AIG pays New York $ 12 million for its unlicensed pension threat switch enterprise
NEW YORK STATE (NEWS10) – The American International Group (AIG), the multinational finance and insurance company, owes New York state $ 12 million in fines for insurance law violations arising from its PRT business ( Pension Risk Transfer).
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Linda A. Lacewell, Superintendent of the New York Treasury Department (DFS) announced the sentence on Monday. She said an investigation by her department found that an unlicensed subsidiary of AIG was soliciting and entering into insurance business in New York.
“A DFS license provides consumers with security by complying with New York City laws and regulations and helps protect assets,” Lacewell said in a statement. “The Department will continue to vigorously enforce the law to protect New Yorkers’ retirement assets in a fragile economy due to the ongoing global pandemic.”
In a typical PRT transaction, like an employer, a plan sponsor offers employees protection from retirement plans. These employees transfer the assets and liabilities from a defined benefit plan to a life insurer, who must then make payments to the sponsor or plan participants.
According to Lacewell, the AIG subsidiary closed four major PRT deals between 2014 and 2019 and made several other offers. Their agents also worked in New York, which would require a license from DFS.
View a copy of the DFS consent form below:
This $ 12 million estimate is the second action DFS has taken to manage the unlicensed insurance business in the PRT industry.
When she learned in September 2019 that unauthorized insurers were operating in the New York PRT market, Superintendent Lacewell warned her to fix violations in a circular.