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.

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.

INVESTIGATIONS CONTINUE

Authorities, including New York Attorney General Eliot Spitzer and New York's Insurance Department, are still investigating the company and there is a possibility that criminal charges could be laid. AIG is cooperating fully with regulators.

AIG shares closed down 85 cents, or 1.51 percent, at $55.55 on the New York Stock Exchange, after a recent run-up. The stock has lost as much as $57 billion of market value in recent months.

"People are selling on the good news of the 10-K coming out," said A.G. Edwards Inc. analyst Paul Newsome.

The insurer's press statement and securities filing on Tuesday followed several releases by the company laying out numerous accounting errors dating back over a decade.

Now, however, "there should be no further restatements going forward," said AIG President and Chief Executive Officer Martin Sullivan in a conference call with investors.

As for the restatements and related publicity: "We haven't seen much impact on our foreign general or foreign life businesses," Sullivan said, although they had seen some "cautious" placing of business at some of its subsidiaries.

In early May, AIG said a planned restatement of more than four years of financial reports for items like reinsurance and its use of derivatives would cut $2.7 billion, or 3.3 percent, from its net worth.