American International Group Inc's board is looking for a new director with regulatory experience, as the insurer readies for the government to classify it as big enough to merit greater scrutiny, according to two sources familiar with the situation.
AIG, which is already regulated by the U.S. Federal Reserve, expects more oversight if it is declared a "systemically important financial institution," or SIFI. The designation is widely expected after the U.S. Financial Stability Oversight Council told the company in October that it may do so.
AIG's board is looking at candidates who have run regulated financial institutions as well as former regulators, according to the sources. There is no specific time frame or deadline for a new director to be named, the sources said. The names of potential candidates could not be learned.
AIG spokesman Matt Gallagher declined to comment on Wednesday.
AIG has been reshaping its board since repaying the government's crisis-era bailout. The search for a director with regulatory experience highlights how major financial institutions now feel even more pressure to manage their relationships with regulators.
Earlier this month, AIG shareholders elected two new directors to the board with insurance experience: William Jurgensen, former CEO of Nationwide Insurance, and Theresa Stone, a former insurance executive.
The board's regulatory, compliance and public policy committee, is chaired by Douglas Steenland, the former CEO of Northwest Airlines Corp and includes Jurgensen and Henry Miller, a restructuring expert. The committee's duties include reviewing AIG's relations with regulators and governmental agencies.
The search for a new director would also help the board identify candidates as board members retire or leave for other reasons, according to the sources.
Long-time director Morris Offit retired from the board this month at the insurer's annual meeting. Arthur Martinez, the former chief executive of Sears, Roebuck and Co, is 73 and now the oldest member of the board, according to an AIG regulatory filing in April. The board's retirement age is 75.
AIG was rescued during the financial crisis by the U.S. government, which pledged $182 billion in taxpayer funds to prop up the insurer. Under its outspoken chief executive, Robert Benmosche, the insurer has since engineered a turnaround, and ended the last vestiges of the bailout in March.
(Reporting By Nadia Damouni and Paritosh Bansal in New York; Editing by Dan Wilchins and Leslie Gevirtz)