A Bermuda holding company at the centre of scrutiny into American International Group Inc.'s offshore structure is one step closer to being wound up after selling off its Gibraltar unit.

Last month, Richmond Insurance Company Ltd.'s sold its European rent-a-captive, Euroguard, to a South African company. The sale of this Gibraltar subsidiary and a previous sale in July of its Bermuda unit cuts Richmond's size in half. A Dublin unit and a Barbados unit still fall under Richmond.

The price AIG received in selling Euroguard was not disclosed. Herman Schoeman, managing director of purchaser Guardrisk Insurance Company Limited, said he was only at liberty to say "a fair price" was paid. AIG spokesman Chris Winans also declined to reveal the sale price. AIG did not disclose the price or the buyer of Bermuda unit, Norfolk Reinsurance Co. Ltd.

Both Euroguard and Norfolk were set up as rent-a-captive companies. Under this type of structure the insured gets to 'rent' space in the company, forming, in effect, a mini-captive. It is common for the structure to be designed as a segregated cell which legally separates each 'mini-captive' from the liabilities of any other cells.

Guardrisk Insurance Company Limited, a wholly owned subsidiary of Alexander Forbes Limited, is the leading South African provider of cell captive facilities, and also has operations in Namibia and Mauritius. Guardrisk said the acquisition allowed it to expand its presence in Europe. It already held a minority, non-voting stake in Euroguard.

Richmond, a holding company that counted AIG as a large customer, surrendered its insurance licence to financial services regulator, the Bermuda Monetary Authority earlier this year.

At the time, an AIG official in Bermuda said Richmond was winding up operations by putting its four units on the sales block or into run off. An insurance company in run off remains open for a time to honour claims from policies still in effect, but does not sell any new policies.

AIG's ties to Richmond drew scrutiny because it hid the truth from regulators, saying it was only a minority stakeholder, and did not have control over the company. AIG admitted in May to hiding its control of offshore reinsurers, including Richmond, a Bermuda company set up in 1986. The admission came after US authorities began probing AIG's offshore structure.

Richmond is based at AIG's Bermuda office on Richmond Road, its management agreement was with an AIG company, and AIG was the only investor at risk because other shareholders held put options to sell back shares at any time, at cost. The put options were guaranteed by former chief executive Maurice (Hank) Greenberg.

In a May lawsuit against AIG and former management, New York Attorney General Eliot Spitzer charged regulators had been "repeatedly misled" about the nature of AIG's relationship with Richmond.

In June, AIG had to increase its 19.9 percent stake in Richmond after its largest shareholder, Germany's Munich Re, exercised its put option. AIG bought out Munich's 49.9 percent stake for $12.2 million.

Besides AIG, Richmond has four minority shareholders.