Prudential Financial Inc., the second-largest U.S. life insurer, said the New York Department of Financial Services told the company that it may not be holding enough reserves to back some savings products, known as variable annuities.

Sales of annuities jumped 17 percent in the fourth quarter, the biggest gain in 11 years, as higher bond yields buoyed insurers that offer the savings products.

American International Group Inc.s U.S. life insurance operation had its credit rating upgraded by A.M. Best after posting higher sales of retirement products including annuities.

AIG is expanding sales of retirement products as rivals such as MetLife Inc. and Prudential Financial Inc. scale back from variable annuities.

American International Group Inc. suffered another year of impairments in its portfolio of death- benefit bets as insured people lived longer than the company expected.

The company had 14,792 employees at the end of 2013, compared with 13,373 a year earlier, according to a regulatory filing.

Prudential Financial Inc. is spending about $57 million to reward workers after topping Chief Executive Officer John Strangfelds profitability goal last.

Chief Executive Officer Robert Benmosche, 69, is focusing on annuities as more Americans approach retirement and competitors including MetLife Inc. limit sales.