(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, 2005
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			14
	Item 1B.		Unresolved Staff Comments			17
	Item 2.		Properties			17
	Item 3.		Legal Proceedings			17
	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			23
	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			69
	Item 8.		Financial Statements and Supplementary Data			69
	Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			140
	Item 9A.		Controls and Procedures			140
	Item 9B.		Other Information			143
PART III
	Item 10.		Directors and Executive Officers of the Registrant			144
	Item 11.		Executive Compensation			144
	Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			144
	Item 13.		Certain Relationships and Related Transactions			144
	Item 14.		Principal Accountant Fees and Services			145
PART IV
	Item 15.		Exhibits and Financial Statement Schedules			144
SIGNATURES						145

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Years Ended December 31,
(in millions)			2005				2004				2003				2002				2001
General Insurance operations:
	Gross premiums written		$	52,725			$	52,046			$	46,938			$	36,678			$	28,341
	Net premiums written			41,872				40,623				35,031				26,718				19,793
	Net premiums earned			40,809				38,537				31,306				23,595				18,661
	Underwriting profit (loss)(a)			(2,050	)			(247	)			1,975				(1,082	)(c)			(777	)(d)
	Net investment income			4,031				3,196				2,566				2,350				2,551
	Realized capital gains (losses)			334				228				(39	)			(345	)			(189	)
	Operating income			2,315				3,177				4,502				923	(c)			1,585	(d)
	Identifiable assets			150,667				131,658				117,511				105,891				88,250
	Loss ratio			81.1				78.8				73.1				83.1				79.3
	Expense ratio			23.6				21.5				19.6				21.8				24.3
	Combined ratio(b)			104.7				100.3				92.7				104.9	(c)			103.6	(d)
Life Insurance & Retirement Services operations:
	GAAP premiums			29,400				28,088				23,496				20,694				19,600
	Net investment income			18,134				15,269				12,942				11,243				10,451
	Realized capital gains (losses)(e)			(218	)			43				240				(372	)			(400	)
	Operating income			8,844				7,923				6,807				5,181				4,633	(f)
	Identifiable assets			480,622				447,841				372,126				289,914				256,767
	Insurance in-force at end of year(g)			1,852,833				1,858,094				1,583,031				1,298,592				1,228,501
Financial Services operations:
	Interest, lease and finance charges (h)			10,525				7,495				6,242				6,822				6,321
	Operating income(g)			4,276				2,180				1,182				2,125				1,769
	Identifiable assets			166,488				165,995				141,667				128,104				107,719
Asset Management operations:
	Advisory and management fees and net investment income from GICs			5,325				4,714				3,651				3,467				3,565
	Operating income			2,253				2,125				1,316				1,125				1,019
	Identifiable assets			81,080				80,075				64,047				53,732				42,961
Other realized capital gains (losses)				225				(227	)			(643	)			(936	)			(321	)
Revenues(i)				108,905				97,666				79,421				66,171				59,958
Total operating income(j)				15,213				14,845				11,907				7,808				5,917
Total assets				853,370				801,145				675,602				561,598				490,614

(a)	Underwriting profit (loss), a Generally Accepted Accounting Principles (GAAP) measure, is statutory underwriting profit (loss) adjusted primarily for changes in the deferral of policy acquisition costs. This adjustment is necessary to present the financial statements in accordance with GAAP.
(b)	Calculated on a statutory basis, includes catastrophe losses of $2.63 billion, $1.05 billion, $83 million, $61 million and $867 million (including World Trade Center and related losses (WTC losses) of $769 million) in 2005, 2004, 2003, 2002 and 2001, respectively.
(c)	In the fourth quarter of 2002, after completion of its annual review of General Insurance loss and loss adjustment expense reserves, AIG increased its net loss reserves relating to accident years 1997 through 2001 by $2.1 billion.

(d)	Includes $867 million of catastrophe losses.

(e)	Includes the effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52. For 2005, 2004, 2003, 2002, and 2001, respectively, the amounts included are $(437) million, $(140) million, $78 million, $(91) million and $(219) million.

(f)	Includes $100 million in WTC losses.

(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 do not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2005, 2004, 2003, 2002 and 2001, respectively, the amounts included in interest, lease and finance charges are $2.01 billion, $(122) million, $(1.01) billion, $220 million and $56 million, and the amounts included in Financial Services operating income are $1.98 billion, $(149) million, $(964) million, $240 million and $75 million.
(i)	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 advisory and management fees and net investment income from Guaranteed Investment Contracts (GICs), and realized capital gains (losses).
(j)	Represents income before income taxes, minority interest and cumulative effect of accounting changes. Includes segment operating income and other realized capital gains (losses) presented above, as well as AIG Parent and other operations of $(2.70) billion, $(333) million, $(1.26) billion, $(610) million and $(751) million in 2005, 2004, 2003, 2002 and 2001, respectively, and acquisition, restructuring and related charges of $(2.02) billion in 2001.

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(in millions)			1995				1996				1997				1998				1999				2000				2001				2002				2003				2004				2005
Net Reserves Held			$	19,755			$	20,496			$	20,901			$	25,418			$	25,636			$	25,684			$	26,005			$	29,347			$	36,228			$	47,254			$	57,476
Discount (in Reserves Held)				217				393				619				897				1,075				1,287				1,423				1,499				1,516				1,553				2,110
Net Reserves Held (Undiscounted)				19,972				20,889				21,520				26,315				26,711				26,971				27,428				30,846				37,744				48,807				59,586
Paid (Cumulative) as of:
	One year later			5,416				5,712				5,607				7,205				8,266				9,709				11,007				10,775				12,163				14,910
	Two years later			8,982				9,244				9,754				12,382				14,640				17,149				18,091				18,589				21,773
	Three years later			11,363				11,943				12,939				16,599				19,901				21,930				23,881				25,513
	Four years later			13,108				14,152				15,484				20,263				23,074				26,090				28,717
	Five years later			14,667				16,077				17,637				22,303				25,829				29,473
	Six years later			16,120				17,551				18,806				24,114				28,165
	Seven years later			17,212				18,415				19,919				25,770
	Eight years later			17,792				19,200				21,089
	Nine years later			18,379				20,105
	Ten years later			19,155

(in millions)			1995				1996				1997				1998				1999				2000				2001				2002				2003				2004				2005
Net Reserves Held (undiscounted)			$	19,972			$	20,889			$	21,520			$	26,315			$	26,711			$	26,971			$	27,428			$	30,846			$	37,744			$	48,807			$	59,586
Undiscounted Liability as of:
	One year later			19,782				20,795				21,563				25,897				26,358				26,979				31,112				32,913				40,931				53,486
	Two years later			19,866				20,877				21,500				25,638				27,023				30,696				33,363				37,583				49,463
	Three years later			19,865				20,994				21,264				26,169				29,994				32,732				37,964				46,179
	Four years later			20,143				20,776				21,485				28,021				31,192				36,210				45,203
	Five years later			19,991				20,917				22,405				28,607				33,910				41,699
	Six years later			19,950				21,469				22,720				30,632				38,087
	Seven years later			20,335				21,671				24,209				33,861
	Eight years later			20,558				22,986				26,747
	Nine years later			21,736				25,264
	Ten years later			23,878
Net Redundancy/(Deficiency)				(3,906	)			(4,375	)			(5,227	)			(7,546	)			(11,376	)			(14,728	)			(17,775	)			(15,333	)			(11,719	)			(4,679	)
Remaining Reserves (Undiscounted)				4,724				5,158				5,658				8,091				9,922				12,226				16,486				20,666				27,690				38,576
Remaining Discount				252				299				358				459				568				690				846				999				1,212				1,568
Remaining Reserves				4,472				4,859				5,300				7,632				9,354				11,536				15,640				19,667				26,478				37,008

(in millions)		1995				1996				1997				1998				1999				2000				2001				2002				2003				2004				2005
Gross Liability, End of Year		$	32,298			$	32,605			$	32,049			$	36,973			$	37,278			$	39,222			$	42,629			$	48,173			$	53,387			$	63,431			$	79,279
Reinsurance Recoverable, End of Year			12,326				11,716				10,529				10,658				10,567				12,251				15,201				17,327				15,643				14,624				19,693
Net Liability, End of Year			19,972				20,889				21,520				26,315				26,711				26,971				27,428				30,846				37,744				48,807				59,586
Reestimated Gross Liability			40,012				40,817				42,937				51,847				56,864				61,991				65,704				66,398				66,967				69,327
Reestimated Reinsurance Recoverable			16,134				15,553				16,190				17,986				18,777				20,292				20,501				20,219				17,504				15,841
Reestimated Net Liability			23,878				25,264				26,747				33,861				38,087				41,699				45,203				46,179				49,463				53,486
Cumulative Gross Redundancy/(Deficiency)			(7,713	)			(8,212	)			(10,888	)			(14,874	)			(19,586	)			(22,769	)			(23,075	)			(18,225	)			(13,580	)			(5,896	)

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(in millions)			1995				1996				1997				1998				1999				2000				2001				2002				2003				2004				2005
Net Reserves Held			$	19,247			$	19,753			$	20,113			$	24,554			$	24,745			$	24,829			$	25,286			$	28,650			$	35,559			$	45,742			$	55,227
Discount (in Reserves Held)				217				393				619				897				1,075				1,287				1,423				1,499				1,516				1,553				2,110
Net Reserves Held (Undiscounted)				19,464				20,146				20,732				25,451				25,820				26,116				26,709				30,149				37,075				47,295				57,336
Paid (Cumulative) as of:
	One year later			5,309				5,603				5,467				7,084				8,195				9,515				10,861				10,632				11,999				14,718
	Two years later			8,771				8,996				9,500				12,190				14,376				16,808				17,801				18,283				21,419
	Three years later			11,013				11,582				12,618				16,214				19,490				21,447				23,430				25,021
	Four years later			12,645				13,724				14,972				19,732				22,521				25,445				28,080
	Five years later			14,139				15,460				16,983				21,630				25,116				28,643
	Six years later			15,404				16,792				18,014				23,282				27,266
	Seven years later			16,355				17,519				18,972				24,753
	Eight years later			16,798				18,149				19,960
	Nine years later			17,230				18,873
	Ten years later			17,826

(in millions)			1995				1996				1997				1998				1999				2000				2001				2002				2003				2004				2005
Net Reserves Held (undiscounted)			$	19,464			$	20,146			$	20,732			$	25,451			$	25,820			$	26,116			$	26,709			$	30,149			$	37,075			$	47,295			$	57,336
Undiscounted Liability as of:
	One year later			18,937				19,904				20,576				24,890				25,437				26,071				30,274				32,129				39,261				51,048
	Two years later			18,883				19,788				20,385				24,602				26,053				29,670				32,438				35,803				46,865
	Three years later			18,680				19,777				20,120				25,084				28,902				31,619				36,043				43,467
	Four years later			18,830				19,530				20,301				26,813				30,014				34,102				42,348
	Five years later			18,651				19,633				21,104				27,314				31,738				38,655
	Six years later			18,574				20,070				21,336				28,345				34,978
	Seven years later			18,844				20,188				21,836				30,636
	Eight years later			18,984				20,515				23,441
	Nine years later			19,173				21,858
	Ten years later			20,379
Net Redundancy/(Deficiency)				(915	)			(1,712	)			(2,709	)			(5,185	)			(9,158	)			(12,539	)			(15,639	)			(13,318	)			(9,790	)			(3,753	)
Remaining Reserves (undiscounted)				2,553				2,985				3,482				5,883				7,712				10,012				14,269				18,446				25,447				36,330
Remaining Discount				252				299				358				459				568				690				846				999				1,212				1,568
Remaining Reserves				2,301				2,686				3,124				5,424				7,144				9,322				13,423				17,447				24,235				34,762

(in millions)		1995				1996				1997				1998				1999				2000				2001				2002				2003				2004				2005
Gross Liability, End of Year		$	30,356			$	30,302			$	29,740			$	34,474			$	34,666			$	36,777			$	40,400			$	46,036			$	51,363			$	59,897			$	73,912
Reinsurance Recoverable, End of Year			10,892				10,156				9,008				9,023				8,846				10,661				13,691				15,887				14,288				12,602				16,576
Net Liability, End of Year			19,464				20,146				20,732				25,451				25,820				26,116				26,709				30,149				37,075				47,295				57,336
Reestimated Gross Liability			30,452				31,660				34,226				43,461				48,886				54,534				58,776				59,813				60,788				63,544
Reestimated Reinsurance Recoverable			10,073				9,802				10,785				12,825				13,908				15,879				16,428				16,346				13,923				12,496
Reestimated Net Liability			20,379				21,858				23,441				30,636				34,978				38,655				42,348				43,467				46,865				51,048
Cumulative Gross Redundancy/(Deficiency)			(96	)			(1,358	)			(4,486	)			(8,987	)			(14,220	)			(17,757	)			(18,376	)			(13,777	)			(9,425	)			(3,647	)

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(in millions)			2005				2004				2003
Net reserve for losses and loss expenses at beginning of year			$	47,254			$	36,228			$	29,347
Foreign exchange effect				(628	)			524				580
Acquisition				–				–				391	(a)
Losses and loss expenses incurred:
	Current year			28,426				26,793				20,509
	Prior years(b)			4,665				3,564				2,363
				33,091				30,357				22,872
Losses and loss expenses paid:
	Current year			7,331				7,692				6,187
	Prior years			14,910				12,163				10,775
				22,241				19,855				16,962
Net reserve for losses and loss expenses at end of year(c)			$	57,476			$	47,254			$	36,228

(a)	Reflects the opening balances with respect to the GE U.S.-based auto and home insurance business acquired in 2003.
(b)	Includes accretion of discount of $(15) million in 2005, including an increase of $375 million in the discount recorded in 2005; $377 million in 2004 and $296 million in 2003. Additionally, includes $269 million in 2005, $317 million in 2004 and $323 million in 2003 for the general reinsurance operations of Transatlantic, and $197 million of additional losses incurred in 2005 resulting from increased labor and material costs related to the 2004 Florida hurricanes.
(c)	See also Note 6(a) of Notes to Consolidated Financial Statements.

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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)				Total				and Assets(b)				Assets(c)
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
2001			1,338				41,481				42,819				6.0				6.2

(a)	Including investment income due and accrued, and real estate.
(b)	Net investment income divided by the annual average sum of cash and invested assets.
(c)	Net investment income divided by the annual average invested assets.

		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)				Total				and Assets(b)				Assets(c)
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
2001			3,615				162,708				166,323				6.3				6.4

(a)	Including investment income due and accrued, and real estate.
(b)	Net investment income divided by the annual average sum of cash and invested assets.
(c)	Net investment income divided by the annual average invested assets.

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-	Downgrades in AIG’s debt ratings will adversely affect AIG’s results of operations. AIG relies on external sources of financing to fund several of its operations. The cost and availability of unsecured financing are generally dependent on the issuer’s long-term and short-term debt ratings. These downgrades and any future downgrades in AIG’s debt ratings may adversely affect AIG’s borrowing costs and therefore adversely affect AIG’s results of operations.
-	The downgrade in AIG’s long-term senior debt ratings will adversely affect AIGFP’s ability to compete for certain businesses. Credit ratings are very important to the ability of financial institutions to compete in the derivative and structured transaction marketplaces. Historically, AIG’s triple-A ratings provided AIGFP a competitive advantage. The downgrades have reduced this advantage and, for specialized financial transactions that generally are conducted only by triple-A rated financial institutions, counterparties may be unwilling to transact business with AIGFP except on a secured basis. This could require AIGFP to post more collateral to counterparties in the future. See below for a further discussion of the effect that posting collateral may have on AIG’s liquidity.
-	Although the financial strength ratings of AIG’s insurance company subsidiaries remain high compared to many of their competitors, the downgrades have reduced the previous ratings differential. The competitive advantage of the ratings to AIG’s insurance company subsidiaries may be lessened accordingly.
-	As a result of the downgrades of AIG’s long-term senior debt ratings, AIG was required to post approximately $1.16 billion of collateral with counterparties to municipal guaranteed investment contracts and financial derivatives transactions. In the event of a further downgrade, AIG will be required to post additional collateral. It is estimated that, as of the close of business on February 28, 2006 based on AIG’s outstanding municipal guaranteed investment agreements and financial derivatives transactions as of such date, a further downgrade of AIG’s long-term senior debt ratings to ‘Aa3’ by Moody’s or ‘AA-’ by S&P would permit counterparties to call for approximately $962 million of additional collateral. Further, additional downgrades could result in requirements for substantial additional collateral, which could have a material effect on how AIG manages its liquidity. The actual amount of additional collateral that AIG would be required to post to counterparties in the event of such downgrades depends on market conditions, the market value of the outstanding affected transactions and other factors prevailing at the time of the downgrade. Any additional obligations to post collateral will increase the demand on AIG’s liquidity.

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						Served as
						Director or
Name		Title		Age		Officer Since
M. Bernard Aidinoff		Director		77		1984
Pei-yuan Chia		Director		67		1996
Marshall A. Cohen		Director		70		1992
William S. Cohen		Director		65		2004
Martin S. Feldstein		Director		66		1987
Ellen V. Futter		Director		56		1999
Stephen L. Hammerman		Director		67		2005
Carla A. Hills		Director		72		1993
Richard C. Holbrooke		Director		64		2001
Fred H. Langhammer		Director		62		2006
George L. Miles, Jr.		Director		64		2005
Morris W. Offit		Director		69		2005
Martin J. Sullivan		Director, President and Chief Executive Officer		51		2002
Michael H. Sutton		Director		65		2005
Edmund S. W. Tse		Director, Senior Vice Chairman – Life Insurance		68		1996
Robert B. Willumstad		Director		60		2006
Frank G. Zarb		Director and Chairman		71		2001
Thomas R. Tizzio		Senior Vice Chairman – General Insurance		68		1982
Jacob A. Frenkel		Vice Chairman – Global Economic Strategies		62		2004
Frank G. Wisner		Vice Chairman – External Affairs		67		1997
Steven J. Bensinger		Executive Vice President and Chief Financial Officer		51		2002
Rodney O. Martin, Jr.		Executive Vice President – Life Insurance		53		2002
Kristian P. Moor		Executive Vice President – Domestic General Insurance		46		1998
Win J. Neuger		Executive Vice President and Chief Investment Officer		56		1995
R. Kendall Nottingham		Executive Vice President – Life Insurance		67		1998
Robert M. Sandler		Executive Vice President – Domestic Personal Lines		63		1980
Nicholas C. Walsh		Executive Vice President – Foreign General Insurance		55		2005
Jay S. Wintrob		Executive Vice President – Retirement Services		48		1999
William N. Dooley		Senior Vice President – Financial Services		53		1992
Axel I. Freudmann		Senior Vice President – Human Resources		59		1986
David L. Herzog		Senior Vice President and Comptroller		46		2005
Robert E. Lewis		Senior Vice President and Chief Risk Officer		54		1993
Ernest T. Patrikis		Senior Vice President and General Counsel		61		1998
Michael E. Roemer		Senior Vice President and Director of Internal Audit		43		2005
Brian T. Schreiber		Senior Vice President – Strategic Planning		40		2002
Richard W. Scott		Senior Vice President – Investments		52		2002
Kathleen E. Shannon		Senior Vice President and Secretary		56		1986
Keith L. Duckett		Vice President – Administration		45		2001
Robert A. Gender		Vice President and Treasurer		48		2005
Charlene M. Hamrah		Vice President and Director of Investor Relations		58		2004

---

 

						Served as
						Director or
Name		Title		Age		Officer Since
Peter K. Lathrop		Vice President and Director of Taxes		63		2001
Eric N. Litzky		Vice President – Corporate Governance		44		2005
Christopher D. Winans		Vice President – Media Relations		55		2005

---

 

(a)	AIG’s common stock is listed in the U.S. on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

		2005								2004
		High				Low				High				Low
First quarter		$	73.46			$	54.18			$	75.12			$	66.79
Second quarter			58.94				49.91				76.77				69.39
Third quarter			63.73				56.00				72.66				66.48
Fourth quarter			64.40				60.43				68.72				54.70

(b)

In 2005, AIG paid a quarterly dividend of 12.5 cents in March and June and 15.0 cents in September and December for a total cash payment of 55.0 cents per share of common stock. In 2004, AIG paid a quarterly dividend of 6.5 cents in March and June and 7.5 cents in September and December for a total cash payment of 28.0 cents per share of common stock. Subject to the dividend preference of any of AIG’s serial preferred stock which may be outstanding, the holders of shares of common stock are entitled to receive such dividends as may be declared by the Board of Directors from funds legally available therefor.

(c)	The approximate number of holders of common stock as of January 31, 2006, based upon the number of record holders, was 56,000.

