AIG agrees to pay $11M to Illinois, other states

CHICAGO -- Illinois will share part of an $11 million payment as part of an agreement with insurance giant American International Group Inc.

The announcement was made Monday by Illinois Department of Insurance Director Andrew Boron. AIG has agreed to change the way it handles the payment of life insurance benefits. The company will pay $11 million to states that are party to the agreement.

Boron says the department appreciates AIG's cooperation and the company's efforts to adopt business practices that protect policyholders and ensure that death benefits are paid quickly.

Illinois was among seven lead states that started discussions with the company.

AIG admits no liability in the settlement.