AIG 2007 Annual Report Download - page 201

American International Group, Inc. and Subsidiaries
business written by AIG’s foreign-based insurance subsidiaries.
1. Summary of Significant Accounting Policies
The Foreign General Insurance group uses various marketing
Continued
methods to write both business and consumer lines insurance
establishes accounting rules for subsequent acquisitions and with certain refinements for local laws, customs and needs. AIU
sales of noncontrolling interests and how noncontrolling interests operates in Asia, the Pacific Rim, Europe, including the United
should be presented in the consolidated statement of income. Kingdom, Africa, the Middle East and Latin America.
The noncontrolling interests’ share of subsidiary income should Each of the General Insurance sub-segments is comprised of
be reported as a part of consolidated net income with disclosure groupings of major products and services as follows: DBG is
of the attribution of consolidated net income to the controlling and comprised of domestic commercial insurance products and ser-
noncontrolling interests on the face of the consolidated statement vices; Transatlantic is comprised of reinsurance products and
of income. services sold to other general insurance companies; Personal
FAS 160 is required to be adopted in the first annual reporting Lines is comprised of general insurance products and services
period beginning on or after December 15, 2008 (January 1, sold to individuals; Mortgage Guaranty is comprised of products
2009 for AIG) and earlier application is prohibited. FAS 160 must insuring against losses arising under certain loan agreements;
be adopted prospectively, except that noncontrolling interests and Foreign General is comprised of general insurance products
should be reclassified from liabilities to a separate component of sold overseas.
shareholders’ equity and consolidated net income should be
recast to include net income attributable to both the controlling Life Insurance & Retirement Services: AIG’s Life Insurance &
and noncontrolling interests retrospectively. Had AIG adopted Retirement Services subsidiaries offer a wide range of insurance
FAS 160 at December 31, 2007, AIG would have reclassified and retirement savings products both domestically and abroad.
$10.4 billion of minority (i.e., noncontrolling) interests from Insurance-oriented products consist of individual and group life,
liabilities to Shareholders’ equity. payout annuities (including structured settlements), endowment
and accident and health policies. Retirement savings products
2. Segment Information consist generally of fixed and variable annuities. Revenues in the
Life Insurance & Retirement Services segment represent Life
AIG identifies its reportable segments by product line consistent Insurance & Retirement Services Premiums and other considera-
with its management structure. These segments and their respec- tions, Net investment income and Net realized capital gains
tive operations are as follows: (losses).
AIG’s principal Foreign Life Insurance & Retirement Services
General Insurance: AIG’s General Insurance subsidiaries write
operations are American Life Insurance Company (ALICO), Ameri-
substantially all lines of commercial property and casualty
can International Assurance Company, Limited, together with
insurance and various personal lines both domestically and
American International Assurance Company (Bermuda) Limited
abroad. Revenues in the General Insurance segment represent
(AIA), Nan Shan Life Insurance Company, Ltd. (Nan Shan), The
General Insurance net Premiums and other considerations earned,
Philippine American Life and General Insurance Company (Philam-
Net investment income and Net realized capital gains (losses).
life), AIG Edison Life Insurance Company (AIG Edison Life) and AIG
AIG’s principal General Insurance operations are as follows:
Star Life Insurance Co. Ltd. (AIG Star Life).
Domestic Brokerage Group (DBG) writes substantially all
AIG’s principal Domestic Life Insurance & Retirement Services
classes of business insurance in the U.S. and Canada, accepting
operations are American General Life Insurance Company (AG
such business mainly from insurance brokers.
Life), The United States Life Insurance Company in the City of
Transatlantic Holdings, Inc. (Transatlantic) subsidiaries offer
New York (USLIFE), American General Life and Accident Insurance
reinsurance on both a treaty and facultative basis to insurers in
Company (AGLA and, collectively with AG Life and USLIFE, the
the U.S. and abroad. Transatlantic structures programs for a full
Domestic Life Insurance internal reporting unit), AIG Annuity
range of property and casualty products with an emphasis on
Insurance Company (AIG Annuity), The Variable Annuity Life
specialty risks.
Insurance Company (VALIC) and AIG Retirement Services, Inc (AIG
AIG’s Personal Lines operations provide automobile insurance
SunAmerica and, collectively with AIG Annuity and VALIC, the
through aigdirect.com, the newly formed operation resulting from
Domestic Retirement Services internal reporting unit).
the merger of AIG Direct and 21st Century Insurance Group (21st
American International Reinsurance Company (AIRCO) acts
Century), and the Agency Auto Division, as well as a broad range
primarily as an internal reinsurance company for AIG’s insurance
of coverages for high net worth individuals through the AIG Private
operations.
Client Group.
Life Insurance & Retirement Services is comprised of two
Mortgage Guaranty operations provide residential mortgage
major groupings of products and services: insurance-oriented
guaranty insurance that covers the first loss for credit defaults on
products and services and retirement savings products and
high loan-to-value conventional first- and second-lien mortgages for
services.
the purchase or refinance of one to four family residences.
AIG’s Foreign General Insurance group accepts risks primarily Financial Services: AIG’s Financial Services subsidiaries engage
underwritten through American International Underwriters (AIU), a in diversified activities including aircraft and equipment leasing,
marketing unit consisting of wholly owned agencies and insurance
companies. The Foreign General Insurance group also includes
AIG 2007 Form 10-K 147