American International Group, Inc.: Form 10-Q for the period ended Sep 30, 2023

Liquidity and Capital Resources

OVERVIEW

Liquidity refers to the ability to generate sufficient cash resources to meet the cash requirements of our business operations and payment obligations.

Capital refers to the long-term financial resources available to support the operation of our businesses, fund business growth and cover financial and operational needs that arise from adverse circumstances. Our primary source of ongoing capital generation is derived from the profitability of our insurance subsidiaries. We must comply with numerous constraints on our capital positions. These constraints drive the requirements for capital adequacy at AIG and the individual businesses and are based on internally defined risk tolerances, regulatory requirements, rating agency and creditor expectations and business needs.

For information regarding our liquidity risk framework, see Part II, Item 7. MD&A – Enterprise Risk Management – Risk Appetite, Limits, Identification and Measurement and Part II, Item 7. MD&A – Enterprise Risk Management – Liquidity Risk Management in the 2022 Annual Report.

We believe that we have sufficient liquidity and capital resources to satisfy future requirements and meet our obligations to policyholders, customers, creditors and debt-holders, including those arising from reasonably foreseeable contingencies or events. Nevertheless, some circumstances may cause our cash or capital needs to exceed projected liquidity or readily deployable capital resources.

For information regarding risks associated with our liquidity and capital resources, see Part I, Item 1A. – Risk Factors – Liquidity, Capital and Credit in the 2022 Annual Report.

Depending on market conditions, regulatory and rating agency considerations and other factors, we may take various liability and capital management actions. Liability management actions may include, but are not limited to, repurchasing or redeeming outstanding debt, issuing new debt or engaging in debt exchange offers. Capital management actions may include, but are not limited to, issuing preferred stock, paying dividends to our shareholders on the AIG Common Stock, par value $2.50 per share (AIG Common Stock), paying dividends to the holders of our Series A 5.85% Non-Cumulative Perpetual Preferred Stock (Series A Preferred Stock), and repurchases of AIG Common Stock.

LIQUIDITY AND CAPITAL RESOURCES HIGHLIGHTS

SOURCES(a)

Liquidity to AIG Parent from Subsidiaries

During the nine months ended September 30, 2023, our General Insurance companies distributed dividends of $2.0 billion to AIG Parent or applicable intermediate holding companies.

During the nine months ended September 30, 2023, Corebridge distributed $573 million of dividends to AIG Parent in its capacity as a public company shareholder of Corebridge after its initial public offering. Of this amount, $309 million consisted of quarterly cash dividends of $0.23 per share on Corebridge common stock and $264 million consisted of a special cash dividend of $0.62 per share on Corebridge common stock.

Senior Notes Offering of AIG

In March 2023, AIG issued $750 million aggregate principal amount of 5.125% Notes Due 2033.

Sale of Crop Risk Services Business

On July 3, 2023, AIG completed the sale of CRS to AFG, for which AIG received gross proceeds, before deducting commissions, of $234 million.

Secondary Offering of Corebridge Shares by AIG

In June 2023, AIG sold 74.75 million shares of Corebridge common stock in a secondary offering at a public offering price of $16.25 per share, which included 65 million shares initially offered and the full exercise by the underwriters of their option to purchase an additional 9.75 million shares. The aggregate gross proceeds of the offering to AIG, before deducting underwriting discounts and commissions and other expenses payable by AIG, were approximately $1.2 billion.

Corebridge Share Repurchase from AIG

In June 2023, Corebridge repurchased 11 million shares of its common stock from AIG at a purchase price of $16.41 per share. The gross proceeds of the share repurchase to AIG were $180 million.

USES

AIG General Borrowings

During the nine months ended September 30, 2023, $679 million of debt categorized as general borrowings matured, was repaid or redeemed as follows:

• Repaid £311 million aggregate principal amount of our 5.00% Notes due 2023, which was equivalent to approximately $388 million at the time of repayment.
• Redeemed $199 million aggregate principal amount of Validus Holdings 8.875% Senior Notes due 2040 for a redemption price of 143.968 percent of the principal amount, plus accrued and unpaid interest, which totaled $289 million.

We made interest payments on our general borrowings totaling $351 million during the nine months ended September 30, 2023.

