AMERICAN INTERNATIONAL GROUP INC, S-3, 1997-02-07

AMERICAN INTERNATIONAL GROUP INC
S-3, 1997-02-07
FIRE, MARINE & CASUALTY INSURANCE

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 7, 1997.

REGISTRATION STATEMENT NO. 333- --
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------

AMERICAN INTERNATIONAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 13-2592361
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>

70 PINE STREET, NEW YORK, NEW YORK 10270
(212) 770-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------

KATHLEEN E. SHANNON
AMERICAN INTERNATIONAL GROUP, INC.
70 PINE STREET
NEW YORK, NEW YORK 10270
(212) 770-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) PRICE PER SHARE(2) OFFERING PRICE(2) FEE(3)
- -----------------------------------------------------------------------------------------------------------------------
Common Stock, par value
$2.50 per share........... 5,152,684 Shares $119.9375 $618,000,037.25 $187,272.74
</TABLE>

- --------------------------------------------------------------------------------

(1) This Registration Statement also relates to an indeterminate number of
additional shares of Common Stock that may be issued pursuant to
anti-dilution provisions of the options described in a Prospectus comprising
a part of this Registration Statement.

(2) Estimated solely for the purposes of calculating the registration fee. Such
estimate has been computed in accordance with Rule 457(c) and is based upon
the average of the high and low sales prices of the Common Stock of American
International Group, Inc. on January 31, 1997, as reported on the New York
Stock Exchange Composite Tape.

(3) Pursuant to Rule 429, this Registration Statement also relates to 75,000
shares of Common Stock for which a registration fee of $1,950.43 was paid.

Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that also relates to 75,000 shares of
Common Stock registered under Registration Statement No. 33-62821 on Form S-3
previously filed by the Registrant on September 22, 1995 and declared effective
on February 20, 1996.
------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

EXPLANATORY NOTE

This Registration Statement on Form S-3 contains (i) a Prospectus relating
to 5,000,000 shares of common stock, par value $2.50 per share (the "Common
Stock"), of American International Group, Inc. ("AIG") which may be delivered by
Starr International Company, Inc. ("SICO") pursuant to SICO's Deferred
Compensation Profit Participation Plans, (ii) a Prospectus relating to 111,684
shares of Common Stock to be sold from time to time by certain Selling
Shareholders, (iii) a Prospectus relating to 115,000 shares of Common Stock to
be delivered upon the exercise of (A) the Stock Option Agreement, dated February
9, 1995, between AIG and Lloyd M. Bentsen, (B) the Stock Option Agreements, each
dated February 21, 1995, between AIG and each of M. Bernard Aidinoff, Marshall
A. Cohen, Barber B. Conable, Jr., Martin S. Feldstein, Carla A. Hills, Frank J.
Hoenemeyer, John I. Howell and Dean P. Phypers (collectively, the "1995
Optionees"), (C) the Stock Option Agreement, dated September 16, 1996, between
AIG and Pei-yuan Chia and (D) the Stock Option Agreements, each dated December
31, 1996, between AIG and each of the 1995 Optionees (other than Mr. Howell) and
(iv) a Prospectus relating to 1,000 shares of Common Stock to be delivered by
AIG from time to time to employees and non-employees.
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED FEBRUARY 7, 1997

PROSPECTUS

5,000,000 SHARES

AMERICAN INTERNATIONAL GROUP, INC.

COMMON STOCK
(PAR VALUE $2.50 PER SHARE)

------------------

This Prospectus relates to up to 5,000,000 shares (the "Plan Shares") of
Common Stock, par value $2.50 per share (the "Common Stock"), of American
International Group, Inc. ("AIG") which may be delivered by Starr International
Company, Inc. ("SICO") pursuant to SICO's Deferred Compensation Profit
Participation Plans, as amended (collectively, the "Plans"). This Prospectus is
to be used by SICO in connection with the delivery of Plan Shares to
participants (the "Participants") in the Plans.

This Prospectus also relates to any Plan Shares that may be offered from
time to time by Participants who may be deemed to be "affiliates" of AIG (the
"Selling Shareholders") for purposes of the United States federal securities
laws. The Plan Shares may be sold by Selling Shareholders from time to time in
one or more transactions (which may involve block transactions) on the New York
Stock Exchange, in the over-the-counter market, through negotiated transactions
or otherwise, at market prices prevailing at the time of the sale or at prices
otherwise negotiated. See "Plan of Distribution".

AIG will not receive any of the proceeds from the delivery of Plan Shares
by SICO to Participants nor from any sales by the Selling Shareholders of Plan
Shares. All costs, expenses and fees in connection with the registration of the
Plan Shares will be borne by SICO.

------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

------------------

THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 4

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL OR AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE PLAN
SHARES.

2
<PAGE> 5

AVAILABLE INFORMATION

AIG is subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, as well as at the following Regional Offices: 7 World Trade Center,
Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may
be obtained at the Commission's Public Reference Section, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains
a Web Site at htpp://www.sec.gov. which contains reports and other information
regarding registrants that file electronically with the Commission.

