According to AIG's Dec. 31, 2008 10-K filing, a National Association of Insurance Commissioners (NAIC) working group began looking into AIG's reporting of 1985-1996 workers' compensation premiums in 2006 and recommended in late 2007 that "a multistate, targeted market conduct examination focusing on workers' compensation insurance be commenced under the direction of the NAIC's Market Analysis Working Group."

AIG said in the filing it was informed of the multistate examination in Jan. 2008.

Beth Dwyer, general counsel for the Rhode Island Insurance Department, said the NAIC investigation began after AIG's agreement with Mr. Spitzer regarding bid-rigging and steering charges.

As a smaller part of that investigation, Mr. Spitzer also looked into whether AIG was writing workers' comp risks at rates not approved by the states, Ms. Dwyer said.

Since the workers' comp issue affected states outside of New York, she said, the NAIC formed a working group to examine that aspect of the charges.

All 50 states agreed to participate in the investigation.

At issue for regulators is the act of underreporting premiums, Ms. Dwyer said, regardless of how or if AIG profited from that action.

Ms. Dwyer said she is hoping the examination will finish in June. At that time, she said, the NAIC will look to come to an agreement with AIG.

If that cannot be done, she said the multistate examination will issue a report and each state will take separate actions.

The seven lead states in the investigation are Rhode Island, Indiana, Minnesota, New York, Pennsylvania, Delaware and Florida, Ms. Dwyer said. She said Rhode Island volunteered to be a lead state.

Christina Pretto, AIG spokesperson, issued a response by e-mail stating, "The 2006 settlement over workers' compensation determined a payment amount per state. AIG was prepared to execute the settlement immediately but to do so required a release from each state and its residual market pool. To this day, we have not received these releases."

She said the company began to work with the NAIC, the states and the pool in 2006 to complete the settlements. "The pool, which consists of the other carriers of workers' compensation insurance, opted to pursue litigation over their share of the settlement, and we have in turn countersued the pool," she added.

The pool contends that by underreporting premiums, residual market risks within the pool were shifted to other companies.

As the states have undertaken the examination, Ms. Pretto said AIG is working closely with the exam consultant and is "optimistic" that there will be a resolution soon.