American International Group has decreased the money it owes the Federal Reserve Bank of New York by $4 billion and its CEO says he sees “light at the end of the tunnel.”

The president and CEO of American International Group told a congressional panel that not only would the insurer repay the more than $132 billion it was loaned by taxpayers, but would pay more than it received.

The executives at the top of American International Group’s Financial Products unit – largely seen as responsible for the insurer’s near-collapse – will escape any federal charges, according to media reports.

As it works to stabilize its operations and repay billions in federal bailout funding, American International Group reported $1.5 billion in net income through its core insurance business for the first quarter of 2010.

In a move it says is “an important step toward repaying the government,” American International Group has agreed to sell its international life insurer to MetLife for $15.5 billion.

American International Group agreed to sell its Asian life insurance business for $35.5 billion, making it one of the largest insurance deals in history.

American International Group reported a fourth-quarter loss of $8.9 billion, a large improvement over the $61.7 billion in loss it reported for the same period in 2008 when its implosion led to a federal bailout.

With MetLife’s recent admission of talks with American International Group for its life insurance division, A.M. Best has put the ratings of that unit under review.

A House committee has scheduled a hearing to examine the Federal Reserve Bank of New York’s possible role in prohibiting public disclosure of some of the details of the taxpayer bailout of American International Group.

On the heels of the New York Federal Reserve obtaining shares of two American International Group subsidiaries, one U.S. senator wants a clearer picture of how the troubled insurer plan to repay taxpayers.