AIG is reportedly in the process of selling American Life Insurance Co, one of its biggest life insurance divisions, to New-York based rival MetLife for between $US14-15 billion ($16-17 billion).

If it comes to pass, the sale would mark AIG’s largest asset divestiture since the giant financial services provider was bailed out by the US Government.

It’s a bailout that US Treasury Secretary Timothy Geithner and his predecessor Henry Paulson have stood firmly behind, despite both men being grilled by a critical congressional committee.

The committee took the two men to task for the decision in November 2008 to buy toxic AIG credit default swaps from various banks for about $US30 billion ($33.7 million).