AIG to Refund Millions to Florida Policyholders

By William Murphy

Published on September 29, 2006

AIG is to refund about $13.6 million to policyholders for excessive rates charged on workers' compensation and approximately $100,000 on several of its other insurance lines. McCarty said that AIG charged too much for coverage required by the federal Terrorism Risk Insurance Act.

AIG must also pay $300,000 in compensation to the Florida Office of Insurance Regulation to cover costs and fees tied to the settlement, which was finalized September 26. An OIR spokesman said that the agency began proceedings against AIG in 2003.

AIG initially filed its intent to charge the disputed rates in January 2003. Under a Florida use-and-provisions statute, the company was allowed to collect premiums while the filing was under review by the OIR. The OIR ultimately decided against the filings, and AIG requested formal hearings. Two judges with the Division of Administrative Hearings ruled separately that AIG had failed to justify the terrorism-related rates.

AIG is required to issue refunds to policyholders within one year of McCarty's order.

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