American International Group Inc accepted a $2.16 billion offer for its Taiwan Nan Shan Life unit from a group led by local conglomerate Ruentex Group, marking the beginning of the end of a over year-long process fraught with delays and political wrangling.

In a statement to the Taiwan stock exchange, Ruentex said the group comprising Ruentex Industries Ltd <2915.TW> along with local firm Pou Chen Corp <9904.TW> had signed the deal on Wednesday.

It will acquire the 97.57 percent of Nan Shan that is for sale. The statement did not give further details.

Ruentex had long been the front runner, but the deal would still be subject to shareholder approval and regulatory clearance.

Sources have previously told Reuters that Ruentex, a major player in the hypermarket business in China and Taiwan, may not meet all of the five strict criteria the regulator has laid down for a buyer.

AIG has been trying to sell the unit for some 15 months as part of its plans to pay back the U.S. government for its bailout.

It had a deal worth $2.15 billion last year. But the regulator blocked it, forcing AIG to put the asset back on sale and Chief Executive Bob Benmosche to personally visit the regulators in December to discuss the deal criteria.

Last week the regulators promised a quick review of any deal.

Nan Shan is Taiwan's No. 3 insurer by market share after the insurance arms of Cathay Financial Holding Co Ltd <2882.TW> and Fubon Financial Holding Co Ltd <2881.TW>. It has about 4 million policy holders - about one-sixth of Taiwan's population.

The Ruentex group beat local banks Cathay Financial, Fubon Financial and Chinatrust Financial <2891.TW> and a consortium of Taiwan Secom <9917.TW> and Hong Kong investment firm Primus Financial in the bidding for Nan Shan.

(Reporting by Taipei bureau; Editing by Chris Lewis and Anshuman Daga)

China Aig Sale