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BOSTON — Massachusetts Attorney General Martha Coakley’s office announced a $58.5 million settlement with the worker’s compensation insurer for the Central Artery Tunnel or “Big Dig” project. American International Group will pay 15 years of unpaid surplus funds, stemming from lower-than-anticipated workers’ compensation claims. The settlement is for $26 million, plus interest. AIG provided the workers’ compensation insurance under the so-called “residual market,” for high-risk employers such construction companies which frequently experience difficulty in buying insurance. The state’s contract with AIG called for it to both collect the surplus and reimburse AIG for high-than-expected losses stemming from the Big Dig account. “In a long term, multi-billion 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,” said Attorney General Martha Coakley. “The Attorney General’s Office will continue our review of the project’s expenses, and we remain committed to ensuring that the Commonwealth is not shortchanged.” The company has agreed to pay part of the settlement immediately and the rest by May 22. The attorney general’s office is conducting a separate criminal investigation into a July 2006 Central Artery Tunnel collapse that killed a woman.

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