AIG Paying $300-Million to Settle Life Insurance Probe

AIG will pay more than $300 million to settle dispute with states over life-insurance payments that go unclaimed, according to California's finance office.

In one agreement over unclaimed property, AIG will pay an estimated $300 million owed on life-insurance claims, according to Jacob Roper, a spokesman for California State Controller's office. That payment will be divided among 39 states and the District of Columbia.

California's share will be between $25 million and $30 million.

In a separate settlement announced Monday, AIG agreed to pay $11 million to insurance regulators.

AIG joins a roster of insurance companies that have pledged to change the way they handle life-insurance claims. Last week, Nationwide agreed to pay $7.2 million in a similar settlement with state insurance regulators. MetLife and Prudential have made similar arrangements.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)