The state officials of New York would be seeking over USD100 million to resolve an inquiry as to the units sold by American International Group Inc (AIG) to MetLife Inc did not have the proper licenses. Alongside this isssue would be the alleged provision of misleading information, according to a person familiar with the situation.
According to the source, who sought anonymity because the matter was deemed private and confidential, both AIG and MetLife may need to pay a portion of the fine. There was no timeline provided though as to when the fine would be imposed.
AIG sold Alico and Delaware American to MetLife in 2010, which was confirmed in regulatory documentation filed last October 31. This pushed the New York Department of Financial Servces, the state's top financial regulator, and the Manhattan District Attorney's Office to seek further information from AIG about the sale.
According to the regulatory filing, "The inquiries relate to whether ALICO, DelAm an their representatives conducted insurance business in New York over an extended period of time without a license and whether certain representations by ALICO concering its activities in New York are accurate."
AIG, whose headquarters are in New York, had declined to provide a comment on the fine to be imposed. This was communicated through their spokesman Jon Diat. For its part, MetLife spokesperson John Calagna did not immediately respond to calls made seeking comment on the matter.
AIG had sold its American Life Insurance Co Division or ALICO to MetLife for USD15.5 billion in March of 2010. The said sale was completed in November of that year. Also included in that sale was Delaware American Life Insurance Company. The sale included a 20% stake in MetLife in exchange for the assets, broken down as 78.2 million common shares and 6.6 million shares of convertible preferred stock,
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