FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2014

Assets and liabilities measured at fair value on a recurring basis

March 31, 2014							Counterparty		Cash
(in millions)		Level 1		Level 2		Level 3		Netting^*	Collateral			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	3	$	2,919	$	-	$	-	$	-	$	2,922
Obligations of states, municipalities and political subdivisions		-		28,547		2,042		-		-		30,589
Non-U.S. governments		629		21,238		17		-		-		21,884
Corporate debt		-		145,176		1,815		-		-		146,991
RMBS		-		21,540		15,764		-		-		37,304
CMBS		-		6,354		5,741		-		-		12,095
CDO/ABS		-		4,542		6,610		-		-		11,152
Total bonds available for sale		632		230,316		31,989		-		-		262,937
Other bond securities:
U.S. government and government sponsored entities		28		5,366		-		-		-		5,394
Obligations of states, municipalities and political subdivisions		-		122		-		-		-		122
Non-U.S. governments		-		2		-		-		-		2
Corporate debt		-		1,108		-		-		-		1,108
RMBS		-		1,282		1,069		-		-		2,351
CMBS		-		508		770		-		-		1,278
CDO/ABS		-		2,965		8,498		-		-		11,463
Total other bond securities		28		11,353		10,337		-		-		21,718
Equity securities available for sale:
Common stock		3,078		1		-		-		-		3,079
Preferred stock		-		28		-		-		-		28
Mutual funds		767		4		-		-		-		771
Total equity securities available for sale		3,845		33		-		-		-		3,878
Other equity securities		653		72		-		-		-		725
Other invested assets		24		2,853		5,990		-		-		8,867
Derivative assets:
Interest rate contracts		12		3,750		35		-		-		3,797
Foreign exchange contracts		-		37		-		-		-		37
Equity contracts		84		34		89		-		-		207
Commodity contracts		-		-		1		-		-		1
Credit contracts		-		-		41		-		-		41
Other contracts		-		-		36		-		-		36
Counterparty netting and cash collateral		-		-		-		(1,680)		(838)		(2,518)
Total derivative assets		96		3,821		202		(1,680)		(838)		1,601
Short-term investments		392		3,361		-		-		-		3,753
Separate account assets		69,216		3,377		-		-		-		72,593
Other assets		-		-		-		-		-		-
Total	$	74,886	$	255,186	$	48,518	$	(1,680)	$	(838)	$	376,072
Liabilities:
Policyholder contract deposits	$	-	$	66	$	765	$	-	$	-	$	831
Derivative liabilities:
Interest rate contracts		-		4,213		133		-		-		4,346
Foreign exchange contracts		-		254		-		-		-		254
Equity contracts		-		92		1		-		-		93
Commodity contracts		-		4		-		-		-		4
Credit contracts		-		-		1,226		-		-		1,226
Other contracts		-		26		145		-		-		171
Counterparty netting and cash collateral		-		-		-		(1,680)		(1,375)		(3,055)
Total derivative liabilities		-		4,589		1,505		(1,680)		(1,375)		3,039
Long-term debt		-		5,616		403		-		-		6,019
Other liabilities		87		451		-		-		-		538
Total	$	87	$	10,722	$	2,673	$	(1,680)	$	(1,375)	$	10,427

