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American International Group
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factoids
S&P 100S&P 500 Index>S&P 500 Component| industry = Financial servicesInsuranceURL=HTTP://STARRFOUNDATION.ORG/FILES/2017/10/CV_STARR_BOOK.PDFShanghai, Republic of China (1912–1949)>China| founder = Cornelius Vander StarrNew York City, New York (state)>New York, United States| area_served = WorldwideBrian Duperreault}}{{nowrapPresident (corporate title) and CEO}}}}{{nowrap>Mark Lyons}}{{nowrapCFO}}}}{{nowrapLucy Fato}}{{nowrap>{{small|General counsel}}}}"GC Powerlist United States 2019",The Legal 500]. Retrieved October 17, 2019.]| products = Insurance, Property Casualty: Commercial & Consumer, Life & Retirement, Mortgage Insurance{{decrease}} {{US$(2018)}}}}{{increase}} {{US$}}$0.226 billion{{small|(2018)}}}}{{increase}} {{US$}}-0.006 billion{{small|(2018)}}}}{{increase}} {{US$}}491.984billion {{small|(2018)}}}}{{decrease}} {{US$}}57.309 billion {{small|(2018)}}}}~49,800 {{small|(2017)}}}}weblink}}WORK= TIME (MAGAZINE) >DATE= SEPTEMBER 18, 2008PUBLISHER=U.S. SECURITIES AND EXCHANGE COMMISSION, February 16, 2018, }}American International Group, Inc., also known as AIG, is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. {{as of|2016|December|31|df=US}}, AIG companies employed 56,400 people.WEB,weblink 2016 10-K American International Group, Inc., December 31, 2016, AIG.com, UNITED STATES SECURITIES AND EXCHANGE COMMISSION,weblink" title="web.archive.org/web/20170329061330weblink">weblink March 29, 2017, dead, March 3, 2017, 8, The company operates through three core businesses: General Insurance, Life & Retirement, and a standalone technology-enabled subsidiary.NEWS, Barlyn, Suzanne, Singh, Sweta, AIG to restructure into three new units, marking CEO's first big move,weblink September 25, 2017, Reuters, 2017, NEWS, Scism, Leslie, AIG Retools Operating Structure Following Pledge From CEO,weblink September 25, 2017, Wall Street Journal, September 25, 2017, NEWS, AIG Restructures Again; Commercial Lines CEO Schimek to Leave,weblink September 26, 2017, Insurance Journal, September 25, 2017, General Insurance includes Commercial, Personal Insurance, U.S. and International field operations. Life & Retirement includes Group Retirement, Individual Retirement, Life, and Institutional Markets.AIG's corporate headquarters are in New York City and the company also has offices around the world. AIG serves 87% of the Fortune Global 500 and 83% of the Forbes 2000.WEB,weblink 2016 10-K American International Group, Inc., December 31, 2016, AIG.com, UNITED STATES SECURITIES AND EXCHANGE COMMISSION, March 3, 2017, 4, AIG was ranked 60th on the 2018 Fortune 500 list.WEB, Fortune 500,weblink Fortune, August 1, 2018, According to the 2016 Forbes Global 2000 list, AIG is the 87th largest public company in the world.WEB, The World's Biggest Public Companies,weblink Forbes, March 15, 2017, en, On December 31, 2017, AIG had $65.2 billion in shareholder equity.WEB, SEC Filing American International Group, Inc. Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2017,weblink aig.gcs-web.com, Item 6, 35, en, During the financial crisis of 2008, the Federal Reserve bailed the company out for $180 billion and assumed control, with the Financial Crisis Inquiry Commission correlating AIG's failure with the mass sales of unhedged insurance.BOOK, Phil Angelides, Financial Crisis Inquiry Report,weblink 2011, DIANE Publishing, 352, 9781437980721, In 2011 the nationalization of AIG was ruled illegal, and after regaining autonomy, AIG repaid $205 billion to the United States government in 2012.WEB,weblink Treasury Sells Final Shares of AIG Common Stock, Positive Return on Overall AIG Commitment Reaches $22.7 Billion, Department of Treasury, February 6, 2013,

History

File:North China Daily News Building Shanghai Simon Fieldhouse.jpg|thumb|left|North China Daily News Building on the Bund, (Shanghai]] (elevation): the original home of what became AIG; now the AIA building.)File:AIG New York building at dusk.jpg|thumb|right|70 Pine Street70 Pine Street

