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Mail Stop 6010 Via Facsimile and U.S. Mail                                                                                                  December 19, 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 Form 10-Q for Fiscal Quarter Ended September 30, 2008 Form 8-K filed December 2, 2008 File No. 1-8787

Dear Mr. Liddy:

We have reviewed your November 21, 2008 letter responding to our October 2,
2008 letter and have considered related te lephonic discussions with your management
and advisors on November 7, 2008. In some of  the following comments, we request you
to revise your disclosure.  In responding to  these comments, we ask that you provide us
with information that shows us what the re vised disclosure will look like. We believe you
should make these disclosures no later than the earlier of your f iling of a registration
statement or your December 31, 2008 Form 10-K.   If you do not believe that revised
disclosure is necessary, please explain the reason in your re sponse.  For example, where
you believe that additional disclosure would not be meaningful in light of the events that
have occurred subsequent to September 30, 2008, provide a comprehensive analysis of
the facts and circumstances that cause the disclosure not to be  meaningful. After
reviewing your response, we may raise a dditional comments and/or request that you
amend your filings.
General

1. We note that you will reconsider the nature  of disclosure necessary to reasonably
inform investors about your multi-sector credit default swaps based on the terms
of and transactions involving your recen tly negotiated facilit y with the Federal
Reserve Bank of New York.  On the basi s of the disclosure in Note 11 and your
subsequently filed Form 8-K, we are not in a position to assess whether the
disclosure you currently pr ovide or that we request below would be unnecessary.
Given the apparent significance of the tr ansaction, we encourage you to provide

Mr. Edward M. Liddy
American Interna tional Group, Inc.
December 19, 2008
Page 2
 to us the disclosure you will provide to reasonably inform investors about this
transaction, its acc ounting, and its affects as well as any additional analysis
necessary to understand your accounting treatment prior to filing your Form 10-K.
 Form 10-Q for the Fiscal Qu arter Ended September 30, 2008

 Note 3 – Fair Value Measurements, page 14

2. In order to help us evaluate your res ponse to prior comment 10, please revise your
disclosure to reconcile am ounts in the table on page 20 with the descriptions and
amounts in footnote “a” to that table.  Al so, revise the disclosure to explain why
the counterparty netting adjust ments do not net to zero.
   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 113

3. We acknowledge your disclosure in response to prior comment 1(C) related to collateral posting.  In order to facilita te an understanding of your liquidity, please
expand this disclosure as follows:

• Separately quantify collateral posted and collateral which you have agreed to
post.
• Provide a breakdown of these amounts fo r each type of CDS contract shown
in the tables on pages 114 and 115 at each balance sheet date. Link the collateral posted to amount s recorded on your consolid ated balance sheets.
• Provide a roll forward of collateral pos ting activity for all periods presented.
• Explain the difference between “marke t value” of the relevant underlying
CDO security and “replacement value of the transaction.”

4. Please refer to prior comment 1(D). We we re unable to locate your disclosure of
incurred payment obligations on pages 101 and 102. Please advise.

5. On page 177, you state that “write-downs … of a referenced credit” represent a
cash settlement triggering event.  Please disclose the specific events that constitute a “write-down.”

6. Part of our objective of prior comment 1E  was to elicit quantified disclosure to
facilitate an understanding of  the amount of losses that would have to be absorbed
by other classes of CDO secu rities before the referenced CDO security incurs a
loss.  While the subordination disclosed in  the table on page 115 appears to be a
component of this amount, it is unclear wh ether, and if so how , the existence of
“cash flow diversion mechanisms of the CDO” and the classes of CDO securities

Mr. Edward M. Liddy
American Interna tional Group, Inc.
December 19, 2008
Page 3
 that rank pari passu with the referenced CDO security impacts this amount.
Please provide clarifying disc losure.  Please also revise the disclosure to quantify
the extent to which erosion of tran saction cash flows has occurred since
transaction inception.  Such disclosure might include, but not necessarily be limited to, the original and current subordination levels.

7. The disclosure on page 1 22 suggests that your expos ure to regulatory capital
credit default swaps could be material.  In  order to facilitate an understanding of
your regulatory capital credit  default swaps, please e xpand your disclosure to
provide the following information:

• Describe the contractual terms and ma rket conditions that you expect will
cause these regulatory capital relief trades  to be terminated within the next 6-
18 months.
• Clarify how the CDS contracts written fo r regulatory capital relief facilitate
compliance with regulatory capital requirements.
• You indicate that these contracts pr ovide credit protection but not risk
mitigation to the counterparties. Please explain this apparent inconsistency.
• Describe the specific contractual term s and market conditions that would
require AIG to make a payment in connection with a regulatory capital relief trade. In your disclosure on page 115, your  statement that these contracts will
likely terminate at no additional cost to AIGFP appears to indicate that you expect no cash payments to occur. Please explain more specifically your basis for this assertion.
• Describe the specific contractual terms and market conditions that caused AIG
to post collateral in conn ection with these trades. Quantify the amount of
collateral posted at each balance sheet date.
• Provide quantified data for the securi ties underlying your re gulatory capital
relief trades, similar to that provided on pages 115 and 116 for your multi-sector CDOs, or explain why you believe that such information would not be
useful to an investor.

8. Please refer to page eight of your Augus t 8, 2008 response.  Please tell us why
you believe that always pick ing the lower of the third party price or the BET-
derived model value results in the best esti mate of fair value in situations where
these two values do not approximate each other.

9. We believe your sensitivity analyses should be revised to:

• Present quantified sensitivity on a disaggregated basis for the ABS
categories depicted in the table on page 122.
• Explain why the reasonably likely ch anges you present differ from recent
historical experience, such as the hi storical price movements shown in the
table on page 122; and

Mr. Edward M. Liddy
American Interna tional Group, Inc.
December 19, 2008 Page 4
 • For the other key inputs, disclose the actual input at the reporting date in
order to provide the necessary context to understand the sensitivity analysis provided.

10. As we discussed in our November 7, 2008 telephonic discussion, please revise
your disclosure to clarify what informa tion your roll rate analysis conveys, how it
should be used by an investor and what its limitations are.

*    *    *    *
  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