NEW YORK (Bloomberg) ? A unit of American International Group Inc., the insurer under investigation for improper accounting, received a subpoena from the New York insurance regulator about its ties with a Cayman Islands reinsurer.

The New York Insurance Department asked AIG?s Transatlantic Holdings Inc. for information about Sunrise Professional Indemnity Ltd., a reinsurer with no other US clients, regulatory filings show. Michael Barry, a spokesman for the state insurance regulator, and Transatlantic?s Steven Skalicky declined to comment on the reasons behind the request, which was disclosed on May 10.

The subpoena is part of state and federal investigations of accounting abuses in the reinsurance industry, which helps insurers manage their risks from claims. AIG, the world?s largest insurer, said earlier this month that failure to disclose the company?s control of offshore reinsurers overstated its net worth by $1.2 billion.

?These offshore entities are inconsistent with the notion of transparency,? said former federal prosecutor Christopher Bebel, who now practices law in Houston. ?Insurance regulators have minimal ability to monitor these affairs.?

The probes of AIG have wiped out more than $50 billion of the company?s market value and forced Maurice (Hank) Greenberg to step down as chief executive officer in March after almost four decades. The New York Insurance Department, New York Attorney General Eliot Spitzer and the US Securities and Exchange Commission have subpoenaed more than a dozen insurers since they began investigating non-traditional reinsurance last year.

New York-based Transatlantic, 59 percent owned by AIG, intends to cooperate with the request, the company said in the May 10 SEC filing. AIG spokesman Chris Winans declined to comment.

Transatlantic, which is a reinsurer itself and also buys some reinsurance to minimise its risks, had $88.8 million of outstanding coverage with Sunrise at the end of the year, making the Cayman Islands company its second-biggest reinsurer, according to US state regulatory data from ScheduleF.com, a service that compiles state regulatory filings. ScheduleF.com also shows Sunrise has no other clients.

Sunrise is owned by WFG Interests LLC, which is in turn owned by William Galtney, according to an SEC filing by Everest Re Group Ltd., a Barbados-based insurer that has Galtney on its board. Galtney, president of a Houston unit of insurance broker Arthur J. Gallagher & Co., didn?t return phone calls to his office.

In the Sunrise transactions, Galtney?s Gallagher unit sold medical malpractice and health-care policies that were passed on through Everest Re and Transatlantic before ending up at the Cayman Islands company that Galtney controls, Everest Re said in an April 14 SEC filing.

Galtney?s unit would sell policies on behalf of Everest Re, which would then reinsure 82 percent of them with Transatlantic, Everest Re said. Transatlantic in turn would reinsure as much as 100 percent of the contracts with Sunrise.

Arthur J. Gallagher spokeswoman Marsha Akin didn?t return phone calls, and Everest Re Chief Financial Officer Stephen Limauro said the filing discloses all relevant details.

The chain of transactions suggests that Galtney participated in the ultimate profit or loss from the policies his company sells, a legitimate and common way for insurers to encourage their agents to produce profitable business, said Joseph Hutelmyer, a past president of the American Association of Managing General Agents.

?Insurers want the person selling the policy to have some skin in the game,? said Hutelmyer.

Hutelmyer said insurers typically transfer no more than 25 percent of the policies? risk back to the salesperson. In 2004, Galtney retained about 60 percent, according to data from Everest Re?s filing and ScheduleF.com. Everest Re ended its agreements with Galtney?s business on April 1, and is now negotiating new terms with him, Everest Re?s filing said.

AIG said earlier this month that it improperly treated Union Excess Reinsurance Co. in Barbados and Richmond Insurance Co. in Bermuda as unaffiliated companies, understating its liabilities from claims by $1.2 billion. The reinsurers had no other clients besides AIG, according to ScheduleF.com.

Transatlantic?s transactions with Sunrise may be drawing scrutiny for similar reasons, said Mark Rouck, a senior director at Fitch Ratings in Chicago.

?If there is a reinsurance company with only one customer, I think there are sometimes questions about why the reinsurer exists,? Rouck said.

A phone number for Sunrise in the Cayman Islands couldn?t be obtained.