1919–1945: Early years

AIG was founded December 19, 1919 when American Cornelius Vander Starr (1892-1968) established a general insurance agency, American Asiatic Underwriters (AAU), in Shanghai, China.NEWS, Laing, Jonathan R., Are the Glory Years Over? – Much Slower Growth Seems in the Offing for AIG, Barron's, July 8, 1991, Business grew rapidly, and two years later, Starr formed a life insurance operation.NEWS, Tracer, Zachary, Benmosche Exits Greenberg Jewel Linked to AIG Founding.,weblink February 21, 2013, Bloomberg Businessweek, December 18, 2012, By the late 1920s, AAU had branches throughout China and Southeast Asia, including the Philippines, Indonesia, and Malaysia.NEWS, AIG Europe – History, Marketline, February 18, 2004, In 1926, Mr. Starr opened his first office in the United States, American International Underwriters Corporation (AIU).NEWS, Bandler, James, Hank's Last Stand,weblink February 21, 2013, Fortune, October 7, 2008, He also focused on opportunities in Latin America and, in the late 1930s, AIU entered Havana, Cuba.NEWS, American International Group Inc (New York Stock Exchange),weblink Thomson Reuters, Company profile, New York, March 18, 2009,weblink February 20, 2009, live, The steady growth of the Latin American agencies proved significant as it would offset the decline in business from Asia due to the impending World War II. In 1939, Mr. Starr moved his headquarters from Shanghai, China, to New York City.NEWS, AIG: What does this US giant do?,weblink September 17, 2008, BBC News, March 18, 2009,weblink" title="web.archive.org/web/20090320013252weblink">weblink March 20, 2009, live, WEB, Foreign Office Files for China, 1949–1976,weblink Adam Matthew Publications, Part 1: Complete Files for 1949: Publisher's Note, March 18, 2009, dead,weblink" title="web.archive.org/web/20081013085518weblink">weblink October 13, 2008,

1945–1959: International and domestic expansion

After World War II, American International Underwriters (AIU) entered Japan and Germany,NEWS, 80 Years of Growth and Diversification; the AIG Story, Business Insurance, April 12, 1999, to provide insurance for American military personnel. Throughout the late 1940s and early 1950s, AIU continued to expand in Europe, with offices opening in France, Italy, and the United Kingdom.NEWS, Collins, Stuart, Greenberg Hails London Role, Insurance Day, May 28, 2003, In 1952, Mr. Starr began to focus on the American market by acquiring Globe & Rutgers Fire Insurance Company and its subsidiary, American Home Fire Assurance Company.BOOK, Ehrbar, Al, Fallen Giant The Amazing Story of Hank Greenberg and the History of AIG, 2006, John Wiley & Sons, Inc., Hoboken, New Jersey, 0-471-91696-X, 82–83 and 91,weblink By the end of the decade, C.V. Starr's general and life insurance organization included an extensive network of agents and offices in over 75 countries.

1959–1979: Reorganization and specialization

In 1960, C.V. Starr hired Maurice R. Greenberg to develop an international accident and health business.NEWS, Greenberg Joining C.V. Starr & Co. in Development Capacity, Insurance Advocate, December 17, 1960, Two years later, Mr. Greenberg reorganized one of C.V. Starr's U.S. holdings into a successful multiple line carrier. Greenberg focused on selling insurance through independent brokers rather than agents to eliminate agent salaries. Using brokers, AIU 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 1967, American International Group, Inc. (AIG) was incorporated as a unifying umbrella organization for most of C.V. Starr's general and life insurance businesses.NEWS, Bowers, Barbara, Building a Global Platform, Best's Review/Life-Health Edition, August 1998, In 1968, Starr named Greenberg his successor. The company went public in 1969.BOOK, Hoover's Handbook of American Business,weblink 9th, 1999, 134, Hoover's, Hoover's Business Press, Austin, TX, 978-1-57311-045-7, March 18, 2009, (File:AIG Headquarters.jpg|thumb|AIG Headquarters in New York)The 1970s presented many challenges for AIG as operations in the Middle East and Southeast Asia were curtailed or ceased altogether due to the changing political landscape. However, AIG continued to expand its markets by introducing specialized energy, transportation, and shipping products to serve the needs of niche industries.BOOK, Cunningham, Lawrence A, The AIG Story, 2013, John Wiley & Sons, Inc., Hoboken, New Jersey, 978-1-118-34587-0, 14–15,

1979–2000: New opportunities and directions

During the 1980s, AIG continued expanding its market distribution and worldwide network by offering a wide range of specialized products, including pollution liability and political risk. In 1984, AIG listed its shares on the New York Stock Exchange (NYSE).NEWS, Barreto, Elzio, AIG marks end of era with $6.45 billion AIA stake sale,weblink March 7, 2013, Reuters, December 16, 2012, Throughout the 1990s, AIG developed new sources of income through diverse investments, including the acquisition of International Lease Finance Corporation (ILFC), a provider of leased aircraft to the airline industry. In 1992, AIG received the first foreign insurance license granted in over 40 years by the Chinese government. Within the U.S., AIG acquired SunAmerica Inc. a retirement savings company managed by Eli Broad, in 1999.NEWS, Insurers Set $17.8 Billion Stock Deal, New York Times, August 21, 1998,weblink 2019-06-25,

2000–2012: Further expansion and decline

File:Los Angeles Valley, Warner Center, AIG Towers.jpg|thumb|right|The AIG Towers of Woodland Hills, Los AngelesWoodland Hills, Los Angeles

