AIG overstated net income by $3.9 billion By Chris Sanders NEW YORK (Reuters) - Insurer American International Group Inc., which is being sued by U.S. regulators over an accounting scandal, said on Tuesday it had overstated net income for the past five years by $3.9 billion, or 10 percent. Following an internal review, AIG finally released a thrice-delayed regulatory filing in which it also cut its net worth through the end of 2004 by $2.26 billion, or 2.7 percent -- less than an early May warning of a possible $2.7 billion. AIG, the world's largest insurer by market value, said the $3.9 billion reduction in net income for the five years through 2004 included an $850 million increase in its asbestos and environmental reserves for the fourth quarter of 2004. "There is both good and bad news," said Michael Chren, senior portfolio manager of National City Investment Management Co., citing the eventual filing of AIG's 10-K annual report and less-than-expected reduction in net worth as positives. "But the big negative from our perspective is the asbestos reserve review. That will leave a cloud over the shares." The reserves were adjusted to reflect a new view that potentially more claims could hit the company as AIG increasingly takes into account the losses it has experienced. The company said it will commission an independent actuarial review of loss reserves, including those for asbestos and environmental claims, for its main property and casualty insurance operations. The filing with the U.S. Securities and Exchange Commission came a week after New York authorities filed a civil lawsuit against AIG, former chief executive Maurice "Hank" Greenberg, and former chief financial officer Howard Smith. The lawsuit said Greenberg and Smith, who were ousted after the investigation picked up steam in February, committed fraud and manipulated company books to exaggerate the strength of AIG's core underwriting business and prop up the stock price. Greenberg's lawyers, who have said they would dispute the charges, on Tuesday reiterated that he did not make company accounting decisions alone and that PriceWaterhouseCoopers not only judged past accounting as sound, the independent auditor also had found the previous asbestos reserves adequate. Furthermore, Tuesday's restatement did not give a sufficient reason to reverse TWC's judgment, Greenberg's legal team said.     Continued ... Quelle "AIG overstated net income by $3.9 billion" : reuters.com Main page for "AIG overstated net income by $3.9 billion"