American International Group Inc. sold coverage to clients with ties to Cuba, a nation sanctioned by the U.S., when the insurer was owned by American taxpayers after its 2008 bailout.
The insurer agreed to a $279,038 settlement after telling regulators that it violated sanctions, according to a statement today from the U.S. Treasury Department’s Office of Foreign Assets Control.
AIG units sold polices from 2006 through late March of 2009 guarding a Canadian client against risks in Cuba, including pollution liability, according to the statement. The insurer was rescued on Sept. 16, 2008, and repaid the U.S. in 2012.
“AIG, including certain members of the institution’s management, had actual knowledge of the conduct,” according to the statement “The compliance programs of AIG’s two Canadian subsidiaries were inadequate.”
AIG also sold travel coverage to Canadians taking trips to the island from March 17, 2006, to Sept. 30, 2008, OFAC said. The premiums collected were about $338,000 on the travel policies and more than $500,000 for commercial policies, which also included protection for joint-venture partners of a Canadian corporation in 2006, according to the statement.
OFAC said it took into account the company’s cooperation and considers the case “non-egregious.”
“Upon identifying and voluntarily disclosing these matters, AIG implemented comprehensive improvements to its global sanctions compliance program, including improvements targeted to more effectively address applicable sanctions laws,” Matt Gallagher, a spokesperson for AIG, said in a statement.
AIG operates in more than 130 nations, and its clients range from individuals to multinational corporations. While the insurer was controlled by the U.S., it disclosed that it had investments of $233 million that had contacts with Iran, Sudan or Syria.