FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2012

FAIR VALUE MEASUREMENTS

Assets and liabilities measured at fair value on a recurring basis

March 31, 2012 (in millions)	Level 1		Level 2		Level 3		Counterparty Netting(a)			Cash Collateral(b)			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	-	$	4,786	$	-	$	-		$	-		$	4,786
Obligations of states, municipalities and political subdivisions		-		36,628		1,054		-			-			37,682
Non-U.S. governments		396		25,711		15		-			-			26,122
Corporate debt		-		145,157		1,323		-			-			146,480
RMBS		-		21,811		13,240		-			-			35,051
CMBS		-		3,890		4,173		-			-			8,063
CDO/ABS		-		3,296		4,882		-			-			8,178
Total bonds available for sale		396		241,279		24,687		-			-			266,362
Bond trading securities:
U.S. government and government sponsored entities		505		6,951		-		-			-			7,456
Obligations of states, municipalities and political subdivisions		-		236		-		-			-			236
Non-U.S. governments		-		36		-		-			-			36
Corporate debt		-		1,088		5		-			-			1,093
RMBS		-		1,339		314		-			-			1,653
CMBS		-		1,280		433		-			-			1,713
CDO/ABS		-		3,878		8,416		-			-			12,294
Total bond trading securities		505		14,808		9,168		-			-			24,481
Equity securities available for sale:
Common stock		2,754		1		50		-			-			2,805
Preferred stock		-		48		106		-			-			154
Mutual funds		54		13		-		-			-			67
Total equity securities available for sale		2,808		62		156		-			-			3,026
Equity securities trading		38		85		-		-			-			123
Mortgage and other loans receivable		-		113		1		-			-			114
Other invested assets(c)		8,332		1,576		7,186		-			-			17,094
Derivative assets:
Interest rate contracts		2		6,510		1,015		-			-			7,527
Foreign exchange contracts		-		38		-		-			-			38
Equity contracts		110		128		48		-			-			286
Commodity contracts		-		153		2		-			-			155
Credit contracts		-		1		64		-			-			65
Other contracts		-		480		214		-			-			694
Counterparty netting and cash collateral		-		-		-		(3,264	)		(1,280	)		(4,544	)
Total derivative assets		112		7,310		1,343		(3,264	)		(1,280	)		4,221
Short-term investments(d)		433		3,975		-		-			-			4,408
Separate account assets		53,210		2,815		-		-			-			56,025
Other assets		-		701		-		-			-			701
Total	$	65,834	$	272,724	$	42,541	$	(3,264	)	$	(1,280	)	$	376,555
Liabilities:
Policyholder contract deposits	$	-	$	-	$	782	$	-		$	-		$	782
Derivative liabilities:
Interest rate contracts		-		6,307		237		-			-			6,544
Foreign exchange contracts		-		165		-		-			-			165
Equity contracts		1		232		8		-			-			241
Commodity contracts		-		156		-		-			-			156
Credit contracts(e)		-		2		2,769		-			-			2,771
Other contracts		-		159		251		-			-			410
Counterparty netting and cash collateral		-		-		-		(3,264	)		(2,801	)		(6,065	)
Total derivative liabilities		1		7,021		3,265		(3,264	)		(2,801	)		4,222
Other long-term debt(f)		-		10,004		575		-			-			10,579
Other liabilities(g)		111		1,405		-		-			-			1,516
Total	$	112	$	18,430	$	4,622	$	(3,264	)	$	(2,801	)	$	17,099

