April 21, 2009

Dear Colleagues,

I am excited to share two significant developments impacting AIU Holdings, Inc., both of which bring us closer to separation from the parent company.

1.       AIG, Inc. will accelerate the positioning of AIU Holdings as an independent global property casualty and general insurance company by placing it in a Special Purpose Vehicle (SPV). This action helps us prepare for the potential sale of a minority stake in the business. 

2.       AIG also intends to purchase AIU Holdings’ equity interests in International Lease Finance Corporation (ILFC), Transatlantic Holdings, Inc. and United Guaranty Corporation. These transactions improve the quality of AIU Holdings’ capital by creating more liquidity on the domestic insurance companies’ balance sheet. Further, they do not impact AIU Holdings’ unparalleled policyholder surplus. In combination with the pending sale of 21st Century, these transactions also help prepare the balance sheet for separation.

Click HERE to read the press release. We will provide further details and talking points shortly.

As we’ve shared in previous communications, AIU Holdings is a general insurance holding company that includes Private Client Group as well as AIG’s Commercial Insurance Group, the Foreign General unit, and other property and casualty operations. Future developments include our own capital structure, balance sheet, board of directors, management team and brand identity. Today’s news is a significant step forward in this complex process.

I look forward to sharing additional milestones with you over the coming weeks and months. Thank you for your ongoing support of Private Client Group.

Sincerely,

Charles Williamson