New York Insurance Superintendent Eric Dinallo will lead a National Association of Insurance Commissioners task force created to expedite the approval of sales of American International Group Inc. assets.

Commissioners approved the creation of the task force Tuesday, according to David Neustadt, an insurance department spokesman.

Observers say regulators and AIG, New York, need to act promptly to get good prices for AIG’s assets.

At press time, the S&P 500 stock index was down more than 3%.

AIG’s stock price was down about 40% early this afternoon, with shares selling for $2.33, giving the company a “market cap,” or total value of all outstanding stock, of just $6.4 billion.

Last week, AIG shares were selling in the mid-20s.

One reason that AIG could not set up a private credit facility is that investment bankers gave some AIG insurance subsidiary assets “low evaluations” when they looked at AIG’s books, Dinallo said today during an appearance on CNBC.

A Chapter 11 bankruptcy reorganization filing would have normally been an appropriate way to deal with AIG’s liquidity problems at the parent-company level, but regulators were concerned about the possibility that a bankruptcy filing could have triggered a frantic sale of AIG products by consumers, as well as decisions by commercial customers to switch their accounts to other insurers, Dinallo said.

Flight from AIG products would have reduced the price that buyers would pay for AIG’s assets through an orderly sale, Dinallo said.

Dinallo noted that the Fed is providing bridge financing for AIG to help it arrange an orderly sale of assets.

Dinallo criticized insurance executives, who, he said, “have gotten away from their core competence” by becoming involved in the acquisition of the speculative financial derivatives that laid AIG low.

Insurance company executives “have to get better at focusing on their core competence,” Dinallo said.

Dinallo said another lesson of AIG’s problems is that more capital is needed at the holding company level, as well as in the operating companies.

Dinallo praised the Federal Reserve Board for protecting insurance policyholders, by not requiring AIG to use the assets and surplus in the insurance subsidiaries to secure the bridge loan.

Under the terms of the loan, entire affiliates, not their underlying cash assets, are securing the loan, Dinallo said.