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Monday, February 7, 2011

American International Group, Inc. (AIG) wikipedia

2/7/2011


This is cross referencing AIG, Ben Bernake, and the Federal Reserve.

The attachment is the same, there may be some slight variations.



Note AIG in Hong Kong, France and Britain.

These three, plus others, have  regularly been on the blog site. Now we know why.

One big happy little nepotistic unit.

All God given inherent  and all other  rights reserved in perpetuity.

;Jeanette/Audrey; [Triplett]





http://en.wikipedia.org/wiki/American_International_Group

American International Group, Inc. (AIG) (NYSE: AIG) is an American insurance corporation. Its corporate headquarters are located in the American International Building in New York City. The British headquarters office is on Fenchurch Street in London, continental Europe operations are based in La Défense, Paris, and its Asian headquarters office is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was once the 18th-largest public company in the world. It was listed on the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008.

AIG suffered from a liquidity crisis when its credit ratings were downgraded below "AA" levels in September 2008. The United States Federal Reserve Bank on September 16, 2008 created an $85 billion credit facility to enable the company to meet increased collateral obligations consequent to the credit rating downgrade, in exchange for the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. The Federal Reserve Bank and the United States Treasury by May 2009 had increased the potential financial support to AIG, with the support of an investment of as much as $70 billion, a $60 billion credit line and $52.5 billion to buy mortgage-based assets owned or guaranteed by AIG, increasing the total amount available to as much as $182.5 billion.[3][4] AIG subsequently sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets.

American International Group, Inc.
Type Public (NYSE: AIG)
S&P 500 Component
Industry Insurance
Financial services
Founded 1967
Founder(s) Cornelius Vander Starr
Headquarters American International Building
New York City, U.S.
Area served Worldwide
Key people Robert S. Miller(Chairman)[1]
Robert Benmosche (President and CEO)
Products Insurance annuities
Mutual funds
Revenue $96.004 billion (2009)[2]
Operating income -$13.648 billion (2009)[2]
Net income −$10.949 billion (2009)[2]
Total assets $847.585 billion (2009)[2]
Total equity $69.824 billion (2009)[2]
Employees 116,000 (2009)[2]
Website AIG.com

Contents

  • 1 History
  • 2 Business
  • 3 Financial crisis
    • 3.1 Chronology of September 2008 liquidity crisis
    • 3.2 Federal Reserve bailout
    • 3.3 Additional Bailouts of 2008
    • 3.4 Counterparty Controversy
    • 3.5 Post-bailout expenditures
    • 3.6 Settlement of credit default swaps
    • 3.7 Sales of assets

      History

      The American International Building in lower Manhattan

      AIG history dates back to 1919, when Cornelius Vander Starr established an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the Chinese, which he continued to do until AIG left China in early 1949—as Mao Zedong led the advance of the Communist People's Liberation Army on Shanghai.[5][6] Starr then moved the company headquarters to its current home in New York City.[7] The company went on to expand, often through subsidiaries, into other markets, including other parts of Asia, Latin America, Europe, and the Middle East.[8]

      In 1962, Starr gave management of the company's lagging U.S. holdings to Maurice R. "Hank" Greenberg, who shifted its focus from personal insurance to high-margin corporate coverage. Greenberg focused on selling insurance through independent brokers rather than agents to eliminate agent salaries. Using brokers, AIG could price insurance according to its potential return even if it suffered decreased sales of certain products for great lengths of time with very little extra expense. In 1968, Starr named Greenberg his successor. The company went public in 1969.[9]

      Beginning in 2005, AIG became embroiled in a series of fraud investigations conducted by the Securities and Exchange Commission, U.S. Justice Department, and New York State Attorney General's Office. Greenberg was ousted amid an accounting scandal in February 2005; he is still fighting civil charges being pursued by New York state.[10][11] The New York Attorney General's investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives.[12] Greenberg was succeeded as CEO by Martin J. Sullivan, who had begun his career at AIG as a clerk in its London office in 1970.[13]

      On June 15, 2008, after disclosure of financial losses and subsequent to a falling stock price, Sullivan resigned and was replaced by Robert B. Willumstad, Chairman of the AIG Board of Directors since 2006. Willumstad was forced by the US government to step down and was replaced by Edward M. Liddy on September 17, 2008.[14] AIG's board of directors named Robert Benmosche CEO on August 3rd 2009 to replace Mr. Liddy, who earlier in the year announced his retirement. [15]

          Business

          Holdings

      Further information: Holdings of American International Group

      In the United States, AIG is the largest underwriter of commercial and industrial insurance, and AIG acquired American General Life Insurance in August 2001.[16]

          Auto insurance

      AIG sold auto insurance policies through its subsidiary unit, AIG Direct (aka aigdirect.com). The policies they offered included insurance for private automobiles, motorcycles, recreational vehicles and commercial vehicles.

      AIG purchased the remaining 39% that it did not own of online auto insurance specialist 21st Century Insurance in 2007 for $749 million.[17] With the failure of the parent company and the continuing recession in late 2008, AIG rebranded its insurance unit to 21st Century Insurance.[18][19] In April 2009 it was announced that AIG was selling the 21st Century Insurance subsidiary to Farmers Insurance Group for $1.9 billion.[20]

          Travel Insurance

      Main article: AIG Travel Guard

      AIG sells travelers insurance internationally through Travel Guard, headquartered in Stevens Point, Wisconsin.

          Financial crisis

      Further information: Subprime mortgage crisis, Financial crisis of 2007–2010, and Liquidity crisis of September 2008

          Chronology of September 2008 liquidity crisis

      On September 16, 2008, AIG suffered a liquidity crisis following the downgrade of its credit rating. Industry practice permits firms with the highest credit ratings to enter swaps without depositing collateral with their trading counter-parties. When its credit rating was downgraded, the company was required to post additional collateral with its trading counter-parties, and this led to an AIG liquidity crisis. AIG's London unit sold credit protection in the form of credit default swaps (CDSs) on collateralized debt obligations (CDOs) that had by that time declined in value.[21] The United States Federal Reserve Bank announced the creation of a secured credit facility of up to US$85 billion, to prevent the company's collapse by enabling AIG to meet its obligations to deliver additional collateral to its credit default swap trading partners. The credit facility provided a structure to loan as much as US$85 billion, secured by the stock in AIG-owned subsidiaries, in exchange for warrants for a 79.9% equity stake, and the right to suspend dividends to previously issued common and preferred stock.[13][22][23] AIG announced the same day that its board accepted the terms of the Federal Reserve Bank's rescue package and secured credit facility.[24] This was the largest government bailout of a private company in U.S. history, though smaller than the bailout of Fannie Mae and Freddie Mac a week earlier.[25][26]

