When a worker is injured on the job, the worker can seek worker’s compensation benefits. Workers’ compensation benefits can help the worker financially during the recovery process. These benefits are typically paid through insurance companies.
A national insurance company, AIG, has recently agreed to a multi-million dollar settlement for violating insurance regulations. Regulators across the nation had accused the insurance company of falsifying financial statements and under-reporting the premiums for workers’ compensation claims.
Though the violations allegedly occurred nearly fifteen years ago, eight states participated in an investigation into AIG reporting practices. According to the investigation, AIG cheated the states out of billions of dollars by under-reporting insurance premiums for workers’ compensation. That meant that states had fewer funds to compensate certain employees who were injured on-the-job.
As part of the settlement, states will monitor AIG for the next two years; if AIG is found in violation of their agreement, they will have to pay a very large fine. In addition, AIG will be required to file financial statements that show where the money had actually been allocated.
If the proposed settlement is accepted by at least 35 more states, regulators in all states will be paid a portion of the settlement. The rest of the money that AIG has agreed to pay will go towards taxes and other types of reviews.
AIG had previously been a part of the government bailout, given nearly $200 billion to help it recover from losses. The insurance company has stated that it will begin working to repay the government for the bailout money it received.
Source: The Associated Press online, “AIG to pay $146M over workers compensation lawsuit,” 24 December 2010