AIG Fined for Cuba Sanctions Violations

Thursday, May 8, 2014
From U.S. Department of Treasury:

American International Group, Inc. Settles Potential Civil Liability for Apparent Violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515:

American International Group, Inc. (“AIG”), an international insurance and financial services organization headquartered in New York, New York has agreed to remit $279,038 to settle potential civil liability for 3,560 apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515, that occurred between January 1, 2006, and March 29, 2009.

The Office of Foreign Assets Control ("OFAC") has determined that AIG voluntarily self-disclosed the apparent violations and that the apparent violations constitute a non-egregious case. The total base penalty amount for the apparent violations was $413,390. 

Between January 2006 and March 2009, two AIG subsidiaries in Canada issued or renewed three types of property and casualty insurance policies that insured Cuban risks of a Canadian corporate entity for an estimated aggregate premium of $486,137.71. The polices involved Comprehensive General Liability, Director’s and Officer’s (“D&O”) Excess Liability, and Pollution Legal Liability coverage. One of the AIG subsidiaries in Canada also maintained a D&O Liability insurance policy that insured certain directors and officers of three Cuban joint venture partners of a Canadian corporation between January 1, 2006, and October 4, 2006. The estimated total premium for D&O coverage during this time period was $55,578.08.

Separately, from March 17, 2006, through September 30, 22008, Travel Guard Canada—an AIG subsidiary in Canada—sold, renewed, or maintained in force 3,446 individual or annual multi-trip travel insurance policies in which the insured identified Cuba as the travel destination. The total premium collected for these policies was $337,973.25. During the coverage period of these 3,446 policies, and extending to December 31, 2008, Travel Guard Canada paid 103 claims for a total value of $96,910.47.