AIG says it's talking with N.Y. Fed about 'alternatives'

CHARLOTTE -- "We continue to work with the Federal Reserve Bank of New York to evaluate potential new alternatives for addressing AIG's financial challenges," AIG spokesman Joseph Norton said. "We will provide a complete update when we report financial results in the near future."

The comments came after CNBC reported that the New York-based insurer will soon report a $60 billion loss and ask the government for more support.

A Treasury spokesman declined to comment.

On the brink of failure in September, AIG was bailed out when the government offered it an $85 billion loan. AIG's bailout swelled to about $150 billion in November when the Federal Reserve and U.S. Treasury stepped in with more cash after it became apparent the insurer needed more to stay afloat.

Problems at AIG did not come from its traditional insurance operations, but from its financial services units, primarily its business that insured mortgage-backed securities and other risky debt against default.

If AIG couldn't make good on its promise to pay off on the sour securities, investors feared the consequences would pose a threat to the U.S. financial system, leading to the government bailout.