Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2011

Fair Value Measurements

Impact of change in discount rate or cash flow estimate on fair value of Maiden Lane III Interests

Nine Months Ended September 30, 2011 (in millions)		Maiden Lane III Fair Value Change
Discount Rates:
	200 basis point increase	$	(547	)
	200 basis point decrease		620
	400 basis point increase		(1,031	)
	400 basis point decrease		1,325
Estimated Future Cash Flows:
	10% increase		667
	10% decrease		(673	)
	20% increase		1,325
	20% decrease		(1,339	)

Assets and liabilities measured at fair value on a recurring basis

September 30, 2011 (in millions)			Level 1		Level 2		Level 3		Counterparty Netting(a)			Cash Collateral(b)			Total
Assets:
	Bonds available for sale:
		U.S. government and government sponsored entities	$	28	$	7,526	$	-	$	-		$	-		$	7,554
		Obligations of states, municipalities and Political subdivisions		1		38,481		908		-			-			39,390
		Non-U.S. governments		702		18,947		5		-			-			19,654
		Corporate debt		110		143,681		2,475		-			-			146,266
		RMBS		-		22,150		10,408		-			-			32,558
		CMBS		-		3,665		3,975		-			-			7,640
		CDO/ABS		-		2,650		4,117		-			-			6,767
Total bonds available for sale				841		237,100		21,888		-			-			259,829
	Bond trading securities:
		U.S. government and government sponsored entities		162		7,395		-		-			-			7,557
		Obligations of states, municipalities and Political subdivisions		-		257		-		-			-			257
		Non-U.S. governments		-		36		-		-			-			36
		Corporate debt		-		773		8		-			-			781
		RMBS		-		1,383		332		-			-			1,715
		CMBS		-		1,291		547		-			-			1,838
		CDO/ABS		-		4,076		8,394		-			-			12,470
Total bond trading securities				162		15,211		9,281		-			-			24,654
	Equity securities available for sale:
		Common stock		2,966		6		56		-			-			3,028
		Preferred stock		-		44		70		-			-			114
		Mutual funds		56		11		-		-			-			67
Total equity securities available for sale				3,022		61		126		-			-			3,209
	Equity securities trading			37		111		-		-			-			148
	Mortgage and other loans receivable			-		104		-		-			-			104
	Other invested assets(c)			11,670		1,777		7,184		-			-			20,631
	Derivative assets:
		Interest rate contracts		2		7,706		1,034		-			-			8,742
		Foreign exchange contracts		-		165		-		-			-			165
		Equity contracts		149		163		34		-			-			346
		Commodity contracts		-		99		3		-			-			102
		Credit contracts		-		-		91		-			-			91
		Other contracts		35		472		284		-			-			791
		Counterparty netting and cash collateral		-		-		-		(3,784	)		(1,707	)		(5,491	)
Total derivative assets				186		8,605		1,446		(3,784	)		(1,707	)		4,746
	Short-term investments(d)			1,484		6,052		-		-			-			7,536
	Separate account assets			45,213		2,899		-		-			-			48,112
Total			$	62,615	$	271,920	$	39,925	$	(3,784	)	$	(1,707	)	$	368,969
Liabilities:
	Policyholder contract deposits		$	-	$	-	$	1,362	$	-		$	-		$	1,362
	Derivative liabilities:
		Interest rate contracts		-		7,017		245		-			-			7,262
		Foreign exchange contracts		-		189		-		-			-			189
		Equity contracts		2		204		10		-			-			216
		Commodity contracts		-		100		-		-			-			100
		Credit contracts(e)		-		6		3,453		-			-			3,459
		Other contracts		-		141		245		-			-			386
		Counterparty netting and cash collateral		-		-		-		(3,784	)		(2,762	)		(6,546	)
Total derivative liabilities				2		7,657		3,953		(3,784	)		(2,762	)		5,066
	Other long-term debt			-		10,450		789		-			-			11,239
	Other liabilities(f)			314		954		-		-			-			1,268
Total			$	316	$	19,061	$	6,104	$	(3,784	)	$	(2,762	)	$	18,935