Growth

The early 2000s saw a marked period of growth as AIG acquired American General Corporation, a leading domestic life insurance and annuities provider,NEWS, AIG Closes American General Acquisition, National Underwriter Life & Health, August 30, 2001, and AIG entered new markets including India.NEWS, Tata-AIG to Kick off with IT Products, Business Line Internet Edition,weblink February 11, 2001, In February 2000, AIG created a strategic advisory venture team with the Blackstone Group and Kissinger Associates "to provide financial advisory services to corporations seeking high level independent strategic advice".WEB,weblink AMERICAN INTERNATIONAL GROUP, INC., THE BLACKSTONE GROUP L.P. AND KISSINGER ASSOCIATES, INC. ANNOUNCE A NEW STRATEGIC ADVISORY VENTURE, AIG was an investor in Blackstone from 1998 to March 2012, when it sold all of its shares in the company. Blackstone acted as an adviser for AIG during the 2007-2008 financial crisis.WEB,weblink A.I.G. Sheds Stake in Blackstone, De La Merced, Michael J., March 2, 2002, New York Times DealBook, In March 2003 American General merged with Old Line Life Insurance Company.WEB,weblink Do You Have An Old Line Life Insurance Policy?, www.rootfin.com, December 28, 2017, In the early 2000s, AIG made significant investments in Russia as the country recovered from its financial crisis. In July 2003, Maurice Greenberg met with Putin to discuss AIG's investments and improving U.S.-Russia economic ties, in anticipation of Putin's meeting with U.S. President George W. Bush later that year."NEWS, Semenenko, Igor, AIG, Interros Set Up $500M Funds,weblink 13 February 2019, The Moscow Times, 30 July 2003, 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 must still cooperate with investigators continuing to probe the sale of a non-traditional insurance product.WEB,weblink AIG Forks Up $126 million to SEC on PNC Deals, November 24, 2004, Insurance Journal, September 18, 2008,weblink" title="web.archive.org/web/20080829181256weblink">weblink August 29, 2008, live,

Accounting scandal

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.WEB,weblink NBC News, NBC News, July 11, 2011, NEWS, Zuill, Lilla,weblink Reuters, Reuters, July 11, 2011, March 3, 2009, WEB,weblink The Street.com, The New York Attorney General's investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives.WEB,weblink AIG executive sentenced to 4 years in prison, The Seattle Times, May 22, 2014, On May 1, 2005, investigations conducted by outside counsel at the request of AIG's Audit Committee and the consultation with AIG's independent auditors, PricewaterhouseCoopers LLP resulted in AIG's decision to restate its financial statements for the years ended December 31, 2003, 2002, 2001 and 2000, the quarters ended March 31, June 30 and September 30, 2004 and 2003 and the quarter ended December 31, 2003.WEB,weblink AIG Nears Completion of Internal Review; Will Restate Results Provides Update on Internal Review and Timing, On November 9, 2005, the company was said to have delayed its third-quarter earnings report because it had to restate earlier financial results, to correct accounting errors.WEB,weblinkweblink" title="web.archive.org/web/20131105225406weblink">weblink dead, 2013-11-05, AIG to Again Restates Previous Results,

Expansion to the credit default insurance market

Martin J. Sullivan became CEO of the company in 2005. He began his career at AIG as a clerk in its London office in 1970.NEWS, Edmund L., Andrews, Michael J., de la Merced, Mary, Williams Walsh, Fed's $85 billion Loan Rescues Insurer, September 16, 2008,weblink The New York Times, September 17, 2008,weblink" title="web.archive.org/web/20110430061807weblink">weblink April 30, 2011, live, AIG then took on tens of billions of dollars of risk associated with mortgages. It insured tens of billions of dollars of derivatives against default, but did not purchase reinsurance to hedge that risk. Secondly, it used collateral on deposit to buy mortgage-backed securities. When losses hit the mortgage market in 2007-2008, AIG had to pay out insurance claims and also replace the losses in its collateral accounts.Maurice R. Greenberg and Lawrence A. Cunningham, The AIG Story (2013)AIG purchased the remaining 39% that it did not own of online auto insurance specialist 21st Century Insurance in 2007 for $749 million.NEWS,weblink AIG buys 21st Century Insurance, Los Angeles Times, September 28, 2007, With the failure of the parent company and the continuing recession in late 2008, AIG rebranded its insurance unit to 21st Century Insurance.WEB,weblinkweblink" title="web.archive.org/web/20081220061735weblink">weblink dead, December 20, 2008, AIG rebrand US auto insurance unit 21st Century Insurance, and cut jobs, November 26, 2008, December 3, 2008, WEB,weblinkweblink" title="web.archive.org/web/20190217030458weblink">weblink dead, February 17, 2019, AIG renaming auto insurance division, cutting jobs, November 26, 2008, December 3, 2008, 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 called a "public spat" between the company's board and management, on the one hand, and its key stockholders, and former CEO Maurice Greenberg on the other hand.NEWS,weblink AIG Investors Seek Ouster of Chief Executive Sullivan, June 11, 2008, Bloomberg, July 21, 2008, 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 Ed Liddy on September 17, 2008.NEWS, Former AIG CEO Willumstad foregoes some stock awards,weblink December 30, 2008, Thomson Reuters, New York, March 18, 2009, Lilla, Zuill, AIG's board of directors named Bob Benmosche CEO on August 3, 2009, to replace Liddy, who earlier in the year announced his retirement.NEWS,weblink The Washington Post, "AIG Names Robert Benmosche New President and CEO", The Washington Post, August 3, 2009, July 11, 2011, Brady, Dennis,

