American International Group has chosen David DeMuro, the former head of compliance and regulation at now-defunct Lehman Brothers Holdings, to serve as its new deputy general counsel and heading of the company's compliance and regulatory affairs.

The company also promoted Karen Nelson to chief compliance officer. Nelson, who joined AIG two years ago, had been acting in the role since January.

DeMuro, who was most recently senior counsel at law firm O'Melveny & Myers, will direct the activities of AIG's compliance and regulatory staff, provide a strategic view of regulators across operations, and oversee how that affects the company's regulatory priorities, said Thomas Russo, the company's general counsel, in a memo to employees.