American International Group has agreed to pay $1.64 billion to settle charges of fraud, bid-rigging and improper accounting.
The settlement with New York Attorney General Eliot Spitzer and State Insurance Supt Howard Mills, the US Securities and Exchange Commission and the Justice Department ends a long-running investigation of the company, and was widely anticipated.
But the biggest regulatory settlement by a single company in US history does not resolve pending cases against former AIG chief executive Maurice "Hank" Greenberg and former chief financial officer Howard Smith, who were forced out last spring.
Both have denied any wrongdoing.
The company will take a $1.15 billion after-tax charge for the fourth quarter of 2005 for the settlement. It also said it "regrets and apologises" for its conduct and said providing incorrect information to investors and regulators was "wrong".
In settling, Mr Spitzer pointed the finger directly at Mr Greenberg, who built AIG over nearly four decades, and Mr Smith.
"There are some who continue to deny there was any wrongdoing at the company," the attorney general said in an interview in New York City. "I think the facts are overwhelming in establishing that - from the highest levels of AIG - there was an intent to misrepresent its financial condition."