NEW YORK (CNN/Money) - The Securities and Exchange Commission said Thursday that American International Group agreed to a $10 million civil penalty to settle charges it assisted Brightpoint Inc. in reporting false financial results.

AIG (AIG: down $0.31 to $60.27, Research, Estimates) developed and marketed a "non-traditional" insurance product for Brightpoint that made the company appear that it was paying premiums in return for the assumption of risk by AIG.

However, Brightpoint, which was hit with a $450,000 civil penalty, used the product to deposit cash with AIG and the funds were later returned to the company, the SEC said in a written statement.

As a result of the transaction, the AIG product helped Brightpoint conceal losses of $11.9 million in 1998, and its full-year net-income before taxes was overstated by 61 percent that year, according to the SEC.

"This transaction was simply a 'round-trip' of cash from Brightpoint to AIG and back to Brightpoint," said Wayne Carlin, Regional Director of the Commission's Northeast Regional Office. "By disguising the money as 'insurance,' AIG enabled Brightpoint to spread over several years a loss that should have been recognized immediately."

The SEC also said AIG must surrender the $100,000 fee plus interest it charged Brightpoint for the product and retain an independent counsel to ensure its products will not be used to violate securities laws in the future.

In a written statement Thursday, AIG acknowledged that "mistakes were made with the underwriting of this policy." The company added that it did not expect the fine to impact its current or future operating results.

The agency also charged three Brightpoint executives and an AIG executive as part of its investigation. It said all defendants except one Brightpoint executive settled the civil action without admitting or denying the allegations.