"We have already begun the process to remediate the material weakness identified by [PricewaterhouseCoopers]," said Sullivan, on a conference call after the company disclosed a record $5.3 billion fourth-quarter loss on Thursday.
AIG earned the "material weakness" rebuke from its auditor after a unit, AIG Financial Products, disclosed it had to write down derivatives exposed to bad mortgage bets.
Sullivan said that Joe Cassano, who has been head of AIG Financial Products, would retire from the company at the end of March.