Spitzer says civil resolution likely for AIG

New York Attorney General Eliot Spitzer says the current investigation into AIG will likely result in a civil resolution.
Spitzer’s office is currently investigating certain non-traditional insurance transactions undertaken by AIG, and the accounting for those transactions. In a statement, Spitzer says, “the board and current management of the company are now cooperating with this investigation. Based upon these efforts, and based upon our knowledge to date, we believe that a civil resolution with the corporation will ultimately be achievable.”
AIG admitted last week that certain finite reinsurance transactions made with Gen Re had been improperly accounted for. Finite reinsurance has come under fire recently, with some analysts and authorities saying the transactions are not being used as risk transfer mechanisms, but are being used to smooth financial earnings. Last week, long-time chairman Maurice “Hank” Greenberg retired from the company, to be replaced by Martin Sullivan.
Sullivan issued a letter to shareholders Monday noting that ongoing internal reviews have uncovered “efforts to remove documents and information from its Bermuda building”. One individual at the Bermuda office has been terminated for failure to comply with the internal review while several others at that location have resigned.
The company says it has been in constant communication with Spitzer’s office as well as the U.S. Securities Exchange Commission (SEC) on the issue of document security at its Bermuda, New York, Ireland and other offices.