Advancing toward independence from the Fed, American International Group Inc. signed $4.3 billion of credit agreements last week. Administered by JPMorgan Chase & Co., the agreements include a three-year deal for $1.5 billion and a similar amount for 364 days, New York-based AIG said in a regulatory filing Monday, noted Bloomberg. Chartis Inc., an AIG subsidiary, obtained an additional $1.3 billion, according to the filing.
According to reports filed with the Securities and Exchange Commission, the agreements are contingent upon the insurer paying down its credit line with the Federal Reserve Bank of New York by March 31.
AIG, which is seeking to replace government funds with private capital, said on Dec. 8 that it had struck a deal to repay a $20 billion credit line from the Fed, which supported the company with Troubled Asset and Relief Program funds during the financial crisis, then focus on its further obligations to the U.S. Treasury Department.
The news of AIG’s three-year deal comes on the heels of reports that it agreed to pay more than $100 million in fines and other penalties surrounding claims the insurer violated workers compensation regulations.
AIG’s proposed settlement involves an agreement that insurance regulators in eight states would close out a probe into allegations the insurance giant under-reported some $2.12 billion of workers’ compensation premiums, Pennsylvania insurance officials reportedly said Wednesday. State regulators have accused AIG of reporting workers’ compensations premiums as general or commercial automobile liability premiums. AIG has been under the microscope for alleged violations dating back to 1996.
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Corrected December 27, 2010 at 11:28AM: yes