AIG: We Have SEC, Spitzer Subpoenas

February 14, 2005 ( -American International Group (AIG), the world's largest insurer by market value Monday disclosed that state and federal regulators have subpoenaed firm records regarding products to help companies smooth earnings or hide losses.

In a  Web site statement , AIG said it had gotten the information demands from both the US Securities and Exchange Commission (SEC) and New York state Attorney General Eliot Spitzer “relating to investigations of non-traditional insurance products and certain assumed reinsurance transactions and AIG’s accounting for such transactions.”

New York-based AIG disclosed the subpoenas five days after saying an internal probe found no wrongdoing outside one unit. AIG Chairman Maurice Greenberg announced February 9 that Spitzer’s probe of AIG still appeared to focus on one broker relationship within its American Home Assurance Co. unit. AIG said its completed internal probe involved the review of more than 850,000 e-mails and 30,000 documents.

AIG also received the subpoenas four months after Spitzer named it in a lawsuit accusing insurance broker Marsh & McLennan Cos. of bid rigging (See Spitzer Takes On Contingent Commissions ). Marsh agreed to pay $850 million in restitution to settle that case (See  MMC Settles ‘Shameful’ Bid-Rigging Case ). AIG was not charged.

AIG said in the statement Monday that it would cooperate with investigators by responding to the subpoenas.

Spitzer and the SEC are examining whether insurers sold policies that might help companies hide losses. In November, AIG agreed to pay $126 million to settle US Department of Justice and SEC allegations that it sold products that helped PNC Financial Services Group Inc. and cell phone distributor Brightpoint Inc. inflate earnings (See  AIG: Settlement Will Cost Us $126M  ).