      AIG's share prices had fallen over 95% to just $1.25 by September 16, 2008, from a 52-week high of $70.13. The company reported over $13.2 billion in losses in the first six months of the year.[27][28] The AIG Financial Products division headed by Joseph Cassano, in London, had entered into credit default swaps to insure $441 billion worth of securities originally rated AAA. Of those securities, $57.8 billion were structured debt securities backed by subprime loans.[29] CNN named Cassano as one of the "Ten Most Wanted: Culprits" of the 2008 financial collapse in the United States.[30]

      As Lehman Brothers (the largest bankruptcy in U.S. history at that time) suffered a catastrophic decline in share price, investors began comparing the types of securities held by AIG and Lehman, and found that AIG had valued its Alt-A and sub-prime mortgage-backed securities at 1.7 to 2 times the values used by Lehman which weakened investors' confidence in AIG.[27] On September 14, 2008, AIG announced it was considering selling its aircraft leasing division, International Lease Finance Corporation, to raise cash.[27] The Federal Reserve hired Morgan Stanley to determine if there are systemic risks to a financial failure of AIG, and asked private entities to supply short-term bridge loans to the company. In the meantime, New York regulators allowed AIG to borrow $20 billion from its subsidiaries.[31][32]

      At the stock market's opening on September 16, 2008, AIG's stock dropped 60 percent.[33] The Federal Reserve continued to meet that day with major Wall Street investment firms, hoping to broker a deal for a non-governmental $75 billion line of credit to the company.[34] Rating agencies Moody's and Standard and Poor downgraded AIG's credit ratings on concerns over likely continuing losses on mortgage-backed securities. The credit rating downgrade forced the company to deliver collateral of over $10 billion to certain creditors and CDS counter-parties.[35] The New York Times later reported that talks on Wall Street had broken down and AIG may file for bankruptcy protection on Wednesday, September 17.[36] Just before the bailout by the US Federal Reserve, AIG former CEO Maurice (Hank) Greenberg sent an impassioned letter to AIG CEO Robert B. Willumstad offering his assistance in any way possible, ccing the Board of Directors. His offer was rebuffed.[37]

          Federal Reserve bailout

      On the evening of September 16, 2008, the Federal Reserve Bank's Board of Governors announced that the Federal Reserve Bank of New York had been authorized to create a 24-month credit-liquidity facility from which AIG could draw up to $85 billion. The loan was collateralized by the assets of AIG, including its non-regulated subsidiaries and the stock of "substantially all" of its regulated subsidiaries, and with an interest rate of 850 basis points over the three-month London Interbank Offered Rate (LIBOR) (i.e., LIBOR plus 8.5%). In exchange for the credit facility, the U.S. government received warrants for a 79.9 percent equity stake in AIG, with the right to suspend the payment of dividends to AIG common and preferred shareholders.[13][23] The credit facility was created under the auspices of Section 13(3) of the Federal Reserve Act.[23][38][39] AIG's board of directors announced approval of the loan transaction in a press release the same day. The announcement did not comment on the issuance of a warrant for 79.9% of AIG's equity, but the AIG 8-K filing of September 18, 2008, reporting the transaction to the Securities and Exchange Commission stated that a warrant for 79.9% of AIG shares had been issued to the Board of Governors of the Federal Reserve.[13][24][40] AIG drew down US$ 28 billion of the credit-liquidity facility on September 17, 2008.[41] On September 22, 2008, AIG was removed from the Dow Jones Industrial Average.[42] An additional $37.8 billion credit facility was established in October. As of October 24, AIG had drawn a total of $90.3 billion from the emergency loan, of a total $122.8 billion.[43]

      Maurice Greenberg, former CEO of AIG, on September 17, 2008, characterized the bailout as a nationalization of AIG. He also stated that he was bewildered by the situation and was at a loss over how the entire situation got out of control as it did.[44] On September 17, 2008, Federal Reserve Board chair Ben Bernanke asked Treasury Secretary Henry Paulson join him, to call on members of Congress, to describe the need for a congressionally authorized bailout of the nation's banking system. Weeks later, Congress approved the Emergency Economic Stabilization Act of 2008. Bernanke said to Paulson on September 17, "We can’t keep doing this. Both because we at the Fed don’t have the necessary resources and for reasons of democratic legitimacy, it's important that the Congress come in and take control of the situation."[45]

          Additional Bailouts of 2008

      From mid September till early November, AIG's credit-default spreads were steadily rising, implying the company was heading for default.[46][47] On November 10, 2008, the U.S. Treasury announced it would purchase $40 billion in newly issued AIG senior preferred stock, under the authority of the Emergency Economic Stabilization Act's Troubled Asset Relief Program.[48][49][50] The FRBNY announced that it would modify the September 16 secured credit facility; the Treasury investment would permit a reduction in its size from $85 billion to $60 billion, and that the FRBNY would extend the life of the facility from three to five years, and change the interest rate from 8.5% plus the three-month London interbank offered rate (LIBOR) for the total credit facility, to 3% plus LIBOR for funds drawn down, and 0.75% plus LIBOR for funds not drawn, and that AIG would create two off- balance-sheet Limited Liability Companies (LLC) to hold AIG assets: one will act as an AIG Residential Mortgage-Backed Securities Facility and the second to act as an AIG Collateralized Debt Obligations Facility.[48][50] Federal officials said the $40 billion investment would ultimately permit the government to reduce the total exposure to AIG to $112 billion from $152 billion.[48] On December 15, 2008, the Thomas More Law Center filed suit to challenge the Emergency Economic Stabilization Act of 2008, alleging that it unconstitutionally promotes Islamic law (Sharia) and religion. The lawsuit was filed because AIG provides Takaful Insurance Plans, which, according to the company, avoid investments and transactions that are"un-Islamic".[51][52]

          Counterparty Controversy

      AIG was required to post additional collateral with many creditors and counter-parties, touching off controversy when over $100 billion was paid out to major global financial institutions that had previously received TARP money. While this money was legally owed to the banks by AIG (under agreements made via credit default swaps purchased from AIG by the institutions), a number of Congressmen and media members expressed outrage that taxpayer money was going to these banks through AIG.[53] In January, 2010, a document known as "Schedule A – List of Derivative Transactions" was released to the public, against the wishes of the New York Fed. It listed many of the insurance deals that AIG had with various other parties, such as Goldman Sachs, Société Générale, Deutsche Bank, and Merrill Lynch.[54][55]

      Had AIG been allowed to fail in a controlled manner through bankruptcy, bondholders and derivative counterparties (major banks) would have suffered significant losses, limiting the amount of taxpayer funds directly used. Fed Chairman Ben Bernanke argued: "If a federal agency had [appropriate authority] on September 16 [2008], they could have been used to put AIG into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate. That outcome would have been far preferable to the situation we find ourselves in now."[56] The "situation" to which he is referring is that the claims of bondholders and counterparties were paid at 100 cents on the dollar by taxpayers, without giving taxpayers the rights to the future profits of these institutions. In other words, the benefits went to the banks while the taxpayers suffered the costs.

