American International Group Inc. announced Thursday that it has been told by the United States Attorney for the Southern District of Indiana that it is a target of a federal grand jury investigation.
The investigation is focused on a contract between the New York-based insurer and Brightpoint Inc. that was previously investigated by the Securities and Exchange Commission, the company said. AIG settled that investigation in September 2003.
The investigation concerns "nontraditional" or "income-smoothing" products that appear to be insurance and are accounted for as insurance but do not involve an actual transfer of risk.
The announcement of this federal investigation came on the heels of AIG's involvement in last week's announcement of a probe by New York Attorney General Eliot Spitzer into contingency fees paid by insurers to insurance brokers.
