Correction - Fitch Revises Rating Watch to Negative on AIG Subsidiaries being Sold to Zurich.

CHICAGO -- (This corrects a release issued on April 16, 2009 and adds rating information on AIG's subsidiary 21st Century Insurance Group in the first paragraph and list at the end of the release.)

Fitch Ratings has revised its Rating Watch on the insurer financial strength (IFS) ratings of various American International Group, Inc. (AIG) subsidiaries to Negative from Evolving (see full rating list below). Additionally, Fitch has placed the issuer default rating (IDR) of AIG's 21st Century Insurance Group (21st Century) subsidiary and its rating on 21st Century's senior unsecured notes on Rating Watch Negative.

Fitch's rating actions follow today's announcement by AIG that the company has entered into an agreement to sell these subsidiaries to Farmers Group, Inc. (FGI) in exchange for $1.5 billion of cash and $400 million of hybrid securities. FGI is an indirect subsidiary of Zurich Insurance Company (Zurich). Zurich's IFS rating is 'A+' and the companies' Rating Outlook is Negative.

Fitch had placed the AIG subsidiaries' ratings on Rating Watch Evolving on Sept. 17, 2008 after details surrounding the U.S. Government's initial phase of financial assistance to AIG were announced. The ratings remained on Rating Watch Evolving since that time as AIG's plans to divest these specific companies emerged.

The AIG subsidiaries' current IFS ratings are 'AA-', reflecting historic benefits from being part of the AIG organization and, more recently, benefits from a series of transactions with the U.S. Government support that have enhanced AIG's financial stability over the last eight months. The revised Rating Watch status reflects Fitch's expectation that the companies' IFS ratings will likely be downgraded to a level more commensurate with that of Zurich's upon the transaction's close.

Fitch notes that a number of the AIG subsidiaries that are being sold to Zurich are directly owned by AIG operating insurance company subsidiaries rather than directly by the ultimate parent company. Fitch's expectation is that the majority of the proceeds from the sales will be retained in AIG's insurance operating subsidiaries and that the effect on these subsidiaries' capital positions will be modest.

The Rating Watch status on the following companies has been revised to Negative from Evolving:

--21st Century Casualty Company;

--21st Century Insurance Company;

--21st Century Insurance Company of the Southwest;

--AIG Advantage Insurance Company (formerly Minnesota Ins. Co.);

--AIG Auto Insurance Company of New Jersey;

--AIG Centennial Insurance Company;

--AIG Hawaii Insurance Company;

--AIG Indemnity Insurance Company;

--AIG National Insurance Company, Inc.;

--AIG Preferred Insurance Company;

--AIG Premier Insurance Company;

--American International Insurance Company;

--American International Insurance Company of California;

--American International Insurance Company of New Jersey;

--American International Pacific Insurance Company;

--American Pacific Insurance Company;

--New Hampshire Indemnity Company, Inc.

Fitch has placed the following ratings on Rating Watch Negative:

21st Century Insurance Group

--Long-term IDR 'A';

--Senior unsecured notes due Dec. 15, 2013 'A'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.