NU Online News Service, Nov. 5, 11:23 a.m.EDT

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American International Group posted a $2.4 billion third-quarterloss on restructuring-related charges of $4.5 billion, as its chiefexecutive boasted of solid insurance operating results.

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The 2010 third-quarter results compare to a $455 million gain inthe same quarter last year.

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The New York-based insurer, which was bailed out by thegovernment two years ago but has since announced steps to pay backthe loans, said income from continuing operations was $2.05 billioncompared to $1.93 billion a year ago during the third quarter.

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Part of AIG's plan for restructuring and to repay taxpayersincludes the sale of certain assets, some of which showed up on thebalance sheet during the third quarter as losses and impairmentcharges.

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AIG took a $1.9 billion loss on its pending sale of AmericanGeneral Finance, and took two separate charges of $1.3 billion fordeferred taxes and a goodwill impairment charge related to thepending sales of AIG Star Life Insurance Co. and AIG Edison LifeInsurance Company to Prudential Financial Inc.

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The sales will go toward repaying taxpayers. Earlier this week,the company said it raised enough money from its sale ofAmerican Life Insurance Company to MetLife Inc. and an initialpublic offering of AIA Group Ltd. in Hong King to repay a line ofcredit with the Federal Reserve Bank of New York (FRBNY).

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With the third-quarter statement, AIG said it plans to completea sale of Nan Shan Life Insurance Company within a year. Apreviously announced sale was not approved by regulators inTaiwan.

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President and Chief Executive Officer Robert H. Benmosche saidAIG will continue its "aggressive plan to close pendingtransactions in order to repay the FRBNY in full and provide forthe exit of U.S. Treasury ownership over time."

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The American General Finance sale should close later this year,and the sale of Star and Edison should close early next year, hesaid.

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Mr. Benmosche said payment of debt to the FRBNY will "trigger anaccelerated amortization of the balance of the prepaid commitmentfee asset, which stood at $4.7 billion at Sept. 30."

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Continued insurance operations remain strong, AIG said, leadingto an adjusted net loss for the third quarter of $200 million.

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Chartis recorded $1.1 billion in operating income, whichincludes underwriting profit, investment income and realizedcapital gains, compared with $719 million during the 2009 thirdquarter. The combined ratio improved to 99.3 from 105.2 a yearago.

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A decline in investment income led to SunAmerica Financial Groupposting $978 million in third-quarter operating income comparedwith $1.2 billion during the same period last year.

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"Of utmost importance is the continued stabilization andstrengthening of AIG's continuing businesses," Mr. Benmoschesaid.

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AIG continues to unwind AIG Financial Products, the unit incharge of the credit default swaps that were blamed for thecompany's downfall. Financial Products reduced its derivativeportfolio by 46 percent to $505.8 billion at Sept. 30 from $940.7billion as of the end of last year.

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