AIG to restate earnings

American International Group Inc., the world's biggest insurer, plans to restate five years of earnings today, and its correction of accounting flaws may make it easier for the company to settle a lawsuit with New York Attorney General Eliot Spitzer.

AIG delayed the release of its 2004 financial report three times since March to complete an internal review of accounting practices. Improper reinsurance contracts and other transactions inflated its net worth by about $2.7 billion, AIG estimated in a statement earlier this month. At the same time, inappropriate derivatives reporting understated the New York-based company's worth by $2.4 billion, AIG said.