Liquidity crisis and government bailout

{{Further|Subprime mortgage crisis|Financial crisis of 2007–08}}In late 2008, the federal government bailed out AIG for $180 billion, and technically assumed control, because some believed its failure would endanger the financial integrity of other major firms that were its trading partners--Goldman Sachs, Morgan Stanley, Bank of America and Merrill Lynch (as well as dozens of European banks), as described belowweblink In January 2011, the Financial Crisis Inquiry Commission issued one of many critical governmental reports, deciding that AIG failed and was rescued by the government primarily because its enormous sales of credit default swaps were made without putting up the initial collateral, setting aside capital reserves, or hedging its exposure, which one analyst considered a profound failure in corporate governance, particularly its risk management practices. Other analysts believed AIG's failure was possible because of the sweeping deregulation of over-the-counter (OTC) derivatives, including credit default swaps, which effectively eliminated federal and state regulation of these products, including capital and margin requirements that would have lessened the likelihood of AIG's failure.BOOK, Jerry M. Rosenberg, The Concise Encyclopedia of The Great Recession 2007-2012,weblink 2012, Scarecrow Press, 244, 9780810883406, BOOK, Asli Yüksel Mermod, Samuel O. Idowu, Corporate Social Responsibility in the Global Business World,weblink 2013, Springer, 127, 9783642376207, AIG had sold credit protection through its London unit in the form of credit default swaps (CDSs) on collateralized debt obligations (CDOs) but by 2008, they had declined in value.NEWS, Morgenson, Gretchen, Behind Insurer's Crisis, Blind Eye to a Web of Risk,weblink September 29, 2008, The New York Times, September 29, 2008, Ng, Serena, and Mollenkamp, Carrick "Goldman Fueled AIG's Gambles", The Wall Street Journal, December 12, 2009 AIG's 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.NEWS, Pittman, Mark, Goldman, Merrill Collect Billions After Fed's AIG Bailout Loans,weblink October 12, 2008, Bloomberg News, September 29, 2008, As a result, AIG's credit rating was downgraded and it was required to post additional collateral with its trading counter-parties, leading to a liquidity crisis that began on September 16, 2008, and essentially bankrupted all of AIG. The New York United States Federal Reserve Bank (led by Timothy Geithner who would later become Treasury secretary) stepped in, announcing creation of a secured credit facility, initially of up to US$85 billion to prevent the company's collapse, enabling AIG to deliver additional collateral to its credit default swap trading partners. The credit facility was secured by the stock in AIG-owned subsidiaries in the form of warrants for a 79.9% equity stake in the company and the right to suspend dividends to previously issued common and preferred stock.NEWS, Andrews, Edmund L, Fed's $85 billion Loan Rescues Insurer,weblink September 28, 2008, The New York Times, September 16, 2008, NEWS, Kaiser, Emily, After AIG rescue, Fed may find more at its door,weblink September 17, 2008, Reuters, September 17, 2008, NEWS, Federal Reserve Board, with full support of the Treasury Department, authorizes the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group (AIG),weblink September 16, 2008, United States Federal Reserve Board of Governors, The AIG board accepted the terms of the Federal Reserve rescue package that same day, making it the largest government bailout of a private company in U.S. history.WEB, Schmidt, Krista, History of U.S. Gov't Bailouts, Pro Publica, April 15, 2009,weblink December 28, 2014,weblink" title="web.archive.org/web/20141227155510weblink">weblink December 27, 2014, dead, mdy-all, BOOK, Stein, Jerome,weblink Stochastic Optimal Control and the U.S. Financial Debt Crisis, AIG in the Crisis, Springer Science & Business Media, 2012, 99, 9781461430797, December 29, 2014, The AIG liquidity crisis led to the largest government bailout of a private company in US history, totaling $182 billion., On March 17, 2009, AIG compounded public cynicism concerning the "too big to fail" firm's bailout by announcing that it would pay its executives over $165 million in executive bonusesweblink{{Better source|Reason=This source is crowdsourced and a tabloid, unlikely that a better source can't be found.