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ITEM 7 / CRITICAL ACCOUNTING ESTIMATES.....................................................................................................................................................................................The following table presents key inputs used in the BET model, and the potential increase (decrease) to thefair value of the derivative liability by ABS category at December 31, 2012 corresponding to changes in thesekey inputs:AverageIncrease (Decrease) to Fair Value of Derivative LiabilityInputs Used at Entire RMBS RMBS RMBS(dollars in millions) December 31, 2012 Change Portfolio Prime Alt-A Subprime CMBS CDOs OtherBond prices 41 points Increase of 5 points $ (152) $ (2) $ (10) $ (72) $ (44) $ (15) $ (9)Decrease of 5 points 146 2 9 62 45 14 14Weighted Increase of 1 year 15 1 – 11 2 – 1average life 5.75 years Decrease of 1 year (23) (1) – (18) (3) (1) –Recovery rates 17% Increase of 10% (13) – (2) (8) (1) (1) (1)Decrease of 10% 15 – 2 9 3 1 –Diversity score (a) 14 Increase of 5 (4)Decrease of 5 11Discount curve (b) N/A Increase of 100bps 10(a) The diversity score is an input at the CDO level. A calculation of sensitivity to this input by type of security is not possible.(b) The discount curve is an input at the CDO level. A calculation of sensitivity to this input by type of security is not possible. Furthermore, forthis input it is not possible to disclose a weighted average input as a discount curve consists of a series of data points.These results are calculated by stressing a particular assumption independently of changes in any other assumption.No assurance can be given that the actual levels of the key inputs will not exceed, perhaps significantly, the rangesassumed by us for purposes of the above analysis. No assumption should be made that results calculated from theuse of other changes in these key inputs can be interpolated or extrapolated from the results set forth above...................................................................................................................................................................................................................................194 AIG 2012 Form 10-K