December 31, 2013							Counterparty		Cash
(in millions)		Level 1		Level 2		Level 3		Netting^*	Collateral			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	133	$	3,062	$	-	$	-	$	-	$	3,195
Obligations of states, municipalities and political subdivisions		-		28,300		1,080		-		-		29,380
Non-U.S. governments		508		21,985		16		-		-		22,509
Corporate debt		-		143,297		1,255		-		-		144,552
RMBS		-		21,207		14,941		-		-		36,148
CMBS		-		5,747		5,735		-		-		11,482
CDO/ABS		-		4,034		6,974		-		-		11,008
Total bonds available for sale		641		227,632		30,001		-		-		258,274
Other bond securities:
U.S. government and government sponsored entities		78		5,645		-		-		-		5,723
Obligations of states, municipalities and political subdivisions		-		121		-		-		-		121
Non-U.S. governments		-		2		-		-		-		2
Corporate debt		-		1,169		-		-		-		1,169
RMBS		-		1,326		937		-		-		2,263
CMBS		-		509		844		-		-		1,353
CDO/ABS		-		3,158		8,834		-		-		11,992
Total other bond securities		78		11,930		10,615		-		-		22,623
Equity securities available for sale:
Common stock		3,218		-		1		-		-		3,219
Preferred stock		-		27		-		-		-		27
Mutual funds		408		2		-		-		-		410
Total equity securities available for sale		3,626		29		1		-		-		3,656
Other equity securities		750		84		-		-		-		834
Other invested assets		1		2,667		5,930		-		-		8,598
Derivative assets:
Interest rate contracts		14		3,716		41		-		-		3,771
Foreign exchange contracts		-		52		-		-		-		52
Equity contracts		151		106		49		-		-		306
Commodity contracts		-		-		1		-		-		1
Credit contracts		-		-		55		-		-		55
Other contracts		-		1		33		-		-		34
Counterparty netting and cash collateral		-		-		-		(1,734)		(820)		(2,554)
Total derivative assets		165		3,875		179		(1,734)		(820)		1,665
Short-term investments		332		5,981		-		-		-		6,313
Separate account assets		67,708		3,351		-		-		-		71,059
Other assets		-		418		-		-		-		418
Total	$	73,301	$	255,967	$	46,726	$	(1,734)	$	(820)	$	373,440
Liabilities:
Policyholder contract deposits	$	-	$	72	$	312	$	-	$	-	$	384
Derivative liabilities:
Interest rate contracts		-		3,661		141		-		-		3,802
Foreign exchange contracts		-		319		-		-		-		319
Equity contracts		-		101		-		-		-		101
Commodity contracts		-		5		-		-		-		5
Credit contracts		-		-		1,335		-		-		1,335
Other contracts		-		25		142		-		-		167
Counterparty netting and cash collateral		-		-		-		(1,734)		(1,484)		(3,218)
Total derivative liabilities		-		4,111		1,618		(1,734)		(1,484)		2,511
Long-term debt		-		6,377		370		-		-		6,747
Other liabilities		42		891		-		-		-		933
Total	$	42	$	11,451	$	2,300	$	(1,734)	$	(1,484)	$	10,575