The Common Stock is listed on the New York Stock Exchange and reports,
proxy statements and other information can be inspected at such Exchange at 20
Broad Street, New York, New York 10005.

This Prospectus constitutes part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by AIG with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information
included in the Registration Statement, certain parts of which are omitted in
accordance with applicable rules and regulations of the Commission. For further
information pertaining to AIG and the securities offered hereby, reference is
made to the Registration Statement and the exhibits thereto.

AIG's principal executive offices are located at 70 Pine Street, New York,
New York 10270, and its telephone number is (212) 770-7000.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents have been filed by AIG with the Commission (File
No. 1-8787) and are incorporated herein by reference:

(1) AIG's Annual Report on Form 10-K for the year ended December 31,
1995;

(2) AIG's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996;

(3) The description of Common Stock contained in AIG's Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the Securities
Exchange Act of 1934; and

(4) AIG's Current Report on Form 8-K, dated June 11, 1996.

All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the termination of
this offering shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained or incorporated by
reference herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.

AIG will provide without charge to each person to whom this Prospectus is
delivered, upon the written or oral request of any such person, a copy of any or
all documents (excluding exhibits unless specifically incorporated by reference
into such documents) referred to above which have been or may be incorporated
herein by reference and not furnished herewith. Requests for such documents
should be directed to AIG's Director of Investor Relations, 70 Pine Street, New
York, New York 10270, telephone (212) 770-7575.

3
<PAGE> 6

REQUIRED DISCLOSURE FOR NORTH CAROLINA RESIDENTS

The Commissioner of Insurance of the State of North Carolina has not
approved or disapproved this offering nor has the Commissioner passed upon the
accuracy or adequacy of this Prospectus.

THE PLANS

The following is a brief summary of the Plans which does not purport to be
complete. The Plans are all substantially identical.

Key employees of SICO, AIG and their affiliates participate in the Plans.
Neither AIG nor SICO has received or will receive any cash or property in
consideration of the granting of units under the Plans.

Under the Plans, Participants are granted units which have a value based on
a percentage (selected by SICO's Board of Directors) of SICO's retained earnings
attributable to the shares of Common Stock held by SICO over a two year period.
The units are payable, at the election of SICO's Board of Directors, in cash or
Common Stock. The units generally vest upon retirement at normal retirement age,
except the SICO Board of Directors has, with respect to certain of the Plans,
permitted an early pay-out of units under certain circumstances.

SELLING SHAREHOLDERS

The Selling Shareholders will consist of Participants who may be deemed to
be "affiliates" of AIG for purposes of the Securities Act. The Selling
Shareholders will be listed in a supplement to this Prospectus. Such supplement
will indicate any relationship which such Selling Shareholder has had with AIG
for the three years preceding the date of such supplement and the number of Plan
Shares which such Selling Shareholder intends to sell pursuant to this
Prospectus.

The directors and officers of AIG as a group own 81.82% of the voting stock
of SICO; SICO owns 16.14% of the outstanding Common Stock and, after giving
effect to the delivery of the 5,000,000 Plan Shares covered by this Prospectus,
will own 15.07% of the outstanding Common Stock. Six directors of AIG also serve
as directors of SICO, and SICO provides certain compensation to directors and
executive officers of AIG. In the ordinary course of business, AIG and its
subsidiaries effect certain transactions with SICO at a cost which, in the
opinion of AIG's management, is not material and does not exceed the cost of
obtaining such services from unaffiliated sources. For a further discussion of
AIG's relationship to SICO, see AIG's Annual Report on Form 10-K for the year
ended December 31, 1995, incorporated herein by reference.

PLAN OF DISTRIBUTION

Plan Shares may be sold from time to time by the Selling Shareholders, or
by their pledgees, donees, transferees or other successors in interest. Such
sales may be made on the New York Stock Exchange, in the over-the-counter market
or otherwise, at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. Plan Shares may be
sold by the Selling Shareholders by one or more of the following: (a) a block
trade in which the broker-dealer so engaged will attempt to sell such Plan
Shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction; (b) purchase of such Plan Shares by a
broker-dealer as principal and resale by such broker-dealer for its account
pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
broker-dealers engaged by the Selling Shareholders may arrange for other
broker-dealers to participate in the resales.

Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Shareholders in amounts to be
negotiated in connection with the sales. Such broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act, in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any securities

4
<PAGE> 7

covered by this Prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than pursuant to this
Prospectus.

All costs, expenses and fees in connection with the registration of the
Plan Shares, including any sold by the Selling Shareholders, will be borne by
SICO. Commissions and discounts, if any, attributable to the sales of Plan
Shares by the Selling Shareholders will be borne by the Selling Shareholders.

VALIDITY OF COMMON STOCK

The validity of the Plan Shares offered hereby will be passed upon by
Kathleen E. Shannon, Esq., Associate General Counsel of AIG. Ms. Shannon is
regularly employed by AIG, participates in various AIG employee benefit plans
under which she may receive shares of Common Stock and currently beneficially
owns less than 1% of the outstanding shares of Common Stock.