(d)	The following table summarizes AIG’s stock repurchases for the three month period ended December 31, 2005:

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, 2005

–

$

–

–

36,542,700

November 1 - 30, 2005

–

–

–

36,542,700

December 1 - 31, 2005

–

–

–

36,542,700

Total

–

$

–

–

(a)	Does not include 76,829 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, 2005.
(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 the Board had expanded the existing program through the authorization of an additional 50 million shares. The purchase program has no set expiration or termination date.

---

 

Years Ended December 31,
(in millions, except per share data)			2005				2004				2003				2002				2001
Revenues(a):
	Premiums and other considerations		$	70,209			$	66,625			$	54,802			$	44,289			$	38,261
	Net investment income			22,165				18,465				15,508				13,593				13,002
	Realized capital gains (losses)			341				44				(442	)			(1,653	)			(910	)
	Other revenues(b)			16,190				12,532				9,553				9,942				9,605
Total revenues				108,905				97,666				79,421				66,171				59,958
Benefits and expenses:
	Incurred policy losses and benefits			63,711				58,360				46,034				40,005				33,984
	Insurance acquisition and other operating expenses			29,981				24,461				21,480				18,358				18,040
	Acquisition, restructuring and related charges			–				–				–				–				2,017
Total benefits and expenses				93,692				82,821				67,514				58,363				54,041
Income before income taxes, minority interest and cumulative effect of accounting changes (c)				15,213				14,845				11,907				7,808				5,917
Income taxes				4,258				4,407				3,556				1,919				1,594
Income before minority interest and cumulative effect of accounting changes				10,955				10,438				8,351				5,889				4,323
Minority interest				(478	)			(455	)			(252	)			(160	)			(101	)
Income before cumulative effect of accounting changes				10,477				9,983				8,099				5,729				4,222
Cumulative effect of accounting changes, net of tax				–				(144	)			9				–				(136	)
Net income				10,477				9,839				8,108				5,729				4,086
Earnings per common share:
	Basic
	Income before cumulative effect of accounting changes			4.03				3.83				3.10				2.20				1.61
	Cumulative effect of accounting changes, net of tax			–				(0.06	)			–				–				(0.05	)
	Net income			4.03				3.77				3.10				2.20				1.56
	Diluted(d)
	Income before cumulative effect of accounting changes			3.99				3.79				3.07				2.17				1.59
	Cumulative effect of accounting changes, net of tax			–				(0.06	)			–				–				(0.05	)
	Net income			3.99				3.73				3.07				2.17				1.54
Dividends per common share(e)				0.63				0.29				0.24				0.18				0.16
Total assets				853,370				801,145				675,602				561,598				490,614
Long-term debt and commercial paper(f)
	Guaranteed by AIG			10,425				8,498				7,469				7,144				8,141
	Liabilities connected to trust preferred stock			1,391				1,489				1,682				–				–
	Matched/not guaranteed by AIG			98,033				86,912				71,198				63,866				56,073
Total Liabilities(g)				766,867				721,273				606,180				501,163				438,551
Shareholders’ equity			$	86,317			$	79,673			$	69,230			$	58,303			$	49,881

(a)	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 advisory and management fees and net investment income from guaranteed investment contracts, and realized capital gains (losses).
(b)	Includes the effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2005, 2004, 2003, 2002 and 2001, respectively, the amounts included are $2.01 billion, $(122) million, $(1.01) billion, $220 million and $56 million.

(c)	Includes catastrophe losses of $3.28 billion in 2005, $1.16 billion in 2004, $83 million in 2003, $61 million in 2002 and World Trade Center losses of $900 million in 2001.

(d)	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.”

(e)	Dividends have not been restated to reflect dividends paid by AGC which was acquired by AIG on August 29, 2001.

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

(g)	Includes $2.1 billion and $2.2 billion for the years ended 2002 and 2001, respectively, of other liabilities connected to the consolidation of the Muni Tender Option Bond Program trusts.

---

 

Index			Page
Cautionary Statement Regarding Projections and Other Information About Future Events				25
Overview of Operations and Business Results				26
Consolidated Results				26
Critical Accounting Estimates				29
Operating Review				30
General Insurance Operations				30
	General Insurance Results			31
	Reinsurance			33
	Reserve for Losses and Loss Expenses			34
	Asbestos and Environmental Reserves			40
Life Insurance & Retirement Services Operations				43
	Life Insurance & Retirement Services Results			44
	Underwriting and Investment Risk			47
Insurance and Asset Management Invested Assets				48
	Credit Quality			49
	Valuation of Invested Assets			49
Financial Services Operations				51
	Financial Services Results			54
	Financial Services Invested Assets			55
Asset Management Operations				56
	Asset Management Results			57
Other Operations				57
Capital Resources				58
Borrowings				58
Contractual Obligations and Other Commercial Commitments				61
Shareholders’ Equity				62
Stock Purchase				62
Dividends from Insurance Subsidiaries				62
Regulation and Supervision				62
Liquidity				63
Special Purpose Vehicles and Off Balance Sheet Arrangements				64
Derivatives				65
Managing Market Risk				65
Insurance				65
Financial Services				66
Recent Accounting Standards				67

---

 

Years Ended December 31,
(in millions)		2005				2004				2003
Total revenues		$	108,905			$	97,666			$	79,421
Income before income taxes, minority interest and cumulative effect of accounting changes			15,213				14,845				11,907
Net income		$	10,477			$	9,839			$	8,108

---

 

(in millions)		2005				2004				2003
Pretax(*)		$	3,280			$	1,155			$	83
Net of tax and minority interest			2,109				729				53

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

(in millions)			2005				2004				2003
Revenues(a):
	General Insurance(b)		$	45,174			$	41,961			$	33,833
	Life Insurance & Retirement Services(c)			47,316				43,400				36,678
	Financial Services(d)			10,525				7,495				6,242
	Asset Management(e)			5,325				4,714				3,651
	Other			565				96				(983	)
Total			$	108,905			$	97,666			$	79,421
Operating Income(a)(f)(g):
	General Insurance		$	2,315			$	3,177			$	4,502
	Life Insurance & Retirement Services			8,844				7,923				6,807
	Financial Services			4,276				2,180				1,182
	Asset Management			2,253				2,125				1,316
	Other(h)(i)			(2,475	)			(560	)			(1,900	)
Total			$	15,213			$	14,845			$	11,907

(a)	Includes the effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2005, 2004 and 2003, the effect was $(34) million, $(27) million and $49 million, respectively, in operating income for Aircraft Finance and $2.01 billion, $(122) million and $(1.01) billion in revenues and operating income, respectively, for Capital Markets (AIGFP).
(b)	Represents the sum of General Insurance net premiums earned, net investment income and realized capital gains (losses).

(c)	Represents the sum of Life Insurance & Retirement Services GAAP premiums, net investment income and realized capital gains (losses). Included in realized capital gains (losses) is the effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52 of $(437) million, $(140) million and $78 million.

(d)	Represents interest, lease and finance charges.

(e)	Represents management and advisory fees, and net investment income with respect to GICs.
(f)	Represents income before income taxes, minority interest, and cumulative effect of accounting changes.

(g)	Catastrophe losses were $3.28 billion, $1.16 billion and $83 million in 2005, 2004 and 2003, respectively.
(h)	Represents unallocated corporate expenses and other realized capital gains (losses) and includes the NYAG, DOI, SEC and DOJ settlement costs in 2005.

(i)	Includes $312 million and $96 million in catastrophe related losses from partially owned companies in 2005 and 2004, respectively, and approximately $1.6 billion of regulatory settlement charges in 2005.

---

 

---

 

-	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 2005 for the year end 2005 loss reserve analysis. For low-frequency, high-severity classes such as excess casualty and D&O, 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.

-	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.

---

 

-	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.

-	Valuation models: utilizing factors, such as market liquidity and current interest, foreign exchange and volatility rates.
-	Pricing 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 prices are 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.
-	The probability of non-realization of a full recovery on its investment, irrespective of the occurrence of one of the foregoing events.

-	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)				2005				2004				2003
Net premiums written:
	Domestic General
		DBG		$	23,128			$	22,506			$	19,563
		Transatlantic			3,466				3,749				3,341
		Personal Lines			4,653				4,354				3,732
		Mortgage Guaranty			628				607				531
	Foreign General				9,997				9,407				7,864
Total				$	41,872			$	40,623			$	35,031
Net premiums earned:
	Domestic General
		DBG		$	22,602			$	21,215			$	16,704
		Transatlantic			3,385				3,661				3,171
		Personal Lines			4,634				4,291				3,678
		Mortgage Guaranty			533				539				496
	Foreign General(f)				9,655				8,831				7,257
Total				$	40,809			$	38,537			$	31,306
Underwriting profit (loss)(a):
	Domestic General
		DBG		$	(3,250	) (b)(c)		$	(1,340	)		$	387
		Transatlantic			(420	)			(47	)			109
		Personal Lines			(19	)			160				183
		Mortgage Guaranty			241				278				264
	Foreign General(e)(f)				1,398				702				1,032
Total				$	(2,050	) (d)		$	(247	)		$	1,975
Net investment income:
	Domestic General
		DBG		$	2,403			$	1,965			$	1,433
		Transatlantic			343				307				271
		Personal Lines			217				186				152
		Mortgage Guaranty			123				120				142
		Intercompany adjustments and eliminations – net			1				–				7
	Foreign General				944				618				561
Total				$	4,031			$	3,196			$	2,566
Realized capital gains (losses)					334				228				(39	)
Operating income(a)				$	2,315	(b)(c)(d)		$	3,177			$	4,502
Domestic General:
	Loss ratio				89.59				83.88				78.35
	Expense ratio				21.00				19.21				17.25
Combined ratio					110.59				103.09				95.60
Foreign General:
	Loss ratio				53.66				61.61				55.52
	Expense ratio(e)				31.90				29.20				27.82
Combined ratio(f)					85.56				90.81				83.34
Consolidated:
	Loss ratio				81.09				78.78				73.06
	Expense ratio				23.60				21.52				19.62
Combined ratio(a)					104.69				100.30				92.68

(a)	The effect of catastrophe related losses on the consolidated General Insurance combined ratio for 2005, 2004 and 2003 was 7.06, 2.74 and 0.27, respectively. Catastrophe related losses for 2005, 2004 and 2003 by reporting unit were as follows:

(in millions)		2005								2004				2003
		Insurance				Net				Insurance				Insurance
		Related				Reinstatement				Related				Related
Reporting Unit		Losses				Premium Cost				Losses				Losses
DBG		$	1,747			$	122			$	582			$	48
Transatlantic			463				45				215				4
Personal Lines			112				2				25				5
Mortgage Guaranty			10				–				–				–
Foreign General			293				94				232				26
Total		$	2,625			$	263			$	1,054			$	83

(b)	Includes $197 million of additional losses incurred resulting from increased labor and material costs related to the 2004 Florida hurricanes.
(c)	The 2005 operating loss for DBG 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. See Note 12(i) of Notes to Consolidated Financial Statements.
(d)	Includes the fourth quarter 2005 increase in net reserves of approximately $1.8 billion.

(f)	Income statement accounts expressed in non-functional currencies are translated into U.S. dollars using average exchange rates.

---

 

		2005
Growth in original currency			2.6	%
Foreign exchange effect			0.5
Growth as reported in U.S. dollars			3.1	%

---

 

---

 

(in millions)
Other liability occurrence		$	18,116
Other liability claims made			12,447
Workers compensation			11,630
Auto liability			6,569
Property			7,217
International			4,939
Reinsurance			2,886
Medical malpractice			2,363
Aircraft			1,844
Products liability			1,937
Commercial multiple peril			1,359
Accident and health			1,678
Fidelity/ surety			1,072
Other			3,112
Total		$	77,169

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

(in millions)
DBG(a)		$	40,782
Personal Lines(b)			2,578
Transatlantic			5,690
Mortgage Guaranty			340
Foreign General(c)			8,086
Total Net Loss Reserve		$	57,476

(a)	DBG loss reserves include approximately $3.77 billion ($4.26 billion 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 $407 million related to business included in AIUO’s statutory filings.
(b)	Personal Lines loss reserves include $878 million related to business ceded to DBG and reported in DBG’s statutory filings.

(c)	Foreign General loss reserves include approximately $2.15 billion related to business reported in DBG’s statutory filings.

---

 

---

 

(in millions)		2005				2004				2003
Net reserve for losses and loss expenses at beginning of year		$	47,254			$	36,228			$	29,347
Foreign exchange effect			(628	)			524				580
Acquisition			–				–				391	(a)
Losses and loss expenses incurred:
Current year			28,426				26,793				20,509
Prior years(b)			4,665	(c)			3,564	(d)			2,363
Losses and loss expenses incurred			33,091				30,357				22,872
Losses and loss expenses paid:
Current year			7,331				7,692				6,187
Prior years			14,910				12,163				10,775
Losses and loss expenses paid			22,241				19,855				16,962
Net reserve for losses and loss expenses at end of year		$	57,476			$	47,254			$	36,228

(a)	Reflects the opening balances with respect to the GE U.S.-based auto and home insurance business acquired in 2003.
(b)	Includes accretion of discount of $(15) million in 2005, including an increase of $375 million in the discount recorded in 2005; $377 million in 2004 and $296 million in 2003. Additionally, includes $269 million in 2005, $317 million in 2004 and $323 million in 2003 for the general reinsurance operations of Transatlantic, and $197 million of additional losses incurred in 2005 resulting from increased labor and material costs related to the 2004 Florida hurricanes.
(c)	Includes fourth quarter charge of $1.8 billion.
(d)	Includes fourth quarter charge of $850 million attributable to the change in estimate for asbestos and environmental exposures.

---

 

-	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 2005 for the year end 2005 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. For low-frequency, high-severity classes such as excess casualty and D&O, expected loss ratios generally are utilized 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.

---

 

---

 

---

 

---

 

-	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.

---

 

			2005								2004								2003
(in millions)			Gross				Net				Gross				Net				Gross				Net
Asbestos:
	Reserve for losses and loss expenses at beginning of year		$	2,559			$	1,060			$	1,235			$	386			$	1,304			$	400
	Losses and loss expenses incurred*			2,207	(a)			903	(a)			1,595	(a)			772	(a)			175				43
	Losses and loss expenses paid*			(325	)			(123	)			(271	)			(98	)			(244	)			(57	)
Reserve for losses and loss expenses at end of year			$	4,441			$	1,840			$	2,559			$	1,060			$	1,235			$	386
Environmental:
	Reserve for losses and loss expenses at beginning of year		$	974			$	451			$	789			$	283			$	832			$	296
	Losses and loss expenses incurred*			47	(b)			27	(b)			314	(b)			234	(b)			133				52
	Losses and loss expenses paid*			(95	)			(68	)			(129	)			(66	)			(176	)			(65	)
Reserve for losses and loss expenses at end of year			$	926			$	410			$	974			$	451			$	789			$	283
Combined:
	Reserve for losses and loss expenses at beginning of year		$	3,533			$	1,511			$	2,024			$	669			$	2,136			$	696
	Losses and loss expenses incurred*			2,254	(c)			930	(c)			1,909	(c)			1,006	(c)			308				95
	Losses and loss expenses paid*			(420	)			(191	)			(400	)			(164	)			(420	)			(122	)
Reserve for losses and loss expenses at end of year			$	5,367			$	2,250			$	3,533			$	1,511			$	2,024			$	669

*	All amounts pertain to policies underwritten in prior years.
(a)	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.
(b)	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.
(c)	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.

		2005								2004								2003
(in millions)		Gross				Net				Gross				Net				Gross				Net
Asbestos		$	3,401			$	1,465			$	2,033			$	876			$	695			$	200
Environmental			586				266				606				284				347				80
Combined		$	3,987			$	1,731			$	2,639			$	1,160			$	1,042			$	280

			2005												2004												2003
			Asbestos				Environmental				Combined				Asbestos				Environmental				Combined				Asbestos				Environmental				Combined
Claims at beginning of year				7,575				8,216				15,791				7,474				8,852				16,326				7,085				8,995				16,080
Claims during year:
	Opened			854				5,253	*			6,107				909				2,592				3,501				669				2,106				2,775
	Settled			(67	)			(219	)			(286	)			(100	)			(279	)			(379	)			(86	)			(244	)			(330	)
	Dismissed or otherwise resolved			(1,069	)			(3,377	)			(4,446	)			(708	)			(2,949	)			(3,657	)			(194	)			(2,005	)			(2,199	)
Claims at end of year				7,293				9,873				17,166				7,575				8,216				15,791				7,474				8,852				16,326

*	The opened claims count increased substantially during 2005 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
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
2003
Survival ratios:
	Asbestos			4.7				4.5
	Environmental			4.7				4.1
	Combined			4.7				4.3

(in millions)			2005				2004(a)				2003(a)
GAAP Premiums:
Domestic Life:
	Life insurance		$	2,108			$	1,888			$	1,751
	Home service			801				812				834
	Group life/health			1,012				1,128				1,046
	Payout annuities(b)			1,473				1,484				1,272
	Total			5,394				5,312				4,903
Domestic Retirement Services:
	Group retirement products			351				313				250
	Individual fixed annuities			100				59				53
	Individual variable annuities			467				407				331
	Individual fixed annuities — runoff(c)			72				80				86
	Total			990				859				720
Total Domestic				6,384				6,171				5,623
Foreign Life:
	Life insurance			15,631				14,938				13,204
	Personal accident & health			5,002				4,301				3,126
	Group products(d)			1,925				2,215				1,267
	Total			22,558				21,454				17,597
Foreign Retirement Services:
	Individual fixed annuities			361				395				255
	Individual variable annuities			97				68				21
	Total			458				463				276
Total Foreign				23,016				21,917				17,873
Total GAAP Premiums			$	29,400			$	28,088			$	23,496
Net investment income:
Domestic Life:
	Life insurance		$	1,411			$	1,287			$	1,179
	Home service			605				608				616
	Group life/health			142				123				121
	Payout annuities			912				801				699
	Total			3,070				2,819				2,615
Domestic Retirement Services:
	Group retirement products			2,233				2,201				2,055
	Individual fixed annuities			3,393				3,100				2,567
	Individual variable annuities			217				239				239
	Individual fixed annuities — runoff(c)			1,046				1,076				1,266
	Total			6,889				6,616				6,127
Total Domestic				9,959				9,435				8,742

(continued)

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(in millions)			2005				2004(a)				2003(a)
Foreign Life:
	Life insurance			4,844				4,065				3,356
	Personal accident & health			255				179				161
	Group products			613				431				326
	Intercompany adjustments			(36	)			(18	)			(15	)
	Total			5,676				4,657				3,828
Foreign Retirement Services:
	Individual fixed annuities			1,728				1,034				368
	Individual variable annuities			771				143				4
	Total			2,499				1,177				372
	Total Foreign			8,175				5,834				4,200
Total net investment income			$	18,134			$	15,269			$	12,942
Realized capital gains (losses):
Domestic realized capital gains (losses)(e)			$	(302	)		$	(329	)		$	(246	)
Foreign realized capital gains (losses)(f)				(260	)			147				330
Pricing net investment gains(g)				344				225				156
Total Foreign				84				372				486
Total realized capital gains (losses)			$	(218	)		$	43			$	240
Operating Income:
	Domestic(h)			3,599				3,075				2,765
	Foreign			5,245				4,848				4,042
Total operating income			$	8,844			$	7,923			$	6,807
Life insurance in–force:
	Domestic		$	825,151	(i)		$	772,251			$	645,606
	Foreign			1,027,682				1,085,843				937,425
Total			$	1,852,833			$	1,858,094			$	1,583,031

(a)	Adjusted to conform to 2005 presentation.
(b)	Includes structured settlements, single premium immediate annuities and terminal funding annuities.
(c)	Primarily represents runoff annuity business sold through discontinued distribution relationships.
(d)	Revenues in 2004 includes approximately $640 million of single premium from a reinsurance transaction involving terminal funding business, which is offset by a similar increase of benefit reserves.
(e)	Includes the effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52. For 2005, 2004, and 2003, respectively, the amounts included are $63 million, $(6) million, and $19 million.
(f)	Includes the effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133 and the application of FAS 52. For 2005, 2004, and 2003, respectively, the amounts included are $(500) million, $(134) million, and $59 million.
(g)	For purposes of this presentation, pricing net investment gains are segregated as a component of total realized gains (losses). They represent certain amounts of realized capital gains where gains are an inherent element in pricing certain life products in some foreign countries.
(h)	Operating income includes the effect on deferred policy acquisition cost amortization for FAS 97 products related to realized capital gains (losses) and has reduced amortization costs totaling $59 million, $44 million and $54 million for 2005, 2004 and 2003, respectively.
(i)	Domestic 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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Domestic Retirement Services — Deposits
December 31,
(in millions)		2005				2004				2003
Group retirement products*		$	6,436			$	6,502			$	5,918
Individual fixed annuities			7,337				9,947				11,384
Individual variable annuities			3,319				4,126				3,412
Individual fixed annuities - runoff			200				253				350
Total		$	17,292			$	20,828			$	21,064

*	Includes mutual funds.