AIG Dividends

During the nine months ended September 30, 2023:

• We made quarterly cash dividend payments of $365.625 per share on AIG’s Series A Preferred Stock totaling $22 million.
• We made cash dividend payments in the amount of $0.36 per share on AIG Common Stock for each of the three months ended September 30, 2023 and June 30, 2023 (an increase of 12.5 percent from prior dividend payments), and $0.32 per share for the three months ended March 31, 2023, totaling $748 million.

Repurchases of AIG Common Stock(b)

During the nine months ended September 30, 2023, AIG Parent repurchased approximately 35 million shares of AIG Common Stock, for an aggregate purchase price of approximately $1.9 billion.

(a) On November 1, 2023, AIG completed the sale of Validus Re to RenaissanceRe and received $3.3 billion cash, including a pre-closing dividend of approximately $570 million from Validus Re.

(b) Pursuant to a Securities Exchange Act of 1934 (the Exchange Act) Rule 10b5-1 repurchase plan, from October 1, 2023 to October 27, 2023, AIG Parent repurchased approximately 3 million shares of AIG Common Stock for an aggregate purchase price of approximately $154 million.

LIQUIDITY AND CAPITAL RESOURCES HIGHLIGHTS OF COREBRIDGE

SOURCES(a)

Following the initial public offering, Corebridge liquidity, including its loan facilities, is not reflected in AIG Parent's liquidity.

Senior Notes Offering of Corebridge

On September 15, 2023, Corebridge issued $500 million aggregate principal amount of its 6.050% Senior Notes due 2033 (the Corebridge Notes).

USES

Delayed Draw Term Loan Facility of Corebridge

Corebridge used the net proceeds of the issuance of the Corebridge Notes to repay $500 million of the $1.5 billion aggregate principal amount drawn under Corebridge’s 3-Year Delayed Draw Term Loan Agreement.

Corebridge Dividends

During the nine months ended September 30, 2023:

• Corebridge made quarterly cash dividend payments of $0.23 per share on Corebridge common stock, totaling $135 million to its public company shareholders other than AIG.
• Corebridge made a special cash dividend of $0.62 per share on Corebridge common stock, totaling $138 million to its public company shareholders other than AIG.

Repurchases of Corebridge Common Stock(b)

In June 2023, Corebridge repurchased 11 million shares of Corebridge common stock from AIG, for an aggregate purchase price of $180 million.

During the nine months ended September 30, 2023, Corebridge repurchased approximately 4 million shares of Corebridge common stock, for an aggregate purchase price of approximately $66 million, from shareholders other than AIG.

(a) On October 31, 2023, Corebridge completed the sale of Laya to AXA and received €650 million in cash. On November 1, 2023, Corebridge announced that it will pay a special dividend of approximately $730 million to Corebridge shareholders as of November 13, 2023.

(b) Pursuant to an Exchange Act Rule 10b5-1 repurchase plan, from October 1, 2023 to October 27, 2023, Corebridge repurchased approximately 2.5 million shares of Corebridge Common Stock for an aggregate purchase price of approximately $50 million, from shareholders other than AIG.

AIG | Third Quarter 2023 Form 10-Q 151

ANALYSIS OF SOURCES AND USES OF CASH

Operating Cash Flow Activities

Insurance companies generally receive most premiums in advance of the payment of claims or policy benefits. The ability of insurance companies to generate positive cash flow is affected by the frequency and severity of losses under their insurance policies, policy retention rates, effective management of our investment portfolio and operating expense discipline.

Interest payments totaled $745 million and $734 million in the nine months ended September 30, 2023 and 2022, respectively. Excluding interest payments, AIG had operating cash inflows of $5.4 billion in the nine months ended September 30, 2023 compared to operating cash inflows of $4.7 billion in the prior year period.

Investing Cash Flow Activities

Net cash used in investing activities in the nine months ended September 30, 2023 was $4.1 billion compared to net cash used in investing activities of $2.3 billion in the prior year period.