|date=September 2019}} Total bonuses for the financial unit could reach $450 million, and bonuses for the entire company could reach $1.2 billion. Newly installed President Barack Obama, who had voted for TARP as a SenatorNEWS, U.S. Senate vote on Emergency Economic Stabilization Act of 2008,weblink July 11, 2011, Senate.gov, June 29, 2011, 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?"WEB,weblink Obama tries to stop AIG bonuses: 'How do they justify this outrage?' - CNN.com, www.cnn.com, en, April 17, 2017, Both Democratic and Republican politicians reacted with similar outrage to the planned bonuses, as did political commentators and journalists in the AIG bonus payments controversy.AIG began selling some assets to pay off its government loans in September 2008 despite a global decline in the valuation of insurance businesses, and the weakening financial condition of potential bidders.NEWS,weblink AIG may rethink asset sales in tough markets, Reuters UK, March 2, 2009, Bansal, Paritosh, February 24, 2009,weblink" title="web.archive.org/web/20090228114450weblink">weblink February 28, 2009, live, In December 2009, AIG formed international life insurance subsidiaries, American International Assurance Company, Limited (AIA) and American Life Insurance Company (ALICO) which were transferred to the Federal Reserve Bank of New York to reduce its debt by US$25 billion.AIG closes two transactions that reduce debt that IAG owes Federal Reserve Bank of New York by $25 billion AIG sold its Hartford Steam Boiler unit on March 31, 2009, to Munich Re for $742 million.WEB,weblink Munich Re buys AIG's Hartford Steam Boiler for $742m, Yvette Essen, Insurance Correspondent, December 22, 2008, Telegraph.co.uk, WEB,weblink Munich Re concludes purchase of Hartford Steam Boiler, May 13, 2017, dead,weblink" title="web.archive.org/web/20111004175417weblink">weblink October 4, 2011, On April 16, 2009, AIG announced plans to sell 21st Century Insurance subsidiary to Farmers Insurance Group for $1.9 billion.NEWS, Lifsher, Marc, AIG selling 21st Century Insurance to Farmers Insurance,weblink February 6, 2013, Los Angeles Times, April 17, 2009, June 10, 2009. AIG sold down its majority ownership of reinsurer Transatlantic Re.WEB,weblink AIG confirms sale of Transatlantic Re shares, postonline.co.uk, The Wall Street Journal reported on September 7, 2009, that Pacific Century Group had agreed to pay $500 million for a part of AIG's asset management business, and that they also expected to pay an additional $200 million to AIG in carried interest and other payments linked to future performance of the business.NEWS, Carew, Rick,weblink Li Is Back In Game With AIG Purchase, The Wall Street Journal, September 7, 2009, July 11, 2011, AIG then sold its American Life Insurance Co. (ALICO) to MetLife Inc. for $15.5 billion in cash and MetLife stock in March 2010.NEWS, Ellis, Blake, AIG in $15.5 billion unit sale to MetLife,weblink February 6, 2013, CNNMoney, March 8, 2010, Bloomberg L.P. reported on March 29, 2010, 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.NEWS, Son, Hugh,weblink AIG Completes Sale of PineBridge Investments to Pacific Century, Bloomberg, March 29, 2010, July 11, 2011, Fortress Investment Group purchased 80% of the interest in financing company American General Finance in August 2010.WEB,weblink Update: American General Finance sold to Fortress Investment Group " Evansville Courier & Press, Courierpress.com, December 16, 2013, In September AIG sold AIG Starr and AIG Edison, two of its Japan-based companies, to Prudential Financial for $4.2 billion in cash and $600 million in assumption of third party AIG debt by Prudential.WEB,weblink AIG to sell Star, Edison to Prudential, MarketWatch, July 11, 2011, On November 1, 2010, AIG raised $36.71 billion from both the sale of ALICO and its IPO of AIA. Proceeds went to pay off FRB of New York loan.NEWS, Bernard, Stephen, AIG set to repay $37 billion in bailout money,weblink February 6, 2013, Washington Times, November 1, 2010, In October 2010, The Wall Street Journal reported that the Tomlinson family was allowed to join a civil suit involving AIG for its alleged complicity in a 'stranger-originated life insurance' scheme.WEB, Scism, Leslie, Maremont, Mark, Judge Allows 'Death Bet' Case,weblink Wall Street Journal, October 5, 2010, The case involved JB Carlson and Germaine Tomlinson, and alleged that AIG managers allowed Carlson to take out life insurance policies against Tomlinson without an insurable interest, which some labeled a "death bet". AIG initially filed a suit against Carlson in 2008 to invalidate the claim altogether, arguing that it was filed fraudulently.NEWS, McLaughlin, Kathleen, Tomisue Hilbert settles suit over $15M policy,weblink March 20, 2018, Indianapolis Business Journal, June 25, 2011, en, The case was settled and dismissed with prejudice by U.S. District Court Judge Sarah Evans Barker on May 25, 2011AIG sold its Taiwanese life insurance company Nan Shan Life to a consortium of buyers for $2.16 billion in January 2011.NEWS, Wassener, Bettina, A.I.G. to Sell Taiwan Unit for $2.16 Billion,weblink February 6, 2013, The New York Times, January 12, 2011, Due to the Q3 2011 net loss widening, on November 3, 2011, AIG shares plunged 49 percent year to date. The insurer's board approved a share buyback of as much as $1 billion.WEB,weblink AIG Posts Loss on Writedowns Tied to AIA, Mortgage Declines, November 4, 2011, Nine years after the initial bailout, in 2017, the U.S. Financial Stability Oversight Council removed AIG from its list of too-big-to-fail institutionsweblink

