NEW YORK_Embattled insurer American International Group Inc. disclosed in a regulatory filing that it could face additional losses on credit default swaps remaining on its books.

As of March 31, AIG had about $192.6 billion outstanding of the swaps, which were primarily written for European financial institutions. Continued declines in the value of the contracts could have a "material adverse effect" on the insurer's financial results, according to the filing submitted late Monday to the Securities and Exchange Commission.

Credit default swaps are essentially insurance contracts protecting an investor against default on an underlying investment, such as mortgage-backed securities. Underwriting of the risky contacts were at the heart of AIG's near collapse last fall when it took an initial $85 billion bailout from the government to remain in business.


New York-based AIG has since received additional loan packages from the government, which now total $182.5 billion. The government has received an 80 percent stake in the insurer as part of the loan package.

The swaps remaining in AIG's portfolio consist mostly of protection against default on underlying corporate loans and residential mortgages. As the value of those underlying loans and mortgages fall or they default, the value of the swaps would decline as well. That would force AIG to take unrealized losses on its portfolio.

AIG is in the process of shedding assets and spinning off some of its subsidiaries in an effort to repay the government and return to profitability. Last week, it announced plans to spin off two life insurance subsidiaries.