American International Group Inc. said it will stop lobbying lawmakers and regulators, after coming under congressional pressure and questioning over how it is using more than $120 billion loaned by the government to keep the company afloat.

The financial-services giant has also cancelled about 160 events scheduled for coming months, that were to cost a total of $80 million, AIG spokesman Nick Ashooh said on Monday. Congressional overseers have raised questions over a series of lavish events thrown by AIG in the days after...