NEW YORK (Bloomberg) — Robert Benmosche, chief executive officer of American International Group Inc., said he was undergoing treatment for cancer and remained committed to repaying the insurer's $182.3 billion taxpayer bailout.

Benmosche, 66, began an "aggressive round of chemotherapy" last week, he told employees yesterday in a letter. The New York-based insurer's board began preparing for a successor before disclosing Benmosche's condition late yesterday because the chief intended to retire in 2012, he told staff.

"While I have every intention of staying on that timetable, it's important that we prepare for any alternate plan that fate may have in mind," Benmosche said in the letter. "As for my long-term prognosis — I will have a better idea over the next couple of months of what that will look like as I continue to undergo treatment and my doctors refine their diagnosis."

Benmosche has presided over a 37 percent rise in AIG's stock this year through yesterday as he announced deals to sell businesses and repay taxpayers by converting a $49.1 billion Treasury Department preferred stake into common stock. The former MetLife Inc. CEO clashed with regulators after starting at AIG in August 2009 and has since been credited for stabilizing credit ratings and hiring top managers.

"The good news is that I feel fine, and I continue to work according to my normal schedule," Benmosche said. "Frankly, learning that I have cancer makes me even more committed to working with all of you to turn AIG into the success story we all envision. It's a turnaround I want to complete." AIG didn't say what type of cancer Benmosche has. The insurer's board will "engage in appropriate contingency planning to ensure management continuity", chairman Steve Miller said in a statement.

There are more than 100 different types of chemotherapy drugs, many given every two to three weeks, said Otis Brawley, chief medical officer of the American Cancer Society. Without knowing the type of cancer or the specific treatment, it's impossible to predict the severity of side effects, Brawley said. He declined to comment specifically on Benmosche's cancer.

"There are many aggressive chemotherapy regimens where it is indeed possible for people to continue to work," Brawley said in a telephone interview.

"Many people will not want to work the day they get chemotherapy or the day after, but they can work for the remainder of the week," he said. Other regimens force patients to remain in the hospital, he said.

Chemotherapy got its reputation in the early days of its use, when high doses of the toxic drugs caused severe bouts of nausea and vomiting, Brawley said. Medicines developed in the past decade can keep those symptoms at bay, he said.

AIG has "a lot of seasoned folks" who can take on larger roles as Benmosche fights cancer, said Ernest Patrikis, AIG's ex-general counsel.