American International Group Inc. (AIG), the U.S. insurance giant, was said on Sunday to be close to reaching a huge settlement with U.S. regulators to resolve accounting fraud allegations, the Wall Street Journal and the New York Times reported.

Citing people familiar with the matter, the Journal said that AIG, the world's largest insurer, was preparing to pay at least $1.5 billion in fines and disgorgement to settle investigations by the Securities and Exchange Commission and New York State Attorney General Eliot Spitzer, and the New York State Insurance Department.

The Times, citing two people briefed on the negotiations, said AIG would pay about $1.6 billion.

AIG officials could not be immediately reached by Reuters for comment.

The Journal said the expected deal, which could be announced as early as this week, might be the largest regulatory settlement with a single company in U.S. history.