AIG expects 4Q charge of $4.1B for loss reserves

NEW YORK (AP) - American International Group Inc. anticipates a fourth-quarter charge of $4.1 billion to build up loss reserves for its Chartis property and casualty insurance units.

The New York insurance company said Wednesday that it also reached a deal with the Treasury Department that allows it to keep $2 billion in proceeds from the sale of its life insurance divisions. Those proceeds, and other funds, will be used to support the Chartis units' capital in connection with the strengthening of the loss reserve.

AIG, which was pulled from the brink of bankruptcy by a U.S. bailout, said the strengthening of the reserve reflected "adverse development" in businesses including asbestos, excess casualty and workers' compensation, mostly covering years before 2006.