New York Attorney General Eliot Spitzer on Tuesday said he will audit American International Group Inc. over reports that AIG improperly booked workers’ compensation premiums, providing an ”unlawful benefit” to the company worth tens of millions of dollars.
Spitzer and the state Insurance Department are appointing a consultant to audit the company for conduct that Spitzer said appears to have happened over a decade and is now discontinued.
Spitzer said a 1992 AIG memorandum to top management reported the practice was illegal, a notice that followed similar warnings in previous years.
Spitzer and acting state Insurance Superintendent Howard Mills are looking at whether AIG booked premiums for workers’ compensation coverage as premiums for general liability coverage. The result could be that AIG avoided paying its share into several workers’ compensation funds.
AIG has been cooperating with the state officials on the issue, the attorney general’s office said. To date, AIG has provided no evidence that it disclosed the practice to regulators or made restitution.
An AIG spokesman didn’t immediately respond to a request for comment Tuesday.
