DUBAI (Bloomberg) - American International Group Inc. (AIG) CEO Martin Sullivan is seeking to relax accounting rules that forced the world's biggest insurer by assets to write down $11.1 billion on debt securities in the fourth quarter.

AIG should have written off closer to $900 million, based on its "stress-test worst-case scenario" for unrealised losses, Mr. Sullivan said in an interview yesterday on the sidelines of an insurance industry conference in Dubai.

"AIG, in a position of financial strength, can hold those assets to maturity so why have the challenge of marking them to market in an illiquid market?" said Mr. Sullivan, 53. "Maybe there's a short-term interpretation or amendment that can be considered in the uncharted waters we're in."

The world's biggest financial institutions have disclosed $195 billion of credit losses and writedowns since defaults on US sub-prime mortgages last year caused a freeze across debt markets.

"Fair value," or "mark-to-market" rule FAS 157, requires companies to estimate a value on holdings that are not traded. A better way may be to account for realised losses and a company's worst-case estimates, Mr. Sullivan said.