AM Best Co. has placed the financial strength rating (FSR) of A++ (superior) and issuer credit ratings (ICR) of "aa+" of the domestic life and retirement services subsidiaries of American International Group (AIG, New York) under review with negative implications.

In addition, Best has placed the FSRs of A+ (superior) and ICRs of "aa-"of most of AIG's domestic property/casualty subsidiaries and AIG's 60 percent majority owned company, Transatlantic Holdings, Inc. (New York), under review with negative implications.

The FSRs and ICRs of these rating groups incorporate implicit support from AIG.

Concurrently, Best has placed the ICR of "aa" under review with negative implications for American International Group, Inc.

Best also has placed all the debt ratings of Transatlantic Holdings, Inc. and 21st Century Insurance Group under review with negative implications.

The FSR of A++ (superior) and ICR of "aa+" of the Hartford Steam Boiler Group (Connecticut) remain unaffected as the group has met the criteria for Best's highest rating category on a stand-alone basis.

These rating actions follow AIG's February 11, 2008, SEC Form 8-K filing clarifying its methodology in determining the fair value of the super senior credit default swap portfolio with respect to the multi-sector collateralised debt obligations of AIG Financial Products Corp. The disclosures revealed that further refinements of data used in its internal models resulted in a significantly higher decline in valuation through November 30, 2007.

It was further disclosed that due to current difficult market conditions, the material benefit of spread differentials incorporated through November 2007 are not quantifiable and will not benefit portfolio valuation at December 31, 2007. Therefore, AIG will reflect a sizable fair value decline.