AIG spokesman Joe Norton told National Underwriter that the broker was formed as a business venture between the New York-based AIG and the National Association of Securities Dealers, the parent company of the NASDAQ Stock Market, in 2000, and that AIG has maintained its stake since then.

"It was created for the purpose of giving NASDAQ-listed companies additional options to accessing insurance coverage, and also to provide NASDAQ an additional set of services to provide its listed companies," he said.

One potential concern over this arrangement, however, was that since AIG was a venture partner for NASDAQ Insurance Agency, the firm might have been inclined to steer more business to AIG over other carriers. Mr. Norton said that has never been the case and that the broker's relationship with AIG has complied with all relevant laws and regulations.

But since New York State Attorney General Eliot Spitzer began his probe into insurance-industry practices and potential abuses last October, AIG has been trying to eliminate "even the appearance of potential conflict," Mr. Norton said.

He said AIG is working towards completion of the sale by the end of this year.