AIG Had Cuba Ties While Owned by U.S., Agrees to Fine

AIG Had Cuba Ties While Owned by U.S., Agrees to Fine
By Zachary Tracer May 8, 2014 5:22 PM GMT+0200

American International Group Inc. (AIG) 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 spokesman 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.

Source: "AIG Had Cuba Ties While Owned by U.S., Agrees to Fine -
Bloomberg" -
http://www.bloomberg.com/news/2014-05-08/aig-had-cuba-ties-while-owned-by-u-s-agrees-to-fine.html