The Financial Stability Oversight Council voted 6-3 to strip AIG of the designation that its failure could "pose a threat to US financial stability," according to a press release issued yesterday evening by the US Department of Treasury.
The move greatly eases the regulatory oversight of AIG, which was saved through a government bailout at the height of the 2008 financial crisis because of its close links with other key financial institutions.
"The Council has worked diligently to thoroughly reevaluate whether AIG poses a risk to financial stability," said Treasury Secretary Steven Mnuchin, who supported the move.
"This action demonstrates our commitment to act decisively to remove any designation if a company does not pose a threat to financial stability."
More From This Section
Mnuchin was joined in the majority by other regulators including Federal Reserve Chair Janet Yellen, acting comptroller of the currency Keith Noreika and J. Christopher Giancarlo, chair of the Commodities Futures Trading Commission.
Those voting against were Richard Cordray, director of the Consumer Financial Protection Bureau; Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation; and Melvin Watt, director of the Federal Housing Finance Agency.
"The Council's decision reflects the substantial and successful de-risking that AIG's employees have achieved since 2008," said chief executive Brian Duperreault.
"The company is committed to continued vigilant risk management and to working closely with our numerous regulators to enable a strong AIG to continue to serve our clients."
Shares in AIG rose 1.0 per cent in afterhours trade to USD 62.