Under the terms of the settlement, A.I.G. will pay $200 million in fines and penalties and put $1.5 billion into three funds to benefit victims of the company's deceptions.

One fund, totaling $800 million, will be available to investors who lost money in A.I.G. stock after its accounting irregularities were disclosed. Another $375 million fund will repay former customers who may have paid too much to buy A.I.G.'s insurance policies. A third fund, with $343 million, will go to the states that A.I.G. cheated by underpayment of taxes relating to workers' compensation premiums earned in those states.

S.E.C. officials said the settlement was important because it will deliver meaningful monetary relief to those harmed by A.I.G.'s conduct.

"While this settlement concludes our investigation of A.I.G., our investigation continues with respect to others who may have participated in A.I.G.'s securities law violations," said Linda C. Thomsen, director of enforcement at the commission.

A.I.G. is also paying $25 million to the United States government to resolve criminal liability arising from its accounting missteps. The company will also cooperate with the Justice Department in its continuing criminal investigation.

A.I.G. has been cooperating with the federal and state investigators since last March, when Mr. Greenberg left the company. Last year, it restated its financial results for five years beginning in 2000, stating that improper accounting during that period had inflated the company's earnings by more than $3 billion.

"These settlements are a major step forward in resolving the legal and regulatory issues facing A.I.G.," Martin J. Sullivan, the company's chief executive, said in a statement. "We have already implemented a wide range of improvements in our accounting, financial reporting and corporate governance, and will continue to make enhancements in these areas."