2012–present: Modern era

The United States Department of the Treasury announced an offering of 188.5 million shares of AIG for a total of $5.8 billion on May 7, 2012. The sale reduced Treasury's stake in AIG to 61 percent, from 70 percent before the transaction.NEWS, Buhayar, Noah, U.S. Treasury Sells $5.8 Billion of AIG Stock,weblink February 6, 2013, Bloomberg, May 7, 2012, Four months later, on September 6, 2012, AIG sold $2 billion of its investment in AIA to repay government loans. The board also approved a $5 billion stock repurchase of government-owned shares in AIA.NEWS, AIG to sell $2 billion in AIA shares, repay US government,weblink February 6, 2013, New York Post, September 6, 2012, The next week, on September 14, 2012, the Department of Treasury completed its fifth sale of AIG common stock, with proceeds of approximately $20.7 billion, reducing the Treasury's ownership stake in AIG to approximately 15.9 percent from 53 percent. Government commitments were fully recovered, and Treasury and the FRBNY to date had received a combined positive return of approximately $15.1 billion.NEWS, Tara LaCapra, Lauren, Treasury sells big chunk of AIG stock at a profit,weblink February 6, 2013, Reuters, September 11, 2012, On October 12, 2012, AIG announced a five and a half year agreement to sponsor six New Zealand-based rugby teams, including world champion All Blacks. The AIG logo and the Adidas logo, the league's primary sponsor, will be displayed on the league's team jerseys.NEWS, Baynes, Dan, AIG Sponsors Jersey of Rugby World Champion All Blacks Team,weblink February 27, 2014, Bloomberg, October 12, 2012, The U.S. Department of the Treasury in December 2012 published an itemized list of the loans, stock purchases, special purpose vehicles (SPVs) and other investments engaged in with AIG, the amount AIG paid back and the positive return on the loans and investments to the government.WEB,weblink Investment in AIG, US Department of Treasury, February 5, 2013, The Treasury said that it and the Federal Reserve Bank of New York provided a total $182.3 billion to AIG, which paid back a total $205 billion, for a total positive return, or profit, to the government of $22.7 billion. In addition, AIG sold off a number of its own assets to raise money to pay back the government. On December 14, 2012, the Treasury Department sold the last of its AIG stock in its sixth stock sale for a total of approximately $7.6 billion. In total, the Treasury Department realized a gain of more than $22 billion from the sale of AIG common stock and $0.9 billion from the sale of AIG preferred stock. The same month, Robert Benmosche announced that he would be stepping down from his position as President and CEO due to his advancing lung cancer.NEWS, AIG Chief Is Being Treated for Cancer,weblink March 20, 2018, Wall Street Journal, October 26, 2010, WEB,weblink Charlie Rose Talks to AIG Chief Robert Benmosche, Bloomberg, March 20, 2018, AIG began an advertising campaign on January 1, 2013, called "Thank You America," in which several company employees, including AIG President and CEO Robert Benmosche, talked directly to the camera and offered their thanks for the government assistance.NEWS, Irwin, Neil, AIG to America: Thanks, guys!,weblink June 4, 2013, The Washington Post, December 31, 2012, Peter Hancock succeeded Benmosche as President and CEO of AIG in September 2014.NEWS, Russolillo, Steven, Meet Peter Hancock, AIG's New CEO,weblink March 20, 2018, WSJ, June 10, 2014, While Benmosche stayed on in an advisory role, he died in February the following year.NEWS, Kandell, Jonathan, Robert Benmosche, Rescuer of A.I.G. After Bailout, Dies at 70,weblink March 20, 2018, The New York Times, February 27, 2015, In June 2015, Taiwan's Nan Shan Life Insurance acquired a stake in AIG's subsidiary in Taiwan for a fee of $158 million.WEB, Emily Chan,weblink Nan Shan Life to buy part of AIG's Taiwan unit for $158 mln, Reuters, June 11, 2015, June 11, 2015, Later that year, activist investor Carl Icahn called for a breakup of AIG, describing the company as "too big to succeed".NEWS, Nasr, Reem, Carl Icahn turns up the pressure on AIG,weblink March 20, 2018, CNBC, November 23, 2015, AIG announced plans for an initial public offering of 19.9 percent of United Guaranty Corp., a Greensboro, North Carolina-based provider of mortgage insurance for lenders in January 2016.NEWS,weblink Corporate giant AIG to begin spinoff of Greensboro's United Guaranty, News & Record, January 26, 2016, February 24, 2016, Later that year, Icahn won a seat on the board of directors and continued to pressure the company to split up its major divisions.NEWS, Basak, Sonali, How AIG CEO Hancock Ended Up on Way Out,weblink March 20, 2018, Insurance Journal, March 10, 2017, AIG also began a joint venture with Hamilton Insurance Group and Two Sigma Investments to serve the insurance needs of small- to medium-sized enterprises. Industry veteran Brian Duperreault became the chairman of the new entity, and Richard Friesenhahn, the executive vice president of U.S. casualty lines at AIG, became CEO.NEWS, Basak, Sonali, AIG to Join Two Sigma, Duperreault in Technology Venture,weblink May 7, 2016, Bloomberg, April 26, 2016, In August 2016, AIG sold off United Guaranty, its mortgage-guarantee unit, to Arch Capital Group, a Bermuda-based insurer, for $3.4 billion.NEWS,weblink AIG Reaches Deal to Sell Mortgage-Insurance Unit to Arch Capital for About $3.4 Billion, Scism, Leslie, August 16, 2016, Lublin, Joann S., The Wall Street Journal, 0099-9660, August 18, 2016, Brian Duperreault was appointed CEO of AIG on May 15, 2017. That September, the company reorganized into three segments, comprising a general insurance unit, a life and retirement unit, and a stand-alone technology-focused unit called Blackboard Insurance, led by Seraina Macia.

