Oregon fines AIG $5 million for mishandling claims
Workers' comp - The group of companies might avoid $4 million of the fines if it complies with state rules

Friday, July 06, 2007
JULIE TRIPP
The Oregonian Staff

Oregon regulators on Thursday imposed $5 million in fines against a group of nine companies, all under the American International Group umbrella, for mishandling workers' compensation claims and failing to accurately report premium and claims data.

The Department of Consumer & Business Services also imposed at least $3 million in back payments to the state's workers' compensation system.

"We take these issues very seriously," said department director Cory Streisinger, saying the companies had failed to pay injured workers in a timely fashion or accurately reimburse people for some medical services. "Injured workers depend on their insurance carriers to pay claims accurately and on time, and our other major carriers succeed in doing so. AIG hasn't lived up to the standards Oregon injured workers are entitled to expect, and it's our job to hold them accountable."

AIG must pay $1 million of the fine within 45 days. The department suspended the remaining $4 million and will withdraw or impose it next year, depending whether the companies improve and comply with the law.

AIG's inaccurate claims reporting also led to an underpayment of the assessments insurers pay to finance the workers' compensation system, the department said in a release. AIG paid about $3 million in past assessments and interest last fall, and has 60 days to provide the department with documentation showing whether additional assessments are due.

The department noted in its statement Thursday that AIG, the third largest provider of workers' compensation insurance in Oregon, has had an ongoing pattern of violations. The company has an average of 68 civil penalties per year for claims and coverage compliance violations in 2005 and 2006.

AIG has agreed to the fine and the conditions, the department reported. An AIG spokesman in New York said the company is pleased to have reached an agreement with Oregon regulators.

Julie Tripp: 503-221-8208; julietripp@news.oregonian.com;
www.oregonlive.com/business/oregonian/julie_ tripp