Tuesday, February 10, 2009

How is AIG doing after bailout?

Posted by: Yi Xin Jin (Lily)

The congressional leaders are requesting the Government Accountability Office to assess the impact of the 150 billion dollars rescue package for the insurance giant American International Group Inc has had on the U.S. insurance market. According to Paul Kanjorski, chairman of the Capital Markets and Insurance Subcommittee, studying the impact of the rescue plan we have to “look at how funds were being deployed, whether they were serving to alleviate systemic financial risk and what sorts of distortionary effects they could have on market pricing, terms and capacity.” Even though the Federal government’s assistance saved AIG from collage, however the future of the insurance industry still remains uncertain. Any negative news could cause more declines in the fragile and volatile market. AIG is slowly working towards achieving the Federal government’s goals and objectives. However, in the process, there has been negative news regarding what the company has done with the rescue fund. For example the executive party scandal, where 500,000 dollars were spent on the AIG executives celebrating bailout. And recently AIG decided to use the taxpayer’s money “to provide an average of $1.1 million to about 400 of its employees at the very business unit.” Many people believe this decision is boggling and wrong.




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