December 31, 2010 (in millions)			Level 1		Level 2		Level 3		Counterparty Netting(a)			Cash Collateral(b)			Total
Assets:
	Bonds available for sale:
		U.S. government and government sponsored entities	$	142	$	7,208	$	-	$	-		$	-		$	7,350
		Obligations of states, municipalities and Political subdivisions		4		46,007		609		-			-			46,620
		Non-U.S. governments		719		14,620		5		-			-			15,344
		Corporate debt		8		124,088		2,262		-			-			126,358
		RMBS		-		13,441		6,367		-			-			19,808
		CMBS		-		2,807		3,604		-			-			6,411
		CDO/ABS		-		2,170		4,241		-			-			6,411
Total bonds available for sale				873		210,341		17,088		-			-			228,302
	Bond trading securities:
		U.S. government and government sponsored entities		339		6,563		-		-			-			6,902
		Obligations of states, municipalities and Political subdivisions		-		316		-		-			-			316
		Non-U.S. governments		-		125		-		-			-			125
		Corporate debt		-		912		-		-			-			912
		RMBS		-		1,837		91		-			-			1,928
		CMBS		-		1,572		506		-			-			2,078
		CDO/ABS		-		4,490		9,431		-			-			13,921
Total bond trading securities				339		15,815		10,028		-			-			26,182
	Equity securities available for sale:
		Common stock		3,577		61		61		-			-			3,699
		Preferred stock		-		423		64		-			-			487
		Mutual funds		316		79		-		-			-			395
Total equity securities available for sale				3,893		563		125		-			-			4,581
	Equity securities trading			6,545		106		1		-			-			6,652
	Mortgage and other loans receivable			-		143		-		-			-			143
	Other invested assets(c)			12,281		1,661		7,414		-			-			21,356
	Derivative assets:
		Interest rate contracts		1		13,146		1,057		-			-			14,204
		Foreign exchange contracts		14		172		16		-			-			202
		Equity contracts		61		233		65		-			-			359
		Commodity contracts		-		69		23		-			-			92
		Credit contracts		-		2		377		-			-			379
		Other contracts		8		923		144		-			-			1,075
		Counterparty netting and cash collateral		-		-		-		(6,298	)		(4,096	)		(10,394	)
Total derivative assets				84		14,545		1,682		(6,298	)		(4,096	)		5,917
	Short-term investments(d)			5,401		18,459		-		-			-			23,860
	Separate account assets			51,607		2,825		-		-			-			54,432
	Other assets			-		14		-		-			-			14
Total			$	81,023	$	264,472	$	36,338	$	(6,298	)	$	(4,096	)	$	371,439
Liabilities:
	Policyholder contract deposits		$	-	$	-	$	445	$	-		$	-		$	445
	Derivative liabilities:
		Interest rate contracts		-		9,387		325		-			-			9,712
		Foreign exchange contracts		14		324		-		-			-			338
		Equity contracts		-		286		43		-			-			329
		Commodity contracts		-		68		-		-			-			68
		Credit contracts(e)		-		5		4,175		-			-			4,180
		Other contracts		-		52		256		-			-			308
		Counterparty netting and cash collateral		-		-		-		(6,298	)		(2,902	)		(9,200	)
Total derivative liabilities				14		10,122		4,799		(6,298	)		(2,902	)		5,735
	Other long-term debt			-		11,161		982		-			-			12,143
	Other liabilities(f)			391		2,228		-		-			-			2,619
Total			$	405	$	23,511	$	6,226	$	(6,298	)	$	(2,902	)	$	20,942

(a)

Represents netting of derivative exposures covered by a qualifying master netting agreement.

(b)

Represents cash collateral posted and received. Securities collateral posted for derivative transactions that is reflected in Fixed maturity securities in the Consolidated Balance Sheet, and collateral received, not reflected in the Consolidated Balance Sheet, were $2.0 billion and $101 million, respectively, at September 30, 2011 and $1.4 billion and $109 million, respectively, at December 31, 2010.

(c)

Included in Level 1 are $11.3 billion and $11.1 billion at September 30, 2011 and December 31, 2010, respectively, of AIA shares publicly traded on the Hong Kong Stock Exchange. Approximately 3 percent and 5 percent of the fair value of the assets recorded as Level 3 relates to various private equity, real estate, hedge fund and fund-of-funds investments that are consolidated by AIG at September 30, 2011 and December 31, 2010, respectively. AIG's ownership in these funds represented 57.8 percent, or $0.8 billion, of Level 3 assets at September 30, 2011 and 68.6 percent, or $1.3 billion, of Level 3 assets at December 31, 2010.

