TAIPEI (Reuters) - Bailed-out US insurer American International Group and the buyers of its Taiwan Nan Shan insurance unit have modified the terms of a stalled $2.2 billion deal to speed up its passage by Taiwanese regulators.

AIG said yesterday $325 million of the purchase price would now be placed in escrow for four years on completion of the deal as an additional measure of support for the capital position of Nan Shan which has more than four million policyholders.

AIG agreed to sell Nan Shan to conglomerate China Strategic Holdings and Hong Kong-based firm Primus Financial Holdings in October as it was selling assets at home and abroad to repay the US government.

It has not been able to close the deal on political concerns in Taiwan that the buyers were backed by mainland Chinese money and did not have the experience to run Taiwan's No.3 life insurer by market share.

"The purchase agreement amendment underscores the continued commitment of all parties to a timely completion of a transaction that provides the greatest possible protections and opportunities for all of Nan Shan's stakeholders," AIG said.

Prior to the Nan Shan bid, China Strategic was known more as a battery maker, but the connections of some of its executives to China's top political advisory body had raised concerns in Taiwan despite recent booming business ties between the erstwhile political foes.