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AIG to pay $279,038 over Canadian subsidiaries selling Cuban coverage

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AIG to pay $279,038 over Canadian subsidiaries selling Cuban coverage

American International Group Inc., has agreed to pay $279,038 to settle charges that it violated sanctions against Cuba by selling policies that insured Cuban risks, according to enforcement documents filed by the Office of Foreign Assets Control Thursday.

OFAC said in the enforcement document that AIG “voluntarily self-disclosed the apparent violations and that the apparent violations constitute a non-egregious case.”

Between January 2006 and March 2009, two AIG subsidiaries in Canada issued or renewed property/casualty policies — comprehensive general liability, directors and officers' excess liability, and pollution legal liability — that covered Cuban risks of a Canadian corporation “for an estimated aggregate premium of $486,137.71,” the OFAC document said.

One of these subsidiaries also had a D&O liability policy between Jan. 1, 2006, and Oct. 4, 2006, insuring some directors and officers of three Cuban joint venture partners of a Canadian corporation, generating premium of $55,578.08.

In addition, from March 17, 2006, to September 30, 2008, AIG subsidiary Travel Guard Canada sold, renewed, or maintained 3,446 travel insurance policies for which Cuba was a travel destination identified by the insured, generating total premiums of $337,973.25.

OFAC stated further that “AIG, including certain members of the institution's management, had actual knowledge of the conduct that led to the apparent violations,” something the agency considered an “aggravating factor.”

“AIG made a voluntary disclosure with the Office of Foreign Assets Control regarding Cuba sanctions, relating primarily to travel insurance sold to individuals but also to a small number of property and casualty insurance policies issued by its Canadian subsidiaries between 2006 and 2009,” AIG said in a statement. “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.”