Domestic Retirement Services
Reserves Subject to Surrender Charges
		Group		Individual				Individual
		Retirement		Fixed				Variable
(in millions)		Products*		Annuities				Annuities
Zero or no surrender charge		$39,831		$	9,324			$	9,765
Greater than 0% - 4%		11,248			10,815				8,386
Greater than 4%		2,648			31,183				10,035
Non-Surrenderable		892			3,148				81
Total		$54,619		$	54,470			$	28,267

*	Excludes mutual funds.

Domestic Retirement Services — Net Flows(a)
December 31,
(in millions)		2005				2004				2003
Group retirement products(b)		$	628			$	1,706			$	2,756
Individual fixed annuities			1,759				6,169				8,679
Individual variable annuities			(336	)			1,145				927
Individual fixed annuities - runoff			(2,508	)			(2,084	)			(1,967	)
Total		$	(457	)		$	6,936			$	10,395

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

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		2005
Growth in original currency			2.7	%
Foreign exchange effect			2.0
Growth as reported in U.S. dollars			4.7	%

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							Life																Percent
							Insurance &																Distribution
			General				Retirement				Asset								Percent
(dollars in millions)			Insurance				Services				Management				Total				of Total				Domestic				Foreign
2005
Fixed maturities:
	Available for sale, at market value		$	50,870			$	273,165			$	34,174			$	358,209				66.2	%			59.2	%			40.8	%
	Held to maturity, at amortized cost			21,528				—				—				21,528				4.0				100.0				—
	Trading securities, at market value			—				1,073				3,563				4,636				0.9				3.3				96.7
Equity securities:
	Common stocks, at market value			4,930				15,558				639				21,127				3.9				18.6				81.4
	Preferred stocks, at market value			1,632				760				—				2,392				0.4				88.8				11.2
Mortgage loans on real estate, policy and collateral loans				19				18,406				4,594				23,019				4.3				65.5				34.5
Short-term investments, including time deposits, and cash				2,787				6,844				5,815				15,446				2.8				26.1				73.9
Real estate				603				2,729				1,710				5,042				0.9				45.2				54.8
Investment income due and accrued				1,232				4,073				402				5,707				1.1				56.9				43.1
Securities lending collateral				4,931				42,991				11,549				59,471				11.0				87.3				12.7
Other invested assets				6,272				7,805				10,459				24,536				4.5				85.7				14.3
Total			$	94,804			$	373,404			$	72,905			$	541,113				100.0	%			62.3	%			37.7	%

2004
Fixed maturities:
	Available for sale, at market value		$	44,376			$	259,602			$	39,077			$	343,055				68.5	%			61.2	%			38.8	%
	Held to maturity, at amortized cost			18,294				–				–				18,294				3.7				100.0				–
	Trading securities, at market value			–				600				2,384				2,984				0.6				1.2				98.8
Equity securities:
	Common stocks, at market value			4,165				11,280				177				15,622				3.1				21.9				78.1
	Preferred stocks, at market value			1,466				565				–				2,031				0.4				91.9				8.1
Mortgage loans on real estate, policy and collateral loans				22				16,858				5,093				21,973				4.4				65.6				34.4
Short-term investments, including time deposits, and cash				2,113				5,515				9,679				17,307				3.4				37.1				62.9
Real estate				592				3,007				326				3,925				0.8				22.8				77.2
Investment income due and accrued				997				4,035				461				5,493				1.1				57.3				42.7
Securities lending collateral				4,889				34,923				9,357				49,169				9.8				86.7				13.3
Other invested assets				5,604				7,072				8,316				20,992				4.2				86.7				13.3
Total			$	82,518			$	343,457			$	74,870			$	500,845				100.0	%			63.8	%			36.2	%

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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 (i) the issuer defaulting on a material outstanding obligation; or (ii) the issuer seeking protection from creditors under the bankruptcy laws or any similar laws intended for the court supervised reorganization of insolvent enterprises; or (iii) the issuer proposing a voluntary reorganization pursuant to which creditors are asked to exchange their claims for cash or securities having a fair value substantially lower than par value of their claims; or
-	In the opinion of AIG’s management, it is probable that AIG may not realize a full recovery on its investment, irrespective of the occurrence of one of the foregoing events.

(in millions)		Amortized Cost
Due in one year or less		$	3,882
Due after one year through five years			25,919
Due after five years through ten years			56,204
Due after ten years			56,786
Total		$	142,791

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			Less than or equal to												Greater than 20% to												Greater than 50%
			20% of Cost(a)												50% of Cost(a)												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		$	101,885			$	1,984				12,264			$	36			$	9				11			$	—			$	—				—			$	101,921			$	1,993				12,275
	7-12 months			14,271				426				1,749				1				—				1				—				—				—				14,272				426				1,750
	>12 months			19,502				791				2,722				450				107				17				5				3				8				19,957				901				2,747
Total			$	135,658			$	3,201				16,735			$	487			$	116				29			$	5			$	3				8			$	136,150			$	3,320				16,772
Below investment grade bonds
	0-6 months		$	3,651			$	129				852			$	111			$	29				24			$	11			$	6				14			$	3,773			$	164				890
	7-12 months			1,524				93				338				139				38				34				2				1				15				1,665				132				387
	>12 months			1,113				84				225				90				24				23				—				—				11				1,203				108				259
Total			$	6,288			$	306				1,415			$	340			$	91				81			$	13			$	7				40			$	6,641			$	404				1,536
Total bonds
	0-6 months		$	105,536			$	2,113				13,116			$	147			$	38				35			$	11			$	6				14			$	105,694			$	2,157				13,165
	7-12 months			15,795				519				2,087				140				38				35				2				1				15				15,937				558				2,137
	>12 months			20,615				875				2,947				540				131				40				5				3				19				21,160				1,009				3,006
Total			$	141,946			$	3,507				18,150			$	827			$	207				110			$	18			$	10				48			$	142,791			$	3,724				18,308
Equity securities
	0-6 months		$	3,041			$	113				1,109			$	75			$	23				71			$	30			$	20				42			$	3,146			$	156				1,222
	7-12 months			573				41				122				169				45				68				6				4				23				748				90				213
	>12 months			66				4				26				30				6				13				1				1				29				97				11				68
Total			$	3,680			$	158				1,257			$	274			$	74				152			$	37			$	25				94			$	3,991			$	257				1,503

(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 certain deferred policy acquisition costs.

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(in millions)			2005				2004				2003
Revenues(a):
	Aircraft Finance(b)		$	3,578			$	3,136			$	2,897
	Capital Markets(c)(d)			3,260				1,278				595
	Consumer Finance(e)			3,613				2,978				2,642
	Other			74				103				108
Total			$	10,525			$	7,495			$	6,242
Operating income (loss)(a):
	Aircraft Finance		$	679			$	642			$	672
	Capital Markets(d)			2,661				662				(188	)
	Consumer Finance(f)			901				808				623
	Other, including intercompany adjustments			35				68				75
Total			$	4,276			$	2,180			$	1,182

(a)	Includes the effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2005, 2004 and 2003, the effect was $(34) million, $(27) million and $49 million, respectively, in operating income for Aircraft Finance and $2.01 billion, $(122) million and $(1.01) billion in both revenues and operating income for Capital Markets.
(b)	Revenues are primarily from ILFC aircraft lease rentals.

(c)	Revenues, shown net of interest expense, are primarily from hedged financial positions entered into in connection with counterparty transactions and the effect of hedging activities that do 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 amount of such tax credits and benefits for the years ended December 31, 2005, 2004 and 2003 are $67 million, $107 million and $123 million, respectively.

(e)	Revenues are primarily finance charges.
(f)	Includes $62 million of catastrophe related losses for 2005.

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		2005								2004
		Invested				Percent of				Invested				Percent of
(dollars in millions)		Assets				Total				Assets				Total
Flight equipment primarily under operating leases, net of accumulated depreciation		$	36,245				24.1	%		$	32,130				21.6	%
Finance receivables, net of allowance			27,995				18.6				23,574				15.9
Unrealized gain on swaps, options and forward transactions			18,695				12.4				22,670				15.3
Securities available for sale, at market value			37,511				24.9				31,225				21.0
Trading securities, at market value			6,499				4.3				2,746				1.8
Securities purchased under agreements to resell, at contract value			14,519				9.7				26,272				17.7
Trading assets			1,204				0.8				3,433				2.3
Spot commodities			92				0.1				534				0.4
Other, including short-term investments			7,615				5.1				5,982				4.0
Total		$	150,375				100.0	%		$	148,566				100.0	%

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		Gross				Gross
		Unrealized				Unrealized
(in millions)		Gains				Losses
Securities available for sale, at market value(a)		$	802			$	863
Unrealized gain/loss on swaps, options and forward transactions(b)			18,695				12,740

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

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(in millions)			2005				2004				2003
Revenues:
	Guaranteed Investment Contracts		$	3,547			$	3,192			$	2,619
	Institutional Asset Management			1,195				1,049				671
	Brokerage Services and Mutual Funds			257				249				206
	Other			326				224				155
Total			$	5,325			$	4,714			$	3,651
Operating income:
	Guaranteed Investment Contracts(a)		$	1,185			$	1,328			$	885
	Institutional Asset Management(b)			686				515				227
	Brokerage Services and Mutual Funds			66				70				60
	Other			316				212				144
Total			$	2,253			$	2,125			$	1,316

(a)	The effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133 was $149 million, $313 million and $230 million for 2005, 2004 and 2003, respectively.

(b)	Includes the results of certain AIG managed private equity and real estate funds that are consolidated effective December 31, 2003 pursuant to FIN46R, “Consolidation of Variable Interest Entities”. For 2005 and 2004, operating income includes $261 million and $195 million of third-party limited partner earnings offset in Minority interest expense.

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December 31,
(in millions)			2005				2004
AIG’s net borrowings			$	10,425			$	8,498
Liabilities connected to trust preferred stock				1,391				1,489
AIGFP
	GIAs			20,811				18,919
	Matched notes and bonds payable			24,950				22,257
Borrowings not guaranteed by AIG				52,272				45,736
Total debt			$	109,849			$	96,899

December 31,
(in millions)			2005				2004
AIG borrowings:
	Medium term notes		$	112			$	667
	Notes and bonds payable			4,495				2,980
	Loans and mortgages payable			814				349
	Total			5,421				3,996
Borrowings guaranteed by AIG:
AIGFP
	GIAs			20,811				18,919
	Notes and bonds payable			26,463				22,695
	Total			47,274				41,614
AIG Funding, Inc. commercial paper				2,694				2,969
AGC Notes and bonds payable				797				1,095
Liabilities connected to trust preferred stock				1,391				1,489
Total borrowings issued or guaranteed by AIG				57,577				51,163
Borrowings not guaranteed by AIG:
ILFC
	Commercial paper			2,615				2,670
	Medium term notes			4,689				5,972
	Notes and bonds payable(a)			19,026				15,734
	Loans and mortgages payable			–				40 (b	)
	Total			26,330				24,416
AGF
	Commercial paper			3,423				3,686
	Medium term notes			17,736				13,709
	Notes and bonds payable			983				1,585
	Total			22,142				18,980
Commercial paper:
	AIG Credit Card Company (Taiwan)			476				359
	AIG Finance (Taiwan) Limited			–				9
	Total			476				368
Loans and mortgages payable:
	AIGCFG			864				792
	AIG Finance (Hong Kong) Limited			183				49
	Total			1,047				841
Other Subsidiaries				927				832
Variable Interest Entity debt:
	AIG Global Investment Group			140				165
	AIG Global Real Estate Investment			977				8
	AIG SunAmerica			233				126
	Total			1,350				299
Total borrowings not guaranteed by AIG				52,272				45,736
Total debt			$	109,849			$	96,899

(a)	Includes borrowings under Export Credit Facility of $2.6 billion.
(b)	Represents capital lease obligations.

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						Payments due by Period
						Less				One				Four
						Than				Through				Through				After
		Total				One				Three				Five				Five
(in millions)		Payments				Year				Years				Years				Years
Borrowings(a)		$	99,291			$	31,504			$	20,717			$	16,886			$	30,184
Loss reserves(b)			77,169				21,221				23,537				11,191				21,220
Insurance and investment contract liabilities(c)			47,956				8,639				16,019				9,855				13,443
Operating leases			2,734				573				761				468				932
Aircraft purchase commitments			23,320				6,037				10,524				3,775				2,984
Total		$	250,470			$	67,974			$	71,558			$	42,175			$	68,763

(a)	Excludes commercial paper and obligations included as debt pursuant to FIN46R. 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 and guaranteed maturities under guaranteed investment contracts. Items excluded from the table include (i) liabilities for future policy benefits of approximately $109 billion, and (ii) policyholder contract deposits of approximately $182 billion. Amounts excluded from the table are generally comprised of policies or contracts where (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. The determination of these liability amounts and timing of payment are not reasonably fixed and determinable. Significant uncertainties relating to these liabilities include mortality, morbidity, expenses, persistency, investment returns, inflation, and future policyholder elections as to benefits.

							Amount of Commitment Expiration
							Less				One				Four
			Total				Than				Through				Through				After
			Amounts				One				Three				Five				Five
(in millions)			Committed				Year				Years				Years				Years
Letters of credit:
	Life Insurance & Retirement Services		$	185			$	53			$	9			$	22			$	101
	DBG			188				188				—				—				—
Standby letters of credit:
	Capital Markets			1,758				8				52				70				1,628
Guarantees:
	Life Insurance & Retirement Services(a)			3,456				109				400				—				2,947
	Aircraft Finance			147				51				14				—				82
	Asset Management			82				27				9				46				—
	Parent Company(b)			393				392				1				—				—
Other commercial commitments(c):
	Capital Markets(d)			10,932				2,241				1,734				789				6,168
	Aircraft Finance(e)			1,883				—				131				868				884
	Life Insurance & Retirement Services(f)			3,505				626				1,286				748				845
	Asset Management			607				437				155				15				—
	DBG(g)			1,334				—				—				—				1,334
Total			$	24,470			$	4,132			$	3,791			$	2,558			$	13,989

(a)	Primarily AIG SunAmerica construction guarantees connected to affordable housing investments.
(b)	Represents reimbursement obligations under letters of credit issued by commercial banks.
(c)	Excludes commitments with respect to pension plans. The annual pension contribution for 2006 is expected to be approximately $70 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)	Primarily commitments to invest in limited partnerships.

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											Life Insurance &
			General Insurance								Retirement Services
(in millions)			2005				2004				2005				2004
Market risk:
	Combined		$	1,617			$	1,396			$	4,515			$	5,024
	Interest rate			1,717				1,563				4,382				4,750
	Currency			130				139				541				478
	Equity			535				727				762				1,024

			2005												2004
(in millions)			Average				High				Low				Average				High				Low
General Insurance:
	Market risk:
	Combined		$	1,585			$	1,672			$	1,396			$	1,299			$	1,497			$	1,100
	Interest rate			1,746				1,931				1,563				1,407				1,591				1,173
	Currency			125				139				111				111				139				88
	Equity			651				727				535				744				797				688
Life Insurance & Retirement Services:
	Market risk:
	Combined		$	4,737			$	5,024			$	4,515			$	4,021			$	5,024			$	3,075
	Interest rate			4,488				4,750				4,382				3,831				4,750				2,967
	Currency			511				560				442				326				478				257
	Equity			953				1,024				762				884				1,024				758

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(in millions)		2005				2004
Combined		$	22			$	17
Interest rate			9				11
Currency			3				4
Equity			14				16
Commodity			9				7

		2005												2004
(in millions)		Average				High				Low				Average				High				Low
Combined		$	17			$	22			$	13			$	19			$	24			$	13
Interest rate			9				11				6				9				12				5
Currency			4				6				3				4				4				3
Equity			9				16				5				13				16				5
Commodity			8				10				7				6				7				4

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Page
Report of Independent Registered Public Accounting Firm			70
Consolidated Balance Sheet at December 31, 2005 and 2004			72
Consolidated Statement of Income for the years ended December 31, 2005, 2004 and 2003			74
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2005, 2004 and 2003			75
Consolidated Statement of Cash Flows for the years ended December 31, 2005, 2004 and 2003			76
Consolidated Statement of Comprehensive Income for the years ended December 31, 2005, 2004 and 2003			78
Notes to Consolidated Financial Statements			79
Schedules:
I  – Summary of Investments – Other Than Investments in Related Parties at December 31, 2005			164
II  – Condensed Financial Information of Registrant at December 31, 2005 and 2004 and for the years ended December 31, 2005, 2004 and 2003			165
III  – Supplementary Insurance Information at December 31, 2005, 2004 and 2003 and for the years then ended			167
IV – Reinsurance at December 31, 2005, 2004 and 2003 and for the years then ended			168

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December 31,
(in millions)					2005				2004
Assets:
	Investments and financial services assets:
		Fixed maturities:
			Bonds available for sale, at market value (amortized cost: 2005 – $349,612; 2004 – $329,838)		$	359,516			$	344,399
			Bonds held to maturity, at amortized cost (market value: 2005 – $22,047; 2004 – $18,791)			21,528				18,294
			Bond trading securities, at market value (cost: 2005 – $4,623; 2004 – $2,973)			4,636				2,984
		Equity securities:
			Common stocks available for sale, at market value (cost: 2005 – $10,125; 2004 – $8,424)			12,227				9,772
			Common stocks trading, at market value (cost: 2005 – $7,746; 2004 – $5,651)			8,959				5,894
			Preferred stocks available for sale, at market value (cost: 2005 – $2,282; 2004 – $2,017)			2,402				2,040
		Mortgage loans on real estate, net of allowance (2005 – $54; 2004 – $65)				14,300				13,146
		Policy loans				7,039				7,035
		Collateral and guaranteed loans, net of allowance (2005 – $10; 2004 – $18)				3,570				3,303
		Financial services assets:
			Flight equipment primarily under operating leases, net of accumulated depreciation (2005 – $7,419; 2004 – $6,390)			36,245				32,130
			Securities available for sale, at market value (cost: 2005 – $37,572; 2004 – $29,171)			37,511				31,225
			Trading securities, at market value			6,499				2,746
			Spot commodities			92				534
			Unrealized gain on swaps, options and forward transactions			18,695				22,670
			Trading assets			1,204				3,433
			Securities purchased under agreements to resell, at contract value			14,547				26,272
			Finance receivables, net of allowance (2005 – $670; 2004 – $571)			27,995				23,574
		Securities lending collateral, at market value (which approximates cost)				59,471				49,169
		Other invested assets				27,267				23,559
		Short-term investments, at cost (approximates market value)				15,342				16,102
		Total investments and financial services assets				679,045				638,281
		Cash				1,897				2,009
	Investment income due and accrued					5,727				5,556
	Premiums and insurance balances receivable, net of allowance (2005 – $1,011; 2004 – $690)					15,333				15,622
	Reinsurance assets, net of allowance (2005 – $992; 2004 – $832)					24,978				19,613
	Deferred policy acquisition costs					33,248				29,817
	Investments in partially owned companies					1,158				1,495
	Real estate and other fixed assets, net of accumulated depreciation (2005 – $4,990; 2004 – $4,650)					7,446				6,192
	Separate and variable accounts					63,797				57,741
	Goodwill					8,093				8,556
	Income taxes receivable – current					319				138
	Other assets					12,329				16,125
Total assets					$	853,370			$	801,145