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

Changes in Level 3 recurring fair value measurements

				Net												Changes in
				Realized and												Unrealized Gains
				Unrealized				Purchases,								(Losses) Included
		Fair Value		Gains (Losses)		Other		Sales,		Gross		Gross		Fair Value		in Income on
		Beginning		Included		Comprehensive		Issues and		Transfers		Transfers		End		Instruments Held
(in millions)		of Period^(a)		in Income		Income (Loss)		Settlements, Net		in		out		of Period		at End of Period
Three Months Ended March 31, 2014
Assets:
Bonds available for sale:
Obligations of states, municipalities
and political subdivisions	$	1,080	$	-	$	117	$	846	$	-	$	(1)	$	2,042	$	-
Non-U.S. governments		16		-		(1)		2		-		-		17		-
Corporate debt		1,255		(3)		20		4		648		(109)		1,815		-
RMBS		14,941		244		133		557		-		(111)		15,764		-
CMBS		5,735		6		111		(50)		(1)		(60)		5,741		-
CDO/ABS		6,974		34		2		8		66		(474)		6,610		-
Total bonds available for sale		30,001		281		382		1,367		713		(755)		31,989		-
Other bond securities:
RMBS		937		28		-		104		-		-		1,069		16
CMBS		844		17		-		(91)		-		-		770		14
CDO/ABS		8,834		335		-		(449)		1		(223)		8,498		166
Total bond trading securities		10,615		380		-		(436)		1		(223)		10,337		196
Equity securities available for sale:
Common stock		1		-		-		-		-		(1)		-		-
Preferred stock		-		-		-		-		-		-		-		-
Total equity securities available for sale		1		-		-		-		-		(1)		-		-
Other invested assets		5,930		-		(1)		-		-		(5,928)		1		-
Total	$	46,547	$	661	$	381	$	931	$	714	$	(6,907)	$	42,327	$	196
Liabilities:
Policyholder contract deposits	$	(312)	$	(404)	$	(8)	$	(40)	$	-	$	-	$	(764)	$	(82)
Interest rate contracts		(100)		(6)		-		9		-		(1)		(98)		(1)
Equity contracts		49		(3)		-		(5)		47		-		88		(6)
Commodity contracts		1		-		-		-		-		-		1		-
Credit contracts		(1,280)		80		-		16		-		(1)		(1,185)		94
Other contracts		(109)		16		(1)		(17)		3		-		(108)		12
Total derivative liabilities, net		(1,439)		87		(1)		3		50		(2)		(1,302)		99
Long-term debt^(b)		(370)		(3)		-		19		-		(49)		(403)		7
Total	$	(2,121)	$	(320)	$	(9)	$	(18)	$	50	$	(51)	$	(2,469)	$	24
				Net												Changes in
				Realized and												Unrealized Gains
				Unrealized				Purchases,								(Losses) Included
		Fair Value		Gains (Losses)		Other		Sales,		Gross		Gross		Fair Value		in Income on
		Beginning		Included		Comprehensive		Issues and		Transfers		Transfers		End		Instruments Held
(in millions)		of Period^(a)		in Income		Income (Loss)		Settlements, Net		in		out		of Period		at End of Period
Three Months Ended March 31, 2013
Assets:
Bonds available for sale:
Obligations of states, municipalities
and political subdivisions	$	1,024	$	1	$	(5)	$	136	$	-	$	(137)	$	1,019	$	-
Non-U.S. governments		14		1		-		2		1		-		18		-
Corporate debt		1,487		(4)		6		22		77		(139)		1,449		-
RMBS		11,662		205		481		(262)		10		-		12,096		-
CMBS		5,124		11		141		(75)		154		(40)		5,315		-
CDO/ABS		4,841		24		76		639		180		(183)		5,577		-
Total bonds available for sale		24,152		238		699		462		422		(499)		25,474		-
Other bond securities:
RMBS		396		22		-		74		238		-		730		(17)
CMBS		812		12		-		(99)		159		(108)		776		(25)
CDO/ABS		8,536		284		-		(436)		486		(28)		8,842		82
Total bond trading securities		9,744		318		-		(461)		883		(136)		10,348		40
Equity securities available for sale:
Common stock		24		9		(1)		(10)		-		-		22		-
Preferred stock		44		-		5		-		-		-		49		-
Total equity securities available for sale		68		9		4		(10)		-		-		71		-
Other invested assets		5,389		61		(13)		(3)		127		(94)		5,467		-
Total	$	39,353	$	626	$	690	$	(12)	$	1,432	$	(729)	$	41,360	$	40
Liabilities:
Policyholder contract deposits	$	(1,257)	$	205	$	-	$	5	$	-	$	-	$	(1,047)	$	28
Derivative liabilities, net:
Interest rate contracts		732		11		-		13		-		-		756		3
Equity contracts		47		28		-		(7)		(2)		-		66		12
Commodity contracts		1		1		-		(1)		-		-		1		-
Credit contracts		(1,991)		175		-		41		-		-		(1,775)		214
Other contracts		(162)		7		-		16		-		-		(139)		(12)
Total derivative liabilities, net		(1,373)		222		-		62		(2)		-		(1,091)		217
Long-term debt^(b)		(344)		(80)		-		19		(2)		-		(407)		(8)
Total	$	(2,974)	$	347	$	-	$	86	$	(4)	$	-	$	(2,545)	$	237

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

(b) Purchases, Sales, Issues and Settlements, Net primarily reflect the effect of consolidating previously unconsolidated securitization vehicles.

