x

a.

The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.

o

b.

The filing of a registration statement under the Securities Act of 1933.

o

c.

A tender offer.

o

d.

None of the above.

(1)

For purposes of calculating the filing fee only, the proposed maximum aggregate value of the transaction, is $811,083,026, which is the sum of (a) the product of (i) the 34,657,198 shares of common stock that are proposed to be converted into the right to receive the merger consideration, multiplied by (ii) the merger consideration of $22.00 per share of common stock, plus (b) the product of (i) 6,934,391, the number of shares of common stock underlying options to purchase such shares at a per-share exercise price of less than $22.00, multiplied by (ii) the amount by which the per-share merger consideration of $22.00 exceeds the $15.1952 per share weighted average exercise price of such options, plus (c) the product of (i) 96,879, the number of certain shares of restricted common stock multiplied by (ii) the per-share merger consideration of $22.00. The filing fee equals the proposed maximum aggregate value of the transaction multiplied by .0000307.

(2) 

The filing fee, calculated in accordance with Regulation 0-11 under the Securities Exchange Act of 1934, as amended, equals .0000307 multiplied by the total Transaction Valuation.

x 

Check the box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(a)

Name and Address. The information set forth in the Proxy Statement under the caption “PARTIES

INVOLVED IN THE PROPOSED TRANSACTION” is incorporated herein by reference.

(b)

Securities. The information set forth in the Proxy Statement under the captions “THE SPECIAL MEETING—Record Date; Voting Rights” and “MARKET PRICE AND DIVIDEND INFORMATION” is incorporated herein by reference. The exact title of each class of the subject equity securities is “21st Century Insurance Group common stock, par value $0.001 per share”.

(c)

Trading Market and Price. The information set forth in the Proxy Statement under the caption “MARKET PRICE AND DIVIDEND INFORMATION”  is incorporated herein by reference.

(d)

Dividends. The information set forth in the Proxy Statement under the caption “MARKET PRICE AND DIVIDEND INFORMATION” and “THE MERGER AGREEMENT—Conduct of the Company’s Business Pending the Merger” is incorporated herein by reference.

(e)

Prior Public Offerings. The information set forth in the Proxy Statement under the caption “PRIOR PUBLIC OFFERINGS AND STOCK PURCHASES” is incorporated herein by reference.

(f)

Prior Stock Purchases. The information set forth in the Proxy Statement under the caption “PRIOR PUBLIC OFFERINGS AND STOCK PURCHASES” is incorporated herein by reference.

(a)

Name and address. The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET”, “PARTIES INVOLVED IN THE PROPOSED TRANSACTION”, “DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY” and “INFORMATION REGARDING THE TRANSACTION PARTICIPANTS” is incorporated herein by reference. The Company is the subject company.

(b)

Business and background of entities. The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET”, “PARTIES INVOLVED IN THE PROPOSED TRANSACTION”, “DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY” and “INFORMATION REGARDING THE TRANSACTION PARTICIPANTS” is incorporated herein by reference.

(c)

Business and background of natural persons. The information set forth in the Proxy Statement under the captions “DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY” and “INFORMATION REGARDING THE TRANSACTION PARTICIPANTS” is incorporated herein by reference.

(a)

(1)

Material Terms. Tender Offers. Not Applicable.

(2)

Material Terms. Mergers or Similar Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “THE SPECIAL MEETING,” “SPECIAL FACTORS,” “THE MERGER AGREEMENT,” and “Annex A—Agreement and Plan of Merger.”

(c)

Different Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Certain Effects of the Merger,” “SPECIAL FACTORS—Interests of Certain Persons in the Merger,” “THE MERGER AGREEMENT—Treatment of Stock and Options” and “THE MERGER AGREEMENT—Treatment of Other Equity-Based Compensation Arrangements.”

(d)

Appraisal Rights. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND

ANSWERS ABOUT THE MERGER”, “SPECIAL FACTORS—Appraisal Rights”, “THE MERGER AGREEMENT—Appraisal Rights” and “Annex C—Section 262 of the General Corporation Law of the State of Delaware.”

