Hostile US regulators are turning foot faults into murder charges when investigating companies, Mr Hank Greenberg, AIG's chairman and chief executive, has claimed.
"I think there is a recognition that, while there are reforms necessary, many have gone too far," Mr Greenberg said yesterday.
"It takes great discipline to deal with regulatory investigations while at the same time run your business."
Such a heavy-handed approach could be a drag on the US economy if it continued, he said.
He said: "As companies become less risk averse and spend more and more time on internalising these issues, business overall will suffer. I'm hoping we are going to see some changes."
Mr Greenberg's comments came as profits at the world's biggest insurer rose 11.5 per cent in the fourth quarter of last year despite AIG being plagued by run-ins with regulators and faced with a $682.7 million after-tax catastrophe loss in the year from hurricanes, typhoons, earthquakes and tsunamis - the biggest in its history.
The company employs around 400 people in the Republic. It does not release separate figures for its Irish operations.
The insurer has been caught in the limelight as Mr Eliot Spitzer, the New York state attorney general, and the Securities and Exchange Commission have scrutinised insurers' activities in the hunt for improper behaviour.
AIG took a $53 million charge in the quarter to pay for a $126 million pact to settle allegations that it sold insurance products that helped PNC Financial, a Pennsylvania bank, and Brightpoint, a telecommunications company, manipulate their earnings and perpetrate accounting fraud.
As part of that settlement, AIG allowed an outside consultant to examine its books. The results have yet to be released.
Yesterday, Mr Ernie Patrikis, AIG's chief lawyer, said a separate internal review found no evidence that additional executives at the insurer were inappropriately rigging bids on insurance contracts with their brokers.
AIG was named in Mr Spitzer's lawsuit, which accused Marsh, the world's biggest insurance broker, of rigging bids.
Two executives at an AIG subsidiary pleaded guilty last year to helping Marsh rig bids.
Net income jumped to $3.02 billion, or $1.15 per share, in the fourth quarter from $2.71 billion, or $1.03 per share, in the previous year. Revenues rose 16 per cent to $25.76 billion, helped by improved sales of life assurance across Asia and solid underwriting results in the US, despite softening rates for some lines of property and casualty insurance.
There was a 23 per cent rise in investment income from its general insurance arm to $930 million, due mainly to putting money in alternative investments.
The insurer also managed to increase its reserves - which now stand at about $46 billion - by more than $9 billion in the quarter.
Mr John Hall, a Prudential Equity analyst, said results suggested "regulatory issues will not interfere with AIG's capacity to grow earnings". - Financial Times Service
