(Mark One)
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2006
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from                 to

Delaware		13-2592361
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
70 Pine Street, New York, New York (Address of principal executive offices)		10270 (Zip Code)

		Name of each exchange
Title of each class		on which registered
Common Stock, Par Value $2.50 Per Share		New York Stock Exchange, Inc.

Title of each class
None

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Index					Page
Part I
	Item 1.		Business			3
	Item 1A.		Risk Factors			15
	Item 1B.		Unresolved Staff Comments			18
	Item 2.		Properties			18
	Item 3.		Legal Proceedings			18
	Item 4.		Submission of Matters to a Vote of Security Holders			21
Part II
	Item 5.		Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			22
	Item 6.		Selected Financial Data			24
	Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
	Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			99
	Item 8.		Financial Statements and Supplementary Data			99
	Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			177
	Item 9A.		Controls and Procedures			177
	Item 9B.		Other Information			179
Part III*
	Item 10.		Directors, Executive Officers and Corporate Governance			180
	Item 11.		Executive Compensation			180
	Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			180
	Item 13.		Certain Relationships and Related Transactions, and Director Independence			180
	Item 14.		Principal Accountant Fees and Services			180
Part IV
	Item 15.		Exhibits and Financial Statement Schedules			180
Signatures						181

*	Except for the information provided in Part I under the heading “Directors and Executive Officers of AIG,” Part III Items 10, 11, 12, 13 and 14 are included in AIG’s Definitive Proxy Statement to be used in connection with AIG’s Annual Meeting of Shareholders scheduled to be held on May 16, 2007.

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	American Home Assurance Company (American Home)
	National Union Fire Insurance Company of Pittsburgh, Pa. (National Union)
	New Hampshire Insurance Company (New Hampshire)
	Lexington Insurance Company (Lexington)
	The Hartford Steam Boiler Inspection and Insurance Company (HSB)
	Transatlantic Reinsurance Company
	United Guaranty Residential Insurance Company
	American International Underwriters Overseas, Ltd. (AIUO)

	Domestic:
	American General Life Insurance Company (AIG American   General)
	American General Life and Accident Insurance Company   (AGLA)
	The United States Life Insurance Company in the City of New   York (USLIFE)
	The Variable Annuity Life Insurance Company (VALIC)
	AIG Annuity Insurance Company (AIG Annuity)
	SunAmerica Life Insurance Company (SunAmerica Life)
	AIG SunAmerica Life Assurance Company
	Foreign:
	American Life Insurance Company (ALICO)
	AIG Star Life Insurance Co., Ltd. (AIG Star Life)
	AIG Edison Life Insurance Company (AIG Edison Life)
	American International Assurance Company, Limited, together   with American International Assurance Company (Bermuda)   Limited (AIA)
	American International Reinsurance Company Limited (AIRCO)
	Nan Shan Life Insurance Company, Ltd. (Nan Shan)
	The Philippine American Life and General Insurance Company   (Philamlife)

	International Lease Finance Corporation (ILFC)
	AIG Financial Products Corp. and AIG Trading Group Inc. and   their respective subsidiaries (collectively, AIGFP)
	American General Finance, Inc. (AGF)
	AIG Consumer Finance Group, Inc. (AIGCFG)
	Imperial A.I. Credit Companies

	AIG SunAmerica Asset Management Corp. (SAAMCo)
	AIG Global Asset Management Holdings Corp. and its
	subsidiaries and affiliated companies (collectively, AIGGIG)

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Years Ended December 31,
(in millions)				2006				2005				2004				2003				2002
General Insurance operations:
	Gross premiums written			$	56,280			$	52,725			$	52,046			$	46,938			$	36,678
	Net premiums written				44,866				41,872				40,623				35,031				26,718
	Net premiums earned				43,451				40,809				38,537				31,306				23,595
	Net investment income(a)				5,696				4,031				3,196				2,566				2,350
	Realized capital gains (losses)				59				334				228				(39	)			(345	)
	Operating income(a)(b)(c)(d)				10,412				2,315				3,177				4,502				923
	Identifiable assets				167,004				150,667				131,658				117,511				105,891
Statutory measures(e):
	Statutory underwriting profit (loss)(b)(c)(d)				4,408				(2,165	)			(564	)			1,559				(1,843	)
	Loss ratio				64.6				81.1				78.8				73.1				83.1
	Expense ratio				24.5				23.6				21.5				19.6				21.8
	Combined ratio(d)				89.1				104.7				100.3				92.7				104.9
Life Insurance & Retirement Services operations:
	GAAP premiums				30,636				29,400				28,088				23,496				20,694
	Net investment income(a)				19,439				18,134				15,269				12,942				11,243
	Realized capital gains (losses) (f)				88				(158	)			45				362				(295	)
	Operating income(a)				10,032				8,904				7,925				6,929				5,258
	Identifiable assets				534,977				480,622				447,841				372,126				289,914
	Insurance in-force at end of year(g)				2,070,600				1,852,833				1,858,094				1,583,031				1,298,592
Financial Services operations:
	Interest, lease and finance charges(h)				8,010				10,525				7,495				6,242				6,822
	Operating income(h)				524				4,276				2,180				1,182				2,125
	Identifiable assets				206,845				166,488				165,995				141,667				128,104
Asset Management operations:
	Net investment income from spread-based products and advisory and management fees				5,814				5,325				4,714				3,651				3,467
	Operating income				2,346				2,253				2,125				1,316				1,125
	Identifiable assets				97,913				81,080				80,075				64,047				53,732
Other operations:
		Realized capital gains (losses)			(41	)			165				(229	)			(765	)			(1,013	)
		All other(i)			(1,586	)			(2,700	)			(333	)			(1,257	)			(610	)
Revenues(j)(k)					113,194				108,905				97,666				79,421				66,171
Total operating income(a)(j)(l)					21,687				15,213				14,845				11,907				7,808
Total assets					979,414				853,051				801,007				675,602				561,131

(a)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts and other mutual funds (unit investment trusts). For 2006, the effect was an increase of $490 million in both revenues and operating income for General Insurance and an increase of $240 million and $169 million in revenues and operating income, respectively, for Life Insurance & Retirement Services.
(b)	Includes current year catastrophe-related losses of $2.89 billion and $1.05 billion in 2005 and 2004, respectively. There were no significant catastrophe-related losses in 2006.
(c)	Includes additional losses incurred and net reinstatement premiums related to prior year catastrophes of $199 million and $277 million in 2006 and 2005, respectively.

(d)	Operating income was reduced by fourth quarter charges of $1.8 billion, $850 million and $2.1 billion for 2005, 2004 and 2002, respectively, resulting from the annual review of General Insurance loss and loss adjustment reserves. In 2006, 2005 and 2004, changes in estimates for asbestos and environmental reserves were $198 million, $873 million and $850 million, respectively.

(e)	Calculated on the basis under which the U.S.-domiciled insurance companies are required to report such measurements to regulatory authorities.

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(f)	Includes the effect of hedging activities that did not qualify for hedge accounting treatment under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (FAS 133) and the application of Statement of Financial Accounting Standards No. 52, “Foreign Currency Translation” (FAS 52). For 2006, 2005, 2004, 2003 and 2002, respectively, the amounts included are $355 million, $(495) million, $(140) million, $78 million and $(91) million.
(g)	2005 includes the effect of the non-renewal of a single large group life case of $36 billion. Also, the foreign in-force is translated to U.S. dollars at the appropriate balance sheet exchange rate in each period.
(h)	Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2006, 2005, 2004, 2003 and 2002, respectively, the effect was $(1.82) billion, $2.01 billion, $(122) million, $(1.01) billion and $220 million in both revenues and operating income for Capital Markets. These amounts result primarily from interest rate and foreign currency derivatives that are economically hedging available for sale securities and borrowings. For 2004, 2003 and 2002, respectively, the effect was $(27) million, $49 million and $20 million in operating income for Aircraft Leasing. In 2006 and 2005, Aircraft Leasing derivative gains and losses were reported as part of AIG’s Other category, and were not reported in Aircraft Leasing operating income.
(i)	Includes $1.6 billion of regulatory settlement costs in 2005 as described under Item 3. Legal Proceedings.
(j)	Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2006, 2005, 2004, 2003 and 2002, respectively, the effect was $(1.86) billion, $2.02 billion, $385 million, $(1.50) billion and $(216) million in revenues and $(1.86) billion, $2.02 billion, $671 million, $(1.22) billion and $(58) million in operating income. These amounts result primarily from interest rate and foreign currency derivatives that are hedging available for sale securities and borrowings.

(k)	Represents the sum of General Insurance net premiums earned, Life Insurance & Retirement Services GAAP premiums, net investment income, Financial Services interest, lease and finance charges, Asset Management net investment income from spread-based products and advisory and management fees, and realized capital gains (losses).

(l)	Represents income before income taxes, minority interest and cumulative effect of accounting changes.

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(in millions)			1996				1997				1998				1999				2000				2001				2002				2003				2004				2005				2006
Net Reserves Held			$	20,496			$	20,901			$	25,418			$	25,636			$	25,684			$	26,005			$	29,347			$	36,228			$	47,254			$	57,476			$	62,630
Discount (in Reserves Held)				393				619				897				1,075				1,287				1,423				1,499				1,516				1,553				2,110				2,264
Net Reserves Held (Undiscounted)				20,889				21,520				26,315				26,711				26,971				27,428				30,846				37,744				48,807				59,586				64,894
Paid (Cumulative) as of:
	One year later			5,712				5,607				7,205				8,266				9,709				11,007				10,775				12,163				14,910				15,326
	Two years later			9,244				9,754				12,382				14,640				17,149				18,091				18,589				21,773				24,377
	Three years later			11,943				12,939				16,599				19,901				21,930				23,881				25,513				28,763
	Four years later			14,152				15,484				20,263				23,074				26,090				28,717				30,757
	Five years later			16,077				17,637				22,303				25,829				29,473				32,685
	Six years later			17,551				18,806				24,114				28,165				32,421
	Seven years later			18,415				19,919				25,770				30,336
	Eight years later			19,200				21,089				27,309
	Nine years later			20,105				22,177
	Ten years later			20,972

(in millions)			1996				1997				1998				1999				2000				2001				2002				2003				2004				2005				2006
Net Reserves Held (undiscounted)			$	20,889			$	21,520			$	26,315			$	26,711			$	26,971			$	27,428			$	30,846			$	37,744			$	48,807			$	59,586			$	64,894
Undiscounted Liability as of:
	One year later			20,795				21,563				25,897				26,358				26,979				31,112				32,913				40,931				53,486				59,533
	Two years later			20,877				21,500				25,638				27,023				30,696				33,363				37,583				49,463				55,009
	Three years later			20,994				21,264				26,169				29,994				32,732				37,964				46,179				51,497
	Four years later			20,776				21,485				28,021				31,192				36,210				45,203				48,427
	Five years later			20,917				22,405				28,607				33,910				41,699				47,078
	Six years later			21,469				22,720				30,632				38,087				43,543
	Seven years later			21,671				24,209				33,861				39,597
	Eight years later			22,986				26,747				34,986
	Nine years later			25,264				27,765
	Ten years later			26,091
Net Redundancy/(Deficiency)				(5,202	)			(6,245	)			(8,671	)			(12,886	)			(16,572	)			(19,650	)			(17,581	)			(13,753	)			(6,202	)			53
Remaining Reserves (Undiscounted)				5,119				5,588				7,677				9,261				11,122				14,393				17,670				22,734				30,632				44,207
Remaining Discount				360				427				517				623				748				894				1,079				1,265				1,484				1,809
Remaining Reserves				4,759				5,161				7,160				8,638				10,374				13,499				16,591				21,469				29,148				42,398

(in millions)		1996				1997				1998				1999				2000				2001				2002				2003				2004				2005				2006
Gross Liability, End of Year		$	32,605			$	32,049			$	36,973			$	37,278			$	39,222			$	42,629			$	48,173			$	53,387			$	63,431			$	79,279			$	82,263
Reinsurance Recoverable, End of Year			11,716				10,529				10,658				10,567				12,251				15,201				17,327				15,643				14,624				19,693				17,369
Net Liability, End of Year			20,889				21,520				26,315				26,711				26,971				27,428				30,846				37,744				48,807				59,586				64,894
Reestimated Gross Liability			41,685				43,993				53,004				58,320				63,768				67,554				68,657				69,007				70,895				78,946
Reestimated Reinsurance Recoverable			15,594				16,227				18,018				18,723				20,224				20,476				20,229				17,511				15,886				19,413
Reestimated Net Liability			26,091				27,766				34,986				39,597				43,544				47,078				48,428				51,496				55,009				59,533
Cumulative Gross Redundancy/ (Deficiency)			(9,080	)			(11,944	)			(16,031	)			(21,042	)			(24,546	)			(24,925	)			(20,484	)			(15,620	)			(7,464	)			333

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(in millions)			1996				1997				1998				1999				2000				2001				2002				2003				2004				2005				2006
Net Reserves Held			$	19,753			$	20,113			$	24,554			$	24,745			$	24,829			$	25,286			$	28,650			$	35,559			$	45,742			$	55,227			$	60,451
Discount (in Reserves Held)				393				619				897				1,075				1,287				1,423				1,499				1,516				1,553				2,110				2,264
Net Reserves Held (Undiscounted)				20,146				20,732				25,451				25,820				26,116				26,709				30,149				37,075				47,295				57,336				62,715
Paid (Cumulative) as of:
	One year later			5,603				5,467				7,084				8,195				9,515				10,861				10,632				11,999				14,718				15,047
	Two years later			8,996				9,500				12,190				14,376				16,808				17,801				18,283				21,419				23,906
	Three years later			11,582				12,618				16,214				19,490				21,447				23,430				25,021				28,129
	Four years later			13,724				14,972				19,732				22,521				25,445				28,080				29,987
	Five years later			15,460				16,983				21,630				25,116				28,643				31,771
	Six years later			16,792				18,014				23,282				27,266				31,315
	Seven years later			17,519				18,972				24,753				29,162
	Eight years later			18,149				19,960				26,017
	Nine years later			18,873				20,779
	Ten years later			19,471

(in millions)			1996				1997				1998				1999				2000				2001				2002				2003				2004				2005				2006
Net Reserves Held (undiscounted)			$	20,146			$	20,732			$	25,451			$	25,820			$	26,116			$	26,709			$	30,149			$	37,075			$	47,295			$	57,336			$	62,715
Undiscounted Liability as of:
	One year later			19,904				20,576				24,890				25,437				26,071				30,274				32,129				39,261				51,048				57,077
	Two years later			19,788				20,385				24,602				26,053				29,670				32,438				35,803				46,865				52,364
	Three years later			19,777				20,120				25,084				28,902				31,619				36,043				43,467				48,691
	Four years later			19,530				20,301				26,813				30,014				34,102				42,348				45,510
	Five years later			19,633				21,104				27,314				31,738				38,655				44,018
	Six years later			20,070				21,336				28,345				34,978				40,294
	Seven years later			20,188				21,836				30,636				36,283
	Eight years later			20,515				23,441				31,556
	Nine years later			21,858				24,261
	Ten years later			22,486
Net Redundancy/(Deficiency)				(2,340	)			(3,529	)			(6,105	)			(10,463	)			(14,178	)			(17,309	)			(15,361	)			(11,616	)			(5,069	)			259
Remaining Reserves (undiscounted)				3,015				3,482				5,539				7,121				8,979				12,247				15,523				20,562				28,458				42,030
Remaining Discount				360				427				517				623				748				894				1,079				1,265				1,484				1,809
Remaining Reserves				2,655				3,055				5,022				6,498				8,231				11,353				14,444				19,297				26,974				40,221

(in millions)		1996				1997				1998				1999				2000				2001				2002				2003				2004				2005				2006
Gross Liability, End of Year		$	30,302			$	29,740			$	34,474			$	34,666			$	36,777			$	40,400			$	46,036			$	51,363			$	59,897			$	73,912			$	77,211
Reinsurance Recoverable, End of Year			10,156				9,008				9,023				8,846				10,661				13,691				15,887				14,288				12,602				16,576				14,495
Net Liability, End of Year			20,146				20,732				25,451				25,820				26,116				26,709				30,149				37,075				47,295				57,336				62,715
Reestimated Gross Liability			32,186				34,940				44,281				50,004				55,974				60,289				61,735				62,488				64,772				73,241
Reestimated Reinsurance Recoverable			9,699				10,679				12,725				13,722				15,680				16,270				16,225				13,797				12,409				16,164
Reestimated Net Liability			22,487				24,261				31,556				36,282				40,294				44,019				45,510				48,691				52,363				57,077
Cumulative Gross Redundancy/(Deficiency)			(1,884	)			(5,200	)			(9,807	)			(15,338	)			(19,197	)			(19,889	)			(15,699	)			(11,125	)			(4,875	)			671

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		Annual Average Cash and Invested Assets
		Cash
		(including												Return on				Return on
Years Ended December 31,		short-term				Invested								Average Cash				Average
(in millions)		investments)				Assets(a)(b)				Total				and Assets(c)				Assets(d)
General Insurance:
2006		$	3,201			$	102,231			$	105,432				5.4	%			5.6	%
2005			2,450				86,211				88,661				4.5				4.7
2004			2,012				73,338				75,350				4.2				4.4
2003			1,818				59,855				61,673				4.2				4.3
2002			1,537				47,477				49,014				4.8				5.0
Life Insurance & Retirement Services:
2006		$	7,205			$	384,724			$	391,929				5.0	%			5.1	%
2005			6,180				352,250				358,430				5.1				5.1
2004			5,089				307,659				312,748				4.9				5.0
2003			4,680				247,608				252,288				5.1				5.2
2002			3,919				199,750				203,669				5.5				5.6

(a)	Including investment income due and accrued and real estate.
(b)	Includes collateral assets invested under the securities lending program.
(c)	Net investment income divided by the annual average sum of cash and invested assets.
(d)	Net investment income divided by the annual average invested assets.

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						Served as
						Director or
Name		Title		Age		Officer Since
Marshall A. Cohen		Director		71		1992
Martin S. Feldstein		Director		67		1987
Ellen V. Futter		Director		57		1999
Stephen L. Hammerman		Director		68		2005
Richard C. Holbrooke		Director		65		2001
Fred H. Langhammer		Director		63		2006
George L. Miles, Jr.		Director		65		2005
Morris W. Offit		Director		70		2005
James F. Orr III		Director		63		2006
Virginia M. Rometty		Director		49		2006
Martin J. Sullivan		Director, President and Chief Executive Officer		52		2002
Michael H. Sutton		Director		66		2005
Edmund S. W. Tse		Director, Senior Vice Chairman – Life Insurance		69		1996
Robert B. Willumstad		Director and Chairman		61		2006
Frank G. Zarb		Director		72		2001
Jacob A. Frenkel		Vice Chairman – Global Economic Strategies		63		2004
Frank G. Wisner		Vice Chairman – External Affairs		68		1997
Steven J. Bensinger		Executive Vice President and Chief Financial Officer		52		2002
Anastasia D. Kelly		Executive Vice President, General Counsel and Senior Regulatory and Compliance Officer		57		2006
Rodney O. Martin, Jr.		Executive Vice President – Life Insurance		54		2002
Kristian P. Moor		Executive Vice President – Domestic General Insurance		47		1998
Win J. Neuger		Executive Vice President and Chief Investment Officer		57		1995
Robert M. Sandler		Executive Vice President – Domestic Personal Lines		64		1980
Nicholas C. Walsh		Executive Vice President – Foreign General Insurance		56		2005
Jay S. Wintrob		Executive Vice President – Retirement Services		49		1999
William N. Dooley		Senior Vice President – Financial Services		54		1992
David L. Herzog		Senior Vice President and Comptroller		47		2005
Robert E. Lewis		Senior Vice President and Chief Risk Officer		55		1993
Brian T. Schreiber		Senior Vice President – Strategic Planning		41		2002

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	•	widespread claim costs associated with property, workers compensation, mortality and morbidity claims;
	•	loss resulting from the cash flows from invested assets being less than the cash flows required to meet the policy and contract liabilities; or
	•	loss resulting from the actual policy experience adversely emerging in comparison to the assumptions made in the product pricing associated with mortality, morbidity, termination and expenses.

---

 

	•	increasing AIG’s interest expense;
	•	reducing AIGFP’s ability to compete in the structured products and derivatives businesses;
	•	reducing the competitive advantage of AIG’s insurance subsidiaries, which may result in reduced product sales and/or lower prices;
	•	adversely affecting relationships with agents and sales representatives; and
	•	in the case of a downgrade of AGF or ILFC, increasing their interest expense and reducing their ability to compete in their respective businesses.

---

 

---

 

---

 

---

 

---

 

		2006												2005
										Dividends												Dividends
		High				Low				Paid				High				Low				Paid
First quarter		$	70.83			$	65.35			$	0.150			$	73.46			$	54.18			$	0.125
Second quarter			66.54				58.67				0.150				58.94				49.91				0.125
Third quarter			66.48				57.76				0.165				63.73				56.00				0.150
Fourth quarter			72.81				66.30				0.165				64.40				60.43				0.150

Maximum

Number of

Total

Shares

Number of

that May

Shares

Yet Be

Purchased

Purchased

Average

as Part of

Under the

Price

Publicly

Plans or

Total Number

Paid

Announced

Programs

of Shares

per

Plans or

at End of

Period

Purchased(a)(b)

Share

Programs

Month(b)

October 1 - 31, 2006

—

$

—

—

36,542,700

November 1 - 30, 2006

—

—

—

36,542,700

December 1 - 31, 2006

—

—

—

36,542,700

Total

—

$

—

—

(a)	Does not include 165,190 shares delivered or attested to in satisfaction of the exercise price by holders of AIG employee stock options exercised during the three months ended December 31, 2006 or 17,000 shares purchased by ILFC to satisfy obligations under employee benefit plans.
(b)	On July 19, 2002, AIG announced that its Board of Directors had authorized the open market purchase of up to 10 million shares of common stock. On February 13, 2003, AIG announced that its Board of Directors had expanded the existing program through the authorization of an additional 50 million shares. The purchase program has no set expiration or termination date. In February 2007, AIG’s Board of Directors increased the repurchase program by authorizing the repurchase of shares with an aggregate purchase price of $8 billion.

---

 

		2001				2002				2003				2004				2005				2006
AIG		$	100.00			$	73.07			$	84.04			$	83.61			$	87.67			$	92.97
S&P 500			100.00				77.90				100.25				111.15				116.61				135.03
New Peer Group			100.00				86.49				109.07				126.05				155.01				179.36
Old Peer Group			100.00				88.84				111.14				134.80				164.51				196.58

---

 

Years Ended December 31,
(in millions, except per share data)				2006				2005				2004				2003				2002
Revenues(a)(b)(c):
	Premiums and other considerations			$	74,083			$	70,209			$	66,625			$	54,802			$	44,289
	Net investment income				25,292				22,165				18,465				15,508				13,593
	Realized capital gains (losses)				106				341				44				(442	)			(1,653	)
	Other income				13,713				16,190				12,532				9,553				9,942
Total revenues					113,194				108,905				97,666				79,421				66,171
Benefits and expenses:
	Incurred policy losses and benefits				59,706				63,558				58,212				46,034				40,005
	Insurance acquisition and other operating expenses				31,801				30,134				24,609				21,480				18,358
Total benefits and expenses					91,507				93,692				82,821				67,514				58,363
Income before income taxes, minority interest and cumulative effect of accounting changes (b)(c)(d)(e)					21,687				15,213				14,845				11,907				7,808
Income taxes					6,537				4,258				4,407				3,556				1,919
Income before minority interest and cumulative effect of accounting changes					15,150				10,955				10,438				8,351				5,889
Minority interest					(1,136	)			(478	)			(455	)			(252	)			(160	)
Income before cumulative effect of accounting changes					14,014				10,477				9,983				8,099				5,729
Cumulative effect of accounting changes, net of tax					34				—				(144	)			9				—
Net income					14,048				10,477				9,839				8,108				5,729
Earnings per common share:
	Basic
		Income before cumulative effect of accounting changes			5.38				4.03				3.83				3.10				2.20
		Cumulative effect of accounting changes, net of tax			0.01				—				(0.06	)			—				—
		Net income			5.39				4.03				3.77				3.10				2.20
	Diluted
		Income before cumulative effect of accounting changes			5.35				3.99				3.79				3.07				2.17
		Cumulative effect of accounting changes, net of tax			0.01				—				(0.06	)			—				—
		Net income			5.36				3.99				3.73				3.07				2.17
Dividends declared per common share					0.65				0.63				0.29				0.24				0.18
Total assets					979,414				853,051				801,007				675,602				561,131
Long-term debt and commercial paper(f)
	Guaranteed by AIG				17,126				10,425				8,498				7,469				7,144
	Liabilities connected to trust preferred stock				1,440				1,391				1,489				1,682				—
	Matched/not guaranteed by AIG				130,113				98,033				86,912				71,198				63,866
Total liabilities					877,546				766,548				721,135				606,180				500,696
Shareholders’ equity				$	101,677			$	86,317			$	79,673			$	69,230			$	58,303

(a)	Represents the sum of General Insurance net premiums earned, Life Insurance & Retirement Services GAAP premiums and net investment income, Financial Services interest, lease and finance charges, Asset Management net investment income from spread-based products and advisory and management fees, and realized capital gains (losses).
(b)	Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2006, 2005, 2004, 2003 and 2002, respectively, the effect was $(1.86) billion, $2.02 billion, $385 million, $(1.50) billion and $(216) million in revenues and $(1.86) billion, $2.02 billion, $671 million, $(1.22) billion and $(58) million in operating income. These amounts result primarily from interest rate and foreign currency derivatives that are economically hedging available for sale securities and borrowings.
(c)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts. For 2006 the effect was an increase of $490 million in both revenues and operating income for General Insurance and an increase of $240 million and $169 million in revenues and operating income, respectively, for Life Insurance & Retirement Services.

(d)	Includes current year catastrophe-related losses of $3.28 billion in 2005 and $1.16 billion in 2004. There were no significant catastrophe-related losses in 2006.

(e)	Operating income was reduced by fourth quarter charges of $1.8 billion, $850 million and $2.1 billion for 2005, 2004 and 2002, respectively, related to the annual review of General Insurance loss and loss adjustment reserves. In 2006, 2005 and 2004, changes in estimates for asbestos and environmental reserves were $198 million, $873 million and $850 million, respectively.

(f)	Including that portion of long-term debt maturing in less than one year. See also Note 9 of Notes to Consolidated Financial Statements.

---

 

Index			Page
Cautionary Statement Regarding Projections and Other Information About Future Events				25
Overview of Operations and Business Results				26
Outlook				26
Consolidated Results				27
Segment Results				29
Capital Resources				30
Liquidity				30
Critical Accounting Estimates				30
Operating Review				31
General Insurance Operations				31
	General Insurance Results			32
	Reserve for Losses and Loss Expenses			37
Life Insurance & Retirement Services Operations				51
	Life Insurance & Retirement Services Results			52
	Deferred Policy Acquisition Costs
Financial Services Operations				63
	Financial Services Results			63
	Aircraft Leasing			63
	Capital Markets			64
	Consumer Finance			65
Asset Management Operations				67
Other Operations				68
Capital Resources and Liquidity				69
Borrowings				69
Shareholders’ Equity				76
Liquidity				77
Invested Assets				79
Risk Management				86
Overview				86
Corporate Risk Management				86
	Credit Risk Management			87
	Market Risk Management			88
	Operational Risk Management			89
	Insurance Risk Management			90
Segment Risk Management				91
	Insurance Operations			91
	Financial Services			94
	Asset Management			97
Economic Capital				97
Recent Accounting Standards				98

---

 

---

 

Years Ended December 31,
(in millions)		2006				2005				2004
Total revenues		$	113,194			$	108,905			$	97,666
Income before income taxes, minority interest and cumulative effect of accounting changes			21,687				15,213				14,845
Net income		$	14,048			$	10,477			$	9,839

---

 

(in millions)		2005				2004
Pretax*		$	3,280			$	1,155
Net of tax and minority interest			2,109				729

*	Includes $312 million and $96 million in catastrophe-related losses from partially owned companies in 2005 and 2004, respectively.

---

 

(in millions)			2006				2005				2004
Revenues(a):
	General Insurance(b)(c)		$	49,206			$	45,174			$	41,961
	Life Insurance & Retirement Services(c)(d)			50,163				47,376				43,402
	Financial Services(e)(f)			8,010				10,525				7,495
	Asset Management(g)			5,814				5,325				4,714
	Other(h)			1				505				94
Total			$	113,194			$	108,905			$	97,666
Operating Income(a)(i)(j):
	General Insurance(c)		$	10,412			$	2,315			$	3,177
	Life Insurance & Retirement Services(c)			10,032				8,904				7,925
	Financial Services(f)			524				4,276				2,180
	Asset Management			2,346				2,253				2,125
	Other(h)(k)			(1,627	)			(2,535	)			(562	)
Total			$	21,687			$	15,213			$	14,845

(a)

Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2006, 2005 and 2004, respectively, the effect was $(1.86) billion, $2.02 billion and $385 million in revenues and $(1.86) billion, $2.02 billion and $671 million in operating income. These amounts result primarily from interest rate and foreign currency derivatives that are hedging available for sale securities and borrowings.

