The US Government has restructured its bailout of AIG, increasing its financial rescue package to $US150 billion ($228 billion).

The extra injection is intended to stabilise the insurer following the announcement of a record third-quarter loss, driven by investment writedowns.

Under the new plan the US Treasury will buy $US40 billion ($60.81 billion) in AIG preferred shares as part of a comprehensive plan to restructure federal aid to the “systematically important company”.

The Emergency Economic Stabilisation Act will allow AIG to pay a reduced interest rate on its borrowings. The loan will also be extended from two to five years, easing the pressure on the insurance giant to sell its business lines and other assets to repay the Government.

But despite the capital injection, the US Treasury says AIG must comply with the same “stringent limitations” on executive bonuses and golden parachutes as other financial institutions that receive government financial assistance.

And it has warned AIG to “continue to maintain and enforce newly adopted restrictions put in place by the new management on corporate expenses”.