(Bloomberg) ? American International Group Inc., the insurer that restated the past five years of earnings by $3.9 billion, said quarterly profit rose 51 percent on gains from investments and its Asian life insurance businesses.

Second-quarter net income increased to $3.99 billion, or 1.53 a share, from $2.65 billion, or $1.01 a share, a year earlier, New York-based AIG said in a regulatory filing yesterday.

AIG has relied this year on life insurance units in countries such as Japan and China as prices for property and casualty prices decline and accounting probes hurt sales of retirement savings products in the US.

The foreign life units ?have better rates of growth than the domestic businesses because of rising prosperity,? said Tom Russo, who helps manage $2 billion at Lancaster, Pennsylvania- based Gardner Russo & Gardner, including 1.7 million shares of AIG as of March. ?In a place like China, people now have discretionary income and they might want to start saving money.?

The second quarter was AIG?s first full period under chief executive Martin Sullivan, who took over in March after Maurice ?Hank? Greenberg, 80, was removed amid the accounting investigations. By May, AIG had lowered net income from 2000 to 2004 by 10 percent, correcting reinsurance and other transactions that hid losses and understated liabilities from claims. The same month New York Attorney General Eliot Spitzer sued AIG and Greenberg, accusing them of securities fraud.

Sullivan said in May that negative publicity had made some banks, agents and brokers more ?cautious? about choosing AIG life insurance or retirement products for their clients. Some clients had also abandoned the financial products division that trades derivatives and other securities as the company?s credit rating fell two notches to AA.

At the end of June, Jay Wintrob, chief executive officer of AIG Retirement Services, said he expected concerns to abate this year.