The former head of the American International Group unit that precipitated a $182 billion bailout pledge from taxpayers stood by a 2007 proclamation that the insurer would not lose even a dollar on a portfolio of securities that included subprime mortgages.

Joseph Cassano, the much-maligned ex-chief of AIG's Financial Products division, told a congressionally appointed commission on Wednesday that he truly believed what he told an earnings call with analysts and investors.

I meant exactly what I said in August 2007, Cassano said, according to prepared testimony for the hearing held by the Financial Crisis Inquiry Commission.

I did not expect actual, economic losses on the portfolio. That said, I was truthful at all times about the unrealized accounting losses and did my very best to estimate them accurately.

The commission is holding two days of hearings into the role of derivatives in the financial crisis, with witnesses that include current and former executives from AIG and Goldman Sachs.

Goldman has been criticized for benefiting from the taxpayer bailout of AIG.

It was among U.S. and European banks that had purchased credit default protection from AIG and were quickly made whole after the U.S. government bailed out AIG, beginning in September of 2008.

AIG said in March, 2009, that $93 billion had been paid to banks, including $12.9 billion to Goldman Sachs, which was the most received by any bank.

Cassano and AIG Chief Risk Officer Robert Lewis said in their written testimony that they believed the collateralized debt obligations (CDOs) -- the loan portfolios linked to the credit default swaps -- were relatively conservative and could have recovered with time.

But Lewis said the deteriorating financial environment triggered collateral calls that depleted AIG's liquidity and the federal government stepped in.

What ended up happening was so extreme that it was beyond anything we had planned for, he said.

Goldman President Gary Cohn offered no apology for his firm making those collateral calls and said considerable shareholder money was spent to insure against the risk that AIG would not pay Goldman in the event of a default

While every market participant benefited from the government's actions, we took our own steps, from the very beginning, to protect our shareholders, Cohn said in his written testimony.

The 10-member commission headed by former California State Treasurer Phil Angelides is due to issue a report by December 15, detailing the causes of financial crisis that peaked in late 2008.

GOLDMAN UNDER FIRE

Goldman has found itself under fire stemming from its own marketing and packaging of derivative products.

On April 16, the SEC charged Goldman with civil fraud relating to investor disclosures for the Abacus collateralized debt obligation, an investment product linked to the performance of a group of mortgages.

Critics have also charged that Goldman bet against some of its clients' views of the mortgage market.

Cohn told the crisis panel that Goldman has combed through its underwriting of mortgage-backed securities and CDOs from December 2006 on, and found it had only sought protection against a tiny slice of those securities by the end of June, 2007.

Cassano's scheduled testimony was a rare event, having evaded public appearances since leaving the bailed-out insurer in February of 2008, albeit on a $1 million-a-month consulting contract.

The son of a Brooklyn policeman, Cassano has been the subject of criminal and civil investigations in the United States and abroad, but recently had the specter of prosecution lifted when the U.S. Department of Justice and Securities and Exchange Commission ended their investigations against him and other AIG executives.

Cassano said he tried to convince AIG management to take a handshake agreement that would have only paid him if the financial product unit's accounting losses reversed, but that management rejected the proposal.

Cassano also said he suggested the AIG bonus program that in 2009 paid out $165 million to employees in its financial products unit keeping our employees together during this critical time, but sparking public outrage.

(Reporting by Steve Eder, Karey Wutkowski, and Kim Dixon; Editing by Tim Dobbyn)

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