AIG 2010 Annual Report Download - page 81

American International Group, Inc., and Subsidiaries
Insurance and Investment Contract Liabilities
Insurance and investment contract liabilities, including GIC liabilities, relate primarily to SunAmerica businesses
and include various investment-type products with contractually scheduled maturities, including periodic payments
of a term certain nature. Insurance and investment contract liabilities also include benefit and claim liabilities, of
which a significant portion represents policies and contracts that do not have stated contractual maturity dates and
may not result in any future payment obligations. For these policies and contracts (i) AIG is currently not making
payments until the occurrence of an insurable event, such as death or disability, (ii) payments are conditional on
survivorship or (iii) payment may occur due to a surrender or other non-scheduled event out of AIG’s control.
AIG has made significant assumptions to determine the estimated undiscounted cash flows of these contractual
policy benefits, which assumptions include mortality, morbidity, future lapse rates, expenses, investment returns
and interest crediting rates, offset by expected future deposits and premiums on in-force policies. Due to the
significance of the assumptions used, the periodic amounts presented could be materially different from actual
required payments. The amounts presented in this table are undiscounted and therefore exceed the future policy
benefits and policyholder contract deposits included in the Consolidated Balance Sheet.
Management believes that adequate financial resources are maintained by individual SunAmerica subsidiaries to
meet the payments actually required under these obligations. These subsidiaries maintain substantial liquidity in
the form of cash and short-term investments. In addition, SunAmerica businesses maintain significant levels of
investment-grade fixed income securities, including substantial holdings in government and corporate bonds (see
Investments herein), which SunAmerica could seek to monetize in the event operating cash flows are insufficient.
Liquidity needs for GIC liabilities are generally expected to be funded through cash flows generated from
maturities and sales of invested assets. See Capital Resources and Liquidity — Liquidity — Analysis of Sources
and Uses of Cash and Capital Resources and Liquidity — Liquidity — Liquidity of Parent and Subsidiaries for
matters that could affect operating cash flows and liquidity of the subsidiaries.
Aircraft Purchase Commitments
At December 31, 2010, ILFC had committed to purchase 115 new aircraft deliverable from 2011 through 2019,
at an estimated aggregate purchase price of approximately $13.5 billion, the majority of which is due after 2015,
with $282 million coming due in 2011. See Note 16 to the Consolidated Financial Statements, and Liquidity of
Parent and Subsidiaries — Financial Services — ILFC.
Off-Balance Sheet Arrangements and Commercial Commitments
The following table summarizes Off-Balance Sheet Arrangements and Commercial Commitments in total, and by
remaining maturity:
Amount of Commitment Expiration
Total
December 31, 2010 Amounts 2012 - 2014 -
(in millions) Committed 2011 2013 2015 Thereafter
Guarantees:
Liquidity facilities(a) $ 849 $ 748 $ - $ - $ 101
Standby letters of credit 990 964 14 11 1
Construction guarantees(b) 37 37 - - -
Guarantees of indebtedness 202 - - - 202
All other guarantees(c) 632 30 149 140 313
Commitments:
Investment commitments(d) 3,947 1,900 1,247 637 163
Commitments to extend credit 197 119 39 38 1
Letters of credit 1,553 252 1,301 - -
Other commercial commitments(e) 776 14 - - 762
Total(f) $9,183 $4,064 $2,750 $826 $1,543
AIG 2010 Form 10-K 65