Insurance giant American International Group, Inc. announced Sunday that it has replaced its CEO, Martin Sullivan, with chairman Robert Willumstad.

Sullivan is leaving AIG and its board of directors. The board has also named Stephen Bollenbach as its lead independent director.

Willumstad, 62, has been chairman of the board of AIG since November 2006. He is the co-founder of Brysam Global Partners, a New York-based private equity investment firm focused on emerging markets financial services investments. Until 2005 he was president and chief operating officer of Citigroup, Inc. Prior to the formation of Citigroup in 1998 from the merger of Citicorp and Travelers Group, he was chairman and CEO of Travelers Group Consumer Financial Services.

“Although conditions in the credit markets continue to create significant challenges in several areas of the business, AIG has great people throughout the organization and an unrivaled global franchise with tremendous long-term growth potential. In the coming months, we will conduct a thorough strategic and operational review of AIG’s businesses and their performance,” Willumstad said. “The board and I recognize that results over the past two quarters have been unacceptable, but we are confident in AIG’s future. We are determined to get the organization back on track as quickly as possible and ensure it is well positioned for future success.”

“The board has determined that Bob’s broad managerial and financial services experience makes him the right person to lead AIG through today’s turbulent markets, drive further organizational change and rebuild shareholder value in the years ahead,” said George Miles, Jr., chairman of the nominating and corporate governance committee of the board.