(Reuters) – American International Group Inc. on Monday agreed to pay a fine of $ 12 million to settle fees incurred by the company conducting life insurance business in New York without a license.
The settlement is the second that results from an investigation by the New York State Department of Financial Services into life insurance companies that take over corporate retirement plans.
An AIG life insurance entity, American General Life Insurance Co., entered into four major deals with such plans and offered several others between January 2014 and June 2019 without a license in New York, the regulator said.
"A DFS license gives consumers peace of mind by enforcing New York laws and regulations, which helps protect assets," said NYDFS CEO Linda Lacewell.
"The Department will continue to vigorously enforce the law to protect New Yorkers' retirement assets."
AIG will transfer the handling of such transactions. to a New York-based subsidiary, the regulator added.
In a typical pension risk transfer transaction, a life insurance company takes on the assets and liabilities of the pension plan, and bets that it will do more on investments than it pays for the system
"We are happy to have resolved this issue", said an AIG spokesman.
There has been no disruption to AIG's pension risk transfer customers or to their New York-based participants in the pension plan, who continue to receive benefits as usual, the AIG spokesman said.
Athene Holding was the first insurance company to agree to a settlement in the New York regulator's investigation and paid a $ 45 million fine last year to settle unpaid insurance fees in New York.