AIG keeps $2.4b from asset sale as taxpayers wait

NEW YORK: American International Group Inc, the insurer dismantling itself to repay US loans, used $2.4 billion from asset sales to shore up a property-casualty unit instead of paying down its government credit line.

Proceeds from the two biggest business divestitures New York-based AIG announced so far were left with Chartis Inc, formerly known as AIU Holdings Inc, to improve the firm's capital. AIG was required to hold the funds by regulators and rating firms that monitor the insurer's ability to pay policyholder claims, said Mark Herr, a company spokesman.

The insurer's need to retain some sale proceeds may draw questions from lawmakers about whether AIG can repay loans within its government bailout, which ballooned to $182.5 billion. AIG's debt on a Federal Reserve credit line exceeded $40 billion most of this year, even after the company announced $6.7 billion in asset sales since being rescued in September.