American International Group Inc., the insurer accused by New York Attorney General Eliot Spitzer of duping investors, said Tuesday that it is restating net income downward by $3.9 billion over five years to correct improper accounting and increase asbestos and environmental reserves.
A 14-week internal review triggered by Mr. Spitzer’s probe examined reinsurance contracts and other transactions that understated liabilities for claims and inflated underwriting profit, the company said in a regulatory filing. AIG, the world’s largest insurer, also cut its book value by $2.26 billion, or 2.7%, to $80.6 billion.
The restatement may move New York-based AIG closer to settling Mr. Spitzer’s May 26 lawsuit, which also named ousted chief executive officer Maurice “Hank’’ Greenberg. Investors’ reaction to the investigation wiped out almost $50 billion of AIG’s market value.
