AIG plans to offer retention payouts of between 5 and 10 per cent of their annual production to independent brokers affiliated with its SagePoint Financial, FSC Securities, and Royal Alliance Associates brokerage subsidiaries who produce more than $300,000 a year in commissions and fees, media reports said.

"This is not an AIG bonus program," an AIG spokeswoman told Dow Jones. "Rather, this common industry practice, conservative in its structure and limited to high-performing advisors and is designed to invest in independent, non-employee financial advisors' practices and encourage them to continue to partner with our broker-dealers, Royal Alliance, SagePoint, and FSC, to grow these businesses."

The payouts come in the form of two-year forgivable loans from AIG - that have to be paid back if brokers fail to meet agreed-on production goals.

New York-based insurer AIG is one of a few US firms including Lehman Brothers and mortgage-market makers Fannie Mae and Freddie Mac whose exposure to US residential mortgages - or to investment and insurance products tied to them - helped send the country's financial service industry into a tailspin a year ago.

AIG's chief executive Robert Benmosche recently backed away from a plan to sell the company's independent brokerage business on the grounds that a sale in this depressed market would amount to a "fire sale" of valuable assets.

AIG has however sold off other assets, and news emerged this week of the sale of its external fund management unit to Pacific Century Group of Hong Kong for around $500 million.