Settlement Reached In Illinois Insurance Case
Tuesday’s Post 1.17.12 – An Illinois court has approved payments by AIG Insurance Company as a settlement from the allegations made against the largest insurance company in the world. The law suit alleges the insurance carrier failed to make mandatory monetary donations to State Workers Compensation Fund by intentionally misreporting its market share of Insurance premiums. The agreement was in response to claims by other Workman’s Comp insurance companies that AIG had intentionally reduced the value of its holdings in order to cut its financial responsibilities toward that states insurance fund. AIG will be responsible for reimbursing the state over $450,000,000.00. The Settlement comes as an alternative to going to trial. The allegations against the insurance carrier, true or false, may prove damaging to the company’s reputation. These representations to Illinois regulators allegedly started the early 1980’s. Laws in many other states require that insurance concerns like AIG contribute funds to cover payments made to uninsured workers whom may be hurt on the job.
Before the close of 2011; the Chicago Judge whom decided the case approved the entire payment amount and structure when AIG needs to cut the big check. Although the amount was near 1/2 a billion dollars, the Judge considered the amount fair and acceptable. Not every insurance carriers whom brought the original law suit are happy with the amount of the settlement. Liberty Mutual Insurance Company, one of the nations largest auto insurance carriers, stated the payment is an obvious attempt by AIG to avoid the truth of the insurance companies under-reporting.
Michael E. Dortch
President & Managing Agent
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