Problems at American International Group (AIG) intensified this week as New York Attorney General Eliot Spitzer announced plans to audit the insurance giant to ensure it has paid its fair share of workers' compensation premiums, the Associated Press reported.

Spitzer's announcement came on the heels of news reported Tuesday by The New York Times that AIG has uncovered at least $1 billion more in accounting problems. The paper cited unnamed "people briefed on the company's investigation."

AIG said on March 30 that it had improperly booked a number of transactions and that correcting the errors would cause a reduction in the company's $82.87 billion shareholder equity by 2 percent, or about $1.7 billion, the AP reported.

As Spitzer begins his probe into whether the company's improper booking of workers' compensation premiums provided an “unlawful benefit” to the company that added up to ten of millions of dollars, officials in Connecticut and California announced similar reviews.

Spitzer said the behavior appears to have occurred over a decade and has since stopped, the AP reported. AIG is cooperating with investigators from Spitzer's office as well as New York Insurance Superintendent Howard Mills's office.

California Insurance Department spokesman Norman Williams said the agency was alerted by news reports that authorities were looking into AIG's booking of workers' comp premiums in New York as part of a larger probe of the insurers' accounting practices. California regulators, Williams said, "will look into" the matter "to make sure that businesses and consumers are not being hurt by those practices here," the Los Angeles Times reported.

AIG is the world's largest insurer and California's biggest private seller of workers' comp policies, ranking behind only the state-backed State Compensation Insurance Fund.