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CORRESP
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CORRESP

[AIG Letterhead]

June 29, 2009

Mr. Jeffrey P. Riedler

Assistant Director

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Mail Stop 6010

Washington, D. C. 20549

    Re:

    American International Group, Inc.

    Amendment No. 1 to

    Registration Statement on Form S-4

    Filed May 1, 2009

    and Documents Incorporated by Reference

    File No. 333-158098

    Amendment No. 1 to

    Registration Statement on Form S-4

    Filed May 1, 2009

    and Documents Incorporated by Reference

    File No. 333-158019

    Response Letter dated April 30, 2009

Dear Mr. Riedler:

     We are in receipt of your letter dated May 13, 2009 and thank you for your comments concerning
the above-captioned filings of American International Group, Inc. (AIG). We are pleased to respond
to the Staff’s comments contained in your comment letter of May 13, 2009 (the “Comment Letter”).

     Following resolution of the Staff’s comments contained in the Comment Letter, AIG intends, as
soon as acceptable, to file an Amendment No. 2 to each of the above-referenced registration
statements on Form S-4, together with requests for acceleration of the effective date of the
above-referenced registration statements on Form S-4. AIG has previously furnished to the Staff a
letter dated May 14, 2009 containing the acknowledgements which are set forth in the Staff’s letter
of April 2, 2009 and which the Staff requested AIG to make in connection with a request for
acceleration.

     With respect to your comment one, we intend to file a Current Report on Form 8-K to add a
risk factor related to the super senior credit default swaps (CDS) written by AIG Financial
Products Corp. (AIGFP) for financial institutions for the purpose of providing regulatory capital
relief, which summarizes information previously disclosed by AIG, to the risk factors set forth
in AIG’s Annual Report on Form 10-K for the year ended December 31, 2008 (“2008 Form 10-K”)
and in AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 (“First

Quarter
2009 Form 10-Q”). We also intend to enhance the disclosure relating to AIGFP’s regulatory capital
CDS transactions in Item 2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations (MD&A) of AIG’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009
(“Second Quarter 2009 Form 10-Q”) as discussed below.

     With respect to your comment two and our discussion with the Staff on May 27, 2009, AIG
intends to expand its disclosures concerning the amortization of the prepaid commitment fee asset
related to the Fed Credit Agreement as part of its Form 8-K filing to revise the financial
statements included in AIG’s 2008 Form 10-K to reflect the retrospective application of FAS 160.

     AIG acknowledges that the adequacy and accuracy of the disclosure in AIG’s filings is the
responsibility of AIG, that Staff comments or changes to disclosure in response to Staff comments
do not foreclose the Securities and Exchange Commission (the “Commission”) from taking any action
with respect to the filings and that Staff comments may not be asserted by AIG as a defense in any
proceeding initiated by the Commission or any person under the Federal securities laws of the
United States.

     To facilitate your review, we have repeated your questions below in bold face type, followed
by the responses of AIG in regular type. The numbers correspond to the numbers in the Comment
Letter.

Form 10-K for the Fiscal Year Ended 12/31/08

Item 1A. Risk Factors, page 21

    1.

    Please refer to prior comments 20 and 24. We continue to believe that your risk factor
disclosure should be enhanced to specifically discuss the material risks relating to your
regulatory capital CDS transactions. Therefore, please include a new risk factor relating
to your regulatory capital CDS transactions in which you:

    •

    Include language similar to that appearing in the last paragraph under
“Regulatory Capital Portfolio” on page 149 of your 2008 10-K;

    •

    Quantify your exposure to these transactions;

    •

    Discuss that you receive limited data relating to the assets underlying these
transactions as disclosed on page 136 of your most recent Form 1O-Q and the effect of
these limitations in understanding the risks of these CDS;

    •

    Discuss how you are able to determine reasonable fair values of these CDS
despite these limitations; and

    •

    If an assumption inherent in the fair value is that the counterparties will
terminate the transactions within the next twelve months, disclose why this is a
reasonable assumption and the effect of this assumption on the fair value of these CDS.

     AIG Response

2

     In response to the Staff’s comment, AIG will file a Current Report on Form 8-K to add the
following risk factor, which summarizes information previously disclosed by AIG, to the risk
factors set forth in AIG’s 2008 Form 10-K and in AIG’s First Quarter 2009 Form 10-Q:

     If the credit markets continue to deteriorate, AIG may recognize unrealized market
valuation losses in AIGFP’s regulatory capital super senior credit default swap portfolio in
future periods which could have a material adverse effect on AIG’s consolidated financial
condition or consolidated results of operations. Moreover, the period of time that AIGFP
remains at risk for such deterioration could be significantly longer than anticipated if
AIGFP’s expectations with respect to the termination of transactions in its regulatory
capital portfolio do not materialize.