Business

(File:NZ All Blacks Mens XV's Shirt.jpg|thumb|NZ All Blacks Mens XV's Shirt)In Australia and China, AIG is identified as a large financial institution and provider of financial services including credit security mechanisms. In the United States, AIG is the largest underwriter of commercial and industrial insurance.WEB,weblink History of American General Life Companies, AIGAG.com,weblink" title="web.archive.org/web/20110707095336weblink">weblink July 7, 2011, live, July 11, 2011, AIG offers property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services.WEB,weblink AIG 2012 Annual Report 10-K, American International Group, October 14, 2013, In the third quarter of 2012, the global property-and-casualty insurance business, Chartis, was renamed AIG Property Casualty. SunAmerica, life-insurance and retirement-services division, was renamed AIG Life and Retirement, other existing brands continue to be used in certain geographies and market segments.NEWS,weblink AIG Brand Revived, Ng, Serena, June 28, 2012, The Wall Street Journal, October 14, 2013,

Subsidiaries

Bailout litigation

  • Starr International Co v U.S. Federal Circuit Court of Appeals
Hank Greenberg, with lead lawyer David Boies, independently sued the U.S. Government for money damages in the United States Court of Federal Claims in 2011.WEB, Zeitlin, Matthew, John Stewart to Former AIG Chief Hank Greenberg: "Go F*ck Yourself!",weblink Buzzfeed, February 5, 2016, The AIG board had announced on January 9 that the company would not join the lawsuit.WEB,weblink As public fumes, AIG says will not sue US over bailout, Reuters, February 6, 2013,weblink" title="web.archive.org/web/20130217025557weblink">weblink February 17, 2013, dead, After hearing thirty-seven days of testimony from Ben Bernanke, Timothy Geithner, Hank Paulson and others,NEWS, Scism, Leslie, Closing Arguments Loom in AIG Bailout Trial,weblink The Wall Street Journal, February 5, 2016, Judge Thomas C. Wheeler ruled that the Federal Reserve payment to AIG had been an illegal exaction, as the Federal Reserve Act did not authorize the New York Fed to nationalize a corporation by owning its stock. Recent Cases: Court of Federal Claims Holds that Government Acquisition of Equity Share in AIG Effected an Illegal Exaction, 129 Harv. L. Rev. 859 (2016). Judge Wheeler did not award compensation to the plaintiffs, ruling that they did not suffer economic damage because "if the government had done nothing, the shareholders would have been left with 100 percent of nothing."NEWS, Sorkin, Andrew,weblink In A.I.G. Case, Surprise Ruling That Could End All Bailouts, The New York Times, The New York Times Company, June 15, 2015, June 16, 2015, Greenberg and the U.S. Government appealed to the Court of Appeals for the Federal Circuit, which ruled that Greenberg had no legal right to challenge the bailout because that right belonged to AIG, which in this case, chose not to sue.WEB, Greenberg's Starr to Appeal AIG Bailout Case to Supreme Court,weblink Insurance Journal, May 10, 2017,
  • AIG Inc. et al. v. Maiden Lane II LLC
AIG filed suit against the New York Federal Reserve in January 2013 in order to maintain the former's right to sue Bank of America and other issuers of bad mortgage debt.NEWS, Stempel, Jonathan, AIG Sues The New York Fed,weblink April 18, 2018, Business Insider, January 12, 2013, The specific issue was whether the New York Federal Reserve transferred $18 billion in litigation claims on troubled mortgage debt through Maiden Lane Transactions, entities created by the Fed in 2008. This transaction, AIG argued, prevented them from recouping losses from insured banks. Owing to events which allowed AIG to proceed in another related case (see below), AIG withdrew the Maiden Lane case "without prejudice" on May 28, 2013.
  • AIG Inc. v. Bank of America Corporation LLC
On May 7, 2013, Los Angeles U.S. District Judge, Mariana Pfaelzer, ruled in a case between AIG and Bank of America concerning possible misrepresentations by Merrill Lynch and Countrywide as to the quality of the mortgage portfolio, that $7.3 billion of the disputed claims had not been assigned.WEB, Stempel, Jonathan,weblink AIG drops a lawsuit versus New York Fed related to bailout, Reuters, December 16, 2013, The two parties settled in July 2014, with Bank of America paying out $650 million to AIG, who in turn dismissed their litigation.NEWS, Freifeld, Karen, BofA pays AIG $650 million to settle mortgage disputes,weblink May 3, 2018, Reuters,