Financing Cash Flow Activities

Net cash used in financing activities in the nine months ended September 30, 2023 totaled $239 million, reflecting:

• $748 million to pay dividends of $0.36 per share in the three months ended September 30, 2023 and June 30, 2023, and $0.32 per share for the three months ended March 31, 2023 on AIG Common Stock;
• $22 million to pay quarterly dividends of $365.625 per share on AIG’s Series A Preferred Stock;
• $1.9 billion to repurchase approximately 35 million shares of AIG Common Stock;
• $135 million paid by Corebridge in the form of quarterly cash dividends on Corebridge common stock to shareholders other than AIG;
• $138 million paid by Corebridge in the form of a special cash dividend on Corebridge common stock to shareholders other than AIG;
• $66 million paid by Corebridge to repurchase approximately 4 million shares of Corebridge common stock;
• $500 million outflow from the repayment on 3-Year Delayed Draw Term Loan Agreement of Corebridge;
• $563 million in net inflows from the issuance and repayment of long-term debt; and
• $201 million in net outflows from the issuance and repayment of debt of consolidated investment entities.

Net cash used in financing activities in the nine months ended September 30, 2022 totaled $1.5 billion reflecting:

• $746 million to pay quarterly dividends of $0.32 per share on AIG Common Stock;
• $22 million to pay quarterly dividends of $365.625 per share on AIG’s Series A Preferred Stock;
• $57 million in the aggregate paid by Corebridge in the form of a cash dividend to Blackstone;
• $4.4 billion to repurchase approximately 77 million shares of AIG Common Stock;
• $1.5 billion inflow from drawdown on 3-Year Delayed Draw Term Loan Agreement of Corebridge;
• $176 million in net outflows from the issuance, repayment and cash tender of long-term debt; and
• $263 million in net outflows from the issuance and repayment of debt of consolidated investment entities.

LIQUIDITY AND CAPITAL RESOURCES OF AIG PARENT AND SUBSIDIARIES

AIG Parent

As of September 30, 2023 and December 31, 2022, respectively, AIG Parent and applicable intermediate holding companies had approximately $8.1 billion and $8.2 billion in liquidity sources held in the form of cash and short-term investments, which includes AIG Parent's committed, revolving syndicated credit facility of $4.5 billion. Following the initial public offering, Corebridge liquidity, including its loan facilities, is not reflected in AIG Parent's liquidity. As a public company shareholder of Corebridge, AIG receives its pro rata share of dividends paid by Corebridge on Corebridge common stock. AIG Parent’s primary sources of liquidity are dividends, distributions, loans and other payments from subsidiaries and credit facilities. AIG Parent’s primary uses of liquidity are for debt service, capital and liability management, operating expenses and dividends on AIG Common Stock and Series A Preferred Stock.

We expect to access the debt and preferred equity markets from time to time to meet funding requirements as needed.

We utilize our capital resources to support our businesses, with the majority of capital allocated to our insurance operations. Should we have or generate more capital than is needed to support our business strategies (including organic or inorganic growth opportunities) or mitigate risks inherent to our business, we may develop plans to distribute such capital to shareholders via dividends or AIG Common Stock repurchase authorizations or deploy such capital towards liability management.

Insurance Companies

We expect that our insurance companies will be able to continue to satisfy reasonably foreseeable future liquidity requirements and meet their obligations, including those arising from reasonably foreseeable contingencies or events, through cash from operations and, to the extent necessary, monetization of invested assets. Our insurance companies’ liquidity resources are primarily held in the form of cash, short-term investments and publicly traded, investment grade rated fixed maturity securities.

Each of our material insurance companies’ liquidity is monitored through various internal liquidity risk measures. The primary sources of liquidity are premiums, fees, reinsurance recoverables and investment income and maturities. The primary uses of liquidity are paid losses, reinsurance payments, benefit claims, surrenders, withdrawals, interest payments, dividends, expenses, investment purchases and collateral requirements.

Our insurance companies may require additional funding to meet capital or liquidity needs under certain circumstances. For example, large catastrophes may require us to provide additional support to the affected operations of our General Insurance companies, and a shift in interest rates may require us to provide support to the affected operations of our Life and Retirement companies.

Certain of our U.S. Life and Retirement insurance companies are members of the FHLBs in their respective districts. Our borrowings from FHLBs are non-puttable and are used to supplement liquidity or for other uses deemed appropriate by management. Our U.S. Life and Retirement companies had $5.7 billion and $4.6 billion which were due to FHLBs in their respective districts at September 30, 2023 and December 31, 2022, respectively, under funding agreements issued through our Individual Retirement, Group Retirement and Institutional Markets operating segments, which were reported in Policyholder contract deposits. Proceeds from funding agreements are generally invested in fixed income securities and other investments intended to generate spread income.

