LONDON (Reuters) ? Billions of dollars worth of controversial insurance policies similar to those at the centre of accounting probes into AIG and MBIA have been bought by many of the world?s largest companies, experts say.

The investigations may be ?just the tip of the iceberg,? said Andrew Barile, an industry consultant.

Barile says ?hundreds of policies? have been sold like the so-called finite risk reinsurance contracts that regulators say were used to burnish the insurers? balance sheets.

The controversy concerning these deals lies in how they differ from traditional reinsurance. Not only do they transfer a strictly limited amount of risk to the reinsurer, but the buyer also stands to get some of its premium back if claims are low.

Although the policies are not illegal providing they are accounted for properly, other companies may well have used them to camouflage weaknesses in their balance sheets, Barile said.

Widely bought by companies in the 1990s as a way of reducing the volatility of their earnings, at least a quarter of the world?s top insurers have bought finite risk policies, according to the estimate of an executive at a major reinsurer that has done many of these kind of deals.

But in today?s American corporate landscape, reshaped by the seismic changes caused by the collapse of energy giant Enron Corp., in which financial transparency has become of paramount importance, concern has grown over their use.

?The primary purpose (of finite risk reinsurance) is financial statement enhancement,? credit rating agency Fitch stated in a special report late last year.

Nevertheless, the coming months promise ?a bonanza for class action law firms,? with a flurry of lawsuits likely to allege that other firms have used finite risk contracts to manipulate their accounts, predicts Barile.

How does he know? Partly because lawyers are paying up to $500 for copies of Barile?s out-of-print book on finite risk, which originally sold for $75, to try to understand the kind of deals that landed AIG and MBIA in trouble with regulators.The key question now being asked by regulators and investigators is exactly how much risk do many of these contracts actually contain?

They must transfer a substantial amount of risk for them to be accounted for as reinsurance. If they don?t, the premium must be accounted for as a deposit to the reinsurer.

But as this doesn?t give the same balance sheet boost as reinsurance, the temptation for insurers is to falsely account for them.