American International Group, Inc.(NYSE:AIG) is reported to be paying more than $300 million to resolve a dispute with states over life insurance payments that go unclaimed, as per California’s finance office.
In an agreement over unclaimed property, AIG will be paying an estimated amount of $300 million owed on life insurance claims, as per a spokesman for Jacob Roper, a California State Controller’s spokesman. The payment will be reportedly divided among 39 states and the District of Columbia.
California’s share will be somewhere between $25 million and $30 million.
In a separate agreement that was announced on Monday, AIG settled to pay $11 million to insurance regulators.
AIG is now a part of a roster of insurance companies that have pledged to alter the way they handle life insurance claims. It was last week when Nationwide had agreed upon paying $7.2 million in a similar agreement with insurance regulators of the state. According to reports, Prudential and MetLife have made akin arrangements.
There was no immediate response from Jim Ankner, a spokesman at AIG, when he was called.
Florida’s insurance commissioner, Kevin McCarty has praised the settlement with AIG in a statement. He said that it has been pleasing that AIG has signed the agreement and vowed to fix its practices to correctly discover worthy beneficiaries. He feels that impetus is building within the industry to alter their practices, pay beneficiaries and reach agreement with fitting regulatory jurisdictions to resolve problems associated with past practices.
Based in New York City, AIG said that the $11 million will aid in paying monitoring costs of the state insurance agencies.
The agreements need the insurance companies to ensure their insurance files alongside information on deaths collected by the Social Security Administration. In case a beneficiary cannot be located, the insurance companies are supposed to hand the unspoken for money over to the states.