Certain of our U.S. Life and Retirement companies have securities lending programs that lend securities from their investment portfolio to supplement liquidity or for other uses as deemed appropriate by management. Under these programs, these companies lend securities to financial institutions and receive cash as collateral equal to 102 percent of the fair value of the loaned securities. As of September 30, 2023 and December 31, 2022 we had no loans outstanding under these programs.

AIG Parent and/or certain subsidiaries are parties to several letter of credit agreements with various financial institutions, which issue letters of credit from time to time in support of our insurance companies. These letters of credit are subject to reimbursement by AIG Parent and/or certain subsidiaries in the event of a drawdown of these letters of credit. Letters of credit issued in support of the General Insurance companies totaled approximately $3.0 billion at September 30, 2023. Letters of credit issued in support of the Life and Retirement companies totaled approximately $150 million at September 30, 2023, which are subject to reimbursement by Corebridge with no recourse to AIG Parent.

Following the initial public offering of Corebridge, AIG owned less than 80 percent of Corebridge common stock, resulting in the tax deconsolidation of Corebridge from AIG. As such, as of September 15, 2022, AIG no longer receives tax sharing payments from Corebridge for tax liabilities of subsequent periods. With respect to historic tax periods and tax periods prior to the tax deconsolidation of Corebridge from AIG, Corebridge and AIG will make tax payments to each other pursuant to the Tax Matters Agreement, dated September 14, 2022.

CREDIT FACILITIES

AIG Parent maintains a committed, revolving syndicated credit facility (the Facility) with aggregate commitments by the bank syndicate to provide AIG Parent with unsecured revolving loans and/or standby letters of credit of up to $4.5 billion without any limits on the type of borrowings. The Facility is scheduled to expire in November 2026.

Our ability to utilize the Facility is conditioned on the satisfaction of certain legal, operating, administrative and financial covenants and other requirements contained in the Facility. These include covenants relating to our maintenance of a specified total consolidated net worth and total consolidated debt to total consolidated capitalization. Failure to satisfy these and other requirements contained in the Facility would restrict our access to the Facility and could have a material adverse effect on our financial condition, results of operations and liquidity.

As of September 30, 2023, a total of $4.5 billion remained available under the Facility.

Corebridge maintains a committed, revolving syndicated credit facility (the Corebridge Facility) with aggregate commitments by the bank syndicate to provide Corebridge with unsecured revolving loans and/or standby letters of credit of up to $2.5 billion without any limits on the type of borrowings and with no recourse to AIG Parent. The Corebridge Facility is scheduled to expire in May 2027.

As of September 30, 2023, a total of $2.5 billion remained available under the Corebridge Facility.

AIG | Third Quarter 2023 Form 10-Q 153

Corebridge also maintains a 3-Year Delayed Draw Term Loan Agreement (the DDTL Facility) with aggregate commitments by the bank syndicate to provide Corebridge with delayed draw term loans of up to $1.5 billion, with no recourse to AIG Parent. On September 15, 2022, Corebridge borrowed $1.5 billion under the DDTL Facility, $500 million of which Corebridge repaid with net proceeds from the Corebridge Notes offering in September 2023. The DDTL Facility is scheduled to mature in February 2025.

As of September 30, 2023, a total of $1.0 billion of borrowings are outstanding under the DDTL Facility.

CONTRACTUAL OBLIGATIONS

As of September 30, 2023, there have been no material changes in our contractual obligations from December 31, 2022, a description of which may be found in Part II, Item 7. MD&A – Liquidity and Capital Resources – Contractual Obligations in the 2022 Annual Report.

OFF-BALANCE SHEET ARRANGEMENTS AND COMMERCIAL COMMITMENTS

As of September 30, 2023, there have been no material changes in our off-balance sheet arrangements and commercial commitments from December 31, 2022, a description of which may be found in Part II, Item 7. MD&A – Liquidity and Capital Resources – Off-Balance Sheet Arrangements and Commercial Commitments in the 2022 Annual Report.

DEBT

AIG expects to service and repay general borrowings through maturing investments and dispositions of invested assets, future cash flows from operations, cash flows generated from invested assets, future debt or preferred stock issuances and other financing arrangements.

For additional information on GIAs and associated collateral posted, see Note 6 to the Condensed Consolidated Financial Statements.

