Attorney General Martha Coakley Recovers Additional $218,920 From Big Dig Insurer

FROM THE OFFICE OF THE ATTORNEY GENERAL

August 19, 2008

BOSTON–Massachusetts Attorney General Martha Coakley’s Office recently recovered an additional $218,920 from American International Group (AIG) for the Central Artery Tunnel (CA/T) Project. The payment, which was made in June, is part of an ongoing reconciliation of premiums and residual market payouts stemming from the insurer’s settlement of Big Dig workers compensation insurance premium issues with the Attorney General’s Office. AIG serves as the workers’ compensation carrier for the Central Artery Tunnel (CA/T) Project.

“In a long term 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,” said Attorney General Martha Coakley. “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.”

A review by the Attorney General’s Office last year found that the company failed to pay certain surplus funds to the Commonwealth as required under its contract. The additional payment stems from further review by the Attorney General’s Office after a May 2007 settlement in which AIG agreed to pay $58.5 million to the Commonwealth, which included $26 million owed to the Big Dig plus other compensation and $40,000 in attorney fees and costs.

As part of the ongoing reconciliation of premiums and residual market payouts and after discussions with staff at the Attorney General’s Office, AIG this year is making an additional $200,000 payment to the CAT Project.

Workers’ compensation insurance pays employees lost wages, compensation for permanent injuries, and medical costs when they are injured on the job. Employers are required by law to carry workers compensation insurance.

This matter was handled by Mathematician Burt Feinberg and Assistant Attorneys General Peter Leight and Glenn Kaplan of Attorney General Coakley’s Insurance and Financial Services Division.