Insurance company to pay NY $12M in penalties for doing business without a license

ABC50 NOW

(pixabay)

NEW YORK (WWTI) — A finance and insurance company has been ordered to pay New York a $12 million penalty.

New York State Department of Financial Services Superintendent Linda A. Lacewell announced on Monday that American International Group Inc., will pay a $12 million penalty to the state for New York Insurance Law violations. Superintendent Lacewell stated that these violations are related to AIG’s subsidiary American General Life Insurance Company and that company’s pension risk transfer business.

According to Lacewell, a New York State Department of Financial Services investigation uncovered that AGL solicited and did insurance business in New York without a license.

The investigation detailed that from January 1, 2014 to June 17,2019, AGL entered into four large-scale pension risk transfer deals and bid on several others. Additionally, during this time, several of the company’s employees were based out of New York and New Jersey.

The DFS also confirmed that in September of 2019, after learning that unauthorized life insurers and their representatives were operating in the PRT market, Superintendent Lacewell issued a circular letter to all life insurers and insurance producers warning them of their obligations under the Insurance Law and putting them on notice to fix any violations.

Superintendent Lacewell commented on AIG’s penalties.

“A DFS license offers consumers peace of mind through the requirement of compliance with New York laws and regulations, helping to safeguard assets,” said Superintendent Lacewell. “The Department will continue to vigorously enforce the law to protect retirement assets of New Yorkers during a vulnerable economy due to the ongoing global pandemic.”

As part of the agreement between the DFS and AIG announced on February 1, AIG will transfer the handling of transactions from AGL to its New York-based subsidiary, The United States Life Insurance Company in the City of New York.

The full copy of the consent order can be read on the New York State Department of Financial Services website.

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.