AIG press release, New York

ALICO to be placed in Special Purpose Vehicle.

02/03/2009

Alico and American International Assurance Company, Ltd (AIA) will continue to review their divestiture options, which ultimately may include a public offering of shares, depending on market conditions.

AIG intends to contribute the equity of Alico and AIA into special purpose vehicles (SPVs) in exchange for preferred and common interests in the SPVs. This will enable the Federal Reserve Bank of New York (FRBNY) … to receive preferred interests in repayment of a portion of the FRBNY facility.

These transactions will reduce AIG's debt and interest-carrying costs, while allowing AIG to continue to benefit from its ongoing common interests in the SPVs.

Given the importance of Alico and AIA to repaying our obligation to the U.S. government, we think this structure is the optimal solution to maintain the value of these businesses and best position them to enhance their franchises,' said Edward M. Liddy, Chairman and Chief Executive Officer, AIG.

'We are delighted by the changes announced by AIG today,' said Rodney O. Martin Jr., Alico Chairman and Chief Executive Officer. 'This sends a clear message to our stakeholders that Alico continues to be a trustworthy, reliable and qualified partner. It will position us well in continuing to focus on our core life insurance and retirement services business. We can continue to execute Alico's successful business model to enhance the value of our franchise and to provide maximum value to the U.S. taxpayers. We continue to have very strong insurance operations and our ability to pay claims will be unaffected by this change.'