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SEC Comment Letter for AMERICAN INTERNATIONAL GROUP, (AIG) — Mar 25, 2011

AMERICAN INTERNATIONAL GROUP, INC.
Date: March 25, 2011 · CIK: 0000005272 · Accession: 0000000000-11-018463

AI Filing Summary & Sentiment

File numbers found in text: 001-8787

Date
March 24, 2011
Author
Jim B. Rosenberg Senior Assistant Chief Accountant
Form
UPLOAD
Company
AMERICAN INTERNATIONAL GROUP, INC.

Letter

March 24, 2011 Mr. Robert H. Benmosche President and Chief Executive Officer American Internati onal Group, Inc. 180 Maiden Lane New York, New York 10038 Re: American International Group, Inc. Form 10-K for the Fiscal Year Ended December 31, 2009 Filed February 24, 2011 File No. 001-8787

Dear Mr. Benmosche: We have reviewed your filing and have the following comments. In our comments, we ask you to provide us with information so we may better understa nd your disclosures. Please respond to this letter within ten business days by providing us the requested information or by advising us when you will provide the requested response. If you do not believe a comment applies to your facts and circ umstances, please tell us why in your response. Please furnish us a letter on EDGAR under the fo rm type label CORRESP that keys your responses to our comments.

After reviewing the information provided, we may raise additional comments and/or request that you amend your filing.

General

1. We note disclosure in your Form 10-K that Chartis International organizes itself into three broad regions: the Far East, Europe and Growth Economies (which primarily include Asia Pacific, the Middle East a nd Latin America). Iran, Syria and Sudan, countries generally understood to be included in references to the Middle East, are identified by the State Department as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls. We note that your Form 10-K does not include disclosure about these c ountries. Please describe to us th e nature and extent of your past, current, and anticipated contact s with Iran, Syria and Sudan wh ether through subsidiaries or other direct or indirect arrangements. In this regard, we note October and November 2010 news articles stating that you indirectly own a 13.5% inte rest in and control a seat on the board of Lifan Industry Group, a motorcycle and car company which does business in Iran and Syria. Your response should describe any se rvices or products you have provided to the referenced countries a nd any agreements, commercial arrangements, or other contacts you have had with the gove rnments of these countries or entities

Robert H. Benmosche American Interna tional Group, Inc. March 24, 2011 Page 2

controlled by these governments. 2. Please discuss the materiality of your contac ts with Iran, Syria and Sudan described in response to the foregoing comment and whethe r those contacts constitute a material investment risk for your security holders. You should address mate riality in quantitative terms, including the approximate dollar amount s of any associated revenues, assets, and liabilities for the last three fiscal years and subseque nt interim period. Also, address materiality in terms of qualitative factor s that a reasonable in vestor would deem important in making an investment decision, including the potential impact of corporate activities upon a company’s reputation and sh are value. Various state and municipal governments, universities, and other investor s have proposed or a dopted divestment or similar initiatives regarding investment in companies that do business with U.S.- designated state sponsors of terrorism. Your materiality analysis should address the potential impact of the investor sentiment evidenced by such actions directed toward companies that have operations asso ciated with Iran, Syria and Sudan.

Item 7. Management’s Discussion and Analys is of Financial Condition and Results of Operations 2011 Business Outlook

Chartis, page 46 3. You disclose that Chartis U.S. expects c ontinued growth within its consumer lines business and an overall decline in certain cl asses of its commercial lines businesses. However, you do not address the ex pected impact on expenses due to this shift in the mix of business. Based on statements made in your 2010 earnings confer ence call, it appears that you will experience higher expe nse ratios as a result of th e shift. Please provide us revised disclosure to be included in fu ture filings beginning with your March 31, 2011 Form 10-Q to discuss the expect ed trend for the expense ratio.

Results of Operations Segment Results Chartis Operations Liability for Unpaid Claims a nd Claims Adjustment Expense Asbestos and Environmental Reserves, page 104 4. Your disclosure on page 106 states that ma nagement will make adjustments to the asbestos reserves when considered necessa ry based on the reserve estimates produced by the third-party actuary. Please tell us the specific amount of the adjustment recorded during the fourth quarter of 2010 and descri be the specific underlying reasons that explain why management believes the adjustment was necessary.

