It's the AIG Financial Products Corp, the AIG's derivatives unit in U.S.. The other units, in fact, are, in good shape and mkaing profits.

This unit got parent AIG in trouble by writting too much CDS ( Credit Default Swap) in past several years. AIG is is one of the world's largest counterparties in the market for credit default swaps. Since the sub-prime crisis began, AIG had to pay the protection buyers on the default MBS (Mortgage Backed Security). Also, AIG had to add more collateral if the CDS referenced debt was downgraded or AIG own rating was downgraded by rating agency. In November, AIG estimated that if Moody's and S&P downgraded its long-term senior debt ratings one notch, the insurer would have to come up with almost $8 billion in collateral and termination payments for counterparties.

All these things added together, AIG didn't have enough short-term liqudity (流动性) to meet the collateral call, it had to aks US goverment for help, 'cause at that time there was no private investors wanted to lend money to AIG.

In China, AIG business primaryly cover personal insurance, not financial product. Right now, AIG want to sell its Asia business, but there is lack of buyer. Only Metlife expressed interest with about $10bn bid price which is very low. Latest news says that China Life may want to purchase its Aisa unit.

Hop it will help you!