AIG has settled its dispute with the New York attorney general's office for $1.6bn, it was announced today.
Under the agreement with State and federal regulators AIG acknowledged misconduct, adopted a series of reforms and agreed to pay more than $1.6bn in restitution and penalties.
The agreement brings to a close pending litigation and investigations of fraud, bid-rigging and improper accounting by the North America's largest insurance company.
AIG will pay $800m to investors deceived by false financial statements, $375m to policyholders harmed by bid rigging activities and $344m to states harmed by AIG's practices between 1986 and 1995 involving workers' compensation funds.
A further $100m is to be paid in penalties to both the New York attorney general and the US Securities and Exchange Commission (SEC). The SEC's penalty will go into the fund for investors.
In a statement today, AIG said it was wrong to provide incorrect information to the public and regulators and that it "regrets and apologises" for its conduct.
Since the investigation began, AIG has also restated its earnings by more than $3.5 billion.
