DEFERRED POLICY ACQUISITION COSTS (Tables)

12 Months Ended

Dec. 31, 2012

DEFERRED POLICY ACQUISITION COSTS

Rollforward of DAC

Years Ended December 31, (in millions)	2012			2011			2010
AIG Property Casualty:
Balance, beginning of year	$	2,375		$	2,099		$	1,919
Acquisition costs deferred		4,861			4,548			4,058
Amortization expense		(4,761	)		(4,324	)		(3,894	)
Increase (decrease) due to foreign exchange and other		(34	)		52			16
Balance, end of year	$	2,441		$	2,375		$	2,099
AIG Life and Retirement:
Balance, beginning of year	$	6,502		$	7,258		$	8,462
Acquisition costs deferred		724			869			701
Amortization expense		(931	)		(1,142	)		(1,086	)
Change in net unrealized losses on securities		(621	)		(486	)		(817	)
Increase (decrease) due to foreign exchange		(2	)		3			1
Other		–			–			(3	)
Balance, end of year(a)	$	5,672		$	6,502		$	7,258
Other operations:
Balance, beginning of year	$	25		$	32		$	17,505
Dispositions(b)		–			–			(16,117	)
Acquisition costs deferred		36			14			1,218
Amortization expense		(17	)		(20	)		(841	)
Change in net unrealized gains (losses) on securities		–			–			28
Increase due to foreign exchange		–			1			314
Activity of discontinued operations		–			–			59
Reclassified to Assets held for sale		–			–			(1,960	)
Other		–			(2	)		(174	)
Subtotal	$	44		$	25		$	32
Consolidation and eliminations		25			35			42
Balance, end of year(a)	$	69		$	60		$	74
Total deferred policy acquisition costs	$	8,182		$	8,937		$	9,431

(a)     Includes $(619) million, $(1.4) billion, and $(758) million for AIG Life and Retirement at December 31, 2012, 2011 and 2010, respectively, and $(34) million for Divested businesses at 2011 related to the effect of net unrealized gains and losses on available for sale securities. For the year ended December 31, 2010, there were no net unrealized gains and losses on available for sale securities associated with divested businesses.

(b)     For 2010, includes AIA which was deconsolidated and ALICO which was sold in 2010.