U.S. insurance giant American International Group Inc., said today it has reached tentative agreements with U.S. authorities to settle allegations that it helped two companies commit accounting fraud.

AIG said staff lawyers at the U.S. Securities and Exchange Commission had agreed to recommend approval of a company settlement offer to the five SEC commissioners, and that it also had reached an agreement in principle with the U.S. Justice Department.

Terms of the settlement offer to the SEC and the agreement with federal prosecutors were not specified.

The insurer previously disclosed that the SEC was considering suing it for civil securities fraud over several 2001 transactions it conducted with regional bank PNC Financial Services Group Inc., and that the Justice Department was weighing criminal prosecutions against it in both the PNC matter and one involving cellphone distributor Brightpoint Inc.

By signing agreements with the Justice Department, New York-based AIG would avoid prosecution.

AIG settled the Brightpoint case with the SEC in September 2003, agreeing to pay a US$10 million civil fine to resolve allegations that it fraudulently helped the company falsify its earnings report and hide losses. AIG neither admitted nor denied the allegations.

A PNC subsidiary already has agreed, in June 2003, to pay US$115 million in civil fines and restitution to settle the SEC’s allegations of securities fraud.

The subsidiary was accused of conspiracy to violate securities laws by transferring US$762 million in troubled loans and investments to off-balance-sheet entities in 2001.