     A total of $192.6 billion (consisting of corporate loans and prime residential
mortgages) in net notional amount of the super senior credit default swap (“CDS”) portfolio
of AIG Financial Products Corp. and AIG Trading Group, Inc. and their respective
subsidiaries (collectively, “AIGFP”), as of March 31, 2009, represented derivatives written
for financial institutions, principally in Europe, for the purpose of providing regulatory
capital relief rather than for arbitrage purposes. The fair value of the derivative
liability for these CDS transactions was $393 million at March 31, 2009.

     The regulatory benefit of these transactions for AIGFP’s financial institution
counterparties is generally derived from the terms of the Capital Accord of the Basel
Committee on Banking Supervision (Basel I) that existed through the end of 2007 and which is
in the process of being replaced by the Revised Framework for the International Convergence
of Capital Measurement and Capital Standards issued by the Basel Committee on Banking
Supervision (Basel II). Financial institution counterparties are expected to transition
from Basel I to Basel II over a two-year adoption period through December 31, 2009, after
which they will receive little or no additional regulatory benefit from these CDS
transactions, except in a small number of specific instances, and therefore AIGFP expects
that the counterparties will terminate the vast majority of these transactions within the
next 12 months. The pace at which these CDS transactions will be terminated following the
transition to Basel II is affected by a number of factors, including the credit performance
of the underlying assets.

     The nature of the information provided or otherwise available to AIGFP regarding the
performance and credit quality of the underlying assets in each regulatory capital CDS
transaction is not consistent across all transactions. Furthermore, in a majority of
corporate loan transactions and all of the residential mortgage transactions, the pools are
blind, meaning that the identities of obligors are not disclosed to AIGFP. In addition,
although AIGFP receives periodic reports on the underlying asset pools, virtually all of the
regulatory capital CDS transactions contain confidentiality restrictions that preclude
AIGFP’s public disclosure of information relating to the underlying referenced assets. AIGFP
analyzes the information regarding the performance and credit quality of the
underlying pools of assets required to make its own risk assessment and to determine
any changes in credit quality with respect to such pools of assets. While much of this

3

information received by AIGFP cannot be aggregated in a comparable way for disclosure
purposes because of the confidentiality restrictions and the inconsistency of the
information, it does provide a sufficient basis for AIGFP to evaluate the risks of the
portfolio and to determine a reasonable estimate of fair value.

     Given the current performance of the underlying portfolios, the level of subordination
and AIGFP’s own assessment of the credit quality, as well as the risk mitigants inherent in
the transaction structures, AIGFP does not expect that it will be required to make payments
pursuant to the contractual terms of those transactions providing regulatory relief.
Further, AIGFP expects that counterparties will terminate these transactions prior to their
maturity. AIGFP will continue to assess the valuation of this portfolio and monitor
developments in the marketplace. Given the potential for further significant deterioration
in the credit markets, there can be no assurance that AIG will not recognize unrealized
market valuation losses from this portfolio in future periods. AIG could also remain at risk
for a significantly longer period of time than anticipated if AIGFP’s expectations with
respect to the termination of these transactions by its counterparties do not materialize.
Moreover, given the size of the credit exposure, a decline in the fair value of this
portfolio could have a material adverse effect on AIG’s consolidated results of operations
or consolidated financial condition.

     AIG intends to enhance the disclosure relating to AIGFP’s regulatory capital CDS
transactions similar to the following language (which is based on first quarter 2009
information) in the Item 2. MD&A of AIG’s Second Quarter 2009 Form 10-Q (this wording would
replace the last full paragraph on page 134 and all of the regulatory capital disclosures on
pages 135, 136 and 137 of AIG’s First Quarter 2009 Form 10-Q):

     In light of early termination experience to date and after analyses of other market
data, to the extent deemed relevant and available, AIG determined that there was no
unrealized market valuation adjustment for any of the transactions in this regulatory
capital relief portfolio for the quarter ended March 31, 2009 other than for transactions
where AIGFP believes the counterparty is no longer using the transaction to obtain
regulatory capital relief as discussed above. Although AIGFP believes the value of
contractual fees receivable on these transactions through maturity exceeds the economic
benefits of any potential payments to the counterparties, the counterparties’ early
termination rights, and AIGFP’s expectation that such rights will be exercised, preclude the
recognition of a derivative asset for these transactions.