(e)

Provisions For Unaffiliated Security Holders. None.

(f)

Eligibility for Listing or Trading. Not applicable.

(a)

Transactions. The information set forth in the Proxy Statement under “SPECIAL FACTORS—Background of the Merger”, “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee”, “SPECIAL FACTORS—Interests of Certain Persons in the Merger”, “THE MERGER AGREEMENT” and “CERTAIN TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS AND AFFILIATES” is incorporated herein by reference.

In the ordinary course of business, the Company and its subsidiaries have completed various transactions with AIG to meet their investment, reinsurance, and insurance needs. The Company’s reinsurance and investment services are purchased through competitive bidding processes with the Company selecting the services providing a combination of the best services and the lowest bids. In 2006, the investment services cost $1.1 million, the reinsurance premiums, covering automobile catastrophes, payable to AIG and its subsidiaries totaled $1.0 million, and the corporate insurance policies listed below totaled $3.7 million. The Company has obtained the following corporate insurance policies from AIG subsidiaries:

1. General liability;

2. Automobile liability;

3. Workers’ compensation;

4. Umbrella excess insurance;

5. Property insurance;

6. Fiduciary liability insurance;

7. Fidelity; and

8. Employment practices liability insurance.

The Company committed $35 million to an AIG Global Investment Corp. managed fund of private equity investments and funded $14.4 million of the $35 million commitment in 2006.

(b)

Significant Corporate Events. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending the Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—Interests of Certain Persons in the Merger” and “THE MERGER AGREEMENT.”

(c)

Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors;

Reasons for Recommending the Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—Interests of Certain Persons in the Merger” and “THE MERGER AGREEMENT.”

(e)

Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “THE SPECIAL MEETING—Record Date; Voting Rights,” “SPECIAL FACTORS—Recommendations of the Special Committee and Board of Directors; Reasons for Recommending the Approval and Adoption of the Merger,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Certain Effects of the Merger,” “THE MERGER AGREEMENT”, “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS” and “AGREEMENTS INVOLVING THE COMPANY’S SECURITIES.” The information set forth above in Item 2(f) of this Schedule 13E-3 is incorporated herein by reference.

(b)

Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “THE SPECIAL MEETING,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Certain Effects of the Merger,” “THE MERGER AGREEMENT—Effective Time; Structure; Effects” and “THE MERGER AGREEMENT—Treatment of Stock and Options.”

(c)
(1)-
(8)

Plans. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending the Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—Certain Effects of the Merger,” “SPECIAL FACTORS—Interests of Certain Persons in the Merger,” “SPECIAL FACTORS—Plans for the Company if the Merger is Not Completed” and “THE MERGER AGREEMENT—Effective Time, Structure; Effects.”

(a)

Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending the Approval and Adoption of the Merger Agreement,” and “SPECIAL FACTORS—Plans for the Company if the Merger is Not Completed.”

(b)

Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS— Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending the Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Alternatives to the Merger,” “SPECIAL FACTORS—Purpose and Reasons for the Merger” and “SPECIAL FACTORS—Plans for the Company if the Merger is Not Completed.”

(c)

Reasons. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and Board of Directors; Reasons for Recommending the Approval and Adoption of the Merger,” “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee,” and “Annex B—Opinion of Lehman Brothers Inc.”

(d)

Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee,” “SPECIAL FACTORS—Certain Effects of the Merger,” “SPECIAL FACTORS—Interests of Certain Persons in the Merger,” “SPECIAL FACTORS—Federal Income Tax Consequences,” “SPECIAL FACTORS—Purpose and Reasons for the Merger” and “THE MERGER AGREEMENT.”

(a)

Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SPECIAL FACTORS—Purposes and Reasons for the Merger,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee,” and “Annex B—Opinion of Lehman Brothers Inc.”

The presentation dated May 14, 2007, prepared by Lehman Brothers Inc. for the Special Committee of the Board of Directors of the Company, is attached hereto as Exhibit (c)(2) and is incorporated by reference herein.

