Taxpayers are still owed more than half their original investment in American International Group (AIG) even as its non-insurance business operates without a consolidated banking regulator, according to the Special Inspector General for the Troubled Asset Relief Program.

AIG still has $30.4 billion from the original $67.8 billion TARP investment outstanding as of July, which is on track to actually earn a return, SIGTARP said in a special report Wednesday.

The more than 1 billion shares equal a 61% government stake in the monoline.

Including other asset purchases, the total original commitment to the AIG bailout was $161 billion. The Federal Reserve Bank of New York continues to sell off those assets, most tied to faulty mortgages.

The AIG Financial Products Corp. still operates today even though it has shrunk its credit default swap portfolio to $168 billion, one-tenth its former size.

The firm remains massive and could be considered a systemically important financial institution, or SIFI, when regulators release such a definition. As a SIFI, the company would fall under Federal Reserve supervision.

It still has 219 subsidiaries and is the third largest insurance company by assets in the U.S. The non-insurance business at AIG still lacks consolidated oversight, according to SIGTARP. Before the crash, part of it was considered a thrift and thus fell under Office of Thrift Supervision.

The Dodd-Frank Act rolled this agency into the Office of the Comptroller of the Currency. Moving it the Fed would be "a massive undertaking," the watchdog said.

"For more than two years, AIG has had no consolidated banking regulator of its non-insurance financial business," SIGTARP said in its report.

Despite the regulatory uncertainty, AIG continues to bet on the mortgage market. From December 2010 through March 31, it doubled its commercial mortgage-backed securities and private-label mortgage bond holdings to $28.4 billion.

"AIG is one of the world's largest companies and is the largest outstanding TARP investment. For two years, AIG has had no federal banking regulator responsible for overseeing its non-insurance financial business, and its prior regulator OTS admitted failures," said Christy Romero, the special inspector general for TARP. "Effective, comprehensive, and rigorous regulation of AIG is vital to ensure that history does not repeat itself."