EXPERTS

The consolidated financial statements and schedules of AIG as of December
31, 1995 and 1994 and for each of the three years in the period ended December
31, 1995, included in AIG's Annual Report on Form 10-K for the year ended
December 31, 1995, have been audited by Coopers & Lybrand L.L.P., independent
public accountants, as indicated in their reports with respect thereto, dated
February 22, 1996, and are incorporated by reference into this Prospectus in
reliance thereon upon the authority of said firm as experts in accounting and
auditing.

5
<PAGE> 8

- ------------------------------------------------------
- ------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Documents by
Reference........................... 3
Required Disclosure for North Carolina
Residents........................... 4
The Plans............................. 4
Selling Shareholders.................. 4
Plan of Distribution.................. 4
Validity of Common Stock.............. 5
Experts............................... 5
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
5,000,000 SHARES

AMERICAN
INTERNATIONAL
GROUP, INC.

(PAR VALUE $2.50 PER SHARE)
, 1997
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 9

SUBJECT TO COMPLETION, DATED FEBRUARY 7, 1997

PROSPECTUS

115,000 SHARES

AMERICAN INTERNATIONAL GROUP, INC.

COMMON STOCK
(PAR VALUE $2.50 PER SHARE)

------------------

This Prospectus relates to up to 115,000 shares (the "Shares") of Common
Stock, par value $2.50 per share (the "Common Stock"), of American International
Group, Inc. ("AIG") which will be delivered upon exercise of (i) the Stock
Option Agreement, dated February 9, 1995 (the "Bentsen Option"), between AIG and
Lloyd M. Bentsen, (ii) the Stock Option Agreements, each dated February 21, 1995
(the "1995 Options"), between AIG and each of M. Bernard Aidinoff, Marshall A.
Cohen, Barber B. Conable, Jr., Martin S. Feldstein, Carla A. Hills, Frank J.
Hoenemeyer, John I. Howell and Dean P. Phypers (collectively, the "1995
Optionees"), (iii) the Stock Option Agreement, dated September 16, 1996 (the
"Chia Option"), between AIG and Pei-yuan Chia, (collectively, with Mr. Bentsen
and the 1995 Optionees, the "Optionees") and (iv) the Stock Option Agreements,
each dated December 31, 1996 (the "1996 Options" and, together with the Bentsen
Option, the 1995 Options and the Chia Option, the "Options"), between AIG and
each of the 1995 Optionees (other than Mr. Howell).

This Prospectus is to be used in connection with the delivery of Shares by
AIG to the Optionees upon the exercise of their respective Options.

------------------

THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 10

2
<PAGE> 11

AVAILABLE INFORMATION

The Common Stock is listed on the New York Stock Exchange and reports,
proxy statements and other information can be inspected at such Exchange at 20
Broad Street, New York, New York 10005.

AIG's principal executive offices are located at 70 Pine Street, New York,
New York 10270, and its telephone number is (212) 770-7000.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents have been filed by AIG with the Commission (File
No. 1-8787) and are incorporated herein by reference:

(1) AIG's Annual Report on Form 10-K for the year ended December 31,
1995;

(2) AIG's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996;

(3) The description of Common Stock contained in AIG's Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the Securities
Exchange Act of 1934; and

(4) AIG's Current Report on Form 8-K, dated June 11, 1996.

3
<PAGE> 12

REQUIRED DISCLOSURE FOR NORTH CAROLINA RESIDENTS

The Commissioner of Insurance of the State of North Carolina has not
approved or disapproved this offering nor has the Commissioner passed upon the
accuracy or adequacy of this Prospectus.

USE OF PROCEEDS

AIG will use all of the proceeds received upon exercise of the Options for
general corporate purposes. All costs, expenses and fees in connection with the
registration of the Shares will be borne by AIG.

THE OPTIONS

The following summary of the Options does not purport to be complete and is
qualified in its entirety by reference to the Options, copies of which have been
filed as exhibits to the Registration Statement of which this Prospectus is a
part.

The Bentsen Option has an exercise price of $66.67 per share (the "Option
Price"), may be exercised at any time after one year for 3,750 shares of Common
Stock, after two years for 7,500 shares of Common Stock, after three years for
10,750 shares of Common Stock and after four years for 15,000 shares of Common
Stock and expires in ten years. Each of the 1995 Options is exercisable for
7,500 shares of Common Stock at any time one year after the date of grant at the
Option Price and expires in ten years. The Chia Option and each of the 1996
Options is exercisable for 5,000 shares of Common Stock at any time one year
after the date of grant, at exercise prices of $98.75 per share and $108.25 per
share, respectively, and expire in ten years. The Options are exercisable solely
for cash, are non-transferable (other than by will or the laws of descent and
distribution) and are subject to customary anti-dilution provisions.

