American International Group said in a statement that American International Assurance would have its own board of directors and management team after the listing, but did not disclose which stock exchange it is planning to use.

It said it 'will accelerate steps to position the AIA Group as an independent entity and seek a public listing on an Asia stock exchange for the group, depending on market conditions and subject to regulatory approval.'

The listing represents an attempt to distance the Asian insurance arm from its parent group, whose reputation has been overshadowed by a huge Washington bailout after it was battered at the onset of the credit crisis last year.

'At this stage, we believe that a public listing for AIA would be in the best interests of all stakeholders, including US taxpayers, policyholders, employees and distribution partners,' said Edward Liddy, chairman and chief executive officer of AIG.

Mark Wilson, president and chief executive officer of AIA, said the listing announcement represented a 'clear and formal roadmap for our independence'.

A source told Dow Jones Newswires that up to a third of AIA would be floated on the Hong Kong Stock Exchange to raise between US$5 billion (S$7.36 billion) to US$10 billions in the first quarter of next year.

AIG will on Friday invite investment banks to submit proposals to underwrite the listing, according to the source.

The listing plan is the second of AIG's attempts to sell the unit. The cash-stricken insurer earlier this year dropped a plan to sell as much as a 49 per cent stake due to a lack of substantial bids. -- AFP