[CORRECTED VERSION] COLUMBUS, Ohio—Maurice R. Greenberg, American International Group Inc.'s former chief, and five other defendants will pay $115 million to settle a shareholder lawsuit filed on behalf of several Ohio state pension funds.

The suit, which will continue against AIG, charges that the funds lost money on their investments in AIG due to alleged accounting fraud and anti-competitive practices at the New York-based insurer and AIG's restatement of its 2005 results.

A hearing on the issue of whether the suit should be granted class action status was held earlier this month; a ruling has not yet been issued.

The settlement agreement, which is subject to approval by federal court and the boards of the pension funds, includes three other former AIG executives—Howard I. Smith, Christian M. Milton and Michael J. Castelli—as well as C.V. Starr & Co. Inc. and Starr International Co. Inc., former AIG affiliates that are associated with Mr. Greenberg.

In a statement, Ohio Attorney General Richard Cordray, who is litigating the case, said he will now focus on preparing for trial against AIG.

“My office has negotiated agreements totaling $284.5 million from secondary defendants in this case. Yet AIG itself has so far refused to do right by investors who were wronged,” Mr. Cordray said.

In an e-mailed statement, a spokeswoman for AIG said the company “has already paid $800 million to investors, including those that are part of the alleged class in this lawsuit—an amount which is almost three times what all the other defendants have agreed to pay combined.

“Any additional payments from AIG would not only come at the expense of taxpayers, but would greatly benefit the plaintiffs' lawyers who are litigating these claims and who would undoubtedly seek millions in fees from any judgment or settlement,” the spokesman wrote.

It was unclear whether the cost of the settlement will be covered by directors and officers liability insurance.

Coverage for the defendants under an AIG policy issued by Great American Insurance Co. is being contested in court, according to documents filed in U.S. District Court for Southern District of New York.

Mr. Greenberg left AIG in 2005 amid investigations into the New York-based insurer's accounting practices.

Earlier this month, Messrs. Greenberg and Smith, AIG's former chief financial officer, reached an agreement to settle accusations by the U.S. Securities and Exchange Commission. The SEC charged Mr. Greenberg with being a "control person" allegedly aware of transactions that enabled AIG to create the false impression that it consistently met or exceeded certain financial expectations. Mr. Greenberg did not admit or deny the claim.