AIG agrees to pay $58.5M to 'Big Dig'

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BOSTON, May 15 (UPI) -- American International Group Inc. has agreed to pay $58.5 million in surplus funds to Massachusetts as part of a contract tied to Boston's "Big Dig" project.

The New York insurer failed to pay 15 years of surplus funds to the state for the Big Dig, officially called the Central Artery/Tunnel Project, which rerouted an interstate highway through the heart of Boston into a 3 1/2-mile tunnel, Massachusetts Attorney General Martha Coakley said.

The payment covers $26 million in money owed to the state, plus interest, Coakley said.

AIG agreed to pay the bulk of the money immediately to help cover the project's financial needs and to pay the remainder by next Tuesday, Coakley said.

"In a long-term, multibillion-dollar project like the Big Dig, it is imperative that we maintain vigilant oversight of the finances to ensure that all parties are performing as agreed," Coakley said.

AIG was the workers' compensation insurance carrier for the project.

The carrier was supposed to give Massachusetts surplus money representing the difference between worker premiums and project-related injury claims.