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

		Net		Net Realized
		Investment		Capital		Other
(in millions)		Income	Gains (Losses)			Income		Total
Three Months Ended March 31, 2014
Bonds available for sale	$	304	$	(36)	$	13	$	281
Other bond securities		51		1		328		380
Equity securities available for sale		-		-		-		-
Other invested assets		77		(4)		6		79
Policyholder contract deposits		-		(474)		-		(474)
Derivative liabilities, net		15		(3)		75		87
Long-term debt		-		-		(3)		(3)
Three Months Ended March 31, 2013
Bonds available for sale	$	210	$	7	$	21	$	238
Other bond securities		33		-		285		318
Equity securities available for sale		-		9		-		9
Other invested assets		47		(7)		21		61
Policyholder contract deposits		-		205		-		205
Derivative liabilities, net		-		22		200		222
Long-term debt		-		-		(80)		(80)

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

								Purchases,
								Sales, Issues and
(in millions)		Purchases		Sales		Settlements		Settlements, Net^(a)
Three Months Ended March 31, 2014
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions^(b)	$	888	$	(5)	$	(37)	$	846
Non-U.S. governments		2		-		-		2
Corporate debt		56		(7)		(45)		4
RMBS		1,087		(15)		(515)		557
CMBS		65		(57)		(58)		(50)
CDO/ABS		330		-		(322)		8
Total bonds available for sale		2,428		(84)		(977)		1,367
Other bond securities:
RMBS		141		(5)		(32)		104
CMBS		-		(6)		(85)		(91)
CDO/ABS		21		(7)		(465)		(451)
Total other bond securities		162		(18)		(582)		(438)
Equity securities available for sale		-		-		-		-
Other invested assets		296		-		(247)		49
Total assets	$	2,886	$	(102)	$	(1,806)	$	978
Liabilities:
Policyholder contract deposits	$	-	$	(12)	$	41	$	29
Derivative liabilities, net		1		-		2		3
Long-term debt^(c)		-		-		19		19
Total liabilities	$	1	$	(12)	$	62	$	51
Three Months Ended March 31, 2013
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	158	$	(22)	$	-	$	136
Non-U.S. governments		3		-		(1)		2
Corporate debt		97		-		(75)		22
RMBS		603		(231)		(634)		(262)
CMBS		373		(146)		(302)		(75)
CDO/ABS		798		(159)		-		639
Total bonds available for sale		2,032		(558)		(1,012)		462
Other bond securities:
Corporate debt		-		-		-		-
RMBS		105		-		(31)		74
CMBS		19		(58)		(60)		(99)
CDO/ABS		188		-		(624)		(436)
Total other bond securities		312		(58)		(715)		(461)
Equity securities available for sale		1		(10)		(1)		(10)
Other invested assets		243		(30)		(216)		(3)
Total assets	$	2,588	$	(656)	$	(1,944)	$	(12)
Liabilities:
Policyholder contract deposits	$	-	$	(6)	$	11	$	5
Derivative liabilities, net		3		(4)		63		62
Long-term debt^(c)		-		-		19		19
Total liabilities	$	3	$	(10)	$	93	$	86

(a) There were no issuances during the three month periods ended March 31, 2014 and 2013.

(b) Purchases primarily reflect the effect of consolidating previously unconsolidated securitization vehicles.

Significant unobservable inputs used for recurring fair value measurements

	Fair Value at
	March 31,		Valuation		Range
(in millions)	2014		Technique	Unobservable Input	(Weighted Average )
Assets:

Obligations of states,	$	1,138	Discounted cash flow	Yield^(b)	4.44% - 5.30% (4.87%)
municipalities and
political subdivisions

Corporate debt		1,166	Discounted cash flow	Yield^(b)	2.87% - 8.28% (5.57%)


RMBS		16,252	Discounted cash flow	Constant prepayment rate^(a)(c)	0.00% - 10.13% (5.05%)
				Loss severity^(a)(c)	43.85% - 79.75% (61.80%)
				Constant default rate^(a)(c)	3.98% - 11.79% (7.89%)
				Yield^(c)	2.59% - 6.85% (4.72%)

Certain CDO/ABS		5,411	Discounted cash flow	Constant prepayment rate^(a)(c)	5.30% - 13.30% (9.50%)
				Loss severity^(a)(c)	46.40% - 61.30% (53.90%)
				Constant default rate^(a)(c)	2.90% - 15.60% (8.40%)
				Yield^(c)	5.00% - 10.80% (8.90%)