(b)	Represents the sum of General Insurance net premiums earned, net investment income and realized capital gains (losses).
(c)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts. For 2006, the effect was an increase of $490 million in both revenues and operating income for General Insurance and an increase of $240 million and $169 million in revenues and operating income, respectively, for Life Insurance & Retirement Services.
(d)	Represents the sum of Life Insurance & Retirement Services GAAP premiums, net investment income and realized capital gains (losses). Included in realized capital gains (losses) and operating income is the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52, of $355 million, $(495) million and $(140) million for 2006, 2005 and 2004, respectively.
(e)	Represents interest, lease and finance charges.
(f)	Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2006, 2005 and 2004, respectively, the effect was $(1.82) billion, $2.01 billion, and $(122) million in both revenues and operating income for Capital Markets. These amounts result primarily from interest rate and foreign currency derivatives that are economically hedging available for sale securities and borrowings. For 2004, the effect was $(27) million in operating income for Aircraft Leasing. During 2006 and 2005, Aircraft Leasing derivative gains and losses were reported as part of AIG’s Other category, and were not reported in Aircraft Leasing operating income.
(g)	Represents net investment income with respect to spread-based products and management and advisory fees.

(h)	Includes consolidation and elimination adjustments which increased revenues and operating income by $296 million and $74 million, respectively, in 2006.

(i)	Represents income before income taxes, minority interest, and cumulative effect of accounting changes.
(j)	Includes current year catastrophe-related losses of $3.28 billion and $1.16 billion in 2005 and 2004, respectively. There were no significant catastrophe-related losses in 2006. Includes additional losses incurred and net reinstatement premiums related to prior year catastrophes of $165 million and $292 million in 2006 and 2005, respectively.
(k)	Includes current year catastrophe-related losses from unconsolidated subsidiaries of $312 million and $96 million in 2005 and 2004. There were no significant catastrophe-related losses in 2006.

---

 

•	Loss trend factors: used to establish expected loss ratios for subsequent accident years based on premium rate adequacy and the projected loss ratio with respect to prior accident years.
•	Expected loss ratios for the latest accident year: in this case, accident year 2006 for the year end 2006 loss reserve analysis. For low-frequency, high-severity classes such as excess casualty, expected loss ratios generally are utilized for at least the three most recent accident years.
•	Loss development factors: used to project the reported losses for each accident year to an ultimate amount.
•	Reinsurance recoverable on unpaid losses: the expected recoveries from reinsurers on losses that have not yet been reported and/or settled.

•	Interest rates: which vary by geographical region, year of issuance and products.
•	Mortality, morbidity and surrender rates: based upon actual experience by geographical region modified to allow for variation in policy form, risk classification and distribution channel.

•

Estimated gross profits: to be realized over the estimated duration of the contracts (investment-oriented products) affect the carrying value of DAC, unearned revenue liability and associated amortization patterns under FAS 97 and Sales Inducement Assets under SOP 03-1. Estimated gross profits include investment income and gains and losses on investments less required interest, actual mortality and other expenses.

---

 

•	Recoverability: based on current and future expected profitability, which is affected by interest rates, foreign exchange rates, mortality experience, and policy persistency.

•	Recoverability and eligibility: based upon the current terms and profitability of the underlying insurance contracts.

•	SD Valuation models: utilizing factors, such as market liquidity and current interest, foreign exchange and volatility rates.
•	Market price data: AIG attempts to secure reliable and independent current market price data, such as published exchange rates from external subscription services such as Bloomberg or Reuters or third-party broker quotes for use in its models. When such data is not available, AIG uses an internal methodology, which includes interpolation and extrapolation from verifiable prices from trades occurring on dates nearest to the dates of the transactions.

•	Trading at a significant (25 percent or more) discount to par or amortized cost (if lower) for an extended period of time (nine months or longer);
•	The occurrence of a discrete credit event resulting in the debtor defaulting or seeking bankruptcy or insolvency protection or voluntary reorganization; or
•	The probability of non-realization of a full recovery on its investment, irrespective of the occurrence of one of the foregoing events.

    At each balance sheet date, AIG evaluates its securities holdings in an unrealized loss position. Where AIG does not intend to hold such securities until they have fully recovered their carrying value, based on the circumstances present at the date of evaluation, AIG records the unrealized loss in income. If events or circumstances change, such as unexpected changes in the creditworthiness of the obligor, unanticipated changes in interest rates, tax laws, statutory capital positions and unforeseen liquidity events, among others, AIG revisits its intent. Further, if a loss is recognized from a sale subsequent to a balance sheet date pursuant to these unexpected changes in circumstances, the loss is recognized in the period in which the intent to hold the securities to recovery no longer existed.

•	Expected undiscounted future net cash flows: based upon current lease rates, projected future lease rates and estimated terminal values of each aircraft based on third party information.

---

 

(in millions, except ratios)				2006				2005				2004
Net premiums written:
	Domestic General
		DBG		$	24,345			$	23,128			$	22,506
		Transatlantic			3,633				3,466				3,749
		Personal Lines			4,654				4,653				4,354
		Mortgage Guaranty			866				628				607
	Foreign General(a)				11,368				9,997				9,407
Total				$	44,866			$	41,872			$	40,623
Net premiums earned:
	Domestic General
		DBG		$	23,936			$	22,602			$	21,215
		Transatlantic			3,604				3,385				3,661
		Personal Lines			4,645				4,634				4,291
		Mortgage Guaranty			740				533				539
	Foreign General(a)				10,526				9,655				8,831
Total				$	43,451			$	40,809			$	38,537
Net investment income(b):
	Domestic General
		DBG		$	3,411			$	2,403			$	1,965
		Transatlantic			435				343				307
		Personal Lines			225				217				186
		Mortgage Guaranty			140				123				120
		Intercompany adjustments and eliminations — net			1				1				—
	Foreign General				1,484				944				618
Total				$	5,696			$	4,031			$	3,196
Realized capital gains (losses)				$	59			$	334			$	228
Operating income (loss)(b)(c)(d):
	Domestic General
		DBG		$	5,985			$	(646	)		$	777
		Transatlantic			589				(39	)			282
		Personal Lines			432				195				357
		Mortgage Guaranty			328				363				399
	Foreign General(e)				3,088				2,427				1,344
Reclassifications and eliminations					(10	)			15				18
Total				$	10,412			$	2,315			$	3,177
Statutory underwriting profit (loss)(c)(d)(g):
	Domestic General
		DBG		$	2,450			$	(3,227	)		$	(1,500	)
		Transatlantic			129				(434	)			(77	)
		Personal Lines			204				(38	)			136
		Mortgage Guaranty			188				249				234
	Foreign General(e)				1,437				1,285				643
Total				$	4,408			$	(2,165	)		$	(564	)

(continued)

---

 

(in millions, except ratios)			2006				2005				2004
Domestic General(c)(d):
	Loss ratio			69.1				89.6				83.9
	Expense ratio			21.5				21.0				19.2
Combined ratio				90.6				110.6				103.1
Foreign General(c)(d):
	Loss ratio(a)			50.5				53.7				61.6
	Expense ratio(e)(f)			33.2				31.9				29.2
Combined ratio				83.7				85.6				90.8
Consolidated(c)(d):
	Loss ratio			64.6				81.1				78.8
	Expense ratio			24.5				23.6				21.5
Combined ratio				89.1				104.7				100.3

(a)	Income statement accounts expressed in non-functional currencies are translated into U.S. dollars using average exchange rates.
(b)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts in 2006. For DBG, the effect was an increase of $66 million, and for Foreign General, the effect was an increase of $424 million.
(c)	Catastrophe-related losses increased the consolidated General Insurance combined ratio for 2005 and 2004 by 7.06 points and 2.74 points, respectively. There were no significant catastrophe-related losses in 2006. Catastrophe-related losses for 2005 and 2004 by reporting unit were as follows:

		2005								2004
		Insurance				Net				Insurance				Net
		Related				Reinstatement				Related				Reinstatement
(in millions)		Losses				Premium Cost				Losses				Premium Cost
Reporting Unit:
DBG		$	1,747			$	122			$	582			$	—
Transatlantic			463				45				215				—
Personal Lines			112				2				25				—
Mortgage Guaranty			10				—				—				—
Foreign General			293				94				232				—
Total		$	2,625			$	263			$	1,054			$	—

(d)	Includes additional losses incurred and net reinstatement premiums related to prior year catastrophes of $199 million and $277 million, in 2006 and 2005, respectively.

(e)	Includes the results of wholly owned Foreign General agencies.

(f)	Includes amortization of advertising costs.
(g)	Statutory underwriting profit (loss) is a measure that U.S. domiciled insurance companies are required to report to their regulatory authorities. The following table reconciles statutory underwriting profit (loss) to operating income for General Insurance for the years ended December 31, 2006, 2005 and 2004:

		Domestic
		Brokerage								Personal				Mortgage				Foreign				Reclassifications
(in millions)		Group				Transatlantic				Lines				Guaranty				General				and Eliminations				Total
2006:
Statutory underwriting profit (loss)		$	2,450			$	129			$	204			$	188			$	1,437			$	—			$	4,408
Increase (decrease) in DAC			26				14				2				3				204				—				249
Net investment income			3,411				435				225				140				1,484				1				5,696
Realized capital gains (losses)			98				11				1				(3	)			(37	)			(11	)			59
Operating income (loss)		$	5,985			$	589			$	432			$	328			$	3,088			$	(10	)		$	10,412
2005:
Statutory underwriting profit (loss)		$	(3,227	)		$	(434	)		$	(38	)		$	249			$	1,285			$	—			$	(2,165	)
Increase (decrease) in DAC			(23	)			14				19				(8	)			113				—				115
Net investment income			2,403				343				217				123				944				1				4,031
Realized capital gains (losses)			201				38				(3	)			(1	)			85				14				334
Operating income (loss)		$	(646	)		$	(39	)		$	195			$	363			$	2,427			$	15			$	2,315
2004:
Statutory underwriting profit (loss)		$	(1,500	)		$	(77	)		$	136			$	234			$	643			$	—			$	(564	)
Increase (decrease) in DAC			160				30				24				44				59				—				317
Net investment income			1,965				307				186				120				618				—				3,196
Realized capital gains (losses)			152				22				11				1				24				18				228
Operating income (loss)		$	777			$	282			$	357			$	399			$	1,344			$	18			$	3,177

---

 

		2006				2005
Growth in original currency*			7.4	%			2.6	%
Foreign exchange effect			(0.2	)			0.5
Growth as reported in U.S. dollars			7.2	%			3.1	%

---

 

---

 

---

 

(in millions)		2006				2005
Other liability occurrence		$	19,156			$	18,116
Workers compensation			13,465				11,630
Other liability claims made			12,394				12,447
Property			6,663				7,217
Auto liability			5,931				6,569
International			5,810				4,939
Reinsurance			2,960				2,886
Medical malpractice			2,308				2,363
Products liability			2,168				1,937
Accident and health			1,649				1,678
Commercial multiple peril			1,621				1,359
Aircraft			1,562				1,844
Fidelity/surety			1,127				1,072
Other			3,185				3,112
Total		$	79,999			$	77,169

*	Presented by lines of business pursuant to statutory reporting requirements as prescribed by the National Association of Insurance Commissioners (NAIC).

(in millions)		2006				2005
DBG(a)		$	43,998			$	40,782
Transatlantic			6,207				5,690
Personal Lines(b)			2,440				2,578
Mortgage Guaranty			460				340
Foreign General(c)			9,525				8,086
Total Net Loss Reserve		$	62,630			$	57,476

(a)	At December 31, 2006 and 2005, respectively, DBG loss reserves include approximately $3.33 billion and $3.77 billion ($3.66 billion and $4.26 billion, respectively, before discount), related to business written by DBG but ceded to AIRCO and reported in AIRCO’s statutory filings. DBG loss reserves also include approximately $535 million and $407 million related to business included in AIUO’s statutory filings at December 31, 2006 and 2005, respectively.
(b)	At December 31, 2006 and 2005, respectively, Personal Lines loss reserves include $861 million and $878 million related to business ceded to DBG and reported in DBG’s statutory filings.
(c)	At December 31, 2006 and 2005, respectively, Foreign General loss reserves include approximately $2.87 billion and $2.15 billion related to business reported in DBG’s statutory filings.

---

 

(in millions)			2006				2005				2004
Net reserve for losses and loss expenses at beginning of year			$	57,476			$	47,254			$	36,228
Foreign exchange effect				741				(628	)			524
Acquisition(a)				55				—				—
Losses and loss expenses incurred:
Current year				27,805				28,426				26,793
Prior years, other than accretion of discount				(53	)			4,680	(b)			3,187	(c)
Prior years, accretion of discount				300				(15	)			377
Losses and loss expenses incurred				28,052				33,091				30,357
Losses and loss expenses paid:
	Current year			8,368				7,331				7,692
	Prior years			15,326				14,910				12,163
Losses and loss expenses paid				23,694				22,241				19,855
Net reserve for losses and loss expenses at end of year			$	62,630			$	57,476			$	47,254

(a)	Reflects the opening balance with respect to the acquisition of the Central Insurance Co., Ltd. in the third quarter of 2006.
(b)	Includes fourth quarter charge of $1.8 billion.
(c)	Includes fourth quarter charge of $850 million attributable to the change in estimate for asbestos and environmental exposures.

(in millions)		2006				2005				2004
Prior Accident Year Development by Reporting Unit:
DBG		$	110			$	4,871			$	2,857
Personal Lines			(111	)			14				75
UGC			(115	)			(103	)			(102	)
Foreign General			(118	)			(371	)			40
Sub total			(234	)			4,411				2,870
Transatlantic			181				269				317
Prior years, other than accretion of discount		$	(53	)		$	4,680			$	3,187

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(in millions)		2006				2005				2004
Prior Accident Year Development by Major Class of Business:
Excess casualty (DBG)		$	102			$	1,191			$	1,240
D&O and related management liability (DBG)			(20	)			1,627				930
Excess workers compensation (DBG)			74				983				279
Reinsurance (Transatlantic)			181				269				317
Asbestos and environmental (primarily DBG)			208				930				1,006
All other, net			(598	)			(320	)			(585	)
Prior years, other than accretion of discount		$	(53	)		$	4,680			$	3,187

		Calendar Year
Accident Year
(in millions)		2006				2005				2004
Prior Accident Year Development by Accident Year:
2005		$	(1,576	)
2004			(511	)		$	(3,853	)
2003			(212	)			(63	)		$	(1,483	)
2002			373				1,360				69
2001			29				1,749				1,123
2000			338				1,323				760
1999			382				944				693
1998			41				605				536
1997			197				281				174
1996 & Prior			886				2,334				1,315
Prior years, other than accretion of discount		$	(53	)		$	4,680			$	3,187

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•	Loss trend factors which are used to establish expected loss ratios for subsequent accident years based on the projected loss ratio for prior accident years.
•	Expected loss ratios for the latest accident year (i.e., accident year 2006 for the year-end 2006 loss reserve analysis) and, in some cases for accident years prior to the latest accident year. The expected loss ratio generally reflects the projected loss ratio from prior accident years, adjusted for the loss trend (see above) and the effect of rate changes and other quantifiable factors on the loss ratio. For low-frequency, high-severity classes such as excess casualty, expected loss ratios generally are used for at least the three most recent accident years.
•	Loss development factors which are used to project the reported losses for each accident year to an ultimate basis. Generally, the actual loss development factors observed from prior accident years would be used as a basis to determine the loss development factors for the subsequent accident years.

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•	The long latency period between asbestos exposure and disease manifestation and the resulting potential for involvement of multiple policy periods for individual claims;
•	The increase in the volume of claims by currently unimpaired plaintiffs;
•	Claims filed under the non-aggregate premises or operations section of general liability policies;
•	The number of insureds seeking bankruptcy protection and the effect of prepackaged bankruptcies;
•	Diverging legal interpretations; and
•	With respect to environmental claims, the difficulty in estimating the allocation of remediation cost among various parties.

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			2006								2005								2004
(in millions)			Gross				Net				Gross				Net				Gross				Net
Asbestos:
	Reserve for losses and loss expenses at beginning of year		$	4,441			$	1,840			$	2,559			$	1,060			$	1,235			$	386
	Losses and loss expenses incurred(a)			571				267				2,207	(b)			903	(b)			1,595	(b)			772	(b)
	Losses and loss expenses paid(a)			(548	)			(218	)			(325	)			(123	)			(271	)			(98	)
Reserve for losses and loss expenses at end of year			$	4,464			$	1,889			$	4,441			$	1,840			$	2,559			$	1,060
Environmental:
	Reserve for losses and loss expenses at beginning of year		$	926			$	410			$	974			$	451			$	789			$	283
	Losses and loss expenses incurred(a)			(232	)			(59	)			47	(c)			27	(c)			314	(c)			234	(c)
	Losses and loss expenses paid(a)			(106	)			(61	)			(95	)			(68	)			(129	)			(66	)
Reserve for losses and loss expenses at end of year			$	588			$	290			$	926			$	410			$	974			$	451
Combined:
	Reserve for losses and loss expenses at beginning of year		$	5,367			$	2,250			$	3,533			$	1,511			$	2,024			$	669
	Losses and loss expenses incurred(a)			339				208				2,254	(d)			930	(d)			1,909	(d)			1,006	(d)
	Losses and loss expenses paid(a)			(654	)			(279	)			(420	)			(191	)			(400	)			(164	)
Reserve for losses and loss expenses at end of year			$	5,052			$	2,179			$	5,367			$	2,250			$	3,533			$	1,511

(a)	All amounts pertain to policies underwritten in prior years, primarily to policies issued in 1984 and prior.
(b)	Includes increases to gross losses and loss expense reserves of $2.0 billion and $1.2 billion in the fourth quarter of 2005 and 2004, respectively, and increases to net losses and loss expense reserves of $843 million and $650 million for the fourth quarter of 2005 and 2004, respectively.
(c)	Includes increases to gross losses and loss expense reserves of $56 million and $250 million in the fourth quarter of 2005 and 2004, respectively, and increases to net losses and loss expense reserves of $30 million and $200 million for the fourth quarter of 2005 and 2004, respectively.
(d)	Includes increases to gross losses and loss expense reserves of $2.0 billion and $1.5 billion in the fourth quarter of 2005 and 2004, respectively, and increases to net losses and loss expense reserves of $873 million and $850 million for the fourth quarter of 2005 and 2004, respectively.

		2006								2005								2004
(in millions)		Gross				Net				Gross				Net				Gross				Net
Asbestos		$	3,212			$	1,469			$	3,401			$	1,465			$	2,033			$	876
Environmental			340				173				586				266				606				284
Combined		$	3,552			$	1,642			$	3,987			$	1,731			$	2,639			$	1,160

			2006												2005												2004
			Asbestos				Environmental				Combined				Asbestos				Environmental				Combined				Asbestos				Environmental				Combined
Claims at beginning of year				7,293				9,873				17,166				7,575				8,216				15,791				7,474				8,852				16,326
Claims during year:
	Opened			643				1,383				2,026				854				5,253	*			6,107				909				2,592				3,501
	Settled			(150	)			(155	)			(305	)			(67	)			(219	)			(286	)			(100	)			(279	)			(379	)
	Dismissed or otherwise resolved			(908	)			(1,659	)			(2,567	)			(1,069	)			(3,377	)			(4,446	)			(708	)			(2,949	)			(3,657	)
Claims at end of year				6,878				9,442				16,320				7,293				9,873				17,166				7,575				8,216				15,791

*	The opened claims count increased substantially during 2005 compared to 2004 because a court ruling led AIG to report separate opened claims for previously pending cases relating to alleged MTBE exposures that AIG previously had counted in the aggregate as only a single claim on the assumption that the cases would be consolidated into a single federal court proceeding.

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			Gross				Net
2006
Survival ratios:
	Asbestos			11.7				12.9
	Environmental			5.3				4.5
	Combined			10.3				10.3
2005
Survival ratios:
	Asbestos			15.9				19.8
	Environmental			6.9				6.2
	Combined			13.0				14.2
2004
Survival ratios:
	Asbestos			10.7				13.5
	Environmental			6.5				6.8
	Combined			9.1				10.5

	•	ALICO
	•	AIG Star Life
	•	AIG Edison Life

	•	AIA
	•	Nan Shan
	•	AIRCO
	•	Philamlife

•	AIG American General
•	USLIFE
•	AGLA

•	VALIC
•	AIG Annuity
•	AIG SunAmerica

*	Japan and Other consists of all operations in Japan and the operations of ALICO and its subsidiaries worldwide.

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								Net				Realized
				GAAP				Investment				Capital Gains				Total				Operating
(in millions)				Premiums				Income				(Losses)				Revenues				Income
2006
	Foreign Life Insurance & Retirement Services			$	24,036			$	9,173			$	707			$	33,916			$	6,792
	Domestic Life Insurance				5,543				3,778				(215	)			9,106				917
	Domestic Retirement Services				1,057				6,488				(404	)			7,141				2,323
		Total		$	30,636			$	19,439			$	88			$	50,163			$	10,032
2005
	Foreign Life Insurance & Retirement Services			$	23,016			$	8,175			$	84			$	31,275			$	5,245
	Domestic Life Insurance				5,447				3,733				35				9,215				1,495
	Domestic Retirement Services				937				6,226				(277	)			6,886				2,164
		Total		$	29,400			$	18,134			$	(158	)		$	47,376			$	8,904
2004
	Foreign Life Insurance & Retirement Services			$	21,917			$	5,834			$	372			$	28,123			$	4,848
	Domestic Life Insurance				5,376				3,459				(120	)			8,715				1,023
	Domestic Retirement Services				795				5,976				(207	)			6,564				2,054
		Total		$	28,088			$	15,269			$	45			$	43,402			$	7,925

			Years Ended December 31,
(in millions)			2006				2005				2004
Foreign			$	1,162,699			$	1,027,682			$	1,085,843
Domestic*				907,901				825,151				772,251
	Total		$	2,070,600			$	1,852,833			$	1,858,094

*	Domestic insurance in-force for 2005 includes the effect of the non-renewal of a single large group life case of $36 billion.

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								Net				Realized
				GAAP				Investment				Capital Gains				Total				Operating
(in millions)				Premiums				Income				(Losses)				Revenues				Income
2006
Japan and Other:
	Life insurance(a)			$	4,769			$	1,696			$	316			$	6,781			$	1,725
	Personal accident				3,957				162				49				4,168				1,122
	Group products				1,740				541				13				2,294				272
	Individual fixed annuities				337				1,930				28				2,295				553
	Individual variable annuities				173				325				—				498				60
		Total		$	10,976			$	4,654			$	406			$	16,036			$	3,732
Asia:
	Life insurance(b)			$	10,949			$	4,188			$	258			$	15,395			$	2,516
	Personal accident				1,561				123				6				1,690				337
	Group products				486				107				34				627				178
	Individual fixed annuities				63				97				3				163				27
	Individual variable annuities				1				4				—				5				2
		Total		$	13,060			$	4,519			$	301			$	17,880			$	3,060
Total Foreign Life Insurance & Retirement Services:
	Life insurance(a)(b)			$	15,718			$	5,884			$	574			$	22,176			$	4,241
	Personal accident				5,518				285				55				5,858				1,459
	Group products				2,226				648				47				2,921				450
	Individual fixed annuities				400				2,027				31				2,458				580
	Individual variable annuities				174				329				—				503				62
		Total		$	24,036			$	9,173			$	707			$	33,916			$	6,792
2005
Japan and Other:
	Life insurance			$	4,852			$	1,752			$	(52	)		$	6,552			$	1,280
	Personal accident				3,788				137				(15	)			3,910				1,051
	Group products				1,473				535				(34	)			1,974				191
	Individual fixed annuities				292				1,672				29				1,993				390
	Individual variable annuities				97				767				—				864				47
		Total		$	10,502			$	4,863			$	(72	)		$	15,293			$	2,959
Asia:
	Life insurance			$	10,779			$	3,056			$	146			$	13,981			$	1,907
	Personal accident				1,214				118				(15	)			1,317				241
	Group products				452				78				25				555				131
	Individual fixed annuities				69				56				—				125				8
	Individual variable annuities				—				4				—				4				(1	)
		Total		$	12,514			$	3,312			$	156			$	15,982			$	2,286
Total Foreign Life Insurance & Retirement Services:
	Life insurance			$	15,631			$	4,808			$	94			$	20,533			$	3,187
	Personal accident				5,002				255				(30	)			5,227				1,292
	Group products				1,925				613				(9	)			2,529				322
	Individual fixed annuities				361				1,728				29				2,118				398
	Individual variable annuities				97				771				—				868				46
		Total		$	23,016			$	8,175			$	84			$	31,275			$	5,245

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								Net				Realized
				GAAP				Investment				Capital Gains				Total				Operating
(in millions)				Premiums				Income				(Losses)				Revenues				Income
2004
Japan and Other:
	Life insurance			$	4,469			$	1,371			$	(134	)		$	5,706			$	1,079
	Personal accident				3,307				96				16				3,419				932
	Group products				1,229				378				(42	)			1,565				133
	Individual fixed annuities				312				1,011				4				1,327				236
	Individual variable annuities				68				142				—				210				13
		Total		$	9,385			$	2,998			$	(156	)		$	12,227			$	2,393
Asia:
	Life insurance			$	10,469			$	2,676			$	497			$	13,642			$	2,098
	Personal accident				994				83				17				1,094				260
	Group products(c)				986				53				14				1,053				90
	Individual fixed annuities				83				23				—				106				7
	Individual variable annuities				—				1				—				1				—
		Total		$	12,532			$	2,836			$	528			$	15,896			$	2,455
Total Foreign Life Insurance & Retirement Services:
	Life insurance			$	14,938			$	4,047			$	363			$	19,348			$	3,177
	Personal accident				4,301				179				33				4,513				1,192
	Group products(c)				2,215				431				(28	)			2,618				223
	Individual fixed annuities				395				1,034				4				1,433				243
	Individual variable annuities				68				143				—				211				13
		Total		$	21,917			$	5,834			$	372			$	28,123			$	4,848

(a)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts. For 2006, the effect was an increase of $32 million in both net investment income and operating income.
(b)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts. For 2006, the effect was an increase of $208 million and $137 million in net investment income and operating income, respectively. Operating income also includes an out of period reduction in participating policyholder dividend reserves of $163 million, primarily as a result of tax remediation adjustments.
(c)	Revenues include approximately $640 million of premiums from a single reinsurance transaction involving terminal funding business, which is offset by a similar increase of benefit reserves.

		2006				2005
Growth in original currency*			6.4	%			2.5%
Foreign exchange effect			(2.0	)			2.5
Growth as reported in U.S. dollars			4.4	%			5.0%

*	Computed using a constant exchange rate for each period.

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								Net				Realized								Operating
				GAAP				Investment				Capital Gains				Total				Income
(in millions)				Premiums				Income				(Losses)				Revenues				(Loss)
2006
	Life insurance(a)			$	2,127			$	1,377			$	(83	)		$	3,421			$	654
	Home service				790				630				(38	)			1,382				282
	Group life/health				995				213				(8	)			1,200				(159	)
	Payout annuities(b)				1,582				1,004				(51	)			2,535				76
	Individual fixed annuities				4				77				(8	)			73				8
	Individual annuities — runoff(c)				45				477				(27	)			495				56
		Total		$	5,543			$	3,778			$	(215	)		$	9,106			$	917
2005
	Life insurance(a)			$	2,041			$	1,352			$	98			$	3,491			$	874
	Home service				801				605				(2	)			1,404				282
	Group life/health				1,079				201				(1	)			1,279				69
	Payout annuities(b)				1,473				912				(34	)			2,351				128
	Individual fixed annuities				3				47				—				50				7
	Individual annuities — runoff(c)				50				616				(26	)			640				135
		Total		$	5,447			$	3,733			$	35			$	9,215			$	1,495
2004
	Life insurance(a)			$	1,821			$	1,228			$	(94	)		$	2,955			$	612
	Home service				812				608				(18	)			1,402				290
	Group life/health				1,195				182				—				1,377				(131	)
	Payout annuities(b)				1,484				801				(8	)			2,277				124
	Individual fixed annuities				4				22				3				29				1
	Individual annuities — runoff(c)				60				618				(3	)			675				127
		Total		$	5,376			$	3,459			$	(120	)		$	8,715			$	1,023

(a)	Effective January 1, 2006, the broker-dealer operations of the Domestic Life Insurance companies are being reported and managed within the Asset Management segment. Included in GAAP premiums and Total Revenues were revenues of $102 million and $96 million, respectively, for 2005 and 2004.
(b)	GAAP Premiums and Total Revenues include structured settlements, single premium immediate annuities and terminal funding annuities.
(c)	Primarily represents runoff annuity business sold through discontinued distribution relationships.