(b)

Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SPECIAL FACTORS—Purposes and Reasons for the Merger,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries),” SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee,” “Annex B—Opinion of Lehman Brothers Inc.,” and “SPECIAL FACTORS—Certain Effects of the Merger.”

The presentation dated May 14, 2007, prepared by Lehman Brothers Inc. for the Special Committee of the Board of Directors of the Company, is attached hereto as Exhibit (c)(2) and is incorporated by reference herein.

(c)

Approval of Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “THE SPECIAL MEETING—Record Date; Voting Rights,” “THE SPECIAL MEETING—Quorum,” “THE SPECIAL MEETING—Required Vote,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries)” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries)” and “THE MERGER AGREEMENT—Conditions to the Merger.”

(d)

Unaffiliated Representative. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee” and “Annex B—Opinion of Lehman Brothers Inc.”

(e)

Approval of Directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries)” and “SPECIAL FACTORS—the Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries).”

(f)

Other Offers. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement” and “SPECIAL FACTORS—the Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries).”

(a)

Report, Opinion or Appraisal. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee,” “SPECIAL FACTORS— Summary of BAS and JPMorgan presentations to AIG” and “Annex B—Opinion of Lehman Brothers Inc.”

The presentation dated December 15, 2006, prepared by Lehman Brothers Inc. for the Special Committee of the Board of Directors of the Company, is attached hereto as Exhibit (c)(2) and is incorporated by reference herein.

The presentation dated May 14, 2007, prepared by Lehman Brothers Inc. for the Special Committee of the Board of Directors of the Company, is attached hereto as Exhibit (c)(3) and is incorporated by reference herein.

The presentations dated January 16, 2007 and March 30, 2007, each prepared by Banc of America Securities LLC and JPMorgan Chase for AIG, are attached hereto as Exhibits (c)(4) and (c)(5) and are incorporated by reference herein.

The materials dated December 1, 2006, prepared by Lehman Brothers Inc., are attached hereto as Exhibit (c)(6) and are incorporated by reference herein.

The presentation dated February 8, 2007, prepared by Lehman Brothers Inc. for the Special Committee of the Board of Directors of the Company, is attached hereto as Exhibit (c)(7) and is incorporated by reference herein.

(b)

Preparer and Summary of the Report, Opinion or Appraisal. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM

SHEET,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—the Company’s Position as to the Fairness of the Merger to the Company’s Stockholders (other than AIG and its subsidiaries),” “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee,” “SPECIAL FACTORS— Summary of BAS and JPMorgan presentations to AIG” and “Annex B—Opinion of Lehman Brothers Inc.”

The presentation dated December 15, 2006, prepared by Lehman Brothers Inc. for the Special Committee of the Board of Directors of the Company, is attached hereto as Exhibit (c)(2) and is incorporated by reference herein.

The presentation dated May 14, 2007, prepared by Lehman Brothers Inc. for the Special Committee of the Board of Directors of the Company, is attached hereto as Exhibit (c)(3) and is incorporated by reference herein.

 The presentations dated January 16, 2007 and March 30, 2007, each prepared by Banc of America Securities LLC and JPMorgan Chase for AIG, are attached hereto as Exhibits (c)(4) and (c)(5) and are incorporated by reference herein.

The materials dated December 1, 2006, prepared by Lehman Brothers Inc., are attached hereto as Exhibit (c)(6) and are incorporated by reference herein.

The presentation dated February 8, 2007, prepared by Lehman Brothers Inc. for the Special Committee of the Board of Directors of the Company, is attached hereto as Exhibit (c)(7) and is incorporated by reference herein.

(c)

Availability of Documents. The reports, opinions or appraisal referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company or AIG during regular business hours by any interested holder of common stock or any representative who has been designated in writing.

(a)-and
(c)

Source of Funds; Conditions; Expenses; Borrowed Funds. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “THE SPECIAL MEETING—Required Vote,” “SPECIAL FACTORS—Purpose and Reasons for the Merger,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Financing of the Merger” and “SPECIAL FACTORS—Estimated Fees and Expenses of the Merger.” In connection with the merger, AIG estimates that the total amount of funds required to purchase all of the outstanding common stock of the Company not currently owned by AIG and its subsidiaries in the Merger and to pay estimated fees and expenses will be approximately $825 million. AIG will use working capital, including cash and/or proceeds of commercial paper issuances, to finance the consummation of the Merger and the associated fees and expenses.

