Ok, so it’s a US story and not a New Zealand story.
Nevertheless, it makes ugly reading and it portrays the insurance industry in a bad light. People read stories like this and would be forgiven for thinking that all life insurance executives are a bunch of money-grabbing fat-cats. My point is that AIG's behaviour doesn't only affect AIG. It affects life insurance companies all around the world.
The earlier story was about AIG in the US making a loss of $85 billion in 2008 and being bailed out by the US government to the tune of $170 billion. A controversy erupted over fat cat bonuses to AIG executives of $165 million!!!… which were later reported to be $218 million… to the executives accountable for the company’s demise.
We commented on this story on our blog when the story broke ( and here) but now there's more…
It seems that whilst executives pledged to pay back their ill-gotten gains, only $39 million has actually been paid back. The rest is still being recovered. Now, to cap it all, the company is all set to pay its executives another $143 million in retention bonuses.
Oops.
Thankfully not all life insurance companies behave this way.
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