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(in millions)			2006				2005				2004
Periodic Premium Sales By Product*:
	Universal life		$	334			$	271			$	201
	Variable universal life			56				44				79
	Term life			240				229				215
	Whole life/other			13				10				13
	Total		$	643			$	554			$	508

*	Periodic premium represents premium from new business expected to be collected over a one-year period.

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								Net				Realized
				GAAP				Investment				Capital Gains				Total				Operating
(in millions)				Premiums				Income				(Losses)				Revenue				Income
2006
	Group retirement products			$	386			$	2,279			$	(144	)		$	2,521			$	1,017
	Individual fixed annuities				122				3,581				(257	)			3,446				1,036
	Individual variable annuities				531				202				5				738				193
	Individual annuities — runoff*				18				426				(8	)			436				77
		Total		$	1,057			$	6,488			$	(404	)		$	7,141			$	2,323
2005
	Group retirement products			$	351			$	2,233			$	(67	)		$	2,517			$	1,055
	Individual fixed annuities				97				3,346				(214	)			3,229				858
	Individual variable annuities				467				217				4				688				189
	Individual annuities — runoff*				22				430				—				452				62
		Total		$	937			$	6,226			$	(277	)		$	6,886			$	2,164
2004
	Group retirement products			$	313			$	2,201			$	(111	)		$	2,403			$	987
	Individual fixed annuities				55				3,078				(78	)			3,055				851
	Individual variable annuities				407				239				(17	)			629				176
	Individual annuities — runoff*				20				458				(1	)			477				40
		Total		$	795			$	5,976			$	(207	)		$	6,564			$	2,054

*	Primarily represents runoff annuity business sold through discontinued distribution relationships.

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(in millions)			2006				2005				2004
Group retirement products:
	Annuities		$	5,464			$	5,532			$	5,555
	Mutual funds			1,361				904				947
Individual fixed annuities				5,330				6,861				9,713
Individual variable annuities				4,266				3,319				4,126
Individual fixed annuities — runoff				56				67				77
	Total		$	16,477			$	16,683			$	20,418

			Group				Individual				Individual
			Retirement				Fixed				Variable
(in millions)			Products*				Annuities				Annuities
Zero or no surrender charge			$	42,741			$	10,187			$	11,467
0% — 2%				6,921				4,503				4,869
Greater than 2% — 4%				4,573				6,422				4,830
Greater than 4%				2,842				28,109				9,836
Non-Surrenderable				877				3,464				91
	Total		$	57,954			$	52,685			$	31,093

*	Excludes mutual funds.

			Net Flows(a)
(in millions)			2006				2005				2004
Group retirement products(b)			$	467			$	628			$	1,706
Individual fixed annuities				(2,697	)			1,288				5,936
Individual variable annuities				(114	)			(336	)			1,145
Individual fixed annuities — runoff				(1,009	)			(818	)			(714	)
	Total		$	(3,353	)		$	762			$	8,073

(a)	Net flows are defined as deposits received less benefits, surrenders, withdrawals and death benefits.
(b)	Includes mutual funds.

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(in millions)			2006				2005				2004
Domestic
	Fixed maturities, including short term investments		$	9,089			$	9,060			$	8,646
	Equity securities			32				10				27
	Interest on mortgage, policy and collateral loans			798				728				669
	Partnership income — excluding Synfuels			505				359				293
	Partnership income (loss) — Synfuels			(107	)			(143	)			(121	)
	Unit investment trusts			5				—				—
	Other(a)			49				56				(20	)
	Total investment income			10,371				10,070				9,494
	Investment expenses			105				111				59
	Net investment income		$	10,266			$	9,959			$	9,435
Foreign
	Fixed maturities, including short term investments		$	6,845			$	5,995			$	5,002
	Equity securities			339				300				182
	Interest on mortgage, policy and collateral loans			455				448				426
	Partnership income			94				57				20
	Unit investment trusts(b)			310				—				—
	Other(a)			312				423				237
	Total investment income before policyholder trading gains (losses)			8,355				7,223				5,867
	Policyholder trading gains (losses)(c)			1,053				1,177				196
	Total investment income			9,408				8,400				6,063
	Investment expenses			235				225				229
	Net investment income		$	9,173			$	8,175			$	5,834
Total
	Fixed maturities, including short term investments		$	15,934			$	15,055			$	13,648
	Equity securities			371				310				209
	Interest on mortgage, policy and collateral loans			1,253				1,176				1,095
	Partnership income — excluding Synfuels			599				416				313
	Partnership income (loss) — Synfuels			(107	)			(143	)			(121	)
	Unit investment trusts(b)			315				—				—
	Other(a)			361	(c)			479				217
	Total investment income before policyholder trading gains (losses)		$	18,726			$	17,293			$	15,361
	Policyholder trading gains (losses)(c)			1,053				1,177				196
	Total investment income			19,779				18,470				15,557
	Investment expenses			340				336				288
	Net investment income(d)		$	19,439			$	18,134			$	15,269

(a)	Other net investment income includes real estate income, income on non-partnership invested assets, securities lending and Life Insurance & Retirement Services’ equal share of the results of AIG Credit Card Company (Taiwan).

(b)	Includes the effect of out of period adjustments relating to the accounting for certain interests in unit investment trusts. For 2006, the effect was an increase of $240 million.
(c)	Relates principally to assets held in various trading securities accounts that do not qualify for separate account treatment under SOP 03-1. These amounts are offset by an equal change included in incurred policy losses and benefits.

(d)	Includes call and tender income.

(in millions)				2006				2005				2004
Domestic Life — excluding Synfuels:
	Life insurance			$	67			$	136			$	43
	Home service				13				(1	)			8
		Subtotal			80				135				51
Domestic Life — Synfuels:
	Life insurance				(73	)			(97	)			(74	)
	Home service				(34	)			(46	)			(47	)
		Subtotal			(107	)			(143	)			(121	)
Total Domestic Life					(27	)			(8	)			(70	)
Retirement Services:
	Group retirement products				178				89				95
	Individual fixed annuities				247				135				147
Total Retirement Services					425				224				242
Total				$	398			$	216			$	172

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(in millions)				2006				2005				2004
Domestic Life Insurance:
	Sales of fixed maturities			$	(33	)		$	65			$	(4	)
	Sales of equity securities				17				18				7
	Other:
		Foreign exchange transactions			(6	)			11				—
		Derivatives instruments			25				65				8
		Other-than-temporary decline			(192	)			(119	)			(98	)
		Other			(26	)			(5	)			(33	)
Total Domestic Life Insurance				$	(215	)		$	35			$	(120	)
Domestic Retirement Services:
	Sales of fixed maturities			$	1			$	(106	)		$	107
	Sales of equity securities				31				115				30
	Other:
		Foreign exchange transactions			(13	)			—				—
		Derivatives instruments			(33	)			(12	)			(14	)
		Other-than-temporary decline			(368	)			(267	)			(305	)
		Other			(22	)			(7	)			(25	)
Total Domestic Retirement Services				$	(404	)		$	(277	)		$	(207	)
Foreign Life Insurance & Retirement Services:
	Sales of fixed maturities			$	(209	)		$	191			$	223
	Sales of equity securities				459				281				295
	Other:
		Foreign exchange transactions			106				40				(382	)
		Derivatives instruments			276				(599	)			248
		Other-than-temporary decline			(81	)			(39	)			(38	)
		Other*			156				210				26
Total Foreign Life Insurance & Retirement Services				$	707			$	84			$	372
Total				$	88			$	(158	)		$	45

*	Net of allocations to participating policyholders of $88 million, $109 million and $65 million for 2006, 2005 and 2004, respectively.

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			2006												2005
(in millions)			DAC				VOBA				Total				DAC				VOBA				Total
Domestic Life Insurance & Retirement Services:
Balance at beginning of year(a)			$	9,599			$	869			$	10,468			$	8,214			$	836			$	9,050
Acquisition costs deferred				1,832				—				1,832				1,840				—				1,840
Amortization (charged) or credited to operating income:
	Related to realized capital gains (losses)			77				16				93				45				3				48
	Related to unlocking future assumptions			(40	)			(5	)			(45	)			(15	)			—				(15	)
	All other amortization(b)			(1,387	)			(81	)			(1,468	)			(1,399	)			(85	)			(1,484	)
Related to change in unrealized gains (losses) on securities				744				34				778				904				112				1,016
Increase (decrease) due to foreign exchange				(1	)			—				(1	)			10				3				13
Balance at end of year			$	10,824			$	833			$	11,657			$	9,599			$	869			$	10,468
Foreign Life Insurance & Retirement Services:
Balance at beginning of year(a)			$	16,360			$	1,278			$	17,638			$	14,349			$	1,681			$	16,030
Acquisition costs deferred				4,991				—				4,991				4,673				—				4,673
Amortization (charged) or credited to operating income:
	Related to realized capital gains (losses)			4				1				5				(1	)			(1	)			(2	)
	Related to unlocking future assumptions			87				15				102				93				—				93
	All other amortization			(2,214	)			(185	)			(2,399	)			(1,764	)			(204	)			(1,968	)
Related to change in unrealized gains (losses) on securities				(127	)			(5	)			(132	)			(47	)			8				(39	)
Increase (decrease) due to foreign exchange				904				44				948				(943	)			(206	)			(1,149	)
Balance at end of year			$	20,005			$	1,148			$	21,153			$	16,360			$	1,278			$	17,638
Total Life Insurance & Retirement Services:
Balance at beginning of year(a)			$	25,959			$	2,147			$	28,106			$	22,563			$	2,517			$	25,080
Acquisition costs deferred				6,823				—				6,823				6,513				—				6,513
Amortization (charged) or credited to operating income:
	Related to realized capital gains (losses)			81				17				98				44				2				46
	Related to unlocking future assumptions			47				10				57				78				—				78
	All other amortization			(3,601	)			(266	)			(3,867	)			(3,163	)			(289	)			(3,452	)
Related to change in unrealized gains (losses) on securities				617				29				646				857				120				977
Increase (decrease) due to foreign exchange				903				44				947				(933	)			(203	)			(1,136	)
Balance at end of year			$	30,829			$	1,981			$	32,810			$	25,959			$	2,147			$	28,106

(a)	In 2006, sales inducement assets were reclassified to Other assets in the consolidated balance sheet. All periods have been adjusted to reflect this reclassification.
(b)	In 2006, all other amortization for Domestic Life Insurance & Retirement Services includes $136 million of negative amortization related to changes in estimates from conversion of actuarial systems, which is substantially offset by related adjustments in incurred policy losses and benefits in the consolidated statement of income.

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(in millions)			2006				2005				2004
Revenues(a):
	Aircraft Leasing(b)		$	4,143			$	3,578			$	3,136
	Capital Markets(c)(d)			(186	)			3,260				1,278
	Consumer Finance(e)			3,819				3,613				2,978
	Other			234				74				103
Total			$	8,010			$	10,525			$	7,495
Operating income (loss)(a):
	Aircraft Leasing		$	639			$	679			$	642
	Capital Markets(d)			(873	)			2,661				662
	Consumer Finance(f)			761				876				786
	Other, including intercompany adjustments(g)			(3	)			60				90
Total			$	524			$	4,276			$	2,180

(a)	Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2006, 2005 and 2004, respectively, the effect was $(1.8) billion, $2.0 billion and $(122) million in both revenues and operating income for Capital Markets. These amounts result primarily from interest rate and foreign currency derivatives that are economically hedging available for sale securities and borrowings. For 2004, the effect was $(27) million in operating income for Aircraft Leasing. During 2006 and 2005, Aircraft Leasing derivative gains and losses were reported as part of AIG’s Other category, and were not reported in Aircraft Leasing operating income.
(b)	Revenues are primarily aircraft lease rentals from ILFC.
(c)	Revenues, shown net of interest expense of $3.2 billion, $3.0 billion and $2.3 billion, in 2006, 2005 and 2004, respectively, were primarily from hedged financial positions entered into in connection with counterparty transactions and the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133 described in (a) above.
(d)	Certain transactions entered into by AIGFP generate tax credits and benefits which are included in income taxes in the consolidated statement of income. The amounts of such tax credits and benefits for the years ended December 31, 2006, 2005 and 2004, respectively, are $50 million, $67 million and $107 million.
(e)	Revenues are primarily finance charges.
(f)	Includes catastrophe-related losses of $62 million recorded in the third quarter of 2005 resulting from hurricane Katrina, which were reduced by $35 million in 2006 due to the reevaluation of the remaining estimated losses.

(g)	Includes specific reserves recorded during 2006 in the amount of $42 million related to two commercial lending transactions.

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(in millions)			2006				2005				2004
Revenues:
	Spread-Based Investment Business		$	3,554			$	3,547			$	3,192
	Institutional Asset Management			1,670				1,195				1,049
	Brokerage Services and Mutual Funds			293				257				249
	Other			297				326				224
Total			$	5,814			$	5,325			$	4,714
Operating income:
	Spread-Based Investment Business(a)		$	947			$	1,185			$	1,328
	Institutional Asset Management(b)(c)			1,031				686				515
	Brokerage Services and Mutual Funds			87				66				70
	Other			281				316				212
Total			$	2,346			$	2,253			$	2,125

(a)	Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2004, the effect was a gain of $313 million in operating income. During 2006 and 2005, these derivative gains and losses were reported as part of AIG’s Other category, and were not reported in Asset Management operating income.
(b)	Includes the full results of certain AIG managed private equity and real estate funds that are consolidated pursuant to FIN 46(R), “Consolidation of Variable Interest Entities”. Also includes $346 million, $261 million and $195 million for 2006, 2005 and 2004, respectively, of third-party limited partner earnings offset in minority interest expense on the consolidated statement of income which is not a component of operating income.
(c)	Includes the full results of certain AIG managed partnerships that are consolidated effective January 1, 2006 pursuant to EITF 04-5, “Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights”. For 2006, operating income includes $252 million of third-party limited partner earnings offset in minority interest expense which is not a component of operating income.

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(in millions)		2006				2005				2004
Other Operating Income (Loss):
Equity earnings in unconsolidated entities		$	193			$	(124	)		$	157
Interest expense			(859	)			(541	)			(435	)
Unallocated corporate expenses			(555	)			(413	)			(316	)
Compensation expense — SICO Plans			(108	)			(205	)			(62	)
Compensation expense — Starr tender offer			(54	)			—				—
Realized capital gains (losses)			(295	)			505				94
Regulatory settlement costs			—				(1,644	)			—
Other miscellaneous, net			(23	)			(113	)			—
Total Other		$	(1,701	)		$	(2,535	)		$	(562	)

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(in millions)			2006				2005
AIG’s net borrowings			$	17,126			$	10,425
Liabilities connected to trust preferred stock				1,440				1,391
AIG MIP matched notes and bonds payable				5,468				—
Series AIGFP matched notes and bonds payable				72				—
AIGFP
	GIAs			20,664				20,811
	Matched notes and bonds payable			35,776				24,950
	Hybrid financial instrument liabilities*			8,856				—
Borrowings not guaranteed by AIG				59,277				52,272
Total			$	148,679			$	109,849

*	Represents structured notes issued by AIGFP that are accounted for using the fair value option.

(in millions)			2006				2005
AIG borrowings:
	Notes and bonds payable		$	8,915			$	4,607
	Loans and mortgages payable			841				814
	AIG MIP matched notes and bonds payable			5,468				—
	Series AIGFP matched notes and bonds payable			72				—
	Total AIG Borrowing			15,296				5,421
Borrowings guaranteed by AIG:
AIGFP
	GIAs			20,664				20,811
	Notes and bonds payable			37,528				26,463
	Hybrid financial instrument liabilities(a)			8,856				—
	Total			67,048				47,274
AIG Funding, Inc. commercial paper				4,821				2,694
AGC Notes and bonds payable				797				797
Liabilities connected to trust preferred stock				1,440				1,391
Total borrowings issued or guaranteed by AIG				89,402				57,577
Borrowings not guaranteed by AIG:
ILFC
	Commercial paper			2,747				2,615
	Notes and bonds payable(b)			26,591				23,715
	Total			29,338				26,330
AGF
	Commercial paper			4,328				3,423
	Notes and bonds payable			19,595				18,719
	Total			23,923				22,142
AIGCFG
	Commercial paper			227				476
	Loans and mortgages payable			1,453				1,047
	Total			1,680				1,523
AIG Finance Taiwan Limited commercial paper				26				—
Other Subsidiaries				1,065				927
Variable Interest Entity debt:
	A.I. Credit			880				—
	AIGGIG			55				140
	AIG Global Real Estate Investment			2,052				977
	AIG SunAmerica			203				233
	ALICO			55				—
Total				3,245				1,350
Total borrowings not guaranteed by AIG				59,277				52,272
Total Debt			$	148,679			$	109,849

(a)	Represents structured notes issued by AIGFP that are accounted for using the fair value option.
(b)	Includes borrowings under Export Credit Facility of $2.7 billion and $2.6 billion, at December 31, 2006 and 2005, respectively.

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			Balance at								Maturities				Effect of								Balance at
			December 31,								and				Foreign				Other				December 31,
(in millions)			2005				Issuances				Repayments				Exchange				Changes				2006
AIG
	Notes and bonds payable		$	4,607			$	5,262			$	(1,096	)		$	142			$	—			$	8,915
	Loans and mortgages payable			814				1,348				(1,325	)			3				1				841
	AIG MIP matched notes and bonds payable			—				5,371				—				98				(1	)			5,468
	Series AIGFP matched notes and bonds payable			—				72				—				—				—				72
AIGFP
	GIAs			20,811				12,265				(12,432	)			20				—				20,664
	Notes and bonds payable and hybrid financial instrument liabilities			26,463				32,115				(12,532	)			299				39				46,384
AGC notes and bonds payable				797				—				—				—				—				797
Liabilities connected to trust preferred stock				1,391				—				—				—				49				1,440
ILFC notes and bonds payable				23,715				6,406				(3,843	)			535				(222	)			26,591
AGF notes and bonds payable				18,719				3,620				(3,065	)			296				25				19,595
AIGCFG loans and mortgages payable				1,047				3,067				(2,711	)			58				(8	)			1,453
Other subsidiaries				927				344				(350	)			4				140				1,065
Total			$	99,291			$	69,870			$	(37,354	)		$	1,455			$	23			$	133,285

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Available

Amount

One-Year

(in millions)

December 31,

Term-Out

Facility

Size

Borrower(s)

2006

Expiration

Option

AIG:

364-Day Syndicated Facility

$1,625

AIG AIG Funding(a) AIG Capital Corporation(a)

$

1,625

July 2007

Yes

5-Year Syndicated Facility

1,625

AIG AIG Funding(a) AIG Capital Corporation(a)

1,625

July 2011

No

364-Day Bilateral Facility

3,200

AIG(b) AIG Funding

505

November 2007

Yes

364-Day Intercompany Facility(c)

2,000

AIG

2,000

October 2007

Yes

Total AIG

$8,450

$

5,755

ILFC:

5-Year Syndicated Facility

$2,500

ILFC

$

2,500

October 2011

No

5-Year Syndicated Facility

2,000

ILFC

2,000

October 2010

No

5-Year Syndicated Facility

2,000

ILFC

2,000

October 2009

No

Total ILFC

$6,500

$

6,500

AGF:

364-Day Syndicated Facility

$2,125

American General Finance Corporation American General Finance, Inc. (d)

$

2,125

July 2007

Yes

5-Year Syndicated Facility

2,125

American General Finance Corporation

2,125

July 2010

No

Total AGF

$4,250

$

4,250

(a)	Guaranteed by AIG.
(b)	This facility can be drawn in the form of loans or letters of credit. All drawn amounts shown above are in the form of letters of credit.
(c)	Subsidiaries of AIG are the lenders on this facility.
(d)	American General Finance, Inc. is an eligible borrower for up to $400 million only.

Short-term Debt

Senior Long-term Debt

Moody’s

S&P

Fitch

Moody’s(a)

S&P(b)

Fitch(c)

AIG

P-1 (1st of 3)

A-1+ (1st of 6)

F1+ (1st of 5)

Aa2 (2nd of 9)

AA (2nd of 8)

AA (2nd of 9)

AIG Financial Products Corp.(d)

P-1

A-1+

—

Aa2

AA

—

AIG Funding, Inc.(d)

P-1

A-1+

F1+

—

—

—

ILFC

P-1

A-1+

F1 (1st of 5)

A1 (3rd of 9)

AA-(e) (2nd of 8)

A+ (3rd of 9)

American General Finance Corporation

P-1

A-1 (1st of 6)

F1

A1

A+ (3rd of 8)

A+

American General Finance, Inc.

P-1

A-1

F1

—

—

A+

(a)	Moody’s Investors Service (Moody’s). Moody’s appends numerical modifiers 1, 2 and 3 to the generic rating categories to show relative position within rating categories.
(b)	Standard & Poor’s, a division of the McGraw-Hill Companies (S&P). S&P ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
(c)	Fitch Ratings (Fitch). Fitch ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
(d)	AIG guarantees all obligations of AIG Financial Products Corp. and AIG Funding, Inc.
(e)	Negative rating outlook. A negative outlook by S&P indicates that a rating may be lowered, but is not necessarily a precursor of a ratings change. The outlook on all other credit ratings in the table is stable.

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						Payments due by Period
		Total				Less Than				1-3				3+-5				Over
(in millions)		Payments				One Year				Years				Years				Five Years
Borrowings(a)		$	133,285			$	34,670			$	29,949			$	30,483			$	38,183
Interest payments on borrowings			44,090				4,960				8,130				5,445				25,555
Loss reserves(b)			79,999				22,000				24,399				11,600				22,000
Insurance and investment contract liabilities (c)			577,730				16,023				27,728				39,376				494,603
GIC liabilities(d)			56,042				19,399				23,209				3,889				9,545
Aircraft purchase commitments			19,042				5,442				7,079				2,155				4,366
Operating leases			2,763				626				802				581				754
Total		$	912,951			$	103,120			$	121,296			$	93,529			$	595,006

(a)	Excludes commercial paper and obligations included as debt pursuant to FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (FIN 46R), and includes hybrid financial instrument liabilities recorded at fair value. See also Note 9 of Notes to Consolidated Financial Statements.
(b)	Represents future loss and loss adjustment expense payments estimated based on historical loss development payment patterns.

(c)	Insurance and investment contract liabilities include various investment-type products with contractually scheduled maturities, including periodic payments of a term certain nature. Insurance and investment contract liabilities also include benefit and claim liabilities, of which a significant portion represents policies and contracts that do not have stated contractual maturity dates and may not result in any future payment obligations. For these policies and contracts (i) AIG is currently not making payments until the occurrence of an insurable event, such as death or disability, (ii) payments are conditional on survivorship, or (iii) the occurrence of a payment due to a surrender or other non-scheduled event out of AIG’s control. AIG has made significant assumptions to determine the estimated undiscounted cash flows of these contractual policy benefits which include mortality, morbidity, future lapse rates, expenses, investment returns and interest crediting rates, offset by expected future deposits and premium on in-force policies. Due to the significance of the assumptions used, the amounts presented could be materially different from actual required payments. The amounts presented in this table are undiscounted and therefore exceed the future policy benefits and policyholder contract deposits included in the balance sheet.
(d)	Represents guaranteed maturities under GICs.

							Amount of Commitment Expiration
			Total Amounts				Less Than				1-3				3+-5				Over
			Committed				One Year				Years				Years				Five Years
Letters of credit:
	Life Insurance & Retirement Services		$	185			$	21			$	28			$	—			$	136
	Parent Company(a)			641				522				1				118				—
	DBG			198				198				—				—				—
Standby letters of credit:
	Capital Markets			1,739				1,427				104				40				168
Guarantees:
	Life Insurance & Retirement Services(b)			2,100				113				423				7				1,557
	Aircraft Leasing			161				—				52				—				109
	Asset Management			246				23				53				—				170
Other commercial commitments(c):
	Capital Markets(d)			15,946				5,127				2,313				2,640				5,866
	Aircraft Leasing(e)			344				—				—				—				344
	Life Insurance & Retirement Services(f)			4,896				1,119				1,730				1,177				870
	Asset Management(g)			1,310				896				255				91				68
	Life Settlement			203				—				203				—				—
	DBG(h)			1,588				690				603				295				—
	Parent Company			193				56				137				—				—
Total			$	29,750			$	10,192			$	5,902			$	4,368			$	9,288

(a)	Represents reimbursement obligations under letters of credit issued by commercial banks.
(b)	Primarily AIG SunAmerica construction guarantees connected to affordable housing investments.
(c)	Excludes commitments with respect to pension plans. The annual pension contribution for 2007 is expected to be approximately $95 million for U.S. and non-U.S. plans. See also Note 15 of Notes to Consolidated Financial Statements.
(d)	Primarily liquidity facilities provided in connection with certain municipal swap transactions and collateralized bond obligations.
(e)	Primarily in connection with options to acquire aircraft.
(f)	Primarily AIG SunAmerica commitments to invest in partnerships.
(g)	Includes commitments to invest in limited partnerships, private equity and hedge funds and real estate.

(h)	Primarily commitments to invest in limited partnerships.

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(in millions)			2006				2005
Beginning of year			$	86,317			$	79,673
	Net income			14,048				10,477
	Unrealized appreciation (depreciation) of investments, net of tax			1,735				(1,978	)
	Cumulative translation adjustment, net of tax			936				(540	)
	Dividends to shareholders			(1,690	)			(1,615	)
	Other*			331				300
End of year			$	101,677			$	86,317

*	Reflects the effects of employee stock transactions and in 2006 also reflects the cumulative effect of accounting changes, including the adoption of FAS 158. See Note 1(hh) of Notes to Consolidated Financial Statements.

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							Life
							Insurance &
			General				Retirement				Financial				Asset
(in millions)			Insurance				Services				Services				Management				Other				Total
2006
Fixed maturities:
	Bonds available for sale, at fair value		$	67,994			$	287,360			$	1,357			$	30,680			$	—			$	387,391
	Bonds held to maturity, at amortized cost			21,437				—				—				—				—				21,437
	Bond trading securities, at fair value			1				1,995				—				7,041				—				9,037
Equity securities:
	Common stocks available for sale, at fair value			4,245				8,711				—				226				80				13,262
	Common and preferred stocks trading, at fair value			350				13,705				—				366				—				14,421
	Preferred stocks available for sale, at fair value			1,884				650				5				—				—				2,539
Mortgage loans on real estate, net of allowance				13				12,852				95				4,107				—				17,067
Policy loans				1				7,458				2				48				(8	)			7,501
Collateral and guaranteed loans, net of allowance				3				733				2,301				729				84				3,850
Financial services assets:
	Flight equipment primarily under operating leases, net of accumulated depreciation			—				—				39,875				—				—				39,875
	Securities available for sale, at fair value			—				—				47,205				—				—				47,205
	Trading securities, at fair value			—				—				5,031				—				—				5,031
	Spot commodities			—				—				220				—				—				220
	Unrealized gain on swaps, options and forward transactions			—				—				19,252				—				—				19,252
	Trading assets			—				—				2,468				—				—				2,468
	Securities purchased under agreements to resell, at contract value			—				—				33,702				—				—				33,702
	Finance receivables, net of allowance			—				—				29,573				—				—				29,573
Securities lending collateral, at fair value				5,376				50,099				76				13,755				—				69,306
Other invested assets				9,207				14,263				2,212				15,823				609				42,114
Short-term investments, at cost				3,281				6,893				1,245				13,825				5				25,249
Total investments and financial services assets as shown on the balance sheet				113,792				404,719				184,619				86,600				770				790,500
	Cash			334				672				390				186				8				1,590
	Investment income due and accrued			1,363				4,364				23				326				1				6,077
	Real estate, net of accumulated depreciation			570				698				17				75				26				1,386
Total invested assets*			$	116,059			$	410,453			$	185,049			$	87,187			$	805			$	799,553

*	At December 31, 2006, approximately 68 percent and 32 percent of invested assets were held in domestic and foreign investments, respectively.

