New York slaps AIG with $12 million penalty over pension risk transfers

Regulators say the insurance company’s American General Life subsidiary operated in the state without a license, undertaking four large-scale pension risk transfers and bidding on others.

AIG will pay a $12 million penalty to New York State for violations related to its subsidiary, American General Life Insurance Co. and its pension risk transfer business after an investigation by the New York State Department of Financial Services found that AGL solicited and did insurance business in New York without a license.

The state found that from Jan. 1, 2014, to June 17, 2019, AGL entered into four large-scale pension risk transfer deals and bid on several others, involving employees based in New York and New Jersey, the department said in a release.

As part of its agreement with the state, AIG will transfer the handling of transactions from AGL to its New York-based subsidiary, the United States Life Insurance Co. in the City of New York.