AIG 2013 Annual Report Download - page 180

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Transaction Approval and Business Practices Committee (TABPC): 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. Our Deputy General Counsel
serves as TABPC Chair and additional members include our CRO and CFO, and other senior executives from
Finance, Legal, Treasury, Investments and our business units.
Operational Risk Committee (ORC): This committee oversees operational risk management activities across
AIG’s businesses, functions, and geographic locations. The ORC reviews the enterprise-wide identification, escalation
and mitigation of operational risks that may arise from inadequate or failed internal processes, people, systems, or
external events. The ORC also monitors current and emerging operational risks, as well as management actions
taken to reduce risks to acceptable levels. The Committee approves the Operational Risk Management (ORM) Policy
and ORM Framework, which includes the identification, assessment, monitoring and measurement of risks. The
Committee ensures applicable governance structures are established to provide oversight of operational risk at each
business unit and corporate function. The ORC also reviews aggregate firm-wide operational risk reports and
provides a forum for senior management to assess our operational risk profile and to discuss operational risks that
may affect our strategic objectives.
Our Chief Administrative Officer is Chair of the ORC and our Head of Operational Risk Management serves as ORC
Secretary. Other ORC members include senior AIG executives with expertise in legal, compliance, technology,
human resources, finance and operational risk, as well as business continuity management and the chief risk officers
of our business units.
Business Unit Risk and Capital Committees: Each of our major insurance businesses has established a risk
and capital committee (BU RCC) that serves as the senior management committee responsible for risk oversight at
the individual business unit level. The BU RCCs are responsible for the identification, assessment and monitoring of
all sources of risk within their respective portfolios. Specific responsibilities include setting risk tolerances, approving
capital management strategies (including asset allocation and risk financing), insurance portfolio optimization, risk
management policies and providing oversight of economic capital models. In addition to its BU RCC, each major
insurance business has established subordinate committees which identify, assess and monitor the specific
operational, transactional and financial risks inherent in its respective business. Together, the BU RCCs and AIG
Risk Committees described above provide comprehensive risk oversight throughout the organization.
Risk oversight activities also continue to be coordinated with ILFC, a held for sale operation, until the pending ILFC
sale transaction is closed.
Group Risk Committee (GRC)
Chair: AIG Chief Risk Officer
Financial Risk Group (FRG)
Chair: AIG Chief Risk Officer
Transaction Approval &
Business Practices Committee
(TABPC)
Chair: Deputy General Counsel
Operational Risk Committee
(ORC)
Chair: Chief Administrative
Officer
Business Unit Risk & Capital
Committees (BU RCCs)
(AIG PC, AIG L&R, UGC)
Our Risk Appetite Framework integrates stakeholder interests, strategic business goals and available financial
resources. We intend to balance these by taking measured risks that are expected to generate repeatable,
sustainable earnings and produce long-term value for our shareholders. The framework includes a Statement of Risk
Appetite approved by the Board of Directors or a committee thereof and a set of supporting tools, including risk
tolerances, risk limits and policies, which we use to manage our risk profile and financial resources.
Risk Appetite, Identification, and Measurement
Risk Appetite Framework
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AIG 2013 Form 10-K162
ITEM 7 / ENTERPRISE RISK MANAGEMENT
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