TAIPEI (Reuters) - Bailed-out insurer American International Group (AIG) faced the prospect of finding another buyer for its Taiwan unit after regulators threw out its proposed $2.2 billion sale to a Chinese company.

Taiwan's economics ministry said AIG's plan to sell Nan Shan Life to battery maker China Strategic and Hong Kong investment firm Primus did not comply with regulations on mainland investment nor meet criteria on experience in the insurance business and ability to raise funds.

It gave the buyers 30 days to appeal, but noted that no previous such appeals had succeeded.

AIG, which needs to sell assets to pay back the US government for a bailout, first agreed to sell Nan Shan last October, but suspicions in Taiwan about the connections of China Strategic with political foe China held up the deal.

The rejection of AIG's Nan Shan plan was the second collapse of a planned Asian deal in four months.

In a statement, AIG said it was disappointed by the decision and was conferring with the buyers on whether to appeal.