A business unit of American International Group (AIG) is currently under investigation by the US Securities Exchange Commission (SEC), according to a Wall Street Journal report, citing sources familiar with the matter.
The Variable Annuity Life Insurance Company (VALIC), an AIG-owned insurance company which specialises in tax-qualified retirement plans, supplemental tax-deferred and after-tax investments, is the firm under the SEC’s scrutiny.
According to the Wall Street Journal report, the SEC’s inquiry revolves around VALIC’s sales and disclosure practices, specifically whether the firm’s compensation structure rewards representatives for selling higher-cost products to retirement plan participants, and whether the insurer properly discloses these payments.
The SEC is also probing VALIC’s services in certain school districts (one of its target classes), according to the report, where it funds certain school expenses while also offering investment advice and products to school employees.
VALIC has not yet commented on the report.