(Bloomberg) ? American International Group Inc., the world?s largest insurer, hired Olin Wethington, the US Treasury Department?s former special envoy in China, to oversee its expansion there.

Wethington, 57, was named chairman of AIG in China and will report to Senior Vice Chairman Edmund Tse, the New York-based company said in a statement yesterday. He had resigned from the Treasury in September for a job outside of government.

International insurers are vying to expand in the nation of 1.3 billion people. Economic growth and lower government welfare benefits has boosted spending on protection and investment products. AIG, founded in Shanghai in 1919, returned to China in 1992, becoming the first foreign life insurer in the country since the communist revolution in 1949.

?They have had more success than other foreign insurers, because of their history,? said Donald Light, an analyst with Celent LLC, a Boston-based financial consulting firm. ?To win in that market depends on being able to win the regulator game. A high-level government official is going to help.?

Shares of AIG rose 48 cents to $66.49 in New York Stock Exchange composite trading. The stock has gained 1 percent in the past year, compared with a 12 percent gain in the KBW Insurance Index.

During Wethington?s tenure as envoy, China dropped a decade- long peg of its currency to the US dollar.