          Post-bailout expenditures

      The week following the September bailout, AIG employees and distributors participated in a California retreat which cost $444,000 and featured spa treatments, banquets, and golf outings.[57][58]

      It was reported that the trip was a reward for top-performing life-insurance agents planned before the bailout.[59] Less than 24 hours after the news of the party was first reported by the media, it was reported that the Federal Reserve had agreed to give AIG an additional loan of up to $37.8 billion.[60] AP reported on October 17 that AIG executives spent $86,000 on a previously scheduled English hunting trip. News of the lavish spending came just days after AIG received an additional $37.8 billion loan from the Federal Reserve, on top of a previous $85 billion emergency loan granted the month before. Regarding the hunting trip, the company responded, "We regret that this event was not canceled."[61] An October 30, 2008 article from CNBC reported that AIG had already drawn upon $90 billion of the $123 billion allocated for loans.[62] On November 10, 2008, just a few days before renegotiating another bailout with the US Government for $40 billion, ABC News reported that AIG spent $343,000 on a trip to a lavish resort in Phoenix, Arizona. [63]

          Settlement of credit default swaps

      On October 22, 2008, pdubs and those creditors of Lehman Brothers who bought credit default swaps to hedge them against Lehman bankruptcy settled those accounts. The net payments were $5.2 billion[64] even though initial estimates of the amount of the settlement were between $100 billion and $400 billion.[65]

      By December 2008, AIG had paid at least $18.7 billion to various financial institutions, including Goldman Sachs and Société Générale to retire obligations related to credit default swaps (CDS). As much as $53.5 billion related to swap payouts are part of the bailout.[66]

      On March 15, 2009, under mounting pressure from Congress and after consultation with the Federal Reserve, AIG disclosed a list of major recipients of collateral postings and payments under credit default swaps, guaranteed investment agreements, and securities lending agreements.[67] Below is data from one of the charts AIG released, representing only a portion of the total payouts, over a period of a few months.

      AIG collateral postings to credit default swap counterparties, from the period 9/16/08 to 12/31/08 [68]
      Counterparty US $ posted Counterparty US $ posted
      Société Générale $4,100,000,000 Deutsche Bank $2,600,000,000
      Goldman Sachs $2,500,000,000 Merrill Lynch $1,800,000,000
      Calyon $1,100,000,000 Barclays $900,000,000
      UBS $800,000,000 DZ Bank $700,000,000
      Wachovia $700,000,000 Rabobank $500,000,000
      KFW $500,000,000 JPMorgan $400,000,000
      Banco Santander $300,000,000 Danske Bank $200,000,000
      Reconstruction Finance Corp $200,000,000 HSBC Bank $200,000,000
      Morgan Stanley $200,000,000 Bank of America $200,000,000
      Bank of Montreal $200,000,000 Royal Bank of Scotland $200,000,000
      Other (unknown) $4,100,000,000


          Sales of assets

      AIG since September 2008 has marketed its assets to pay off its government loans. A global decline in the valuation of insurance businesses, and the weakening financial condition of potential bidders, has challenged its efforts. If the U.S. government decides to continue to protect the company from falling into bankruptcy, it may have to take the assets itself in exchange for the loans, or offer further direct financial support.[69]

      As of Sept 6, 2009, The Wall Street Journal has reported that Pacific Century Group has agreed to pay $500 million for a part of American International Group Inc.'s asset management business, and that they also expect to pay an additional $200 million to AIG in carried interest and other payments linked to future performance of the business.[70]

      Also in 2009, AIG sold its operations in Colombia to Ecuador's Banco del Pichincha.

      On March 1, 2010, insurance company Prudential confirmed that it was in advanced negotiations to buy the Asian operations of AIG.[71] Prudential was to buy the pan-Asian life insurance company, American International Assurance (AIA), for approximately $35.5 billion.[72] On June 1, 2010 the deal failed because AIG would not accept the $30.5 billion after Prudential lowered the amount by $5 billion from the originally planned $35.5 billion after Prudential shareholder discontent.[73]

      AIG agreed on March 8, 2010 to sell its American Life Insurance Co. unit (Alico) to MetLife Inc. for $15.5 billion in cash and stock by November 1, 2010. Alico has annuities, life and health insurance operations in Japan, Middle East (including Nepal, Bangladesh and Pakistan), Western and Eastern Europe, Latin America and the Caribbean. AIG said it will sell Alico for $6.8 billion in cash and the remainder in MetLife equity. The deal leaves AIG as the second-largest shareholder of MetLife, with a stake of more than 20% in the company.

