Federal securities regulators and New York investigators are considering expanding their probes of the insurance industry to see whether insurers use offshore reinsurance arrangements to manipulate their financial statements, people familiar with the matter told Wednesday's Wall Street Journal.

A spokesman for New York Attorney General Eliot Spitzer's office declined to comment, as did Securities & Exchange Commission officials. But one of the people familiar with the matter says Mr. Spitzer's office has been flooded with tips from insurance-industry insiders about a range of complicated reinsurance matters. Mr. Spitzer's office is said to be taking the tips seriously and is sorting through them, considering where to throw further investigative heft, if anywhere.

At issue are reinsurers based in Barbados, the Cayman Islands and other tax havens. Reinsurance is insurance that insurers buy to help spread the risk from policies they sell.

The potential new avenue would bring Mr. Spitzer's insurance inquiries into territory far removed from its spring 2004 origins as an investigation into commissions paid by insurers to insurance brokers. It also would present an expansion of a joint probe by Mr. Spitzer's office and the SEC into a class of complex nontraditional insurance products known as "finite risk" contracts, among other names.

Mr. Spitzer's inquiries into insurers' dealings with offshore firms are at an early stage, according to the people familiar with the matter, and may not lead to full-blown probes. These people add that the new inquiries are taking a backseat while investigators try to wrap up its investigation of and settlements with insurance brokers.

Among other things, tipsters have urged Mr. Spitzer to re-open a probe into American International Group Inc.'s (AIG) past ties to Coral Reinsurance Co., a thinly capitalized Barbados-based reinsurer. The ties were the subject of inquiries in the mid-1990s by at least three different state insurance departments. AIG disclaimed ownership or control of Coral, which closed in 1999, and maintained its accounting was proper. Those inquiries ended without any penalties to AIG.

-Wall Street Journal Staff Reporters Ian McDonald and Theo Francis contributed to this story. Dow Jones Newswires 03-02-05 0515ET Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.