CMBS		6,017	Discounted cash flow	Yield^(b)	0.00% - 13.70% (5.09%)

CDO/ABS - Direct			Binomial Expansion	Recovery rate^(b)	5.00% - 61.00% (25.00%)
Investment book		565	Technique (BET)	Diversity score^(b)	6 - 29 (13.1)
				Weighted average life^(b)	1.30 - 10.50 years (5.30 years)
Liabilities:

Policyholder contract
deposits		765	Discounted cash flow	Equity implied volatility^(b)	6.00% - 39.00%
				Base lapse rate^(b)	1.00% - 40.00%
				Dynamic lapse rate^(b)	0.20% - 60.00%
				Mortality rate^(b)	0.50% - 40.00%
				Utilization rate^(b)	0.50% - 25.00%

Total derivative
liabilities, net		909	BET	Recovery rate^(b)	5.00% - 34.00% (17.00%)
				Diversity score^(b)	9 - 33 (14)
				Weighted average life^(b)	4.12 - 10.53 years (5.82 years)


		Fair Value at
		December 31,	Valuation		Range
(in millions)		2013	Technique	Unobservable Input	(Weighted Average )
Assets:

Obligations of states,	$	920	Discounted cash flow	Yield^(b)	4.94% - 5.86% (5.40%)
municipalities and
political subdivisions

Corporate debt		788	Discounted cash flow	Yield^(b)	0.00% - 14.29% (6.64%)


RMBS		14,419	Discounted cash flow	Constant prepayment rate^(a)(c)	0.00% - 10.35% (4.97%)
				Loss severity^(a)(c)	42.60% - 79.07% (60.84%)
				Constant default rate^(a)(c)	3.98% - 12.22% (8.10%)
				Yield^(c)	2.54% - 7.40% (4.97%)

Certain CDO/ABS		5,414	Discounted cash flow	Constant prepayment rate^(a)(c)	5.20% - 10.80% (8.20%)
				Loss severity^(a)(c)	48.60% - 63.40% (56.40%)
				Constant default rate^(a)(c)	3.20% - 16.20% (9.00%)
				Yield^(c)	5.20% - 11.50% (9.40%)

CMBS		5,847	Discounted cash flow	Yield^(b)	0.00% - 14.69% (5.58%)

CDO/ABS - Direct			Binomial Expansion	Recovery rate^(b)	6.00% - 63.00% (25.00%)
Investment book		557	Technique (BET)	Diversity score^(b)	5 - 35 (12)
				Weighted average life^(b)	1.07 - 9.47 years (4.86 years)
Liabilities:

Policyholder contract
deposits		312	Discounted cash flow	Equity implied volatility^(b)	6.00% - 39.00%
				Base lapse rate^(b)	1.00% - 40.00%
				Dynamic lapse rate^(b)	0.20% - 60.00%
				Mortality rate^(b)	0.50% - 40.00%
				Utilization rate^(b)	0.50% - 25.00%

Total derivative
liabilities, net		996	BET	Recovery rate^(b)	5.00% - 34.00% (17.00%)
				Diversity score^(b)	9 - 32 (13)
				Weighted average life^(b)	4.50 - 9.47 years (5.63 years)

(a) The unobservable inputs and ranges for the constant prepayment rate, loss severity and constant default rate relate to each of the individual underlying mortgage loans that comprise the entire portfolio of securities in the RMBS and CDO securitization vehicles and not necessarily to the securitization vehicle bonds (tranches) purchased by us. The ranges of these inputs do not directly correlate to changes in the fair values of the tranches purchased by us because there are other factors relevant to the fair values of specific tranches owned by us including, but not limited to, purchase price, position in the waterfall, senior versus subordinated position and attachment points.

(b) Represents discount rates, estimates and assumptions that we believe would be used by market participants when valuing these assets and liabilities.

