Insurer Agrees To Pay $58.5 Million To Mass. Over Excess Profits Related To Big Dig

BOSTON (AP) _ The workers' compensation insurance carrier for the Big Dig construction project has agreed to pay $58.5 million for excess profits it failed to return to the state, the state attorney

Monday, May 14th 2007, 3:35 pm

By: News On 6

BOSTON (AP) _ The workers' compensation insurance carrier for the Big Dig construction project has agreed to pay $58.5 million for excess profits it failed to return to the state, the state attorney general said Monday.

American International Group Inc.'s settlement includes $26 million in losses to the state, with the rest in interest. The money will be returned to the Big Dig, which at nearly $15 billion is the most expensive construction project in U.S. history.

The contract between AIG, one of the world's largest insurers, and the Big Dig required the insurer to return ``surplus'' profits to the state. In exchange, AIG could limit its losses because of the high-risk nature of the work and the potential for workplace injuries.

Attorney General Martha Coakley said her analysis showed AIG never passed along surplus funds as agreed _ resulting in the $26 million in losses to the state.

Company spokesman Chris Winans said AIG was pleased to have settled the matter. He declined to comment further.

The Big Dig started 15 years ago at a cost of $2.6 billion to replace the above-ground Central Artery with a series of traffic tunnels, but it was bogged down with delays, leaks, falling debris and cost overruns.