VALIDITY OF COMMON STOCK

The validity of the Shares offered hereby has been passed upon by Kathleen
E. Shannon, Esq., Associate General Counsel of AIG. Ms. Shannon is regularly
employed by AIG, participates in various AIG employee benefit plans under which
she may receive shares of Common Stock and currently beneficially owns less than
1% of the shares of outstanding Common Stock.

EXPERTS

4
<PAGE> 13

- ------------------------------------------------------
- ------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Documents by
Reference........................... 3
Required Disclosure for North Carolina
Residents........................... 4
Use of Proceeds....................... 4
The Options........................... 4
Validity of Common Stock.............. 4
Experts............................... 4
</TABLE>

115,000 SHARES

AMERICAN
INTERNATIONAL
GROUP, INC.

(PAR VALUE $2.50 PER SHARE)
, 1997
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 14

SUBJECT TO COMPLETION, DATED FEBRUARY 7, 1997

PROSPECTUS

111,684 SHARES

AMERICAN INTERNATIONAL GROUP, INC.

COMMON STOCK
(PAR VALUE $2.50 PER SHARE)

------------------

This Prospectus relates to up to 111,684 shares (the "Shares") of Common
Stock, par value $2.50 per share (the "Common Stock"), of American International
Group, Inc. ("AIG") which may be offered from time to time by Stuart A. Myers,
Sari Miller, Eileen Rachelson and Fred Schiller (collectively, the "Selling
Shareholders"). See "Selling Shareholders".

The Shares may be sold from time to time in one or more transactions (which
may involve block transactions) on the New York Stock Exchange, in the
over-the-counter market, through negotiated transactions or otherwise, at market
prices prevailing at the time of the sale or at prices otherwise negotiated. See
"Plan of Distribution".

The Selling Shareholders acquired the Shares in connection with the
acquisition (the "Acquisition") by AIG of York Claims Service, Inc. Pursuant to
the terms of the Acquisition, AIG is required to register the Shares under the
Securities Act of 1933, as amended (the "Securities Act"). AIG will not receive
any of the proceeds from the sales by the Selling Shareholders of the Shares.
All costs, expenses and fees in connection with the registration of the Shares
will be borne by AIG.

------------------

THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 15

2
<PAGE> 16

AVAILABLE INFORMATION

The Common Stock is listed on the New York Stock Exchange and reports,
proxy statements and other information can be inspected at such Exchange at 20
Broad Street, New York, New York 10005.

This Prospectus constitutes part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by AIG with the Commission under the Securities Act. This Prospectus does not
contain all of the information included in the Registration Statement, certain
parts of which are omitted in accordance with applicable rules and regulations
of the Commission. For further information pertaining to AIG and the securities
offered hereby, reference is made to the Registration Statement and the exhibits
thereto.

AIG's principal executive offices are located at 70 Pine Street, New York,
New York 10270, and its telephone number is (212) 770-7000.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents have been filed by AIG with the Commission (File
No. 1-8787) and are incorporated herein by reference:

(1) AIG's Annual Report on Form 10-K for the year ended December 31,
1995;

(2) AIG's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996;

(3) The description of Common Stock contained in AIG's Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the Securities
Exchange Act of 1934; and

(4) AIG's Current Report on Form 8-K, dated June 11, 1996.

3
<PAGE> 17

REQUIRED DISCLOSURE FOR NORTH CAROLINA RESIDENTS

The Commissioner of Insurance of the State of North Carolina has not
approved or disapproved this offering nor has the Commissioner passed upon the
accuracy or adequacy of this Prospectus.

SELLING SHAREHOLDERS

The following table sets forth the number of Shares which each Selling
Shareholder intends to sell pursuant to this Prospectus and includes information
with respect to positions, offices or other material relationships of the
Selling Shareholders with AIG or any affiliate thereof during the past three
years, other than as a shareholder thereof. After completion of the sales
hereunder, each Selling Shareholder will own less than 1% of the outstanding
shares of Common Stock.

<TABLE>
<CAPTION>
NUMBER OF
SHARES OWNED NUMBER OF
SELLING SHAREHOLDER POSITION BEFORE OFFERING SHARES OFFERED
- ------------------------ ----------------------------------- --------------- --------------
<S> <C> <C> <C>
Stuart A. Myers(1)...... Senior Vice President, AIG Claim 82,355 82,355
Services, Inc.; President, York
Claims Service, Inc.
Sari Miller(2).......... Executive Vice President and Chief 3,197 3,197
Financial Officer, York Claims
Service, Inc.
Eileen Rachelson(2)..... Executive Vice President and Chief 13,066 13,066
Operating Officer, York Claims
Service, Inc.
Fred Schiller(2)........ Executive Vice President, York 13,166 13,066
Claims Service, Inc.
Total......... 111,784 111,684
=========== ==========
</TABLE>

- ---------------
(1) 27,148 Shares are held in escrow with Chase Manhattan Bank, as escrow agent,
and 10,860 Shares are subject to an Employment Agreement, dated August 12,
1996, between AIG and Mr. Meyers which contains customary forfeiture
provisions.
(2) Each of Ms. Miller's, Ms. Rachelson's and Mr. Schiller's Shares are held in
a trust for their respective benefit, and are subject to customary
forfeiture provisions. Chase Manhattan Bank acts as trustee for each of such
trusts.

