An insurance scandal at New York-based American International Group ( AIG)? Fuhgeddaboutit. The world's biggest insurer, laughing in the face of the kickback and bid-rigging scandal that's tarred much of the industry, raised its dividend 67% to 12.5 cents a quarter. AIG, a Dow component, says the increase is a reflection of the company's strong earnings growth. The stock added 66 cents, or 1%, to $66.91 Wednesday morning. At that price, the dividend yield remains sub-1%. The company cited its "superior financial position and our confidence in our strategic plans." Of course, the dividend hike could be an attempt by AIG to throw a bone to its beleaguered shareholders, who have seen the giant insurer ensnared in one scandal after another the past few months. AIG figures prominently in the kickback and bid-rigging investigation launched by New York Attorney General Eliot Spitzer that led to the filing of civil fraud charges against insurance brokerage Marsh & McLennan ( MMC). In that scandal, two AIG employees have pleaded guilty to charges they participated in a bid-rigging scheme orchestrated by Marsh. The stock is down 3% since the scandal broke in October. The insurer also paid a $126 million penalty to settle allegations stemming from a federal investigation into several questionable financing deals an AIG subsidiary arranged for PNC Financial ( PNC) and Brightpoint ( CELL), a cell phone company. Regulators and prosecutors were looking into AIG's role in arranging financial engineering transactions used by PNC and Brightpoint to either smooth earnings or enhance a corporate balance sheet. The settlement also calls for the appointment of an independent consultant to review other earnings-smoothing transactions AIG entered into from 2000 to 2004. The insurer also will establish a committee to review any new transactions. The agreements with the Securities and Exchange Commission and federal prosecutors, however, may not be the end of AIG's troubles. That's because Spitzer and the SEC have begun a broad-based inquiry into such deals, serving subpoenas on more than a dozen insurers that have sold similar insurance products, commonly referred to as finite insurance policies.