AIG seen as trying to hobble probe with Lawsky lawsuit

The suit by AIG against Lawsky involves a former AIG life insurance unit, American Life Insurance Co., or Alico.

A March 31 consent order signed by Lawsky with MetLife Inc. found that Alico, and Delaware American Life Insurance Co., DelAm, violated insurance regulations by marketing from New York group life, disability and medical insurance to companies with overseas operations, without being licensed by the state. AIG sold Alico and DelAm to MetLife in 2010.

In the same order, Lawsky's agency found that Alico made "misrepresentations and omissions" about its insurance business to the state Insurance Department, a predecessor to the Department of Financial Services.

Lawsky's department also in the March order said Alico was told that unlicensed insurance companies are limited to performing back-office functions in New York.

MetLife agreed to pay $60 million to resolve its part in the probe, with $50 million going to Lawsky's agency and $10 million to the office of Manhattan District Attorney Cyrus R. Vance Jr.

The case is American International Group, Inc. v. New York State Department of Financial Services, 14-cv-2355 U.S. District Court, Southern District of New York, (Manhattan).

See also:

• AIG preparing for federal regulation
• AIG earnings fall
• MetLife settles on license issues, AIG balks