PLAN OF DISTRIBUTION

The Shares may be sold from time to time by the Selling Shareholders, or by
their pledgees, donees, transferees or other successors in interest. Such sales
may be made on the New York Stock Exchange, in the over-the-counter market or
otherwise, at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Shares may be sold
by one or more of the following: (a) a block trade in which the broker-dealer so
engaged will attempt to sell such Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchase of
such Shares by a broker-dealer as principal and resale by such broker-dealer for
its account pursuant to this Prospectus; and (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers. In effecting sales,
broker-dealers engaged by the Selling Shareholders may arrange for other
broker-dealers to participate in the resales.

All costs, expenses and fees in connection with the registration of the
Shares will be borne by AIG. Commissions and discounts, if any, attributable to
the sales of the Shares will be borne by the Selling Shareholders.

4
<PAGE> 18

VALIDITY OF COMMON STOCK

The validity of the Shares offered hereby will be passed upon by Kathleen
E. Shannon, Esq., Associate General Counsel of AIG. Ms. Shannon is regularly
employed by AIG, participates in various AIG employee benefit plans under which
she may receive shares of Common Stock and currently beneficially owns less than
1% of the outstanding shares of Common Stock.

EXPERTS

5
<PAGE> 19

- ------------------------------------------------------
- ------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Documents by
Reference........................... 3
Required Disclosure for North Carolina
Residents........................... 4
Selling Shareholders.................. 4
Plan of Distribution.................. 4
Validity of Common Stock.............. 5
Experts............................... 5
</TABLE>

111,684 SHARES

AMERICAN
INTERNATIONAL
GROUP, INC.

(PAR VALUE $2.50 PER SHARE)
, 1997
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 20

SUBJECT TO COMPLETION, DATED FEBRUARY 7, 1997

PROSPECTUS

1,000 SHARES

AMERICAN INTERNATIONAL GROUP, INC.

COMMON STOCK
(PAR VALUE $2.50 PER SHARE)

------------------

This Prospectus relates to up to 1,000 shares (the "Shares") of Common
Stock, par value $2.50 per share (the "Common Stock"), of American International
Group, Inc. ("AIG") which may be delivered from time to time by AIG to employees
and non-employees as gifts, prizes and in other similar transactions
(collectively, a "Transfer").

------------------

THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 21

2
<PAGE> 22

AVAILABLE INFORMATION

The Common Stock is listed on the New York Stock Exchange and reports,
proxy statements and other information can be inspected at such Exchange at 20
Broad Street, New York, New York 10005.

AIG's principal executive offices are located at 70 Pine Street, New York,
New York 10270, and its telephone number is (212) 770-7000.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents have been filed by AIG with the Commission (File
No. 1-8787) and are incorporated herein by reference:

(1) AIG's Annual Report on Form 10-K for the year ended December 31,
1995;

(2) AIG's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996;

(3) The description of Common Stock contained in AIG's Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the Securities
Exchange Act of 1934; and

(4) AIG's Current Report on Form 8-K, dated June 11, 1996.

3
<PAGE> 23

REQUIRED DISCLOSURE FOR NORTH CAROLINA RESIDENTS

The Commissioner of Insurance of the State of North Carolina has not
approved or disapproved this offering nor has the Commissioner passed upon the
accuracy or adequacy of this Prospectus.

USE OF PROCEEDS

Unless otherwise indicated in a Prospectus Supplement, AIG will not receive
any proceeds from any Transfer. All costs, expenses and fees in connection with
the registration of the Shares will be borne by AIG.

VALIDITY OF COMMON STOCK

EXPERTS

4
<PAGE> 24

- ------------------------------------------------------
- ------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Documents by
Reference........................... 3
Required Disclosure for North Carolina
Residents........................... 4
Use of Proceeds....................... 4
Validity of Common Stock.............. 4
Experts............................... 4
</TABLE>

1,000 SHARES

AMERICAN
INTERNATIONAL
GROUP, INC.

(PAR VALUE $2.50 PER SHARE)
, 1997
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 25

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*

<TABLE>
<CAPTION>
PAID BY PAID BY
AIG SICO TOTAL
---------- ----------- -----------
<S> <C> <C> <C>
Registration............................................. $ 5,549.26 $181,723.48 $187,272.74
Legal Fees and Expenses.................................. 5,000.00 500.00 5,500.00
Auditors' Fees and Expenses.............................. 2,500.00 500.00 3,000.00
Printing................................................. 4,500.00 500.00 5,000.00
Miscellaneous............................................ 319.17 200.00 519.17
--------- --------- ----------
Total.................................................. $17,868.43 $183,423.48 $201,291.91
========= ========= ==========
</TABLE>

- ---------------

* All fees other than the registration fee are estimates.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Restated Certificate of Incorporation of the Company (the
"Certificate") provides that the Company shall indemnify to the full extent
permitted by law any person made, or threatened to be made, a party to an
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that he, his testator or intestate is or
was a director, officer or employee of the Company or serves or served any other
enterprise at the request of the Company. Section 6.4 of the Company's By-laws
contains a similar provision.

