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Spitzer and SEC issue subpoenas to

'Nontraditional' products targeted in probes of AIG

NEW YORK -- Insurance giant American International Group Inc. said yesterday it has received subpoenas from New York Attorney General Eliot Spitzer and the Securities and Exchange Commission related to nontraditional insurance products and ''certain assumed reinsurance transactions."

The company said it will cooperate with the probe.

Spitzer previously accused the insurance industry of bid-rigging and price fixing in an investigation that focused on contingent commissions, which are incentive fees paid to brokers by insurance companies in exchange for getting more business.

In recent weeks, however, Spitzer has broadened his investigation to include so-called nontraditional or loss mitigation products to try to determine whether they are really insurance aimed at reducing risk or are actually vehicles to help companies smooth earnings.

Last month, Spitzer and the SEC subpoenaed billionaire investor Warren Buffett's Berkshire Hathaway Inc. demanding information about its reinsurance subsidiary, General Re Corp.

The Omaha, Neb.-based Berkshire said the subpoenas sought documentation and information relating to nontraditional or loss mitigation insurance products from General Re and all its affiliates. Berkshire Hathaway said it was cooperating with the probe.

Other property and casualty companies also have disclosed receiving subpoenas from the SEC, including Platinum Underwriters Holdings Ltd. and ACE Ltd., both headquartered in Bermuda; Chubb Corp. of Warren, N.J.; and Swiss Reinsurance Co. of Zurich.

Spitzer's office declined to comment on the latest subpoenas.

In yesterday's statement, AIG said it received subpoenas last Wednesday ''relating to investigations of nontraditional insurance products and certain assumed reinsurance transactions and AIG's accounting for such transactions."

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