The initial reporting was not accurate - which came to light more recently.
It was a long-planned event by one of the insurance subsidiaries - said subsidiaries being very solvent, state regulated companies, the sale of which being a primary source of the cash that will be used to repay the federal loan. Say what we will about the extravagant expense, but it's entirely appropriate for the profitable operating companies to take care of business, part of which is ensuring that their best performing agents don't get worried and defect.
AIG CEO clarifies to Henry Paulson on agent meeting - Update
Wed Oct 08 14:02:00 2008 EDT (RTTNews) - Wednesday, American International Group Inc. (AIG), said its chairman and chief executive
officer, Edward Liddy, has sent a letter to U.S. Treasury Secretary, Henry Paulson, clarifying the circumstances
of a business event held by its subsidiary, which was discussed during an October 7, 2008 hearing by
the House committee on Oversight and Government reform.
New York-based financial and insurance services provider AIG came in the spotlight last month when
it was not able to withstand the financial crisis and had to be provided a credit facility of up to
$85 billion by the Federal Reserve in exchange for a 79.9% equity stake in the company.
The company said that the event, held by one of AIG's insurance subsidiaries for independent life
insurance agents, was planned well three months before the Fed's loan, and was wrongly mischaracterized
as an "Executive Retreat".
AIG said that the event had more than 100 attendees, of which only 10 were employees of the company's
subsidiary, and no AIG executives from headquarters attended the meeting.
Edward liddy said in his letter assuring Henry Paulson, "AIG is focused on doing what is necessary
to address our capital structure, repay the Fed credit facility and emerge as a healthy global insurer.
In the meantime, our insurance businesses continue to operate normally and satisfy the needs of our
policy holders."
The CEO also noted that the company is reevaluating the costs of all aspects of its operations in
light of the new circumstances in which they are operating. |
