New York – based American International Group has announced an agreement to sell AIG Life Insurance Co. of Canada to BMO Financial Group.

AIG Life of Canada, headquartered in Toronto, Canada, offers various insurance and wealth products, including universal life and term life insurance plans, critical illness plans, permanent plans and immediate annuities.

AIG is selling the unit to BMO for $308 million, subject to any change in net worth between Sept. 30, 2008 and closing, according to the company. The transaction is expected to close by June 1 and is subject to approvals by various regulatory authorities.

The agreement will add 300 employees and 400,000 customers of AIG Life of Canada to the insurer’s rolls, said Bill Downe, BMO Financial Group’s president and CEO, said in a statement. “Acquiring AIG Life of Canada will strengthen BMO’s overall financial planning, wealth and retirement offering, giving us the ability to expand our client relationships through a comprehensive line up of products,” he said.

Peter McCarthy, president and CEO of AIG Life of Canada, said that the unit’s management team is “excited about becoming an integral part of one of Canada’s premier financial institutions.”