      On March 29, 2010, Bloomberg L.P. reported that after almost three months of delays, AIG had completed the $500 million sale of a portion of its asset management business, branded PineBridge Investments, to the Asia-based Pacific Century Group.[74]

      On September 30th 2010, AIG announced an agreement to sell two of its life insurance companies in Japan, AIG Star and AIG Edison, to Prudential Financial for $4.2 billion in cash and $600 million in the assumption of third party debt to help repay some of the money owed to the U.S. government. [75]

      On November 1st 2010, AIG announced it had raised $36.71 billion from the sale of ALICO and an initial public offering for AIA. The company will use the proceeds Federal Reserve Bank of New York credit facility and make payments on other interests owned by the government.[76]

          Record losses

      On March 2, 2009, AIG reported a fourth quarter loss of $61.7bn (£43bn) and revenue of −$23.7bn (−£16.2bn) for the final three months of 2008. This was the largest quarterly loss in corporate history at that time.[77] The announcement of the loss had an impact on morning trading in Europe and Asia, with the FTSE100, DAX and Nikkei all suffering sharp falls. In the US the Dow Jones Industrial Average fell to below 7000 points, a twelve-year low.[78][79] The news of the loss came the day after the U.S. Treasury Department had confirmed that AIG was to get an additional $30 billion in aid, on top of the $150 billion it has already received.[80] The Treasury Department suggested that the potential losses to the US and global economy would be 'extremely high' if it were to collapse[81] and has suggested that if in future there is no improvement, it will invest more money into the company, as it is unwilling to allow it to fail.[82] The firm's position as not just a domestic insurer, but also one for small businesses and many listed firms, has prompted US officials to suggest its demise could be 'disastrous' and the Federal Reserve said that AIG posed a 'systemic risk' to the global economy.[77] The fourth quarter result meant the company made a $99.29 billion loss for the whole of 2008,[81] with five consecutive quarters of losses costing the company well over $100 billion.[82] In a testimony before the Senate Budget Committee on March 3, 2009, the Federal Reserve Chairman Ben Bernanke stated that "AIG exploited a huge gap in the regulatory system," ... and "to nobody's surprise, made irresponsible bets and took huge losses".[83]

          2009 employee bonus payments

      Main article: AIG bonus payments controversy

      In March 2009, AIG announced that they were paying out $165 million in executive bonuses. Total bonuses for the financial unit could reach $450 million and bonuses for the entire company could reach $1.2 billion.[84] President Barack Obama, who voted for the AIG bailout as a Senator[85] responded to the planned payments by saying "[I]t's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?" and "In the last six months, AIG has received substantial sums from the U.S. Treasury. I’ve asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole."[86]

      Protester outside 60 Wall Street Deutsche Bank's US main office in the wake of the bonus controversy is interviewed by news media.

      Politicians on both sides of the Congressional aisle reacted with outrage to the planned bonuses. Senator Chuck Grassley (R-Iowa) said "I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide."[87] Senator Chuck Schumer (D-New York) accused AIG of "Alice in Wonderland business practices" and said "It boggles the mind." He has threatened to tax the bonuses at up to 100%.[88] Senator Richard Shelby (R-Alabama) said "These people brought this on themselves. Now you're rewarding failure. A lot of these people should be fired, not awarded bonuses. This is horrible. It's outrageous."[89] Senator Mitch McConnell (R-Kentucky) echoed his comments, saying "This is an outrage."[90] Senator Jon Tester (D-Montana) said "This is ridiculous." and AIG executives "need to understand that the only reason they even have a job is because of the taxpayers."[91] Senator Dick Durbin (D-Illinois) said "I've had it." and "The fact that they continue to do it while we pour in billions of dollars is indefensible."[92]


      		 Wikinews has related news: US president Obama, Congress call for blocking of executive bonuses at AIG insurance company

      Representative Barney Frank (D-Massachusetts), Chairman of the House Financial Services Committee, said paying these bonuses would be "rewarding incompetence"[91] and "These people may have a right to their bonuses. They don't have a right to their jobs forever."[89]

      Representative Mark Kirk (R-Illinois) said "AIG should not be on welfare from Uncle Sam, and yet paying bonuses and transferring a considerable amount of taxpayer funds to entities overseas."[92] Federal Reserve Chairman Ben Bernanke said "It makes me angry. I slammed the phone more than a few times on discussing AIG."[89] Lawrence Summers, Director of the National Economic Council, said "The easy thing would be to just say, you know, ‘Off with their heads,’ and violate the contracts."[93] Austan Goolsbee, of the Council of Economic Advisers said "I don't know why they would follow a policy that's really not sensible, is obviously going to ignite the ire of millions of people." and "You worry about that backlash."[94]

      Political commentators and journalists expressed an equally bipartisan outrage.[87][95][96][97][97][98][99][100][101][102][103]

      On March 24, 2009, The New York Times printed the resignation letter of Jake DeSantis, executive vice president of AIG's financial products unit, to Edward M. Liddy, the chief executive of AIG. DeSantis stated he had nothing to do with the credit default swaps, he lost much of his life savings in the form of deferred compensation invested in the capital of AIG Financial Products; he had agreed to work for an annual salary of $1 out of a sense of duty, that he was assured many times the bonuses would be paid in March 2009, and that he believed he and others were let down by Liddy's lack of support. He also stated he was going to donate his bonus to those suffering from the global economic downturn.[104]

      It was reported that Senator Christopher Dodd (D-Con) (who first denied, then admitted to amending the legislation to allow the AIG bonuses), received $160,000 from employees of AIG.[105][106][107][108] A memo issued in 2006 by Joseph Cassano, AIG Financial Products chief executive, urged AIG employees to donate to Dodd, saying that as "next in line to become chairman of the Senate Banking, Housing, and Urban Affairs Committee... Senator Dodd will now have the opportunity to set the committee's agenda on issues critical to the financial services industry."[109]

          Manchester United Sponsorship

      AIG was the principal sponsor of English football club Manchester United from 2006–2010, and as part of the sponsorship deal, their logo was prominently displayed on the front of the club's jerseys and a plethora of other merchandise. The AIG deal was announced by Manchester United chief executive David Gill on 6 April 2006, for a British shirt sponsorship record £56.5 million, to be paid over four years (£14.1 million a year). The deal became the most valuable sponsorship deal in the world in September 2006, after the renegotiation and subsequent degrading of the £15 million-a-year deal Italian team Juventus had with oil firm Tamoil. During AIG's sponsorship, Manchester United enjoyed one of its most successful periods in history, winning the Premier League three consecutive years, two Football League Cups, and the UEFA Champions League.

      On 21 January 2009, it was announced that AIG would not be renewing their sponsorship of the club at the end of the deal in May 2010. It is not clear, however, whether or not AIG's agreement to run MU Finance will continue. American reinsurance company Aon Corporation was named the club's new principal sponsor on 3 June 2009, with their sponsorship of the club taking effect from the beginning of the 2010–11 season. The terms of the deal were not revealed, but it has been reported to be worth approximately £80 million over four years, which would make it the biggest sponsorship deal in football history.