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December 31,
(in millions, except share data)				2005				2004
Liabilities:
	Reserve for losses and loss expenses			$	77,169			$	61,878
	Reserve for unearned premiums				24,243				23,400
	Future policy benefits for life and accident and health insurance contracts				108,807				104,740
	Policyholders’ contract deposits				227,027				216,474
	Other policyholders’ funds				10,870				10,280
	Reserve for commissions, expenses and taxes				4,769				4,629
	Insurance balances payable				3,564				3,661
	Funds held by companies under reinsurance treaties				4,174				3,404
	Income taxes payable – deferred				6,607				6,588
	Financial services liabilities:
		Borrowings under obligations of guaranteed investment agreements			20,811				18,919
		Securities sold under agreements to repurchase, at contract value			11,047				23,581
		Trading liabilities			2,546				2,503
		Securities and spot commodities sold but not yet purchased, at market value			5,975				5,404
		Unrealized loss on swaps, options and forward transactions			12,740				15,985
		Trust deposits and deposits due to banks and other depositors			4,877				4,248
		Commercial paper			6,514				6,724
		Notes, bonds, loans and mortgages payable			71,313				61,296
	Commercial paper				2,694				2,969
	Notes, bonds, loans and mortgages payable				7,126				5,502
	Liabilities connected to trust preferred stock				1,391				1,489
	Separate and variable accounts				63,797				57,741
	Minority interest				5,124				4,831
	Securities lending payable				60,409				49,972
	Other liabilities				23,273				25,055
Total liabilities					766,867				721,273
Preferred shareholders’ equity in subsidiary companies					186				199
Commitments and Contingent Liabilities (See Note 12)
Shareholders’ equity:
	Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2005 and 2004 – 2,751,327,476				6,878				6,878
	Additional paid-in capital				2,339				2,094
	Retained earnings				72,330				63,468
	Accumulated other comprehensive income				6,967				9,444
	Treasury stock, at cost; 2005 – 154,680,704; 2004 – 154,904,286 shares of common stock (including 119,271,176 and 119,263,196 shares, respectively, held by subsidiaries)				(2,197	)			(2,211	)
Total shareholders’ equity					86,317				79,673
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity				$	853,370			$	801,145

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Years Ended December 31,
(in millions, except per share data)				2005				2004				2003
Revenues:
	Premiums and other considerations			$	70,209			$	66,625			$	54,802
	Net investment income				22,165				18,465				15,508
	Realized capital gains (losses)				341				44				(442	)
	Other revenues				16,190				12,532				9,553
	Total revenues				108,905				97,666				79,421
Benefits and expenses:
	Incurred policy losses and benefits				63,711				58,360				46,034
	Insurance acquisition and other operating expenses				29,981				24,461				21,480
	Total benefits and expenses				93,692				82,821				67,514
Income before income taxes, minority interest and cumulative effect of accounting changes					15,213				14,845				11,907
Income taxes:
	Current				2,569				2,593				2,741
	Deferred				1,689				1,814				815
					4,258				4,407				3,556
Income before minority interest and cumulative effect of accounting changes					10,955				10,438				8,351
Minority interest					(478	)			(455	)			(252	)
Income before cumulative effect of accounting changes					10,477				9,983				8,099
Cumulative effect of accounting changes, net of tax					–				(144	)			9
Net income				$	10,477			$	9,839			$	8,108
Earnings per common share:
	Basic
		Income before cumulative effect of accounting changes		$	4.03			$	3.83			$	3.10
		Cumulative effect of accounting changes, net of tax			–				(0.06	)			–
		Net income			4.03				3.77				3.10
	Diluted
		Income before cumulative effect of accounting changes		$	3.99			$	3.79			$	3.07
		Cumulative effect of accounting changes, net of tax			–				(0.06	)			–
		Net income			3.99				3.73				3.07
Average shares outstanding:
	Basic				2,597				2,606				2,610
	Diluted				2,627				2,637				2,637

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Years Ended December 31,
(in millions, except per share data)						2005				2004				2003
Common stock:
		Balance at beginning of year				$	6,878			$	6,878			$	6,878
			Issued under stock plans				–				–				–
		Balance at end of year					6,878				6,878				6,878
Additional paid-in capital:
		Balance at beginning of year					2,094				2,028				1,783
			Excess of cost over proceeds of common stock issued under stock plans				(91	)			(105	)			(76	)
	Other						336				171				321
		Balance at end of year					2,339				2,094				2,028
Retained earnings:
		Balance at beginning of year					63,468				54,384				46,908
			Net income				10,477				9,839				8,108
			Dividends to common shareholders ($0.63, $0.29 and $0.24 per share, respectively)				(1,615	)			(755	)			(632	)
		Balance at end of year					72,330				63,468				54,384
Accumulated other comprehensive income (loss):
		Balance at beginning of year					9,444				7,337				4,077
			Unrealized (depreciation) appreciation of investments – net of reclassification adjustments				(3,577	)			1,868				4,159
				Deferred income tax benefit (expense) on changes			1,599				(612	)			(1,237	)
			Foreign currency translation adjustments				(926	)			993				347
				Applicable income tax benefit (expense) on above changes			386				(170	)			4
			Net derivative gains arising from cash flow hedging activities				35				83				75
				Deferred income tax expense on above changes			(7	)			(33	)			(22	)
			Retirement plan liabilities adjustment, net of tax				13				(22	)			(66	)
			Other comprehensive income				(2,477	)			2,107				3,260
		Balance at end of year					6,967				9,444				7,337
Treasury stock, at cost:
		Balance at beginning of year					(2,211	)			(1,397	)			(1,343	)
			Cost of shares acquired during year				(176	)			(1,083	)			(207	)
			Issued under stock plans				173				263				151
			Other				17				6				2
		Balance at end of year					(2,197	)			(2,211	)			(1,397	)
Total shareholders’ equity at end of year						$	86,317			$	79,673			$	69,230

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Years Ended December 31,
(in millions)					2005				2004				2003
Summary:
	Net cash provided by operating activities				$	25,138			$	30,716			$	33,241
	Net cash used in investing activities					(57,321	)			(97,115	)			(66,904	)
	Net cash provided by financing activities					32,999				66,494				33,070
	Effect of exchange rate changes on cash					(928	)			992				350
	Change in cash					(112	)			1,087				(243	)
	Cash at beginning of year					2,009				922				1,165
	Cash at end of year				$	1,897			$	2,009			$	922
Cash flows from operating activities:
	Net income				$	10,477			$	9,839			$	8,108
	Adjustments to reconcile net income to net cash provided by operating activities:
		Noncash revenues, expenses, gains and losses included in income:
		Change in:
			General and life insurance reserves			20,912				26,937				22,456
			Premiums and insurance balances receivable and payable – net			192				(1,020	)			(2,236	)
			Reinsurance assets			(5,365	)			1,032				2,137
			Deferred policy acquisition costs			(2,263	)			(4,042	)			(3,778	)
			Investment income due and accrued			(171	)			(916	)			(388	)
			Funds held under reinsurance treaties			770				361				832
			Other policyholders’ funds			590				1,156				687
			Current and deferred income taxes – net			1,507				1,396				2,179
			Reserve for commissions, expenses and taxes			140				(16	)			1,005
			Other assets and liabilities – net			2,535				1,113				579
			Bonds and common stocks trading, at market value			(4,717	)			(3,582	)			544
			Trading assets and liabilities – net			2,272				(4,783	)			4,592
			Trading securities, at market value			(3,753	)			792				764
			Spot commodities			442				(289	)			240
			Net unrealized (gain) loss on swaps, options and forward transactions			728				1,534				(4,500	)
			Securities purchased under agreements to resell			11,725				(5,427	)			(3,010	)
			Securities sold under agreements to repurchase			(12,534	)			5,688				7,542
			Securities and spot commodities sold but not yet purchased, at market value			571				(269	)			(6,306	)
		Realized capital (gains) losses				(341	)			(44	)			442
		Equity in income of partially owned companies and other invested assets				(1,421	)			(1,279	)			(707	)
		Amortization of premium and discount on securities				292				324				60
		Depreciation expenses, principally flight equipment				2,200				2,035				1,861
		Provision for finance receivable losses				435				389				429
		Other – net				(85	)			(213	)			(291	)
		Total adjustments				14,661				20,877				25,133
Net cash provided by operating activities					$	25,138			$	30,716			$	33,241

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Years Ended December 31,
(in millions)			2005				2004				2003
Cash flows from investing activities:
	Cost of bonds, at market sold		$	111,866			$	91,714			$	90,430
	Cost of bonds, at market matured or redeemed			16,017				13,958				15,966
	Cost of equity securities sold			11,072				11,711				10,012
	Realized capital gains (losses)			341				44				(442	)
	Purchases of fixed maturities			(152,045	)			(158,023	)			(153,742	)
	Purchases of equity securities			(12,972	)			(13,674	)			(10,473	)
	Acquisitions, net of cash acquired			–				–				(2,091	)
	Mortgage, policy and collateral loans granted			(5,306	)			(2,128	)			(3,016	)
	Repayments of mortgage, policy and collateral loans			3,973				1,731				2,043
	Sales of securities available for sale			9,324				4,291				8,376
	Maturities of securities available for sale			3,023				5,802				4,690
	Purchases of securities available for sale			(20,642	)			(16,133	)			(12,010	)
	Sales of flight equipment			695				1,329				1,212
	Purchases of flight equipment			(6,193	)			(4,860	)			(5,460	)
	Change in securities lending collateral			(10,302	)			(19,777	)			(6,048	)
	Net additions to real estate and other fixed assets			(2,018	)			(950	)			(1,131	)
	Sales or distributions of other invested assets			14,379				8,453				8,730
	Investments in other invested assets			(14,387	)			(11,599	)			(10,483	)
	Change in short-term investments			760				(2,542	)			(1,563	)
	Investments in partially owned companies			(50	)			1				255
	Finance receivable originations and purchases			(52,281	)			(21,636	)			(14,690	)
	Finance receivable principal payments received			47,425				15,173				12,531
Net cash used in investing activities			$	(57,321	)		$	(97,115	)		$	(66,904	)
Cash flows from financing activities:
	Receipts from policyholders’ contract deposits		$	46,298			$	55,919			$	38,867
	Withdrawals from policyholders’ contract deposits			(35,797	)			(24,497	)			(18,422	)
	Change in trust deposits and deposits due to banks and other depositors			629				648				641
	Change in commercial paper			(485	)			3,755				(3,174	)
	Proceeds from notes, bonds, loans and mortgages payable			53,875				31,918				23,665
	Repayments on notes, bonds, loans and mortgages payable			(42,248	)			(22,565	)			(14,408	)
	Liquidation of zero coupon notes payable			–				(189	)			–
	Proceeds from guaranteed investment agreements			12,388				10,814				6,387
	Maturities of guaranteed investment agreements			(10,496	)			(7,232	)			(5,900	)
	Change in securities lending payable			10,437				19,777				6,501
	Redemption of subsidiary company preferred stock			(100	)			(200	)			(371	)
	Proceeds from common stock issued			82				158				74
	Cash dividends to shareholders			(1,421	)			(730	)			(584	)
	Acquisition of treasury stock			(176	)			(1,083	)			(207	)
	Other – net			13				1				1
Net cash provided by financing activities			$	32,999			$	66,494			$	33,070
Supplementary information:
Taxes paid			$	2,593			$	3,060			$	2,454
Interest paid			$	4,958			$	4,314			$	4,128

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Years Ended December 31,
(in millions)				2005				2004				2003
Comprehensive income (loss):
	Net income			$	10,477			$	9,839			$	8,108
Other comprehensive income (loss):
	Unrealized (depreciation) appreciation of investments – net of reclassification adjustments				(3,577	)			1,868				4,159
		Deferred income tax benefit (expense) on above changes			1,599				(612	)			(1,237	)
	Foreign currency translation adjustments				(926	)			993				347
		Applicable income tax benefit (expense) on above changes			386				(170	)			4
	Net derivative gains arising from cash flow hedging activities				35				83				75
		Deferred income tax expense on above changes			(7	)			(33	)			(22	)
	Retirement plan liabilities adjustment, net of tax				13				(22	)			(66	)
Other comprehensive income (loss)					(2,477	)			2,107				3,260
Comprehensive income (loss)				$	8,000			$	11,946			$	11,368

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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 (i) the issuer defaulting on a material outstanding obligation; or (ii) the issuer seeking protection from creditors under the bankruptcy laws or any similar laws intended for the court supervised reorganization of insolvent enterprises; or (iii) the issuer proposing a voluntary reorganization pursuant to which creditors are asked to exchange their claims for cash or securities having a fair value substantially lower than par value of their claims; or
-	In the opinion of AIG’s management, it is probable that AIG may not realize a full recovery on its investment, irrespective of the occurrence of one of the foregoing events.

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Years Ended December 31,
(in millions, except per share data)			2005				2004				2003
Numerator for basic earnings per share:
Income before cumulative effect of accounting changes			$	10,477			$	9,983			$	8,099
Cumulative effect of accounting changes, net of tax				–				(144	)			9
Net income applicable to common stock			$	10,477			$	9,839			$	8,108
Denominator for basic earnings per share:
Average shares outstanding used in the computation of per share earnings:
	Common stock issued			2,752				2,752				2,752
	Common stock in treasury			(155	)			(146	)			(142	)
Average shares outstanding – basic				2,597				2,606				2,610

(continued)

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Years Ended December 31,
(in millions, except per share data)		2005				2004				2003
Numerator for diluted earnings per share:
Income before cumulative effect of accounting changes		$	10,477			$	9,983			$	8,099
Cumulative effect of accounting changes, net of tax			–				(144	)			9
Net income applicable to common stock			10,477				9,839				8,108
Interest on contingently convertible bonds, net of tax (a)			11				11				11
Adjusted net income applicable to common stock(a)		$	10,488			$	9,850			$	8,119
Denominator for diluted earnings per share:
Average shares outstanding			2,597				2,606				2,610
Incremental shares from potential common stock:
Average number of shares arising from outstanding employee stock plans (treasury stock method)(b)			21				22				18
Contingently convertible bonds(a)			9				9				9
Adjusted average shares outstanding – diluted(a)			2,627				2,637				2,637
Earnings per share:
Basic:
Income before cumulative effect of accounting changes		$	4.03			$	3.83			$	3.10
Cumulative effect of accounting changes, net of tax			–				(0.06	)			–
Net income		$	4.03			$	3.77			$	3.10
Diluted:
Income before cumulative effect of accounting changes		$	3.99			$	3.79			$	3.07
Cumulative effect of accounting changes, net of tax			–				(0.06	)			–
Net income		$	3.99			$	3.73			$	3.07

(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 19 million, 7 million and 26 million for 2005, 2004 and 2003, respectively.

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		Operating Segments
						Life
						Insurance
		General				& Retirement				Financial				Asset												Reclassifications
(in millions)		Insurance				Services				Services				Management				Other(a)				Total				and Eliminations				Consolidated
2005
Revenues (b)		$	45,174			$	47,316			$	10,525			$	5,325			$	565			$	108,905			$	–			$	108,905
Interest expense			7				83				5,279				11				293				5,673				–				5,673
Operating income (loss) before minority interest			2,315				8,844				4,276				2,253				(2,475	) (c)			15,213				–				15,213
Income taxes (benefits)			140				2,176				1,366				718				(142	)			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				93,154				972,011				(118,641	)			853,370
2004
Revenues(b)		$	41,961			$	43,400			$	7,495			$	4,714			$	96			$	97,666			$	–			$	97,666
Interest expense			9				63				4,041				8				306				4,427				–				4,427
Operating income (loss) before minority interest			3,177				7,923				2,180				2,125				(560	)			14,845				–				14,845
Income taxes (benefits)			616				2,526				654				753				(142	)			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				79,890				905,459				(104,314	)			801,145
2003
Revenues(b)		$	33,833			$	36,678			$	6,242			$	3,651			$	(983	)		$	79,421			$	–			$	79,421
Interest expense			4				68				3,817				8				322				4,219				–				4,219
Operating income (loss) before minority interest			4,502				6,807				1,182				1,316				(1,900	)			11,907				–				11,907
Income taxes (benefits)			1,146				2,229				287				465				(571	)			3,556				–				3,556
Depreciation expense			204				244				1,261				15				137				1,861				–				1,861
Capital expenditures			284				483				5,461				19				239				6,486				–				6,486
Identifiable assets			117,511				372,126				141,667				64,047				69,988				765,339				(89,737	)			675,602

(a)	Includes AIG Parent and other operations which are not required to be reported separately.
(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 advisory and management fees and net investment income from guaranteed investment contracts, and realized capital gains (losses).
(c)	Includes settlement costs of $1.64 billion as described in Note 12(i).

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		General Insurance
		Domestic																				Total				Reclassifications				Total
		Brokerage								Personal				Mortgage				Foreign				Reportable				and				General
(in millions)		Group				Transatlantic				Lines				Guaranty				General				Segment				Eliminations				Insurance
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
Underwriting profit (loss) (b)(c)(d)(e)			(3,250	) (f)(g)			(420	)			(19	)			241				1,398	(h)			(2,050	)			–				(2,050	)
Operating income (loss)(c)			(646	) (f)(g)			(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
Underwriting profit (loss)(b)(c)(d)			(1,340	)			(47	)			160				278				702	(h)			(247	)			–				(247	)
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
2003
Revenues(a)		$	18,091			$	3,452			$	3,850			$	683			$	7,787			$	33,863			$	(30	)		$	33,833
Losses & loss expenses incurred			13,711				2,233				2,789				110				4,029				22,872				–				22,872
Underwriting expenses			2,606				829				706				122				2,196				6,459				–				6,459
Underwriting profit(b)(c)(d)			387				109				183				264				1,032	(h)			1,975				–				1,975
Operating income (c)			1,774				390				355				451				1,562				4,532				(30	)			4,502
Depreciation expense			97				3				19				3				82				204				–				204
Capital expenditures			83				2				45				3				151				284				–				284
Identifiable assets			73,516				8,708				4,958				2,879				31,615				121,676				(4,165	)			117,511

(a)	Represents the sum of General Insurance net premiums earned, net investment income and realized capital gains (losses).
(b)	Underwriting profit (loss) is a GAAP measure that represents statutory underwriting profit or loss adjusted primarily for changes in deferred policy acquisition costs.
(c)	Catastrophe related losses for 2005, 2004 and 2003 by reporting unit were:

(in millions)		2005								2004				2003
						Net
		Insurance				Reinstatement				Insurance				Insurance
		Related				Premium				Related				Related
Reporting Unit		Losses				Cost				Losses				Losses
DBG		$	1,747			$	122			$	582			$	48
Transatlantic			463				45				215				4
Personal Lines			112				2				25				5
Mortgage Guaranty			10				–				–				–
Foreign General			293				94				232				26
Total		$	2,625			$	263			$	1,054			$	83

(d)	For Foreign General, includes the results of wholly owned AIU agencies.

(e)	Includes the fourth quarter 2005 increase in net reserves of approximately $1.8 billion.
(f)	Includes $197 million of additional losses incurred resulting from increased labor and material costs related to the 2004 Florida hurricanes.

(g)	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.
(h)	Income statement accounts expressed in non-functional currencies are translated into U.S. dollars using average exchange rates.

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		Life Insurance & Retirement Services
						AIA,								VALIC/																Total Life
		ALICO/				AIRCO				AGLA				AIG Annuity/				Philamlife				Total				Reclassifications				Insurance &
		AIG Star Life/				and Nan				and				AIG				and				Reportable				and				Retirement
(in millions)		AIG Edison Life(a)				Shan(b)				AG Life(c)				SunAmerica(d)				Other				Segment				Eliminations				Services
2005
Revenues(e)		$	15,233			$	15,499			$	9,215			$	6,826			$	543			$	47,316			$	–			$	47,316
Operating income			2,956				2,217				1,495				2,104				72				8,844				–				8,844
Depreciation expense			88				77				65				31				7				268				–				268
Capital expenditures			153				338				71				26				2				590				–				590
Identifiable assets			113,422				85,715				99,597				185,383				4,166				488,283				(7,661	)			480,622
2004
Revenues(e)		$	12,177			$	15,450			$	8,715			$	6,562			$	496			$	43,400			$	–			$	43,400
Operating income			2,393				2,371				1,023				2,052				84				7,923				–				7,923
Depreciation expense			101				55				62				37				7				262				–				262
Capital expenditures			308				93				47				29				3				480				–				480
Identifiable assets			102,808				74,647				91,538				183,092				2,630				454,715				(6,874	)			447,841
2003
Revenues(e)		$	8,958			$	13,151			$	8,297			$	5,822			$	450			$	36,678			$	–			$	36,678
Operating income			2,187				1,766				1,233				1,532				89				6,807				–				6,807
Depreciation expense			77				56				68				36				7				244				–				244
Capital expenditures			281				51				91				58				2				483				–				483
Identifiable assets			79,648				61,426				84,094				151,672				2,523				379,363				(7,237	)			372,126

(a)	Reflects acquisition of AIG Edison Life in August 2003. Revenues and operating income include realized capital gains (losses) of $(74) million, $(152) million and $319 million for 2005, 2004 and 2003, respectively. The effect of FAS 133 and the application of FAS 52 included in realized capital gains (losses) are $(339) million, $(300) million and $226 million for 2005, 2004 and 2003, respectively.
(b)	Revenues in 2004 include approximately $640 million of single premium from a 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 $144 million, $519 million and $168 million for 2005, 2004 and 2003, respectively. The effect of FAS 133 and the application of FAS 52 included in realized capital gains (losses) are $(162) million, $166 million and $(167) million for 2005, 2004 and 2003, respectively.
(c)	Includes the life operations of AIG Life Insurance Company and American International Life Assurance Company of New York. 2004 includes a $178 million charge related to a workers compensation quota share reinsurance agreement with Superior National Insurance Company. See Note 12(h) 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 $35 million, $(120) million and $(37) million for 2005, 2004 and 2003, respectively. The effect of FAS 133 and the application of FAS 52 included in realized capital gains (losses) are $73 million, $8 million and $24 million for 2005, 2004 and 2003, respectively.
(d)	“AIG SunAmerica” represents the annuity operations of AIG SunAmerica Life Assurance Company, as well as those of First SunAmerica Life Insurance Company and SunAmerica Life Insurance Company. Revenues and operating income include realized capital gains (losses) of $(337) million, $(209) million and $(209) million for 2005, 2004 and 2003, respectively. The effect of FAS 133 and the application of FAS 52 included in realized capital gains (losses) are $(10) million, $(14) million and $(5) million for 2005, 2004 and 2003, respectively.
(e)	Represents the sum of Life Insurance & Retirement Services GAAP premiums, net investment income and realized capital gains (losses).

