Massachusetts Attorney General Martha Coakley announced today that her office has reached a $58.5 million settlement with American International Group over an alleged $26 million contract violation involving workers' compensation coverage for Boston's Big Dig tunnel project.

Ms. Coakley's statement said that as part of AIG's agreement to cover the Big Dig, known formally as the Central Artery / Tunnel (CA/T) Project, the state was required to reimburse AIG for any additional "residual market" loss attributable to the CA/T Project account. Similarly, AIG was required to pass through to the state any residual market surplus attributable to the CA/T Project account, which it failed to do.

AIG said in a statement: "We are pleased to have settled this matter. The amount had previously been fully reserved and reported in earnings."

Recommended For You

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.