Oklahoma Insurance Department Levies $400,000 Fine
Wednesday, March 21st 2007, 7:44 am
News On 6
OKLAHOMA CITY (AP) -- The state has levied a $400,000 fine against 11 insurance companies for not providing information needed to calculate workers' compensation premiums.
The companies are controlled by American International Group Inc. and include two of the largest private workers' comp insurers in the state.
Insurance Commissioner Kim Holland said lapses in data could have resulted in Oklahoma consumers paying too much or not enough for workers' comp insurance policies.
"These reporting irregularities not only impact the rates of AIG companies, but those of every insurance company writing workers' compensation products in the state," Holland said.
She said AIG paid the fine assessed by the Oklahoma Insurance Department and the money will go to the department's revolving fund for general operations.
"The message that is sent is that we are going to work with you, but we have expectations," Holland said. "If you don't perform, there will be consequences, as there should be."
According to the department's consent order, the AIG companies in Oklahoma didn't report accurate information required either by the state or the National Council on Compensation Insurance Inc. between 1998 and 2004.
NCCI collects financial data from insurance companies on behalf of Oklahoma and other states to help determine loss costs, which are then used to calculate workers' comp premium rates.
The department found several discrepancies in AIG's Oklahoma data, including a more than $13 million difference in premiums reported. Holland said NCCI could not use the companies' financial data for 2005 loss costs because of late filing and data quality issues.
AIG spokesman Joe Norton said the company continues to "work with NCCI and the Oklahoma (Insurance) Department to fully comply with current and future data calls."
AIG has completed the first phase of a data remediation plan for states using NCCI data, the company said.