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                                                                                                September 5, 2008

Mr. Robert B. Willumstad
Chief Executive Officer
American Internati onal Group, Inc.
70 Pine Street New York, New York 10270

Re:      American International Group, Inc.
Form 10-K for Fiscal Year Ended December 31, 2007
Form 10-Q for Fiscal Quarter Ended June 30, 2008
File No. 1-8787

Dear Mr. Willumstad:

We have reviewed your August 8, 2008 and August 12, 2008 responses to our
June 25, 2008 letter and have the following comments. In our comments, we ask you to
provide us with information so we may better understand your disclosure. Where a
comment requests you to revise disclosure, the information you provide should show us
what the revised disclosure will look like and identify the filing in which you intend to
first include it. If you do not believe that re vised disclosure is necessary, explain the
reason in your response. After reviewi ng the information provided, we may raise
additional comments and/or requ est that you amend your filing.

Form 10-Q for the Fiscal Quarter Ended June 30, 2008

Note 3 – Fair Value Measurements, page 13

1. Please refer to your tabular disclosure on page 17.  Please explain the basis for the
counterparty netting adjustments shown in the table.  Please tell us whether any
portion of the counterparty netting adjust ments are related to your super senior
credit default swap portfolio, and explain how the adjustments are consistent with
the requirements of SFAS 157 or other applicable literature.

Mr. Robert B. Willumstad
American Interna tional Group, Inc.
September 5, 2008 Page 2  Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

 Critical Accounting Estimates

 AIGFP’s Super Senior Credit De fault Swap Portfolio, page 49

2. You disclose that the unrealized mark et valuation losses on your super senior
credit default swap portfolio represen ts the amount you would need to pay a
willing, able and knowledgeable  third-party to assume the obligations.  Please
revise your disclosure to  discuss how you determined the principal or most
advantageous market in accordance with SFAS 157, and disclose who you believe the market participants would be.
You disclose that you value your credit default swaps written on the most senior risk layers (super senior) of desi gnated pools of debt securiti es or loans using internal
valuation models, third-party pr ices and market indices.  We believe that your disclosure
of the contractual terms, methodology, inputs an d assumptions could be improved so that
an average investor can better understand how you establish the fair value of your CDS.
While we acknowledge that the valuation of  these instruments may be complex, we do
not believe such complexities obviate the need  to provide readable  and understandable
disclosure.  In addition, where differences exist in your valua tions of different types of
CDS, we believe that your disclosure should be presented on a disa ggregated basis. We
issue the following comments to address these matters.
3. You have provided extensive disclosure regarding the valua tion of CDS relating
to multi-sector CDOs, but appear to have provided only limited disclosures regarding the valuati on of CDS relating to corporate de bt/CLOs.  Please revise to
provide disclosure of the contractual terms, methodology, inputs and assumptions
regarding the valuation of your CDS relating to corporate debt/CLOs.
4. You disclose that your modified version of the Binomial Expansion Technique (BET) model to value your credit default swap portfolio written on super senior
tranches of CDOs of asset- backed securities.  Please clarify how the output of the
modified BET model transl ates into the amount that  you would need to pay a
willing, able and knowledgeable third- party to assume the obligations.
5. Please revise to disclose how the BET model calculates the probabilistic measure
of expected loss for your credit default swap s.  Explain each significant step in the
valuation process.

6. Please refer to prior comment two of our letter dated June 25, 2008.  Please revise
your disclosure to provide a summary that quantifies the CDO pool pricing assumptions for each period presented, and explains any significant changes between periods.

Mr. Robert B. Willumstad
American Interna tional Group, Inc.
September 5, 2008 Page 3
7. You disclose that the most significant assumption in your CDS valuation is the
pricing of securities within the CDO collateral pools, which you state are “obtained in most cases from the CD O collateral managers, to the extent
available.” Please expand your disclosure  to include the following information:

• Describe the relative significance an d effect on the valuation of each
pricing methodology used.
• Describe more specifically the thir d party pricing serv ices and in-house
valuation models used by collateral managers.
• Describe more specifically your analysis and testing that verifies the accuracy and completeness of pricing information provided by collateral managers.
• Quantify the impact of the time lag in prices provided by the collateral
managers. Describe how and to what ex tent this time lag affects your fair
value estimate.
• Describe more specifically the methods and assumptions used to determine pricing for individual securi ties when the collateral manager
has been unable to provide this information.
• Explain the relative signif icance of the Monte Carlo simulation process to
the overall valuation process.  If th e Monte Carlo simulation process has a
material effect on the valuation, describe the process in more detail.
8. You state that AIG considers all available information in addition to the results of
the BET model and that for each individual super senior bond, you compare the
BET-driven valuation to the highest third party prices and use the lower value if
they do not approximate each other. Please expand your disclosure to describe more specifically the nature and sources of  these third party prices and provide a
breakdown of your fair valuation that quantifies the third party and BET-driven
components for each period presented.
9. You disclose that other inputs to th e BET model include diversity scores,
weighted average lives, recovery rates a nd discount rates.  Please disclose how
each of these inputs are obtained, along with any key underlying assumptions.

10. We acknowledge the new disclosure in your second quarter Form 10-Q. However,
we believe that investors would benefit from an expanded description and
quantification of the key assumptions unde rlying your roll rate analysis. Please
provide this information, much of wh ich appears on pages 10-14 of your August
8, 2008 response letter.

11. You state that the roll rate and loss se verity assumptions were based on several
sources, including the research of a well known investment bank and rating
agency roll rate models and assumptions. Please include in your revised

Mr. Robert B. Willumstad
American Interna tional Group, Inc.
September 5, 2008 Page 4
 disclosure a more detailed explanation of  the specific factor s and sources that you
considered in selecting each key assu mption. For each of your key assumptions,
quantify the impact of changes in key assumptions underlying the estimates at
March 31, 2008 and June 30, 2008 (i.e. both scenarios).
12. You provide sensitivity disclosure for your SFAS 157 compliant fair valuation but
not for your estimate of the potential r ealized credit losses for AIGFP’s super
senior multi-sector credit default swap portfolio. Please discuss and quantify the
sensitivity of this estimate to reasonably likely changes in key assumptions.

*    *    *    *

Please respond to the comments within 10 business days or tell us when you will
provide us with a response.  Your letter should key your responses to our comments.
Detailed cover letters greatly facilitate our review.  Please furnish your letter on EDGAR
under the form type label CORRESP.
You may contact Frank Wyman, St aff Accountant, at 202-551-3660  or Carlton
Tartar, Accounting Branch Chief, at 202-551- 3387, if you have questi ons regarding these
comments.  In this regard, do not he sitate to contact me, at 202-551-3679.

       S i n c e r e l y ,

       J i m  B .  R o s e n b e r g
      Senior Assistant Chief Accountant