(d)

Included in Level 2 is the fair value of $0.3 billion and $1.6 billion at September 30, 2011 and December 31, 2010, respectively, of securities purchased under agreements to resell.

(e)

Included in Level 3 is the fair value derivative liability of $3.3 billion and $3.7 billion at September 30, 2011 and December 31, 2010, respectively, on the AIGFP super senior credit default swap portfolio.

(f)

Included in Level 2 is the fair value of $0.8 billion, $148 million and $7 million at September 30, 2011 of securities sold under agreements to repurchase, securities and spot commodities sold but not yet purchased and trust deposits and deposits due to banks and other depositors, respectively. Included in Level 2 is the fair value of $2.1 billion, $94 million and $15 million at December 31, 2010 of securities sold under agreements to repurchase, securities and spot commodities sold but not yet purchased and trust deposits and deposits due to banks and other depositors, respectively.

Changes in Level 3 recurring fair value measurements

(in millions)			Fair value Beginning of Period(b)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income			Purchases, Sales, Issuances and Settlements, Net			Gross Transfers in		Gross Transfers out			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Three Months Ended September 30, 2011
Assets:
	Bonds available for sale:
		Obligations of states, municipalities and political subdivisions	$	800		$	1		$	83		$	74		$	-	$	(50	)	$	908		$	-
		Non-U.S. governments		5			-			(1	)		1			-		-			5			-
		Corporate debt		1,844			13			(21	)		(56	)		1,170		(475	)		2,475			-
		RMBS		10,692			(83	)		29			(437	)		254		(47	)		10,408			-
		CMBS		4,228			(46	)		(293	)		134			16		(64	)		3,975			-
		CDO/ABS		3,925			12			(131	)		220			329		(238	)		4,117			-
Total bonds available for sale				21,494			(103	)		(334	)		(64	)		1,769		(874	)		21,888			-
	Bond trading securities:
		Corporate debt		9			-			-			(1	)		-		-			8			-
		RMBS		170			(5	)		(1	)		168			-		-			332			(12	)
		CMBS		483			(31	)		(4	)		(16	)		115		-			547			(37	)
		CDO/ABS		9,503			(993	)		(9	)		(131	)		48		(24	)		8,394			(916	)(a)
Total bond trading securities				10,165			(1,029	)		(14	)		20			163		(24	)		9,281			(965	)
	Equity securities available for sale:
		Common stock		59			9			(9	)		(11	)		10		(2	)		56			-
		Preferred stock		64			2			2			-			2		-			70			-
Total equity securities available for sale				123			11			(7	)		(11	)		12		(2	)		126			-
	Equity securities trading			1			(1	)		-			-			-		-			-			(1	)
	Other invested assets			7,045			(27	)		42			(54	)		205		(27	)		7,184			13
Total			$	38,828		$	(1,149	)	$	(313	)	$	(109	)	$	2,149	$	(927	)	$	38,479		$	(953	)
Liabilities:
	Policyholder contract deposits		$	(406	)	$	(928	)	$	-		$	(28	)	$	-	$	-		$	(1,362	)	$	950
	Derivative liabilities, net:
		Interest rate contracts		754			47			-			9			-		(21	)		789			(1	)
		Foreign exchange contracts		4			1			-			(5	)		-		-			-			(1	)
		Equity contracts		34			(10	)		-			-			-		-			24			(7	)
		Commodity contracts		5			(1	)		-			(1	)		-		-			3			(1	)
		Credit contracts		(3,332	)		(25	)		-			(5	)		-		-			(3,362	)		(27	)
		Other contracts		(69	)		32			(32	)		9			-		99			39			(21	)
Total derivative liabilities, net				(2,604	)		44			(32	)		7			-		78			(2,507	)		(58	)
	Other long-term debt			(958	)		183			-			(14	)		-		-			(789	)		167
Total			$	(3,968	)	$	(701	)	$	(32	)	$	(35	)	$	-	$	78		$	(4,658	)	$	1,059