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							Life
							Insurance &
			General				Retirement				Financial				Asset
(in millions)			Insurance				Services				Services				Management				Other				Total
2005
Fixed maturities:
	Bonds available for sale, at fair value		$	50,870			$	273,165			$	1,307			$	34,174			$	—			$	359,516
	Bonds held to maturity, at amortized cost			21,528				—				—				—				—				21,528
	Bond trading securities, at fair value			—				1,073				—				3,563				—				4,636
Equity securities:
	Common stocks available for sale, at fair value			4,505				7,436				—				227				59				12,227
	Common stocks trading, at fair value			425				8,122				—				412				—				8,959
	Preferred stocks available for sale, at fair value			1,632				760				10				—				—				2,402
Mortgage loans on real estate, net of allowance				14				10,247				71				3,968				—				14,300
Policy loans				2				6,987				2				48				—				7,039
Collateral and guaranteed loans, net of allowance				3				1,172				1,719				578				98				3,570
Financial services assets:
	Flight equipment primarily under operating leases, net of accumulated depreciation			—				—				36,245				—				—				36,245
	Securities available for sale, at fair value			—				—				37,511				—				—				37,511
	Trading securities, at fair value			—				—				6,499				—				—				6,499
	Spot commodities			—				—				92				—				—				92
	Unrealized gain on swaps, options and forward transactions			—				—				18,695				—				—				18,695
	Trading assets			—				—				1,204				—				—				1,204
	Securities purchased under agreements to resell, at contract value			—				28				14,519				—				—				14,547
	Finance receivables, net of allowance			—				—				27,995				—				—				27,995
Securities lending collateral, at fair value				4,931				42,991				—				11,549				—				59,471
Other invested assets				6,350				9,847				2,758				12,096				21				31,072
Short-term investments, at cost				2,482				5,855				1,382				5,619				4				15,342
Total investments and financial services assets as shown on the balance sheet				92,742				367,683				150,009				72,234				182				682,850
	Cash			305				989				331				196				76				1,897
	Investment income due and accrued			1,232				4,073				18				402				2				5,727
	Real estate, net of accumulated depreciation			525				659				17				73				19				1,293
Total invested assets*			$	94,804			$	373,404			$	150,375			$	72,905			$	279			$	691,767

*	At December 31, 2005, approximately 70 percent and 30 percent of invested assets were held in domestic and foreign investments, respectively.

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		Gross				Gross
		Unrealized				Unrealized
(in millions)		Gains				Losses
Securities available for sale, at fair value(a)		$	1,575			$	282
Unrealized gain/loss on swaps, options and forward transactions(b)			19,252				11,401

(a)	See Note 8(i) of Notes to Consolidated Financial Statements.
(b)	These amounts are also presented as the respective balance sheet amounts.

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															Greater than 20% to												Greater than 50%
			Less than or equal to												50% of Cost(a)												of Cost(a)
			20% of Cost(a)																																				Total
Aging			Unrealized												Unrealized												Unrealized												Unrealized
(dollars in millions)			Cost(a)				Loss				Items				Cost(a)				Loss				Items				Cost(a)				Loss				Items				Cost(a)				Loss(b)				Items
Investment grade bonds
	0-6 months		$	28,869			$	376				3,941			$	74			$	17				9			$	—			$	—				—			$	28,943			$	393				3,950
	7-12 months			37,835				777				4,876				—				—				—				—				—				—				37,835				777				4,876
	>12 months			82,945				2,377				10,640				10				4				5				—				—				—				82,955				2,381				10,645
Total			$	149,649			$	3,530				19,457			$	84			$	21				14			$	—			$	—				—			$	149,733			$	3,551				19,471
Below investment grade bonds
	0-6 months		$	1,828			$	56				341			$	3			$	1				5			$	1			$	1				4			$	1,832			$	58				350
	7-12 months			1,043				28				146				3				1				4				—				—				—				1,046				29				150
	>12 months			1,085				47				201				—				—				—				—				—				—				1,085				47				201
Total			$	3,956			$	131				688			$	6			$	2				9			$	1			$	1				4			$	3,963			$	134				701
Total bonds
	0-6 months		$	30,697			$	432				4,282			$	77			$	18				14			$	1			$	1				4			$	30,775			$	451				4,300
	7-12 months			38,878				805				5,022				3				1				4				—				—				—				38,881				806				5,026
	>12 months			84,030				2,424				10,841				10				4				5				—				—				—				84,040				2,428				10,846
Total			$	153,605			$	3,661				20,145			$	90			$	23				23			$	1			$	1				4			$	153,696			$	3,685				20,172
Equity securities
	0-6 months		$	2,042			$	86				1,309			$	68			$	20				54			$	1			$	—				3			$	2,111			$	106				1,366
	7-12 months			566				36				309				56				16				72				1				1				3				623				53				384
	>12 months			—				—				—				—				—				—				—				—				—				—				—				—
Total			$	2,608			$	122				1,618			$	124			$	36				126			$	2			$	1				6			$	2,734			$	159				1,750

(a)	For bonds, represents amortized cost.
(b)	As more fully described above, upon realization, certain realized losses will be charged to participating policyholder accounts, or realization will result in a current decrease in the amortization of DAC.

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(in millions)		Amortized Cost
Due in one year or less		$	6,139
Due after one year through five years			31,839
Due after five years through ten years			51,084
Due after ten years			64,634
Total		$	153,696

•	Insurance risk — the potential loss resulting from ultimate claims and expenses exceeding held reserves.
•	Credit risk — the potential loss arising from an obligor’s inability or unwillingness to meet its obligations to AIG.
•	Market risk — the potential loss arising from adverse fluctuations in interest rates, foreign currencies, equity and commodity prices, and their levels of volatility.
•	Operational risk — the potential loss resulting from inadequate or failed internal processes, people, and systems, or from external events.

•	The Credit Risk Committee (CRC) is responsible for (i) approving credit risk policies and procedures for use throughout AIG; (ii) delegating credit authority to business unit credit officers and select business unit managers; (iii) approving transaction requests and limits for corporate, sovereign and cross-border credit exposures that exceed the delegated authorities; (iv) establishing and maintaining AIG’s risk rating process for corporate, financial and sovereign obligors; and (v) regular reviews of credit risk exposures in the portfolios of all credit-incurring business units.
•	The Financial Risk Committee (FRC) oversees AIG’s market risk exposures to interest rates, foreign exchange and equity prices and provides strategic direction for AIG’s asset-liability management. The FRC meets monthly and acts as a central mechanism for AIG senior management to review comprehensive information on AIG’s financial exposures and to exercise broad control over these exposures.
•	The Foreign Exchange Committee (FEC) monitors trends in foreign exchange rates, reviews AIG’s foreign exchange exposures, and provides recommendations on foreign currency asset allocation and remittance hedging.
•	The Derivatives Review Committee (DRC) provides an independent review of any proposed derivative transaction or program not otherwise managed by AIGFP. The DRC examines, among other things, the nature and purpose of the derivative transaction, its potential credit exposure, if any, and the estimated benefits.
•	The Complex Structured Finance Transaction Committee (CSFTC) has the authority and responsibility to review and approve proposed transactions that could subject AIG to heightened legal, reputational, accounting, or regulatory risk (CSFTs). The CSFTC provides guidance to and monitors the activities of transaction review committees (TRCs) which have been established in all major business units. TRCs have the responsibility to identify, review and refer CSFTs to the CSFTC.

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•	Manage the approval process for all requests for credit limits, program limits and transactions.
•	Approve delegated credit authorities to CRM credit executives and business unit credit officers.
•	Aggregate globally all credit exposure data by counterparty, country and industry and report risk concentrations regularly to the CRC.
•	Administer regular portfolio credit reviews of all investment, derivative and credit-incurring business units.
•	Develop methodologies for quantification and assessment of credit risks, including the establishment and maintenance of AIG’s internal risk rating process.
•	Approve appropriate credit reserves and methodologies at the business unit and enterprise levels.

							Credit Exposure
							as a percentage of Total
Category			Risk Rating(a)				Shareholders’ Equity
Investment Grade:
	10 largest combined			AA (weighted average	) (b)			73.5%
	Single largest non-sovereign (financial institution)			AA				7.4
	Single largest corporate			AAA				5.6
	Single largest sovereign			AA	-			14.3
Non-Investment Grade:
	Single largest sovereign			BB				1.4
	Single largest non-sovereign			BB				0.6

(a)	Risk rating is based on external ratings, or equivalent, based on AIG’s internal risk rating process.
(b)	Six are highly-rated financial institutions and three are investment-grade rated sovereigns; none is rated lower than BBB+ or its equivalent.

•	AIG’s single largest industry credit exposure is to the highly-rated global financial institutions sector, accounting for 72 percent of total shareholders’ equity at December 31, 2006.
•	AIG’s other industry credit concentrations in excess of 10 percent of total shareholders’ equity at December 31, 2006 exist to the following industries (in descending order by approximate size):

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•	AIG is a globally diversified enterprise with capital deployed in a variety of currencies. Capital deployed in AIG’s overseas businesses, when converted into U.S. dollars for financial reporting purposes, constitutes a “long foreign currency/short U.S. dollar” market exposure on AIG’s balance sheet. Similarly, overseas earnings denominated in foreign currency also represent a “long foreign currency/short U.S. dollar” market exposure on AIG’s income statement.
•	Much of AIG’s domestic capital is invested in fixed income or equity securities, leading to exposures to U.S. yields and equity markets.
•	Several of AIG’s Foreign Life subsidiaries operate in developing markets where maturities on longer-term life insurance liabilities exceed the maximum maturities of available local currency assets.

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								For the Year Ended																For the Year Ended
								December 31, 2006																December 31, 2005
(in millions)				As of December 31				Average				High				Low				As of December 31				Average				High				Low
Total AIG Non-Trading Market risk:
		Diversified		$	5,073			$	5,209			$	5,783			$	4,852			$	5,186			$	5,353			$	5,543			$	5,186
		Interest rate			4,577				4,962				5,765				4,498				4,869				4,963				5,223				4,707
		Currency			686				641				707				509				667				622				667				532
		Equity			1,873				1,754				1,873				1,650				1,650				2,113				2,358				1,650
General Insurance:
	Market risk:
		Diversified		$	1,717			$	1,697			$	1,776			$	1,617			$	1,617			$	1,585			$	1,672			$	1,396
		Interest rate			1,541				1,635				1,717				1,541				1,717				1,746				1,931				1,563
		Currency			212				162				212				119				130				125				139				111
		Equity			573				551				573				535				535				651				727				535
Life Insurance & Retirement Services:
	Market risk: Diversified			$	4,574			$	4,672			$	5,224			$	4,307			$	4,307			$	4,710			$	5,088			$	4,307
		Interest rate			4,471				4,563				5,060				4,229				4,277				4,425				4,715				4,277
		Currency			568				538				592				459				538				515				556				441
		Equity			1,293				1,228				1,299				1,133				1,133				1,396				1,559				1,133
Non-Trading
Financial Services:
	Market risk:
		Diversified		$	125			$	165			$	252			$	125			$	252			$	161			$	252			$	85
		Interest rate			127				166				249				127				249				165				249				85
		Currency			11				8				11				7				10				7				10				4
		Equity			1				1				2				1				2				2				2				1
Asset Management:
	Market risk:
		Combined		$	64			$	144			$	190			$	64			$	186			$	148			$	186			$	113
		Interest rate			63				145				192				63				189				137				189				101
		Currency			3				4				7				3				4				2				4				2
		Equity			8				9				13				8				13				75				178				13

•	Governance

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•	Risk and Control Self Assessment

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												Percent of
						A.M.		Gross				General								Uncollateralized
		S&P				Best		Reinsurance				Reinsurance				Collateral				Reinsurance
(in millions)		Rating				Rating		Assets				Assets, Net				Held(a)				Assets
Reinsurer:
Swiss Reinsurance Group			AA-			A+		$	2,032				9.3%			$	339			$	1,693
Berkshire Hathaway Insurance Group			AAA			A++		$	1,575				7.2%			$	144			$	1,431
Munich Reinsurance Group			AA-			A+		$	1,268				5.8%			$	341			$	927
Lloyd’s Syndicates — Lloyd’s of London(b)			A			A		$	1,250				5.7%			$	101			$	1,149

(a)	Excludes collateral held in excess of applicable treaty balances.
(b)	Excludes Equitas gross reinsurance assets that are unrated, which are less than five percent of AIG’s general reinsurance assets.

•	General Insurance — risks covered include property, casualty, fidelity/surety, management liability and mortgage insurance. Risks in the general insurance segment are managed through aggregations and limitations of concentrations at multiple levels: policy, line of business, correlation and catastrophic risk events.
•	Life Insurance & Retirement Services — risks include mortality and morbidity in the insurance-oriented products and insufficient cash flows to cover contract liabilities in the retirement savings-oriented products. In the Life Insurance & Retirement Services segment, risk is aggregated and limited by individual/group, product group, country and catastrophic risk events.

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										Net, After				Percentage of Total
						Net of				Income				Shareholders’ Equity at
(in millions)		Gross				Reinsurance				Taxes				December 31, 2006
Natural Peril:
Earthquake		$	3,676			$	2,474				$1,608				1.6%
Tropical Cyclone*		$	4,780			$	3,196				$2,077				2.0%

*	Includes hurricanes, typhoons and other wind-related events.

						Net of
(in millions)		Gross				Reinsurance
Natural Peril:
Miami Hurricane		$	4,493			$	2,798
San Francisco Earthquake			4,029				2,613
Northeast Hurricane			3,711				2,592
Los Angeles Earthquake			3,508				2,440
Gulf Coast Hurricane			2,609				1,717
Japanese Earthquake			553				150
European Windstorm			230				83
Japanese Typhoon			178				143

(1)	Lloyd’s Realistic Disaster Scenarios, Scenario Specifications, April 2006

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		2006
AAA			31%
AA			26
A			23
BBB			14
Below investment grade			4
Non-rated			2
Total			100%

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			Percentage of
			Total Fair
			Value
			2006				2005
Counterparty credit quality:
	AAA			28	%			24	%
	AA			41				43
	A			19				21
	BBB			11				9
	Below investment grade			1				3
Total				100	%			100	%

							For the Year Ended																For the Year Ended
							December 31, 2006																December 31, 2005
(in millions)			As of December 31				Average				High				Low				As of December 31				Average				High				Low
Total AIG trading market risk:
	Diversified		$	4			$	4			$	7			$	3			$	5			$	4			$	7			$	3
	Interest rate			2				2				3				1				2				2				3				1
	Currency			1				1				3				1				1				1				1				—
	Equity			3				3				4				2				3				2				5				—
	Commodity			3				3				4				2				2				2				3				1

*	In 2006, VaR calculations were changed from a 30-day holding period to a one-day holding period. Accordingly, the 2005 VaR amounts have been restated to reflect this change.

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Page
Report of Independent Registered Public Accounting Firm			100
Consolidated Balance Sheet at December 31, 2006 and 2005			102
Consolidated Statement of Income for the years ended December 31, 2006, 2005 and 2004			104
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2006, 2005 and 2004			105
Consolidated Statement of Cash Flows for the years ended December 31, 2006, 2005 and 2004			106
Consolidated Statement of Comprehensive Income for the years ended December 31, 2006, 2005 and 2004			108
Notes to Consolidated Financial Statements			110
Schedules:
I  – Summary of Investments — Other Than Investments in Related Parties at December 31, 2006			199
II  – Condensed Financial Information of Registrant at December 31, 2006 and 2005 and for the years ended December 31, 2006, 2005 and 2004			200
III  – Supplementary Insurance Information at December 31, 2006, 2005 and 2004 and for the years then ended			202
IV – Reinsurance at December 31, 2006, 2005 and 2004 and for the years then ended			203
V  – Valuation and Qualifying Accounts at December 31, 2006, 2005 and 2004			204

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December 31,
(in millions)					2006				2005
Assets:
	Investments and financial services assets:
		Fixed maturities:
			Bonds available for sale, at fair value (amortized cost: 2006 — $377,698; 2005 — $349,612) (includes hybrid financial instruments: 2006 — $522)		$	387,391			$	359,516
			Bonds held to maturity, at amortized cost (fair value: 2006 — $22,154; 2005 — $22,047)			21,437				21,528
			Bond trading securities, at fair value (cost: 2006 — $9,016; 2005 — $4,623)			9,037				4,636
		Equity securities:
			Common stocks available for sale, at fair value (cost: 2006 — $10,662; 2005 — $10,125)			13,262				12,227
			Common and preferred stocks trading, at fair value (cost: 2006 — $12,734; 2005 — $7,746)			14,421				8,959
			Preferred stocks available for sale, at fair value (cost: 2006 — $2,485; 2005 — $2,282)			2,539				2,402
		Mortgage loans on real estate, net of allowance (2006 — $55; 2005 — $54)				17,067				14,300
		Policy loans				7,501				7,039
		Collateral and guaranteed loans, net of allowance (2006 — $9; 2005 — $10)				3,850				3,570
		Financial services assets:
			Flight equipment primarily under operating leases, net of accumulated depreciation (2006 — $8,835; 2005 — $7,419)			39,875				36,245
			Securities available for sale, at fair value (cost: 2006 — $45,912; 2005 — $37,572)			47,205				37,511
			Trading securities, at fair value			5,031				6,499
			Spot commodities			220				92
			Unrealized gain on swaps, options and forward transactions			19,252				18,695
			Trading assets			2,468				1,204
			Securities purchased under agreements to resell, at contract value			33,702				14,547
			Finance receivables, net of allowance (2006 — $737; 2005 — $670) (includes finance receivables held for sale: 2006 — $1,124; 2005 — $1,110)			29,573				27,995
		Securities lending collateral, at fair value (which approximates cost)				69,306				59,471
		Other invested assets				42,114				31,072
		Short-term investments, at cost (approximates fair value)				25,249				15,342
		Total investments and financial services assets				790,500				682,850
	Cash					1,590				1,897
	Investment income due and accrued					6,077				5,727
	Premiums and insurance balances receivable, net of allowance (2006 — $756; 2005 — $871)					17,789				15,333
	Reinsurance assets, net of allowance (2006 — $536; 2005 — $999)					23,355				24,978
	Deferred policy acquisition costs					37,235				32,154
	Investments in partially owned companies					1,101				1,158
	Real estate and other fixed assets, net of accumulated depreciation (2006 — $5,525; 2005 — $4,990)					4,381				3,641
	Separate and variable accounts					72,655				63,797
	Goodwill					8,628				8,093
	Other assets					16,103				13,423
Total assets					$	979,414			$	853,051

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December 31,
(in millions, except share data)				2006				2005
Liabilities:
	Reserve for losses and loss expenses			$	79,999			$	77,169
	Unearned premiums				26,271				24,243
	Future policy benefits for life and accident and health insurance contracts				122,230				108,807
	Policyholders’ contract deposits				244,658				227,027
	Other policyholders’ funds				10,238				10,870
	Commissions, expenses and taxes payable				5,305				4,769
	Insurance balances payable				3,789				3,564
	Funds held by companies under reinsurance treaties				2,602				4,174
	Income taxes payable				9,546				6,288
	Financial services liabilities:
		Borrowings under obligations of guaranteed investment agreements			20,664				20,811
		Securities sold under agreements to repurchase, at contract value			22,710				11,047
		Trading liabilities			3,141				2,546
		Hybrid financial instrument liabilities, at fair value			8,856				—
		Securities and spot commodities sold but not yet purchased, at market value			4,076				5,975
		Unrealized loss on swaps, options and forward transactions			11,401				12,740
		Trust deposits and deposits due to banks and other depositors			5,249				4,877
		Commercial paper			8,208				6,514
		Notes, bonds, loans and mortgages payable			87,602				71,313
	Commercial paper				4,821				2,694
	Notes, bonds, loans and mortgages payable				17,088				7,126
	Liabilities connected to trust preferred stock				1,440				1,391
	Separate and variable accounts				72,655				63,797
	Securities lending payable				70,198				60,409
	Minority interest				7,778				5,124
	Other liabilities (includes hybrid financial instruments: 2006 — $111)				27,021				23,273
Total liabilities					877,546				766,548
Preferred shareholders’ equity in subsidiary companies					191				186
Commitments and Contingent Liabilities (See Note 12)
Shareholders’ equity:
	Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2006 and 2005 — 2,751,327,476				6,878				6,878
	Additional paid-in capital				2,590				2,339
	Retained earnings				84,996				72,330
	Accumulated other comprehensive income (loss)				9,110				6,967
	Treasury stock, at cost; 2006 — 150,131,273; 2005 — 154,680,704 shares of common stock (including 119,278,644 and 119,271,176 shares, respectively, held by subsidiaries)				(1,897	)			(2,197	)
Total shareholders’ equity					101,677				86,317
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity				$	979,414			$	853,051

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Years Ended December 31,
(in millions, except per share data)				2006				2005				2004
Revenues:
	Premiums and other considerations			$	74,083			$	70,209			$	66,625
	Net investment income				25,292				22,165				18,465
	Realized capital gains (losses)				106				341				44
	Other income				13,713				16,190				12,532
	Total revenues				113,194				108,905				97,666
Benefits and expenses:
	Incurred policy losses and benefits				59,706				63,558				58,212
	Insurance acquisition and other operating expenses				31,801				30,134				24,609
	Total benefits and expenses				91,507				93,692				82,821
Income before income taxes, minority interest and cumulative effect of accounting changes					21,687				15,213				14,845
Income taxes:
	Current				5,489				2,587				2,645
	Deferred				1,048				1,671				1,762
	Total income taxes				6,537				4,258				4,407
Income before minority interest and cumulative effect of accounting changes					15,150				10,955				10,438
Minority interest					(1,136	)			(478	)			(455	)
Income before cumulative effect of accounting changes					14,014				10,477				9,983
Cumulative effect of accounting changes, net of tax					34				—				(144	)
Net income				$	14,048			$	10,477			$	9,839
Earnings per common share:
	Basic
		Income before cumulative effect of accounting changes		$	5.38			$	4.03			$	3.83
		Cumulative effect of accounting changes, net of tax			0.01				—				(0.06	)
		Net income		$	5.39			$	4.03			$	3.77
	Diluted
		Income before cumulative effect of accounting changes		$	5.35			$	3.99			$	3.79
		Cumulative effect of accounting changes, net of tax			0.01				—				(0.06	)
		Net income		$	5.36			$	3.99			$	3.73
Average shares outstanding:
	Basic				2,608				2,597				2,606
	Diluted				2,623				2,627				2,637

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Years Ended December 31,							Amounts												Shares
(in millions, except share and per
share data)							2006				2005				2004				2006				2005				2004
Common stock:
		Balance, beginning and end of year					$	6,878			$	6,878			$	6,878				2,751,327,476				2,751,327,476				2,751,327,476
Additional paid-in capital:
		Balance, beginning of year						2,339				2,094				2,028
			Excess of cost over proceeds of common stock issued under stock plans					(128	)			(91	)			(105	)
	Other							379				336				171
		Balance, end of year						2,590				2,339				2,094
Retained earnings:
		Balance, beginning of year						72,330				63,468				54,384
			Cumulative effect of accounting changes, net of tax					308				—				—
			Adjusted balance, beginning of year					72,638				63,468				54,384
			Net income					14,048				10,477				9,839
			Dividends to common shareholders ($0.65, $0.63 and $0.29 per share, respectively)					(1,690	)			(1,615	)			(755	)
		Balance, end of year						84,996				72,330				63,468
Accumulated other comprehensive income (loss):
		Unrealized appreciation (depreciation) of investments, net of tax:
			Balance, beginning of year					8,348				10,326				9,070
				Unrealized appreciation (depreciation) of investments, net of reclassification adjustments				2,574				(3,577	)			1,868
					Income tax benefit (expense)			(839	)			1,599				(612	)
			Balance, end of year					10,083				8,348				10,326
		Foreign currency translation adjustments, net of tax:
			Balance, beginning of year					(1,241	)			(701	)			(1,524	)
				Translation adjustment				1,283				(926	)			993
				Income tax benefit (expense)				(347	)			386				(170	)
			Balance, end of year					(305	)			(1,241	)			(701	)
		Net derivative gains (losses) arising from cash flow hedging activities:
			Balance, beginning of year					(25	)			(53	)			(103	)
				Net deferred gains on cash flow hedges, net of reclassification adjustments				13				35				83
				Deferred income tax expense				(15	)			(7	)			(33	)
			Balance, end of year					(27	)			(25	)			(53	)
		Retirement plan liabilities adjustment, net of taxes:
			Balance, beginning of year					(115	)			(128	)			(106	)
			Minimum pension liability adjustment					80				81				(100	)
				Deferred income tax benefit (expense)				(74	)			(68	)			78
				Adjustment to initially apply FAS 158, net of tax				(532	)			—				—
			Balance, end of year					(641	)			(115	)			(128	)
		Accumulated other comprehensive income (loss), end of year						9,110				6,967				9,444
Treasury stock, at cost:
		Balance, beginning of year						(2,197	)			(2,211	)			(1,397	)			(154,680,704	)			(154,904,286	)			(142,880,430	)
			Cost of shares acquired					(20	)			(176	)			(1,083	)			(288,365	)			(2,654,272	)			(16,426,114	)
			Issued under stock plans					291				173				263				4,579,913				2,625,227				4,310,733
			Other					29				17				6				257,883				252,627				91,525
		Balance, end of year						(1,897	)			(2,197	)			(2,211	)			(150,131,273	)			(154,680,704	)			(154,904,286	)
Total shareholders’ equity, end of year							$	101,677			$	86,317			$	79,673

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Years Ended December 31,
(in millions)				2006				2005				2004
Summary:
	Net cash provided by operating activities			$	6,829			$	25,382			$	29,414
	Net cash used in investing activities				(67,040	)			(62,500	)			(92,596	)
	Net cash provided by financing activities				59,790				37,169				64,217
	Effect of exchange rate changes on cash				114				(163	)			52
	Change in cash				(307	)			(112	)			1,087
	Cash at beginning of year				1,897				2,009				922
	Cash at end of year			$	1,590			$	1,897			$	2,009
Cash flows from operating activities:
	Net income			$	14,048			$	10,477			$	9,839
	Adjustments to reconcile net income to net cash provided by operating activities:
	Noncash revenues, expenses, gains and losses included in income:
		Net gains on sales of securities available for sale and other assets			(763	)			(1,218	)			(1,003	)
		Foreign exchange transaction (gains) losses			1,795				(3,330	)			1,231
		Net unrealized (gains) losses on non-AIGFP derivative assets and liabilities			(713	)			878				(648	)
		Equity in income of partially owned companies and other invested assets			(3,990	)			(1,421	)			(1,279	)
		Amortization of deferred policy acquisition costs			11,578				10,693				9,815
		Amortization of premium and discount on securities			699				207				502
		Depreciation expenses, principally flight equipment			2,374				2,200				2,035
		Provision for finance receivable losses			495				435				389
		Impairment losses			944				598				684
	Changes in operating assets and liabilities:
		General and life insurance reserves			13,173				27,299				22,818
		Premiums and insurance balances receivable and payable — net			(1,214	)			192				(953	)
		Reinsurance assets			1,665				(5,365	)			1,032
		Capitalization of deferred policy acquisition costs			(15,363	)			(14,454	)			(13,334	)
		Investment income due and accrued			(235	)			(171	)			(916	)
		Funds held under reinsurance treaties			(1,612	)			770				361
		Other policyholders’ funds			(953	)			518				962
		Income taxes payable			2,003				1,543				1,356
		Commissions, expenses and taxes payable			408				140				(16	)
		Other assets and liabilities — net			331				2,966				1,943
		Bonds, common and preferred stocks trading, at fair value			(7,851	)			(5,448	)			(3,189	)
		Trading assets and liabilities — net			(668	)			2,272				(4,783	)
		Trading securities, at fair value			1,339				(3,753	)			1,254
		Spot commodities			(128	)			442				(289	)
		Net unrealized (gain) loss on swaps, options and forward transactions			(1,482	)			934				2,302
		Securities purchased under agreements to resell			(19,154	)			11,725				(5,427	)
		Securities sold under agreements to repurchase			11,645				(12,534	)			5,688
		Securities and spot commodities sold but not yet purchased, at market value			(1,899	)			571				(269	)
		Finance receivables held for sale — originations and purchases			(10,786	)			(13,070	)			(6,504	)
		Sales of finance receivables — held for sale			10,602				12,821				5,784
		Other, net			541				(1,535	)			29
		Total adjustments			(7,219	)			14,905				19,575
Net cash provided by operating activities				$	6,829			$	25,382			$	29,414

