AIG 2011 Annual Report Download - page 173

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The TABPC provides the primary corporate-level review function for all proposed transactions and business
practices that are significant in size, complex in scope, or that present heightened legal, reputational, accounting
or regulatory risks. AIG’s Executive Vice President and Treasurer serves as Chair of the committee that also
includes AIG’s General Counsel, the AIG CRO, CFO, Executive Vice President — Investments and Financial
Services, and a senior executive from Finance.
The ORC is tasked with identifying the risks that may arise from adverse outcomes that stem from internal
processes, people, systems, or external events. AIG’s Chief Administrative Officer is Chair of the ORC and he is
joined by senior AIG executives with expertise in legal, compliance, technology and operational risk, as well as the
chief risk officers of key AIG business units.
Group Risk Committee (GRC)
Chair: SVP, AIG Chief Risk
Officer
Financial Risk Group (FRG)
Chair: SVP, AIG Chief Risk
Officer
Transaction Approval &
Business Practices Committee
(TABPC)
Chair: EVP and Treasurer
Operational Risk Committee
(ORC)
Chair: Chief Administrative
Officer
Business Unit Risk & Capital
Committees
(Chartis, SunAmerica, UGC)
Each of AIG’s major insurance businesses has established committees that are responsible for managing risks at
the individual business-unit level:
• Chartis Risk & Capital Committee (CRCC): The CRCC is co-chaired by the Chartis CRO and Chief
Financial Officer and consists of Chartis executive management, the AIG CRO and the AIG Chief Actuary.
The CRCC mandate encompasses the identification, monitoring and control of all sources of risk within the
global Chartis portfolio, including emerging and catastrophic risks. Specific responsibilities include setting
risk tolerance, approving capital management strategies (including asset allocation and risk financing),
insurance portfolio optimization and providing oversight of economic capital models. Each major geographic
region of the Chartis footprint maintains a local committee with a similar mandate that reports directly or
indirectly to the CRCC.
• SunAmerica Financial Group Risk & Capital Committee (SARCC): The SARCC is co-chaired by the
SunAmerica CRO and the SunAmerica CEO and consists of SunAmerica executive management, the AIG
CRO and the AIG Chief Actuary. The scope of SARCC responsibilities encompasses the identification,
monitoring and control of all sources of risk within SAFG and includes financial, capital, liquidity and
insurance risks. The SARCC creates and implements all risk management policies and oversees all risk
assessment processes. It reviews strategic and financial initiatives and activities as recommended by its
various business units and functional groups.
• UGC Risk Committee (URC): The URC is chaired by the UGC CRO who reports regularly to the AIG
CRO and the UGC executive committee. The URC creates, oversees and implements UGC’s risk
management framework and establishes the policies and guiding principles for managing risk across the
UGC portfolio.
AIG’s risk tolerance is reflected in its business planning and integrated into the management of its operations.
AIG’s GRC routinely reviews the level of risk taken by the consolidated organization in relation to established risk
tolerances. A consolidated risk report is presented to the FRMC by the AIG CRO.
AIG uses a proprietary stress testing framework to measure its quantifiable risks. The framework measures risk
over multiple time horizons and under different levels of stress. This framework measures the risk in each of
AIG 2011 Form 10-K 159
RISK IDENTIFICATION, MEASUREMENT AND TOLERANCE