Catalyzes a Baeyer-Villiger oxidation reaction, i.e. the insertion of an oxygen atom into a carbon-carbon bond adjacent to a carbonyl, which converts ketones to esters or lactones using NADPH and/or NADH as an electron donor. Thus, can convert bicyclo[3.2.0]hept-2-en-6-one into the oxidative lactone products 2-oxabicyclo[3.3.0]oct-6-en-3-one and 3-oxabicyclo[3.3.0]oct-6-en-2-one. Is also able to catalyze the sulfoxidation of methyl phenyl sulfide (thioanisole). Belongs to the FAD-binding monooxygenase family.