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		Financial Services
																		Total				Reclassifications				Total
		Aircraft				Capital				Consumer								Reportable				and				Financial
(in millions)		Finance				Markets(a)				Finance				Other				Segment				Eliminations				Services
2005
Revenues (b)(c)		$	3,578			$	3,260			$	3,613			$	387			$	10,838			$	(313	)		$	10,525
Interest expense(c)			1,125				3,033				1,005				316				5,479				(200	)			5,279
Operating income(c)			679				2,661				901	(d)			60				4,301				(25	)			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 (b)(c)		$	3,136			$	1,278			$	2,978			$	835			$	8,227			$	(732	)		$	7,495
Interest expense(c)			993				2,300				705				144				4,142				(101	)			4,041
Operating income(c)			642				662				808				90				2,202				(22	)			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
2003
Revenues (b)(c)		$	2,897			$	595			$	2,642			$	641			$	6,775			$	(533	)		$	6,242
Interest expense(c)			895				2,272				619				132				3,918				(101	)			3,817
Operating income (loss)(c)			672				(188	)			623				80				1,187				(5	)			1,182
Depreciation expense			1,139				51				34				37				1,261				–				1,261
Capital expenditures			5,362				42				29				28				5,461				–				5,461
Identifiable assets			31,534				82,270				20,571				11,742				146,117				(4,450	)			141,667

(a)	Certain transactions entered into by AIGFP generate tax credits and benefits which are shown in the income tax line on the consolidated statement of income. Thus, this source of income is not reflected in the Revenue and Operating Income categories in the above table. The amount of such tax credits and benefits for the years ended December 31, 2005, 2004, and 2003 are $67 million, $107 million, and $123 million, respectively.
(b)	Represents primarily the sum of ILFC aircraft lease rentals, AIGFP hedged financial positions entered into in connection with counterparty transactions and finance charges from consumer finance operations.
(c)	Includes the effect of hedging activities that do not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. For 2005, 2004 and 2003, the effect was $(34) million, $(27) million and $49 million, respectively, in operating income for Aircraft Finance and $2.01 billion, $(122) million and $(1.01) billion in both revenues and operating income for Capital Markets.
(d)	Includes $62 million of catastrophe related losses.

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		Geographic Segments
										Other
(in millions)		Domestic(a)				Far East				Foreign				Consolidated
2005
Revenues(b)		$	59,858			$	32,036			$	17,011			$	108,905
Real estate and other fixed assets, net of accumulated depreciation			3,840				2,669				937				7,446
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			2,341				2,834				1,017				6,192
Flight equipment primarily under operating leases, net of accumulated depreciation(c)			32,130				–				–				32,130
2003
Revenues(b)		$	43,221			$	22,787			$	13,413			$	79,421
Real estate and other fixed assets, net of accumulated depreciation			2,539				2,518				909				5,966
Flight equipment primarily under operating leases, net of accumulated depreciation(c)			29,870				–				–				29,870

(a)	Including revenues from General Insurance operations in Canada of $638 million, $549 million, and $433 million in 2005, 2004, and 2003, 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 advisory and management fees and net investment income with respect to guaranteed investment contracts, and realized capital gains (losses).

(c)	Approximately 90 percent of ILFC’s fleet is operated by foreign airlines.

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(in millions)		2005				2004				2003
Domestic		$	6,103			$	6,069			$	4,177
Foreign			9,110				8,776				7,730
Total		$	15,213			$	14,845			$	11,907

			2005								2004								2003
							Percent								Percent								Percent
Years Ended December 31,							of Pretax								of Pretax								of Pretax
(dollars in millions)			Amount				Income				Amount				Income				Amount				Income
“Expected” tax expense			$	5,325				35.0	%		$	5,197				35.0	%		$	4,167				35.0	%
	Adjustments:
	Tax exempt interest			(566	)			(3.7	)			(440	)			(2.9	)			(329	)			(2.8	)
	Dividends received deduction			(117	)			(0.8	)			(83	)			(0.6	)			(83	)			(0.7	)
	State income taxes			86				0.6				23				0.2				12				0.1
	Effect of foreign operations(a)			(253	)			(1.7	)			(11	)			(0.1	)			(95	)			(0.8	)
	Synthetic fuel tax credits			(274	)			(1.8	)			(264	)			(1.8	)			(278	)			(2.3	)
	Affordable housing tax credits			(22	)			(0.1	)			(46	)			(0.3	)			(24	)			(0.2	)
	Nondeductible compensation			83				0.5				20				0.1				96				0.8
	Penalties			76				0.5				28				0.2				–				–
	Other			(80	)			(0.5	)			(17	)			(0.1	)			90				0.8
Actual tax expense			$	4,258				28.0	%		$	4,407				29.7	%		$	3,556				29.9	%
Foreign and domestic components of actual tax expense:
Foreign(b):
	Current		$	974							$	1,104							$	882
	Deferred			426								561								708
Domestic(b):
	Current			1,595								1,489								1,859
	Deferred			1,263								1,253								107
Total			$	4,258							$	4,407							$	3,556

(a)	In 2005 and 2004, it was determined that the earnings of certain foreign subsidiaries are expected to be repatriated to the U.S., and, accordingly, the undistributed earnings of these subsidiaries are no longer considered indefinitely reinvested abroad. As a consequence of this determination, U.S. deferred taxes have been provided for the undistributed earnings of these foreign subsidiaries.
(b)	Foreign tax expense reflects the expense resulting from local tax regulation. Domestic tax expense includes U.S. taxes incurred on foreign income.

(in millions)			2005				2004
Deferred tax assets*:
	Loss reserve discount		$	3,061				$2,400
	Unearned premium reserve reduction			1,042				1,074
	Loan loss and other reserves			419				394
	Investment in foreign subsidiaries and joint ventures			349				542
	Adjustment to life policy reserves			2,351				3,458
	Accruals not currently deductible, cumulative translation adjustment and other			1,189				1,031
Deferred tax liabilities:
	Deferred policy acquisition costs			7,573				7,956
	Depreciation of flight equipment			3,196				2,766
	Unrealized appreciation of investments			4,025				4,668
	Other			224				97
Net deferred tax liability			$	6,607				$6,588

*	A valuation allowance in the amount of $280 million related to the Connecticut net deferred tax asset at December 31, 2005 (including net operating losses that expire between 2020 through 2025) has been provided because it is remote that such amount will be realized. In addition, AIG has a $192 million alternative minimum tax credit carryforward that does not expire.

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Years Ended December 31,
(in millions)			2005				2004				2003
General Insurance operations:
	Balance at beginning of year		$	3,998			$	3,619			$	3,072
	Acquisition costs deferred			7,480				6,617				5,223
	Amortization charged to Income			(7,430	)			(6,238	)			(4,676	)
	Balance at end of year		$	4,048			$	3,998			$	3,619
Life Insurance & Retirement Services operations:
	Balance at beginning of year		$	25,819			$	22,375			$	18,850
	Value of business acquired			–				–				1,538	*
	Acquisition costs deferred			6,777				6,504				5,052
	Amortization charged to Income			(3,379	)			(3,551	)			(2,778	)
	Change in net unrealized gains (losses) on securities			1,127				(219	)			(813	)
	Increase (decrease) due to foreign exchange			(1,144	)			710				526
Balance at end of year			$	29,200			$	25,819			$	22,375
Total deferred policy acquisition costs			$	33,248			$	29,817			$	25,994

*	Relates to the acquisition of AIG Edison Life in August 2003.

Years Ended December 31,
(in millions)		Written				Earned
2005
Gross premiums		$	52,725			$	51,715
Ceded premiums			(10,853	)			(10,906	)
Net premiums		$	41,872			$	40,809
2004
Gross premiums		$	52,046			$	50,203
Ceded premiums			(11,423	)			(11,666	)
Net premiums		$	40,623			$	38,537
2003
Gross premiums		$	46,938			$	42,745
Ceded premiums			(11,907	)			(11,439	)
Net premiums		$	35,031			$	31,306

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Years Ended December 31,
(in millions)		2005				2004				2003
Gross GAAP premiums		$	30,717			$	29,202			$	24,448
Ceded premiums			(1,317	)			(1,114	)			(952	)
GAAP premiums		$	29,400			$	28,088			$	23,496

Years Ended December 31,
(in millions)		2005				2004				2003
Life Insurance in force		$	365,082			$	344,036			$	293,064

		As				Net of
(in millions)		Reported				Reinsurance
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				–
2004
Reserve for losses and loss expenses		$	(61,878	)		$	(47,254	)
Future policy benefits for life and accident and health insurance contracts			(104,740	)			(103,348	)
Reserve for unearned premiums			(23,400	)			(20,278	)
Reinsurance assets			19,613				–

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Years Ended December 31,
(in millions)			2005				2004				2003
At beginning of year:
	Reserve for losses and loss expenses		$	61,878			$	51,871			$	46,674
	Reinsurance recoverable			(14,624	)			(15,643	)			(17,327	)
				47,254				36,228				29,347
Foreign exchange effect				(628	)			524				580
Acquisitions				–				–				391	(a)
Losses and loss expenses incurred:
	Current year			28,426				26,793				20,509
	Prior years(b)			4,665	(c)			3,564	(d)			2,363
Total				33,091				30,357				22,872
Losses and loss expenses paid:
	Current year			7,331				7,692				6,187
	Prior years			14,910				12,163				10,775
Total				22,241				19,855				16,962
At end of year:
	Net reserve for losses and loss expenses			57,476				47,254				36,228
	Reinsurance recoverable			19,693				14,624				15,643
Total			$	77,169			$	61,878			$	51,871

(a)	Reflects the opening balances with respect to the GE U.S.-based auto and home insurance business acquired in 2003.
(b)	Includes accretion of discount of $(15) million in 2005, including an increase of $375 million in the discount recorded in 2005; $377 million in 2004 and $296 million in 2003.
(c)	Includes fourth quarter charge of $1.8 billion.
(d)	Includes fourth quarter charge of $850 million attributable to the change in estimate for asbestos and environmental exposures.

(in millions)			2005				2004
Future policy benefits:
	Long duration contracts		$	105,490			$	101,584
	Short duration contracts			3,317				3,156
Total			$	108,807			$	104,740
Policyholders’ contract deposits:
	Annuities		$	142,057			$	130,524
	Guaranteed investment contracts (GICs)			39,705				46,472
	Corporate life products			2,077				2,042
	Universal life			18,682				16,771
	Variable products			7,799				5,960
	Variable investment contracts			8,373				7,579
	Other investment contracts			8,334				7,126
Total			$	227,027			$	216,474

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Years Ended December 31,
(in millions)			2005				2004				2003
Statutory surplus(a):
	General Insurance		$	24,508			$	20,632			$	20,462
	Life Insurance & Retirement Services			30,739				28,609				25,501
Statutory net income(a)(b):
	General Insurance			1,713				3,028	(c)			2,911
	Life Insurance & Retirement Services(a)			4,762				4,474				3,453

(a)	Statutory surplus and net income with respect to foreign operations are reported as of their respective fiscal year ends.
(b)	Includes realized capital gains and losses and taxes.

(c)	Includes catastrophe losses, net of tax of $660 million.

Years Ended December 31,
(in millions)		2005				2004				2003
Fixed maturities		$	17,685			$	15,884			$	13,710
Equity securities			1,730				621				484
Short-term investments			494				177				94
Interest on mortgage, policy and collateral loans			1,177				1,096				1,047
Other invested assets			1,905				1,444				898
Total investment income			22,991				19,222				16,233
Investment expenses			826				757				725
Net investment income		$	22,165			$	18,465			$	15,508

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Years Ended December 31,
(in millions)			2005				2004				2003
Realized capital gains (losses) on investments:
	Fixed maturities		$	(108	)		$	178			$	(222	)
	Equity securities			588				541				(495	)
	Other invested assets			(139	)			(675	)			275
Realized capital gains (losses)			$	341			$	44			$	(442	)
Increase (decrease) in unrealized appreciation of investments:
	Fixed maturities		$	(4,656	)		$	1,436			$	2,493
	Equity securities			850				445				1,354
	Other invested assets			229				(13	)			312
Increase (decrease) in unrealized appreciation			$	(3,577	)		$	1,868			$	4,159

		Gross				Gross
		Realized				Realized
(in millions)		Gains				Losses
2005
Bonds		$	1,586			$	1,694
Common stocks			930				409
Preferred stocks			101				34
Total		$	2,617			$	2,137
2004
Bonds		$	1,560			$	1,382
Common stocks			774				379
Preferred stocks			173				27
Total		$	2,507			$	1,788
2003
Bonds		$	2,470			$	2,692
Common stocks			465				827
Preferred stocks			139				272
Total		$	3,074			$	3,791

							Gross				Gross				Estimated
			Amortized				Unrealized				Unrealized				Market
(in millions)			Cost				Gains				Losses				Value
2005
Fixed maturities:
	Bonds – States*		$	21,528			$	552			$	33			$	22,047
Total			$	21,528			$	552			$	33			$	22,047
2004
Fixed maturities:
	Bonds – States*		$	18,294			$	510			$	13			$	18,791
Total			$	18,294			$	510			$	13			$	18,791

*	Including municipalities and political subdivisions.

							Gross				Gross				Estimated
			Amortized				Unrealized				Unrealized				Market
(in millions)			Cost				Gains				Losses				Value
2005
Bonds:
	U.S. government(a)		$	7,848			$	124			$	94			$	7,878
	States(b)			49,116				853				315				49,654
	Foreign governments			57,509				4,881				665				61,725
	All other corporate			235,139				7,770				2,650				240,259
Total bonds			$	349,612			$	13,628			$	3,724			$	359,516
2004
Bonds:
	U.S. government(a)		$	8,055			$	156			$	37			$	8,174
	States(b)			37,204				1,175				83				38,296
	Foreign governments			64,374				3,715				446				67,643
	All other corporate			220,205				11,089				1,008				230,286
Total bonds			$	329,838			$	16,135			$	1,574			$	344,399

(a)	Including U.S. government agencies and authorities.
(b)	Including municipalities and political subdivisions.

						Estimated
		Amortized				Market
(in millions)		Cost				Value
Fixed maturities available for sale:
Due in one year or less		$	10,417			$	10,991
Due after one year through five years			68,520				70,108
Due after five years through ten years			128,353				130,446
Due after ten years			142,322				147,971
Total available for sale		$	349,612			$	359,516

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		Less than 12 Months								12 Months or More								Total
						Unrealized								Unrealized								Unrealized
(in millions)		Cost(a)				Losses				Cost(a)				Losses				Cost(a)				Losses
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
2004
Bonds(b)		$	51,901			$	758			$	14,204			$	816			$	66,105			$	1,574
Equity securities			2,435				256				–				–				2,435				256
Total		$	54,336			$	1,014			$	14,204			$	816			$	68,540			$	1,830

(a)	For bonds, represents amortized cost.
(b)	Primarily relates to the “All other corporate” category.

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							Gross				Gross				Estimated
			Amortized				Unrealized				Unrealized				Market
(in millions)			Cost				Gains				Losses				Value
2005
Securities available for sale:
	Corporate and bank debt		$	24,496			$	373			$	780			$	24,089
	Foreign government obligations			825				5				31				799
	Asset-backed and collateralized			3,522				202				42				3,682
	Preferred stocks			6,194				13				3				6,204
	U.S. government obligations			2,535				209				7				2,737
Total			$	37,572			$	802			$	863			$	37,511
2004
Securities available for sale:
	Corporate and bank debt		$	15,067			$	1,492			$	81			$	16,478
	Foreign government obligations			1,239				134				2				1,371
	Asset-backed and collateralized			4,132				424				1				4,555
	Preferred stocks			6,651				38				23				6,666
	U.S. government obligations			2,082				78				5				2,155
Total			$	29,171			$	2,166			$	112			$	31,225

						Estimated
		Amortized				Market
(in millions)		Cost				Value
Securities available for sale:
Due in one year or less		$	5,156			$	5,066
Due after one year through five years			4,582				4,505
Due after five years through ten years			3,794				3,646
Due after ten years			20,518				20,612
Asset-backed and collateralized			3,522				3,682
Total securities available for sale		$	37,572			$	37,511

Years Ended December 31,
(in millions)				2005				2004
Real estate loans				$	20,407			$	17,069
Non-real estate loans					3,831				3,462
Credit card loans					1,498				1,226
Retail sales finance					2,522				2,254
Other loans					407				134
	Total finance receivables				28,665				24,145
	Allowance for losses				(670	)			(571	)
		Finance receivables, net		$	27,995			$	23,574

(in millions)
AIG’s net borrowings			$	10,425
Liabilities connected to trust preferred stock				1,391
Borrowings not guaranteed by AIG(a)				52,272
AIGFP:
	GIAs			20,811
	Matched notes and bonds payable			24,950
Total debt				109,849
Commercial paper				(9,208	)
Variable interest entity (VIE) debt(b)				(1,350	)
Total debt, excluding commercial paper and VIE			$	99,291

(a)	Includes commercial paper not guaranteed by AIG.
(b)	Represents borrowings of VIEs required to be consolidated under the provisions of FIN 46R.

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(in millions)					Total				2006				2007				2008				2009				2010				Thereafter
Borrowings under obligations of GIAs					$	20,811			$	7,577			$	1,899			$	1,208			$	579			$	562			$	8,986
Medium term notes:
	AGF(a)					17,736				2,992				3,944				2,346				1,866				2,425				4,163
	ILFC(a)					4,689				1,134				1,088				1,306				700				447				14
	AIG					112				23				65				–				–				–				24
Total						22,537				4,149				5,097				3,652				2,566				2,872				4,201
Notes and bonds payable:
	AIGFP					26,463				14,841				1,009				1,064				1,498				1,802				6,249
	ILFC(a):
		Notes				15,011				1,727				2,204				2,548				2,282				2,482				3,768
		Export credit facility(b)				2,616				432				432				432				381				267				672
		Bank financings				1,399				725				75				25				471				103				–
			Total ILFC			19,026				2,884				2,711				3,005				3,134				2,852				4,440
	AGF(a)					983				387				75				–				399				122				–
	AIG:
		Term notes				3,000				–				–				500				–				500				2,000
		Zero coupon convertible debt				1,060				–				–				–				–				–				1,060
		SAI				435				–				100				73				–				–				262
			Total AIG			4,495				–				100				573				–				500				3,322
	AGC					797				–				–				–				–				–				797
Total						51,764				18,112				3,895				4,642				5,031				5,276				14,808
Loans and mortgages payable:
	AIGCFG(a)					864				864				–				–				–				–				–
	AIG					814				600				121				–				–				–				93
	AIG Finance (Hong Kong) Limited (a)					183				37				7				139				–				–				–
Total						1,861				1,501				128				139				–				–				93
Other subsidiaries(a)						927				165				5				52				–				–				705
Liabilities connected to trust preferred stock						1,391				–				–				–				–				–				1,391
Total					$	99,291			$	31,504			$	11,024			$	9,693			$	8,176			$	8,710			$	30,184

(a)	AIG does not guarantee these borrowings.
(b)	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		$	2,615			$	10			$	2,625				4.17	%			36
AGF			3,423				10				3,433				4.32				29
AIG Funding			2,694				7				2,701				4.32				32
AIGCCC – Taiwan*			476				2				478				2.08				63
Total		$	9,208			$	29			$	9,237				—				—

*	Issued in Taiwan N.T. dollars at prevailing local interest rates.