          Litigation


      		 This section needs additional citations for verification.
      Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (September 2008)

      In November 2004, AIG reached a US$126 million settlement with the U.S. Securities and Exchange Commission and the Justice Department partly resolving a number of regulatory matters, but the company still must cooperate with investigators continuing to probe the sale of a non-traditional insurance product.[110]

      On June 11, 2008, three stockholders, collectively owning 4% of the outstanding stock of AIG, delivered a letter to the Board of Directors of AIG seeking to oust CEO Martin Sullivan and make certain other management and Board of Directors changes. This letter was the latest volley in what the Wall Street Journal deemed a "public spat" between the Company's Board and management, on the one hand, and its key stockholders, and former CEO Maurice "Hank" Greenberg on the other hand.[111]

      Death Bet

      Circa 2010 the WSJ reported that a family sued AIG for alleged complicity in a 'stranger-originated life insurance' scheme, whereby AIG managers allegedly welcomed people without an insurable interest to take out life insurance policies against others. The case involved JB Carlson and Germaine Tomlinson, and was one of many similar lawsuits in the US at the time. [112]

          Accounting fraud claims

      On October 14, 2004 the New York State Office of Attorney General Eliot Spitzer announced that it had commenced a civil action against Marsh & McLennan Companies for steering clients to preferred insurers with whom the company maintained lucrative payoff agreements, and for soliciting rigged bids for insurance contracts from the insurers. The Attorney General announced in a release that two AIG executives pleaded guilty to criminal charges in connection with this illegal course of conduct. In early May 2005, AIG restated its financial position and issued a reduction in book value of USD $2.7 billion, a 3.3 percent reduction in net worth.

      On February 9, 2006, AIG and the New York State Attorney General's office agreed to a settlement in which AIG would pay a fine of $1.6 billion.[113]

          Corporate governance

          Board of directors

    • Robert H. Benmosche – President and Chief Executive Officer, American International Group, Inc.
    • Laurette T. Koellner – Former Senior Vice President, The Boeing Company and Former President Boeing International
    • Donald H. Layton - Former Chairman and Chief Executive Officer, E*Trade Financial Corporation
    • Christopher S. Lynch – Former Partner, KPMG LLP
    • Arthur C. Martinez – Former Chairman of the Board, President and Chief Executive Officer, Sears, Roebuck and Co.
    • George L. Miles, Jr. – President and Chief Executive Officer, WQED Multimedia
    • Henry S. Miller - Chairman and Managing Director, Miller Buckfire & Co., LLC
    • Robert S. Miller - Non-Executive Chairman of the Board, American International Group, Inc.
    • Suzanne Nora Johnson – Former Vice Chairman, The Goldman Sachs Group, Inc.
    • Morris W. Offit – Chairman, Offit Capital Advisors LLC
    • Ronald A. Rittenmeyer - Former Chairman, Chief Executive Officer and President, Electronic Data Systems Corporation
    • Douglas M. Steenland – Former President and Chief Executive Officer, Northwest Airlines Corporation

        See also


    		 Companies portal
  • AIG Advisor Group
  • AIG Retirement
  • Bailout (finance)
  • Chartis
  • Global financial crisis of 2008-2009
  • Lemon socialism
  • List of United States insurance companies
  • MBIA – very large insurer of bonds which has similarly faced major credit downgrades

    Notes

  1. ^ BusinessInsurance, "'Turnaround Kid' Miller gets challenge at AIG"
  2. ^ a b c d e f "Form 10-K". http://idea.sec.gov/Archives/edgar/data/5272/000095012309003734/y74794e10vk.htm. Retrieved 2009-03-06. 
  3. ^ http://www.bloomberg.com/apps/news?pid=20601103&sid=aaog3i4yUopo&refer=us
  4. ^ http://www.federalreserve.gov/newsevents/press/other/20090302a.htm
  5. ^ Thompson, Clifford; Block, Maxine; Moritz, Charles; Rothe, Anna Herthe; Candee, Marjorie Dent (1941). Current Biography Yearbook. Current Biography (60th ed.). H. W. Wilson Company. p. 247. http://books.google.com/?id=P4oYAAAAIAAJ&q=%22AIG+abandoned+China+completely+in+1949%22. Retrieved 2009-03-18. 
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  37. ^ Many blame the financial problems on the legal problems AIG began having as a result of a number of government investigations alleging fraud and other inproprieties which were approved by the office of its then chairman, Maurice Greenberg. These problems placed such a focus on AIG's activities that it created a level of required transparency and fear of getting caught, which many believe forced the company to be less active and willing to cheat its way out of these problems. A manner of doing business it learned with its core activity of denying legitimate insurance claims and then pressuring its insureds, their witnesses and anyone else coming to their support while trying to intimidate judges and insurance commissioners. So who began all this? In May 2001 an insurance claimant and shareholder, Cesar Balbin stepped into the annual shareholders meetings. For the first time ever in the company's history, AIG was publicly accused of criminal and civil racketeering activities including: extortion, blackmale, claims fraud, theft of company equity: it took with it the chairman, billions of dollars and led to a greater transparency and fear that possibly contributed to inaction by many at AIG to participate in its typically less that legal and proper activities required to keep the company afloat."Letter from Maurice Greenberg to AIG Ceo and Board of Directors" (PDF). WikiLeaks. 2008-09-16. https://secure.wikileaks.org/wiki/Image:AIG09162008.pdf. Retrieved 2008-09-17. 
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    References and further reading

External links


 Wikimedia Commons has media related to: American International Group

Wikinews has related news: Obama calls for blocking of bonuses issued at AIG insurance company

http://www.federalreserve.gov/newsevents/testimony/bernanke20090324a.htm


Testimony

Chairman Ben S. Bernanke

American International Group

Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.

March 24, 2009

Chairman Frank, Ranking Member Bachus, and other members of the Committee, I appreciate having this opportunity to discuss the Federal Reserve's involvement with American International Group, Inc. (AIG). In my testimony, I will describe why supporting AIG was a difficult but necessary step to protect our economy and stabilize our financial system. I will also discuss issues related to compensation and note two matters raised by this experience that merit congressional attention.

Reasons for Our Original Lending Decision
We at the Federal Reserve, working closely with the Treasury, made our decision to lend to AIG on September 16 of last year. It was an extraordinary time. Global financial markets were experiencing unprecedented strains and a worldwide loss of confidence. Fannie Mae and Freddie Mac had been placed into conservatorship only two weeks earlier, and Lehman Brothers had filed for bankruptcy the day before. We were very concerned about a number of other major firms that were under intense stress.

