NEW YORK (Bloomberg) - American International Group Inc. (AIG), the insurer that posted a fourth-quarter loss after adding to reserves, told regulators that Sanford Bernstein's review of its claims-paying resources relied on faulty analysis.

The report by Todd Bault, then a Bernstein analyst, used data that AIG had labeled in a regulatory filing as insufficient, the New York-based insurer said in a February 18 letter to the US Securities and Exchange Commission (SEC). Part of the inadequacy of Bernstein's November 30 analysis stemmed from the accounting for portfolios of business that AIG moved outside the US, the insurer said in the letter released on Tuesday.

"These portfolio transfers significantly distorted both paid loss statistics and loss reserve information," AIG senior vice-president and deputy general counsel Kathleen Shannon said in the letter. AIG attempted to recreate Bernstein's analysis and "identified errors in both the data and methods used".

The dispute centres on the adequacy of funds available for claims that surface on policies sold in prior years. AIG fell 15 percent on the day Bault estimated a shortfall of about $11 billion for property-casualty claims.

John Meyers, a spokesman for Sanford Bernstein, and Bault, who no longer works for the firm, declined to comment. SEC spokesman John Nestor and Mark Herr of AIG also had no comment.