AIG will pay John Neal $US2.7 million ($4.2 million) following a reversal of plans for him to become president from next month.

A regulatory filing on Friday said the insurer has finalised documentation on “the mutual decision that he will no longer be joining the company” and an agreement provides for payment of the sum, representing Mr Neal’s forgone incentives at his former employer.

AIG said earlier this month that Mr Neal, previously Lloyd’s CEO, would no longer be joining “due to personal circumstances”.

The Wall Street Journal reported AIG pulled the appointment after discovering Mr Neal’s previous employer had launched an investigation into an alleged workplace relationship.

Lloyd’s last week responded to questions by revealing an initial review was being followed up by a further investigation. 

Chairman Charles Roxburgh commissioned an independent fact-finding review last month to ensure the corporation’s processes were robust and fully aligned with regulatory expectations, the Lloyd’s statement said.

“That work identified that our internal processes had not been fully adhered to in respect of a prior matter. In recent days, new information has emerged. In response, Lloyd’s has launched an investigation with the support of a law firm.”

Mr Neal became Lloyd’s CEO in October 2018 and drove a turnaround in its performance. He was expected to join Aon after leaving but it was later announced he would join AIG.

He previously led QBE in Sydney. The insurer’s 2016 remuneration report said Mr Neal’s performance was well regarded but his short-term incentive bonus had been cut 20% as some “recent personal decisions” were inconsistent with board expectations.

London Markets Association CEO Sheila Cameron says the group looks forward to the Lloyd’s investigation findings being made public and action taken.

“Under the new Lloyd’s leadership, there has been a refreshing commitment to behavioural change and openness,” she said. “We call on Lloyd’s to accelerate their commitment to this change.”