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Minnesota Fines AIG Over 'Short Paying' for Auto Repairs

December 13, 2007

MINNEAPOLIS, Minn. --- The state of Minnesota fined AIG $20,000 and issued a cease-and-desist consent order, after Minnesota collision repair shops organized to draw the government's attention to the practice of "short paying" by insurance companies.According to Automotive Body Repair News, Minnesota Commissioner of Commerce Glenn Wilson ordered AIG to reimburse policyholders and third-party claimants within 30 days for payments they were forced to pay out-of-pocket. Body shop owners in the state have long complained that some insurance companies were not paying the full cost of necessary vehicle repairs.The order was based on charges that AIG paid a so-called prevailing rate to body shops that was less than the actual amount charged for required repairs."We are glad we reached an amicable agreement with the commissioner that is in the best interests of consumers," AIG spokesman Joseph Norton told Automotive Body Repair News. AIG declined a formal hearing on the matter and accepted the terms of the consent order.
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