• American International Group, the world's largest insurer, has agreed to pay US$1.64 billion to settle federal and state lawsuits accusing the firm of accounting abuses. The settlement will result in a US$1.15 billion after-tax charge to AIG's fourth-quarter results for 2005. AIG will also take a US$1.1 billon reserve charge in the quarter.

The settlement resolves the lawsuits filed against AIG by the U.S. Securities and Exchange Commission, the U.S. Department of Justice, the New York attorney general and the New York State Department of Insurance. It also concludes negotiations with these departments about AIG's accounting, financial reporting and insurance brokerage practices.

As part of the settlement, AIG will pay US$800 million – which includes a US$100 million penalty – to investors. The payment includes investors involved in shareholder litigation relating to AIG's accounting and financial reporting practices. AIG will also pay US$375 million into a fund used primarily to pay AIG customers that purchased excess casualty insurance policies through broker Marsh.

In addition, the company will pay about US$343 million to compensate each U.S. state for the underpayment of certain workers' compensation premium taxes and other assessments. The company will pay a further US$25 million settlement to the U.S. Department of Justice, and a US$100 million fine to the State of New York.

Rating agency AM Best said it would not be taking any action on AIG's financial strength rating as a result of the settlement.

• U.S. reinsurer OdysseyRe has restated its results for the four years from 2001 to 2004 and the first nine months of 2005. This is because it had incorrectly accounted for certain finite reinsurance contracts. The changes decreased the company's stockholders' equity by about US$8.4 million after tax. The restatements will also increase OdysseyRe's 2004 net income by US$16.1 million and reduce its nine-month 2005 net income by US$2.4 million.

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OdysseyRe made a net loss of US$101.8 million for 2005, compared with a net profit of US$203 million for 2004.

• U.S. holding company Berkshire Hathaway has acquired Applied Underwriters and all its subsidiaries. Applied, a San Francisco underwriting firm, specializes in designing workers' compensation and business services solutions for small-to-medium-sized companies. Terms of the deal were not disclosed.

• Broking firm Aon made a net profit of US$737 million for 2005, compared with a profit of US$546 million in 2004. For the fourth quarter of 2005, the broker made a net profit of US$224 million, compared with a profit of US$81 million for the same period in 2004.

• U.S. financial services company Principal Financial Group made a net profit of US$901.3 million in 2005, compared with a US$825.6 million profit the previous year. In the fourth quarter last year the company made a US$246.9 million profit, compared with a US$213.5 million profit in the same period of 2004.

• U.S. life firm Jefferson Pilot Financial Companies reported a net profit of US$578.6 million in 2005, compared with a US$546.1 million profit the previous year. In the fourth quarter of last year the company made a US$149.7 million profit, compared with a US$145.7 million profit in the same period of 2004.

• Bermudian insurer and reinsurer Axis Capital Holdings made a US$90.1 million profit in 2005, 82% less than the US$495 million profit it made the previous year. In the fourth quarter of 2005 the company made a US$233.5 million profit, compared with a US$181.1 million profit for the same period the year before.

• US insurer Argonaut Group made a net profit of US$80.5 million in 2005, compared with a US$71.8 million profit the previous year. The Group's combined ratio for 2005 was 98.7%, compared with 99.8% in 2004. In the fourth quarter 2005 the company made a US$25.4 million profit, slightly down on the US$26.2 million profit it made in the same period the year before.

• Bermudian reinsurer PartnerRe reported a net loss of US$51.1 million in 2005, compared with a US$492.4 million profit the previous year. In the fourth quarter of last year the company made a net loss of US$33.6 million, compared with a US$143.7 million profit in 2004.

• Broker Willis Group reported a US$300 million profit for 2005 compared with a US$427 million profit in 2004. Profit for the fourth quarter of 2005 was US$60 million, 44% less than its US$108 million profit for the fourth quarter of 2004.

• The U.K. Court of Appeal has ruled that Lloyd's underwriters are entitled to access placing and claims documents held by brokers.

The decision, made in the Goshawk v. Tyser case, overturns a 2005 ruling by the U.K.'s Commercial Court, which said brokers were not required to hand over placing and claims documents to underwriters without the insured's consent, and that underwriters were only entitled access to accounting documents relevant to the risk.

This is an important ruling for Lloyd's underwriters, especially those dealing with old claims. In the earlier years of Lloyd's, although underwriters were shown documents, they tended not to keep copies, and so are now reliant on access to brokers' files. Under the 2005 ruling, brokers could refuse underwriters access to the placing and claims documents.

• Bermudian reinsurer Endurance Speciality Holdings reported a net loss of US$220.5 million in 2005, compared with a US$355.6 million profit the previous year. In the fourth quarter of last year the company made a net loss of US$49.7 million, compared with US$113.1 million profit in 2004.

• U.S. life insurer Aetna made US$1.63 billion profit in 2005, 28% less than the US$2.25 billion profit it made the previous year. In the fourth quarter of 2005 the company made a US$423 million profit compared with a US$300.7 million profit in the same period the year before.

• Canadian life insurer Manulife Financial Corporation reported a profit of C$3.29 billion (US$2.86 billion) in 2005, compared with a C$2.55 billion (US$2.22 billion) profit the previous year. In the fourth quarter of last year the company made a profit of C$908 million (US$790.7 million) compared with a C$756 million (US$658.3 million) profit in 2004.