(in millions)		AIG				SAI				Total
Balance December 31, 2004		$	565			$	102			$	667
Matured during year			(500	)			(55	)			(555	)
Balance December 31, 2005		$	65			$	47			$	112

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Range of						U.S. Dollar
Maturities				Range of		Carrying
(dollars in millions)		Currency		Interest Rates		Value
2006-2039		U.S. dollar		0.09-8.60%		$	18,514
2006-2010		United Kingdom pound		4.59-4.68			2,370
2006-2024		Euro		0.29-9.25			2,922
2005-2009		New Zealand dollar		4.17-8.35			1,185
2006-2035		Japanese yen		0.01-4.00			1,050
2006-2015		Australian dollar		1.14-4.89			104
2007-2024		Swiss francs		0.25-1.38			247
2007-2015		Other		1.03-3.72			71
Total						$	26,463

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		Uncollateralized				Collateralized
		Loans				Loans and
(in millions)		Payable				Mortgages Payable
AIG Finance (Hong Kong) Limited		$	183			$	–
AIGCFG			864				–
AIG			814				–
Other subsidiaries			618				309
Total		$	2,479			$	309

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11.	Shareholders’ Equity

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		2005				2004				2003
Shares outstanding at beginning of year			2,596,423,190				2,608,447,046				2,609,600,831
Acquired during the year			(2,654,272	)			(16,426,114	)			(3,899,991	)
Issued pursuant to performance stock unit obligations			15,757				24,025				–
Issued under stock plans			2,625,227				4,310,733				2,699,584
Issued under contractual obligations			236,870				67,500				46,622
Shares outstanding at end of year			2,596,646,772				2,596,423,190				2,608,447,046

12.	Commitments and Contingent Liabilities

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13.	Fair Value of Financial Instruments

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			2005								2004
			Carrying				Fair				Carrying				Fair
(in millions)			Value*				Value				Value*				Value
Assets:
	Fixed maturities		$	385,680			$	386,199			$	365,677			$	366,174
	Equity securities			23,588				23,588				17,706				17,706
	Mortgage loans on real estate, policy and collateral loans			24,909				26,352				23,484				23,980
	Securities available for sale			37,511				37,511				31,225				31,225
	Trading securities			6,499				6,499				2,746				2,746
	Spot commodities			92				96				534				534
	Unrealized gain on swaps, options and forward transactions			18,695				18,695				22,670				22,670
	Trading assets			1,204				1,204				3,433				3,433
	Securities purchased under agreements to resell			14,547				14,547				26,272				26,272
	Finance receivables, net of allowance			27,995				27,528				23,574				24,133
	Securities lending collateral			59,471				59,471				49,169				49,169
	Other invested assets			27,267				27,267				23,559				23,559
	Short-term investments			15,342				15,342				16,102				16,102
	Cash			1,897				1,897				2,009				2,009
Liabilities:
	Policyholders’ contract deposits			227,027				223,244				216,474				212,543
	Borrowings under obligations of guaranteed investment agreements			20,811				22,373				18,919				20,897
	Securities sold under agreements to repurchase			11,047				11,047				23,581				23,581
	Trading liabilities			2,546				2,546				2,503				2,503
	Securities and spot commodities sold but not yet purchased			5,975				5,975				5,404				5,404
	Unrealized loss on swaps, options and forward transactions			12,740				12,740				15,985				15,985
	Trust deposits and deposits due to banks and other depositors			4,877				5,032				4,248				4,553
	Commercial paper			9,208				9,208				9,693				9,693
	Notes, bonds, loans and mortgages payable			78,439				79,518				66,798				68,700
	Securities lending payable			60,409				60,409				49,972				49,972

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(in millions, except per share data)			2005				2004				2003
Net income, as reported			$	10,477			$	9,839			$	8,108
Add back interest on contingently convertible bonds, net of tax				11				11				11
				10,488				9,850				8,119
Actual stock-based compensation recognized, net of tax				53				40				16
				10,541				9,890				8,135
Fair Value for Grants Issued prior to January 1, 2003, net of tax				39				49				56
Actual stock-based compensation recognized, net of tax				53				40				16
Net income, pro forma			$	10,449			$	9,801			$	8,063
Earnings per common share:
	Basic:
	Net income, as reported		$	4.03			$	3.77			$	3.10
	Stock-based compensation, net of tax			(0.01	)			(0.02	)			(0.02	)
Net income, pro forma			$	4.02			$	3.75			$	3.08
	Diluted:
	Net income, as reported		$	3.99			$	3.73			$	3.07
	Stock-based compensation, net of tax			(0.01	)			(0.02	)			(0.02	)
Net income, pro forma			$	3.98			$	3.71			$	3.05
Average shares outstanding:
	Basic			2,597				2,606				2,610
	Diluted			2,627				2,637				2,637

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			2005								2004								2003
							Weighted								Weighted								Weighted
							Average								Average								Average
			Shares				Exercise Price				Shares				Exercise Price				Shares				Exercise Price
Shares Under Option:
	Outstanding at beginning of year			54,463,003			$	51.94				59,253,166			$	48.00				54,214,016			$	45.63
	Granted			4,397,500				62.69				3,474,100				64.65				8,602,909				56.15
	Exercised			(2,263,377	)			27.22				(3,387,734	)			34.02				(2,182,680	)			22.69
	Exercised, delivery deferred			(1,731,471	)			11.29				(3,397,999	)			5.98				(495,787	)			8.46
	Forfeited			(2,320,230	)			60.97				(1,478,530	)			70.69				(885,292	)			66.37
Outstanding at end of year				52,545,425			$	54.84				54,463,003			$	51.94				59,253,166			$	48.00
Options exercisable at year-end				39,952,281			$	52.47				40,211,710			$	47.80				43,397,566			$	42.17
Weighted average fair value per share of options granted							$	21.84							$	25.61							$	20.86

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		Options Outstanding										Options Exercisable
				Weighted				Weighted								Weighted
				Average				Average								Average
		Number		Remaining				Exercise				Number				Exercise
		Outstanding		Contractual Life				Price				Exercisable				Price
Range of Exercise Prices:
$11.28 – 27.14		6,900,520			1.3 years			$	21.38				6,900,520			$	21.38
30.44 – 41.51		5,560,658			2.5 years				36.75				5,560,658				36.75
43.31 – 53.41		7,163,076			4.9 years				48.54				5,476,932				49.01
54.11 – 59.99		8,516,644			5.2 years				57.84				6,328,084				57.33
60.13 – 63.95		9,382,325			6.9 years				62.33				6,193,792				61.92
64.01 – 69.63		8,397,522			7.8 years				65.44				3,876,532				65.66
70.35 – 98.00		6,624,680			5.3 years				83.82				5,615,763				84.63
		52,545,425						$	54.84				39,952,281			$	52.47

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(in millions)		2005				2004
Non-U.S. pension benefit plans		$	1,210			$	1,260
U.S. pension benefit plans		$	2,704			$	2,367

			Pension												Postretirement
			Non-												Non-
			U.S.				U.S.								U.S.				U.S.
(in millions)			Plans				Plans(a)				Total				Plans				Plans				Total
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 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
2004
Change in projected benefit obligation:
	Benefit obligation at beginning of year		$	1,348			$	2,602			$	3,950			$	16			$	247			$	263
	Service cost			59				101				160				3				6				9
	Interest cost			33				147				180				2				14				16
	Participant contributions			2				–				2				–				–				–
	Actuarial loss			133				59				192				11				(6	)			5
	Plan amendments and mergers			(92	)			(42	)			(134	)			–				–				–
	Benefits paid:
	AIG assets			(48	)			(8	)			(56	)			(1	)			(16	)			(17	)
	Plan assets			(27	)			(71	)			(98	)			–				–				–
	Effect of foreign currency fluctuation			67				–				67				1				–				1
	Other(b)			(99	)			(38	)			(137	)			3				(2	)			1
Benefit obligation at end of year			$	1,376			$	2,750			$	4,126			$	35			$	243			$	278

(a)	Includes excess retirement income type plans and supplemental executive type plans.
(b)	With respect to AIG’s non-U.S. plans obligations, the reduction resulted from transferring to the Japanese government certain Japanese plan obligations approximating $50 million. Additionally, the Japanese government also provided a subsidy with respect to certain Japanese plan obligations approximating $50 million.

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			Pension								Postretirement
			Non-U.S.				U.S.				Non-U.S.				U.S.
			Plans				Plans				Plans				Plans
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	%
2004
	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	%

		One Percentage Point
(in millions)		Increase				Decrease
Non-U.S. plans		$	8			$	(6	)
U.S. plans		$	(2	)		$	2

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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
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			(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	)
2004
Fair value of plan assets			$	624			$	2,247			$	2,871			$	–			$	–			$	–
Less projected benefit obligations				1,376				2,750				4,126				35				243				278
	Funded status			(752	)			(503	)			(1,255	)			(35	)			(243	)			(278	)
Amounts not yet recognized:
	Actuarial (gains)/losses(c)			380				840				1,220				–				44				44
	Prior service cost			(101	)			3				(98	)			–				(39	)			(39	)
	Transition obligations			2				–				2				–				–				–
Net amount recognized			$	(471	)		$	340			$	(131	)		$	(35	)		$	(238	)		$	(273	)
Composition of net amount recognized:
	Prepaid benefit cost		$	13			$	499			$	512			$	–			$	–			$	–
	Accrued benefit cost			(697	)			(191	)			(888	)			(35	)			(238	)			(273	)
	Intangible asset			5				6				11				–				–				–
	Accumulated other comprehensive income			208				26				234				–				–				–
Net amount recognized			$	(471	)		$	340			$	(131	)		$	(35	)		$	(238	)		$	(273	)

(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 $410 million and $480 million and approximately $360 million and $400 million has been recognized at December 31, 2005 and December 31, 2004, 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.

		2005								2004
		Non-U.S.				U.S.				Non-U.S.				U.S.
(in millions)		Plans				Plans				Plans				Plans
Projected benefit obligation		$	1,284			$	3,130			$	1,344			$	2,750
Accumulated benefit obligation			1,163				2,704				1,240				2,367
Fair value of plan assets			610				2,561				576				2,247

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		2005								2004
		Non-U.S.				U.S.				Non-U.S.				U.S.
(in millions)		Plans				Plans				Plans				Plans
Projected benefit obligation		$	1,281			$	268			$	1,324			$	232
Accumulated benefit obligation			1,161				224				1,226				194
Fair value of plan assets			607				9				558				9

			Pension												Postretirement
			Non-U.S.				U.S.								Non-U.S.				U.S.
(in millions)			Plans				Plans				Total				Plans				Plans				Total
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 at end of year			$	699			$	2,561			$	3,260			$	–			$	–			$	–
2004
Change in plan assets:
	Fair value of plan assets at beginning of year		$	591			$	2,124			$	2,715			$	–			$	–			$	–
	Actual return on plan assets net of expenses			40				151				191				–				–				–
	AIG contributions			81				61				142				1				16				17
	Participant contributions			2				–				2				–				–				–
	Benefits paid:
	AIG assets			(48	)			(8	)			(56	)			(1	)			(16	)			(17	)
	Plan assets			(27	)			(71	)			(98	)			–				–				–
	Effect of foreign currency fluctuation			30				–				30				–				–				–
	Other*			(45	)			(10	)			(55	)			–				–				–
Fair value of plan assets at end of year			$	624			$	2,247			$	2,871			$	–			$	–			$	–

*	Approximately $50 million was disbursed as a result of the settlement of certain Japanese plan obligations with the Japanese government.

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							Allocation
			Target				Actual				Actual
			2006				2005				2004
Asset class:
	Equity securities			0-70	%			59	%			63	%
	Debt securities			0-100				34				32
	Other			0-40				7				5
Total				100	%			100	%			100	%

							Allocation
			Target				Actual				Actual
			2006				2005				2004
Asset class:
	Equity securities			0-75	%			46	%			32	%
	Debt securities			0-100				27				14
	Other			0-100				27				54
Total				100	%			100	%			100	%

		Pension								Postretirement
		Non-U.S.				U.S.				Non-U.S.				U.S.
(in millions)		Plans				Plans				Plans				Plans
2006		$	61			$	102			$	1			$	16
2007			63				111				1				17
2008			68				119				1				17
2009			76				128				1				18
2010			73				137				1				18
2011-2015			401				885				6				98

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			Pensions												Postretirement
			Non-U.S.				U.S.								Non-U.S.				U.S.
(in millions)			Plans				Plans				Total				Plans				Plans				Total
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 liability			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 liability			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
2003
	Components of net periodic benefit cost:
	Service cost		$	52			$	79			$	131			$	1			$	4			$	5
	Interest cost			33				151				184				1				15				16
	Expected return on assets			(18	)			(145	)			(163	)			–				–				–
	Amortization of prior service cost			(3	)			4				1				–				(6	)			(6	)
	Amortization of transitional liability			2				1				3				–				–				–
	Recognition of net actuarial (gains)/losses			19				61				80				–				1				1
	Other			(26	)			–				(26	)			–				–				–
Net periodic benefit cost			$	59			$	151			$	210			$	2			$	14			$	16

*	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
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
2003
	Discount rate			2.00 -  8.00%				6.75%				5.50 - 6.00%				6.75%
	Rate of compensation increase			1.50 -  7.00%				4.50%				5.50%				4.50%
	Expected return on assets			3.00 - 10.00%				8.75%				N/A				N/A

*	The benefit obligations outside the United States reflect those assumptions that were most appropriate for each local economic environment of the subsidiaries providing such benefits.

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17.	Leases

(in millions)
2006		$	573
2007			436
2008			325
2009			253
2010			215
Remaining years after 2010			932
Total		$	2,734

(in millions)
2006		$	3,227
2007			2,813
2008			2,296
2009			1,820
2010			1,490
Remaining years after 2010			3,740
Total		$	15,386

18.	Ownership and Transactions With Related Parties

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-	An asset-backed commercial paper conduit, with which it entered into several total return swaps covering all the conduit’s assets that absorb the majority of the expected losses of the entity. The total assets of the conduit that serve as collateral to the conduit’s obligations that are reflected in AIG’s consolidated balance sheet at December 31, 2005 were $5.9 billion.
-	Several structured financing transactions in which AIGFP held the first loss position either by investing in the equity of the entity or implicitly through a lending or derivative arrangement. The total assets of these entities that are reflected in AIG’s consolidated balance sheet at December 31, 2005 were $1.6 billion. The obligations of these entities are paid solely from the cash flows of the assets held by the VIEs.

-	AIG uses VIEs primarily in connection with certain guaranteed investment contract programs (GIC Programs) written by its Life Insurance & Retirement Services subsidiaries. In the GIC Programs, AIG’s Life Insurance subsidiaries (principally SunAmerica Life Insurance Company) provide guaranteed investment contracts to VIEs which are not controlled by AIG, and in which AIG does not have a direct variable interest, as defined under FIN46R, in the entity. The VIE issues notes or bonds which are sold to third-party institutional investors. Neither AIG nor the insurance company issuing the GICs has any obligation to the investors in the notes or bonds. The proceeds from the securities issued by the VIE are invested by the VIE in the GICs. The insurance company subsidiaries use the proceeds to invest in a diversified portfolio of securities, primarily investment grade bonds. Both the assets and the liabilities of the insurance companies arising from these GIC Programs are presented in AIG’s consolidated balance sheet. Thus, at December 31, 2005, approximately $37 billion of policyholders’ contract deposits represented liabilities from issuances of GICs included in these GIC Programs, the proceeds of which are used to invest in insurance invested assets.
-	AIG manages Collateralized Bond and Loan Obligation trusts (collectively, Collateralized Debt Obligation trusts or CDO trusts). As asset manager, AIG receives fees for management of the assets held in the CDO trust, which support the issuance of securities sold by the CDO trust. AIG may take minority equity and/or fixed-income security interests in the CDO trust. AIG has entered into such arrangements to expand its asset management activities. Third-party investors have recourse only to the CDO trust and have no recourse to AIG.
-	AIG’s insurance operations also invest in obligations of VIEs. These VIEs are established by unrelated third parties. Investments include collateralized mortgage backed securities and similar securities backed by pools of mortgages, consumer receivables, or other assets. The investment in these VIEs allows AIG’s insurance entities to purchase assets permitted by insurance regulations while maximizing their return on these assets.

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20.	Derivatives

			Remaining Life of Notional Amount*
			One				Two Through				Six Through				After Ten				Total				Total
(in millions)			Year				Five Years				Ten Years				Years				2005				2004
Capital Markets interest rate, currency and equity swaps and swaptions:
Notional amount:
	Interest rate swaps		$	235,255			$	440,686			$	141,482			$	19,966			$	837,389			$	858,733
	Currency swaps			57,555				103,483				35,886				14,595				211,519				275,466
	Swaptions, equity and commodity swaps			84,960				52,566				22,148				15,423				175,097				151,789
Total			$	377,770			$	596,735			$	199,516			$	49,984			$	1,224,005			$	1,285,988

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

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			Remaining Life
			One				Two Through				Six Through				After Ten				Total				Total
(in millions)			Year				Five Years				Ten Years				Years				2005				2004
Futures, forward and options contracts:
	Exchange traded futures and options contracts contractual amount		$	19,182			$	4,768			$	1,287			$	61			$	25,298			$	27,456
	Over the counter forward contracts contractual amount			287,894				7,017				867				–				295,778				277,935
Total			$	307,076			$	11,785			$	2,154			$	61			$	321,076			$	305,391

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			Fair Value
			Total				Total
(in millions)			2005				2004
Counterparty credit quality:
	AAA		$	4,568			$	9,185
	AA			8,057				7,244
	A			3,838				4,448
	BBB			1,709				1,193
	Below investment grade			523				600
Total			$	18,695			$	22,670

		Fair Value
		Total				Total
(in millions)		2005				2004
Non-U.S. banks		$	6,182			$	7,163
Insured municipalities			387				543
U.S. industrials			1,434				2,139
Governmental			2,158				1,387
Non-U.S. financial service companies			873				1,511
Non-U.S. industrials			2,287				2,377
Special purpose			2,529				4,937
U.S. banks			1,147				773
U.S. financial service companies			1,618				1,726
Supranationals			51				114
Utility			29				–
Total		$	18,695			$	22,670

21.	Variable Life and Annuity Contracts

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21.	Variable Life and Annuity Contracts

		Net Deposits
		Plus a Minimum				Highest Contract
(dollars in billions)		Return				Value Attained
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%
2004
Account Value(a)			$57				$12
Amount at Risk(b)			8				2
Average Attained Age of Contract Holders by Product			49-70 years				52-68 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)		2005				2004
Balance at January 1		$	485			$	479	*
Reserve increase			33				86
Benefits paid			(76	)			(80	)
Balance at December 31		$	442			$	485

*	Includes amounts from the one-time cumulative accounting charge resulting from the adoption of SOP 03-1.

-	Data used was up to 5,000 stochastically generated investment performance scenarios.
-	Mean investment performance assumptions ranged from approximately three percent to 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 103 percent of various life and annuity mortality tables.