The following table provides the rollforward of AIG’s total debt outstanding:

(in millions)

154 AIG | Third Quarter 2023 Form 10-Q

(a) We have entered into a guarantee reimbursement agreement with Corebridge and Corebridge Life Holdings, Inc. (CRBGLH) (formerly known as AIG Life Holdings, Inc.) which provides that Corebridge and CRBGLH will reimburse AIG for the full amount of any payment made by or on behalf of AIG pursuant to AIG’s guarantee of the CRBGLH notes and junior subordinated debt. We have also entered into a collateral agreement with Corebridge and CRBGLH which provides that in the event of: (i) a ratings downgrade of Corebridge or CRBGLH long-term unsecured indebtedness below specified levels or (ii) the failure by CRBGLH to pay principal and interest on the CRBGLH debt when due, Corebridge and CRBGLH must collateralize an amount equal to the sum of: (i) 100 percent of the principal amount outstanding, (ii) accrued and unpaid interest, and (iii) 100 percent of the net present value of scheduled interest payments. through the maturity dates of the CRBGLH debt.

(b) Collateral posted to third parties was $101 million and $63 million at September 30, 2023 and December 31, 2022, respectively. This collateral primarily consists of securities of the U.S. government and government sponsored entities and generally cannot be repledged or resold by the counterparties.

(c) At September 30, 2023, includes debt of consolidated investment entities primarily related to real estate investments of $1.6 billion and other securitization vehicles of $1.1 billion. At December 31, 2022, includes debt of consolidated investment entities related to real estate investments of $1.5 billion and other securitization vehicles of $4.4 billion.

(d) Primarily represents amounts reclassified to Liabilities held for sale. Such notes were redeemed during the three months ended September 30, 2023.

(e) Primarily relates to the sale of AIG Credit Management, LLC where certain consolidated investment entities were deconsolidated.

Debt Maturities

The following table summarizes maturing short-term and long-term debt at September 30, 2023 of AIG for the next four quarters:

(in millions)

* Corebridge has the ability to further continue this borrowing through February 25, 2025.

The following table presents maturities of short-term and long-term debt (including unamortized original issue discount, hedge accounting valuation adjustments and fair value adjustments, when applicable):

(in millions)

(a) In May 2023, the AIG Japan Holdings Kabushiki Kaisha syndicated loan facility in the amount of JPY24.65 billion and with a maturity date of May 25, 2023, was refinanced, and will now mature on March 25, 2025.

(b) Corebridge has the ability to further continue this borrowing through February 25, 2025.

(c) Does not reflect $2.7 billion of notes issued by consolidated investment entities, for which recourse is limited to the assets of the respective investment entities and for which there is no recourse to the general credit of AIG.

AIG | Third Quarter 2023 Form 10-Q 155

CREDIT RATINGS

Credit ratings estimate a company’s ability to meet its obligations and may directly affect the cost and availability of financing to that company. The following table presents the credit ratings of AIG and certain of its subsidiaries as of the date of this filing. Figures in parentheses indicate the relative ranking of the ratings within the agency’s rating categories; that ranking refers only to the major rating category and not to the modifiers assigned by the rating agencies.

(a) Moody’s appends numerical modifiers 1, 2 and 3 to the generic rating categories to show relative position within the rating categories.

(b) S&P ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

(c) Fitch Ratings Inc. (Fitch) ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

These credit ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any time by the rating agencies as a result of changes in, or unavailability of, information or based on other circumstances. Ratings may also be withdrawn at our request.

We are party to some agreements that contain “ratings triggers.” Depending on the ratings maintained by one or more rating agencies, these triggers could result in (i) the termination or limitation of credit availability or a requirement for accelerated repayment, (ii) the termination of business contracts or (iii) a requirement to post collateral for the benefit of counterparties.

In the event of a downgrade of AIG’s long-term senior debt ratings, certain AIG entities would be required to post additional collateral under some derivative and other transactions, or certain of the counterparties of such AIG entities would be permitted to terminate such transactions early.

The actual amount of collateral that we would be required to post to counterparties in the event of such downgrades, or the aggregate amount of payments that we could be required to make, depends on market conditions, the fair value of outstanding affected transactions and other factors prevailing at the time of the downgrade.

FINANCIAL STRENGTH RATINGS

Financial Strength ratings estimate an insurance company’s ability to pay its obligations under an insurance policy. The following table presents the ratings of our significant insurance subsidiaries as of the date of this filing.

* For a discussion of the sale of Validus Re, see Note 1 and Note 4 to the Condensed Consolidated Financial Statements.

