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Coakley settles with Workers' Comp carrier

By John O'Brien | May 14, 2007


BOSTON - As part of a settlement with Massachusetts Attorney General Martha Coakley, American International Group will pay $58.5 million to resolve allegations that it failed to pay certain surplus funds to the Commonwealth.

AIG is the Workers' Compensation carrier for the Central Artery Tunnel Project, also known as the "Big Dig." It is designed to ease traffic congestion on Boston's main highways, with construction beginning in 1991.

The settlement represents $26 million in losses to the state, plus interest, Coakley says.

"In a long term, multi-billion dollar project like the Big Dig, it is imperative that we maintain vigilant oversight of the finances to ensure that all parties are performing as agreed," Coakley said. "The Attorney General's office will continue our review of the project's expenses, and we remain committed to ensuring that the Commonwealth is not shortchanged."

Part of AIG's contract with the Commonwealth required Massachusetts to reimburse AIG for any additional residual market loss attributable to the CA/T Project account. Meanwhile, AIG was required to pass through to the Commonwealth any residual market surplus attributable to the account.

Coakley said her review showed that AIG failed to charge the state or pass along surplus monies.

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