(a)

Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “SPECIAL FACTORS—Interests of Certain Persons in the Merger,” “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS” and “BENEFICIAL OWNERSHIP OF SECURITIES.”

(b)

Securities Transactions. The information set forth in the Proxy Statement under “RECENT TRANSACTIONS” is incorporated herein by reference.

(d)

Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “THE SPECIAL MEETING—Record Date; Voting Rights,” “THE SPECIAL MEETING—Required Vote,” “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company Stockholders (other than AIG and its subsidiaries); “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending the Approval and Adoption of the Merger Agreement” “SPECIAL FACTORS—Position of AIG as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries)” and “SPECIAL FACTORS—Interests of Certain Persons in the Merger.”

(e)

Recommendation of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Position of AIG and Merger Sub as to the Fairness of the Merger to 21st Century’s Stockholders (other than AIG and its subsidiaries)” and “SPECIAL FACTORS—The Company’s Position as to the Fairness of the Merger to the Company Stockholders (other than AIG and its subsidiaries).”

(a)

Financial Information. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SELECTED HISTORICAL FINANCIAL DATA,” “RATIO OF EARNINGS TO FIXED CHARGES” and “WHERE YOU CAN FIND MORE INFORMATION.” The information contained in the Consolidated Financial Statements included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2006 and in its quarterly reports on Form 10-Q for its quarters ended March 31, 2007 and June 30, 2007 is incorporated herein by reference. Certain of the materials filed as Exhibits (c)(2)-(c)(7) to this Schedule 13E-3 include projected financial information. The Company does not, as a matter of course, publicly disclose projections of future revenues or earnings. However, as requested, senior management did provide financial forecasts to AIG, the Special Committee and its financial advisor, Lehman Brothers. The projections were not prepared with a view to public disclosure and are included in this Schedule 13E-3 only because such information was made available to AIG in connection with its due diligence investigation of the Company. The projections were not prepared with a view to compliance with the published guidelines of the SEC regarding projections, nor were they prepared in accordance with generally accepted accounting principles or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial projections. The projections included in this Schedule 13E-3  have been prepared by, and are the responsibility of the Company’s management. PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, has neither examined nor compiled the projections, and accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect to the projections  included in any of the presentations filed as Exhibits to this Schedule 13E-3. The audit report incorporated by reference into this transaction statement relates to the Company’s historical financial information. It does not extend to the prospective financial information and should not be read to do so.

(b)

Pro Forma Information. Not applicable.

(a)- (b)

Solicitations or Recommendations; Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: “SUMMARY TERM SHEET,” “THE SPECIAL MEETING—Solicitation of Proxies,” “SPECIAL FACTORS—Background of the Merger,” “SPECIAL FACTORS—Recommendations of the Special Committee and the Board of Directors; Reasons for Recommending the Approval and Adoption of the Merger Agreement,” “SPECIAL FACTORS—Opinion of the Financial Advisor to the Special Committee,” “SPECIAL FACTORS—Interests of Certain Persons in the Merger,” “SPECIAL FACTORS—Estimated Fees and Expenses of the Merger,” and “Annex B—Opinion of Lehman Brothers Inc.”

(b)

Other Material Information. The entirety of the Proxy Statement, including all Annexes thereto, is incorporated herein by reference.

(a)

(1)

Definitive Proxy Statement for the special meeting of the stockholders of 21st Century Insurance Group (other than AIG and its subsidiaries), incorporated herein by reference to the Schedule 14A filed with the Commission on August [   ], 2007, as amended (the “Proxy Statement”).

(a)

(2)

Form of Proxy Card filed with the Commission together with the Proxy Statement.

(a)

(3)

Form of Letter to Stockholders filed with the Commission together with the Proxy Statement.

(a)

(4)

Press Release dated May 15, 2007 (filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated May 16, 2007 and incorporated herein by reference).