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21.	Variable Life and Annuity Contracts

-	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,
			2005												2005												2005
(in millions, except per share			Previously				2005								Previously				2005								Previously				2005
data)			Reported				Restated				2004				Reported				Restated				2004				Reported				Restated				2004				2005				2004
Revenues:
	Premiums and other considerations		$	17,682			$	17,680			$	15,979			$	17,541			$	17,536			$	16,175			$	17,244			$	17,243			$	17,281			$	17,750			$	17,190
	Net investment income			5,292				5,332				4,600				5,198				5,227				4,541				5,629				5,654				4,509				5,952				4,815
	Realized capital gains (losses)			88				137				(86	)			245				(125	)			89				79				77				(78	)			252				119
	Other revenues			4,050				4,053				2,729				3,877				5,265				3,284				3,409				3,434				3,602				3,438				2,917
	Total revenues			27,112				27,202				23,222				26,861				27,903				24,089				26,361				26,408				25,314				27,392				25,041
Benefits and expenses:
	Incurred policy losses and benefits			14,865				14,873				13,590				14,336				14,283				13,480				16,503				16,501				15,217				18,054				16,073
	Insurance acquisition & other operating expenses			6,804				6,680				5,790				6,730				6,919				5,960				7,381				7,360				6,041				9,022				6,670
	Total benefits and expenses			21,669				21,553				19,380				21,066				21,202				19,440				23,884				23,861				21,258				27,076				22,743
Income before income taxes, minority interest and cumulative effect of an accounting change				5,443				5,649				3,842				5,795				6,701				4,649				2,477				2,547				4,056				316				2,298
Income taxes:
	Current			987				968				1,345				790				1,015				1,092				372				372				201				214				(45	)
	Deferred			626				738				(215	)			884				1,068				372				334				376				1,064				(493	)			593
				1,613				1,706				1,130				1,674				2,083				1,464				706				748				1,265				(279	)			548
Income before minority interest and cumulative effect of an accounting change				3,830				3,943				2,712				4,121				4,618				3,185				1,771				1,799				2,791				595				1,750
Minority interest				(146	)			(144	)			(70	)			(129	)			(129	)			(105	)			(54	)			(54	)			(142	)			(151	)			(138	)
Income before cumulative effect of an accounting change				3,684				3,799				2,642				3,992				4,489				3,080				1,717				1,745				2,649				444				1,612
Cumulative effect of an accounting change, net of tax				-				-				(144	)			-				-				-				-				-				-				-				-
Net income			$	3,684			$	3,799			$	2,498			$	3,992			$	4,489			$	3,080			$	1,717			$	1,745			$	2,649			$	444			$	1,612
Earnings per common share:
	Basic
	Income before cumulative effect of an accounting change		$	1.42			$	1.46			$	1.01			$	1.54			$	1.73			$	1.19			$	0.66			$	0.67			$	1.01			$	0.17			$	0.62
	Cumulative effect of an accounting change, net of tax			-				-				(0.06	)			-				-				-				-				-				-				-				-
	Net income			1.42				1.46				0.95				1.54				1.73				1.19				0.66				0.67				1.01				0.17				0.62
	Diluted
	Income before cumulative effect of an accounting change		$	1.40			$	1.45			$	1.00			$	1.53			$	1.71			$	1.17			$	0.65			$	0.66			$	1.00			$	0.17			$	0.62
	Cumulative effect of an accounting change, net of tax			-				-				(0.06	)			-				-				-				-				-				-				-				-
	Net income			1.40				1.45				0.94				1.53				1.71				1.17				0.65				0.66				1.00				0.17				0.62
Average shares outstanding:
	Basic			2,597				2,597				2,610				2,596				2,596				2,608				2,597				2,597				2,606				2,597				2,601
	Diluted			2,624				2,624				2,642				2,623				2,623				2,640				2,624				2,624				2,638				2,626				2,632

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23.	Information Provided in Connection With Outstanding Debt

			American
			International
			Group, Inc.				AGC				Other								Consolidated
(in millions)			Guarantor				Issuer				Subsidiaries				Eliminations				AIG
December 31, 2005
Assets:
	Invested assets		$	1,392			$	–			$	691,349			$	(13,696	)		$	679,045
	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			2,768				2,577				167,252				(1,327	)			171,270
Total assets			$	95,073			$	29,604			$	875,885			$	(147,192	)		$	853,370
Liabilities:
	Insurance liabilities		$	408			$	–			$	460,271			$	(56	)		$	460,623
	Debt			4,607				2,087				115,212				(12,057	)			109,849
	Other liabilities			3,741				4,110				191,598				(3,054	)			196,395
Total liabilities				8,756				6,197				767,081				(15,167	)			766,867
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			$	95,073			$	29,604			$	875,885			$	(147,192	)		$	853,370
December 31, 2004
Assets:
	Invested assets		$	1,027			$	–			$	650,238			$	(12,984	)		$	638,281
	Cash			17				–				1,992				–				2,009
	Carrying value of subsidiaries and partially owned companies, at equity			80,966				26,179				12,763				(118,413	)			1,495
	Other assets			2,786				2,546				154,417				(389	)			159,360
Total assets			$	84,796			$	28,725			$	819,410			$	(131,786	)		$	801,145
Liabilities:
	Insurance liabilities		$	405			$	–			$	428,130			$	(69	)		$	428,466
	Debt			3,647				2,482				103,027				(12,257	)			96,899
	Other liabilities			1,071				4,076				191,967				(1,206	)			195,908
Total liabilities				5,123				6,558				723,124				(13,532	)			721,273
Preferred shareholders’ equity in subsidiary companies				–				–				199				–				199
Total shareholders’ equity				79,673				22,167				96,087				(118,254	)			79,673
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity			$	84,796			$	28,725			$	819,410			$	(131,786	)		$	801,145

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		American
		International
		Group, Inc.				AGC				Other								Consolidated
(in millions)		Guarantor				Issuer				Subsidiaries				Eliminations				AIG
Year Ended December 31, 2005
Operating income		$	(1,569)			$	(200	)		$	16,982			$	–			$	15,213
Equity in undistributed net income of consolidated subsidiaries			10,368				2,530				–				(12,898	)			–
Dividend income from consolidated subsidiaries			1,746				–				–				(1,746	)			–
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			8,705				2,048				–				(10,753	)			–
Dividend income from consolidated subsidiaries			1,836				65				–				(1,901	)			–
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
Year Ended December 31, 2003
Operating income		$	(708	)		$	(98	)		$	12,713			$	–			$	11,907
Equity in undistributed net income of consolidated subsidiaries			7,708				1,804				–				(9,512	)			–
Dividend income from consolidated subsidiaries			1,471				196				–				(1,667	)			–
Income taxes (benefits)			363				(23	)			3,216				–				3,556
Minority interest			–				–				(252	)			–				(252	)
Cumulative effect of an accounting change			–				–				9				–				9
Net income (loss)		$	8,108			$	1,925			$	9,254			$	(11,179	)		$	8,108

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			American
			International
			Group, Inc.				AGC				Other				Consolidated
(in millions)			Guarantor				Issuer				Subsidiaries				AIG
Year Ended December 31, 2005
Net cash provided by operating activities			$	1,673			$	805			$	22,660			$	25,138
Cash flows from investing activities:
	Invested assets disposed			–				–				218,825				218,825
	Invested assets acquired			(598	)			–				(273,530	)			(274,128	)
	Other			(1,294	)			(247	)			(477	)			(2,018	)
Net cash used in investing activities				(1,892	)			(247	)			(55,182	)			(57,321	)
Cash flows from financing activities:
	Change in debts			1,493				(398	)			11,939				13,034
	Other			(1,176	)			(160	)			21,301				19,965
Net cash (used in) provided by financing activities				317				(558	)			33,240				32,999
Effect of exchange rate changes on cash				75				–				(1,003	)			(928	)
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			$	2,732			$	839			$	27,145			$	30,716
Cash flows from investing activities:
	Invested assets disposed			502				–				151,163				151,665
	Invested assets acquired			(107	)			–				(247,723	)			(247,830	)
	Other			(1,039	)			(408	)			497				(950	)
Net cash used in investing activities				(644	)			(408	)			(96,063	)			(97,115	)
Cash flows from financing activities:
	Change in debts			(400	)			(349	)			17,250				16,501
	Other			(1,515	)			(82	)			51,590				49,993
Net cash (used in) provided by financing activities				(1,915	)			(431	)			68,840				66,494
Effect of exchange rate changes on cash				(175	)			–				1,167				992
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
Year Ended December 31, 2003
Net cash provided by operating activities			$	625			$	1,376			$	31,240			$	33,241
Cash flows from investing activities:
	Invested assets disposed			186				–				152,054				152,240
	Invested assets acquired			(830	)			–				(215,092	)			(215,922	)
	Acquisitions, net of cash acquired			–				–				(2,091	)			(2,091	)
	Other			(842	)			(926	)			637				(1,131	)
Net cash used in investing activities				(1,486	)			(926	)			(64,492	)			(66,904	)
Cash flows from financing activities:
	Change in debts			1,288				(376	)			5,658				6,570
	Other			(411	)			(75	)			26,986				26,500
Net cash provided by (used in) financing activities				877				(451	)			32,644				33,070
Effect of exchange rate changes on cash				(15	)			–				365				350
Change in cash				1				(1	)			(243	)			(243	)
Cash at beginning of year				18				1				1,146				1,165
Cash at end of year			$	19			$	–			$	903			$	922

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			American
			International				AIG
			Group, Inc.				Liquidity				Other								Consolidated
(in millions)			Guarantor				Corp.				Subsidiaries				Eliminations				AIG
December 31, 2005
Assets:
	Invested assets		$	1,392			$		*		$	691,349			$	(13,696	)		$	679,045
	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			2,768					*			169,829				(1,327	)			171,270
Total assets			$	95,073			$		*		$	905,489			$	(147,192	)		$	853,370
Liabilities:
	Insurance liabilities		$	408			$	–			$	460,271			$	(56	)		$	460,623
	Debt			4,607					*			117,299				(12,057	)			109,849
	Other liabilities			3,741					*			195,708				(3,054	)			196,395
Total liabilities				8,756					*			773,278				(15,167	)			766,867
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			$	95,073			$		*		$	905,489			$	(147,192	)		$	853,370
December 31, 2004
Assets:
	Invested assets		$	1,027			$		*		$	650,238			$	(12,984	)		$	638,281
	Cash			17					*			1,992				–				2,009
	Carrying value of subsidiaries and partially owned companies, at equity			80,966				–				38,942				(118,413	)			1,495
	Other assets			2,786					*			156,963				(389	)			159,360
Total assets			$	84,796			$		*		$	848,135			$	(131,786	)		$	801,145
Liabilities:
	Insurance liabilities		$	405			$	–			$	428,130			$	(69	)		$	428,466
	Debt			3,647					*			105,509				(12,257	)			96,899
	Other liabilities			1,071					*			196,043				(1,206	)			195,908
Total liabilities				5,123					*			729,682				(13,532	)			721,273
Preferred shareholders’ equity in subsidiary companies				–				–				199				–				199
Total shareholders’ equity				79,673					*			118,254				(118,254	)			79,673
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity			$	84,796			$		*		$	848,135			$	(131,786	)		$	801,145

*	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, 2005
Operating Income		$	(1,569	)		$		*		$	16,782			$	–			$	15,213
Equity in undistributed net income of consolidated subsidiaries			10,368				–				2,530				(12,898	)			–
Dividend income from consolidated subsidiaries			1,746					*			–				(1,746	)			–
Income taxes (benefits)			68				–				4,190				–				4,258
Minority interest			–				–				(478	)			–				(478	)
Cumulative effect of an accounting change			–				–				–				–				–
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			8,705				–				2,048				(10,753	)			–
Dividend income from consolidated subsidiaries			1,836				–				65				(1,901	)			–
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
Year Ended December 31, 2003
Operating Income		$	(708	)		$		*		$	12,615			$	–			$	11,907
Equity in undistributed net income of consolidated subsidiaries			7,708				–				1,804				(9,512	)			–
Dividend income from consolidated subsidiaries			1,471				–				196				(1,667	)			–
Income taxes (benefits)			363					*			3,193				–				3,556
Minority interest			–				–				(252	)			–				(252	)
Cumulative effect of an accounting change			–				–				9				–				9
Net income (loss)		$	8,108			$		*		$	11,179			$	(11,179	)		$	8,108

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			American
			International				AIG
			Group, Inc.				Liquidity				Other				Consolidated
(in millions)			Guarantor				Corp.				Subsidiaries				AIG
Year Ended December 31, 2005
Net cash provided by operating activities			$	1,673			$		*		$	23,465			$	25,138
Cash flows from investing activities:
	Invested assets disposed			–				–				218,825				218,825
	Invested assets acquired			(598	)			–				(273,530	)			(274,128	)
	Other			(1,294	)				*			(724	)			(2,018	)
Net cash used in investing activities				(1,892	)				*			(55,429	)			(57,321	)
Cash flows from financing activities:
	Change in debts			1,493				–				11,541				13,034
	Other			(1,176	)				*			21,141				19,965
Net cash provided by financing activities				317					*			32,682				32,999
Effect of exchange rate changes on cash				75				–				(1,003	)			(928	)
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			$	2,732			$		*		$	27,984			$	30,716
Cash flows from investing activities:
	Invested assets disposed			502				–				151,163				151,665
	Invested assets acquired			(107	)			–				(247,723	)			(247,830	)
	Other			(1,039	)				*			89				(950	)
Net cash used in investing activities				(644	)				*			(96,471	)			(97,115	)
Cash flows from financing activities:
	Change in debts			(400	)			–				16,901				16,501
	Other			(1,515	)				*			51,508				49,993
Net cash (used in) provided by financing activities				(1,915	)				*			68,409				66,494
Effect of exchange rate changes on cash				(175	)			–				1,167				992
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
Year Ended December 31, 2003
Net cash provided by operating activities			$	625			$		*		$	32,616			$	33,241
Cash flows from investing activities:
	Invested assets disposed			186				–				152,054				152,240
	Invested assets acquired			(830	)			–				(215,092	)			(215,922	)
	Acquisitions, net of cash acquired			–				–				(2,091	)			(2,091	)
	Other			(842	)				*			(289	)			(1,131	)
Net cash used in investing activities				(1,486	)				*			(65,418	)			(66,904	)
Cash flows from financing activities:
	Change in debts			1,288				–				5,282				6,570
	Other			(411	)				*			26,911				26,500
Net cash provided by financing activities				877					*			32,193				33,070
Effect of exchange rate changes on cash				(15	)			–				365				350
Change in cash				1					*			(244	)			(243	)
Cash at beginning of year				18				–				1,147				1,165
Cash at end of year			$	19			$		*		$	903			$	922

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-	adoption and implementation of new corporate guidelines on balance sheet reconciliations;
-	implementation of new programs to train staff on the requirements of the new guidelines;
-	enhancement of the oversight of the balance sheet reconciliation function by adding qualified staff and engaging outside resources; and
-	enhancement of processes for evaluating and monitoring financial statement exposures related to balance sheet reconciliations.

-	enhancement of systems and implementation of new controls over the accounting for derivatives and related assets and liabilities;
-	implementation of new procedures and controls to ensure technical compliance with the provisions of FAS 133, including specific documentation requirements, prior to application of hedge accounting by AIG subsidiaries; and
-	establishment of improved oversight, monitoring and supervision of derivative accounting issues in part, through the hiring of additional personnel with expertise in FAS 133.

-	implementation of new controls over its accounting for income taxes;
-	enhancement of its oversight over income tax accounting through hiring of additional qualified staff;
-	engagement of an outside accounting firm to assist in the analysis of its income tax accounting; and
-	enhancement of processes for evaluating and monitoring financial statement exposure related to income tax accounting.

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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/ M. Bernard Aidinoff (M. Bernard Aidinoff)		Director
/s/ Pei-yuan Chia (Pei-yuan Chia)		Director
/s/ Marshall A. Cohen (Marshall A. Cohen)		Director
/s/ William S. Cohen (William S. Cohen)		Director
/s/ Martin S. Feldstein (Martin S. Feldstein)		Director

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Signature		Title
/s/ Ellen V. Futter (Ellen V. Futter)		Director
/s/ Stephen L. Hammerman (Stephen L. Hammerman)		Director
/s/ Carla A. Hills (Carla A. Hills)		Director
/s/ Richard C. Holbrooke (Richard C. Holbrooke)		Director
/s/ Fred H. Langhammer (Fred H. Langhammer)		Director
/s/ George L. Miles, Jr. (George L. Miles, Jr.)		Director
/s/ Morris W. Offit (Morris W. Offit)		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

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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							Filed herewith.
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.
			(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.

* All material contracts are management contracts or compensatory plans or arrangements, except items (68), (69), (70) and (71).

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Exhibit
Number		Description						Location
		(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).
		(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).

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Exhibit
Number		Description						Location
		(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).
		(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).

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Exhibit
Number		Description						Location
		(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 Donald P. Kanak, dated March 16, 2005				Incorporated by reference to Exhibit 10.2 to AIG’s Current Report on Form 8-K filed with the SEC on March 17, 2005 (File No. 1-8787).
		(58)		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).
		(59)		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).
		(60)		Employment Agreement between AIG and Donald P. Kanak, dated as of June 27, 2005				Incorporated by reference to Exhibit 10(2) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(61)		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).
		(62)		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).
		(63)		Assurance Agreement, by AIG in favor of eligible employees dated as of June 27, 2005, relating to certain obligations of C.V. Starr & Co., Inc.				Incorporated by reference to Exhibit 10(5) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(64)		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).
		(65)		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).
		(66)		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).
		(67)		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).
		(68)		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).
		(69)		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).
		(70)		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).

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Exhibit
Number		Description							Location
			(71)		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).
			(72)		AIG Senior Partners Plan (amended and restated)				Filed herewith.
			(73)		AIG Partners Plan				Filed herewith.
11		Statement re computation of per share earnings							Included in Note 1(dd) 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.
16		Letter re change in certifying accountant							None.
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
At December 31, 2005											in the
(in millions)			Cost*				Value				Balance Sheet
Fixed maturities:
	Bonds:
	United States government and government agencies and authorities		$	7,869			$	7,901			$	7,901
	States, municipalities and political subdivisions			70,662				71,716				71,200
	Foreign governments			57,896				62,120				62,117
	Public utilities			15,156				15,582				15,582
	All other corporate			224,180				228,880				228,880
	Total bonds			375,763				386,199				385,680
Total fixed maturities				375,763				386,199				385,680
Equity securities:
	Common stocks:
	Public utilities			250				289				289
	Banks, trust and insurance companies			1,567				1,967				1,967
	Industrial, miscellaneous and all other			16,054				18,930				18,930
	Total common stocks			17,871				21,186				21,186
	Preferred stocks			2,282				2,402				2,402
Total equity securities				20,153				23,588				23,588
Mortgage loans on real estate, policy and collateral loans				24,909				26,352				24,909
Financial services assets:
	Flight equipment primarily under operating leases, net of accumulated depreciation			36,245				—				36,245
	Securities available for sale, at market value			37,572				37,511				37,511
	Trading securities, at market value			—				6,499				6,499
	Spot commodities			—				96				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			14,547				—				14,547
	Finance receivables, net of allowance			27,995				27,528				27,995
Securities lending collateral, at market value (approximates cost)				59,471				59,471				59,471
Other invested assets (approximates market value)				27,267				27,267				27,267
Short-term investments, at cost (approximates market value)				15,342				15,342				15,342
Total investments				—				—			$	679,045

*	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)			2005				2004
Assets:
	Cash		$	190			$	17
	Short-term investments			1,270				672
	Invested assets			122				355
	Carrying value of subsidiaries and partially-owned companies, at equity			90,723				80,966
	Premiums and insurance balances receivable – net			186				198
	Other assets			2,582				2,588
Total assets				95,073				84,796
Liabilities:
	Insurance balances payable			408				405
	Due to affiliates – net			3,250				3,364
	Medium term notes payable			112				667
	Term notes payable			3,435				1,935
	Zero coupon notes			1,060				1,045
	Other liabilities			491				(2,293	)
Total liabilities				8,756				5,123
Shareholders’ equity:
	Common stock			6,878				6,878
	Additional paid-in capital			2,339				2,094
	Retained earnings			72,330				63,468
	Accumulated other comprehensive income			6,967				9,444
	Treasury stock			(2,197	)			(2,211	)
Total shareholders’ equity				86,317				79,673
Total liabilities and shareholders’ equity			$	95,073			$	84,796

Years Ended December 31,
(in millions)			2005				2004				2003
Agency income (loss)			$	3			$	(8	)		$	(1	)
Financial services income				507				578				518
Asset management loss				(3	)			(11	)			(13	)
Dividend income from consolidated subsidiaries:
	Cash			1,746				1,835				1,471
	Other			–				1				–
Dividend income from partially-owned companies				127				11				9
Equity in undistributed net income of consolidated subsidiaries and partially-owned companies				10,368				8,705				7,708
Other income (expenses) – net				(2,203	)			(409	)			(1,221	)
Income before income taxes				10,545				10,702				8,471
Income taxes				68				863				363
Net income			$	10,477			$	9,839			$	8,108

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Years Ended December 31,			2005				2004				2003
(in millions)
Cash flows from operating activities:
	Net income		$	10,477			$	9,839			$	8,108
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			(10,368	)			(8,705	)			(7,708	)
	Change in premiums and insurance balances receivable and payable – net			15				(12	)			(4	)
	Other – net			1,549				1,610				229
	Total adjustments			(8,804	)			(7,107	)			(7,483	)
Net cash provided by operating activities				1,673				2,732				625
Cash flows from investing activities:
	Purchase of investments			–				(107	)			–
	Sale of investments			–				200				186
	Change in short-term investments			(598	)			302				(830	)
	Contributions to subsidiaries and investments in partially owned companies			(1,500	)			(1,026	)			(573	)
	Other – net			206				(13	)			(269	)
Net cash used in investing activities				(1,892	)			(644	)			(1,486	)
Cash flows from financing activities:
	Change in medium term notes			(555	)			(124	)			(207	)
	Change in term notes			1,500				1				1,500
	Redemption of zero coupon notes			–				(189	)			–
	Proceeds from common stock issued			82				158				74
	Change in loans payable			548				(88	)			(5	)
	Cash dividends to shareholders			(1,420	)			(730	)			(584	)
	Acquisition of treasury stock			(176	)			(1,083	)			(207	)
	Other – net			338				140				306
Net cash (used in) provided by financing activities				317				(1,915	)			877
Effect of exchange rate changes on cash				75				(175	)			(15	)
Change in cash				173				(2	)			1
Cash at beginning of year				17				19				18
Cash at end of year			$	190			$	17			$	19

(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 2004 and 2003 financial statements to conform to their 2005 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
2005
	General Insurance		$	4,048			$	77,169			$	24,243			$	–			$	40,809			$	4,031			$	33,091			$	7,430			$	2,338			$	41,872
	Life Insurance & Retirement Services			29,200				108,807				–				2,473				29,400				18,134				30,620				3,377				4,475				–
			$	33,248			$	185,976			$	24,243			$	2,473			$	70,209			$	22,165			$	63,711			$	10,807			$	6,813			$	41,872
2004
	General Insurance		$	3,998			$	61,878			$	23,400			$	–			$	38,537			$	3,196			$	30,357			$	6,238			$	2,189			$	40,623
	Life Insurance & Retirement Services			25,819				104,740				–				2,435				28,088				15,269				28,003				3,551				3,923				–
			$	29,817			$	166,618			$	23,400			$	2,435			$	66,625			$	18,465			$	58,360			$	9,789			$	6,112			$	40,623
2003
	General Insurance		$	3,619			$	51,871			$	21,235			$	–			$	31,306			$	2,566			$	22,872			$	4,676			$	1,783			$	35,031
	Life Insurance & Retirement Services			22,375				92,915				–				2,006				23,496				12,942				23,162				2,778				3,931				–
			$	25,994			$	144,786			$	21,235			$	2,006			$	54,802			$	15,508			$	46,034			$	7,454			$	5,714			$	35,031

(a)	Reserves for losses and loss expenses with respect to the General Insurance operations are net of discounts of $2.11 billion, $1.55 billion and $1.52 billion at December 31, 2005, 2004 and 2003, respectively.
(b)	Reflected in insurance balances payable on the accompanying consolidated balance sheet.

