New York State Imposes 'Unauthorized' Insurer Penalty on AIG

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AIG has another subsidiary, The United States Life Insurance Company in the City of New York, that is authorized to do business in New York state. AIG has agreed, through a consent agreement with the New York department, to transfer the handling of transactions related to pension risk transfers to U.S. Life.

Under New York state law, "an unauthorized insurer may not make telephone calls, provide access to web portals (save for limited circumstances …), or engage in any other manner of communication with any person in New York from outside New York, other than by mail," according to the consent order. "In addition, an unauthorized life insurer may not solicit, negotiate, or sell group annuity contracts ("GACs") through in-person meetings, telephone calls, mail, emails, access to web portals, or any other form of communication from a location in New York."

The New York department imposed a $45 million penalty on another insurer, Athene Annuity and Life Company, in connection with similar allegations in April 2020.

AIG representatives said in a written comment on the New York state consent agreement that they are pleased to have resolved the matter.

"We have been working closely with our regulator throughout this process and are taking all necessary steps to ensure alignment with their industrywide guidance," AIG representatives said.

"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," they said.

— Read New York Imposes $19.75 Million in Fines in Pension Risk Transfer Case, on ThinkAdvisor.

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