(c)

(1)

Opinion of Lehman Brothers Inc. (attached as Annex B to the Proxy Statement and incorporated herein by reference).

(c)

(2)

Presentation materials, dated as of December 15, 2006, prepared by Lehman Brothers Inc.*

(c)

(3)

Presentation materials, dated as of May 14, 2007, prepared by Lehman Brothers Inc.*

(c)

(4)

Presentation materials, dated as of January 16, 2007, prepared by Banc of America Securities LLC and JPMorgan Chase.*

(c)

(5)

Presentation materials, dated as of March 30, 2007, prepared by Banc of America Securities LLC and JPMorgan Chase.*

(c)

(6)

Materials, dated as of December 1, 2006, prepared by Lehman Brothers Inc.***

(c)

(7)

Presentation materials, dated as of February 8, 2007, prepared by Lehman Brothers Inc.***

(d)

(1)

Agreement and Plan of Merger dated as May 15, 2007, among 21st Century Insurance Group, American International Group, Inc. and AIG TW Corp. (incorporated herein by reference to Annex A to the Proxy Statement).

(d)

(2)

Employment Agreement entered into as of May 15, 2007, by and between 21st Century Insurance Group, American International Group, Inc. and Bruce W. Marlow (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 18, 2007 and incorporated herein by reference).

(d)

(3)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Michael J. Cassanego (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 18, 2007 and incorporated herein by reference).

(d)

(4)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Dean E. Stark (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated May 18, 2007 and incorporated herein by reference).

(d)

(5)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Michael T. Ray (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K dated May 18, 2007 and incorporated herein by reference).

(d)

(6)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Jesus C. Zaragoza (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K dated May 18, 2007 and incorporated herein by reference).

(d)

(7)

Confidentiality Agreement dated August 17, 2006, by and between 21st Century Insurance Group and American International Group, Inc.*

(d)

(8)

Investment and Strategic Alliance Agreement, dated as of October 17, 1994, by and between 20th Century Industries and AIG (filed as Exhibit B to the Statement on Schedule 13D, dated December 16, 1994, previously filed by AIG and incorporated herein by reference).

(d)

(9)

Registration Rights Agreement, dated as of December 16, 1994, by and between 20th Century Industries and AIG (filed as Exhibit H to the Statement on Schedule 13D, dated December 16, 1994, previously filed by AIG and incorporated herein by reference).

(d)

(10)

Amendment No. 1 to Investment and Strategic Alliance Agreement, dated as of March 23, 1995, by and between 20th Century Industries and AIG (filed as Exhibit A to Amendment No. 1 to the Statement on Schedule 13D, dated March 23, 1995, previously filed by AIG and incorporated herein by reference).

(d)

(11)

Amendment No. 1 to Agreement and Plan of Merger, dated as of June 8, 2007, among the Company, AIG and Merger Sub (incorporated herein by reference to Annex D to the Proxy Statement).

(d)

(12)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Richard A. Andre.**

(d)

(13)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Chong Ha.**

(d)

(14)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Marlis S. Kerby.**

(d)

(15)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Allen Lew.**

(d)

(16)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and John M. Lorentz.**

(d)

(17)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Caren L. Silvestri.**

(d)

(18)

Retention and Severance Agreement entered into as of May 14, 2007 between 21st Century Insurance Group and Anthony W. Tomich.**

(f)

(1)

Appraisal rights are described under the caption “SPECIAL FACTORS—Appraisal Rights” set forth in the Proxy Statement and in Annex C to the Proxy Statement entitled Section 262 of the General Corporation Law of the State of Delaware and are incorporated herein by reference.

21ST CENTURY INSURANCE GROUP

By:

/s/ Steven P. Erwin

Steven P. Erwin

Senior Vice President and Chief Financial Officer

AMERICAN INTERNATIONAL GROUP, INC.

/s/ Kathleen E. Shannon

Kathleen E. Shannon

Senior Vice President and Secretary

AIG TW CORP.

/s/ Brian T. Schreiber

Brian T. Schreiber

President