A variable interest entity (VIE) is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. Consolidation of a VIE by its primary beneficiary is not based on majority voting interest, but is based on other criteria discussed below.

We enter into various arrangements with VIEs in the normal course of business and consolidate the VIEs when we determine we are the primary beneficiary. This analysis includes a review of the VIE’s capital structure, related contractual relationships and terms, nature of the VIE’s operations and purpose, nature of the VIE’s interests issued and our involvement with the entity. When assessing the need to consolidate a VIE, we evaluate the design of the VIE as well as the related risks to which the entity was designed to expose the variable interest holders.

The primary beneficiary is the entity that has both (i) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. While also considering these factors, the consolidation conclusion depends on the breadth of our decision-making ability and our ability to influence activities that significantly affect the economic performance of the VIE.

Creditors or beneficial interest holders of VIEs for which AIG is the primary beneficiary generally have recourse only to the assets and cash flows of the VIEs and do not have recourse to AIG, except in limited circumstances when AIG has provided a guarantee to the VIE’s interest holders. The following table presents the total assets and total liabilities associated with our variable interests in consolidated VIEs, as classified in the Consolidated Balance Sheets:


(in millions)	Real Estate and Investment Entities(d)			Securitization Vehicles(e)		Total
December 31, 2023
Assets:
Bonds available for sale	$	36	$	148	$	184
Other bond securities		45		—		45
Equity securities		8		—		8
Mortgage and other loans receivable		—		2,063		2,063
Other invested assets
Alternative investments(a)		2,695		—		2,695
Investment real estate		1,488		—		1,488
Short-term investments		125		10		135
Cash		61		—		61
Accrued investment income		2		7		9
Other assets		94		2		96

Total(b)	$	4,554	$	2,230	$	6,784
Liabilities:
Debt of consolidated investment entities	$	1,094	$	1,106	$	2,200
Other(c)		82		1		83
Total	$	1,176	$	1,107	$	2,283


(in millions)	Real Estate and Investment Entities(d)			Securitization Vehicles(e)		Total
December 31, 2022
Assets:
Bonds available for sale	$	—	$	3,672	$	3,672

Equity securities		51		—		51
Mortgage and other loans receivable		—		2,221		2,221
Other invested assets
Alternative investments(a)		2,842		—		2,842
Investment real estate		1,731		—		1,731
Short-term investments		191		281		472
Cash		71		—		71
Accrued investment income		—		9		9
Other assets		102		70		172
Total(b)	$	4,988	$	6,253	$	11,241
Liabilities:
Debt of consolidated investment entities	$	1,358	$	4,336	$	5,694
Other(c)		85		47		132
Total	$	1,443	$	4,383	$	5,826

(d)At December 31, 2023 and 2022, off-balance sheet exposure primarily consisting of our insurance companies’ commitments to real estate and investment entities were $1.9 billion and $2.1 billion, respectively, of which commitments to external parties were $0.4 billion and $0.6 billion, respectively.

(e)During the year ended December 31, 2023, as part of the sale of AIG Credit Management, LLC, certain consolidated investment entities were deconsolidated. The impact of the deconsolidation was a decrease of $3.6 billion in assets and $3.1 billion in liabilities, resulting in a pre-tax loss of $14 million.

We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where we have also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii) other commitments and guarantees to the VIE.


				Maximum Exposure to Loss
(in millions)		Total VIE Assets		On-Balance Sheet(c)		Off-Balance Sheet			Total
December 31, 2023
Real estate and investment entities(a)	$	528,053	$	9,125	$	3,720	(d)	$	12,845
Other(b)		1,027		58		748	(e)		806
Total	$	529,080	$	9,183	$	4,468		$	13,651
December 31, 2022
Real estate and investment entities(a)	$	504,219	$	9,145	$	3,938	(d)	$	13,083
Other(b)		1,302		247		747	(e)		994
Total	$	505,521	$	9,392	$	4,685		$	14,077

(b)At December 31, 2023 and 2022, excludes approximately $1,971 million and $2,057 million, respectively, of VIE assets related to AIGFP and its consolidated subsidiaries, with maximum off-balance sheet exposure to loss of $1,941 million and $2,033 million, respectively. For additional information, see Note 1.

(e)These amounts represent our estimate of the maximum exposure to loss under certain insurance policies issued to VIEs if a hypothetical loss occurred to the extent of the full amount of the insured value. Our insurance policies cover defined risks and our estimate of liability is included in our insurance reserves on the balance sheet.

Through our insurance operations and AIG Global Real Estate Investment Corp., we are an investor in various real estate investment entities, some of which are VIEs. These investments are typically with unaffiliated third-party developers via a partnership or limited liability company structure. The VIEs’ activities consist of the development or redevelopment of commercial, industrial and residential real estate. Our involvement varies from being a passive equity investor or finance provider to actively managing the activities of the VIEs.

Our insurance operations participate as passive investors in the equity issued by certain third-party-managed hedge and private equity funds that are VIEs. Our insurance operations typically are not involved in the design or establishment of these VIEs, nor do they actively participate in the management of the VIEs.

We created certain VIEs that hold investments, primarily in investment-grade debt securities and loans, and issued beneficial interests in these investments. Some of these VIEs were created to facilitate our purchase of asset-backed securities. In these situations, all of the beneficial interests are owned by our insurance operations and are consolidated by AIG. In other instances, we have created VIEs that are securitizations of residential mortgage loans or other forms of collateralized loan obligations or repackage loan and other assets into pass-through securities. Our insurance subsidiaries own some of the beneficial interests of these VIEs, and we maintain the power to direct the activities of the VIEs that most significantly impact their economic performance. Accordingly, we consolidate these entities and those beneficial interests issued to third parties are reported as debt of consolidated investment entities. This debt is non-recourse to AIG.

Primarily through our insurance operations, we are a passive investor in RMBS, CMBS, other ABS and CLOs, the majority of which are issued by domestic special purpose entities. We generally do not sponsor or transfer assets to, or act as the servicer to these asset-backed structures, and were not involved in the design of these entities.

Our maximum exposure in these types of structures is limited to our investment in securities issued by these entities and, where applicable, any unfunded commitments to these entities. Conditional unfunded commitments for these unconsolidated entities are $435 million at December 31, 2023. Based on the nature of our investments and our passive involvement in these types of structures, we have determined that we are not the primary beneficiary of these entities. We have not included these entities in the above tables; however, the fair values of our investments in these structures are reported in Notes 5 and 6.

Additionally from time to time, AIG participates in the design of certain VIEs which we do not consolidate. The notes issued by these VIEs are recognized at fair value and included in available for sale securities in our financial statements. As of December 31, 2023, the total VIE assets from these securitizations are $3 billion, of which AIG’s maximum exposure to loss is $2.4 billion.