AEG dropped its claim Monday for a $17.5 million insurance policy for Michael Jackson, just days after e-mails revealed the concert promoter had doubts about Jackson's health at the time they were applying for the insurance.

AEG lawyer Marvin Putnam told CNN later Monday the move has been in the works for months and is not connected with the controversy over the e-mails.

A Lloyds of London underwriter sued AEG and Michael Jackson LLC after Jackson's death, claiming they failed to disclose information about the pop star's health and drug use.

"In exchange for AEG withdrawing its insurance claim, underwriters agreed to dismiss AEG from the case and to waive any costs recoverable from AEG," said Paul Schrieffer, attorney for the insurance underwriter. "The insurance case continues against the Michael Jackson Company LLC for, among other things, rescission of the policy due to nondisclosures of Michael Jackson's prior drug use."

The Michael Jackson estate, which controls Michael Jackson Company LLC, is still pursuing the insurance payout, its lawyer said Monday.

Jackson died of an overdose of a surgical anesthesia in combination with sedatives on June 25, 2009, according the the Los Angeles County coroner. Dr. Conrad Murray was found guilty last year of involuntary manslaughter in Jackson's death.

A controversy over the insurance claim erupted last week after the Los Angeles Times published e-mails which the insurance lawyer said had not been provided to him despite a year of discovery in the case.

Randy Phillips, the president of AEG Live -- the concert-promotion branch of AEG -- called Jackson's death "a terrible tragedy" in one e-mail written weeks after he died, adding "but life must go on."

"AEG will make a fortune from merch sales, ticket retention, the touring exhibition and the film/dvd," Phillips wrote. In fact, AEG Live was allowed to sell Jackson tour merchandise and share in the profits from the documentary "This Is It," produced from rehearsal video.

The e-mails suggest AEG Live's president saw Jackson's problems first-hand the day the pop star was to appear at the O2 Arena to publicly announce the shows.

"MJ is locked in his room drunk and despondent," Phillips wrote in a March 5, 2009, e-mail to AEG Live's parent company, the paper reported. "I (am) trying to sober him up."

"I screamed at him so loud the walls are shaking," Phillips wrote. "He is an emotionally paralyzed mess riddled with self-loathing and doubt now that it is show time."

The promoter blamed London traffic when Jackson was 90 minutes late for the announcement that day.

"He's as healthy as he can be -- no health problems whatsoever," Phillips told CNN two months later to refute reports Jackson's health was threatening the concerts.

The Los Angeles Times story, however, said the e-mails indicated major doubts about Jackson's ability to perform.

"We cannot be forced into stopping this, which MJ will try to do because he is lazy and constantly changes his mind to fit his immediate wants," AEG Live executive Paul Gongaware e-mailed to Phillips.

Jackson's missed rehearsals in June triggered concerns in e-mails that he was slow in learning his dance routines and would have to lip-sync on stage, the newspaper reported.

"MJ is not in shape enough yet to sing this stuff live and dance at the same time," one e-mail from the show's music director read, the paper reported.

A production manager wrote: "He was a basket case. Doubt is pervasive."

A loud warning from show director Kenny Ortega, who worked closely with Jackson on previous tours, came in mid-June, just over a week before his death. Ortega wrote to Phillips that Jackson had "strong signs of paranoia, anxiety and obsessive-like behavior" and suggesting they bring a "top psychiatrist in to evaluate him ASAP."