December 31, 2011 (in millions)	Level 1		Level 2		Level 3		Counterparty Netting(a)			Cash Collateral(b)			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	174	$	5,904	$	-	$	-		$	-		$	6,078
Obligations of states, municipalities and political subdivisions		-		36,538		960		-			-			37,498
Non-U.S. governments		259		25,467		9		-			-			25,735
Corporate debt		-		142,883		1,935		-			-			144,818
RMBS		-		23,727		10,877		-			-			34,604
CMBS		-		3,991		3,955		-			-			7,946
CDO/ABS		-		3,082		4,220		-			-			7,302
Total bonds available for sale		433		241,592		21,956		-			-			263,981
Bond trading securities:
U.S. government and government sponsored entities		100		7,404		-		-			-			7,504
Obligations of states, municipalities and political subdivisions		-		257		-		-			-			257
Non-U.S. governments		-		35		-		-			-			35
Corporate debt		-		809		7		-			-			816
RMBS		-		1,345		303		-			-			1,648
CMBS		-		1,283		554		-			-			1,837
CDO/ABS		-		3,835		8,432		-			-			12,267
Total bond trading securities		100		14,968		9,296		-			-			24,364
Equity securities available for sale:
Common stock		3,294		70		57		-			-			3,421
Preferred stock		-		44		99		-			-			143
Mutual funds		55		5		-		-			-			60
Total equity securities available for sale		3,349		119		156		-			-			3,624
Equity securities trading		43		82		-		-			-			125
Mortgage and other loans receivable		-		106		1		-			-			107
Other invested assets(c)		12,549		1,709		6,618		-			-			20,876
Derivative assets:
Interest rate contracts		2		7,251		1,033		-			-			8,286
Foreign exchange contracts		-		143		2		-			-			145
Equity contracts		92		133		38		-			-			263
Commodity contracts		-		134		2		-			-			136
Credit contracts		-		-		89		-			-			89
Other contracts		29		462		250		-			-			741
Counterparty netting and cash collateral		-		-		-		(3,660	)		(1,501	)		(5,161	)
Total derivative assets		123		8,123		1,414		(3,660	)		(1,501	)		4,499
Short-term investments(d)		2,309		3,604		-		-			-			5,913
Separate account assets		48,502		2,886		-		-			-			51,388
Total	$	67,408	$	273,189	$	39,441	$	(3,660	)	$	(1,501	)	$	374,877
Liabilities:
Policyholder contract deposits	$	-	$	-	$	918	$	-		$	-		$	918
Derivative liabilities:
Interest rate contracts		-		6,661		248		-			-			6,909
Foreign exchange contracts		-		178		-		-			-			178
Equity contracts		-		198		10		-			-			208
Commodity contracts		-		146		-		-			-			146
Credit contracts(e)		-		4		3,362		-			-			3,366
Other contracts		-		155		217		-			-			372
Counterparty netting and cash collateral		-		-		-		(3,660	)		(2,786	)		(6,446	)
Total derivative liabilities		-		7,342		3,837		(3,660	)		(2,786	)		4,733
Other long-term debt(f)		-		10,258		508		-			-			10,766
Other liabilities(g)		193		714		-		-			-			907
Total	$	193	$	18,314	$	5,263	$	(3,660	)	$	(2,786	)	$	17,324

(a)

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

(b)

Represents cash collateral posted and received. Securities collateral posted for derivative transactions that is reflected in Fixed maturity securities in the Consolidated Balance Sheet, and collateral received, not reflected in the Consolidated Balance Sheet, were $1.2 billion and $87 million, respectively, at March 31, 2012 and $1.8 billion and $100 million, respectively, at December 31, 2011.

(c)

Included in Level 1 are $8.2 billion and $12.4 billion at March 31, 2012 and December 31, 2011, respectively, of AIA shares publicly traded on the Hong Kong Stock Exchange. Approximately 3 percent of the fair value of the assets recorded as Level 3 relate to various private equity, real estate, hedge fund and fund-of-funds investments that are consolidated by AIG at both March 31, 2012 and December 31, 2011. AIG's ownership in these funds represented 63.6 percent, or $0.9 billion, of Level 3 assets at March 31, 2012 and 57.3 percent, or $0.8 billion, of Level 3 assets at December 31, 2011.

(d)

Included in Level 2 is the fair value of securities purchased under agreements to resell of $0.7 billion and $0.1 billion at March 31, 2012 and December 31, 2011, respectively.

(e)

Included in Level 3 is the fair value derivative liability of $2.6 billion and $3.2 billion at March 31, 2012 and December 31, 2011, respectively, on the super senior credit default swap portfolio.

(f)

Includes Guaranteed Investment Agreements (GIAs), notes, bonds, loans and mortgages payable.

(g)

Included in Level 2 is the fair value of securities sold under agreements to repurchase and securities and spot commodities sold but not yet purchased, of $1.4 billion and $53 million, respectively, at March 31, 2012. Included in Level 2 is the fair value of securities sold under agreements to repurchase, securities and spot commodities sold but not yet purchased and trust deposits and deposits due to banks and other depositors, of $0.6 billion, $144 million and $6 million, respectively, at December 31, 2011.

