<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>5
<FILENAME>y66975exv5.txt
<DESCRIPTION>OPINION RE VALIDITY
<TEXT>
<PAGE>
                                                                       EXHIBIT 5

               [Letterhead of American International Group, Inc.]

                                                               December 18, 2002





American International Group, Inc.
70 Pine Street
New York, New York 10270

Ladies and Gentlemen:

                  In connection with the registration under the Securities Act
of 1933 (the "Act") of 25,000,000 shares (the "Shares") of common stock, par
value $2.50 per share (the "Common Stock"), of American International Group,
Inc. (the "Company") to be offered under the American International Group, Inc.
Amended and Restated 2002 Stock Incentive Plan (the "Plan") and together with
the applicable RSU Award Agreement, I, as Vice President and Deputy General
Counsel of the Company, have examined such corporate records, certificates and
other documents, and such questions of law, as I have considered necessary or
appropriate for the purposes of this opinion.

                  Upon the basis of such examination, I advise you that, in my
opinion, when the registration statement relating to the Shares (the
"Registration Statement") has become effective under the Act and the Shares are
duly issued and delivered pursuant to the Plan, the Shares will be validly
issued, fully paid and non-assessable.

                  The foregoing opinion is limited to the Federal laws of the
United States and the General Corporation Law of the State of Delaware, and I am
expressing no opinion as to the effect of the laws of any other jurisdiction.

                  I have relied as to certain matters on information obtained
from public officials, officers of the Company and other sources believed by me
to be responsible and I have assumed that the certificates for the Shares will
conform to the specimen of Common Stock examined by me and will be duly
countersigned by a transfer agent and duly registered by a registrar of the
Common Stock, that at the time of delivery of each Share all conditions to such
delivery shall have been satisfied or waived, and that the signatures on all
documents examined by me are genuine, assumptions which I have not independently
verified.


<PAGE>
American International Group, Inc.
December 18, 2002
Page 2


            I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Interests
of Named Experts and Counsel" in the Registration Statement. In giving such
consent, I do not thereby admit that I am in the category of persons whose
consent is required under Section 7 of the Act.

                                         Very truly yours,

                                         /s/ Kathleen E. Shannon
                                         ------------------------------------
                                         Kathleen E. Shannon


</TEXT>
</DOCUMENT>
