Following the U.S. Treasury'srecent sell-down to a minority stake in American InternationalGroup, two ratings agencies offered positive assessments of theinsurance giant, with Moody's Investor's Service calling thedevelopment “another credit-positive milestone” and Fitch Ratingsstating that the recent actions have rejuvenated AIG.

Peter Eastwood, President & CEO of the Americas for Chartis,spoke with NU about why he believes the future is bright for therebounding carrier.

How do you see the remainder of 2012 playing out, withregard to AIG's resurgence?

I've worked for the company for 21 years, and I've never seen amore exciting time within AIG. If you go back over the lastfour-and-a-half years, starting with AIG's liquidity event inSeptember of 2008, I think many people would have said that it wasunlikely there would be an AIG. I think those who wereoptimistic believed it would be many years before we would seeclarity beyond AIG's [financial] situation, its capital managementand what its business was going to be.

Over the last 12 months, there's a tremendous amount of progressthat's been made, a clarity that's been brought to the situationthat's allowed us to see clearly what's core to AIG: Chartis, SunAmerica, Financial Group and United Guaranty. And you can see somenon-core assets that the holding company still owns, with some veryclear plans on what can happen with those assets—and the abilitythat AIG has to raise upward of $18 billion to $25 billion incapital that it can use in whatever strategic way it wants to,including the ability to use those proceeds to go and buy sharesback from the U.S. Treasury.

That line of sight and clarity allows us to focus on our corebusiness. I look forward to the day when the tagline isn't: “AIG,the bailed-out insurance company.”

What's the realistic time frame on reacquiring all ofAIG's shares from the government, putting this chapter for thecompany behind it?

There's the potential for the U.S. Treasury to be out of itsequity position in 12 to 18 months, but it's up to them what theywant to do with their [remaining] shares in the company—not up tous. There's a whole bunch of external factors that could come intoplay that could change that time frame for better or for worse.

What's your take on the potential for increased federalregulation for the insurance industry now, and for AIG inparticular? 

Our experience over the last few years, starting in September of2008, was that the regulatory framework that's currently inplace—meaning state regulation—proved to be quite effective interms of its ability to protect the policyholders of the AIGProperty/Casualty businesses from the liquidity event that tookplace, both in the holding company and with the capital-marketsubsidiary.

With respect to AIG, we'll continue with the insurance entitiesbeing regulated on a state-by-state basis. There's potential thatthe holding company itself from a prudential-regulation standpointgets designated a SIFI [systemically important financialinstitution], and that's regulation we'd welcome. [Editor'snote: AIG has since received notice that it is under considerationfor proposed determination that it is a SIFI.] We think theopportunity to have a regulator who's looking at the companyholistically, in a robust way, really will make us a bettercompany.

How that applies to the broader industry, I'm not really sure. Ithink you may have one or two other institutions within theindustry that end up with a similar designation, but it's unlikelythat it's going to be broad-based.