The Certificate also provides that a director will not be personally liable
to the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent that such an exemption from liability
or limitation thereof is not permitted by the Delaware General Corporation Law
(the "GCL").

Section 145 of the GCL permits indemnification against expenses, fines,
judgments and settlements incurred by any director, officer or employee of the
Company in the event of pending or threatened civil, criminal, administrative or
investigative proceedings, if such person was, or was threatened to be made, a
party by reason of the fact that he is or was a director, officer or employee of
the Company. Section 145 also provides that the indemnification provided for
therein shall not be deemed exclusive of any other rights to which those seeking
indemnification may otherwise be entitled. In addition, the Company and its
subsidiaries maintain a directors' and officers' liability insurance policy.

II-1
<PAGE> 26

ITEM 16. EXHIBIT LIST.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION LOCATION
- --- ------------------------------------------ ---------------------------------------------
<C> <S> <C>
4 Instruments defining the rights of
security holders, including indentures
(a) Restated Certificate of Incorporation
of AIG................................ Incorporated by reference herein from Exhibit
3(i) to AIG's Annual Report on Form 10-K for
the year ended December 31, 1994 (File No.
1-8787) (the "Form 10-K").
(b) By-laws of AIG........................ Incorporated by reference herein from Exhibit
3(ii) of the Form 10-K.
(c) Stock Option Agreement, dated February
9, 1995, between AIG and Mr. Lloyd M.
Bentsen............................... Incorporated by reference herein from Exhibit
4(e) to AIG's Registration Statement No.
33-60327.
(d) Form of Stock Option Agreement, dated
February 21, 1995, between AIG and
each of M. Bernard Aidinoff, Marshall
A. Cohen, Barber B. Conable, Jr.,
Martin S. Feldstein, Carla A. Hills,
Frank J. Hoenemeyer, John I. Howell
and Dean P. Phypers................... Incorporated by reference herein from Exhibit
4(f) to AIG's Registration Statement No.
33-60327.
(e) Stock Option Agreement, dated
September 16, 1996, between AIG and
Pei-yuan Chia......................... Filed as exhibit hereto.
(f) Form of Stock Option Agreement, dated
December 31, 1996 between AIG and each
of M. Bernard Aidinoff, Marshall A.
Cohen, Barber B. Conable, Jr., Martin
S. Feldstein, Carla A. Hills, Frank J.
Hoenemeyer and Dean P. Phypers........ Filed as exhibit hereto.
5 Opinion re validity....................... Filed as exhibit hereto.
23 Consents of experts and counsel
(a) Coopers & Lybrand..................... Filed as exhibit hereto.
(b) Kathleen E. Shannon, Esq.............. Included in Exhibit 5.
25 Power of Attorney......................... Included on the signature page hereto.
</TABLE>

ITEM 17. CERTAIN UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, (ii) to reflect in the prospectus any
facts or events arising after the effective date of this Registration Statement
(or the most recent post-effective amendment

II-2
<PAGE> 27

thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement; notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that subparagraphs (i) and (ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated
by reference in this Registration Statement; (2) that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.

(b) The Registrant undertakes that, for the purpose of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-3
<PAGE> 28

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON THE 7TH DAY OF
FEBRUARY, 1997.

AMERICAN INTERNATIONAL GROUP, INC.

By: /s/ M. R. GREENBERG
-------------------------------------
(M.R. Greenberg, Chairman)
------------------

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS: that each person whose signature appears
below constitutes and appoints M.R. Greenberg, Edward E. Matthews and Howard I.
Smith, and each of them, as true and lawful attorneys-in-fact and agents with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing required and necessary to be done in
and about the foregoing, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
------------------

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-3 has been signed below by the following
persons in the capacities indicated and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------- -------------------------------------- -----------------
<S> <C> <C>
/s/ MAURICE R. GREENBERG Chairman and Director February 7, 1997
- --------------------------------- (Principal Executive Officer)
(Maurice R. Greenberg)

/s/ HOWARD I. SMITH Executive Vice President, February 7, 1997
- --------------------------------- Chief Financial Officer
(Howard I. Smith) and Comptroller
(Principal Financial and
Accounting Officer)

/s/ M. BERNARD AIDINOFF Director February 7, 1997
- ---------------------------------
(M. Bernard Aidinoff)
/s/ LLOYD M. BENSTEN Director February 7, 1997
- ---------------------------------
(Lloyd M. Bentsen)

Director
- ---------------------------------
(Pei-yuan Chia)
</TABLE>

II-4
<PAGE> 29

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------- -------------------------------------- -----------------
<S> <C> <C>

/s/ MARSHALL A. COHEN Director February 7, 1997
- ---------------------------------
(Marshall A. Cohen)

/s/ BARBER B. CONABLE, JR. Director February 7, 1997
- ---------------------------------
(Barber B. Conable, Jr.)