     The following table presents, for each of the regulatory capital CDS transactions –
corporate loan portfolio, the gross transaction notional amount at March 31, 2009, net
notional amount at March 31, 2009, attachment point at inception and at March 31, 2009,
inception to date realized losses through March 31, 2009 and percent non-investment grade at
March 31, 2009:

4

    Gross

    Transaction

    Percent

    Notional

    Net Notional

    Realized Losses

    Non-Investment

    Amount at

    Amount at

    Attachment Point

    Attachment Point

    through

    Grade at

    CDS

    March 31, 2009

    March 31, 2009

    at Inception(a)

    at March 31, 2009(a)

    March 31, 2009(b)

    March 31, 2009(c)

    1 (d)

    $
    3,159

    $
    2,654

    11.00
    %

    15.98
    %

    0.14
    %

    95.70
    %

    2

    3,321

    2,789

    16.00
    %

    16.00
    %

    0.00
    %

    42.33
    %

    3

    959

    896

    10.10
    %

    9.98
    %

    0.48
    %

    11.62
    %

    4 (e)

    5,280

    4,435

    12.80
    %

    16.00
    %

    0.00
    %

    7.61
    %

    5

    13,283

    7,438

    44.00
    %

    44.00
    %

    0.00
    %

    2.06
    %

    6 (e)

    5,280

    4,541

    11.20
    %

    14.00
    %

    0.00
    %

    9.17
    %

    7

    2,387

    2,151

    10.00
    %

    9.86
    %

    0.18
    %

    11.11
    %

    8 (e)

    7,192

    6,137

    11.74
    %

    14.67
    %

    0.01
    %

    11.17
    %

    9

    9,585

    8,145

    12.02
    %

    15.02
    %

    0.02
    %

    14.87
    %

    10

    7,994

    7,103

    11.00
    %

    11.15
    %

    0.00
    %

    6.95
    %

    11

    645

    406

    18.00
    %

    37.07
    %

    0.00
    %

    62.40
    %

    12

    10,289

    9,141

    10.80
    %

    11.16
    %

    0.00
    %

    5.23
    %

    13 (f)

    5,098

    1,984

    19.99
    %

    22.18
    %

    0.00
    %

    20.97
    %

    14

    12,341

    10,843

    11.30
    %

    12.14
    %

    0.02
    %

    22.36
    %

    15

    5,140

    4,560

    11.00
    %

    11.28
    %

    0.09
    %

    8.71
    %

    16

    5,161

    4,017

    21.00
    %

    22.16
    %

    0.00
    %

    69.68
    %

    17

    9,298

    2,849

    12.00
    %

    12.00
    %

    0.00
    %

    4.15
    %

    18

    2,465

    2,069

    15.85
    %

    16.08
    %

    0.00
    %

    8.42
    %

    19

    4,060

    3,294

    14.50
    %

    21.06
    %

    0.00
    %

    73.66
    %

    20

    2,250

    1,793

    12.30
    %

    20.30
    %

    0.00
    %

    29.77
    %

    21

    1,041

    709

    23.44
    %

    31.90
    %

    0.00
    %

    29.77
    %

    22

    2,491

    2,126

    11.73
    %

    14.67
    %

    0.00
    %

    29.77
    %

    23

    2,000

    1,820

    9.00
    %

    9.00
    %

    0.00
    %

    6.25
    %

    24

    9,739

    7,481

    17.00
    %

    23.18
    %

    0.00
    %

    9.24
    %

    Total

    $
    130,458

    $
    99,381

    (a)

    Expressed as a percentage of gross transaction notional amount of the referenced obligations.
As a result of participation ratios and replenishment rights, the attachment point may not
always be computed by dividing net notional amount by gross transaction notional amount.

    (b)

    Represents realized losses incurred by the transaction (defaulted amounts less amounts
recovered) from inception through March 31, 2009 expressed as a percentage of the initial gross
transaction notional amount.

    (c)

    Represents non-investment grade obligations in the underlying pools of corporate loans
expressed as a percentage of gross transaction notional amount.

    (d)

    Trade termination notice received by AIGFP with effective date of July 6, 2009.

    (e)

    Trade termination notices received by AIGFP through April 30, 2009 with effective dates in 2009.

    (f)

    Matured on April 27, 2009.

     The following table presents, for each of the regulatory capital CDS transactions –
prime residential mortgage portfolio, the gross transaction notional amount at March 31,
2009, the net notional amount at March 31, 2009, attachment point at inception and at March
31, 2009 and inception to date realized losses through March 31, 2009:

5

    Gross

    Transaction

    Notional

    Net Notional

    Realized Losses

    Amount at

    Amount at

    Attachment Point

    Attachment Point

    through

    CDS

    March 31, 2009

    March 31, 2009

    at Inception(a)

    at March 31, 2009(a)

    March 31, 2009(b)

    25

    $
    584

    $
    376

    17.01
    %

    35.59
    %

    2.15
    %

    26

    1,160

    1,027

    10.00
    %

    11.45
    %

    0.00
    %

    27

    380

    238

    18.48
    %

    37.18
    %