American International Group Inc said on Thursday it expects to recognize a loss of about $1.4 billion on the sale of Nan Shan Life Insurance Co, its life insurance unit in Taiwan.

AIG agreed on Tuesday to sell the unit to two little-known buyers for $2.15 billion, marking the largest disposal since a U.S. government bailout saved the insurer from collapse last year.

Primus Financial, a firm founded by Citigroup Inc's former Asia investment banking head, together with China Strategic Holdings <0235.HK>, are to buy Nan Shan Life.

AIG expects to meet the criteria for held-for-sale accounting with respect to Nan Shan and recognize the loss, which is net of taxes, in the fourth quarter, it said in a U.S. Securities and Exchange Commission filing.

AIG is undergoing a broad restructuring as it tries to pay back the U.S. government, which had to commit about $180 billion in taxpayer funds to pull the insurer back from the brink during the height of the financial crisis.

So far AIG has announced deals to sell two dozen assets for more than $11.9 billion.

AIG's shares were up 74 cents, or 1.7 percent, at $45.15 during late morning trading on the New York Stock Exchange.

(Reporting by Paritosh Bansal; Editing by Tim Dobbyn)