AIG receives new subpoenas from Spitzer, SEC

US insurer AIG has received new subpoenas from New York Attorney General Mr Eliot Spitzer and the SEC related to insurance products…

US insurer AIG has received new subpoenas from New York Attorney General Mr Eliot Spitzer and the SEC related to insurance products that might help companies smooth earnings or hide losses.

The world's largest insurer by market value announced the subpoenas five days after saying an internal investigation found no wrongdoing outside of one unit. This raised hopes that AIG might soon resolve various regulatory inquiries.

New York-based AIG said the new subpoenas concern non-traditional insurance products, assumed reinsurance transactions and its accounting for such transactions.

Mr Spitzer and the SEC are examining whether insurers sold policies that might help companies hide losses. They are questioning whether such products can function as loans to help camouflage earnings weakness.

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Several insurers have received regulatory subpoenas or requests concerning the products - including Ace, Chubb Corp and St Paul Travelers.

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 and cell phone distributor Brightpoint inflate earnings.

AIG was named but not charged in Mr Spitzer's October legal action accusing Marsh & McLennan, the world's largest insurance broker, of bid rigging.

In morning trading, AIG shares fell $1.02, or 1.4 per cent, to $72.10, after earlier falling to $71.75. They had risen from $67.73 since AIG reported results.