ABIG was acquired in 1999 by Belgian-based Fortis financial group, which combined it with the American Security Group in Atlanta and named the combined company the Asssurant Group.

The monetary sanctions are a result of a 1999-2000 examination of the company's practices conducted pursuant to a multistate compliance enforcement effort originated in 1998.

In recent years, ABIG has been disciplined more than 60 times by various states for misconduct such as sales violations, using unlicensed agents and improperly handling claims.

The Minnesota Department of Insurance alone has penalized the organization four times since 1993 for a total of $957,700 in fines and investigative costs.

In fact, earlier this year Minnesota began proceedings to revoke ABIG's license to sell insurance in the state. The department has claimed that ABIG issued illegal insurance policies to more than 200,000 Minnesota residents and failed to provide information to the department in violation of state law and the 1998 consent agreement between ABIG and state regulators.

During 1997 and 1998, several states experienced similar regulatory problems with ABIG. As a result, the states began a multistate market conduct action.

In November 1998, the states jointly signed a consent order to resolve possible insurance code violations by ABIG. Under the consent order, ABIG agreed to pay states a monetary sanction of $15 million. Of this amount, $3 million was to be paid by ABIG if the states' on-site examination revealed that ABIG had not complied with the consent order.

"It is important for consumers and industry alike to understand that regulators will enforce the terms of consent agreements," said NAIC Secretary-Treasurer and Illinois Insurance Director Nat Shapo. "Companies will be held to the standards of market conduct that they agreed to follow."

It is based on the results of the most recent examination that ABIG now faces additional sanctions of $3 million, the NAIC said.

ABIG had agreed to conduct an audit of all transactions from May 27 through Nov. 23, 1998, and to pay any appropriate refunds or additional claim payments identified.

ABIG also was required to initiate a compliance plan and to provide monthly reports to the states on the progress of the plan. An on-site market conduct examination, made up of a team of representatives from a number of states participating in the action, was initiated in December 1999.

Of the 50 states in which ABIG is licensed to do business, 43 states and the District of Columbia have participated in this multistate market conduct effort, the NAIC reported.

Regulators from Kentucky and Minnesota originally spearheaded the effort to look at the practices of the company and their compliance with state laws. Mr. Shapo and Maryland Insurance Commissioner Steve Larsen jointly led the company's market conduct examination that followed the compliance enforcement effort.

"I am very gratified that American Bankers has now been held accountable for the previously agreed upon compliance plan which covers a wide range of business practices," Mr. Larsen said.

"It is a testament to true cooperation that 43 states and the District of Columbia worked together on this action to bring it to a successful conclusion," he continued. "Now that the joint action is behind us, states can move forward to monitor their compliance issues with the company."