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Years Ended December 31,
(in millions)			2006				2005				2004
Cash flows from investing activities:
Proceeds from (payments for)
	Sales and maturities of fixed maturity securities available for sale		$	112,899			$	140,076			$	115,625
	Sales of equity securities available for sale			12,475				11,661				12,246
	Proceeds from fixed maturity securities held to maturity			205				46				226
	Sales of flight equipment			697				573				1,219
	Sales or distributions of other invested assets			14,087				14,899				8,361
	Payments received on mortgage, policy, collateral and guaranteed loans			5,165				3,679				1,928
	Principal payments received on finance receivables held for investment			12,586				12,461				10,780
	Purchases of fixed maturity securities available for sale			(146,465	)			(175,657	)			(159,229	)
	Purchases of equity securities available for sale			(14,482	)			(13,273	)			(13,361	)
	Purchases of fixed maturity securities held to maturity			(197	)			(3,333	)			(10,512	)
	Purchases of flight equipment			(6,009	)			(6,193	)			(4,860	)
	Purchases of other invested assets			(16,040	)			(15,059	)			(11,764	)
	Mortgage, policy, collateral and guaranteed loans issued			(7,438	)			(5,310	)			(2,180	)
	Finance receivables held for investment — originations and purchases			(13,830	)			(17,276	)			(16,416	)
	Change in securities lending collateral			(9,835	)			(10,301	)			(19,777	)
	Net additions to real estate, fixed assets, and other assets			(1,097	)			(941	)			(643	)
	Net change in short-term investments			(9,716	)			760				(2,542	)
	Net change in non-AIGFP derivative assets and liabilities			(45	)			688				(1,697	)
Net cash used in investing activities				(67,040	)			(62,500	)			(92,596	)
Cash flows from financing activities:
Proceeds from (payments for)
	Policyholders’ contract deposits			54,195				50,229				54,550
	Policyholders’ contract withdrawals			(41,866	)			(35,797	)			(24,497	)
	Change in other deposits			1,269				(957	)			2,519
	Change in commercial paper			2,952				(476	)			3,738
	Notes, bonds, loans and mortgages payable, and hybrid financial instrument liabilities issued			58,763				53,624				31,488
	Repayments on notes, bonds, loans and mortgages payable, and hybrid financial instrument liabilities			(24,047	)			(40,767	)			(24,638	)
	Issuance of guaranteed investment agreements			12,265				13,437				11,469
	Maturities of guaranteed investment agreements			(12,433	)			(10,861	)			(8,314	)
	Change in securities lending payable			9,789				10,437				19,777
	Redemption of subsidiary company preferred stock			—				(100	)			(200	)
	Issuance of treasury stock			163				82				158
	Cash dividends paid to shareholders			(1,638	)			(1,421	)			(730	)
	Acquisition of treasury stock			(20	)			(176	)			(1,083	)
	Other, net			398				(85	)			(20	)
Net cash provided by financing activities			$	59,790			$	37,169			$	64,217
Supplementary disclosure of cash flow information:
Cash paid during the period for:
	Interest		$	6,539			$	4,883			$	4,281
	Taxes		$	4,693			$	2,593			$	3,060
Non-cash activities:
	Interest credited to policyholder accounts included in financing activities		$	10,746			$	9,782			$	6,859

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Years Ended December 31,
(in millions)				2006				2005				2004
	Net income			$	14,048			$	10,477			$	9,839
Other comprehensive income (loss):
	Unrealized (depreciation) appreciation of investments — net of reclassification adjustments				2,574				(3,577	)			1,868
		Deferred income tax benefit (expense) on above changes			(839	)			1,599				(612	)
	Foreign currency translation adjustments				1,283				(926	)			993
		Deferred income tax benefit (expense) on above changes			(347	)			386				(170	)
	Net derivative gains arising from cash flow hedging activities — net of reclassification adjustments				13				35				83
		Deferred income tax expense on above changes			(15	)			(7	)			(33	)
	Retirement plan liabilities adjustment				80				81				(100	)
		Deferred income tax benefit (expense) on above changes			(74	)			(68	)			78
Other comprehensive income (loss)					2,675				(2,477	)			2,107
Comprehensive income				$	16,723			$	8,000			$	11,946

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				Page
Note 1.		Summary of Significant Accounting Policies			110
Note 2.		Segment Information			118
Note 3.		Federal Income Taxes			124
Note 4.		Deferred Policy Acquisition Costs			126
Note 5.		Reinsurance			127
Note 6.		Reserve for Losses and Loss Expenses and Future Life Policy Benefits and Policyholders’ Contract Deposits			128
Note 7.		Statutory Financial Data			130
Note 8.		Investment Information			130
Note 9.		Debt Outstanding			135
Note 10.		Preferred Shareholders’ Equity in Subsidiary Companies			140
Note 11.		Shareholders’ Equity and Earnings Per Share			140
Note 12.		Commitments, Contingencies and Guarantees			141
Note 13.		Fair Value of Financial Instruments			146
Note 14.		Stock Compensation Plans			148
Note 15.		Employee Benefits			153
Note 16.		Benefits Provided by Starr International Company, Inc. and C.V. Starr & Co., Inc.			162
Note 17.		Ownership and Transactions with Related Parties			162
Note 18.		Variable Interest Entities			163
Note 19.		Derivatives			165
Note 20.		Variable Life and Annuity Contracts			167
Note 21.		Quarterly Financial Information (Unaudited)			169
Note 22.		Information Provided in Connection With Outstanding Debt			170
Note 23.		Cash Flows			176

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•	Accrued interest income, as well as amortization and accretion of premiums and discounts on bonds.
•	Dividend income and distributions from common and preferred stock and other investments when receivable.
•	Unrealized gains and losses from investments in trading securities and hybrid financial instruments.
•	Earnings from hedge funds and limited partnership investments accounted for under the equity method.
•	The difference between the carrying amount of a life settlement contract and the life insurance proceeds of the underlying life insurance policy recorded in income upon the death of the insured.

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•	Sales of fixed maturity securities, equity securities, real estate, investments in joint ventures and limited partnerships and other types of investments.
•	Reductions to the cost basis of fixed maturities, equity securities and other invested assets for other-than-temporary impairments.
•	Changes in fair value of derivatives used for other than hedging activities.
•	Exchange gains and losses resulting from foreign currency transactions.

•	Accrued interest income and expense, as well as amortization and accretion of premiums and discounts on bonds.
•	Dividend income and distributions from common and preferred stock and other investments when receivable.
•	Changes in the fair value of derivatives. In certain instances, no initial gain or loss is recognized in accordance with Emerging Issues Task Force Issue No. 02-3, “Issues Involved in Accounting for Derivative Contracts held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities” (EITF 02-3). The initial gain or loss is recognized over the life of the transactions and as observable market data becomes available.
•	Unrealized gains and losses from trading securities, commodities sold, but not yet purchased, futures and hybrid financial instruments.
•	Realized gains and losses from the sale of available for sale securities and investments in private equities, joint ventures and limited partnerships.
•	Exchange gains and losses resulting from foreign currency transactions.
•	Reductions to the cost basis of equity securities for other-than-temporary impairments.
•	Earnings from hedge funds and limited partnership investments accounted for under the equity method.

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•	Trading at a significant (25 percent or more) discount to par or amortized cost (if lower) for an extended period of time (nine months or longer);
•	The occurrence of a discrete credit event resulting in the debtor defaulting or seeking bankruptcy or insolvency protection or voluntary reorganization; or
•	The probability of non-realization of a full recovery on its investment, irrespective of the occurrence of one of the foregoing events.

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		Operating Segments
						Life
						Insurance
		General				& Retirement				Financial				Asset												Consolidation
(in millions)		Insurance				Services				Services				Management				Other(a)				Total				and Elimination				Consolidated
2006
Revenues(b)		$	49,206			$	50,163			$	8,010			$	5,814			$	(295	)		$	112,898			$	296			$	113,194
Interest expense			23				74				6,216				105				533				6,951				—				6,951
Operating income (loss) before minority interest			10,412				10,032				524				2,346				(1,701	)			21,613				74				21,687
Income taxes (benefits)			2,351				2,861				(23	)			606				716				6,511				26				6,537
Depreciation expense			274				268				1,655				13				164				2,374				—				2,374
Capital expenditures			375				711				6,278				835				244				8,443				—				8,443
Identifiable assets			167,004				534,977				206,845				97,913				105,279				1,112,018				(132,604	)			979,414
2005
Revenues(b)		$	45,174			$	47,376			$	10,525			$	5,325			$	505			$	108,905			$	—			$	108,905
Interest expense			7				83				5,279				11				293				5,673				—				5,673
Operating income (loss) before minority interest			2,315				8,904				4,276				2,253				(2,535	)(c)			15,213				—				15,213
Income taxes (benefits)			140				2,155				1,366				718				(121	)			4,258				—				4,258
Depreciation expense			273				268				1,447				43				169				2,200				—				2,200
Capital expenditures			417				590				6,300				25				194				7,526				—				7,526
Identifiable assets			150,667				480,622				166,488				81,080				92,835				971,692				(118,641	)			853,051
2004
Revenues(b)		$	41,961			$	43,402			$	7,495			$	4,714			$	94			$	97,666			$	—			$	97,666
Interest expense			9				63				4,041				8				306				4,427				—				4,427
Operating income (loss) before minority interest			3,177				7,925				2,180				2,125				(562	)			14,845				—				14,845
Income taxes (benefits)			616				2,525				654				753				(141	)			4,407				—				4,407
Depreciation expense			251				262				1,366				19				137				2,035				—				2,035
Capital expenditures			350				480				4,481				11				207				5,529				—				5,529
Identifiable assets			131,658				447,841				165,995				80,075				79,752				905,321				(104,314	)			801,007

(a)	Includes AIG Parent and other operations which are not required to be reported separately. The following table presents the operating loss for AIG’s Other category for the years ended December 31, 2006, 2005 and 2004:

For the Years Ended December 31,
(in millions)			2006				2005				2004
Operating income (loss):
	Equity earnings in unconsolidated entities*		$	193			$	(124	)		$	157
	Interest expense			(859	)			(541	)			(435	)
	Unallocated corporate expenses			(555	)			(413	)			(316	)
	Compensation expense — SICO Plans			(108	)			(205	)			(62	)
	Compensation expense — Starr tender offer			(54	)			—				—
	Realized capital gains (losses)			(295	)			505				94
	Regulatory settlement costs			—				(1,644	)			—
	Other miscellaneous, net			(23	)			(113	)			—
Total Other			$	(1,701	)		$	(2,535	)		$	(562	)

	*	Includes current year catastrophe-related losses from unconsolidated entities of $312 million and $96 million for 2005 and 2004, respectively. There were no significant catastrophe-related losses in 2006.

(b)	Represents the sum of General Insurance net premiums earned, Life Insurance & Retirement Services GAAP premiums, net investment income, Financial Services interest, lease and finance charges, Asset Management net investment income from spread-based products and advisory and management fees, and realized capital gains (losses).
(c)	Includes settlement costs of $1.64 billion as described in Note 12(a) Litigation and Investigations herein.

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		General Insurance
		Domestic																				Total				Consolidation				Total
		Brokerage								Personal				Mortgage				Foreign				Reportable				and				General
(in millions)		Group				Transatlantic				Lines				Guaranty				General				Segment				Elimination				Insurance
2006
Revenues(a)(b)		$	27,445			$	4,050			$	4,871			$	877			$	11,973			$	49,216			$	(10	)		$	49,206
Losses & loss expenses incurred			16,622				2,463				3,306				349				5,312				28,052				—				28,052
Underwriting expenses			4,838				998				1,133				200				3,573				10,742				—				10,742
Operating income(b)(c)(d)			5,985				589				432				328				3,088				10,422				(10	)			10,412
Depreciation expense			100				2				52				5				115				274				—				274
Capital expenditures			125				2				94				11				143				375				—				375
Identifiable assets			104,866				14,268				5,391				3,604				43,879				172,008				(5,004	)			167,004
2005
Revenues(a)		$	25,206			$	3,766			$	4,848			$	655			$	10,684			$	45,159			$	15			$	45,174
Losses & loss expenses incurred			21,328				2,877				3,566				139				5,181				33,091				—				33,091
Underwriting expenses			4,524				928				1,087				153				3,076				9,768				—				9,768
Operating income (loss) (c)(d)(e)			(646	) (f)			(39	)			195				363				2,427				2,300				15				2,315
Depreciation expense			114				2				48				4				105				273				—				273
Capital expenditures			119				2				94				6				196				417				—				417
Identifiable assets			95,829				12,365				5,245				3,165				39,044				155,648				(4,981	)			150,667
2004
Revenues(a)		$	23,332			$	3,990			$	4,488			$	660			$	9,473			$	41,943			$	18			$	41,961
Losses & loss expenses incurred			18,808				2,755				3,211				142				5,441				30,357				—				30,357
Underwriting expenses			3,747				953				920				119				2,688				8,427				—				8,427
Operating income(c)			777				282				357				399				1,344				3,159				18				3,177
Depreciation expense			122				3				29				3				94				251				—				251
Capital expenditures			115				2				92				7				134				350				—				350
Identifiable assets			81,754				10,605				5,159				2,826				36,055				136,399				(4,741	)			131,658

(a)	Represents the sum of General Insurance net premiums earned, net investment income and realized capital gains (losses).
(b)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts. For DBG, the effect was an increase of $66 million in both revenues and operating income and for Foreign General, the effect was an increase of $424 million in both revenues and operating income.
(c)	There were no significant catastrophe-related losses in 2006. Catastrophe-related losses for 2005 and 2004 by reporting unit were:

		2005								2004
						Net								Net
		Insurance				Reinstatement				Insurance				Reinstatement
		Related				Premium				Related				Premium
(in millions)		Losses				Cost				Losses				Cost
Reporting Unit:
DBG		$	1,747			$	122			$	582			$	—
Transatlantic			463				45				215				—
Personal Lines			112				2				25				—
Mortgage Guaranty			10				—				—				—
Foreign General			293				94				232				—
Total		$	2,625			$	263			$	1,054			$	—

(d)	Includes additional losses incurred and net reinstatement premiums related to prior year catastrophes of $199 million and $277 million in 2006 and 2005, respectively.
(e)	Includes the fourth quarter 2005 increase in net reserves of approximately $1.8 billion resulting from the annual review of General Insurance loss and loss adjustment reserves.
(f)	Includes $291 million of expenses related to changes in estimates for uncollectible reinsurance and other premium balances, and $100 million of accrued expenses in connection with certain workers compensation insurance policies written between 1985 and 1996.

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			Life Insurance & Retirement Services
																																			Total Life
															Domestic						Domestic						Total				Consolidation				Insurance &
			Japan												Life						Retirement						Reportable				and				Retirement
(in millions)			and Other				(a)		Asia				(b)		Insurance				(c)		Services				(d)		Segment				Elimination				Services
2006
Revenues:(e)(f)
	Insurance-oriented products		$	13,243					$	17,712					$	8,538					$	—					$	39,493			$	—			$	39,493
	Retirement savings products			2,793						168						568						7,141						10,670				—				10,670
	Total revenues			16,036						17,880						9,106						7,141						50,163				—				50,163
Operating income(f)				3,732						3,060						917						2,323						10,032				—				10,032
Depreciation expense				101						70						63						34						268				—				268
Capital expenditures				342						260						71						38						711				—				711
Identifiable assets				136,127						109,148						103,628						192,885						541,788				(6,811	)			534,977
2005
Revenues:(e)
	Insurance-oriented products		$	12,436					$	15,853					$	8,525					$	—					$	36,814			$	—			$	36,814
	Retirement savings products			2,857						129						690						6,886						10,562				—				10,562
	Total revenues			15,293						15,982						9,215						6,886						47,376				—				47,376
Operating income				2,959						2,286						1,495						2,164						8,904				—				8,904
Depreciation expense				91						81						65						31						268				—				268
Capital expenditures				153						340						71						26						590				—				590
Identifiable assets				115,487						87,816						99,597						185,383						488,283				(7,661	)			480,622
2004
Revenues:(e)
	Insurance-oriented products		$	10,690					$	15,789					$	8,011					$	—					$	34,490			$	—			$	34,490
	Retirement savings products			1,537						107						704						6,564						8,912				—				8,912
	Total revenues			12,227						15,896						8,715						6,564						43,402				—				43,402
Operating income				2,393						2,455						1,023						2,054						7,925				—				7,925
Depreciation expense				104						59						62						37						262				—				262
Capital expenditures				308						96						47						29						480				—				480
Identifiable assets				104,060						76,025						91,538						183,092						454,715				(6,874	)			447,841

(a)	Revenues and operating income include realized capital gains (losses) of $406 million, $(72) million and $(156) million for 2006, 2005 and 2004, respectively. Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52, which were $191 million, $(462) million and $(300) million for 2006, 2005 and 2004, respectively.
(b)	Revenues in 2004 include approximately $640 million of premium from a single reinsurance transaction involving terminal funding pension business, which is offset by a similar increase in benefit reserves. Revenues and operating income include realized capital gains (losses) of $301 million, $156 million and $528 million for 2006, 2005 and 2004, respectively. Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52, which were $191 million, $(97) million and $166 million for 2006, 2005 and 2004, respectively.
(c)	Includes the life operations of AIG Life Insurance Company and American International Life Assurance Company of New York. Operating income in 2006 included charges of $125 million resulting from the adverse Superior National arbitration ruling and $66 million related to the exiting of the domestic financial institutions credit life business. Operating income in 2004 included a $178 million charge related to a workers compensation quota share reinsurance agreement with Superior National. See Note 12(c) herein for additional information. In addition, in 2004, as part of the business review of group life/health, approximately $68 million was incurred for reserve strengthening and allowances for receivables. Revenues and operating income include realized capital gains (losses) of $(215) million, $35 million and $(120) million for 2006, 2005 and 2004, respectively. Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52, which were $19 million, $76 million and $8 million for 2006, 2005 and 2004, respectively.
(d)	Revenues and operating income include realized capital gains (losses) of $(404) million, $(277) million and $(207) million for 2006, 2005 and 2004, respectively. Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52, which were $(46) million, $(12) million and $(14) million for 2006, 2005 and 2004, respectively.
(e)	Represents the sum of Life Insurance & Retirement Services GAAP premiums, net investment income and realized capital gains (losses).
(f)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts. For 2006 the effect was an increase of $240 million in revenues and $169 million in operating income.

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		Financial Services
																		Total				Consolidation				Total
		Aircraft				Capital				Consumer								Reportable				and				Financial
(in millions)		Leasing				Markets(a)				Finance				Other(b)				Segment				Elimination				Services
2006
Revenues (c)(d)(e)		$	4,143			$	(186	)		$	3,819			$	626			$	8,402			$	(392	)		$	8,010
Interest expense(d)			1,442				3,215				1,303				319				6,279				(63	)			6,216
Operating income (loss)(e)			639				(873	)			761	(f)			(3	)			524				—				524
Depreciation expense			1,584				19				41				11				1,655				—				1,655
Capital expenditures			6,012				15				52				199				6,278				—				6,278
Identifiable assets			41,975				121,243				32,702				16,786				212,706				(5,861	)			206,845
2005
Revenues (c)(d)(e)		$	3,578			$	3,260			$	3,613			$	387			$	10,838			$	(313	)		$	10,525
Interest expense(d)			1,125				3,033				1,005				316				5,479				(200	)			5,279
Operating income(e)			679				2,661				876	(f)			60				4,276				—				4,276
Depreciation expense			1,384				20				38				5				1,447				—				1,447
Capital expenditures			6,193				3				54				50				6,300				—				6,300
Identifiable assets			37,515				90,090				30,704				14,872				173,181				(6,693	)			166,488
2004
Revenues (c)(d)(e)		$	3,136			$	1,278			$	2,978			$	835			$	8,227			$	(732	)		$	7,495
Interest expense(d)			993				2,300				705				144				4,142				(101	)			4,041
Operating income(e)			642				662				786				90				2,180				—				2,180
Depreciation expense			1,273				42				33				18				1,366				—				1,366
Capital expenditures			4,400				29				35				17				4,481				—				4,481
Identifiable assets			33,997				98,303				26,560				13,985				172,845				(6,850	)			165,995

(a)	Certain transactions entered into by AIGFP generate tax credits and benefits which are included in income taxes in the consolidated statement of income. The amount of such tax credits and benefits for the years ended December 31, 2006, 2005 and 2004 were $50 million, $67 million, and $107 million, respectively.
(b)	Operating loss in 2006 includes specific reserves of $42 million related to two commercial lending transactions.
(c)	Represents primarily the sum of aircraft lease rentals from ILFC, AIGFP hedged financial positions entered into in connection with counterparty transactions, the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses, and finance charges from consumer finance operations.
(d)	Interest expense for the Capital Markets business is included in Revenues above and in Other income on the Consolidated Statement of Income.
(e)	Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2006, 2005 and 2004, respectively, the effect was $(1.82) billion, $2.01 billion and $(122) million in both revenues and operating income for Capital Markets. These amounts result primarily from interest rate and foreign currency derivatives that are economically hedging available for sale securities and borrowings. For 2004, the effect was $(27) million in operating income for Aircraft Leasing. During 2006 and 2005, Aircraft Leasing derivative gains and losses were reported as part of AIG’s Other category, and were not reported in Aircraft Leasing’s operating income.

(f)	Includes catastrophe-related losses of $62 million recorded in 2005 resulting from hurricane Katrina, which were reduced by $35 million in 2006 as a result of reevaluation of the remaining estimated losses.

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		Geographic Segments
										Other
(in millions)		Domestic(a)				Far East				Foreign				Consolidated
2006
Revenues(b)		$	57,986			$	33,795			$	21,413			$	113,194
Real estate and other fixed assets, net of accumulated depreciation			2,432				1,082				867				4,381
Flight equipment primarily under operating leases, net of accumulated depreciation(c)			39,875				—				—				39,875
2005
Revenues(b)		$	59,858			$	32,036			$	17,011			$	108,905
Real estate and other fixed assets, net of accumulated depreciation			1,905				929				807				3,641
Flight equipment primarily under operating leases, net of accumulated depreciation(c)			36,245				—				—				36,245
2004
Revenues(b)		$	53,827			$	27,761			$	16,078			$	97,666
Real estate and other fixed assets, net of accumulated depreciation			1,777				894				834				3,505
Flight equipment primarily under operating leases, net of accumulated depreciation(c)			32,130				—				—				32,130

(a)	Including revenues from General Insurance operations in Canada of $691 million, $638 million and $549 million in 2006, 2005 and 2004, respectively.
(b)	Represents the sum of General Insurance net premiums earned, Life Insurance & Retirement Services GAAP premiums, net investment income, Financial Services interest, lease and finance charges, Asset Management net investment income with respect to spread-based products and advisory and management fees, and realized capital gains (losses).
(c)	Approximately 90 percent of ILFC’s fleet is operated by foreign airlines.

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(in millions)		2006				2005				2004
U.S.		$	9,862			$	6,103			$	6,069
Foreign			11,825				9,110				8,776
Total		$	21,687			$	15,213			$	14,845

				2006								2005								2004
								Percent								Percent								Percent
Years Ended December 31,								of Pretax								of Pretax								of Pretax
(dollars in millions)				Amount				Income				Amount				Income				Amount				Income
U.S. federal income tax at statutory rate				$	7,591				35.0	%		$	5,325				35.0	%		$	5,197				35.0	%
	Adjustments:
		Tax exempt interest			(718	)			(3.3	)			(566	)			(3.7	)			(440	)			(2.9	)
		Partnerships and joint ventures			(265	)			(1.2	)			(85	)			(0.5	)			(27	)			(0.2	)
		Synthetic fuel and other tax credits			(196	)			(0.9	)			(296	)			(1.9	)			(310	)			(2.1	)
		Effect of foreign operations			(132	)			(0.6	)			(253	)			(1.7	)			(11	)			(0.1	)
		Dividends received deduction			(102	)			(0.5	)			(117	)			(0.8	)			(83	)			(0.6	)
		State income taxes			59				0.3				86				0.6				23				0.2
		Nondeductible compensation			61				0.3				83				0.5				20				0.1
		Penalties			3				—				76				0.5				28				0.2
		Other			236				1.0				5				—				10				0.1
Actual income tax expense				$	6,537				30.1	%		$	4,258				28.0	%		$	4,407				29.7	%
Foreign and U.S. components of actual income tax expense:
Foreign:
		Current		$	2,725							$	974							$	1,104
		Deferred			933								426								561
U.S.:
		Current			2,764								1,613								1,541
		Deferred			115								1,245								1,201
Total				$	6,537							$	4,258							$	4,407

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(in millions)			2006				2005
Deferred tax assets:
	Loss reserve discount		$	1,969			$	2,242
	Unearned premium reserve reduction			1,352				1,042
	Loan loss and other reserves			1,054				419
	Investment in foreign subsidiaries and joint ventures			420				349
	Adjustment to life policy reserves			3,584				3,170
	Accruals not currently deductible, and other			1,420				1,189
Total deferred tax assets				9,799				8,411
Deferred tax liabilities:
	Deferred policy acquisition costs			10,396				7,573
	Flight equipment, fixed assets and intangible assets			4,377				3,196
	Unrealized appreciation of investments			3,370				4,025
	Other			508				224
Total deferred tax liabilities				18,651				15,018
Net deferred tax liability			$	8,852			$	6,607

Years Ended December 31,
(in millions)			2006				2005				2004
General Insurance operations:
	Balance at beginning of year		$	4,048			$	3,998			$	3,619
	Acquisition costs deferred			8,115				7,480				6,617
	Amortization expense			(7,866	)			(7,365	)			(6,301	)
	Increase (decrease) due to foreign exchange			58				(65	)			63
	Balance at end of year		$	4,355			$	4,048			$	3,998
Life Insurance & Retirement Services operations:
	Balance at beginning of year		$	28,106			$	25,080			$	21,822
	Acquisition costs deferred			6,823				6,513				6,266
	Amortization expense			(3,712	)			(3,328	)			(3,514	)
	Change in net unrealized gains (losses) on securities			646				977				(198	)
	Increase (decrease) due to foreign exchange			947				(1,136	)			704
Subtotal			$	32,810			$	28,106			$	25,080
Consolidation and elimination				70				—				—
Balance at end of year			$	32,880			$	28,106			$	25,080
Total deferred policy acquisition costs			$	37,235			$	32,154			$	29,078

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Years Ended December 31,
(in millions)			2006				2005				2004
Premiums written:
	Direct		$	49,609			$	46,689			$	44,692
	Assumed			6,671				6,036				7,354
	Ceded			(11,414	)			(10,853	)			(11,423	)
Total			$	44,866			$	41,872			$	40,623
Premiums earned:
	Direct		$	47,973			$	45,794			$	43,109
	Assumed			6,449				5,921				7,094
	Ceded			(10,971	)			(10,906	)			(11,666	)
Total			$	43,451			$	40,809			$	38,537

Years Ended December 31,
(in millions)		2006				2005				2004
Gross premiums		$	32,117			$	30,717			$	29,202
Ceded premiums			(1,481	)			(1,317	)			(1,114	)
Premiums		$	30,636			$	29,400			$	28,088

Years Ended December 31,
(in millions)		2006				2005				2004
Life Insurance in force ceded		$	408,970			$	365,082			$	344,036

		As				Net of
(in millions)		Reported				Reinsurance
2006
Reserve for losses and loss expenses		$	(79,999	)		$	(62,630	)
Future policy benefits for life and accident and health insurance contracts			(122,230	)			(120,656	)
Reserve for unearned premiums			(26,271	)			(22,759	)
Reinsurance assets			23,355				—
2005
Reserve for losses and loss expenses		$	(77,169	)		$	(57,476	)
Future policy benefits for life and accident and health insurance contracts			(108,807	)			(107,420	)
Reserve for unearned premiums			(24,243	)			(21,174	)
Reinsurance assets			24,978				—

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Years Ended December 31,
(in millions)			2006				2005				2004
At beginning of year:
	Reserve for losses and loss expenses		$	77,169			$	61,878			$	51,871
	Reinsurance recoverable			(19,693	)			(14,624	)			(15,643	)
Total				57,476				47,254				36,228
Foreign exchange effect				741				(628	)			524
Acquisition(a)				55				—				—
Losses and loss expenses incurred:
	Current year			27,805				28,426				26,793
	Prior years, other than accretion of discount			(53	)			4,680	(b)			3,187	(c)
	Prior years, accretion of discount			300				(15	)			377
Total				28,052				33,091				30,357
Losses and loss expenses paid:
	Current year			8,368				7,331				7,692
	Prior years			15,326				14,910				12,163
Total				23,694				22,241				19,855
At end of year:
	Net reserve for losses and loss expenses			62,630				57,476				47,254
	Reinsurance recoverable			17,369				19,693				14,624
Total			$	79,999			$	77,169			$	61,878

(a)	Reflects the opening balance with respect to the acquisition of the Central Insurance Co., Ltd. in the third quarter of 2006.
(b)	Includes fourth quarter charge of $1.8 billion resulting from the annual review of General Insurance loss and loss adjustment reserves.
(c)	Includes fourth quarter charge of $850 million attributable to the change in estimate for asbestos and environmental exposures.

Years Ended December 31,
(in millions)			2006				2005*
Future policy benefits:
	Long duration contracts		$	121,364			$	107,877
	Short duration contracts			866				930
Total			$	122,230			$	108,807
* 2005 amounts have been reclassified to conform to 2006 presentation.

