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                                                                                                October 2, 2008

Mr. Edward M. Liddy
Chairman and 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. Liddy:

We have reviewed the Company’s September 10, 2008 and September 16, 2008
letters responding to our September 5, 2008 lett er and considered telephonic discussions
we had with American International Group, Inc.’s management and its advisors on
September 12, 2008.  We have the followi ng comments in which we request the
Company to revise its disclosure.  In re sponding to these comments, we ask that you
provide us with information that shows us wh at the revised disclosure will look like.  We
believe you should make these disclosures as well as those proposed in your previous
responses as soon as practicable , but no later than the earlier of the Company’s filing of a
registration statement or its September 30, 2008 Form 10-Q.  If you do not believe that
revised disclosure is necessary, please expl ain the reason in your response.  After
reviewing your response, we may raise a dditional comments and/or request that you
amend your filings.

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

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

1. Please revise your disclosure to address the points below for each asset class, or
subset of asset class, to the extent material.  Our primary objective is to facilitate investors’ understanding of the risks inherent in  your credit default swap
portfolio, as well as the effects that this portfolio has had and may be expected to

Mr. Edward M. Liddy
American Interna tional Group, Inc.
October 2, 2008 Page 2
have on the Company’s financial position, liquidity and operating results.  We
believe that modifying the disclosu re you proposed in your September 16
th letter
to address these points may help to ac hieve these objectives.  However, we
recognize that the Company’s management is  in the best position to determine the
disclosures necessary to ach ieve these objectives.  Therefore, we encourage you
to consider and advise us whether different or incremental disclosure would best achieve these objectives.

• Describe more specifically the terms of all material defined credit events
and collateral posting requirements in your  credit default swap contracts, as
well as the events and conditions that trigger them.
• For multi-sector CDOs, quantify the notional amounts and the nature and type of the underlying securities as a percentage of the notional amounts,
such as residential mortgage backed securities (i.e. prime, sub-prime, and
Alt-A), commercial mortgage backed securities, corporate, and other CDO’s.  Also, disclose information about  credit ratings and vintage.  Please
link this data to the derivative asset or liability record ed on the balance
sheet.
• For contracts where collateral obligations have been or are reasonably likely to be triggered, present data qu antifying and describing the collateral
you have posted at the balance sheet da te, the reasonably likely amounts of
additional collateral that you could be required to post, and the maximum amount of collateral that you could be re quired to post.  Fo r the reasonably
likely additional amounts of collateral, please address why such amounts are reasonably likely in the context of  the contractual trigger that would
require additional collateral to be pos ted. Please link this data to the
derivative asset or liability r ecorded on the balance sheet.
• For contracts where a payment obligation has been or is reasonably likely to
be triggered, present data quantifying and describing the amounts due and the timing of those amounts.  For pa yment obligations that have been
incurred, please state where the payment obligations are recorded on the balance sheet.
• Present quantified data that helps facili tate an understanding of the amount
of additional defaults that would need to occur before you would be required to either make payments or pos t collateral, and your analysis of the
likelihood of such events occurring.  For example, consider presenting data depicting the original le vel of subordination below the super senior risk
layer, the current level of subordinati on, and the effect and expected effects
of any deterioration on your liquidity.  Please link this data to the derivative asset or liability recorded on the balance sheet.

When considering the above points, we believe that summarizing CDS contracts and/or underlying loans and debt with similar characteristics,  risks and terms

Mr. Edward M. Liddy
American Interna tional Group, Inc.
October 2, 2008 Page 3
would be appropriate, and th at using tables and bulle ted lists to present the
information where possible would be most useful to an investor.