Corporate governance

{{Update section|date=September 2019}}

Board of directors

  • Brian Duperreault – President and Chief Executive Officer, American International Group, Inc.
  • W. Don Cornwell – Former Chairman of the Board and Chief Executive Officer, Granite Broadcasting Corporation
  • Peter R. Fischer - Former Head of Fixed Income Portfolio Management, Blackrock Inc.
  • John H. Fitzpatrick – Chairman, Oak Street Management Co., LLC
  • Christopher S. Lynch – Former Partner, KPMG LLP
  • Samuel J. Merksamer - Managing Director of Icahn Capital LP
  • Henry S. Miller – Chairman, Marblegate Asset Management, LLC
  • Linda A. Mills - Former Vice President of Operations, Northrop Grumman Corporation
  • Suzanne Nora Johnson – Former Vice Chairman, The Goldman Sachs Group, Inc.
  • Ronald A. Rittenmeyer – Former Chairman, Chief Executive Officer and President, Electronic Data Systems Corporation
  • Douglas Steenland – Former President and Chief Executive Officer, Northwest Airlines Corporation
  • Theresa M. Stone - Former Executive Vice President and Treasurer, Massachusetts Institute of Technology
  • William G. Jurgensen - Former Chief Executive Officer Nationwide Insurance
  • Nkosinathi P Mthembu - International Executive Officer
(as of January 23, 2018)WEB, Board of Directors,weblink January 23, 2018, live,weblink" title="web.archive.org/web/20170911204424weblink">weblink September 11, 2017,

See also

References

{{Reflist|2}}

Further reading

  • BOOK, Angelides, Phil, Financial Crisis Inquiry Report,weblink 2011, DIANE Publishing, 978-1-4379-8072-1,
  • BOOK, Cunningham, Lawrence A., Greenberg, Maurice R., The AIG story, 2013, John Wiley & Sons, Hoboken, N.J., 978-1118345870,
  • WEB, Sjostrom, Jr., William K., The AIG Bailout, 1346552, (2009)
  • NEWS, An Insurance Giant, Brought Down, September 27, 2008,weblink The New York Times, September 27, 2008,weblink" title="web.archive.org/web/20080930071745weblink">weblink September 30, 2008, live, (Graphic)
  • "Losses in Perspective" New York Times. September 17, 2008. (Graphic of AIG quarterly net profit & losses over five years, comparing Finance vs. Insurance activities.)
  • NEWS, Bill, Marsh, A Tally of Federal Rescues,weblink The New York Times, September 28, 2008, September 28, 2008,weblink" title="web.archive.org/web/20081001202707weblink">weblink October 1, 2008, live,
  • NEWS, R.M, Schneiderman, Philip, Caulfield, Celena, Fang, Elisabeth, Goodridge, Vikas, Bajaj, How a Market Crisis Unfolded: Some of the key events in the upheaval, September 15, 2008,weblink The New York Times, September 17, 2008,weblink" title="web.archive.org/web/20080916231720weblink">weblink September 16, 2008, live, (Graphic and interactive timeline.)
  • BOOK, Fatal Risk: A Cautionary Tale of AIG's Corporate Suicide, Boyd, Roddy, 2011, Wiley, Hoboken, NJ, 978-0-470-88980-0,
  • BOOK, Fallen Giant: The Amazing Story of Hank Greenberg and the History of AIG, Shelp, Ron, Ronald Shelp, 2006, Wiley, Hoboken, NJ, 0-471-91696-X,weblink
  • For a list of counterparties receiving U.S. taxpayer dollars, see: weblink" title="web.archive.org/web/20100110204144weblink">Business Week – List of Counterparties and Payouts

External links

{{Commons category|American International Group}} {{Finance links| name = American International Group| symbol = AIG| sec_cik = AIG| yahoo = AIG| google = AIG}}{{American International Group}}{{Major insurance companies}}

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