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Years Ended December 31,
(in millions)			2006				2005*
Policyholders’ contract deposits:
	Annuities		$	144,599			$	142,057
	GICs			34,746				39,705
	Universal life products			22,632				18,682
	Variable investment contracts			14,289				8,373
	Variable products			14,264				7,799
	Corporate life products			2,083				2,077
	Other investment contracts			12,045				8,334
Total			$	244,658			$	227,027

•	Interest rates (exclusive of immediate/terminal funding annuities), which vary by territory, year of issuance and products, range from 1.0 percent to 12.5 percent within the first 20 years. Interest rates on immediate/terminal funding annuities are at a maximum of 11.5 percent and grade to not greater than 6.0 percent.
•	Mortality and surrender rates are based upon actual experience by geographical area modified to allow for variations in policy form. The weighted average lapse rate, including surrenders, for individual and group life approximated 7.4 percent.
•	The portions of current and prior net income and of current unrealized appreciation of investments that can inure to the benefit of AIG are restricted in some cases by the insurance contracts and by the local insurance regulations of the countries in which the policies are in force.
•	Participating life business represented approximately 19 percent of the gross insurance in force at December 31, 2006 and 34 percent of gross GAAP premiums in 2006. The amount of annual dividends to be paid is determined locally by the boards of directors. Provisions for future dividend payments are computed by jurisdiction, reflecting local regulations.

•	Interest rates credited on deferred annuities, which vary by territory and year of issuance, range from 1.2 percent to, including bonuses, 12.0 percent. Less than 1.0 percent of the liabilities are credited at a rate greater than 9.0 percent. Current declared interest rates are generally guaranteed to remain in effect for a period of one year though some are guaranteed for longer periods. Withdrawal charges generally range from zero percent to 20.0 percent grading to zero over a period of zero to 19 years.
•	Domestically, guaranteed investment contracts (GICs) have market value withdrawal provisions for any funds withdrawn other than benefit responsive payments. Interest rates credited generally range from 2.6 percent to 9.0 percent. The vast majority of these GICs mature within five years. Overseas, interest rates credited on GICs generally range from 1.2 percent to 5.2 percent and maturities range from one to five years.
•	Interest rates on corporate life insurance products are guaranteed at 4.0 percent and the weighted average rate credited in 2006 was 5.2 percent.
•	The universal life funds have credited interest rates of 1.5 percent to 7.0 percent and guarantees ranging from 1.5 percent to 5.5 percent depending on the year of issue. Additionally, universal life funds are subject to surrender charges that amount to 12.2 percent of the aggregate fund balance grading to zero over a period not longer than 20 years.
•	For variable products and investment contracts, policy values are expressed in terms of investment units. Each unit is linked to an asset portfolio. The value of a unit increases or decreases based on the value of the linked asset portfolio. The current liability at any time is the sum of the current unit value of all investment units plus any liability for guaranteed minimum death or withdrawal benefits. A portion of these liabilities are classified in the Spread-Based Investment Business for segment reporting purposes.

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Years Ended December 31,
(in millions)			2006				2005				2004
Statutory surplus(a):
	General Insurance		$	32,665			$	24,508			$	20,632
	Life Insurance & Retirement Services			35,058				30,739				28,609
Statutory net income(a)(b):
	General Insurance(c)			8,010				1,713				3,028
	Life Insurance & Retirement Services(a)			5,088				4,762				4,474

(a)	Statutory surplus and net income with respect to foreign operations are estimated as of November 30. The basis of presentation for branches of AIA is the Hong Kong statutory filing basis. The basis of presentation for branches of ALICO is the U.S. statutory filing basis. AIG Star Life, AIG Edison Life, Nan Shan and Philamlife are estimated based on their respective local country filing basis.
(b)	Includes realized capital gains and losses and taxes.
(c)	Includes catastrophe losses, net of tax, of $1.9 billion and $660 million in 2005 and 2004, respectively.

Years Ended December 31,
(in millions)		2006				2005				2004
Fixed maturities		$	19,078			$	17,685			$	15,884
Equity securities			1,693				1,730				621
Short-term investments			719				494				177
Interest on mortgage, policy and collateral loans			1,253				1,177				1,096
Other invested assets			3,551				1,905				1,444
Total investment income			26,294				22,991				19,222
Investment expenses			1,002				826				757
Net investment income		$	25,292			$	22,165			$	18,465

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Years Ended December 31,
(in millions)			2006				2005				2004
Realized capital gains (losses):
	Fixed maturities*		$	(1,069	)		$	(108	)		$	178
	Equity securities*			679				588				541
	Other gains (losses)			496				(139	)			(675	)
Realized capital gains (losses)			$	106			$	341			$	44
Increase (decrease) in unrealized appreciation of investments:
	Fixed maturities		$	(198	)		$	(4,656	)		$	1,436
	Equity securities			432				850				445
	Other investments			986				2,138				(283	)
	Capital Markets investments			1,354				(1,909	)			270
Increase (decrease) in unrealized appreciation			$	2,574			$	(3,577	)		$	1,868

		2006								2005								2004
		Gross				Gross				Gross				Gross				Gross				Gross
		Realized				Realized				Realized				Realized				Realized				Realized
(in millions)		Gains				Losses				Gains				Losses				Gains				Losses
Fixed maturities		$	711			$	1,780			$	1,586			$	1,694			$	1,560			$	1,382
Equity securities			1,111				454				930				409				774				379
Preferred stocks			22				—				101				34				173				27
Total		$	1,844			$	2,234			$	2,617			$	2,137			$	2,507			$	1,788

			December 31, 2006																December 31, 2005
							Gross				Gross				Estimated								Gross				Gross				Estimated
			Amortized				Unrealized				Unrealized				Fair				Amortized				Unrealized				Unrealized				Fair
(in millions)			Cost				Gains				Losses				Value				Cost				Gains				Losses				Value
Available for sale: (a)(b)
	U.S. government and government sponsored entities		$	5,386			$	106			$	130			$	5,362			$	7,848			$	124			$	94			$	7,878
	States(b)(c)			59,785				1,056				210				60,631				49,116				853				315				49,654
	Foreign governments			62,153				5,428				436				67,145				57,509				4,881				665				61,725
	Corporate debt			249,839				6,519				2,627				253,731				235,139				7,770				2,650				240,259
Total bonds			$	377,163			$	13,109			$	3,403			$	386,869			$	349,612			$	13,628			$	3,724			$	359,516
Equity securities				13,147				2,813				159				15,801				12,407				2,479				257				14,629
Total			$	390,310			$	15,922			$	3,562			$	402,670			$	362,019			$	16,107			$	3,981			$	374,145
Held to maturity:(a)
Bonds — States(c)			$	21,437			$	731			$	14			$	22,154			$	21,528			$	552			$	33			$	22,047

(a)	At December 31, 2006 and 2005, fixed maturities held by AIG that were below investment grade or not rated totaled $21.24 billion and $20.54 billion, respectively.
(b)	In 2006, excludes hybrid financial instruments with an estimated fair value of $522 million at December 31, 2006.
(c)	Including municipalities and political subdivisions.

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		Available for Sale								Held to Maturity
						Estimated								Estimated
		Amortized				Fair				Amortized				Fair
(in millions)		Cost				Value				Cost				Value
Due in one year or less		$	12,730			$	12,925			$	66			$	68
Due after one year through five years			78,800				80,349				430				444
Due after five years through ten years			139,579				141,994				17,516				18,092
Due after ten years			146,054				151,601				3,425				3,550
Total available for sale*		$	377,163			$	386,869			$	21,437			$	22,154

*	Contractual maturities include mortgage backed securities with an amortized cost and estimated fair value of $48.2 billion and $48.1 billion, respectively. Such securities have been allocated to the contractual maturities based on estimated future cash flows.

		Less than 12 Months								12 Months or More								Total
						Unrealized								Unrealized								Unrealized
(in millions)		Cost(a)				Losses				Cost(a)				Losses				Cost(a)				Losses
2006
Bonds(b)		$	60,591			$	1,197			$	82,252			$	2,206			$	142,843			$	3,403
Equity securities			2,734				159				—				—				2,734				159
Total		$	63,325			$	1,356			$	82,252			$	2,206			$	145,577			$	3,562
2005
Bonds(b)		$	121,631			$	2,715			$	21,160			$	1,009			$	142,791			$	3,724
Equity securities			3,894				246				97				11				3,991				257
Total		$	125,525			$	2,961			$	21,257			$	1,020			$	146,782			$	3,981

(a)	For bonds, represents amortized cost.
(b)	Primarily relates to the corporate debt category.

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(dollars in millions)
Remaining Life
Expectancy			Number of				Carrying				Face Value
of Insureds			Contracts				Value				(Death Benefits)
0 – 1 year				4			$	6			$	8
1 – 2 years				23				10				15
2 – 3 years				61				58				88
3 – 4 years				123				108				188
4 – 5 years				135				79				170
Thereafter				1,453				829				3,197
	Total			1,799			$	1,090			$	3,666

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			December 31, 2006																December 31, 2005
							Gross				Gross				Estimated								Gross				Gross				Estimated
			Amortized				Unrealized				Unrealized				Fair				Amortized				Unrealized				Unrealized				Fair
(in millions)			Cost				Gains				Losses				Value				Cost				Gains				Losses				Value
Securities available for sale:
	Corporate and bank debt		$	40,194			$	1,257			$	265			$	41,186			$	30,690			$	386			$	783			$	30,293
	Foreign governments			706				33				1				738				825				5				31				799
	Asset-backed and collateralized			2,731				170				6				2,895				3,522				202				42				3,682
	U.S. government and government sponsored entities			2,281				115				10				2,386				2,535				209				7				2,737
Total			$	45,912			$	1,575			$	282			$	47,205			$	37,572			$	802			$	863			$	37,511

						Estimated
		Amortized				Fair
(in millions)		Cost				Value
Securities available for sale:
Due in one year or less		$	1,235			$	1,336
Due after one year through five years			7,509				7,746
Due after five years through ten years			10,570				11,023
Due after ten years			23,867				24,204
Asset-backed and collateralized			2,731				2,896
Total securities available for sale		$	45,912			$	47,205

		Less than 12 Months								12 Months or More								Total
						Gross								Gross								Gross
						Unrealized								Unrealized								Unrealized
(in millions)		Cost				Losses				Cost				Losses				Cost				Losses
2006
Securities available for sale		$	9,065			$	60			$	1,788			$	222			$	10,853			$	282
2005
Securities available for sale		$	15,676			$	713			$	1,280			$	150			$	16,956			$	863

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Years Ended December 31,
(in millions)		2006				2005
Real estate loans		$	20,321			$	20,407
Non-real estate loans			4,506				3,831
Retail sales finance			3,092				2,522
Credit card loans			1,413				1,498
Other loans			978				407
Total finance receivables			30,310				28,665
Allowance for losses			(737	)			(670	)
Finance receivables, net		$	29,573			$	27,995

(in millions)			2006				2005
AIG’s net borrowings			$	17,126			$	10,425
Liabilities connected to trust preferred stock				1,440				1,391
AIG Matched Investment Program
	matched notes and bonds payable			5,468				—
Series AIGFP matched notes and bonds payable				72				—
AIGFP:
	GIAs			20,664				20,811
	Matched notes and bonds payable			35,776				24,950
	Hybrid financial instrument liabilities(a)			8,856				—
Borrowings not guaranteed by AIG(b)				59,277				52,272
Total debt(c)			$	148,679			$	109,849

(a)	Represents structured notes issued by AIGFP that are accounted for under the fair value option.
(b)	Includes commercial paper not guaranteed by AIG.
(c)	Total debt in 2006 includes commercial paper of $12.15 billion and $3.25 billion of debt related to VIEs required to be consolidated under the provisions of FIN 46R.

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(in millions)				Total(a)				2007				2008				2009				2010				2011				Thereafter
AIG:
	Notes and bonds payable			$	8,915			$	165			$	1,322			$	—			$	498			$	420			$	6,510
	Loans and mortgages payable				841				744				—				—				—				—				97
	AIG Matched Investment Program matched notes and bonds payable				5,468				—				—				750				755				2,909				1,054
	Series AIGFP matched notes and bonds payable				72				—				—				—				—				—				72
Total AIG(a)					15,296				909				1,322				750				1,253				3,329				7,733
AIGFP:
	GIAs				20,664				6,962				2,145				953				920				478				9,206
	Notes and bonds payable				37,528				15,835				5,139				3,475				323				8,145				4,611
	Hybrid financial instrument liabilities(b)				8,856				2,082				1,288				392				1,687				566				2,841
Total AIGFP					67,048				24,879				8,572				4,820				2,930				9,189				16,658
AGC Notes and bonds payable					797				—				—				—				499				—				298
Liabilities connected to trust preferred stock					1,440				—				—				—				—				—				1,440
ILFC(c):
		Notes and bonds payable			22,773				3,347				3,865				3,145				3,465				3,488				5,463
		Export credit facility(d)			2,659				482				482				430				317				227				721
		Bank financings			1,159				75				25				471				103				160				325
Total ILFC					26,591				3,904				4,372				4,046				3,885				3,875				6,509
AGF Notes and bonds payable(c)					19,595				4,415				2,512				2,279				2,711				2,797				4,881
AIGCFG Loans and mortgages payable (c)					1,453				358				450				645				—				—				—
Other subsidiaries(c)					1,065				205				55				126				15				—				664
Total				$	133,285			$	34,670			$	17,283			$	12,666			$	11,293			$	19,190			$	38,183

(a)	Excludes $12.15 billion of commercial paper and $3.25 billion of debt related to VIEs required to be consolidated under the provisions of FIN 46R.
(b)	Represents structured notes issued by AIGFP that are accounted for under the fair value option.
(c)	AIG does not guarantee these borrowings.
(d)	Reflects future minimum payment for ILFC’s borrowing under the Export Credit Facility.

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						Unamortized								Weighted				Weighted
		Net				Discount								Average				Average
		Book				and Accrued				Face				Interest				Maturity
(dollars in millions)		Value				Interest				Amount				Rate				in Days
ILFC		$	2,747			$	11			$	2,758				5.30	%			28
AGF			4,328				14				4,342				5.30				24
AIG Funding			4,821				18				4,839				5.28				28
AIGCC — Taiwan(a)			227				1				228				2.32				48
AIGF — Taiwan(a)			26				—				26				2.00				83
Total(b)		$	12,149			$	44			$	12,193				—				—

(a)	Issued in Taiwan N.T. dollars at prevailing local interest rates.
(b)	Excludes $880 million of VIE commercial paper required to be consolidated under the provisions of FIN 46R.

Range of								U.S. Dollar
Maturities				Range of				Carrying
(dollars in millions)		Currency		Interest Rates				Value
2007-2046		U.S. dollar			0.18 - 8.60	%		$	34,788
2007-2011		United Kingdom pound			4.68 - 5.31				4,285
2007-2024		Euro			0.29 - 9.25				3,312
2008-2011		New Zealand dollar			6.30 - 8.35				1,395
2007-2036		Japanese Yen			0.01 - 7.00				1,533
2007-2015		Australian dollar			1.14 - 4.89				392
2007-2024		Swiss francs			0.25 - 1.38				600
2007-2015		Other			2.53 - 3.72				79
Total								$	46,384

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		Uncollateralized				Collateralized
		Notes/Bonds/Loans				Loans and
(in millions)		Payable				Mortgages Payable
AIGCFG		$	1,453			$	—
AIG			841				—
Other subsidiaries			774				291
Total		$	3,068			$	291

Available Amount

One-Year

Term-

(in millions)

December 31,

Out

Facility

Size

Borrower(s)

2006

Expiration

Option

AIG:

364-Day Syndicated Facility

$

1,625

AIG

$

1,625

July 2007

Yes

AIG Funding(a)

AIG Capital Corporation(a)

5-Year Syndicated Facility

1,625

AIG

1,625

July 2011

No

AIG Funding(a)

AIG Capital Corporation(a)

364-Day Bilateral Facility

3,200

AIG

505

(b)

November 2007

Yes

AIG Funding

364-Day Intercompany Facility (c)

2,000

AIG

2,000

October 2007

Yes

Total AIG

8,450

5,755

ILFC:

5-Year Syndicated Facility

2,500

ILFC

2,500

October 2011

No

5-Year Syndicated Facility

2,000

ILFC

2,000

October 2010

No

5-Year Syndicated Facility

2,000

ILFC

2,000

October 2009

No

Total ILFC

6,500

6,500

AGF:

364-Day Syndicated Facility

2,125

American General Finance Corporation

2,125

July 2007

Yes

American General Finance, Inc.(d)

5-Year Syndicated Facility

2,125

American General Finance Corporation

2,125

July 2010

No

Total AGF

$

4,250

$

4,250

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Years Ended December 31,
(in millions, except per share data)			2006				2005				2004
Numerator for earnings per share:
Income before cumulative effect of accounting changes			$	14,014			$	10,477			$	9,983
Cumulative effect of accounting changes, net of tax				34				—				(144	)
Net income applicable to common stock for basic EPS			$	14,048			$	10,477			$	9,839
Interest on contingently convertible bonds, net of tax (a)				10				11				11
Net income applicable to common stock for diluted EPS			$	14,058			$	10,488			$	9,850
Cumulative effect of accounting changes, net of tax				(34	)			—				144
Income before cumulative effect of accounting changes applicable to common stock for diluted EPS			$	14,024			$	10,488			$	9,994
Denominator for earnings per share:
Weighted-average shares outstanding used in the computation of EPS:
	Common stock issued			2,751				2,751				2,751
	Common stock in treasury			(153	)			(155	)			(146	)
	Deferred shares			10				1				1
Weighted-average shares outstanding — basic				2,608				2,597				2,606
Incremental shares from potential common stock:
Weighted-average number of shares arising from outstanding employee stock plans (treasury stock method)(b)				7				21				22
Contingently convertible bonds(a)				8				9				9
Weighted-adjusted average shares outstanding — diluted (b)				2,623				2,627				2,637
Earnings per share:
Basic:
Income before cumulative effect of accounting changes			$	5.38			$	4.03			$	3.83
Cumulative effect of accounting changes, net of tax				0.01				—				(0.06	)
Net income			$	5.39			$	4.03			$	3.77
Diluted:
Income before cumulative effect of accounting changes			$	5.35			$	3.99			$	3.79
Cumulative effect of accounting changes, net of tax				0.01				—				(0.06	)
Net income			$	5.36			$	3.99			$	3.73

(a)	Assumes conversion of contingently convertible bonds due to the adoption of EITF Issue No. 04-8 “Accounting Issues Related to Certain Features of Contingently Convertible Debt and the Effect on Diluted Earnings per Share.”
(b)	Certain shares arising from employee stock plans were not included in the computation of diluted earnings per share where the exercise price of the options exceeded the average market price and would have been antidilutive. The number of shares excluded were 13 million, 19 million and 7 million for 2006, 2005 and 2004, respectively.

---

 

---

 

---

 

---

 

(in millions)
2007		$	3,663
2008			3,220
2009			2,682
2010			2,271
2011			1,800
Remaining years after 2011			4,011
Total		$	17,647

(in millions)
2007		$	626
2008			461
2009			341
2010			274
2011			307
Remaining years after 2011			754
Total		$	2,763

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---

 

---

 

			2006								2005
			Carrying				Fair				Carrying				Fair
(in millions)			Value(a)				Value				Value(a)				Value
Assets:
	Fixed maturities		$	417,865			$	418,582			$	385,680			$	386,199
	Equity securities			30,222				30,222				23,588				23,588
	Mortgage loans on real estate, policy and collateral loans			28,418				28,655				24,909				26,352
	Securities available for sale			47,205				47,205				37,511				37,511
	Trading securities			5,031				5,031				6,499				6,499
	Spot commodities			220				220				92				96
	Unrealized gain on swaps, options and forward transactions			19,252				19,252				18,695				18,695
	Trading assets			2,468				2,468				1,204				1,204
	Securities purchased under agreements to resell			33,702				33,702				14,547				14,547
	Finance receivables, net of allowance			29,573				26,712				27,995				27,528
	Securities lending collateral			69,306				69,306				59,471				59,471
	Other invested assets(b)			40,330				40,637				29,186				29,408
	Short-term investments			25,249				25,249				15,342				15,342
	Cash			1,590				1,590				1,897				1,897
Liabilities:
	Policyholders’ contract deposits			244,658				239,964				227,027				223,244
	Borrowings under obligations of guaranteed investment agreements			20,664				20,684				20,811				22,373
	Securities sold under agreements to repurchase			22,710				22,710				11,047				11,047
	Trading liabilities			3,141				3,141				2,546				2,546
	Hybrid financial instrument liabilities			8,856				8,856				—				—
	Securities and spot commodities sold but not yet purchased			4,076				4,076				5,975				5,975
	Unrealized loss on swaps, options and forward transactions			11,401				11,401				12,740				12,740
	Trust deposits and deposits due to banks and other depositors			5,249				5,261				4,877				5,032
	Commercial paper			13,029				13,029				9,208				9,208
	Notes, bonds, loans and mortgages payable			104,690				106,494				78,439				79,518
	Securities lending payable			70,198				70,198				60,409				60,409

---

 

										Including
						Effect of				Effect of
		Pre-adoption of				Adoption of				Adoption of
(in millions, except per share data)		FAS 123R				FAS 123R				FAS 123R
Income before income taxes, minority interest and cumulative effect of an accounting change		$	21,704			$	(17	)		$	21,687
Provision for income taxes		$	6,539			$	(2	)		$	6,537
Income before minority interest and cumulative effect of an accounting change		$	15,165			$	(15	)		$	15,150
Cumulative effect of an accounting change, net of tax		$	—			$	34			$	34
Net income		$	14,029			$	19			$	14,048
Net cash provided by (used in) operating activities		$	6,857			$	(28	)		$	6,829
Net cash provided by financing activities		$	59,762			$	28			$	59,790
Basic earnings per share		$	5.38			$	0.01			$	5.39
Diluted earnings per share		$	5.35			$	0.01			$	5.36

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		2006				2005
Expected annual dividend yield(a)			0.92%				0.71%
Expected volatility(b)			23.50%				27.3%
Risk-free interest rate(c)			4.61%				4.17%
Expected term(d)			7  years				7  years

(a)	The dividend yield is based on the dividend yield over the twelve month period prior to the grant date.
(b)	In 2006, expected volatility is the average of historical volatility (based on seven years of daily stock price changes) and the implied volatility of actively traded options on AIG shares and in 2005, expected volatility is the historical volatility based on five years of daily stock price changes.
(c)	The interest rate curves used in the valuation model were the U.S. Treasury STRIP rates with terms from 3 months to 10 years.
(d)	The contractual term of the option is generally 10 years with an expected term of 7 years calculated based on an analysis of historical employee exercise behavior and employee turnover (post-vesting terminations). The early exercise rate is a function of time elapsed since the grant. Fifteen years of historical data were used to estimate the early exercise rate.

						Weighted Average
Options:		Shares				Exercise Price
Outstanding at beginning of year			52,545,425				$54.84
Granted			1,621,910				$70.51
Exercised*			(5,329,026	)			$27.97
Forfeited or expired			(1,182,589	)			$70.76
Outstanding at end of year			47,655,720				$57.99
Options exercisable at end of year			39,383,670				$56.81
Weighted average fair value per share of options granted							$23.41

*	Includes options with respect to 2,067,643 shares exercised with delivery deferred, resulting in obligations to issue 1,527,613 shares.

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Options Outstanding																		Options Exercisable
						Weighted																Weighted
						Average				Weighted												Average				Weighted
						Remaining				Average				Aggregate Intrinsic				Number				Remaining				Average				Aggregate
Range of		Number				Contractual				Exercise				Values				Exercisable				Contractual				Exercise				Intrinsic Values
Exercise Prices		Outstanding				Life				Price				(in millions)				(vested)				Life				Price				(in millions)
$24.55-$26.45			3,077,376				0.82			$	24.67			$	144				3,077,376				0.82			$	24.67			$	144
$31.02-$41.51			5,198,823				1.58				36.91				181				5,198,823				1.58				36.91				181
$43.31-$53.40			6,665,147				3.83				48.59				154				5,900,494				3.53				48.80				135
$54.11-$59.99			8,314,413				4.07				57.86				115				6,780,399				3.01				57.52				96
$60.13-$63.95			8,766,329				5.94				62.33				82				7,547,511				5.77				62.12				72
$64.01-$69.63			8,034,276				6.82				65.45				50				4,948,364				5.75				65.53				30
$70.35-$98.00			7,599,356				5.53				81.36				1				5,930,703				4.40				84.06				—
Total			47,655,720				4.60			$	57.99			$	727				39,383,670				3.81			$	56.81			$	658

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		Number of Shares																				Weighted Average Grant-Date Fair Value
						AIG				AIG Partners				Total				SICO								AIG				AIG Partners				Total				SICO
		2002 Plan				DCPPP				Plan				2002 Plan				Plans				2002 Plan				DCPPP				Plan				2002 Plan				Plans
Unvested at January 1, 2006			4,322,265				4,898,880				—				9,221,145				12,650,292			$	63.63			$	52.55			$	—			$	57.74			$	61.92
Granted			3,198,885				—				3,637,900				6,836,785				—				70.04				—				56.49				62.83				—
Vested			(130,185	)			—				—				(130,185	)			(794,814	)			61.44				—				—				61.44				65.68
Forfeited			(209,370	)			(308,258	)			(30,860	)			(548,488	)			(411,706	)			62.53				59.40				56.22				60.41				60.38
Unvested at December 31, 2006			7,181,595				4,590,622				3,607,040				15,379,257				11,443,772			$	66.56			$	52.09			$	56.50			$	59.88			$	61.72

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			Unrecognized				Blended
			Compensation				Weighted-
			Cost				Average
			(in millions)				Period
2002 Plan			$	322				1.79 years
	AIG DCPPP		$	208				4.49 years
	AIG Partners Plan		$	191				2.37 years
Total 2002 Plan			$	721				2.72 years
SICO Plans			$	301				5.95 years

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(in millions)		2006*				2005
Non-U.S. pension benefit plans		$	1,384			$	1,210
U.S. pension benefit plans		$	2,689			$	2,704

*	As of November 30, 2006 for non-U.S. plans of sponsoring companies with a fiscal year-end date of November 30, 2006.

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			Pension												Postretirement
			Non-												Non-
			U.S.				U.S.								U.S.				U.S.
(in millions)			Plans				Plans(a)				Total				Plans				Plans				Total
2006(b)
Change in projected benefit obligation:
	Benefit obligation at beginning of year		$	1,351			$	3,131			$	4,482			$	43			$	205			$	248
	Service cost			78				130				208				4				6				10
	Interest cost			36				169				205				2				11				13
	Participant contributions			1				—				1				—				—				—
	Actuarial (gain) loss			(40	)			(245	)			(285	)			5				(1	)			4
	Plan amendments and mergers			—				—				—				—				47				47
	Benefits paid:
	AIG assets			(28	)			(10	)			(38	)			(1	)			(16	)			(17	)
	Plan assets			(27	)			(84	)			(111	)			—				—				—
	Effect of foreign currency fluctuation			71				—				71				—				—				—
	Other(c)			136				(12	)			124				—				—				—
Benefit obligation at end of year			$	1,578			$	3,079			$	4,657			$	53			$	252			$	305
2005
Change in projected benefit obligation:
	Benefit obligation at beginning of year		$	1,376			$	2,750			$	4,126			$	35			$	243			$	278
	Service cost			71				111				182				4				5				9
	Interest cost			32				153				185				2				11				13
	Participant contributions			1				—				1				—				—				—
	Actuarial (gain) loss			77				241				318				3				(38	)			(35	)
	Plan amendments, mergers and new material plans			43				(29	)			14				—				—				—
	Benefits paid:
	AIG assets			(28	)			(11	)			(39	)			(1	)			(16	)			(17	)
	Plan assets			(29	)			(84	)			(113	)			—				—				—
	Effect of foreign currency fluctuation			(184	)			—				(184	)			1				—				1
	Other			(8	)			—				(8	)			(1	)			—				(1	)
Benefit obligation at end of year			$	1,351			$	3,131			$	4,482			$	43			$	205			$	248

(a)	Includes excess retirement income type plans and supplemental executive retirement type plans.
(b)	As of November 30, 2006 for non-U.S. plans of sponsoring companies with fiscal year-end date of November 30, 2006.
(c)	With respect to AIG’s non-U.S. plan obligations, $100 million of this increase is the result of the reclassification of the Swiss plans. The Swiss plans were previously categorized as defined contribution plans since insurance companies have guaranteed the risks associated with these plans. However, the cost of paying for these guarantees is now viewed as a liability for the company in Switzerland. Therefore, the Swiss plans are treated as defined benefit plans. $45 million of the increase is due to the inclusion of new plans during 2006.

			Pension								Postretirement
			Non-U.S.				U.S.				Non-U.S.				U.S.
			Plans				Plans				Plans				Plans
2006*
	Discount rate			2.25 - 10.75%				6.00%				4.00 - 5.75%				6.00	%
	Rate of compensation increase			1.50 - 10.00%				4.25%				3.00%				4.25	%
2005
	Discount rate			1.75 - 12.00%				5.50%				4.50 - 5.50%				5.50	%
	Rate of compensation increase			1.50 - 10.00%				4.25%				2.50 - 3.00%				4.25	%

*	At November 30, 2006 for non-U.S. plans of sponsoring companies with a fiscal year-end date of November 30, 2006.

