AIG Repays Nearly $4 Billion on Federal Loan

Payment represents single largest cash reduction

More On Legal & Compliance

from The Advisor's Professional Library
  • Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients’ financial well-being may be jeopardized.  RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.   
  • Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communications—to clients, from clients, and about client accounts.  To comply with fiduciary obligations, communications must be thorough and not mislead.
AIG announced Monday, Augusut 23, that it has repaid almost $4 billion to the Federal Reserve Bank of New York. International Lease Finance Corporation, a subsidiary of AIG, sold $4.4 billion in secured and unsecured notes to make the $3.9 billion payment.

The payment is the single largest the company has made to the Federal Reserve Bank of New York, and brings the total owed including principal and interest to approximately $21 billion.

Robert Benmosche, president and CEO of AIG, expressed confidence in the company's success.

"AIG is getting stronger every day. We still have more work to do, but we will finish the job and make sure we repay the American taxpayers," Benmosche said in a statement.

"Our insurance businesses are profitable; client retention rates have stabilized; and surrender rates have improved to normal levels. We are starting to see light at the end of the tunnel," he added.

Reprints Discuss this story