Joseph H. Umansky, AIG’s senior vice president and president of A.I.G. Reinsurance Advisers, has agreed to cooperate with New York State Attorney General Eliot Spitzer in the investigation concerning AIG’ questionable accounting practices and the role played in objectionable deals by the insurer’ former chief executive and chairman Maurice R. Greenberg. The agreement reached between a senior AIG executive and regulators could precipitate the probe and increase the likelihood of charges against Greenberg.

The agreement "signals that Mr. Greenberg is clearly the ultimate prize in this investigation and Spitzer’s office thinks they can make this case in fairly short order," according to Robert Mintz, a former federal prosecutor. "The more usual course is to work from the bottom up, cutting deals with midlevel, less culpable people."

AIG is now under the scrutiny of a host of federal regulators, including the Department of Justice, the Securities and Exchange Commission and the New York State Insurance Department, all of whom are interested in whether creative reinsurance deals might have helped the company to boost its net worth and earnings. In a recent review of its accounting, the world’ largest insurer already admitted that its net worth was overstated by $2.7billion.

Umansky was the key person in preparing deals with offshore reinsurance companies. The report related to a draft copy of an internal A.I.G. report, made by lawyers at Paul, Weiss, Rifkind, Wharton & Garrison and Simpson Thacher & Bartlett also features Umansky. The agreement promises Umansky protection from persecution in return for cooperation with the investigation.