AIG's financial condition had been deteriorating for some time, caused by actual and expected losses on subprime mortgage-backed securities and on credit default swaps that AIG's Financial Products unit, AIG-FP, had written on mortgage-related securities. As confidence in the firm declined, and with efforts to find a private-sector solution unsuccessful, AIG faced severe liquidity pressures that threatened to force it imminently into bankruptcy.

The Federal Reserve and the Treasury agreed that AIG's failure under the conditions then prevailing would have posed unacceptable risks for the global financial system and for our economy. Some of AIG's insurance subsidiaries, which are among the largest in the United States and the world, would have likely been put into rehabilitation by their regulators, leaving policyholders facing considerable uncertainty about the status of their claims. State and local government entities that had lent more than $10 billion to AIG would have suffered losses. Workers whose 401(k) plans had purchased $40 billion of insurance from AIG against the risk that their stable value funds would decline in value would have seen that insurance disappear. Global banks and investment banks would have suffered losses on loans and lines of credit to AIG, and on derivatives with AIG-FP. The banks' combined exposures exceeded $50 billion.1 Money market mutual funds and others that held AIG's roughly $20 billion of commercial paper would also have taken losses. In addition, AIG's insurance subsidiaries had substantial derivatives exposures to AIG-FP that could have weakened them in the event of the parent company's failure.

Moreover, as the Lehman case clearly demonstrates, focusing on the direct effects of a default on AIG's counterparties understates the risks to the financial system as a whole. Once begun, a financial crisis can spread unpredictably. For example, Lehman's default on its commercial paper caused a prominent money market mutual fund to "break the buck" and suspend withdrawals, which in turn ignited a general run on prime money market mutual funds, with resulting severe stresses in the commercial paper market. As I mentioned, AIG had about $20 billion in commercial paper outstanding, so its failure would have exacerbated the problems of the money market mutual funds. Another worrisome possibility was that uncertainties about the safety of insurance products could have led to a run on the broader insurance industry by policyholders and creditors. Moreover, it was well known in the market that many major financial institutions had large exposures to AIG. Its failure would likely have led financial market participants to pull back even more from commercial and investment banks, and those institutions perceived as weaker would have faced escalating pressure. Recall that these events took place before the passage of the Emergency Economic Stabilization Act, which provided funds that the Treasury used to help stem a global banking panic in October. Consequently, it is unlikely that the failure of additional major firms could have been prevented in the wake of the failure of AIG. At best, the consequences of AIG's failure would have been a significant intensification of an already severe financial crisis and a further worsening of global economic conditions. Conceivably, its failure could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income, and jobs.

The decision by the Federal Reserve on September 16, 2008, with the full support of the Treasury, to lend up to $85 billion to AIG should be viewed with this background in mind. At that time, no federal entity could provide capital to stabilize AIG and no federal or state entity outside of a bankruptcy court could wind down AIG. Unfortunately, federal bankruptcy laws do not sufficiently protect the public's strong interest in ensuring the orderly resolution of nondepository financial institutions when a failure would pose substantial systemic risks, which is why I have called on the Congress to develop new emergency resolution procedures. However, the Federal Reserve did have the authority to lend on a fully secured basis, consistent with our emergency lending authority provided by the Congress and our responsibility as central bank to maintain financial stability. We took as collateral for our loan AIG's pledge of a substantial portion of its assets, including its ownership interests in its domestic and foreign insurance subsidiaries. This decision bought time for subsequent actions by the Congress, the Treasury, the Federal Deposit Insurance Corporation, and the Federal Reserve that have avoided further failures of systemically important institutions and have supported improvements in key credit markets.

The Federal Reserve's Ongoing Involvement with AIG
Having lent AIG money to avert the risk of a global financial meltdown, we found ourselves in the uncomfortable situation of overseeing both the preservation of its value and its dismantling, a role quite different from our usual activities. We have devoted considerable resources to this effort and have engaged outside advisers. Using our rights as creditor, we have worked with AIG's new management team to begin the difficult process of winding down AIG-FP and to oversee the company's restructuring and divestiture strategy. Progress is being made on both fronts. However, financial turmoil and a worsening economy since September have contributed to large losses at the company, and the Federal Reserve has found it necessary to restructure and extend our support. In addition, under its Troubled Asset Relief Program (TARP), the Treasury injected capital into AIG in both November and March. Throughout this difficult period, our goals have remained unchanged: to protect our economy and preserve financial stability, and to position AIG to repay the Federal Reserve and return the Treasury's investment as quickly as possible.

In our role as creditor, we have made clear to AIG's management, beginning last fall, our deep concern surrounding compensation issues at AIG. We believe it is in the taxpayers' interest for AIG to retain qualified staff to maintain the value of the businesses that must be sold to repay the government's assistance. But, at the same time, the company must scrupulously avoid any excessive and unwarranted compensation. We have pressed AIG to ensure that all compensation decisions are covered by robust corporate governance, including internal review, review by the Compensation Committee of the Board of Directors, and consultations with outside experts. Operating under this framework, AIG has voluntarily limited the salary, bonuses, and other types of compensation for 2008 and 2009 of the CEO and other senior managers. Moreover, executive compensation must comply with the most stringent set of rules promulgated by the Treasury for TARP fund recipients. The New York Attorney General has also imposed restrictions on compensation at AIG.

Many of you have raised specific issues with regard to the payout of retention bonuses to employees at AIG-FP. My reaction upon becoming aware of these specific payments was that, notwithstanding the business purposes that might be served by this action, it was highly inappropriate to pay substantial bonuses to employees of the division that had been the primary source of AIG's collapse. I asked that the AIG-FP payments be stopped but was informed that they were mandated by contracts agreed to before the government's intervention. I then asked that suit be filed to prevent the payments. Legal staff counseled against this action, on the grounds that Connecticut law provides for substantial punitive damages if the suit would fail; legal action could thus have the perverse effect of doubling or tripling the financial benefits to the AIG-FP employees. I was also informed that the company had been instructed to pursue all available alternatives and that the Reserve Bank had conveyed the strong displeasure of the Federal Reserve with the retention payment arrangement. I strongly supported President Dudley's conveying that concern and directing the company to redouble its efforts to renegotiate all plans that could result in excessive bonus payments. I have also directed staff to work with the Treasury and the Administration in their review of whether the FP bonus and retention payments can be reclaimed. Moreover, the Federal Reserve and the Treasury will work closely together to monitor and address similar situations in the future.