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

		March 31, 2014				December 31, 2013
			Fair Value Using Net Asset Value Per Share (or its equivalent)				Fair Value Using Net Asset Value Per Share (or its equivalent)

					Unfunded				Unfunded
(in millions)	Investment Category Includes				Commitments				Commitments
Investment Category
Private equity funds:
Leveraged buyout	Debt and/or equity investments made as part of a transaction in which assets of mature companies are acquired from the current shareholders, typically with the use of financial leverage	$	2,511	$	548	$	2,544	$	578

Real Estate / Infrastructure	Investments in real estate properties and infrastructure positions, including power plants and other energy generating facilities		424		275		346		86

Venture capital	Early-stage, high-potential, growth companies expected to generate a return through an eventual realization event, such as an initial public offering or sale of the company		133		11		140		13

Distressed	Securities of companies that are in default, under bankruptcy protection, or troubled		179		33		183		34

Other	Includes multi-strategy and mezzanine strategies		161		225		134		238
Total private equity funds			3,408		1,092		3,347		949
Hedge funds:
Event-driven	Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations		1,197		2		976		2

Long-short	Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk		2,026		8		1,759		11

Macro	Investments that take long and short positions in financial instruments based on a top-down view of certain economic and capital market conditions		438		-		612		-

Distressed	Securities of companies that are in default, under bankruptcy protection or troubled		623		14		594		15

Emerging markets	Investments in the financial markets of developing countries		292		-		287		-

Other	Includes multi-strategy and relative value strategies		172		-		157		-
Total hedge funds			4,748		24		4,385		28
Total		$	8,156	$	1,116	$	7,732	$	977

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

Three Months Ended March 31,	Gain (Loss)
(in millions)		2014		2013
Assets:
Mortgage and other loans receivable	$	-	$	1
Bond and equity securities		666		376
Alternative investments^(a)		154		84
Other, including Short-term investments		3		3
Liabilities:
Long-term debt^(b)		(74)		9
Other liabilities		(4)		(4)
Total gain	$	745	$	469

(a) Includes hedge funds, private equity funds and other investment partnerships.

(b) Includes GIAs, notes, bonds, loans and mortgages payable.

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

	March 31, 2014						December 31, 2013
			Outstanding						Outstanding
(in millions)	Fair Value		Principal Amount		Difference		Fair Value		Principal Amount		Difference
Liabilities:
Long-term debt^*	$	6,019	$	4,656	$	1,363	$	6,747	$	5,231	$	1,516

* Includes GIAs, notes, bonds, loans and mortgages payable.

Fair value assets measured on nonrecurring basis and impairment charges

		Assets at Fair Value							Impairment Charges
		Non-Recurring Basis							Three Months Ended March 31,
(in millions)		Level 1		Level 2		Level 3		Total		2014		2013
March 31, 2014
Other investments	$	-	$	-	$	1,510	$	1,510	$	35	$	36
Investments in life settlements		-		-		270		270		42		43
Other assets		-		-		1		1		1		31
Total	$	-	$	-	$	1,781	$	1,781	$	78	$	110
December 31, 2013
Other investments	$	-	$	-	$	1,615	$	1,615
Investments in life settlements		-		-		896		896
Other assets		-		11		48		59
Total	$	-	$	11	$	2,559	$	2,570

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

	Estimated Fair Value									Carrying
(in millions)		Level 1		Level 2		Level 3		Total		Value
March 31, 2014
Assets:
Mortgage and other loans receivable	$	-	$	171	$	22,329	$	22,500	$	21,569
Other invested assets		-		573		2,727		3,300		4,245
Short-term investments		-		13,905		-		13,905		13,905
Cash		2,490		-		-		2,490		2,490
Liabilities:
Policyholder contract deposits associated
with investment-type contracts		-		198		115,467		115,665		105,229
Other liabilities		-		3,418		-		3,418		3,418
Long-term debt		-		34,510		3,182		37,692		33,489
December 31, 2013
Assets:
Mortgage and other loans receivable	$	-	$	219	$	21,418	$	21,637	$	20,765
Other invested assets		-		529		2,705		3,234		4,194
Short-term investments		-		15,304		-		15,304		15,304
Cash		2,241		-		-		2,241		2,241
Liabilities:
Policyholder contract deposits associated
with investment-type contracts		-		199		114,361		114,560		105,093
Other liabilities		-		4,869		1		4,870		4,869
Long-term debt		-		36,239		2,394		38,633		34,946