American International Group Inc. said Thursday that it would take an after-tax charge of about $1.15 billion in connection with its $1.64 billion resolution of claims and investigations by the Securities and Exchange Commission and the New York attorney general.
The charge, to be taken against fourth-quarter results, is related to an increase in AIG’s net reserve for loss and loss expenses of about $1.69 billion, roughly 3% of its net general insurance loss and loss expense reserves, the company said.
The settlements concluded negotiations with the state and federal governments over accounting, financial reporting, and insurance brokerage practices at AIG and its subsidiaries, as well as claims related to the underpayment of certain workers’ compensation premium taxes and other assessments, the insurer said.
More than half the $1.64 billion to be paid will be used to resolve claims asserted in various regulatory and civil proceedings, including shareholder lawsuits, AIG said.