Lessons Learned from AIG
To conclude, I would note that AIG offers two clear lessons for the upcoming discussion in the Congress and elsewhere on regulatory reform. First, AIG highlights the urgent need for new resolution procedures for systemically important nonbank financial firms. If a federal agency had had such tools on September 16, they could have been used to put AIG into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate. That outcome would have been far preferable to the situation we find ourselves in now. Second, the AIG situation highlights the need for strong, effective consolidated supervision of all systemically important financial firms. AIG built up its concentrated exposure to the subprime mortgage market largely out of the sight of its functional regulators. More-effective supervision might have identified and blocked the extraordinarily reckless risk-taking at AIG-FP. These two changes could measurably reduce the likelihood of future episodes of systemic risk like the one we faced at AIG.

Footnotes

1. In addition, many of these same banks had borrowed securities from AIG's securities lending program for which they had given AIG cash as collateral. Upon an AIG bankruptcy, the banks would have taken possession of the securities instead of receiving back their cash, exposing them to possible losses on those securities. Return to text

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Last update: March 24, 2009



http://www.federalreserve.gov/newsevents/testimony/2009testimony.htm
  • December 3, 2009
    Chairman Ben S. Bernanke
    Confirmation hearing
    Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
  • November 30, 2009
    Jon D. Greenlee, Associate Director, Division of Banking Supervision and Regulation
    Small business lending
    Before the Subcommittee on Oversight and Investigations, Committee on Financial Services, U.S. House Of Representatives, Southfield, Michigan
  • November 2, 2009
    Jon D. Greenlee, Associate Director, Division of Banking Supervision and Regulation
    Residential and commercial real estate
    Before the Subcommittee on Domestic Policy, Committee on Oversight and Government Reform, U.S. House of Representatives, Atlanta, Georgia
  • October 29, 2009
    Governor Daniel K. Tarullo
    Regulatory reform
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • October 14, 2009
    Governor Daniel K. Tarullo
    State of the banking industry
    Before the Subcommittee on Financial Institutions, Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
  • October 1, 2009
    Chairman Ben S. Bernanke
    Regulatory reform
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • September 30, 2009
    Governor Daniel K. Tarullo
    International cooperation to modernize financial regulation
    Before the Subcommittee on Security and International Trade and Finance, Committee on Banking, Housing, and Urban Affairs, Washington, D.C.
  • September 25, 2009
    Scott G. Alvarez, General Counsel
    Federal Reserve Transparency
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • August 4, 2009
    Governor Daniel K. Tarullo
    Bank supervision
    Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
  • July 24, 2009
    Chairman Ben S. Bernanke
    Regulatory restructuring
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
    Governor Tarullo presented identical remarks to the Committee on Banking, Housing, and Urban Affairs, U.S. Senate on July, 23, 2009
  • July 23, 2009
    Governor Daniel K. Tarullo
    Regulatory restructuring
    Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
    Chairman Bernanke presented identical remarks before the Committee on Financial Services, U.S. House of Representatives, on July 24, 2009
  • July 21, 2009
    Chairman Ben S. Bernanke
    Semiannual Monetary Policy Report to the Congress
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
    Chairman Bernanke presented identical remarks before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, on July 22, 2009
  • July 16, 2009
    Governor Elizabeth A. Duke
    Consumer protection
    Before the Subcommittee on Domestic Monetary Policy and Technology, Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • July 9, 2009
    Jon D. Greenlee, Associate Director, Division of Banking Supervision and Regulation
    Commercial real estate
    Before the Joint Economic Committee, U.S. Congress, Washington, D.C.
  • July 9, 2009
    Donald L. Kohn, Vice Chairman
    Federal Reserve independence
    Before the Subcommittee on Domestic Monetary Policy and Technology, Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • June 25, 2009
    Chairman Ben S. Bernanke
    Acquisition of Merrill Lynch by Bank of America
    Before the Committee on Oversight and Government Reform, U.S. House of Representatives, Washington, D.C.
  • June 22, 2009
    Patricia White, Associate Director, Division of Research and Statistics
    Over-the-counter derivatives
    Before the Subcommittee on Securities, Insurance, and Investment, Committee of Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
  • June 11, 2009
    Scott G. Alvarez, General Counsel
    Executive compensation
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • June 3, 2009
    Chairman Ben S. Bernanke
    Current economic and financial conditions and the federal budget
    Before the Committee on the Budget, U.S. House of Representatives, Washington, D.C.
  • May 20, 2009
    David W. Wilcox, Deputy Director, Division of Research and Statistics
    Municipal finance
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • May 5, 2009
    Chairman Ben S. Bernanke
    The economic outlook
    Before the Joint Economic Committee, U.S. Congress, Washington, D.C.
  • April 29, 2009
    Sandra F. Braunstein, Director, Division of Consumer and Community Affairs
    Financial literacy
    Before the Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Committee on Homeland Security and Governmental Affairs, U.S. Senate, Washington, D.C.
  • March 25, 2009
    Governor Elizabeth A. Duke
    Credit availability and prudent lending standards
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • March 24, 2009
    Chairman Ben S. Bernanke
    American International Group
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • March 20, 2009
    Governor Elizabeth A. Duke
    Enforcement of financial consumer protection laws
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • March 19, 2009
    Sandra F. Braunstein, Director, Division of Consumer and Community Affairs
    Protections for users of credit cards and overdraft services
    Before the Subcommittee on Financial Institutions and Consumer Credit, Committee of Financial Services, U.S. House of Representatives, Washington, D.C.
  • March 19, 2009
    Governor Daniel K. Tarullo
    Modernizing bank supervision and regulation
    Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
  • March 18, 2009
    Roger T. Cole, Director, Division of Banking Supervision and Regulation
    Risk management in the banking industry
    Before the Subcommittee on Securities, Insurance, and Investment, Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
  • March 11, 2009
    Sandra F. Braunstein, Director, Division of Consumer and Community Affairs
    Mortgage lending reform
    Before the Subcommittee on Financial Institutions and Consumer Credit, Committee on Financial Services, U.S House of Representatives, Washington, D.C.
    Ms. Braunstein presented identical remarks before the Committee on Financial Services, U.S. House of Representatives, on April 23, 2009
  • March 5, 2009
    Donald L. Kohn, Vice Chairman
    American International Group
    Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
  • March 3, 2009
    Chairman Ben S. Bernanke
    Current economic and financial conditions and the federal budget
    Before the Committee on the Budget, U.S. Senate, Washington, D.C.
  • February 24, 2009
    Chairman Ben S. Bernanke
    Semiannual Monetary Policy Report to the Congress
    Before the Committee on Banking, Housing and Urban Affairs, U.S. Senate, Washington, D.C.
    Chairman Bernanke presented identical remarks before the Committee on Financial Services, U.S. House of Representatives, on February 25, 2009
  • February 10, 2009
    Chairman Ben S. Bernanke
    Federal Reserve programs to strengthen credit markets and the economy
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
  • January 13, 2009
    Donald L. Kohn, Vice Chairman
    Troubled Asset Relief Program
    Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.