Changes in Level 3 recurring fair value measurements

(in millions)	Fair value Beginning of Period(a)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income (Loss)			Purchases, Sales, Issues and Settlements, Net			Gross Transfers in			Gross Transfers out			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Three Months Ended March 31, 2012
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	960		$	1		$	16		$	100		$	-		$	(23	)	$	1,054		$	-
Non-U.S. governments		9			-			8			(2	)		-			-			15			-
Corporate debt		1,935			(16	)		76			(3	)		291			(960	)		1,323			-
RMBS		10,877			(70	)		793			1,326			348			(34	)		13,240			-
CMBS		3,955			(69	)		287			11			31			(42	)		4,173			-
CDO/ABS		4,220			14			177			70			438			(37	)		4,882			-
Total bonds available for sale		21,956			(140	)		1,357			1,502			1,108			(1,096	)		24,687			-
Bond trading securities:
Corporate debt		7			-			-			(2	)		-			-			5			-
RMBS		303			33			-			(19	)		-			(3	)		314			39
CMBS		554			33			-			(135	)		32			(51	)		433			85
CDO/ABS		8,432			1,621			-			(1,637	)		-			-			8,416			2,122
Total bond trading securities		9,296			1,687			-			(1,793	)		32			(54	)		9,168			2,246
Equity securities available for sale:
Common stock		57			14			(12	)		(14	)		5			-			50			-
Preferred stock		99			2			8			8			-			(11	)		106			-
Total equity securities available for sale		156			16			(4	)		(6	)		5			(11	)		156			-
Mortgage and other loans receivable		1			-			-			-			-			-			1			-
Other invested assets		6,618			(147	)		210			101			742			(338	)		7,186			(4	)
Total	$	38,027		$	1,416		$	1,563		$	(196	)	$	1,887		$	(1,499	)	$	41,198		$	2,242
Liabilities:
Policyholder contract deposits	$	(918	)	$	139		$	-		$	(3	)	$	-		$	-		$	(782	)	$	(144	)
Derivative liabilities, net:
Interest rate contracts		785			-			-			(7	)		-			-			778			(23	)
Foreign exchange contracts		2			-			-			(2	)		-			-			-			-
Equity contracts		28			12			-			2			(2	)		-			40			10
Commodity contracts		2			-			-			-			-			-			2			-
Credit contracts		(3,273	)		(143	)		-			711			-			-			(2,705	)		(525	)
Other contracts		33			(410	)		9			412			(81	)		-			(37	)		24
Total derivative liabilities, net		(2,423	)		(541	)		9			1,116			(83	)		-			(1,922	)		(514	)
Other long-term debt(b)		(508	)		(110	)		(77	)		114			-			6			(575	)		(104	)
Total	$	(3,849	)	$	(512	)	$	(68	)	$	1,227		$	(83	)	$	6		$	(3,279	)	$	(762	)

(in millions)	Fair value Beginning of Period(a)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income (Loss)			Purchases, Sales, Issues and Settlements, Net			Gross Transfers In			Gross Transfers Out			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Three Months Ended March 31, 2011
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	609		$	-		$	4		$	112		$	-		$	(23	)	$	702		$	-
Non-U.S. governments		5			-			-			-			-			-			5			-
Corporate debt		2,262			(3	)		7			(33	)		226			(1,224	)		1,235			-
RMBS		6,367			(81	)		533			38			11			-			6,868			-
CMBS		3,604			(27	)		664			72			25			(22	)		4,316			-
CDO/ABS		4,241			20			238			(455	)		72			(259	)		3,857			-
Total bonds available for sale		17,088			(91	)		1,446			(266	)		334			(1,528	)		16,983			-
Bond trading securities:
Corporate debt		-			-			-			-			18			-			18			-
RMBS		91			2			-			6			-			-			99			2
CMBS		506			38			-			(58	)		81			(44	)		523			39
CDO/ABS		9,431			1,030			5			(5	)		-			-			10,461			1,027
Total bond trading securities		10,028			1,070			5			(57	)		99			(44	)		11,101			1,068
Equity securities available for sale:
Common stock		61			15			(2	)		(15	)		6			(2	)		63			-
Preferred stock		64			(2	)		-			1			-			-			63			-
Total equity securities available for sale		125			13			(2	)		(14	)		6			(2	)		126			-
Equity securities trading		1			-			-			-			-			-			1			-
Other invested assets		7,414			53			343			(350	)		-			(390	)		7,070			(192	)
Total	$	34,656		$	1,045		$	1,792		$	(687	)	$	439		$	(1,964	)	$	35,281		$	876
Liabilities:
Policyholder contract deposits	$	(445	)	$	79		$	-		$	(3	)	$	-		$	-		$	(369	)	$	(93	)
Derivative liabilities, net:
Interest rate contracts		732			(116	)		-			3			-			-			619			(25	)
Foreign exchange contracts		16			-			-			-			-			-			16			-
Equity contracts		22			(7	)		-			38			-			(19	)		34			(7	)
Commodity contracts		23			3			-			(11	)		-			-			15			2
Credit contracts		(3,798	)		382			-			(4	)		-			-			(3,420	)		381
Other contracts		(112	)		4			25			50			-			27			(6	)		(70	)
Total derivatives liabilities, net		(3,117	)		266			25			76			-			8			(2,742	)		281
Other long-term debt(b)		(982	)		(54	)		-			61			(21	)		-			(996	)		(42	)
Total	$	(4,544	)	$	291		$	25		$	134		$	(21	)	$	8		$	(4,107	)	$	146

