AIG admits reinsurance deal ‘improper’

US FINANCIAL services firm American International Group admits a reinsurance transaction with the Dublin-based subsidiary of General Re was improper.

In a statement yesterday, AIG said the $500 million deal with General Re, whose Dublin subsidiary is being probed by regulators in several countries, should not have been recorded in its books as premium income.

“Based on its review to date, AIG has concluded that the Gen Re transaction documentation was improper and, in light of the lack of evidence of risk transfer, these transactions should not have been recorded as insurance.”