Robert H. Benmosche American Interna tional Group, Inc. March 24, 2011 Page 3

Notes to Consolidated Financial Statements, page 207

8. Lending Activities, page 279 5. On page 215 you disclose the risk factors ev aluated in monitoring the credit quality of commercial mortgages. Please provide us revise d disclosure to be included in future filings beginning with your March 31, 2011 Fo rm 10-Q to include the carrying amount of commercial mortgage loans at the class level by credit quality indicato r. Please note that class is defined as a level of information be low a portfolio segment. In addition, please disclose a detailed description of the me thodology used to estimate the allowance for credit losses. Please refer to ASC 310-10-50. 6. Please provide us revised disclosu re to be included in future filings beginning with your March 31, 2011 Form 10-Q to address the followi ng for commercial real estate loans that have been extended at maturity or othe rwise restructured for which you have not considered the loans to be impaired: • The amount of these loans and types of extensions being made, whether loan terms are being adjusted from the origin al terms, and whether you consider these types of loans as co llateral-dependent; • To the extent you extend commercial loans at or near maturity at the existing loan rate or restructure the loan’s interest rate or principal amount, how you consider whether it is a troubled debt restructuring; and • For those with a guarantee, separately identify them and disclose: o How you evaluate the financial wherewith al of the guarantor, addressing the type of financial information revi ewed, how current and objective the information reviewed is, and how of ten the review is performed and o How many times you have sought performa nce under the guarantee discussing the extent of the successes. As part of your response, discuss the decision making process you go through in decidi ng whether to pursue the guarantor and whether there are circumstances you would not seek to enforce the guarantee.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure in the filing to be certain that the filing include s the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules requir e. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In responding to our comments, please provi de a written statement from the company acknowledging that: • the company is responsible for the adequacy an d accuracy of the disclo sure in the filing; • staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and • the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States.

Robert H. Benmosche American Interna tional Group, Inc. March 24, 2011 Page 4

You may contact Vanessa Robert son, Staff Accountant, at (2 02) 551-3649 or Joel Parker, Accounting Branch Chief, at (202) 551-3651 if you have any questions regarding the processing of your response, as well as any questions rega rding comments on the financial statements and related matters. You may contact Sebastian Go mez Abero, Staff Attorney, at (202) 551-3578 or Jeffrey Riedler, Assistant Director, at (202) 551-3715 with questions on any of the other comments. In this regard, do not hes itate to contact me at (202) 551-3679.

Sincerely,
Jim B. Rosenberg Senior Assistant Chief Accountant

Show Raw Text
March 24, 2011
 Mr. Robert H. Benmosche President and Chief Executive Officer  American Internati onal Group, Inc.
180 Maiden Lane New York, New York 10038
Re: American International Group, Inc.
   Form 10-K for the Fiscal Year Ended December 31, 2009
   Filed February 24, 2011
File No. 001-8787

Dear Mr. Benmosche:
 We have reviewed your filing and have the following comments.  In our comments, we
ask you to provide us with information so we may better understa nd your disclosures.
 Please respond to this letter within ten business days by providing us the requested
information or by advising us when you will provide the requested response.  If you do not believe a comment applies to your facts and circ umstances, please tell us why in your response.
Please furnish us a letter on EDGAR under the fo rm type label CORRESP that keys your
responses to our comments.

After reviewing the information provided, we may raise additional comments and/or
request that you amend your filing.

General

1. We note disclosure in your Form 10-K that  Chartis International organizes itself into
three broad regions: the Far East, Europe  and Growth Economies (which primarily
include Asia Pacific, the Middle East a nd Latin America).  Iran, Syria and Sudan,
countries generally understood to  be included in references  to the Middle East, are
identified by the State Department as state sponsors of terrorism, and are subject to U.S.
economic sanctions and export controls.  We note that your Form 10-K does not include
disclosure about these c ountries.  Please describe to us th e nature and extent of your past,
current, and anticipated contact s with Iran, Syria and Sudan wh ether through subsidiaries
or other direct or indirect arrangements. In this regard, we note October and November
2010 news articles stating that  you indirectly own a 13.5% inte rest in and control a seat
on the board of Lifan Industry Group, a motorcycle and car company which does
business in Iran and Syria.  Your response should describe any se rvices or products you
have provided to the referenced countries a nd any agreements, commercial arrangements,
or other contacts you have had with the gove rnments of these countries or entities

