NEW YORK (Bloomberg)—American International Group Inc. hired Federal Reserve Bank of New York veteran Brian Peters to help manage risk after the bailed-out insurer paid down a credit line with the regulator.

Mr. Peters is joining as a senior managing director in the enterprise risk management group, according to a Jan. 18 memo to staff from Sid Sankaran, chief risk officer. The insurer was rescued by the Fed in 2008 and repaid the last $21 billion it owed the regulator on Jan. 14. Mr. Peters was senior vp in risk management at the New York Fed, where he helped oversee the 12 “largest and most systemically important financial institutions and industry utilities,” according to the memo.

“In his 20-year career at the central bank, Brian played critical roles in addressing the most challenging issues for the financial industry,” Mr. Sankaran wrote in the memo, obtained by Bloomberg News. “Brian will be a key member of the AIG team responsible for working on regulatory issues.”

AIG has been overhauling risk management, and named Mr. Sankaran in November to replace Robert Lewis, who stepped down after about 17 years at AIG and said in June that the New York-based insurer underestimated the danger of subprime loans. AIG on Jan. 27 named Charlie Shamieh to the newly created post of senior vp-corporate chief actuary.

Mr. Peters moved in May to the New York Fed's research and statistics division after working in bank supervision, according to two people familiar with his work history who declined to be identified because the regulator didn't publicly announce his departure. Senior Fed officials who leave are prohibited for six months from attending any meetings with the central bank or from any contact with it on matters related to the area in which the official worked, according to a person familiar with the matter.

Treasury's stake

AIG is preparing for independence from government ownership after repaying the Fed and converting the U.S. Treasury Department’s preferred stake into common stock last month. Treasury owns 92% of the company’s shares after investing about $49 billion through the end of last year and plans to dispose of its stake in stock offerings.

Mr. Peters has a master’s of business administration from New York University’s Stern School of Business and an undergraduate degree from Bucknell University.

Jack Gutt, a spokesman for the New York Fed, declined to comment. AIG’s Mark Herr had no immediate comment.

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