On October 16, 2023, S&P revised the outlook for AIG and the core General Insurance subsidiaries (excluding Validus Re) to stable from negative and affirmed the ‘BBB+/A-2’ issuer credit ratings on AIG and the ‘A+’ insurer financial strength ratings on AIG's core General Insurance entities.

On July 11, 2023, Moody's changed the rating outlook for AIG and General Insurance subsidiaries to positive from stable and affirmed the 'A2' insurance financial strength rating of the General Insurance subsidiaries and the 'Baa2' senior unsecured debt rating of AIG.

In response to the announcement of the sale of Validus Re, on May 24, 2023, S&P placed Validus ratings on CreditWatch with negative implications, and on May 25, 2023, A.M. Best placed its ratings on Validus under review with developing implications.

On February 27, 2023, Fitch Ratings upgraded the Insurer Financial Strength Ratings of AIG General Insurance subsidiaries to 'A+' from 'A'.

These financial strength ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any time by the rating agencies as a result of changes in, or unavailability of, information or based on other circumstances.

For information regarding the effects of downgrades in our credit ratings and financial strength ratings, see Note 11 to the Condensed Consolidated Financial Statements and Part I, Item 1A. Risk Factors – Liquidity, Capital and Credit – “A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings of our insurance or reinsurance companies could limit their ability to write or prevent them from writing new business and impair their retention of customers and in-force business, and a downgrade in our credit ratings could adversely affect our business, results of operations, financial condition and liquidity” in the 2022 Annual Report.

REGULATION AND SUPERVISION

For a discussion of our regulation and supervision by different regulatory authorities in the United States and abroad, including with respect to our liquidity and capital resources, see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation in the 2022 Annual Report, and – Executive Summary – Regulatory, Industry and Economic Factors – Regulatory Environment in this MD&A.

DIVIDENDS

On November 1, 2023, our Board of Directors declared a cash dividend on AIG Common Stock of $0.36 per share, payable on December 28, 2023 to shareholders of record on December 14, 2023.

On November 1, 2023, our Board of Directors declared a cash dividend on AIG's Series A Preferred Stock of $365.625 per share, payable on December 15, 2023 to holders of record on November 30, 2023.

The payment of any future dividends will be at the discretion of our Board of Directors and will depend on various factors. For further detail on our dividends, see Note 16 to the Condensed Consolidated Financial Statements.

REPURCHASES OF AIG COMMON STOCK

Our Board of Directors has authorized the repurchase of shares of AIG Common Stock through a series of actions. On August 1, 2023, our Board of Directors authorized the repurchase of $7.5 billion of AIG Common Stock (inclusive of the approximately $2.15 billion of expected remaining authorization under the Board's prior share repurchase authorization). During the nine months ended September 30, 2023, AIG Parent repurchased approximately 35 million shares of AIG Common Stock for an aggregate purchase price of $1.9 billion. Pursuant to an Exchange Act Rule 10b5-1 repurchase plan, from October 1, 2023 to October 27, 2023, we repurchased approximately 3 million shares of AIG Common Stock for an aggregate purchase price of approximately $154 million. As of October 27, 2023, $7.1 billion remained under the Board's authorization.

The timing of any future share repurchases will depend on market conditions, our business and strategic plans, financial condition, results of operations, liquidity and other factors, as discussed further in Note 16 to the Condensed Consolidated Financial Statements.

DIVIDEND RESTRICTIONS

Payments of dividends to AIG by its insurance subsidiaries are subject to certain restrictions imposed by regulatory authorities.

For information regarding restrictions on payments of dividends by our subsidiaries, see Note 18 to the Consolidated Financial Statements in the 2022 Annual Report.

AIG | Third Quarter 2023 Form 10-Q 157

Included in Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Enterprise Risk Management.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by American International Group, Inc. (AIG) management, with the participation of AIG’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of September 30, 2023. Based on this evaluation, AIG’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2023.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the first quarter of 2023, AIG adopted Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI), which resulted in a change to our recognition and measurement of long-duration contracts. In connection with the adoption of this standard, AIG changed processes, systems and controls related to certain of our long-duration contracts. Many of these controls are similar to those previously maintained under the historical GAAP framework but have been updated to reflect changes necessitated by the adoption of LDTI. There have been no other changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) that have occurred during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in the 2022 Annual Report.