Metlife agreed today to settle for $60 million allegations by New York state insurance regulators and prosecutors that two former American International Group insurance units based in Delaware operated in New York from 2007 to 2013 without paying New York premium and franchise taxes during that period.
AIG sold the companies to MetLife in 2010.
However, AIG implied that it is challenging the enforcement action.
In a statement, AIG spokesman Jon Diat said the company “disagrees that the conduct in question violated the law,” but would have no further comment.
Diat said that, “Decades of industry practice and the plain language of the relevant statute make clear that a New York license is required only where a foreign insurer issues policies covering New Yorkers.
“Moreover, there is no allegation, and we are aware of no evidence, that anyone has been harmed by the conduct at issue,” Diat said.
In the shorthand used on these occasions, Benjamin M. Lawsky, New York’s superintendent of Financial Services, would only say that the investigation into AIG’s role “remains ongoing and is not resolved.”
“Obviously we strongly disagree with AIG’s statement and our investigation into AIG will continue,” said Matt Anderson, a spokesperson for Lawsky.
The two companies are American Life Insurance Company (ALICO) and Delaware American Life Insurance Company (DelAm).
The two companies announced the probe was underway in securities filings in November.
Lawsky and Cyrus Vance, Manhattan District Attorney, contend that those subsidiaries solicited insurance business in New York without a license and made intentional misrepresentations and omissions to the Department about those activities. Of the $60 million, a $50 million fine will be paid to DFS and $10 million will be paid to the Manhattan District Attorney’s Office. Lawsky also said that MetLife has agreed to fully cooperate with DFS’ investigation concerning Insurance Law violations by AIG, ALICO, DelAm, and other AIG subsidiaries and affiliates related to conduct prior to MetLife’s acquisition.