Top executives of AIG, the beleaguered global insurance giant, had visited China and still in talks with a Chinese firm over the sale of its Asian unit - American International Assurance (AIA), said a Chinese regulator.

The Chinese government, though supportive of sound Chinese firms to seek acquisition abroad, would not meddle in the business talks, said China Insurance Regulatory Commission vice-chairman Li Kemu at a press conference on China's insurance industry outlook on Thursday.

Li said Chinese regulators were more concern of the performance of AIA in the country as that would affect the well being of Chinese policy holders. He added the Chinese authorities had held several talks with US and Hong Kong regulators on the subject.

"As of now, AIA operation in China appear to be running smoothly," he said.

AIG had said last year it planned to sell all assets except its U.S. property and casualty business, foreign general insurance and an ownership interest in some foreign life operations, as it sought to raise funds to repay the US government for a bail out that had swelled over 100 billion US dollars.

The Group had been looking for interested bidders for AIA in the past months, and was reportedly in talks with China Life as well.

At the Thursday press conference, Li said despite the gloomy global economic outlook, China would maintain its open policy in welcoming foreign insurance companies and supportive of domestic ones exploring overseas market.

He believed the industry could still find opportunities in the current crisis. His optimism partly stemmed from the strong growth in the Chinese insurance sector last year, with its premium in take jumping nearly 40% to 978.4 billion yuan compared to the previous year.

However, the growth had somehow slowed in January this year, at a rate of 8.6% year-on-year. He attributed the slower growth to the industry's over expansion last year instead of the global economic climate.