NEW YORK, April 3 Insurer American International
Group Inc on Thursday sued New York regulators to force
them to back off a threatened costly enforcement proceeding over
possible violations of state law by a former unit.
AIG's lawsuit against the New York State Department of
Financial Services and its superintendent, Benjamin Lawsky, is
unusual, with an investigation target trying to stop any action.
The dispute centers on American Life Insurance Co, better
known as ALICO, and another former AIG unit known as DelAm.
MetLife Inc, another insurer, both bought units from AIG
Earlier this week New York regulators said MetLife would pay
$60 million because those two subsidiaries solicited insurance
business in New York without a license.
The Department of Financial Services added that a probe into
possible violations by AIG and other units before the 2010
MetLife purchase was ongoing.
In its complaint, AIG said New York officials have
threatened to begin administrative proceedings and other actions
in which they would seek "substantial monetary penalties" from
AIG over ALICO's activities.
AIG said Lawsky's activity violated its rights to due
process and other provisions of the U.S. Constitution, and was
an "unprecedented attempt" to expand his regulatory authority.
The Department of Financial Services said it would respond
"AIG may not want to cooperate with our probe, but they are
not above the law - no matter how big or powerful they may be,"
Matt Anderson, a spokesman for Lawsky, said on Thursday.
AIG last year repaid the last of what grew into a $182.3
billion federal bailout related to the financial crisis.
(Reporting by Jonathan Stempel, Karen Freifeld and Luciana
Lopez; Editing by Lisa Shumaker)