(in millions)			Fair value Beginning of Period(b)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income			Purchases, Sales, Issuances and Settlements, Net			Gross Transfers in			Gross Transfers out			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Nine Months Ended September 30, 2011
Assets:
	Bonds available for sale:
		Obligations of states, municipalities and political subdivisions	$	609		$	-		$	110		$	248		$	17		$	(76	)	$	908		$	-
		Non-U.S. governments		5			-			(1	)		1			-			-			5			-
		Corporate debt		2,262			10			1			216			1,703			(1,717	)		2,475			-
		RMBS		6,367			(85	)		397			3,506			276			(53	)		10,408			-
		CMBS		3,604			(80	)		262			206			69			(86	)		3,975			-
		CDO/ABS		4,241			44			181			(617	)		775			(507	)		4,117			-
Total bonds available for sale				17,088			(111	)		950			3,560			2,840			(2,439	)		21,888			-
	Bond trading securities:
		Corporate debt		-			-			-			(10	)		18			-			8			-
		RMBS		91			(5	)		(8	)		254			-			-			332			(15	)
		CMBS		506			35			(1	)		(92	)		276			(177	)		547			31
		CDO/ABS		9,431			(840	)		-			(221	)		48			(24	)		8,394			(770	)(a)
Total bond trading securities				10,028			(810	)		(9	)		(69	)		342			(201	)		9,281			(754	)
	Equity securities available for sale:
		Common stock		61			27			(5	)		(38	)		18			(7	)		56			-
		Preferred stock		64			(1	)		3			-			4			-			70			-
Total equity securities available for sale				125			26			(2	)		(38	)		22			(7	)		126			-
	Equity securities trading			1			-			-			(1	)		-			-			-			-
	Other invested assets			7,414			9			511			(565	)		250			(435	)		7,184			142
Total			$	34,656		$	(886	)	$	1,450		$	2,887		$	3,454		$	(3,082	)	$	38,479		$	(612	)
Liabilities:
	Policyholder contract deposits		$	(445	)	$	(882	)	$	-		$	(35	)	$	-		$	-		$	(1,362	)	$	887
	Derivative liabilities, net:
		Interest rate contracts		732			69			-			9			-			(21	)		789			(55	)
		Foreign exchange contracts		16			(11	)		-			(5	)		-			-			-			-
		Equity contracts		22			(17	)		-			38			(7	)		(12	)		24			(14	)
		Commodity contracts		23			1			-			(21	)		-			-			3			(1	)
		Credit contracts		(3,798	)		451			-			(15	)		-			-			(3,362	)		446
		Other contracts		(112	)		9			(58	)		49			-			151			39			(87	)
Total derivative liabilities, net				(3,117	)		502			(58	)		55			(7	)		118			(2,507	)		289
	Other long-term debt			(982	)		(28	)		-			242			(21	)		-			(789	)		(31	)
Total			$	(4,544	)	$	(408	)	$	(58	)	$	262		$	(28	)	$	118		$	(4,658	)	$	1,145