2. In your September 16, 2008 response, you in clude the table shown on page 50 of
your June 30, 2008 Form 10-Q.  Please tell us and revise that  table and other
presentations, if any, to clarify what “net  notional” means.  Consider the need to
provide disaggregated quantified informati on.  Please also revi se the phrase “fair
value loss at June 30, 2008” to clarify whet her you are referring to the fair value
of a derivative liability at June 30, 2008.  Consider linking this amount directly to
the derivative asset or liability recorded  on the balance sheet or through a link to
the table on page 17 of your June 30, 2008 Form 10-Q.
 3. We acknowledge your response to prior comment five of our letter dated
September 5, 2008.  Please expand your disclosure to clarify the following:

• How the model converts the prices for the CDO portfolio securities into
credit spreads.
• How the credit spreads are used to determine the implied probabilities of
default.
• The purpose of dividing the collateral  pool into a hypothetical number of
independent identical securities.
• The change in the amount of the adjustment for the risk of non-performance by AIG for each period presented, including the factors
underlying the changes in this adjustment.
• The specific modifications made to the BET model.

4.     On page 15 of your response letter da ted September 16, 2008, you disclose that
the fair value of your multi -sector super senior credit  default swap portfolio
was determined using: (i) the BET mode l, (ii) third party prices, (iii) the
average of the BET model and third part y prices and (iv) other, and have
agreed to provide tabula r disclosure regarding th e notional amount and fair
value attributable to each valuation methodology.  In addition, you state that
third party prices may be determined based on values implied by collateral calls
or price estimates for the referenced CDO securities.  Please revise your table to separately quantify the notional amounts and fair values that were determined using third party prices  based on collateral calls and those
determined using price estimates for the referenced CDO securities.  In addition, please revise your disclosure  to describe more specifically the
circumstances under which each of the five categories of valuation methodologies is used.
     5.     Please refer to prior comment six of our  letter dated September 5, 2008.  Please
revise your proposed disclosure on pa ge nine of your September 16, 2008
response to explain the reasons for significant changes between periods

Mr. Edward M. Liddy
American Interna tional Group, Inc.
October 2, 2008 Page 4
presented (e.g. March 31, 2008 as compar ed to June 30, 2008) in the weighted
average price for each ABS Category.  Also, please disclose the notional
amounts of the multi-sector CDO super senior credit default swap portfolio for each ABS category.  We may have additional comments after the amounts in your tabular disclosu re are quantified.
   6.     Please refer to prior comments seven and eight.  Please expand your proposed
disclosure relating to the pricing data obtained from the collateral managers to:

• Describe more specifically the nature and scope of your testing
performed to validate the accuracy  and completeness of pricing
information provided by the collat eral managers. Describe and
quantify the adjustments that resulted from this validation process for
each period presented.
• Describe in the disclosure proposed on page ten of your September 16,
2008 response what a pricing matrix is and how you use a pricing
matrix to derive the prices for individual securities for which a price is not provided by a CDO collateral manager.

7.     Please refer to page nine of your Se ptember 16, 2008 response.  Please revise
your disclosure to describe more specifically the observable market transactions used to valu e credit default swaps written  to facilitate regulatory
capital relief.

8.     Please refer to prior comment 12 of our  letter dated September 5, 2008.  In
performing the roll rate analysis, you assume that “referenced obligations
acquired by AIGFP in extinguishing its obligations under the swaps are held to maturity.” Please disclose the factor s that you considered in making this
assumption and determining it to  be a reasonable assumption.

Note 1 – Summary of Significan t Accounting Policies, page 8

9. Please tell us and disclose your accounti ng policies relating to  the collateral
posting requirements for your credit derivatives.
Note 3 – Fair Value Measurements, page 13
10. Please refer to prior comment one of  our letter dated September 5, 2008.
Please revise your disclosure on page 17 to separately identify and quantify
each material component of the counterparty netting adjustments.  Please tell us
and clarify whether any portion of the c ounterparty netting adjustment accounts
for the differences in credit applie d to the gross and net cash flows.

*    *    *    *

Mr. Edward M. Liddy
American Interna tional Group, Inc.
October 2, 2008 Page 5

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