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		One Percent								One Percent
		Increase								Decrease
(in millions)		2006				2005				2006				2005
Non-U.S. plans		$	10			$	8			$	(7	)		$	(6	)
U.S. plans		$	3			$	(2	)		$	(3	)		$	2

*	At November 30, 2006, for non-U.S. plans with a fiscal year-end date of November 30, 2006.

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			Pension												Postretirement(b)
			Non-U.S.				U.S.								Non-U.S.				U.S.
(in millions)			Plans(a)				Plans				Total				Plans				Plans				Total
2006
Fair value of plan assets			$	850			$	2,760			$	3,610			$	—			$	—			$	—
Less projected benefit obligations				1,578				3,079				4,657				53				252				305
	Funded status at end of year		$	(728	)		$	(319	)		$	(1,047	)		$	(53	)		$	(252	)		$	(305	)
Amounts recognized in the consolidated balance sheet:
	Assets		$	18			$	—			$	18			$	—			$	—			$	—
	Liabilities			(746	)			(319	)			(1,065	)			(53	)			(252	)			(305	)
	Total amounts recognized		$	(728	)		$	(319	)		$	(1,047	)		$	(53	)		$	(252	)		$	(305	)
Amounts recognized in Accumulated other comprehensive income:
	Net loss		$	256			$	687			$	943			$	7 —			$	3			$	10
	Prior service cost (credit)			(72	)			(20	)			(92	)							22				22
	Total amounts recognized		$	184			$	667			$	851			$	7			$	25			$	32
2005
Fair value of plan assets			$	699			$	2,561			$	3,260			$	—			$	—			$	—
Less projected benefit obligations				1,351				3,130				4,481				43				205				248
	Funded status at end of year		$	(652	)		$	(569	)		$	(1,221	)		$	(43	)		$	(205	)		$	(248	)
Amounts not yet recognized:
	Actuarial (gains)/losses(c)			303				1,093				1,396				3				5				8
	Prior service cost			(79	)			(23	)			(102	)			—				(32	)			(32	)
	Transition obligations			1				—				1				—				—				—
Net amount recognized			$	(427	)		$	501			$	74			$	(40	)		$	(232	)		$	(272	)
Composition of net amount recognized:
	Prepaid benefit cost		$	24			$	670			$	694			$	—			$	—			$	—
	Accrued benefit cost			(590	)			(217	)			(807	)			(40	)			(232	)			(272	)
	Intangible asset			3				6				9				—				—				—
	Accumulated other comprehensive income			136				42				178				—				—				—
Net amount recognized			$	(427	)		$	501			$	74			$	(40	)		$	(232	)		$	(272	)

(a)	A significant portion of these plans, particularly those in Japan, are not required by local regulation to be funded currently. With respect to the funded status of these Japanese plans, the projected benefit obligation amounts to approximately $414 million and $410 million of which approximately $379 million and $360 million has been recognized at November 30, 2006 and December 31, 2005, respectively.
(b)	AIG does not currently fund postretirement benefits.
(c)	Actuarial (gains)/losses are amounts included in the projected benefit obligations but not yet recognized in the financial statements.

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										Including
						Effect of				Effect of
		Pre-adoption				Adoption of				Adoption of
(in millions)		of FAS 158				FAS 158				FAS 158
Prepaid assets (pensions)		$	550			$	(532	)		$	18
Intangible assets (pensions)			6				(6	)			—
Total assets			979,952				(538	)			979,414
Liability for pension benefits(a)			1,140				230				1,370
Net deferred tax liability			9,088				(236	)			8,852
Total liabilities			877,552				(6	)			877,546
Accumulated other comprehensive income, net of tax			9,642				(532	)			9,110
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity		$	979,952			$	(538	)		$	979,414

(a)	Included in Other liabilities in the consolidated balance sheet.

		2006*								2005
		Non-U.S.				U.S.				Non-U.S.				U.S.
(in millions)		Plans				Plans				Plans				Plans
Projected benefit obligation		$	1,486			$	3,079			$	1,284			$	3,130
Accumulated benefit obligation			1,323				2,689				1,163				2,704
Fair value of plan assets			740				2,760				610				2,561

*	At November 30, 2006 for non-U.S. plans of sponsoring companies with fiscal year-end date of November 30, 2006.

		2006*								2005
		Non-U.S.				U.S.				Non-U.S.				U.S.
(in millions)		Plans				Plans				Plans				Plans
Projected benefit obligation		$	1,465			$	240			$	1,281			$	268
Accumulated benefit obligation			1,311				204				1,161				224
Fair value of plan assets			723				11				607				9

*	At November 30, 2006 for non-U.S. plans of sponsoring companies with fiscal year-end date of November 30, 2006.

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			Pension												Postretirement
			Non-U.S.				U.S.								Non-U.S.				U.S.
(in millions)			Plans				Plans				Total				Plans				Plans				Total
2006(a)
Change in plan assets:
	Fair value of plan assets, at beginning of year		$	699			$	2,561			$	3,260			$	—			$	—			$	—
	Actual return on plan assets, net of expenses			33				282				315				—				—				—
	AIG contributions			69				11				80				1				16				17
	Participant contributions			1				—				1				—				—				—
	Benefits paid:
	AIG assets			(28	)			(10	)			(38	)			(1	)			(16	)			(17	)
	Plan assets			(27	)			(84	)			(111	)			—				—				—
	Effect of foreign currency fluctuation			41				—				41				—				—				—
	Other(b)			62				—				62				—				—				—
Fair value of plan assets, end of year			$	850			$	2,760			$	3,610			$	—			$	—			$	—
2005
Change in plan assets:
	Fair value of plan assets, at beginning of year		$	624			$	2,247			$	2,871			$	—			$	—			$	—
	Actual return on plan assets, net of expenses			101				113				214				—				—				—
	AIG contributions			95				298				393				1				16				17
	Participant contributions			1				—				1				—				—				—
	Benefits paid:
	AIG assets			(28	)			(11	)			(39	)			(1	)			(16	)			(17	)
	Plan assets			(29	)			(84	)			(113	)			—				—				—
	Effect of foreign currency fluctuation			(85	)			—				(85	)			—				—				—
	Other			20				(2	)			18				—				—				—
Fair value of plan assets, end of year			$	699			$	2,561			$	3,260			$	—			$	—			$	—

(a)	As of November 30, 2006 for non-U.S. plans of sponsoring companies with fiscal year-end date of November 30, 2006.
(b)	With respect to AIG’s non-U.S. plan assets $80 million of this increase resulted from the reclassification of the Swiss plans. For further discussion of the Swiss plans see the preceding discussion in Note 15(e).

			Non-U.S. Plans-Allocation												U.S. Plans-Allocation
			Target				Actual				Actual				Target				Actual				Actual
			2007				2006*				2005				2007				2006				2005
Asset class:
	Equity securities			0-75	%			47	%			46	%			20-70	%			64	%			59	%
	Debt securities			0-100				32				27				20-70				26				34
	Other			0-100				21				27				5-25				10				7
Total								100	%			100	%							100	%			100	%

*	At November 30, 2006 for non-U.S. plans of sponsoring companies with fiscal year-end of November 30, 2006.

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		Pension								Postretirement
		Non-U.S.				U.S.				Non-U.S.				U.S.
(in millions)		Plans				Plans				Plans				Plans
2007		$	67			$	108			$	1			$	20
2008			71				117				1				21
2009			80				126				1				22
2010			79				136				1				20
2011			83				148				1				21
2012-2016			440				944				3				116

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			Pensions												Postretirement
			Non-U.S.				U.S.								Non-U.S.				U.S.
(in millions)			Plans				Plans				Total				Plans				Plans				Total
2006
	Components of net periodic benefit cost:
	Service cost		$	78			$	130			$	208			$	4			$	6			$	10
	Interest cost			36				169				205				2				11				13
	Expected return on assets			(28	)			(201	)			(229	)			—				—				—
	Amortization of prior service cost			(9	)			(3	)			(12	)			—				(6	)			(6	)
	Amortization of transitional obligation			1				—				1				—				—				—
	Recognition of net actuarial (gains)/losses			16				75				91				—				—				—
	Other			1				6				7				—				—				—
Net periodic benefit cost			$	95			$	176			$	271			$	6			$	11			$	17
Total recognized in other comprehensive income			$	38			$	24			$	62			$	—			$	—			$	—
Total recognized in net periodic benefit cost and other comprehensive income			$	133			$	200			$	333			$	6			$	11			$	17
2005
	Components of net periodic benefit cost:
	Service cost		$	71			$	111			$	182			$	4			$	5			$	9
	Interest cost			32				153				185				2				11				13
	Expected return on assets			(21	)			(180	)			(201	)			—				—				—
	Amortization of prior service cost			(10	)			(3	)			(13	)			—				(6	)			(6	)
	Amortization of transitional obligation			1				—				1				—				—				—
	Recognition of net actuarial (gains)/losses			21				55				76				—				—				—
	Other			7				1				8				—				—				—
Net periodic benefit cost			$	101			$	137			$	238			$	6			$	10			$	16
2004
	Components of net periodic benefit cost:
	Service cost		$	59			$	101			$	160			$	3			$	6			$	9
	Interest cost			33				147				180				2				14				16
	Expected return on assets			(22	)			(170	)			(192	)			—				—				—
	Amortization of prior service cost			(8	)			—				(8	)			—				(7	)			(7	)
	Amortization of transitional obligation			2				—				2				—				—				—
	Recognition of net actuarial (gains)/losses			15				53				68				11				2				13
	Other*			(24	)			—				(24	)			3				—				3
Net periodic benefit cost			$	55			$	131			$	186			$	19			$	15			$	34

*	The reduction resulted from transferring to the Japanese government certain Japanese plan obligations approximating $50 million reduced by approximately $26 million loss incurred with respect to the settlement of those obligations.

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			Pension								Postretirement
			Non-U.S.				U.S.				Non-U.S.				U.S.
			Plans*				Plans				Plans*				Plans
2006
	Discount rate			1.75-12.00%				5.50%				4.50-5.50%				5.50%
	Rate of compensation increase			1.50-10.00%				4.25%				2.50-3.00%				4.25%
	Expected return on assets			2.50-13.50%				8.00%				N/A				N/A
2005
	Discount rate			1.75-12.00%				5.75%				4.50-6.00%				5.75%
	Rate of compensation increase			1.50-10.00%				4.25%				3.00%				4.25%
	Expected return on assets			2.15-13.50%				8.00%				N/A				N/A
2004
	Discount rate			2.00-8.00%				6.00%				5.50-6.00%				6.00%
	Rate of compensation increase			1.50-7.00%				4.25%				5.50%				4.25%
	Expected return on assets			2.50-10.00%				8.25%				N/A				N/A

*	The benefit obligations for non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of the subsidiaries providing such benefits.

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19.	Derivatives

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			Remaining Life of Notional Amount*
			One				Two Through				Six Through				After Ten				Total				Total
(in millions)			Year				Five Years				Ten Years				Years				2006				2005
Capital Markets interest rate, currency and equity swaps and swaptions:
Notional amount:
	Interest rate swaps		$	380,704			$	505,317			$	149,573			$	22,685			$	1,058,279			$	837,389
	Currency swaps			59,656				111,571				36,438				10,426				218,091				211,519
	Swaptions, equity and commodity swaps			65,402				64,467				30,319				19,852				180,040				175,097
Total			$	505,762			$	681,355			$	216,330			$	52,963			$	1,456,410			$	1,224,005

*	Notional amount is not representative of either market risk or credit risk and is not recorded in the consolidated balance sheet.

			Remaining Life
			One				Two Through				Six Through				After Ten				Total				Total
(in millions)			Year				Five Years				Ten Years				Years				2006				2005
Futures, forward and options contracts:
	Exchange traded futures and options contracts contractual amount		$	25,798			$	1,473			$	—			$	—			$	27,271			$	25,298
	Over the counter forward contracts contractual amount			484,524				6,903				1,486				—				492,913				295,778
Total			$	510,322			$	8,376			$	1,486			$	—			$	520,184			$	321,076

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20.	Variable Life and Annuity Contracts

		Net Deposits
		Plus a Minimum				Highest Contract
(dollars in billions)		Return				Value Attained
2006
Account value(a)			$64				$15
Amount at risk(b)			6				1
Average attained age of contract holders by product			38-70 years				56-71 years
Range of guaranteed minimum return rates			0-10%
2005
Account value(a)			$59				$13
Amount at risk(b)			7				1
Average attained age of contract holders by product			51-70 years				57-70 years
Range of guaranteed minimum return rates			0-10%

(a)	Included in Policyholders’ contract deposits in the Consolidated Balance Sheet.
(b)	Represents the amount of death benefit currently in excess of Account value.

(in millions)		2006				2005
Balance at January 1		$	442			$	485
Reserve increase			35				33
Benefits paid			(71	)			(76	)
Balance at December 31		$	406			$	442

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•	Data used was up to 5,000 stochastically generated investment performance scenarios.
•	Mean investment performance assumptions ranged from 0 percent to approximately ten percent depending on the block of business.
•	Volatility assumptions ranged from 10 percent to 30 percent depending on the block of business.
•	Mortality was assumed at between 60 percent and 102 percent of various life and annuity mortality tables.
•	For domestic contracts, lapse rates vary by contract type and duration and ranged from zero percent to 40 percent. For Japan, lapse rates ranged from zero percent to 20 percent depending on the type of contract.
•	For domestic contracts, the discount rate ranged from 3.25 percent to 11 percent. For Japan, the discount rate ranged from zero percent to seven percent.

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				Three Months Ended
				March 31,								June 30,								September 30,								December 31,
(in millions, except per share data)				2006				2005				2006				2005				2006				2005(a)				2006				2005(b)
Revenues				$	27,259			$	27,202			$	26,743			$	27,903			$	29,199			$	26,408			$	29,993			$	27,392
Income before income taxes, minority interest and cumulative effect of an accounting change					4,793				5,649				5,241				6,701				6,301				2,547				5,352				316
Income before cumulative effect of an accounting change					3,161				3,799				3,190				4,489				4,224				1,745				3,439				444
Net income				$	3,195			$	3,799			$	3,190			$	4,489			$	4,224			$	1,745			$	3,439			$	444
Earnings per common share:
	Basic
		Income before cumulative effect of an accounting change		$	1.21			$	1.46			$	1.23			$	1.73			$	1.62			$	0.67			$	1.32			$	0.17
		Cumulative effect of an accounting change, net of tax			0.01				—				—				—				—				—				—				—
	Net income			$	1.22			$	1.46			$	1.23			$	1.73			$	1.62			$	0.67			$	1.32			$	0.17
	Diluted
		Income before cumulative effect of an accounting change		$	1.21			$	1.45			$	1.21	(c)		$	1.71			$	1.61			$	0.66	(c)		$	1.31			$	0.17
		Cumulative effect of an accounting change, net of tax			0.01				—				—				—				—				—				—				—
	Net income			$	1.22			$	1.45			$	1.21	(c)		$	1.71			$	1.61			$	0.66	(c)		$	1.31			$	0.17
Average shares outstanding:
	Basic				2,605				2,597				2,606				2,596				2,607				2,597				2,610				2,597
	Diluted				2,624				2,624				2,625				2,623				2,626				2,624				2,622				2,626

(a)	The third quarter of 2005 included catastrophe losses of approximately $2.4 billion.
(b)	The fourth quarter of 2005 included catastrophe losses of $841 million, regulatory settlement costs of approximately $1.6 billion, and an increase in net reserves of approximately $1.8 billion resulting from the annual review of General Insurance loss and loss adjustment reserves.
(c)	Diluted earnings per common share were $1.216 for the quarter ended June 30, 2006, and $0.666 for the quarter ended September 30, 2005 using the discrete period weighted average shares outstanding for the respective periods.

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22.	Information Provided in Connection With Outstanding Debt

			American
			International
			Group, Inc.				AGC				Other								Consolidated
(in millions)			Guarantor				Issuer				Subsidiaries				Eliminations				AIG
December 31, 2006
Assets:
	Invested assets		$	7,346			$	—			$	797,976			$	(14,822	)		$	790,500
	Cash			76				—				1,514				—				1,590
	Carrying value of subsidiaries and partially owned companies, at equity			109,125				27,967				8,436				(144,427	)			1,101
	Other assets			3,989				2,622				181,561				(1,949	)			186,223
Total assets			$	120,536			$	30,589			$	989,487			$	(161,198	)		$	979,414
Liabilities:
	Insurance liabilities		$	21			$	—			$	495,135			$	(64	)		$	495,092
	Debt			15,157				2,136				146,206				(14,820	)			148,679
	Other liabilities			3,681				3,508				228,068				(1,482	)			233,775
Total liabilities				18,859				5,644				869,409				(16,366	)			877,546
Preferred shareholders’ equity in subsidiary companies				—				—				191				—				191
Total shareholders’ equity				101,677				24,945				119,887				(144,832	)			101,677
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity			$	120,536			$	30,589			$	989,487			$	(161,198	)		$	979,414
December 31, 2005
Assets:
	Invested assets		$	122			$	—			$	696,424			$	(13,696	)		$	682,850
	Cash			190				—				1,707				—				1,897
	Carrying value of subsidiaries and partially owned companies, at equity			90,723				27,027				15,577				(132,169	)			1,158
	Other assets			4,332				2,577				161,564				(1,327	)			167,146
Total assets			$	95,367			$	29,604			$	875,272			$	(147,192	)		$	853,051
Liabilities:
	Insurance liabilities		$	408			$	—			$	460,271			$	(56	)		$	460,623
	Debt			5,329				2,087				114,490				(12,057	)			109,849
	Other liabilities			3,313				4,110				191,707				(3,054	)			196,076
Total liabilities				9,050				6,197				766,468				(15,167	)			766,548
Preferred shareholders’ equity in subsidiary companies				—				—				186				—				186
Total shareholders’ equity				86,317				23,407				108,618				(132,025	)			86,317
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity			$	95,367			$	29,604			$	875,272			$	(147,192	)		$	853,051

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		American
		International
		Group, Inc.				AGC				Other								Consolidated
(in millions)		Guarantor				Issuer				Subsidiaries				Eliminations				AIG
Year Ended December 31, 2006
Operating income		$	(786	)		$	122			$	22,351			$	—			$	21,687
Equity in undistributed net income of consolidated subsidiaries			13,308				1,263				—				(14,571	)			—
Dividend income from consolidated subsidiaries			1,689				602				—				(2,291	)			—
Income taxes (benefits)			197				(131	)			6,471				—				6,537
Minority interest			—				—				(1,136	)			—				(1,136	)
Cumulative effect of an accounting change			34				—				—				—				34
Net income (loss)		$	14,048			$	2,118			$	14,744			$	(16,862	)		$	14,048
Year Ended December 31, 2005
Operating income		$	(1,569)			$	(200	)		$	16,982			$	—			$	15,213
Equity in undistributed net income of consolidated subsidiaries			10,156				2,530				—				(12,686	)			—
Dividend income from consolidated subsidiaries			1,958				—				—				(1,958	)			—
Income taxes (benefits)			68				(92	)			4,282				—				4,258
Minority interest			—				—				(478	)			—				(478	)
Net income (loss)		$	10,477			$	2,422			$	12,222			$	(14,644	)		$	10,477
Year Ended December 31, 2004
Operating income		$	161			$	90			$	14,594			$	—			$	14,845
Equity in undistributed net income of consolidated subsidiaries			8,602				2,048				—				(10,650	)			—
Dividend income from consolidated subsidiaries			1,939				65				—				(2,004	)			—
Income taxes (benefits)			863				31				3,513				—				4,407
Minority interest			—				—				(455	)			—				(455	)
Cumulative effect of an accounting change			—				—				(144	)			—				(144	)
Net income (loss)		$	9,839			$	2,172			$	10,482			$	(12,654	)		$	9,839

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			American
			International
			Group, Inc.				AGC				Other				Consolidated
(in millions)			Guarantor				Issuer				Subsidiaries				AIG
Year Ended December 31, 2006
Net cash provided by operating activities			$	(590	)		$	258			$	7,161			$	6,829
Cash flows from investing:
	Invested assets disposed			3,831				—				154,283				158,114
	Invested assets acquired			(8,298	)			—				(215,759	)			(224,057	)
	Other			(3,176	)			(67	)			2,146				(1,097	)
Net cash used in investing activities				(7,643	)			(67	)			(59,330	)			(67,040	)
Cash flows from financing activities:
	Issuance of debt			12,038				—				61,942				73,980
	Repayments of debt			(2,417	)			—				(34,063	)			(36,480	)
	Other			(1,502	)			(191	)			23,983				22,290
Net cash provided by (used in) financing activities				8,119				(191	)			51,862				59,790
Effect of exchange rate changes on cash				—				—				114				114
Change in cash				(114	)			—				(193	)			(307	)
Cash at beginning of year				190				—				1,707				1,897
Cash at end of year			$	76			$	—			$	1,514			$	1,590
Year Ended December 31, 2005
Net cash provided by operating activities			$	1,854			$	805			$	22,723			$	25,382
Cash flows from investing:
	Invested assets disposed			—				—				184,843				184,843
	Invested assets acquired			(598	)			—				(245,804	)			(246,402	)
	Other			(1,083	)			(247	)			389				(941	)
Net cash used in investing activities				(1,681	)			(247	)			(60,572	)			(62,500	)
Cash flows from financing activities:
	Issuance of debt			2,101				—				64,960				67,061
	Repayments of debt			(607	)			(398	)			(51,099	)			(52,104	)
	Other			(1,494	)			(160	)			23,866				22,212
Net cash provided by (used in) financing activities				—				(558	)			37,727				37,169
Effect of exchange rate changes on cash				—								(163	)			(163	)
Change in cash				173				—				(285	)			(112	)
Cash at beginning of year				17				—				1,992				2,009
Cash at end of year			$	190			$	—			$	1,707			$	1,897
Year Ended December 31, 2004
Net cash provided by operating activities			$	1,390			$	839			$	27,185			$	29,414
Cash flows from investing:
	Invested assets disposed			502				—				149,883				150,385
	Invested assets acquired			(107	)			—				(242,231	)			(242,338	)
	Other			251				(408	)			(486	)			(643	)
Net cash used in investing activities				646				(408	)			(92,834	)			(92,596	)
Cash flows from financing activities:
	Issuance of debt			—				—				46,695				46,695
	Repayments of debt			(400	)			(349	)			(32,203	)			(32,952	)
	Other			(1,638	)			(82	)			52,194				50,474
Net cash provided by (used in) financing activities				(2,038	)			(431	)			66,686				64,217
Effect of exchange rate changes on cash				—								52				52
Change in cash				(2	)			—				1,089				1,087
Cash at beginning of year				19				—				903				922
Cash at end of year			$	17			$	—			$	1,992			$	2,009

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			American
			International				AIG
			Group, Inc.				Liquidity				Other								Consolidated
(in millions)			Guarantor				Corp.				Subsidiaries				Eliminations				AIG
December 31, 2006
Assets:
	Invested assets		$	7,346			$		*		$	797,976			$	(14,822	)		$	790,500
	Cash			76					*			1,514				—				1,590
	Carrying value of subsidiaries and partially owned companies, at equity			109,125				—				36,403				(144,427	)			1,101
	Other assets			3,989					*			184,183				(1,949	)			186,223
Total assets			$	120,536			$		*		$	1,020,076			$	(161,198	)		$	979,414
Liabilities:
	Insurance liabilities		$	21			$	—			$	495,135			$	(64	)		$	495,092
	Debt			15,157					*			148,342				(14,820	)			148,679
	Other liabilities			3,681					*			231,576				(1,482	)			233,775
Total liabilities				18,859			$		*		$	875,053			$	(16,366	)		$	877,546
Preferred shareholders’ equity in subsidiary companies				—				—				191				—				191
Total shareholders’ equity				101,677					*			144,832				(144,832	)			101,677
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity			$	120,536			$		*		$	1,020,076			$	(161,198	)		$	979,414
December 31, 2005
Assets:
	Invested assets		$	122			$		*		$	696,424			$	(13,696	)		$	682,850
	Cash			190					*			1,707				—				1,897
	Carrying value of subsidiaries and partially owned companies, at equity			90,723				—				42,604				(132,169	)			1,158
	Other assets			4,332					*			164,141				(1,327	)			167,146
Total assets			$	95,367			$		*		$	904,876			$	(147,192	)		$	853,051
Liabilities:
	Insurance liabilities		$	408			$	—			$	460,271			$	(56	)		$	460,623
	Debt			5,329					*			116,577				(12,057	)			109,849
	Other liabilities			3,313					*			195,817				(3,054	)			196,076
Total liabilities				9,050					*			772,665				(15,167	)			766,548
Preferred shareholders’ equity in subsidiary companies				—				—				186				—				186
Total shareholders’ equity				86,317					*			132,025				(132,025	)			86,317
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity			$	95,367			$		*		$	904,876			$	(147,192	)		$	853,051

*	Amounts significantly less than $1 million.

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		American
		International				AIG
		Group, Inc.				Liquidity				Other								Consolidated
(in millions)		Guarantor				Corp.				Subsidiaries				Eliminations				AIG
Year Ended December 31, 2006
Operating Income		$	(786	)		$		*		$	22,473			$	—			$	21,687
Equity in undistributed net income of consolidated subsidiaries			13,308				—				1,263				(14,571	)			—
Dividend income from consolidated subsidiaries			1,689				—				602				(2,291	)			—
Income taxes (benefits)			197					*			6,340				—				6,537
Minority interest			—				—				(1,136	)			—				(1,136	)
Cumulative effect of an accounting change			34					*			—				—				34
Net income (loss)		$	14,048			$		*		$	16,862			$	(16,862	)		$	14,048
Year Ended December 31, 2005
Operating Income		$	(1,569	)		$		*		$	16,782			$	—			$	15,213
Equity in undistributed net income of consolidated subsidiaries			10,156				—				2,530				(12,686	)			—
Dividend income from consolidated subsidiaries			1,958					*			—				(1,958	)			—
Income taxes (benefits)			68				—				4,190				—				4,258
Minority interest			—				—				(478	)			—				(478	)
Net income (loss)		$	10,477			$		*		$	14,644			$	(14,644	)		$	10,477
Year Ended December 31, 2004
Operating Income		$	161			$		*		$	14,684			$	—			$	14,845
Equity in undistributed net income of consolidated subsidiaries			8,602				—				2,048				(10,650	)			—
Dividend income from consolidated subsidiaries			1,939				—				65				(2,004	)			—
Income taxes (benefits)			863					*			3,544				—				4,407
Minority interest			—				—				(455	)			—				(455	)
Cumulative effect of an accounting change			—				—				(144	)			—				(144	)
Net income (loss)		$	9,839			$		*		$	12,654			$	(12,654	)		$	9,839

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			American
			International				AIG
			Group, Inc.				Liquidity				Other				Consolidated
(in millions)			Guarantor				Corp.				Subsidiaries				AIG
Year Ended December 31, 2006
Net cash provided by operating activities			$	(590	)		$		*		$	7,419			$	6,829
Cash flows from investing activities:
	Invested assets disposed			3,831				—				154,283				158,114
	Invested assets acquired			(8,298	)			—				(215,759	)			(224,057	)
	Other			(3,176	)				*			2,079				(1,097	)
Net cash used in investing activities				(7,643	)				*			(59,397	)			(67,040	)
Cash flows from financing activities:
	Issuance of debt			12,038				—				61,942				73,980
	Repayments of debt			(2,417	)			—				(34,063	)			(36,480	)
	Other			(1,502	)				*			23,792				22,290
Net cash provided by (used in) financing activities				8,119					*			51,671				59,790
Effect of exchange rate changes on cash				—				—				114				114
Change in cash				(114	)				*			(193	)			(307	)
Cash at beginning of year				190				—				1,707				1,897
Cash at end of year			$	76			$		*		$	1,514			$	1,590
Year Ended December 31, 2005
Net cash provided by operating activities			$	1,854			$		*		$	23,528			$	25,382
Cash flows from investing activities:
	Invested assets disposed			—				—				184,843				184,843
	Invested assets acquired			(598	)			—				(245,804	)			(246,402	)
	Other			(1,083	)				*			142				(941	)
Net cash used in investing activities				(1,681	)				*			(60,819	)			(62,500	)
Cash flows from financing activities:
	Issuance of debt			2,101				—				64,960				67,061
	Repayments of debt			(607	)			—				(51,497	)			(52,104	)
	Other			(1,494	)				*			23,706				22,212
Net cash provided by (used in) financing activities				—					*			37,169				37,169
Effect of exchange rate changes on cash				—				—				(163	)			(163	)
Change in cash				173					*			(285	)			(112	)
Cash at beginning of year				17				—				1,992				2,009
Cash at end of year			$	190			$		*		$	1,707			$	1,897
Year Ended December 31, 2004
Net cash provided by operating activities			$	1,390			$		*		$	28,024			$	29,414
Cash flows from investing activities:
	Invested assets disposed			502				—				149,883				150,385
	Invested assets acquired			(107	)			—				(242,231	)			(242,338	)
	Other			251					*			(894	)			(643	)
Net cash used in investing activities				646					*			(93,242	)			(92,596	)
Cash flows from financing activities:
	Issuance of debt			—				—				46,695				46,695
	Repayments of debt			(400	)			—				(32,552	)			(32,952	)
	Other			(1,638	)				*			52,112				50,474
Net cash provided by (used in) financing activities				(2,038	)				*			66,255				64,217
Effect of exchange rate changes on cash				—				—				52				52
Change in cash				(2	)				*			1,089				1,087
Cash at beginning of year				19				—				903				922
Cash at end of year			$	17			$		*		$	1,992			$	2,009

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		Year Ended				Year Ended
(in millions)		December 31, 2005				December 31, 2004
Cash flows from operating activities — As previously reported		$	25,138			$	30,716
Revisions			244				(1,302	)
Cash flows from operating activities — As revised		$	25,382			$	29,414
Cash flows from investing activities — As previously reported		$	(57,321	)		$	(97,115	)
Revisions			(5,179	)			4,519
Cash flows from investing activities — As revised		$	(62,500	)		$	(92,596	)
Cash flows from financing activities — As previously reported		$	32,999			$	66,494
Revisions			4,170				(2,277	)
Cash flows from financing activities — As revised		$	37,169			$	64,217
Effect of exchange rate changes on cash — As previously reported		$	(928	)		$	992
Revisions			765				(940	)
Effect of exchange rate changes on cash — As revised		$	(163	)		$	52

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•	Continued focus on implementing and testing of standard key controls globally,
•	Continued focus on reconciling, evaluating and monitoring of historical balance sheet income tax accounts as well as more detailed financial statement exposure analysis,
•	Implementation of a global income tax accounting reporting tool,
•	Hiring of additional qualified staff including a new Director of Taxes, as well as Tax Managers and Tax Accountants at designated business units and Corporate, and
•	Development and dissemination of income tax accounting training and education programs at the Corporate and business unit levels utilizing site visits and training conferences.

