AIG Says Congress Mischaracterized Subsidiary’s Conference as Retreat
We reported in the "Daily Newsflash" early on Wednesday, along with many other news services, that during the House Oversight and Government Reform Committee hearing held on October 7 lawmakers criticized American International Group Inc. (AIG) for attending what they characterized as an "executive retreat” just days after receiving an $85 billion loan credit facility from the New York Fed. The so-called "retreat", according to AIG, was a conference for leading independent distributors with its subsidiary American General.
AIG’s CEO Edward Liddy responded immediately to the lawmakers' statements in a letter to Treasury Secretary Henry Paulson, stating that the "retreat" in question was held by an AIG subsidiary for independent life insurance, not for AIG employees, who were top business producers for the insurer.
"The vast majority of the attendees were independent business people and their guests, not AIG employees," wrote Mr. Liddy. "Indeed, of the more than 100 attendees, only 10 were employees of one our insurance subsidiaries who attended to represent their company. Not a single corporate executive from AIG headquarters attended."
The meeting was planned months before the Federal Reserve Bank of New York's loan to AIG.
Mr. Liddy in his letter stated that the company understood that it is now facing very difficult challenges – and "that we owe our employees and the American public new standards and approaches." Liddy assured Paulson that the insurer was reevaluating all operational costs in light of its new circumstances.
Conferences such as the one that took place last month provide opportunities for top independent distributors to meet with selected members of insurance company management to learn about ongoing developments in the company and to provide them with product, marketing and operational updates. AIG American General made a commitment to hold this conference in advance of the current crisis and believed it was important to honor that commitment.
Published on October 9, 2008
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