Robert H. Benmosche American Interna tional Group, Inc.
March 24, 2011 Page 2

controlled by these governments.
2. Please discuss the materiality of your contac ts with Iran, Syria and Sudan described in
response to the foregoing comment and whethe r those contacts constitute a material
investment risk for your security holders.  You should address mate riality in quantitative
terms, including the approximate dollar amount s of any associated revenues, assets, and
liabilities for the last  three fiscal years and subseque nt interim period.  Also, address
materiality in terms of qualitative factor s that a reasonable in vestor would deem
important in making an investment decision, including the potential impact of corporate
activities upon a company’s reputation and sh are value.  Various state and municipal
governments, universities, and other investor s have proposed or a dopted divestment or
similar initiatives regarding investment in companies that do business with U.S.-
designated state sponsors of terrorism.  Your  materiality analysis  should address the
potential impact of the investor sentiment evidenced by such actions directed toward
companies that have operations asso ciated with Iran, Syria and Sudan.

Item 7.  Management’s Discussion and Analys is of Financial Condition and Results of
Operations
 2011 Business Outlook

Chartis, page 46
3. You disclose that Chartis U.S. expects c ontinued growth within its consumer lines
business and an overall decline in certain cl asses of its commercial lines businesses.
However, you do not address the ex pected impact on expenses due to this shift in the mix
of business.  Based on statements made in your 2010 earnings confer ence call, it appears
that you will experience higher expe nse ratios as a result of th e shift.  Please provide us
revised disclosure to be included in fu ture filings beginning with your March 31, 2011
Form 10-Q to discuss the expect ed trend for the expense ratio.

Results of Operations
Segment Results
Chartis Operations
Liability for Unpaid Claims a nd Claims Adjustment Expense
Asbestos and Environmental Reserves, page 104
4. Your disclosure on page 106 states that ma nagement will make adjustments to the
asbestos reserves when considered necessa ry based on the reserve estimates produced by
the third-party actuary.  Please tell us the specific amount of the adjustment recorded
during the fourth quarter of 2010 and descri be the specific underlying reasons that
explain why management believes  the adjustment was necessary.

Robert H. Benmosche American Interna tional Group, Inc.
March 24, 2011 Page 3

Notes to Consolidated Financial Statements, page 207

8. Lending Activities, page 279
5. On page 215 you disclose the risk factors ev aluated in monitoring the credit quality of
commercial mortgages. Please provide us revise d disclosure to be included in future
filings beginning with your March 31, 2011 Fo rm 10-Q to include the carrying amount of
commercial mortgage loans at the class level by credit quality indicato r. Please note that
class is defined as a level of information be low a portfolio segment. In addition, please
disclose a detailed description of the me thodology used to estimate the allowance for
credit losses. Please refer to ASC 310-10-50.
6. Please provide us revised disclosu re to be included in future  filings beginning with your
March 31, 2011 Form 10-Q to address the followi ng for commercial real estate loans that
have been extended at maturity or othe rwise restructured for which you have not
considered the loans to be impaired:
• The amount of these loans and types of extensions being made, whether loan
terms are being adjusted from the origin al terms, and whether you consider these
types of loans as co llateral-dependent;
• To the extent you extend commercial loans at  or near maturity at the existing loan
rate or restructure the loan’s interest rate or principal amount, how you consider
whether it is a troubled debt restructuring; and
• For those with a guarantee, separately identify them and disclose:
o How you evaluate the financial wherewith al of the guarantor, addressing the
type of financial information revi ewed, how current and objective the
information reviewed is, and how of ten the review is performed and
o How many times you have sought performa nce under the guarantee discussing
the extent of the successes.  As part  of your response, discuss the decision
making process you go through in decidi ng whether to pursue the guarantor
and whether there are circumstances you would not seek to enforce the
guarantee.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
 In responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

Robert H. Benmosche American Interna tional Group, Inc.
March 24, 2011 Page 4

You may contact Vanessa Robert son, Staff Accountant, at (2 02) 551-3649 or Joel Parker,
Accounting Branch Chief, at (202) 551-3651 if you have any questions regarding the processing
of your response, as well as any questions rega rding comments on the financial statements and
related matters. You may contact Sebastian Go mez Abero, Staff Attorney, at (202) 551-3578 or
Jeffrey Riedler, Assistant Director, at (202)  551-3715 with questions on any of the other
comments.  In this regard, do not hes itate to contact me at (202) 551-3679.

Sincerely,

Jim B. Rosenberg Senior Assistant Chief Accountant