(in millions)			Fair value Beginning of Period(b)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income			Purchases, Sales, Issuances and Settlements, Net			Net Transfers			Activity of Discontinued Operations			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Three Months Ended September 30, 2010
Assets:
	Bonds available for sale:
		Obligations of states, municipalities and political subdivisions	$	1,086		$	(10	)	$	37		$	(94	)	$	(131	)	$	-		$	888		$	-
		Non-U.S. governments		42			-			3			4			1			-			50			-
		Corporate debt		3,167			(23	)		35			(58	)		(117	)		(116	)		2,888			-
		RMBS		7,114			(285	)		609			(223	)		828			(8	)		8,035			-
		CMBS		4,576			(185	)		612			(153	)		(391	)		(918	)		3,541			-
		CDO/ABS		4,837			14			126			(354	)		(449	)		(211	)		3,963			-
Total bonds available for sale				20,822			(489	)		1,422			(878	)		(259	)		(1,253	)		19,365			-
	Bond trading securities:
		U.S. government and government sponsored entities		-			-			-			-			-			-			-			-
		Non-U.S. governments		7			-			-			16			(6	)		-			17			-
		Corporate debt		103			7			-			(4	)		-			-			106			3
		RMBS		5			(25	)		-			-			118			-			98			(31	)
		CMBS		226			36			-			3			-			-			265			29
		CDO/ABS		8,523			496			-			114			1			-			9,134			495	(a)
Total bond trading securities				8,864			514			-			129			113			-			9,620			496
	Equity securities available for sale:
		Common stock		32			(1	)		9			7			7			1			55			-
		Preferred stock		53			-			1			2			-			-			56			-
		Mutual funds		20			-			1			(11	)		(8	)		-			2			-
Total equity securities available for sale				105			(1	)		11			(2	)		(1	)		1			113			-
	Equity securities trading			1			-			-			-			-			-			1			-
	Other invested assets			6,780			77			114			(6	)		1,390			(281	)		8,074			(67	)
	Other assets			-			-			-			-			-			-			-			-
	Separate account assets			1			-			-			-			(1	)		-			-			-
Total			$	36,573		$	101		$	1,547		$	(757	)	$	1,242		$	(1,533	)	$	37,173		$	429
Liabilities:
	Policyholder contract deposits		$	(4,510	)	$	(60	)	$	-		$	(193	)	$	-		$	-		$	(4,763	)	$	222
	Derivative liabilities, net:
		Interest rate contracts		151			(520	)		1			903			98			-			633			185
		Foreign exchange contracts		24			5			(2	)		2			-			(16	)		13			(4	)
		Equity contracts		-			34			-			(29	)		-			-			5			1
		Commodity contracts		17			5			-			(2	)		-			-			20			(4	)
		Credit contracts		(4,583	)		208			-			98			(1	)		-			(4,278	)		(237	)
		Other contracts		(107	)		11			-			(16	)		8			-			(104	)		13
Total derivatives liabilities, net				(4,498	)		(257	)		(1	)		956			105			(16	)		(3,711	)		(46	)
	Other long-term debt			(954	)		(139	)		-			68			21			-			(1,004	)		177
Total			$	(9,962	)	$	(456	)	$	(1	)	$	831		$	126		$	(16	)	$	(9,478	)	$	353

(in millions)			Fair value Beginning of Period(b)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income		Purchases, Sales, Issuances and Settlements, Net			Net Transfers			Activity of Discontinued Operations			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Nine Months Ended September 30, 2010
Assets:
	Bonds available for sale:
		Obligations of states, municipalities and political subdivisions	$	613		$	(31	)	$	24	$	64		$	218		$	-		$	888		$	-
		Non-U.S. governments		753			-			3		28			6			(740	)		50			-
		Corporate debt		4,791			(33	)		137		(293	)		(1,505	)		(209	)		2,888			-
		RMBS		6,654			(526	)		1,601		(529	)		878			(43	)		8,035			-
		CMBS		4,939			(767	)		1,687		(307	)		56			(2,067	)		3,541			-
		CDO/ABS		4,724			88			401		(514	)		(343	)		(393	)		3,963			-
Total bonds available for sale				22,474			(1,269	)		3,853		(1,551	)		(690	)		(3,452	)		19,365			-
	Bond trading securities:
		U.S. government and government sponsored entities		16			-			-		-			-			(16	)		-			-
		Non-U.S. governments		56			-			-		(35	)		2			(6	)		17			-
		Corporate debt		121			(9	)		-		(4	)		-			(2	)		106			(8	)
		RMBS		4			(24	)		-		-			118			-			98			(26	)
		CMBS		325			96			-		(92	)		34			(98	)		265			146
		CDO/ABS		6,865			2,287			-		(22	)		4			-			9,134			2,503	(a)
Total bond trading securities				7,387			2,350			-		(153	)		158			(122	)		9,620			2,615
	Equity securities available for sale:
		Common stock		35			(2	)		10		2			10			-			55			-
		Preferred stock		54			(5	)		5		1			1			-			56			-
		Mutual funds		6			-			-		(3	)		(1	)		-			2			-
Total equity securities available for sale				95			(7	)		15		-			10			-			113			-
	Equity securities trading			8			-			-		-			-			(7	)		1			-
	Other invested assets			6,910			62			493		(930	)		1,721			(182	)		8,074			(258	)
	Other assets			270			-			-		(270	)		-			-			-			-
	Separate account assets			1			-			-		-			-			(1	)		-			-
Total			$	37,145		$	1,136		$	4,361	$	(2,904	)	$	1,199		$	(3,764	)	$	37,173		$	2,357
Liabilities:
	Policyholder contract deposits		$	(5,214	)	$	(684	)	$	-	$	(461	)	$	-		$	1,596		$	(4,763	)	$	(378	)
	Derivative liabilities, net:
		Interest rate contracts		(1,469	)		13			-		1,098			991			-			633			236
		Foreign exchange contracts		29			4			-		(1	)		-			(19	)		13			(7	)
		Equity contracts		74			(29	)		-		(60	)		20			-			5			2
		Commodity contracts		22			-			-		(2	)		-			-			20			-
		Credit contracts		(4,545	)		534			-		(265	)		(2	)		-			(4,278	)		(740	)
		Other contracts		(176	)		45			-		(3	)		23			7			(104	)		(12	)
Total derivatives liabilities, net				(6,065	)		567			-		767			1,032			(12	)		(3,711	)		(521	)
	Other long-term debt			(881	)		(201	)		-		690			(612	)		-			(1,004	)		235
Total			$	(12,160	)	$	(318	)	$	-	$	996		$	420		$	1,584		$	(9,478	)	$	(664	)