http://www.duringtravel.com/s/AIG+HK

AIG unit stock soars in Hong Kong as insurer works to pay back U.S.
Oct 29, 2010 · Shares of Asian-based insurer AIA, the unit recently taken public by bailed-out insurance giant American International Group , soared more than 17 percent on its ...
http://www.washingtonpost


http://www.duringtravel.com/go.php?url=http://www.washingtonpost.com/wp-dyn/content/article/2010/10/29/AR2010102904351.html




AIG unit stock soars in Hong Kong as insurer works to pay back U.S.
Oct 29, 2010 · Shares of Asian-based insurer AIA, the unit recently taken public by bailed-out insurance giant American International Group , soared more than 17 percent on its ...
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/29/AR2010102904351.html
AIG secures HK exchange nod to list AIA: sources
HONG KONG (Reuters) - American International Group Inc ( AIG.N ) inched closer in its ambitious plan to list its Asian life insurance business, AIA Group Ltd, after securing ...




http://www.washingtonpost.com/wp-dyn/content/article/2010/10/29/AR2010102904351.html


AIG unit stock soars in Hong Kong as insurer works to pay back U.S.


Washington Post Staff Writer
Friday, October 29, 2010; 10:49 PM

A lively day on the Hong Kong stock exchange Friday could translate into good news for American taxpayers.

This Story


Shares of Asian-based insurer AIA,


Shares of Asian-based insurer AIA, the unit recently taken public by bailed-out insurance giant American International Group, soared more than 17 percent on its first day of trading.

"It's certainly a positive sign," said Rob Haines, an analyst for CreditSights. "It's good for the government, good for the taxpayers, good news for AIG."

At the end of last month, officials at AIG and the Treasury Department announced that they had finalized a deal to restore the troubled insurer to independence and to have it repay the massive taxpayer aid that rescued the company more than two years ago.

Taking AIA public is a key part of that plan. That effort, which came after an attempt to sell the valuable division fell through earlier this year, was months in the making.

The sale of another of AIG's crown jewels, American Life Insurance Co., or Alico, is expected to close in coming days. MetLife is paying $15.5 billion for Alico, which operates in more than 50 countries.

Together, the AIA and Alico transactions are expected to wipe out AIG's remaining debt to the Federal Reserve Bank of New York, which bailed out AIG with an emergency $85 billion loan in September 2008, giving the government an 80 percent stake in the company. The bailout eventually grew to a government commitment of more than $180 billion, though the company's actual tab has decreased steadily over the past year.


Even after AIG repays its debt to the Fed, the company still must make good on Treasury's nearly $50 billion investment.

Under the current strategy, Treasury plans to swap its preferred shares in the company for about 1.7 billion shares of AIG common stock, leaving the federal government with a temporary 92.1 percent ownership stake in AIG, up from its current stake of 79.8 percent.

Treasury expects to sell those shares to investors over time, meaning that AIG's stock price ultimately will determine how quickly the government can pull out of the company and how much of the taxpayer investment it can recoup. If the stock falls flat, taxpayers could be on the hook for billions of dollars; if it holds steady or improves, the government stands to reap a profit.

Either way, AIG will emerge as a much smaller company than the behemoth it was before the crisis. It also will be primarily an insurance company once again, rather than depending on the profits of units such as AIG Financial Products, whose troubled derivatives contracts nearly drove its parent company into the ground.

Plenty of hurdles remain before AIG pays back its debt to the government and achieves its independence, said Haines, the CreditSights analyst. But Friday's successful AIA debut certainly helps.

"It's one step. There are a lot more steps. A lot of things could go wrong," he said. "But this is a positive first step."

AIA stock closed Friday at HK$23.05.




AIG insurance products and services offering auto insurance, life ...

AIG insurance products and services offering auto insurance, life insurance, accident and health insurance, environmental coverage, property and casualty, and more for consumers ...

http://www.aig.com/home_355_86566.html

AIA Central - Wikipedia, the free encyclopedia

The AIA Central (previously called AIG Tower) in Hong Kong is a 185 m (607 ft.), 40 storey skyscraper that was completed in 2005. It is located in Central, not far from the ...

http://en.wikipedia.org/wiki/AIG_Tower

建行(亞洲) 財務

www.ccbaf.com

http://www.aigcard.com/

AIG unit stock soars in Hong Kong as insurer works to pay back U.S.

Oct 29, 2010 · Shares of Asian-based insurer AIA, the unit recently taken public by bailed-out insurance giant American International Group , soared more than 17 percent on its ...

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/29/AR2010102904351.html

AIG secures HK exchange nod to list AIA: sources

HONG KONG (Reuters) - American International Group Inc ( AIG.N ) inched closer in its ambitious plan to list its Asian life insurance business, AIA Group Ltd, after securing ...

http://www.reuters.com/article/2010/09/21/us-aia-ipo-idUSTRE68K2XW20100921

CCB (Asia) Credit Card

AIG Tower is a skyscraper in Hong Kong, China. See a detailed profile of the structure here, with data, descriptions, and property listings from the Emporis database.

http://www.ccbaf.com/

AIG gets Hong Kong approval for IPO of Asian unit - MarketWatch

HONG KONG (MarketWatch) -- American International Group has received approval to list its Asian life insurance business AIA Group Ltd. on the Hong Kong Stock Exchange, according ...

http://www.marketwatch.com/story/aig-gets-hong-kong-approval-for-ipo-of-asian-unit-2010-09-21

American International Group - Wikipedia, the free encyclopedia

American International Group, Inc. (AIG) (NYSE: AIG) is an American ... and its Asian headquarters office is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was ...

http://en.wikipedia.org/wiki/American_International_Group

AIG United Guaranty - Hong Kong

Hong Kong : AIG United Guaranty began its expansion into Asia with the launch of its Hong Kong operations in 1999, as part of a long-term reinsurance agreement with the HKMC, a ...






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