder guarantees", said Pennsylvania insurance commissioner Michael Consedine.