(a)

In 2011, AIG made revisions to the presentation to include income from ML III. The prior periods have been revised to conform to the current period presentation.

(b)

Total Level 3 derivative exposures have been netted in these tables for presentation purposes only.

Schedule of net realized and unrealized gains and losses related to Level 3 items

(in millions)		Net Investment Income			Net Realized Capital Gains (Losses)			Other Income			Policyholder Benefits and Claims Incurred			Total
Three Months Ended September 30, 2011
	Bonds available for sale	$	193		$	(300	)	$	4		$	-		$	(103	)
	Bond trading securities		(1,333	)		4			300			-			(1,029	)
	Equity securities available for sale		-			11			-			-			11
	Equity securities trading		(1	)		-			-			-			(1	)
	Other invested assets		(13	)		(29	)		15			-			(27	)
	Policyholder contract deposits		-			(928	)		-			-			(928	)
	Derivative liabilities, net		1			54			(11	)		-			44
	Other long-term debt		-			-			183			-			183
Three Months Ended September 30, 2010
	Bonds available for sale	$	90		$	(583	)	$	4		$	-		$	(489	)
	Bond trading securities		449			-			65			-			514
	Equity securities available for sale		-			(1	)		-			-			(1	)
	Other invested assets		113			(9	)		(27	)		-			77
	Policyholder contract deposits		-			81			22			(163	)		(60	)
	Derivative liabilities, net		-			386			(643	)		-			(257	)
	Other long-term debt		-			-			(139	)		-			(139	)
Nine Months Ended September 30, 2011
	Bonds available for sale	$	433		$	(556	)	$	12		$	-		$	(111	)
	Bond trading securities		(828	)		4			14			-			(810	)
	Equity securities available for sale		-			26			-			-			26
	Equity securities trading		-			-			-			-			-
	Other invested assets		31			(81	)		59			-			9
	Policyholder contract deposits		-			(882	)		-			-			(882	)
	Derivative liabilities, net		2			7			493			-			502
	Other long-term debt		-			-			(28	)		-			(28	)
Nine Months Ended September 30, 2010
	Bonds available for sale	$	242		$	(1,524	)	$	13		$	-		$	(1,269	)
	Bond trading securities		1,806			-			544			-			2,350
	Equity securities available for sale		-			(7	)		-			-			(7	)
	Other invested assets		361			(257	)		(42	)		-			62
	Policyholder contract deposits		-			(616	)		62			(130	)		(684	)
	Derivative liabilities, net		-			385			182			-			567
	Other long-term debt		-			-			(201	)		-			(201	)

