Attorney General Martha Coakley has announced American International Group (AIG) has paid an additional $900,000 to its workers’ compensation carrier for the Central Artery Tunnel (CA/T) Project, aka Boston’s Big Dig.

The payment is part of an ongoing reconciliation of premiums and residual market payouts stemming from the insurer’s settlement of Big Dig workers compensation insurance premium issues with the AG’s Office.

Under a May 2007 settlement, AIG agreed to pay the state $58.5 million after the AG’s office found the company failed to pay surplus money as required under its contract.

AIG also agreed to pay $26 million in losses to the state plus interest. The recovered money, which represents 15 years of unpaid surplus funds, was returned to the Big Dig, minus $40,000 in attorneys’ fees and costs.

Last August, after discussions with the AG’s office, AIG paid an additional $200,000 to the state for reconciliations of premiums not yet paid out.  This year, per the ongoing reconciliation arrangement, AIG has made a further payment of $900,000. 

The worker’s compensation insurance system is a "residual market system," Coakleys’ office said in a statement. This allows high risk employers such as roofing and construction companies to obtain insurance from a common pool of funding drawn from all insurers in the market place.

As part of the final contract between AIG and the state, there was a caveat which stipulated that years when the insurance pool loses money, the state is required to pass that money back to AIG. Similarly, years when AIG experienced an additional pool share, that money should have been passed back to the Central Artery Tunnel Project. The AG’s 2007 review showed that AIG failed to both charge the state and pass along surplus monies as agreed in the contract.