/s/ MARTIN S. FELDSTEIN Director February 7, 1997
- ---------------------------------
(Martin S. Feldstein)

/s/ LESLIE L. GONDA Director February 7, 1997
- ---------------------------------
(Leslie L. Gonda)

/s/ EVAN G. GREENBERG Director February 7, 1997
- ---------------------------------
(Evan G. Greenberg)

/s/ CARLA A. HILLS Director February 7, 1997
- ---------------------------------
(Carla A. Hills)

/s/ FRANK J. HOENEMEYER Director February 7, 1997
- ---------------------------------
(Frank J. Hoenemeyer)

/s/ EDWARD E. MATTHEWS Director February 7, 1997
- ---------------------------------
(Edward E. Matthews)

/s/ DEAN P. PHYPERS Director February 7, 1997
- ---------------------------------
(Dean P. Phypers)

/s/ JOHN J. ROBERTS Director February 7, 1997
- ---------------------------------
(John J. Roberts)

/s/ THOMAS R. TIZZIO Director February 7, 1997
- ---------------------------------
(Thomas R. Tizzio)

/s/ EDMUND S.W. TSE Director February 7, 1997
- ---------------------------------
(Edmund S.W. Tse)
</TABLE>

II-5
<PAGE> 30

EXHIBIT INDEX

II-6

<PAGE> 1
Exhibit 4(e)

AMERICAN INTERNATIONAL GROUP, INC.
STOCK OPTION AGREEMENT

Agreement, dated September 16, 1996 between American International
Group, Inc. ("AIG") and Pei-yuan Chia (the "Director"), a director of AIG.

The parties hereto agree as follows:

1. Grant of Option. AIG hereby grants to the Director an option to
purchase all or any part of 5,000 shares of AIG Common Stock (the "Common
Stock") at a price of $98.75 per share at any time after one year from the date
hereof or at such earlier time as provided in Section 4 of this Agreement. Such
option shall expire on September 16, 2006 or at such earlier time as provided in
Section 4 of this Agreement.

2. Exercisability of Option. This option is not transferable by the
Director otherwise than by will or the laws of descent and distribution, and is
exercisable during the lifetime of the Director only by the Director. In the
event of the death of the Director, the option may be exercised by the person or
persons to whom the Director's rights under the option are transferred by will
or the laws of descent and distribution.

3. Exercise of Stock Option and Payment for Shares. To exercise the
stock option, the Director shall give written notice to AIG specifying the
number of shares to be purchased and accompanied by payment of the full purchase
price therefor. Upon the exercise, the Director shall make such representations
and agreements and furnish such information as AIG may deem necessary or
desirable to assure compliance by AIG, on terms acceptable to AIG, with the
provisions of the Securities Act of 1933 and any other applicable legal
requirements. If the Director so requests, shares purchased may be issued in the
name of the Director and another jointly with the right of survivorship.

1
<PAGE> 2
4. Termination of Directorship. Upon termination of the Director's
service as a director of AIG, the option shall be exercisable as follows:

(i) if such termination of directorship is due to
disability, any portion of the option, whether or not
exercisable at the time of such termination, may be
exercised by the Director or his legal representative
at any time on or before September 16, 2006;

(ii) if such termination of directorship is due to death,
any portion of the option, whether or not exercisable
at the time of such termination, may be exercised by
the legal representative of the Director at any time
within five years after the death of the Director
(but in no event later than September 16, 2006); and

(iii) if such termination of directorship is not due to
disability or death, any portion of the option may be
exercised by the Director within five years after
such termination (but in no event after September 16,
2006), but only to the extent such option was
exercisable at the time of such termination.

5. Adjustments in Event of Changes in Capitalization. In the event of a
recapitalization, stock split, stock dividend, combination or exchange of
shares, merger, consolidation, rights offering, separation, reorganization or
liquidation, or any other change in the corporate structure or shares of AIG
subsequent to the date hereof, the Board of Directors shall make such equitable
adjustments, designed to protect against dilution or enlargement of rights, as
it may deem appropriate in the number and kind of shares covered hereby and in
the option price.

2
<PAGE> 3
6. Rights as a Shareholder. The Director shall have no rights as a
shareholder with respect to any shares covered by the stock option until the
date of issuance of a stock certificate for such shares.

AMERICAN INTERNATIONAL GROUP, INC.
Attest:

By
- ----------------------------- ---------------------------------
Secretary Chairman

---------------------------------
Director

---------------------------------
Address

---------------------------------
City State

---------------------------------
Social Security Number

<PAGE> 1
Exhibit 4(f)

AMERICAN INTERNATIONAL GROUP, INC.
STOCK OPTION AGREEMENT

Agreement, dated December 31, 1996 between American International
Group, Inc. ("AIG") and [ ] (the "Director"), a director of AIG.

