After using talk shows to adjudicate the wrongdoings of American International Group and its defrocked executives, New York Attorney General Eliot Spitzer along with New York Insurance Superintendent Howard Mills on 26 May filed a civil complaint against AIG, former CEO Maurice "Hank" Greenberg, and former CFO Howard Smith

A statement from Mr Spitzer said that the company's "top management routinely and persistently resorted to deception and fraud in an apparent effort to improve the company's financial results." It was the uncovering by Mr Spitzer of a possibly bogus $500m finite reinsurance arrangement between AIG and Berkshire Hathaway's General Re division that resulted in the upheaval at AIG.

Going further, Mr Spitzer has convened a New York grand jury to determine if a criminal complaint should be brought against a number of former AIG executives. Previously, he has said he would not bring criminal charges against the insurance company. As has been his pattern in previous investigation, Mr Spitzer usually settles the civil complaints out of court, and it is expected the AIG case will be similarly handled.

AIG, after repeated delays, released its 2004 annual report on 31 May. It reduced net income in four of five years: 2004 down by $1.3bn, 2003 by $1.27bn, 2001 by $1.19bn and 2000 by $498m. Net income in 2002 increased by $347m. AIG also reduced its book value by $2.26bn. Furthermore, the group announced an $850m pretax reserve strengthening for asbestos and environmental exposure, plus a $572m after-tax charge to reverse unsupported IBNR reserve releases. The group added that an independent actuarial review of loss reserves was being conducted.

In Florida, the insurance commissioner issued investigative subpoenas relating to finite reinsurance activities to 17 re/insurers, many in Bermuda and Europe. He also ordered AIG to turn over information about the company's previously disclosed accounting misrepresentations, or 43 AIG companies could possibly be suspended from doing business in the state

To correct past sins and to prevent future ones, the National Association of Insurance Commissioners is considering changing the accounting rules for finite reinsurance transactions. The Massachusetts insurance commissioner ordered that the chair of the audit committee of an insurance company's board must sign off on any finite reinsurance contracts. CEOs of New York insurers will be required to avow that all reinsurance contracts they enter into contain documentation on their economic intent and a risk transfer analysis.