American International Group Inc. (AIG) plans to spin off its Asian life insurance unit in a US$5 billion-US$10 billion Hong Kong initial public offering in the first quarter of next year, a person familiar with the situation said Thursday.

The cash-striken insurer will likely sell 25% to a third of American International Assurance Co., and maintain majority control of the operation, the person added.

-By Amy Or, Dow Jones Newswires; 852-2832 2335; amy.or@dowjones.com