(a)

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

(b)

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

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

(in millions)	Net Investment Income			Net Realized Capital Gains (Losses)			Other Income			Total
Three Months Ended March 31, 2012
Bonds available for sale	$	231		$	(375	)	$	4		$	(140	)
Bond trading securities		1,549			-			138			1,687
Equity securities available for sale		-			16			-			16
Other invested assets		(14	)		(132	)		(1	)		(147	)
Policyholder contract deposits		-			139			-			139
Derivative liabilities, net		(1	)		19			(559	)		(541	)
Other long-term debt		-			-			(110	)		(110	)
Three Months Ended March 31, 2011
Bonds available for sale	$	81		$	(176	)	$	4		$	(91	)
Bond trading securities		1,001			-			69			1,070
Equity securities available for sale		-			13			-			13
Other invested assets		46			(15	)		22			53
Policyholder contract deposits		-			79			-			79
Derivative liabilities, net		-			(54	)		320			266
Other long-term debt		-			-			(54	)		(54	)

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

(in millions)	Purchases		Sales			Settlements			Purchases, Sales, Issues and Settlements, Net(a)
Three Months Ended March 31, 2012
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	108	$	(8	)	$	-		$	100
Non-U.S. governments		-		(2	)		-			(2	)
Corporate debt		61		(1	)		(63	)		(3	)
RMBS		1,912		(94	)		(492	)		1,326
CMBS		126		(64	)		(51	)		11
CDO/ABS		317		(4	)		(243	)		70
Total bonds available for sale		2,524		(173	)		(849	)		1,502
Bond trading securities:
Corporate debt		-		-			(2	)		(2	)
RMBS		-		-			(19	)		(19	)
CMBS		113		(57	)		(191	)		(135	)
CDO/ABS		-		(310	)		(1,327	)		(1,637	)
Total bond trading securities		113		(367	)		(1,539	)		(1,793	)
Equity securities available for sale:
Common stock		-		(14	)		-			(14	)
Preferred stock		11		-			(3	)		8
Total equity securities available for sale		11		(14	)		(3	)		(6	)
Other invested assets		266		(4	)		(161	)		101
Total assets	$	2,914	$	(558	)	$	(2,552	)	$	(196	)
Liabilities:
Policyholder contract deposits	$	-	$	(6	)	$	3		$	(3	)
Derivative liabilities, net:
Interest rate contracts		-		-			(7	)		(7	)
Foreign exchange contracts		-		-			(2	)		(2	)
Equity contracts		2		-			-			2
Credit contracts		-		-			711			711
Other contracts		-		-			412			412
Total derivative liabilities, net		2		-			1,114			1,116
Other long-term debt(b)		-		-			114			114
Total liabilities	$	2	$	(6	)	$	1,231		$	1,227