The parties hereto agree as follows:

1. Grant of Option. AIG hereby grants to the Director an option to
purchase all or any part of 5,000 shares of AIG Common Stock (the "Common
Stock") at a price of $108.25 per share at any time after one year from the date
hereof or at such earlier time as provided in Section 4 of this Agreement. Such
option shall expire on December 31, 2006 or at such earlier time as provided in
Section 4 of this Agreement.

1
<PAGE> 2
4. Termination of Directorship. Upon termination of the Director's
service as a director of AIG, the option shall be exercisable as follows:

(iii) if such termination of directorship is not due to
disability or death, any portion of the option may be
exercised by the Director within five years after
such termination (but in no event after December 31,
2006), but only to the extent such option was
exercisable at the time of such termination.

AMERICAN INTERNATIONAL GROUP, INC.
Attest:

By
- ----------------------------- ---------------------------------
Secretary Chairman

---------------------------------
Director

---------------------------------
Address

---------------------------------
City State

---------------------------------
Social Security Number

<PAGE> 1
Exhibit 5

[AMERICAN INTERNATIONAL GROUP, INC. LETTERHEAD]

February 7, 1997

American International Group, Inc.,
70 Pine Street,
New York, New York 10270

Dear Sirs:

In connection with the registration under the Securities Act of 1933
(the "Act") of 5,152,684 shares (the "Securities") of Common Stock, par value
$2.50 per share, of American International Group, Inc., a Delaware corporation
(the "Company"), I, as Vice President and Associate General Counsel of the
Company, have examined such corporate records, certificates and other
documents, and such questions of law, as I have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such
examination, I advise you that, in my opinion:

(1) With respect to the Securities (the "Plan Shares") to be
delivered by Starr International Company, Inc. ("SICO") pursuant to
SICO's Deferred Compensation Profit Participation Plans, as amended
(collectively, the "Plans"), the Plan Shares have been duly
authorized and validly issued and are fully paid and non-assessable.

(2) With respect to the Securities (the "Option Shares") to be
acquired upon the exercise of stock options granted under (i) the Stock
Option Agreement, dated February 9, 1995 (the "Bentsen Option"),
between the Company and Lloyd M. Bentsen, (ii) the Stock Option
Agreements, each dated February 21, 1995 (the "1995 Options"), between
the Company and each of M. Bernard Aidinoff, Marshall A. Cohen, Barber
B. Conable, Jr., Martin S. Feldstein, Carla A. Hills, Frank J.
Hoenemeyer, John I. Howell and Dean P. Phypers (collectively, the "1995
Optionees"), (iii) the Stock Option Agreement, dated September 16, 1996
(the "Chia Option"), between the Company and Pei-yuan Chia and (iv) the
Stock Option Agreements, each dated December 31, 1996 (the "1996
Options" and, together with the Bentsen Option, the 1995 Options and
the Chia Option, the "Options"), between the Company and each of the
1995 Optionees (other than Mr. Howell), when the registration
statement relating to the Securities (the "Registration Statement") has
become effective under the Act and Option Shares are delivered upon the
exercise of any of the Options in accordance with their terms as
contemplated by the Registration Statement, the Option Shares will be
validly issued, fully paid and non-assessable.

(3) With respect to the Securities (the "Selling Shareholder
Shares") to be offered from time to time in one or more transactions
by Stuart A. Myers, Sari Miller, Eileen Rachelson and non-employees and
Fred Schiller, the Selling Shareholder Shares have been duly authorized
and are, or when issued will be, validly issued, fully paid and
non-assessable.

(4) With respect to the Securities (the "Prize Shares") to be
delivered from time to time by the Company to employees and
non-employees as gifts, prizes and in other similar transactions, when
the Registration Statement has become effective under the Act and the
Prize Shares have been delivered as contemplated by the Registration
Statement, the Prize Shares will be validly issued, fully paid and
non-assessable.

The foregoing opinion is limited to the Federal laws of the United
States and the General Corporation Law of the State of Delaware, and I am
expressing no opinion as to the effect of the laws of any other jurisdiction.

I have relied as to certain matters on information obtained from public
officials, officers of the Company and other sources believed by me to be
responsible.

I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to me under the headings "Validity
of Common Stock" in each of the Prospectuses contained in the Registration
Statement. In giving such consent, I do not thereby admit that I am in the
category of persons whose consent is required under Section 7 of the Act.

Very truly yours,

/s/ Kathleen E. Shannon
Kathleen E. Shannon
Vice President and
Associate General Counsel

<PAGE> 1

EXHIBIT 23(A)

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this registration statement
on Form S-3 of our report, which includes an explanatory paragraph relating to
accounting changes for investments in certain fixed maturity securities in 1993,
dated February 22, 1996, on our audits of the consolidated financial statements
and financial statement schedules of American International Group, Inc. and
subsidiaries as of December 31, 1995 and 1994, and for the years ended December
31, 1995, 1994, and 1993, which report is included in the Company Annual Report
on Form 10-K. We also consent to the reference to our firm under the caption
"Experts".

/s/ COOPERS & LYBRAND, L.L.P.
Coopers & Lybrand, L.L.P.

New York, New York
February 6, 1997