Report: AIG discussing sale of unit to MetLife

NEW YORK - Insurer American International Group Inc. is discussing a possible deal to sell all or part of one of its foreign life insurance units to MetLife Inc., according to published reports.

The New York-based insurance giant, which is in the midst of trying to repay tens of billions of dollars to the U.S. government, could sell a stake in its American Life Insurance Co. unit to rival insurer MetLife, according to a report in The Wall Street Journal.

Both AIG and MetLife declined to comment on the report.

The talks come just two weeks after AIG took steps to spin off American Life Insurance, known as ALICO, as part of its efforts to repay the government. In late June, AIG said it would move ALICO and American International Assurance Co. into special purpose vehicles ahead of planned initial public offerings of the two divisions. SPVs are entities sometimes set up ahead of the spinoff or sale of a unit to separate its operations from the parent company.

The government rescued New York-based AIG last fall as the credit crisis worsened, giving the insurer access to $182.5 billion in loans and taking an 80 percent stake in the company. AIG, once the world's biggest insurer, was crippled by its financial products business, which underwrote risky credit derivatives contracts.

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