Gross components of purchases, sales, issuances and settlements, net

(in millions)			Purchases			Sales			Settlements			Purchases, Sales, Issuances and Settlements, Net*
Three Months Ended September 30, 2011
Assets:
	Bonds available for sale:
		Obligations of states, municipalities and political subdivisions	$	78		$	-		$	(4	)	$	74
		Non-U.S. governments		-			-			1			1
		Corporate debt		58			(27	)		(87	)		(56	)
		RMBS		(11	)		-			(426	)		(437	)
		CMBS		178			-			(44	)		134
		CDO/ABS		405			-			(185	)		220
Total bonds available for sale				708			(27	)		(745	)		(64	)
	Bond trading securities:
		Corporate debt		-			-			(1	)		(1	)
		RMBS		197			-			(29	)		168
		CMBS		79			(90	)		(5	)		(16	)
		CDO/ABS		101			(93	)		(139	)		(131	)
Total bond trading securities				377			(183	)		(174	)		20
	Equity securities available for sale:
		Common stock		-			(8	)		(3	)		(11	)
		Preferred stock		-			-			-			-
Total equity securities available for sale				-			(8	)		(3	)		(11	)
	Other invested assets			156			(59	)		(151	)		(54	)
Total assets			$	1,241		$	(277	)	$	(1,073	)	$	(109	)
Liabilities:
	Policyholder contract deposits		$	-		$	(32	)	$	4		$	(28	)
	Derivative liabilities, net:
		Interest rate contracts		-			-			9			9
		Foreign exchange contracts		-			-			(5	)		(5	)
		Equity contracts		1			-			(1	)		-
		Commodity contracts		-			-			(1	)		(1	)
		Credit contracts		-			-			(5	)		(5	)
		Other contracts		-			-			9			9
Total derivative liabilities, net				1			-			6			7
Other long-term debt				-			-			(14	)		(14	)
Total liabilities			$	1		$	(32	)	$	(4	)	$	(35	)

(in millions)			Purchases		Sales			Settlements			Purchases, Sales, Issuances and Settlements, Net*
Nine Months Ended September 30, 2011
Assets:
	Bonds available for sale:
		Obligations of states, municipalities and political subdivisions	$	254	$	-		$	(6	)	$	248
		Non-U.S. governments		1		(1	)		1			1
		Corporate debt		478		(27	)		(235	)		216
		RMBS		4,613		(22	)		(1,085	)		3,506
		CMBS		419		(20	)		(193	)		206
		CDO/ABS		666		-			(1,283	)		(617	)
Total bonds available for sale				6,431		(70	)		(2,801	)		3,560
	Bond trading securities:
		Corporate debt		-		-			(10	)		(10	)
		RMBS		300		-			(46	)		254
		CMBS		139		(144	)		(87	)		(92	)
		CDO/ABS		245		(219	)		(247	)		(221	)
Total bond trading securities				684		(363	)		(390	)		(69	)
	Equity securities available for sale:
		Common stock		-		(31	)		(7	)		(38	)
		Preferred stock		-		-			-			-
Total equity securities available for sale				-		(31	)		(7	)		(38	)
	Equity securities trading			-		-			(1	)		(1	)
	Other invested assets			506		(217	)		(854	)		(565	)
Total assets			$	7,621	$	(681	)	$	(4,053	)	$	2,887
Liabilities:
	Policyholder contract deposits		$	-	$	(51	)	$	16		$	(35	)
	Derivative liabilities, net:
		Interest rate contracts		-		-			9			9
		Foreign exchange contracts		-		-			(5	)		(5	)
		Equity contracts		40		-			(2	)		38
		Commodity contracts		-		-			(21	)		(21	)
		Credit contracts		-		-			(15	)		(15	)
		Other contracts		-		-			49			49
Total derivative liabilities, net				40		-			15			55
Other long-term debt				-		-			242			242
Total liabilities			$	40	$	(51	)	$	273		$	262

*

There were no issuances during the three- and nine-month periods ended September 30, 2011.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

			September 30, 2011				December 31, 2010
(in millions)		Investment Category Includes	Fair Value Using Net Asset Value		Unfunded Commitments		Fair Value Using Net Asset Value			Unfunded Commitments
Investment Category
Private equity funds:
	Leveraged buyout	Debt and/or equity investments made as part of a transaction in which assets of mature companies are acquired from the current shareholders, typically with the use of financial leverage	$	3,399	$	1,046	$	3,137		$	1,151
	Non-U.S.	Investments that focus primarily on Asian and European based buyouts, expansion capital, special situations, turnarounds, venture capital, mezzanine and distressed opportunities strategies		190		60		172			67
	Venture capital	Early-stage, high-potential, growth companies expected to generate a return through an eventual realization event, such as an initial public offering or sale of the company		490		105		325			42
	Distressed	Securities of companies that are already in default, under bankruptcy protection, or troubled		223		64		258			67
	Other	Real estate, energy, multi-strategy, mezzanine, and industry-focused strategies		272		110		373			147
Total private equity funds				4,574		1,385		4,265			1,474
Hedge funds:
	Event-driven	Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations		839		2		1,310			2
	Long-short	Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk		905		-		1,038			-
	Relative value	Funds that seek to benefit from market inefficiencies and value discrepancies between related investments		115		-		230			-
	Distressed	Securities of companies that are already in default, under bankruptcy protection or troubled		317		2		369			20
	Other	Non-U.S. companies, futures and commodities, macro and multi-strategy and industry-focused strategies		703		-		708			-
Total hedge funds				2,879		4		3,655			22
Total			$	7,453	$	1,389	$	7,920	*	$	1,496

*

Includes investments of entities classified as held for sale of $415 million at December 31, 2010.

