American International Group Inc (AIG) has finalized a settlement of $1.6 billion for allegations of accounting fraud. The settlement will be split almost equally between the Securitites and Exchange Commission (SEC) and the State of New York.

Civil fraud charges were brought against AIG by New York Attorney General Eliot Spitzer and the New York State Insurance Department. The SEC hadn’t yet filed charges, but is expect to file and settle all charges soon.

The settlement includes payment of fines, restitution, and disgorgement of ill-gotten gains. $375 million of the settlement will go to AIG policyholders who were injured because of alleged bid-rigging for commercial insurance policies.

AIG is also agreeing to business reforms, including not paying certain commissions to brokers and submitting annual reports to regulators. AIG is the world’s largest insurer with a market capitalization of almost $171 billion.

Check out Sequence Inc.’s insurance fraud investigation services here.