The US Federal Reserve has offered even more cash to the struggling AIG. Less than a month after its US$85 billion ($129 billion) bailout package, the bank has made another $US37.8 billion ($57 billion) available as the insurer works to clear its liabilities.

This brings the total amount made available to AIG from the US Government to around $US122.8 billion ($187.8 billion).

The second injection will swap cash for fixed-income securities owned by domestic life insurance subsidiaries of the world’s largest insurer. AIG says the securities are investment grade and will be lent, in return for the cash, to the Federal Reserve on an “overnight basis”.

“These borrowings will allow AIG to replenish liquidity on an as-needed basis, while providing possession and control of these third-party securities to the Fed,” the company said.

US lawmakers are investigating claims the company was warned about the fragility of its position several months before the bailout.

The Congress Oversight and Government Committee has revealed a letter from the Office of Thrift Supervision warned AIG accountants the company’s financial products “lack critical elements of independence, transparency and granularity”.