Two life insurers, AXA SA, Paris, and MetLife Inc., arereportedly vying to purchase American International Group'sAmerican Life Insurance Co. (ALICO).

Spokespersons for AXA and MetLife declined comment and aspokesperson for AIG could not be immediately reached to comment onthe Bloomberg report.

ALICO, domiciled in Delaware, had $33.5 billion in net premiumswritten in 2007 on net income of $737 million, according toHighline Data, part of Summit Business Media, which also ownsNational Underwriter.

A report last week by ProPublica, a New York-based nonprofit,public-interest news organization, raised questions about apotential tax issue and the impact that could have on the sale ofALICO, considered to be one of AIG's most profitable units.

The issue centers on U.S. Internal Revenue Service ruling2004-75, issued in 2004. The ruling requires that nonresidentaliens receiving payments from contracts such as annuities from aU.S. life insurer are subject to a 30 percent tax withholding.

According to the ProPublica report, ALICO is saying that becauseit is an 80/20 company (a business in which 80 percent of itsrevenue is from overseas) it is not subject to the 2004 IRS rulingbecause such companies are not specifically mentioned.

However, the report said the issue is unclear and companyofficials reportedly said the matter has not been disclosed topotential buyers. The report also said that if the company has tocomply with the ruling it would have a negative impact on businessand on the sale of the company at a price that would help AIG repayits current $150 billion loan to the U.S. government.

An AIG spokesperson referred National Underwriter to a responseposted under the article in which the company said that as a normalpart of the divestiture process, AIG approached the IRS to affirmits position on the issue and that the issue is not material toALICO. The response goes on to say the information would bedisclosed to companies that are serious contenders for thecompany.

ProPublica asserted the accuracy and fairness of its story.