American International Group Inc., the world’s largest insurer, settled with federal regulators who were investigating transactions that may have let clients such as PNC Financial Services Group Inc. inflate profit.

The agreements with the Securities and Exchange Commission and Justice Department stem from products New York-based American International designed to help PNC remove bad loans from its books and insurance it sold to Brightpoint Inc., the company said in a statement. It didn’t disclose terms of the accords, which still need final approval.

The company’s chairman, Maurice “Hank” Greenberg, 79, wants to clear the inquiries to focus on New York Attorney General Eliot Spitzer, who is probing collusion with insurance brokers, said an analyst at Gartmore Global Investments, Stuart Quint. Two of the insurer’s executives last month pleaded guilty to charges that they fabricated bids, agreeing to testify in future cases.

“The next question is what happens with Spitzer,” said Mr. Quint, who helps manage about $75 billion at Gartmore in West Conshohocken, Pa. “It’s one step in a series of many.”

Gartmore sold almost 60% of its American International shares in the second quarter, leaving it with 294,390 shares at the end of June.

The settlements still need final approval from both agencies, American International said. A spokesman for American International, Joe Norton, declined to comment beyond the statement. A Justice Department spokesman, Bryan Sierra, and an SEC spokesman, John Nester, also declined to comment.

The agreements will probably cost the insurer less than $450 million, before taxes, said a UBS AG analyst, Andrew Kligerman.

The estimate assumes a maximum $250 million settlement with the Justice Department and $200 million with the SEC, and is based on previous accords with companies such as Computer Associates International Inc., Mr. Kligerman said in an interview. He recommends investors buy the company’s shares.

American International said in September that the SEC and Justice Department were investigating special purpose entities designed by AIG Financial Products Corp. PNC, a Pittsburgh-based bank, settled SEC and Justice Department accusations that it used the products to help hide $762 million in bad loans and inflate 2001 earnings by 27%. The accord with the Justice Department, reached last year, cost PNC $115 million.

The Justice Department said the special-purpose entities should have been included in the bank’s financial statements because American International didn’t own enough of them to qualify for nonconsolidated accounting treatment.

The SEC also threatened to sue American International for failing to disclose that the regulator’s probe also involved five transactions with two unidentified insurers.

Yesterday’s settlement also covers a federal grand jury investigation into insurance policies American International designed to allegedly help clients smooth client earnings.

The review stemmed from SEC allegations that a policy American International sold to Brightpoint, a Plainfield, Ind.-based distributor of cellular phones, helped the company hide losses, the insurer said last month. American International agreed to pay $10 million to resolve the SEC’s claims.

Brightpoint sought the policy six years ago to avoid telling investors that a one-time cost would be about $11 million higher than originally anticipated, the SEC said.

Essentially a loan, the policy allowed Brightpoint to spread the loss over several years when the company should have recognized it immediately, the agency said.

In settling the SEC case on Brightpoint last year, American International said “mistakes were made” in the underwriting of the policy, which it had “taken steps to correct.”

It neither admitted nor denied wrongdoing.