UPDATE 2-Sun Life, Kingsway detail AIG investments

(Recasts, adds details from Kingsway Financial, adds comment from industry executive, updates share prices)

By Lynne Olver

TORONTO, Sept 17 (Reuters) - Shares of Canadian banks and insurance companies stumbled on Wednesday after the U.S. government's bailout of insurance giant American International Group (AIG.N) did little to assuage global concerns about the financial industry, and pressure mounted on other Wall Street investment firms.

Sun Life Financial (SLF.TO), Canada's third largest life insurer by market value, said on Wednesday it holds C$315 million ($292 million) in bonds issued by AIG and its subsidiaries, but has minimal exposure to AIG derivatives, net of collateral.

The statement, coming days after Sun Life said it would take a charge on its Lehman Brothers Holdings LEH.N investments, helped send Sun Life's shares reeling.

The stock was down about 7 percent at C$36.22 on the Toronto Stock Exchange on Wednesday afternoon as Canadian financial stocks in general were rattled. Sun Life shares traded as low as C$35.23 earlier in the day.

The S&P/TSX financials index of banks, insurance companies and asset managers was down 4.3 percent.

One industry executive said that most Canadian insurance companies did not write the risky products such as credit derivatives that sparked AIG's downfall.

"AIG's a big name, it's as big as it gets, and when 'big' has problems, everyone always assumes it will filter down to everybody else, but that's not the case," said George Mohacsi, president and chief executive of Foresters, a Toronto-based fraternal benefit company that sells life insurance and investments in the United States, Britain and Canada.

"I think a lot of insurance companies, a lot of financial institutions, carry AIG bonds and so there's some question about what will happen to that, but there's more than enough reserves and capital (in Canadian companies) to withstand any kind of bond or asset writedowns that may occur," Mohacsi told Reuters at an industry conference.

Sun Life said it held bonds with a par value of C$88 million issued by AIG; C$188 million from AIG subsidiary American General Finance Corp; C$25 million from AIG unit International Lease Finance Corp; and C$14 million issued by other AIG subsidiaries.

Kingsway Financial Services Inc, a specialty property and casualty insurer that sells truck and auto policies in the United States and Canada, said that it holds $30.25 million of par value fixed income investments in three subsidiaries of AIG, as well as $17 million of par value Lehman Brothers bonds.

Kingsway said it is working to determine what impairment charges it could take in the third quarter.

Kingsway shares were down about 7 percent at C$7.30 on the Toronto Stock Exchange on Wednesday afternoon.

Late on Tuesday, the U.S. government agreed to rescue AIG with an emergency $85 billion loan from the New York Federal Reserve to stave off bankruptcy, just days after Lehman Brothers had to file for protection from creditors.

Earlier this week, Sun Life said it would take an unspecified third-quarter charge on its Lehman Brothers holdings, which include C$334 million par value of Lehman bond securities.