American International Group Inc. will pay a $12 million penalty to New York state for violations of state insurance law related to the pension risk transfer business of subsidiary American General Life Insurance Co.
The penalty was assessed by the New York state Department of Financial Services, which said American General Life Insurance solicited and completed four unauthorized pension risk transfer transactions with New York-based corporate pension plan sponsors between Jan. 1, 2014, to June 17, 2019, according to a news release from the department Monday. The subsidiary is not licensed as an insurer in New York.
As part of its agreement with the state's department of financial services, AIG is transferring future transactions to a different subsidiary, the United States Life Insurance Co. in the City of New York.
It is the second PRT-related action by the DFS against an insurer. In May, the department announced Athene Holding Ltd. would pay a $45 million penalty to New York state for state insurance law violations related to the pension risk transfer business of subsidiary Athene Annuity & Life Co.
"A DFS license offers consumers peace of mind through the requirement of compliance with New York laws and regulations, helping to safeguard assets," said Linda A. Lacewell, superintendent of financial services, in the news release. "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."
In a statement emailed by spokesman Marc Hazelton, AIG said: "We are pleased to have resolved this matter with the New York state Department of Financial Services. We have been working closely with our regulator throughout this process and are taking all necessary steps to ensure alignment with their industrywide guidance. There has been no disruption for our pension risk transfer corporate clients or for their New York-based retirement plan participants who will continue to receive their benefit payments as usual. We remain fully committed to serving as a strategic partner in this important market."