Spitzer Says He’ll Audit AIG

New York Atty. Gen. Eliot Spitzer said Tuesday that he would audit American International Group Inc. over reports that AIG improperly booked workers’ compensation premiums, providing an “unlawful benefit” to the company worth tens of millions of dollars.

Spitzer and the state Insurance Department are appointing a consultant to audit the company for conduct that Spitzer said appeared to have happened over a decade and has been discontinued.

Spitzer said a 1992 AIG memorandum to top management reported the practice was illegal, a notice that followed similar warnings in previous years.

Spitzer and acting state Insurance Superintendent Howard Mills are looking at whether AIG booked premiums for workers’ compensation coverage as premiums for general liability coverage.

The result could be that AIG avoided paying its share into several workers’ compensation funds.

AIG has been cooperating with state officials on the issue, the attorney general’s office said. To date, AIG has provided no evidence that it disclosed the practice to regulators or made restitution. An AIG spokesman didn’t respond to a request for comment Tuesday.

AIG shares fell 69 cents to $51.07 on the New York Stock Exchange.

The funds at issue are supposed to be used for the operations of the state Workers’ Compensation Board and to provide certain other claim benefits for injured workers, Spitzer said.