AIG could pay as much as $1.5bn to settle the investigations by state and federal authorities into the accounting scandal, according to reports.
New York Attorney General Eliot Spitzer and the New York State Insurance Department filed a civil suit against the AIG and its former chief executive, Maurice "Hank" Greenberg, last May charging it with misleading investors by using improper accounting.
A settlement is likely in two or three weeks and would include a deal with the Securities and Exchange Commission, a source has said.
Although the SEC has not brought a lawsuit against AIG, the federal regulatory agency is expected to file and settle civil charges on the same day, if a deal can be reached. Although terms of the deal could change, parties are negotiating a payment of about $1.5bn.
In addition to a fine, a settlement is likely to make formal a number of corporate governance reforms, some of which AIG has already put in place.
AIG is said to be considering three new director candidates. While interim Chairman Frank Zarb has said he would stay in the job until the annual meeting in May, the newspaper said he could stay up to another six months if a successor is not in place.
