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Sub-contractor, Kidnap & Ransom/Extortion and Accidental Death & Dismemberment Coverages Strengthen DBA Insurance Program

NEW YORK--April 27, 2005-- AIG WorldSource(R), a division of the Domestic Brokerage Group of American International Group, Inc. (AIG), today announced enhancements to several key components of its Defense Base Act (DBA) coverage program. AIG WorldSource will now provide DBA policies for sub-contractors in conjunction with a DBA policy for a primary contractor.(a)

"If a sub-contractor fails to secure DBA coverage, then the liability on work-related injuries falls to the primary contractor, and that liability is not automatically covered under the primary contractor's DBA policy," said Gordon Knight, President, AIG WorldSource. "Our sub-contractor enhancement is designed to eliminate this gap in coverage and make it easier for smaller sub-contractors to obtain DBA insurance without being subject to a minimum policy premium. While we underwrite primary and sub-contractor risks individually, the similarity in risk profile and type of work being conducted in DBA-mandated locations allows us to underwrite the primary and sub-contractor policies simultaneously."

Mandated by the Defense Base Act of 1941, all primary and sub-contractors working in overseas locations on contracts funded by the United States government must secure workers compensation coverage known as DBA insurance. Up to this point, sub-contractors have generally had to secure their own DBA insurance independent of their primary contractor relationships.

In addition to the sub-contractor enhancement, AIG WorldSource's DBA program now includes Accidental Death and Dismemberment (AD&D) insurance, which provides 24-hour AD&D coverage, as well as travel and medical assistance services for covered employees. AIG WorldSource has also added Kidnap and Ransom/Extortion coverage to its DBA policies, which covers certain costs associated with a kidnapping, such as ransom monies, consulting fees, legal costs and related expenses.

"AIG WorldSource is committed to offering comprehensive DBA coverage to contractors working in Iraq," continued Knight. "No matter how volatile the environment, AIG WorldSource can help. We understand the local issues and have on-the-ground claims resources to help solve problems quickly and efficiently. No other carrier can match our regional infrastructure and commitment to the DBA market."

For more information on AIG WorldSource's DBA program, please contact John Thompson, Assistant Vice President of Marketing, AIG WorldSource, at (212) 458-2123 or john.thompson@aig.com.

AIG is the world's leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In the United States, AIG companies are the largest underwriters of commercial and industrial insurance and AIG American General is a top-ranked life insurer. AIG's global businesses also include retirement services, financial services and asset management. AIG's financial services businesses include aircraft leasing, financial products, trading and market making. AIG's growing global consumer finance business is led in the United States by American General Finance. AIG also has one of the largest U.S. retirement services businesses through AIG SunAmerica and AIG VALIC, and is a leader in asset management for the individual and institutional markets, with specialized investment management capabilities in equities, fixed income, alternative investments and real estate. AIG's common stock is listed on the New York Stock Exchange and ArcaEx, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

(a) Insurance is underwritten by member companies of American International Group, Inc. and is subject to underwriting review and approval. The description herein is a summary only. It does not include all terms, conditions and exclusions. Coverage may not be available in all jurisdictions. Non-insurance products may be provided through independent third parties.

Andrew Silver