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	AMERICAN INTERNATIONAL GROUP, INC.

	By	/s/ Martin J. Sullivan

	(Martin J. Sullivan, President and Chief Executive Officer)

Signature				Title
/s/ Martin J. Sullivan   (Martin J. Sullivan)				President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ Steven J. Bensinger   (Steven J. Bensinger)				Executive Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ David L. Herzog   (David L. Herzog)				Senior Vice President and Comptroller (Principal Accounting Officer)
/s/ Marshall A. Cohen   (Marshall A. Cohen)				Director
/s/ Martin S. Feldstein   (Martin S. Feldstein)				Director
/s/ Ellen V. Futter   (Ellen V. Futter)				Director
/s/ Stephen L. Hammerman   (Stephen L. Hammerman)				Director
/s/ Richard C. Holbrooke   (Richard C. Holbrooke)				Director
/s/ Fred H. Langhammer   (Fred H. Langhammer)				Director

---

 

Signature				Title
/s/ George L. Miles, Jr.   (George L. Miles, Jr.)				Director
/s/ Morris W. Offit   (Morris W. Offit)				Director
/s/ James F. Orr III   (James F. Orr III)				Director
/s/ Virginia M. Rometty   (Virginia M. Rometty)				Director
/s/ Michael H. Sutton   (Michael H. Sutton)				Director
/s/ Edmund S.W. Tse   (Edmund S.W. Tse)				Director
/s/ Robert B. Willumstad   (Robert B. Willumstad)				Director
/s/ Frank G. Zarb   (Frank G. Zarb)				Director

---

 

Exhibit
Number		Description							Location
2		Plan of acquisition, reorganization, arrangement, liquidation or succession
		Agreement and Plan of Merger, dated as of May 11, 2001, among American International Group, Inc., Washington Acquisition Corporation and American General Corporation							Incorporated by reference to Exhibit 2.1(i)(a) to AIG’s Registration Statement on Form S-4 (File No. 333-62688).
3(i)(a)		Restated Certificate of Incorporation of AIG							Incorporated by reference to Exhibit 3(i) to AIG’s Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-8787).
3(i)(b)		Certificate of Amendment of Certificate of Incorporation of AIG, filed June 3, 1998							Incorporated by reference to Exhibit 3(i) to AIG’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-8787).
3(i)(c)		Certificate of Merger of SunAmerica Inc. with and into AIG, filed December 30, 1998 and effective January 1, 1999							Incorporated by reference to Exhibit 3(i) to AIG’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-8787).
3(i)(d)		Certificate of Amendment of Certificate of Incorporation of AIG, filed June 5, 2000							Incorporated by reference to Exhibit 3(i)(c) to AIG’s Registration Statement on Form S-4 (File No. 333-45828).
3(ii)		Amended and Restated By-laws of AIG							Incorporated by reference to Exhibit 3(ii) to AIG’s Current Report on Form 8-K filed with the SEC on January 19, 2007 (File No. 1-8787).
4		Instruments defining the rights of security holders, including indentures							Certain instruments defining the rights of holders of long-term debt securities of AIG and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. AIG hereby undertakes to furnish to the Commission, upon request, copies of any such instruments.
9		Voting Trust Agreement							None.
10		Material contracts*
			(1)		AIG 1969 Employee Stock Option Plan and Agreement Form				Filed as exhibit to AIG’s Registration Statement (File No. 2-44043) and incorporated herein by reference.
			(2)		AIG 1972 Employee Stock Option Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-44702) and incorporated herein by reference.
			(3)		AIG 1972 Employee Stock Purchase Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-44043) and incorporated herein by reference.
			(4)		AIG 1984 Employee Stock Purchase Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-91945) and incorporated herein by reference.
			(5)		AIG Amended and Restated 1996 Employee Stock Purchase Plan				Filed as exhibit to AIG’s Definitive Proxy Statement dated April 4, 2003 (File No. 1-8787) and incorporated herein by reference.
			(6)		AIG 2003 Japan Employee Stock Purchase Plan				Incorporated by reference to Exhibit 4 to AIG’s Registration Statement on Form S-8 (File No. 333-111737).
			(7)		AIG 1977 Stock Option and Stock Appreciation Rights Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-59317) and incorporated herein by reference.
			(8)		AIG 1982 Employee Stock Option Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-78291) and incorporated herein by reference.
			(9)		AIG 1987 Employee Stock Option Plan				Filed as exhibit to AIG’s Definitive Proxy Statement dated April 6, 1987 (File No. 0-4652) and incorporated herein by reference.
			(10)		AIG 1991 Employee Stock Option Plan				Filed as exhibit to AIG’s Definitive Proxy Statement dated April 4, 1997 (File No. 1-8787) and incorporated herein by reference.

* All material contracts are management contracts or compensatory plans or arrangements, except items (66), (67), (68) and (69).

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Exhibit
Number		Description						Location
		(11)		AIG Amended and Restated 1999 Stock Option Plan				Filed as exhibit to AIG’s Definitive Proxy Statement dated April 4, 2003 (File No. 1-8787) and incorporated herein by reference.
		(12)		Form of Stock Option Grant Agreement under the AIG Amended and Restated 1999 Stock Option Plan				Incorporated by reference to Exhibit 10(a) to AIG’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (File No. 1-8787).
		(13)		AIG Amended and Restated 2002 Stock Incentive Plan				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-101967).
		(14)		Form of Restricted Stock Unit Award Agreement under the AIG Amended and Restated 2002 Stock Incentive Plan				Incorporated by reference to Exhibit 10(b) to AIG’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (File No. 1-8787).
		(15)		AIG Executive Deferred Compensation Plan				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-101640).
		(16)		AIG Supplemental Incentive Savings Plan				Incorporated by reference to Exhibit 4(b) to AIG’s Registration Statement on Form S-8 (File No. 333-101640).
		(17)		AIG Director Stock Plan				Filed as an exhibit to AIG’s Definitive Proxy Statement dated April 5, 2004 (File No. 1-8787) and incorporated herein by reference.
		(18)		AIG Chief Executive Officer Annual Compensation Plan				Filed as an exhibit to AIG’s Definitive Proxy Statement dated April 5, 2004 (File No. 1-8787) and incorporated herein by reference.
		(19)		AIRCO 1972 Employee Stock Option Plan				Incorporated by reference to AIG’s Joint Proxy Statement and Prospectus (File No. 2-61994).
		(20)		AIRCO 1977 Stock Option and Stock Appreciation Rights Plan				Incorporated by reference to AIG’s Joint Proxy Statement and Prospectus (File No. 2-61994).
		(21)		Purchase Agreement between AIA and Mr. E.S.W. Tse				Incorporated by reference to Exhibit 10(l) to AIG’s Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-8787).
		(22)		Retention and Employment Agreement between AIG and Jay S. Wintrob				Incorporated by reference to Exhibit 10(m) to AIG’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-8787).
		(23)		SunAmerica Inc. 1988 Employee Stock Plan				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(24)		SunAmerica 1997 Employee Incentive Stock Plan				Incorporated by reference to Exhibit 4(b) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(25)		SunAmerica Nonemployee Directors’ Stock Option Plan				Incorporated by reference to Exhibit 4(c) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(26)		SunAmerica 1995 Performance Stock Plan				Incorporated by reference to Exhibit 4(d) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(27)		SunAmerica Inc. 1998 Long-Term Performance-Based Incentive Plan For the Chief Executive Officer				Incorporated by reference to Exhibit 4(e) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(28)		SunAmerica Inc. Long-Term Performance-Based Incentive Plan Amended and Restated 1997				Incorporated by reference to Exhibit 4(f) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(29)		SunAmerica Five Year Deferred Cash Plan				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-31346).
		(30)		SunAmerica Executive Savings Plan				Incorporated by reference to Exhibit 4(b) to AIG’s Registration Statement on Form S-8 (File No. 333-31346).

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Exhibit
Number		Description						Location
		(31)		HSB Group, Inc. 1995 Stock Option Plan				Incorporated by reference to Exhibit 10(iii)(f) to HSB’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-13135).
		(32)		HSB Group, Inc. 1985 Stock Option Plan				Incorporated by reference to Exhibit 10(iii)(a) HSB’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (File No. 1-13135).
		(33)		HSB Group, Inc. Employee’s Thrift Incentive Plan				Incorporated by reference to Exhibit 4(i)(c) to The Hartford Steam Boiler Inspection and Insurance Company’s Registration Statement on Form S-8 (File No. 33-36519).
		(34)		American General Corporation 1984 Stock and Incentive Plan				Incorporated by reference to Exhibit 10.1 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-7981).
		(35)		Amendment to American General Corporation 1984 Stock and Incentive Plan (January 2000)				Incorporated by reference to Exhibit 10.2 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(36)		American General Corporation 1994 Stock and Incentive Plan (January 2000)				Incorporated by reference to Exhibit 10.2 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-7981).
		(37)		Amendment to American General Corporation 1994 Stock and Incentive Plan (January 1999)				Incorporated by reference to Exhibit 10.4 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(38)		Amendment to American General Corporation 1994 Stock and Incentive Plan (January 2000)				Incorporated by reference to Exhibit 10.5 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(39)		Amendment to American General Corporation 1994 Stock and Incentive Plan (November 2000)				Incorporated by reference to Exhibit 10.1 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-7981).
		(40)		American General Corporation 1997 Stock and Incentive Plan				Incorporated by reference to Exhibit 10.3 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-7981).
		(41)		Amendment to American General Corporation 1997 Stock and Incentive Plan (January 1999)				Incorporated by reference to Exhibit 10.7 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(42)		Amendment to American General Corporation 1997 Stock and Incentive Plan (November 2000)				Incorporated by reference to Exhibit 10.2 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-7981).
		(43)		American General Corporation 1999 Stock and Incentive Plan				Incorporated by reference to Exhibit 10.4 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-7981).
		(44)		Amendment to American General Corporation 1999 Stock and Incentive Plan (January 1999)				Incorporated by reference to Exhibit 10.9 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(45)		Amendment to American General Corporation 1999 Stock and Incentive Plan (November 2000)				Incorporated by reference to Exhibit 10.3 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-7981).
		(46)		Amended and Restated American General Corporation Deferred Compensation Plan (12/11/00)				Incorporated by reference to Exhibit 10.13 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-7981).
		(47)		Amended and Restated Restoration of Retirement Income Plan for Certain Employees Participating in the Restated American General Retirement Plan (Restoration of Retirement Income Plan) (12/31/98)				Incorporated by reference to Exhibit 10.14 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-7981).
		(48)		Amended and Restated American General Supplemental Thrift Plan (12/31/98)				Incorporated by reference to Exhibit 10.15 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-7981).

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Exhibit
Number		Description						Location
		(49)		American General Employees’ Thrift and Incentive Plan (restated July 1, 2001)				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-68640).
		(50)		American General Agents’ and Managers’ Thrift and Incentive Plan (restated July 1, 2001)				Incorporated by reference to Exhibit 4(b) to AIG’s Registration Statement on Form S-8 (File No. 333-68640).
		(51)		CommLoCo Thrift Plan (restated July 1, 2001)				Incorporated by reference to Exhibit 4(c) to AIG’s Registration Statement on Form S-8 (File No. 333-68640).
		(52)		Western National Corporation 1993 Stock and Incentive Plan, as amended				Incorporated by reference to Exhibit 10.18 to Western National Corporation’s Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 1-12540).
		(53)		USLIFE Corporation 1991 Stock Option Plan, as amended				Incorporated by reference to USLIFE Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1995 (File No. 1-5683).
		(54)		Employment Agreement, Amendment to Employment Agreement, and Split-Dollar Agreement, including Assignment of Life Insurance Policy as Collateral, with Rodney O. Martin, Jr.				Incorporated by reference to Exhibit 10(xx) to AIG’s Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 1-8787).
		(55)		Employment Arrangements with Richard W. Scott
				(a) Employment Agreement				Incorporated by reference to Exhibit 10.3 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 (File No. 1-7981).
				(b) Change in Control Severance Agreement				Incorporated by reference to Exhibit 10.32 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
				(c) Amendment to Employment Arrangements				Incorporated by reference to Exhibit 10(zz)(iii) to AIG’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 1-8787).
		(56)		Letter from AIG to Martin J. Sullivan, dated March 16, 2005				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on March 17, 2005 (File No. 1-8787).
		(57)		Letter from AIG to Steven J. Bensinger, dated March 16, 2005				Incorporated by reference to Exhibit 10.3 to AIG’s Current Report on Form 8-K filed with the SEC on March 17, 2005 (File No. 1-8787).
		(58)		Employment Agreement between AIG and Martin J. Sullivan, dated as of June 27, 2005				Incorporated by reference to Exhibit 10(1) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(59)		Employment Agreement between AIG and Steven J. Bensinger, dated as of June 27, 2005				Incorporated by reference to Exhibit 10(3) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(60)		Executive Severance Plan, effective as of June 27, 2005				Incorporated by reference to Exhibit 10(4) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(61)		Assurance Agreement, by AIG in favor of eligible employees, dated as of June 27, 2005, relating to certain obligations of Starr International Company, Inc.				Incorporated by reference to Exhibit 10(6) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(62)		2005/2006 Deferred Compensation Profit Participation Plan				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on September 26, 2005 (File No. 1-8787).
		(63)		Summary of Director Compensation				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on November 22, 2005 (File No. 1-8787).
		(64)		AIG 2005 Senior Partners Plan				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on December 20, 2005 (File No. 1-8787).

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Exhibit
Number		Description							Location
			(65)		AIG Special Restricted Stock Unit Award Agreement with Steven J. Bensinger, dated January 6, 2006				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on January 9, 2006 (File No. 1-8787).
			(66)		Agreement with the United States Department of Justice, dated February 7, 2006				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on February 9, 2006 (File No. 1-8787).
			(67)		Final Judgment and Consent with the Securities and Exchange Commission, including the related complaint, dated February 9, 2006				Incorporated by reference to Exhibit 10.2 to AIG’s Current Report on Form 8-K filed with the SEC on February 9, 2006 (File No. 1-8787).
			(68)		Agreement between the Attorney General of the State of New York and AIG and its Subsidiaries, dated January 18, 2006				Incorporated by reference to Exhibit 10.3 to AIG’s Current Report on Form 8-K filed with the SEC on February 9, 2006 (File No. 1-8787).
			(69)		Stipulation with the State of New York Insurance Department, dated January 18, 2006				Incorporated by reference to Exhibit 10.4 to AIG’s Current Report on Form 8-K filed with the SEC on February 9, 2006 (File No. 1-8787).
			(70)		AIG Senior Partners Plan (amended and restated)				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on July 21, 2006 (File No. 1-8787).
			(71)		AIG Partners Plan				Incorporated by reference to Exhibit 10.2 to AIG’s Current Report on Form 8-K filed with the SEC on May 22, 2006 (File No. 1-8787).
			(72)		AIG Executive Incentive Plan				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on May 22, 2006 (File No. 1-8787).
11		Statement re computation of per share earnings							Included in Note 11 of Notes to Consolidated Financial Statements.
12		Statements re computation of ratios							Filed herewith.
13		Annual report to security holders							Not required to be filed.
18		Letter re change in accounting principles							None.
21		Subsidiaries of the Registrant							Filed herewith.
23		Consent of PricewaterhouseCoopers LLP							Filed herewith.
24		Power of attorney							Included on the signature page hereof.
31		Rule 13a-14(a)/15d-14(a) Certifications							Filed herewith.
32		Section 1350 Certifications							Filed herewith.
99		Additional exhibits							None.

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											Amount at
											which shown
											in the
At December 31, 2006							Fair				Balance
(in millions)			Cost*				Value				Sheet
Fixed maturities:
	Bonds:
	United States government and government agencies and authorities		$	5,415			$	5,391			$	5,391
	States, municipalities and political subdivisions			81,236				82,802				82,085
	Foreign governments			62,708				67,698				67,698
	Public utilities			14,687				15,012				15,012
	All other corporate			244,105				247,679				247,679
	Total bonds			408,151				418,582				417,865
Total fixed maturities				408,151				418,582				417,865
Equity securities:
	Common stocks:
	Public utilities			286				372				372
	Banks, trust and insurance companies			1,796				2,596				2,596
	Industrial, miscellaneous and all other			21,292				24,692				24,692
	Total common stocks			23,374				27,660				27,660
	Preferred stocks			2,507				2,562				2,562
Total equity securities				25,881				30,222				30,222
Mortgage loans on real estate, policy and collateral loans				28,418				28,655				28,418
Financial services assets:
	Flight equipment primarily under operating leases, net of accumulated depreciation			39,875				–				39,875
	Securities available for sale, at market value			45,912				47,205				47,205
	Trading securities, at market value			–				5,031				5,031
	Spot commodities			–				220				220
	Unrealized gain on swaps, options and forward transactions			–				19,252				19,252
	Trading assets			–				2,468				2,468
	Securities purchased under agreements to resell, at contract value			33,702				–				33,702
	Finance receivables, net of allowance			29,573				26,712				29,573
Securities lending collateral, at market value (approximates cost)				69,306				69,306				69,306
Other invested assets (approximates market value)				42,114				42,421				42,114
Short-term investments, at cost (approximates fair value)				25,249				25,249				25,249
Total investments				–				–			$	790,500

*	Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts.

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December 31,
(in millions)			2006				2005
Assets:
	Cash		$	76			$	190
	Invested assets			7,346				122
	Carrying value of subsidiaries and partially-owned companies, at equity			109,125				90,723
	Premiums and insurance balances receivable – net			222				186
	Other assets			3,767				4,146
Total assets				120,536				95,367
Liabilities:
	Insurance balances payable			21				408
	Due to affiliates – net			1,841				3,250
	Notes and bonds payable			8,917				4,607
	Loans payable			700				722
	AIG MIP matched notes and bonds payable			5,468				—
	Series AIGFP matched notes and bonds payable			72				—
	Other liabilities			1,840				63
Total liabilities				18,859				9,050
Shareholders’ equity:
	Common stock			6,878				6,878
	Additional paid-in capital			2,590				2,339
	Retained earnings			84,996				72,330
	Accumulated other comprehensive income			9,110				6,967
	Treasury stock			(1,897	)			(2,197	)
Total shareholders’ equity				101,677				86,317
Total liabilities and shareholders’ equity			$	120,536			$	95,367

Years Ended December 31,
(in millions)			2006				2005				2004
Agency income (loss)			$	9			$	3			$	(8	)
Financial services income				531				507				578
Asset management income (loss)				34				(3	)			(11	)
Dividend income from consolidated subsidiaries:
	Cash			1,689				1,958				1,938
	Other			–				–				1
Dividend income from partially-owned companies				11				127				11
Equity in undistributed net income of consolidated subsidiaries and partially-owned companies				13,308				10,156				8,602
Other income (expenses) – net				(1,371	)			(2,203	)			(409	)
Cumulative effect of an accounting change				34				–				–
Income before income taxes				14,245				10,545				10,702
Income taxes				197				68				863
Net income			$	14,048			$	10,477			$	9,839

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Years Ended December 31,			2006				2005				2004
(in millions)
Cash flows from operating activities:
	Net income		$	14,048			$	10,477			$	9,839
Adjustments to reconcile net income to net cash provided by operating activities:
	Noncash revenues, expenses, gains and losses included in income:
	Equity in undistributed net income of consolidated subsidiaries and partially-owned companies			(13,308	)			(10,156	)			(8,602	)
	Change in premiums and insurance balances receivable and payable — net			(423	)			15				(12	)
	Foreign exchange transaction (gains) losses			232				—				—
	Other — net			(1,139	)			1,518				165
	Total adjustments			(14,638	)			(8,623	)			(8,449	)
Net cash provided by (used in) operating activities				(590	)			1,854				1,390
Cash flows from investing activities:
	Purchase of investments			(8,298	)			—				(107	)
	Sale of investments			3,417				—				200
	Change in short-term investments			414				(598	)			302
	Contributions to subsidiaries and investments in partially-owned companies			(3,017	)			(966	)			270
	Other — net			(159	)			(117	)			(19	)
Net cash used in investing activities				(7,643	)			(1,681	)			646
Cash flows from financing activities:
	Notes, bonds and loans issued			12,038				2,101				—
	Repayments of notes, bonds and loans			(2,417	)			(607	)			(400	)
	Issuance of treasury stock			163				82				158
	Cash dividends paid to shareholders			(1,638	)			(1,421	)			(730	)
	Acquisition of treasury stock			(20	)			(176	)			(1,083	)
	Other — net			(7	)			21				17
Net cash (used in) provided by financing activities				8,119				—				(2,038	)
Change in cash				(114	)			173				(2	)
Cash at beginning of year				190				17				19
Cash at end of year			$	76			$	190			$	17

(1)	Agency operations conducted in New York through the North American Division of AIU are included in the financial statements of the parent company.
(2)	Certain accounts have been reclassified in the 2005 and 2004 financial statements to conform to their 2006 presentation.
(3)	“Equity in undistributed net income of consolidated subsidiaries and partially-owned companies” in the accompanying Statement of Income — Parent Company Only — includes equity in income of the minority-owned insurance operations.

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							Reserves
							for																				Losses
							Losses and																				and				Amortization
			Deferred				Loss				Reserve				Policy												Loss				of Deferred
			Policy				Expenses,				for				and								Net				Expenses				Policy				Other				Net
			Acquisition				Future Policy				Unearned				Contract				Premium				Investment				Incurred,				Acquisition				Operating				Premiums
Segment (in millions)			Costs				Benefits(a)				Premiums				Claims(b)				Revenue				Income				Benefits				Costs				Expenses				Written
2006
	General Insurance		$	4,355			$	79,999			$	26,271			$	–			$	43,451			$	5,696			$	28,052			$	7,866			$	2,876			$	44,866
	Life Insurance & Retirement Services			32,810				122,230				–				2,788				30,636				19,439				31,505				3,712				4,914				–
	Other			70				–-				–				–				(4	)			157				149				–				–				–
			$	37,235			$	202,229			$	26,271			$	2,788			$	74,083			$	25,292			$	59,706			$	11,578			$	7,790			$	44,866
2005
	General Insurance		$	4,048			$	77,169			$	24,243			$	–			$	40,809			$	4,031			$	33,091			$	7,365			$	2,403			$	41,872
	Life Insurance & Retirement Services			28,106				108,807				–				2,473				29,400				18,134				30,467				3,328				4,677				–
			$	32,154			$	185,976			$	24,243			$	2,473			$	70,209			$	22,165			$	63,558			$	10,693			$	7,080			$	41,872
2004
	General Insurance		$	3,998			$	61,878			$	23,400			$	–			$	38,537			$	3,196			$	30,357			$	6,301			$	2,126			$	40,623
	Life Insurance & Retirement Services			25,080				104,740				–				2,435				28,088				15,269				27,855				3,514				4,108				–
			$	29,078			$	166,618			$	23,400			$	2,435			$	66,625			$	18,465			$	58,212			$	9,815			$	6,234			$	40,623

(a)	Reserves for losses and loss expenses with respect to the General Insurance operations are net of discounts of $2.26 billion, $2.11 billion and $1.55 billion at December 31, 2006, 2005 and 2004, respectively.
(b)	Reflected in insurance balances payable on the accompanying consolidated balance sheet.

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																			Percent of
							Ceded				Assumed								Amount
			Gross				to Other				from Other				Net				Assumed
(dollars in millions)			Amount				Companies				Companies				Amount				to Net
2006
Life Insurance in-force			$	2,069,617			$	408,970			$	983			$	1,661,630				0.1	%
Premiums:
	General Insurance		$	49,609			$	11,414			$	6,671			$	44,866				14.9	%
	Life Insurance & Retirement Services			32,097				1,481				20				30,636	*			0.1
Total premiums			$	81,706			$	12,895			$	6,691			$	75,502				8.9	%
2005
Life Insurance in-force			$	1,838,337			$	365,082			$	14,496			$	1,487,751				1.0	%
Premiums:
	General Insurance		$	46,689			$	10,853			$	6,036			$	41,872				14.4	%
	Life Insurance & Retirement Services			30,637				1,317				80				29,400	*			0.3
Total premiums			$	77,326			$	12,170			$	6,116			$	71,272				8.6	%
2004
Life Insurance in-force			$	1,844,189			$	344,036			$	13,905			$	1,514,058				0.9	%
Premiums:
	General Insurance		$	44,692			$	11,423			$	7,354			$	40,623				18.1	%
	Life Insurance & Retirement Services			28,486				1,114				716				28,088	*			2.5
Total premiums			$	73,178			$	12,537			$	8,070			$	68,711				11.7	%

*	Includes accident and health premiums of $7.11 billion, $6.51 billion and $5.63 billion in 2006, 2005 and 2004, respectively.

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							Additions
			Balance,				Charged to Costs								Other				Balance,
(in millions)			Beginning of Year				and Expenses				Charge offs				Changes(a)(b)				End of Year
2006
	Allowance for mortgage loans		$	54			$	6			$	—			$	(5	)		$	55
	Allowance for collateral and guaranteed loans			10				11				(11	)			(1	)			9
	Allowance for finance receivables			670				495				(534	)			106				737
	Allowance for premiums and insurances balances receivable			871				240				(481	)			126				756
	Allowance for reinsurance assets			999				147				(381	)			(229	)			536
	Overhaul reserve(c)			142				249				—				(146	)			245
2005
	Allowance for mortgage loans		$	65			$	1			$	(19	)		$	7			$	54
	Allowance for collateral and guaranteed loans			18				—				(7	)			(1	)			10
	Allowance for finance receivables			571				435				(414	)			78				670
	Allowance for premiums and insurances balances receivable			561				418				(104	)			(4	)			871
	Allowance for reinsurance assets			846				185				(49	)			17				999
	Overhaul reserve(c)			68				260				—				(186	)			142
2004
	Allowance for mortgage loans		$	68			$	11			$	(9	)		$	(5	)		$	65
	Allowance for collateral and guaranteed loans			15				4				(2	)			1				18
	Allowance for finance receivables			562				389				(443	)			63				571
	Allowance for premiums and insurances balances receivable			485				147				(25	)			(46	)			561
	Allowance for reinsurance assets			569				276				(11	)			12				846
	Overhaul reserve(c)			69				164				—				(165	)			68

(a)	Includes recoveries of amounts previously charged off and reclassifications to/from other accounts.
(b)	Amounts for Overhaul reserve represent reimbursements to lessees for overhauls performed and amounts transferred to buyers for aircraft sold.
(c)	Included in Other liabilities on the Consolidated Balance Sheet.