NEW YORK (Reuters) Bailed-out insurer American International Group Inc said it would take a $4.1 billion charge at its Chartis unit after a review showed higher-than-expected claims on older policies for asbestos exposure and workers’ compensation.In a further bid to bolster capital at the unit, the US government will allow AIG to retain $2 billion from recent sales.Under chief executive Robert Benmosche, AIG had been selling businesses such as its AIG Star Life Insurance Co and AIG Edison Life Insurance Co to refocus on core units including global property insurer Chartis and US life insurer SunAmerica.But an annual loss-reserve review of Chartis showed it needed to put more money aside for accidents, mostly from 2005 and earlier, AIG said in a statement yesterday.To boost capital at Chartis after the fourth-quarter charge, the US government agreed to let AIG keep half of its $4 billion in proceeds from the Star Life and Edison Life sales.“I’m not surprised by this,” said analyst Cathy Seifert. “I think it’s a very prudent move.”Chartis’ reserving practices and methodology prior to 2005 seemed a little aggressive, relative to peers and in consideration of the mix of business it was writing, she explained.AIG shares were down 63 cents or 1.5 percent at $41.74 in morning trading, after earlier falling as much as 2.9 percent.The US government will still be repaid in full for its investment in AIG despite the change in the distribution of asset sale proceeds, a source familiar with the matter said.“At the end of the day, the whole point is strengthening (AIG’s) balance sheet,” said the source, who was not authorised to discuss the matter publicly.The company and the US Treasury plan to sell at least $15 billion in stock in May.The reserve strengthening a total of $4.6 billion, excluding $446 million in discount and premium adjustments is mostly in response to asbestos, excess casualty, excess workers’ compensation and primary workers’ compensation claims, AIG said.Changes to expectations of asbestos-related claims made up most of the charge. AIG said it had changed some of its loss-reserve-related assumptions, “taking into consideration recent, higher industrywide trends regarding expanding coverage theories for liability”.The changes in loss estimates for excess and primary workers’ compensation resulted from continuing medical inflation, additional treatment specialties and longer claim periods, the company said. Losses from primary workers’ compensation were “further compounded by reduced return to work opportunities in today’s high unemployment environment.”