AIG 2013 Annual Report Download - page 41

The following table summarizes the investment results of AIG’s insurance operations.
AIG Property Casualty:
2012 120,425 4,780 4.0
2011 112,310 4,253 3.8
AIG Life and Retirement:
2012 190,983 10,718 5.6
2011 172,846 9,882 5.7
(a) Excludes cash and short-term investments and includes unrealized appreciation of investments.
(b) Net investment income divided by the annual average investments. The increase in AIG Property Casualty pre-tax return on average investments
for the year ended December 31, 2013 compared to 2012 primarily relates to alternative investments and fair value option assets. See Item 7.
MD&A — Results of Operations — AIG Property Casualty — AIG Property Casualty Net Investment Income and Net Realized Capital Gains
(Losses).
Our operations around the world are subject to regulation by many different types of regulatory authorities, including
insurance, securities, derivatives, investment advisory, banking and thrift regulators in the United States and abroad.
Our insurance subsidiaries are subject to regulation and supervision by the states and jurisdictions in which they do
business. The insurance and financial services industries generally have been subject to heightened regulatory
scrutiny and supervision in recent years.
The following table provides a general overview of our primary regulators and related bodies and a brief
description of their oversight with respect to us and our subsidiaries, including key regulations or initiatives
that we are currently, or may in the future be, subject to. Such regulations and initiatives, both in the United
States and abroad, are discussed in more detail following the table.
U.S. Federal Regulation
Board of Governors of the Federal Reserve System (FRB): Oversees and regulates financial institutions,
including non-bank systemically important financial institutions (SIFIs), bank holding companies and savings and
loan holding companies (SLHCs). We are currently subject to the FRB’s examination, supervision and
enforcement authority, and reporting requirements, as an SLHC and as a SIFI.
Office of the Comptroller of the Currency (OCC): Charters, regulates and supervises all national banks and
federal savings associations. The OCC supervises and regulates AIG Federal Savings Bank, our federal savings
association subsidiary.
Securities and Exchange Commission (SEC): Oversees and regulates the U.S. securities and security-based
swap markets, U.S. mutual funds, U.S. broker-dealers and U.S. investment advisors. Principal regulator of the
mutual funds offered by our broker-dealer subsidiaries owned by AIG Life and Retirement. The SEC is in the
process of implementing rules and regulations governing reporting, execution and margin requirements for
security-based swaps entered into within the U.S. Our security-based swap activities conducted by Global Capital
Markets are subject to these rules and regulations.
Commodities Futures Trading Commission (CFTC): Oversees and regulates the U.S. swap, commodities and
futures markets. The CFTC has implemented, and is in the process of implementing, rules and regulations
governing reporting, execution and margin requirements for swaps entered into within the U.S. or by U.S. persons.
Our swap activities conducted by Global Capital Markets are subject to these rules and regulations.
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank): Dodd-Frank has effected
comprehensive changes to financial services regulation and subjects us, or will subject us, as applicable, to
additional federal regulation, including:
• minimum capital requirements for SLHCs and insured depository institutions;
• enhanced prudential standards for SIFIs (including minimum leverage and risk-based capital requirements,
stress tests and an early remediation regime process);
• prohibitions on proprietary trading; and
• increased regulation and restrictions on derivatives markets and transactions.
REGULATION
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AIG 2013 Form 10-K 23
ITEM 1 / BUSINESS
Years Ended December 31, Annual Average Net Investment Pre-tax Return on
(in millions) Investments(a) Income Average Investments(b)
2013 $ 119,307 $ 5,267 4.4%
2013 $ 192,895 $ 10,854 5.6%
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