AIG Settlement Leaves Out Life Issues
BY STEVE TUCKEY
National Underwriter News
February 10, 2006
Posted February 24, 2006
The $1.64 billion settlement announced yesterday between American International Group Inc. and a variety of state and federal agencies will cover only allegations of wrongdoing on the property-casualty side of the business.
AIG Chief Executive Martin Sullivan emphasized that point during a conference call Thursday.
"These settlements do exclude the life company," Sullivan said. "Those charges are the target of investigations by the New York attorney general's officer with which we are cooperating fully."
Sullivan did not talk about when he thought the life investigations would be resolved.
Internal AIG memos included in court pleadings suggest that former AIG Chairman Maurice Greenberg was uneasy in 2001 when AIG got into the life settlement business. AIG used a third-party trust to handle life settlement operations and ultimately booked its life settlement profits as underwriting profits.
Officials also are looking into allegations that AIG may have converted a Brazilian life insurance company's underwriting losses into investment losses.
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