Fair value assets measured on nonrecurring basis and impairment charges

										Impairment Charges
		Assets at Fair Value
										Three Months Ended September 30,				Nine Months Ended September 30,
		Non-Recurring Basis
(in millions)		Level 1		Level 2		Level 3		Total		2011		2010		2011		2010
September 30, 2011
	Investment real estate	$	-	$	-	$	525	$	525	$	-	$	21	$	15	$	551
	Other investments		-		194		2,105		2,299		181		29		526		106
	Aircraft*		-		-		1,501		1,501		1,518		465		1,676		872
	Other assets		-		-		-		-		-		-		-		5
Total		$	-	$	194	$	4,131	$	4,325	$	1,699	$	515	$	2,217	$	1,534
December 31, 2010
	Investment real estate	$	-	$	-	$	1,588	$	1,588
	Other investments		-		4		2,388		2,392
	Aircraft		-		-		4,224		4,224
	Other assets		-		-		2		2
Total		$	-	$	4	$	8,202	$	8,206

*

Aircraft impairment charges include fair value adjustments on aircraft.

Gains or losses related to the eligible instruments for which AIG elected the fair value option

		Gain (Loss) Three Months Ended September 30,						Gain (Loss) Nine Months Ended September 30,
(in millions)		2011			2010			2011			2010
Assets:
	Mortgage and other loans receivable	$	(3	)	$	28		$	(2	)	$	65
	Bonds and equity securities		(138	)		1,644			1,299			2,248
	Trading – ML II interest		(43	)		156			32			436
	Trading – ML III interest		(931	)		301			(854	)		1,410
	Securities purchased under agreements to resell		-			18			-			14
	Retained interest in AIA		(2,315	)		-			268			-
	Short-term investments and other invested assets and Other assets		12			4			40			(40	)
Liabilities:
	Policyholder contract deposits		-			(163	)		-			(130	)
	Debt		(447	)		(1,228	)		(919	)		(2,329	)
	Other liabilities		84			(1	)		(91	)		1
Total gain (loss)*		$	(3,781	)	$	759		$	(227	)	$	1,675

*

Excludes discontinued operations gains or losses on instruments that are required to be carried at fair value. For instruments required to be carried at fair value, AIG recognized losses of $102 million and gains of $2.1 billion for the three months ended September 30, 2011 and 2010, respectively, and gains of $819 million and $2.8 billion for the nine months ended September 30, 2011 and 2010, respectively, that were primarily due to changes in the fair value of derivatives, trading securities and certain other invested assets for which the fair value option was not elected.

Difference between fair values and aggregate contractual principal amounts, fair value option

		September 30, 2011							December 31, 2010
(in millions)		Fair Value		Outstanding Principal Amount		Difference			Fair Value		Outstanding Principal Amount		Difference
Assets:
	Mortgage and other loans receivable	$	104	$	161	$	(57	)	$	143	$	203	$	(60	)
Liabilities:
	Long-term debt	$	10,394	$	7,988	$	2,406		$	10,778	$	8,977	$	1,801

Carrying value and estimated fair value of AIG's financial instruments

		September 30, 2011				December 31, 2010
(in millions)		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Assets:
	Mortgage and other loans receivable	$	19,175	$	20,132	$	20,094	$	20,285
	Other invested assets*		19,332		17,927		19,472		18,864
	Short-term investments		21,562		21,562		19,878		19,878
	Cash		1,542		1,542		1,558		1,558
Liabilities:
	Policyholder contract deposits associated with investment-type contracts		117,302		123,150		102,585		112,710
	Long-term debt (including Federal Reserve Bank of New York credit facility)		66,150		62,786		94,318		93,745

*

Excludes aircraft asset investments held by non-Aircraft Leasing subsidiaries.