Aig Scandal and Hank Greenberr

AIG Scandal and Maurice R. "Hank" Greenberg

About

American International Group, Inc. (AIG) is a global insurance company which provides various ranges of casualty insurance which include life insurance, retirement products, mortgage insurance and other financial services to customers all over the world. AIG also owns ILFC the world’s largest aircraft leasing company. There primary source of revenue is through insurance premiums, policy fees from universal life insurance and investment products, and income from investments. (aig.com) AIG was founded in 1919 by Cornelius Vander Starr in Shanghai , China originally named “Continental Casualty Company (Shelp & Ehrbar, 2009). Maurice “Hank” Greenberg joined the company in 1960 at which that time he become president in 1962 of a subsidiary company “American Home Assurance Corporation.” During his time as president Greenberg was credited with developing reinsurance facilities and personal accident insurance which assisted with the company’s growth. American Home became very successful and profitable having the ability to acquire other major insurance companies thus creating it into AIG corporate structure. Upon the founder Vander Starr death, Greenberg was named CEO of AIG and ran the company for over 30 years (Schlep & Ehrbar, 2009). Under Greenberg’s leadership the company became one of the largest insurance companies in the world, outperforming its competitors, ranked as the number 9 company on the Fortune 500 list with $850 billion of assets making it the fourth largest company in the US (Shlep & Ehrbar, 2009).

The Scandal

American General was subpoenaed in February 2005 by the Office of Attorney General of the State of New York (NYAG), Eliot Spitzer and the Securities Exchange Commission (SEC) for documents relating to “investigations of nontraditional insurance products and certain assumed reinsurance transactions”. Investigators have been looking into transactions of referred to as “reinsurance” or...