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																			Percent of
							Ceded				Assumed								Amount
							to Other				from Other				Net				Assumed
(dollars in millions)			Gross Amount				Companies				Companies				Amount				to Net
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	%
2003
Life Insurance in-force			$	1,580,982			$	293,064			$	2,049			$	1,289,967				0.2	%
Premiums:
	General Insurance		$	40,786			$	11,907			$	6,152			$	35,031				17.6	%
	Life Insurance & Retirement Services			24,412				952				36				23,496	*			0.2
Total premiums			$	65,198			$	12,859			$	6,188			$	58,527				10.6	%

*	Includes accident and health premiums of $6.51 billion, $5.63 billion and $4.17 billion in 2005, 2004 and 2003, respectively.

 

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Years Ended December 31,
(in millions, except ratios)			2005				2004				2003				2002				2001
Income before income taxes, minority interest and cumulative effect of accounting changes			$	15,213			$	14,845			$	11,907			$	7,808			$	5,917
Less – Equity income of less than 50% owned persons				(129	)			164				146				168				14
Add – Dividends from less than 50% owned persons				146				22				13				13				2
				15,488				14,703				11,774				7,653				5,905
Add – Fixed charges				7,663				6,049				5,762				4,893				5,695
Less – Capitalized interest				64				59				52				61				71
Income before income taxes, minority interest, cumulative effect of accounting changes and fixed charges			$	23,087			$	20,693			$	17,484			$	12,485			$	11,529
Fixed charges:
	Interest costs		$	7,464			$	5,860			$	5,588			$	4,725			$	5,538
	Rental expense*			199				189				174				168				157
Total fixed charges			$	7,663			$	6,049			$	5,762			$	4,893			$	5,695
Ratio of earnings to fixed charges				3.01				3.42				3.03				2.55				2.02
Secondary Ratio
Interest credited to GIC and GIA policy and contract holders			$	(4,760	)		$	(3,674	)		$	(3,578	)		$	(2,702	)		$	(3,196	)
Total fixed charges excluding interest credited to GIC and GIA policy and contract holders			$	2,903			$	2,375			$	2,184			$	2,191			$	2,499
Secondary ratio of earnings to fixed charges				6.31				7.17				6.37				4.47				3.33

 

							Percentage
							of Voting
							Securities
			Jurisdiction of				Owned by its
			Incorporation				Immediate
			or Organization				Parent(2)
American International Group, Inc. (Registrant)(1)				Delaware					(3)
	AIG Aviation, Inc.			Georgia				100
	AIG Bulgaria Insurance and Reinsurance Company EAD			Bulgaria				100
	AIG Capital Corporation			Delaware				100
	AIG Consumer Finance Group, Inc.			Delaware				100
	AIG Bank Polska S.A.			Poland				99.92
	AIG Credit S.A.			Poland				100
	Compania Financiera Argentina S.A.			Argentina				100
	AIG Equipment Finance Holdings, Inc.			Delaware				100
	AIG Commercial Equipment Finance, Inc.			Delaware				100
	AIG Commercial Equipment Finance Company, Canada			Canada				100
	AIG Finance Holdings, Inc.			New York				100
	AIG Finance (Hong Kong) Limited			Hong Kong				100
	AIG Global Asset Management Holdings Corp.			Delaware				100
	AIG Asset Management Services, Inc.			Delaware				100
	Brazos Capital Management, L.P.			Delaware				92
	AIG Capital Partners, Inc.			Delaware				100
	AIG Equity Sales Corp.			New York				100
	AIG Global Investment Corp.			New Jersey				100
	AIG Global Securities Lending Corp.			Delaware				100
	International Lease Finance Corporation			California				67.23	(4)
	AIG Global Real Estate Investment Corp.			Delaware				100
	AIG Credit Corp.			Delaware				100
	A.I. Credit Consumer Discount Corp.			Pennsylvania				100
	A.I. Credit Corp.			New Hampshire				100
	AICCO, Inc.			Delaware				100
	AICCO, Inc.			California				100
	AIG Credit Corp. of Canada			Canada				100
	Imperial Premium Funding, Inc.			Delaware				100
	AIG Egypt Insurance Company, S.A.E.			Egypt				89.98
	AIG Federal Savings Bank			U.S.A.				100
	AIG Financial Advisor Services, Inc.			Delaware				100
	AIG Financial Advisor Services (Europe), S.A.			Luxembourg				100
	AIG Financial Products Corp.			Delaware				100
	AIG Matched Funding Corp.			Delaware				100
	Banque AIG			France				90	(5)
	AIG Funding, Inc.			Delaware				100
	AIG Global Trade & Political Risk Insurance Company			New Jersey				100
	A.I.G. Golden Insurance Ltd.			Israel				50.01
	AIG Life Holdings (International) LLC			Delaware				100
	American International Reinsurance Company, Ltd.			Bermuda				100
	AIG Edison Life Insurance Company			Japan				90	(6)
	American International Assurance Company, Limited			Hong Kong				100
	American International Assurance Company (Australia) Limited			Australia				100
	American International Assurance Company (Bermuda) Limited			Bermuda				100
	American International Assurance Co. (Vietnam) Limited			Vietnam				100
	Tata AIG Life Insurance Company Limited			India				26
	Nan Shan Life Insurance Company, Ltd.			Taiwan				95
	AIG Life Insurance Company			Delaware				79	(7)
	AIG Life Insurance Company of Puerto Rico			Puerto Rico				100
	AIG Liquidity Corp.			Delaware				100
	AIG Marketing, Inc.			Delaware				100
	AIG Private Bank Ltd.			Switzerland				100

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						Percentage
						of Voting
						Securities
		Jurisdiction of				Owned by its
		Incorporation				Immediate
		or Organization				Parent(2)
AIG Retirement Services, Inc.			Delaware				100	(8)
SunAmerica Life Insurance Company			Arizona				100
SunAmerica Investments, Inc.			Georgia				70	(9)
AIG Advisor Group, Inc.			Maryland				100
Advantage Capital Corporation			New York				100
FSC Securities Corporation			Delaware				100
Royal Alliance Associates, Inc.			Delaware				100
Sentra Securities Corporation			California				100
Spelman & Co., Inc.			California				100
SunAmerica Securities, Inc.			Delaware				100
AIG SunAmerica Life Assurance Company			Arizona				100	(10)
AIG SunAmerica Asset Management Corp.			Delaware				100
AIG SunAmerica Capital Services, Inc.			Delaware				100
First SunAmerica Life Insurance Company			New York				100
AIG Risk Management, Inc.			New York				100
AIG Technologies, Inc.			New Hampshire				100
AIGTI, Inc.			Delaware				100
AIG Trading Group Inc.			Delaware				100
AIG International, Inc.			Delaware				100
AIU Holdings, LLC			Delaware				100
AIG Central Europe & CIS Insurance Holdings Corporation			Delaware				100
AIG Bulgaria Insurance and Reinsurance Company EAD			Bulgaria				100
AIG Czech Republic pojistovna, as			Czech Republic				100
AIG Kazakhstan Insurance Company, S.A.			Kazakhstan				88.87
AIU Africa Holdings, Inc.			Delaware				100
AIG Kenya Insurance Company, Limited			Kenya				100
AIG Memsa, Inc.			Delaware				100
AIG Iraq			Delaware				100
AIG Lebanon, S.A.L.			Lebanon				100
AIG Libya, Inc.			Delaware				100
AIG Hayleys Investment Holdings (Private) Ltd.			Sri Lanka				80
Hayleys AIG Insurance Company, Ltd.			Sri Lanka				100
AIG Sigorta A.S.			Turkey				100
Tata AIG General Insurance Company Limited			India				26
AIU Insurance Company			New York				52	(11)
AIU North America, Inc.			New York				100
American General Corporation			Texas				100
American General Bancassurance Services, Inc.			Illinois				100
AGC Life Insurance Company			Missouri				100
AIG Life Holdings (Canada), ULC			Canada				100
AIG Assurance Canada			Canada				100
AIG Life Insurance Company of Canada			Canada				100
AIG Life of Bermuda, Ltd.			Bermuda				100
American General Life and Accident Insurance Company			Tennessee				100
American General Life Insurance Company			Texas				100
American General Annuity Service Corporation			Texas				100
AIG Enterprise Services, LLC			Delaware				100
American General Equity Services Corporation			Delaware				100
American General Life Companies, LLC			Delaware				100
The Variable Annuity Life Insurance Company			Texas				100
VALIC Retirement Services Company			Texas				100
VALIC Trust Company			Texas				100
American General Property Insurance Company			Tennessee				51.85	(12)
American General Property Insurance Company of Florida			Florida				100
AIG Annuity Insurance Company			Texas				100

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						Percentage
						of Voting
						Securities
		Jurisdiction of				Owned by its
		Incorporation				Immediate
		or Organization				Parent(2)
The United States Life Insurance Company in the City of New York			New York				100
American General Finance, Inc.			Indiana				100
American General Auto Finance, Inc.			Delaware				100
American General Finance Corporation			Indiana				100
MorEquity, Inc.			Nevada				100
Wilmington Finance, Inc.			Delaware				100
Merit Life Insurance Co.			Indiana				100
Yosemite Insurance Company			Indiana				100
CommoLoCo, Inc.			Puerto Rico				100
American General Financial Services of Alabama, Inc.			Delaware				100
American General Investment Management Corporation			Delaware				100
American General Realty Investment Corporation			Texas				100
American General Assurance Company			Illinois				100
American General Indemnity Company			Illinois				100
Knickerbocker Corporation			Texas				100
American Home Assurance Company			New York				100
AIG Domestic Claims, Inc.			Delaware				50	(13)
AIG Hawaii Insurance Company, Inc.			Hawaii				100
American Pacific Insurance Company, Inc.			Hawaii				100
American International Insurance Company			New York				100
American International Insurance Company of California, Inc.			California				100
American International Insurance Company of New Jersey			New Jersey				100
Minnesota Insurance Company			Minnesota				100
American International Realty Corp.			Delaware				31.5	(14)
Pine Street Real Estate Holdings Corp.			New Hampshire				31.47	(14)
Transatlantic Holdings, Inc.			Delaware				33.41	(15)
Transatlantic Reinsurance Company			New York				100
Putnam Reinsurance Company			New York				100
Trans Re Zurich			Switzerland				100
American International Insurance Company of Delaware			Delaware				100
American International Life Assurance Company of New York			New York				77.52	(16)

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						Percentage
						of Voting
						Securities
		Jurisdiction of				Owned by its
		Incorporation				Immediate
		or Organization				Parent(2)
American International Underwriters Corporation			New York				100
American International Underwriters Overseas, Ltd.			Bermuda				100
AIG Europe (Ireland) Limited			Ireland				100
AIG Europe (U.K.) Limited			England				100
AIG Brasil Companhia de Seguros			Brazil				50
AIG General Insurance (Vietnam) Company Limited			Vietnam				100
Universal Insurance Co., Ltd.			Thailand				100
La Seguridad de Centroamerica, Compania de Seguros S.A.			Guatemala				100
La Meridional Compania Argentina de Seguros			Argentina				100
American International Insurance Company of Puerto Rico			Puerto Rico				100
A.I.G. Colombia Seguros Generales S.A.			Colombia				100
American International Underwriters GmBH			Germany				100
Richmond Insurance Company Limited			Bermuda				100
Underwriters Adjustment Company, Inc.			Panama				100
American Life Insurance Company			Delaware				100
AIG Life (Bulgaria) Z.D. A.D			Bulgaria				100
ALICO, S.A			France				100
First American Polish Life Insurance and Reinsurance Company, S.A.			Poland				100
Inversiones Interamericana S.A. (Chile)			Chile				100
Pharaonic American Life Insurance Company			Egypt				71.63
Unibanco AIG Seguros S.A.			Brazil				47.81	(17)
AIG Life Insurance Company (Switzerland) Ltd.			Switzerland				100
American Security Life Insurance Company, Ltd.			Lichtenstein				100
Birmingham Fire Insurance Company of Pennsylvania			Pennsylvania				100
Commerce and Industry Insurance Company			New York				100
Commerce and Industry Insurance Company of Canada			Ontario				100
Delaware American Life Insurance Company			Delaware				100
Hawaii Insurance Consultants, Ltd.			Hawaii				100
HSB Group, Inc.			Delaware				100
The Hartford Steam Boiler Inspection and Insurance Company			Connecticut				100
The Hartford Steam Boiler Inspection and Insurance Company of Connecticut			Connecticut				100
HSB Engineering Insurance Limited			England				100
The Boiler Inspection and Insurance Company of Canada			Canada				100
The Insurance Company of the State of Pennsylvania			Pennsylvania				100
Landmark Insurance Company			California				100
Mt. Mansfield Company, Inc.			Vermont				100
National Union Fire Insurance Company of Pittsburgh, Pa.			Pennsylvania				100
American International Specialty Lines Insurance Company			Alaska				70	(18)
Lexington Insurance Company			Delaware				70	(18)
AIG Centennial Insurance Company			Pennsylvania				100
AIG Premier Insurance Company			Pennsylvania				100
AIG Indemnity Insurance Company			Pennsylvania				100
AIG Preferred Insurance Company			Pennsylvania				100
AIG Auto Insurance Company of New Jersey			New Jersey				100
JI Accident & Fire Insurance Co. Ltd.			Japan				50
National Union Fire Insurance Company of Louisiana			Louisiana				100
National Union Fire Insurance Company of Vermont			Vermont				100
21st Century Insurance Group			California				33.03	(19)
21st Century Insurance Company			California				100
21st Century Casualty Company			California				100
21st Century Insurance Company of the Southwest			Texas				100
Starr Excess Liability Insurance Company, Ltd.			Delaware				100
Starr Excess Liability Insurance International Ltd.			Ireland				100

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						Percentage
						of Voting
						Securities
		Jurisdiction of				Owned by its
		Incorporation				Immediate
		or Organization				Parent(2)
NHIG Holding Corp.			Delaware				100
Audubon Insurance Company			Louisiana				100
Audubon Indemnity Company			Mississippi				100
Agency Management Corporation			Louisiana				100
The Gulf Agency, Inc.			Alabama				100
New Hampshire Insurance Company			Pennsylvania				100
AIG Europe, S.A.			France				70.48	(20)
AI Network Corporation			Delaware				100
American International Pacific Insurance Company			Colorado				100
American International South Insurance Company			Pennsylvania				100
Granite State Insurance Company			Pennsylvania				100
New Hampshire Indemnity Company, Inc.			Pennsylvania				100
AIG National Insurance Company, Inc.			New York				100
Illinois National Insurance Co.			Illinois				100
New Hampshire Insurance Services, Inc.			New Hampshire				100
AIG Star Life Insurance Co., Ltd			Japan				100
The Philippine American Life and General Insurance Company			Philippines				99.78
Pacific Union Assurance Company			California				100
Philam Equitable Life Assurance Company, Inc.			Philippines				95.31
Philam Insurance Company, Inc.			Philippines				100
Risk Specialist Companies, Inc.			Delaware				100
United Guaranty Corporation			North Carolina				36.31	(21)
A.I.G. Mortgage Holdings Israel, Ltd.			Israel				82.12
E.M.I.-Ezer Mortgage Insurance Company, Limited			Israel				100
AIG United Guaranty Agenzia DI Assicurazione S.R.L.			Italy				100
AIG United Guaranty Insurance (Asia) Limited			Hong Kong				100
AIG United Guaranty Re, Ltd.			Ireland				100
United Guaranty Insurance Company			North Carolina				100
United Guaranty Mortgage Insurance Company			North Carolina				100
United Guaranty Mortgage Insurance Company of North Carolina			North Carolina				100
United Guaranty Partners Insurance Company			Vermont				80
United Guaranty Residential Insurance Company of North Carolina			North Carolina				100
United Guaranty Residential Insurance Company			North Carolina				75.03	(22)
United Guaranty Commercial Insurance Company of North Carolina			North Carolina				100
United Guaranty Mortgage Indemnity Company			North Carolina				100
United Guaranty Credit Insurance Company			North Carolina				100
United Guaranty Services, Inc.			North Carolina				100

(1)	All subsidiaries listed are consolidated in the accompanying financial statements. Certain subsidiaries have been omitted from the tabulation. The omitted subsidiaries, when considered in the aggregate as a single subsidiary, do not constitute a significant subsidiary.
(2)	Percentages include directors’ qualifying shares.
(3)	The common stock is owned approximately 12.0 percent by Starr International Company, Inc., 1.8 percent by C.V. Starr & Co., Inc. and 2.0 percent by The Starr Foundation.
(4)	Also owned 32.77 percent by National Union Fire Insurance Company of Pittsburgh, Pa.
(5)	Also owned 10 percent by AIG Matched Funding Corp.

(6)	Also owned 10 percent by a subsidiary of American Life Insurance Company.

(7)	Also owned 21 percent by Commerce and Industry Insurance Company.
(8)	Formerly known as AIG SunAmerica Inc.
(9)	Also owned 30 percent by AIG Retirement Services, Inc.

(10)	Formerly known as Anchor National Life Insurance Company.
(11)	Also owned eight percent by The Insurance Company of the State of Pennsylvania, 32 percent by National Union Fire Insurance Company of Pittsburgh, Pa. and eight percent by Birmingham Fire Insurance Company of Pennsylvania.
(12)	Also owned 48.15 percent by American General Life and Accident Insurance Company.
(13)	Also owned 50 percent by The Insurance Company of the State of Pennsylvania.
(14)	Also owned by 11 other AIG subsidiaries.
(15)	Also owned 25.95 percent by AIG.
(16)	Also owned 22.48 percent by American Home Assurance Company.

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(17)	Also owned 1.7 percent by American International Underwriters Overseas, Ltd. and .48 percent by American Home Assurance Company.
(18)	Also owned 20 percent by The Insurance Company of the State of Pennsylvania and ten percent by Birmingham Fire Insurance Company of Pennsylvania.
(19)	Also owned 16.85 percent by American Home Assurance Company, 6.34 percent by Commerce and Industry Insurance Company and 6.34 percent by New Hampshire Insurance Company.
(20)	100 percent held together with other AIG companies.
(21)	Also owned 45.88 percent by National Union Fire Insurance Company of Pittsburgh, Pa., 16.95 percent by New Hampshire Insurance Company and 0.86 percent by The Insurance Company of the State of Pennsylvania.
(22)	Also owned 24.97 percent by United Guaranty Residential Insurance Company of North Carolina.

 

 

	(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Martin J. Sullivan
	Martin J. Sullivan
	President and Chief Executive Officer

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	(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	/s/ Steven J. Bensinger
	Steven J. Bensinger
	Executive Vice President and Chief Financial Officer

 

	/s/ Martin J. Sullivan
	Martin J. Sullivan
	President and Chief Executive Officer

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	/s/ Steven J. Bensinger
	Steven J. Bensinger
	Executive Vice President and Chief Financial Officer