(in millions)	Purchases		Sales			Settlements			Purchases, Sales, Issues and Settlements, Net(a)
Three Months Ended March 31, 2011
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	113	$	-		$	(1	)	$	112
Corporate debt		8		(19	)		(22	)		(33	)
RMBS		317		(13	)		(266	)		38
CMBS		142		-			(70	)		72
CDO/ABS		65		-			(520	)		(455	)
Total bonds available for sale		645		(32	)		(879	)		(266	)
Bond trading securities:
RMBS		-		-			6			6
CMBS		-		(5	)		(53	)		(58	)
CDO/ABS		3		-			(8	)		(5	)
Total bond trading securities		3		(5	)		(55	)		(57	)
Equity securities available for sale:
Common stock		-		(15	)		-			(15	)
Preferred stock		-		-			1			1
Mutual funds		-		-			-			-
Total equity securities available for sale		-		(15	)		1			(14	)
Other invested assets		114		(12	)		(452	)		(350	)
Total assets	$	762	$	(64	)	$	(1,385	)	$	(687	)
Liabilities:
Policyholder contract deposits	$	-	$	(9	)	$	6		$	(3	)
Derivative liabilities, net:
Interest rate contracts		-		-			3			3
Equity contracts		39		-			(1	)		38
Commodity contracts		-		-			(11	)		(11	)
Credit contracts		-		-			(4	)		(4	)
Other contracts		-		-			50			50
Total derivative liabilities, net		39		-			37			76
Other long-term debt(b)		-		-			61			61
Total liabilities	$	39	$	(9	)	$	104		$	134

(a)

There were no issues during the three-month periods ended March 31, 2012 and 2011.

(b)

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

Fair value assets measured on nonrecurring basis and impairment charges

									Impairment Charges
	Assets at Fair Value
									Three Months Ended March 31,
	Non-Recurring Basis
(in millions)	Level 1		Level 2		Level 3		Total		2012		2011
March 31, 2012
Investment real estate	$	-	$	-	$	-	$	-	$	-	$	12
Other investments		-		-		1,621		1,621		93		106
Aircraft*		-		-		94		94		54		114
Other assets		-		-		18		18		8		-
Total	$	-	$	-	$	1,733	$	1,733	$	155	$	232
December 31, 2011
Investment real estate	$	-	$	-	$	457	$	457
Other investments		-		-		2,199		2,199
Aircraft		-		-		1,683		1,683
Other assets		-		-		4		4
Total	$	-	$	-	$	4,343	$	4,343

*

Aircraft impairment charges include fair value adjustments on aircraft.

Significant unobservable inputs used for recurring fair value measurements

(in millions)	Fair Value at March 31, 2012		Valuation Technique	Unobservable Input(a)	Range/ (Weighted Average)(a)
Assets:
Corporate debt	$	685	Discounted cash flow	Yield(b)	2.37% - 11.08% (6.73%)
Residential mortgage backed securities		12,326	Discounted cash flow	Constant prepayment rate(c)	0.00% - 16.89% (8.02%)
				Loss severity(c)	44.10% - 79.01% (61.56%)
				Constant default rate(c)	4.34% - 13.83% (9.09%)
				Yield(c)	4.09% - 11.80% (7.95%)
Certain CDO/ABS		1,961	Discounted cash flow	Constant prepayment rate(c)	0.00% - 49.80% (18.55%)
				Loss severity(c)	0.00% - 19.46% (3.22%)
				Constant default rate(c)	0.00% - 2.29% (0.38%)
				Yield(c)	2.29% - 6.57% (4.43%)
Commercial mortgage backed securities		2,665	Discounted cash flow	Yield(c)	0.00% - 24.52% (11.58%)
Maiden Lane III		6,916	Discounted cash flow	Yield(b)	10.93%
CDO/ABS – Direct Investment book		1,579	Binomial Expansion	Recovery rates(b)	3% - 65% (33%)
			Technique (BET)	Diversity score(b)	5 - 75 (10)
				Weighted average life(b)	1.40-9.65 years (4.60 years)
Liabilities :
Policyholder contract deposits – GMWB		509	Discounted cash flow	Equity implied volatility(b)	5.0% - 40.0%
				Base lapse rates(b)	1.0% - 40.0%
				Dynamic lapse rates(b)	0.2% - 60.0%
				Mortality rates(b)	0.5% - 40.0%
				Utilization rates(b)	0.5% - 25.0%
Derivative Liabilities – Credit contracts		1,822	BET	Recovery rates(b)	3% - 37% (17%)
				Diversity score(b)	6 - 44 (13)
				Weighted average life(b)	5.27-9.65 years (6.41 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 AIG. The ranges of these inputs do not directly correlate to changes in the fair values of the tranches purchased by AIG because there are other factors relevant to the specific tranches owned by AIG 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 AIG believes would be used by market participants when valuing these assets and liabilities.

