AIG 2015 Annual Report Download - page 171

ITEM 7 / ENTERPRISE RISK MANAGEMENT
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liability management, derivatives activity, and foreign exchange transactions. It 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. Membership of the FRG includes our CFO, CRO, Chief
Investment Officer and Chief Strategy Officer.
Operational Risk Committee (ORC): This committee oversees operational risk management activities across our 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 ORC approves the Operational Risk Management (ORM) Policy and ORM Framework, which includes the
identification, assessment, monitoring and measurement of risks. The ORC 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.
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 officer of our business units.
Business Unit Risk and Capital Committees: Each of our major insurance businesses has established a risk committee that
serves as the senior management committee responsible for risk oversight at the individual business unit level. The risk
committees are responsible for the identification, assessment and monitoring of all sources of risk within their respective
portfolios. Specific responsibilities include setting risk tolerances, reviewing capital management strategies (including asset
allocation and risk financing), insurance portfolio optimization, risk management policies and providing oversight of risk-
adjusted metrics. In addition, each business unit has established subordinate committees which identify, assess and monitor
the specific operational, transactional and financial risks inherent in its respective business. Together, the committees
described above provide comprehensive risk oversight throughout the organization.
Risk and Capital Committee
(RCC)
Group Risk Committee
(GRC)
Financial Risk Group (FRG) Operational Risk Committee
(ORC)
Business Unit Risk &
Capital Committees (BU
RCCs)
(Commercial, Consumer,
UGC)