Troubled US insurer AIG copped further criticism at a Congressional Oversight Panel last week, despite assurances that it will pay back its debt to the US Government in full.

In what must have been a difficult day for the company, it was characterised as a “corporate Frankenstein” by the Chairman of the panel, in addition to having its ability to repay the more than $US180 billion ($211 billion) of financial aid it has received from the US Government questioned by numerous parties.

US Treasury Chief Restructuring Officer Jim Millstein told the panel the Treasury Department will seek to sell its nearly 80% stake in the company “as soon as practicable” after AIG improves its credit rating to A.

The company is currently rated one level lower than this at A- by Standard & Poor’s.

Mr Millstein says the sale of AIG’s two biggest international life insurance companies, American International Assurance and American Life Insurance, are expected to generate enough cash to pay off the $US83.2 billion ($97.4) the company owes in loans and interest to the New York Federal Reserve.

On a more positive note, he says AIG has reduced its exposure to credit derivatives by nearly two-thirds to $US136 billion ($159 billion). About $US109 billion ($128 billion) of its remaining exposure is tied to transactions with European banks.

It was, unsurprisingly, left to AIG President and CEO Robert Benmosche to defend the company and its ability to recover from its current situation.

“I believe we will pay back all we owe to the US Government” with “suitable profit” he told the panel.