(c)

Information received from independent third-party valuation service providers.

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

Three Months Ended March 31, 2012 (in millions)	Maiden Lane III Fair Value Change
Discount Rates:
200 basis point increase	$	(717	)
200 basis point decrease		824
400 basis point increase		(1,346	)
400 basis point decrease		1,777
Estimated Future Cash Flows:
10% increase		711
10% decrease		(720	)
20% increase		1,415
20% decrease		(1,451	)

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

		March 31, 2012				December 31, 2011
(in millions)	Investment Category Includes	Fair Value Using Net Asset Value		Unfunded Commitments		Fair Value Using Net Asset Value		Unfunded Commitments
Investment Category
Private equity funds:
Leveraged buyout	Debt and/or equity investments made as part of a transaction in which assets of mature companies are acquired from the current shareholders, typically with the use of financial leverage	$	3,244	$	900	$	3,185	$	945
Non-U.S.	Investments that focus primarily on Asian and European based buyouts, expansion capital, special situations, turnarounds, venture capital, mezzanine and distressed opportunities strategies		171		54		165		57
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		301		37		316		39
Distressed	Securities of companies that are already in default, under bankruptcy protection, or troubled		189		38		182		42
Other	Real estate, energy, multi-strategy, mezzanine, and industry-focused strategies		372		150		252		98
Total private equity funds			4,277		1,179		4,100		1,181
Hedge funds:
Event-driven	Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations		872		2		774		2
Long-short	Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk		1,097		-		927		-
Relative value	Funds that seek to benefit from market inefficiencies and value discrepancies between related investments		48		-		52		-
Distressed	Securities of companies that are already in default, under bankruptcy protection or troubled		289		-		272		10
Other	Non-U.S. companies, futures and commodities, macro and multi-strategy and industry-focused strategies		736		-		748		-
Total hedge funds			3,042		2		2,773		12
Total		$	7,319	$	1,181	$	6,873	$	1,193

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)	2012			2011
Assets:
Mortgage and other loans receivable	$	22		$	(5	)
Bonds and equity securities		644			902
Trading – ML II interest		246			251
Trading – ML III interest		1,252			744
Retained interest in AIA		1,795			1,062
Short-term investments and other invested assets and Other assets		4			16
Liabilities:
Other long-term debt(a)		(446	)		(44	)
Other liabilities		(48	)		(112	)
Total gain(b)	$	3,469		$	2,814

(a)

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

(b)

Excludes discontinued operation gains or losses on instruments that were required to be carried at fair value in 2011. For instruments required to be carried at fair value, AIG recognized gains of $0.6 billion and $1.0 billion for the three months ended March 31, 2012 and 2011, respectively, that were primarily due to changes in the fair value of derivatives, trading securities and certain other invested assets for which the fair value option was not elected.

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

	March 31, 2012							December 31, 2011
(in millions)	Fair Value		Outstanding Principal Amount		Difference			Fair Value		Outstanding Principal Amount		Difference
Assets:
Mortgage and other loans receivable	$	114	$	139	$	(25	)	$	107	$	150	$	(43	)
Liabilities:
Other long-term debt*	$	10,580	$	8,330	$	2,250		$	10,766	$	8,624	$	2,142

*

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

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

	Estimated Fair Value
									Carrying Value
(in millions)	Level 1		Level 2		Level 3		Total
March 31, 2012
Assets:
Mortgage and other loans receivable	$	-	$	668	$	20,290	$	20,958	$	19,405
Other invested assets		-		462		4,098		4,560		4,864
Short-term investments		-		14,351		-		14,351		16,381
Cash		1,315		-		-		1,315		1,315
Liabilities:
Policyholder contract deposits associated with investment-type contracts		-		281		123,597		123,878		107,019
Other liabilities		-		-		476		476		476
Long-term debt		14,991		49,523		2,700		67,214		65,517
December 31, 2011
Assets:
Mortgage and other loans receivable							$	20,494	$	19,382
Other invested assets								3,390		4,701
Short-term investments								16,657		16,659
Cash								1,474		1,474
Liabilities:
Policyholder contract deposits associated
with investment-type contracts								122,125		106,950
Long-term debt								61,295		64,487