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Cathay, Gena, Hailey, Sarah

Sarah D'Aurizio

on 16 October 2012

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Transcript of AIG

AIG Scandal Presented by Cathay, Gena, Hailey and Sarah Agenda Who is AIG?

The Scandal
Timeline (When/How)
The Motives
What Would We Do? Definitions Who is AIG? •American multinational insurance corporation
•29th largest public company in the world
•Headquarters in London, Paris, New York, Hong Kong Definitions REINSURANCE Insurance for insurance companies
Reinsurance company -> Insurance company -> Customer FINITE INSURANCE Limited period, very high premium
If there is no claim, insurer returns premium The Scandal •2000 and 2001 – AIG took over claims from General Re
•General Re passed premiums to AIG
•AIG recorded premiums as $500 million
in revenue
•Recorded the amount to reserve funds used
to pay potential claims
•Issue: providing insurance coverage or
receiving a loan? The Stakeholders Timeline The Motives Consequences What would
we do? Proactive Response Reactive Response AIG and General Re
Hank Greenberg and Martin J Sullivan, CEOs of AIG
AIG potential investors and shareholders
Clients of General Re
Eliot Spitzer, American lawyer
Regulatory agencies -> PricewaterhouseCoopers In order to prevent scandal:
Follow proper accounting scandals
Value the integrity of the company
Importance of knowing right vs. wrong
No conflicts of interest
No lies & secretiveness 2001 Beg. 2005 Feb. 2005 Mar. 2005 2003 2004 2006 Greenberg forced to step down as CEO

AIG settled case for 1.6 billion
16 counts of alleged violation of criminal code $PROFIT$
Worked within companies that they owned to increase numbers
Looked highly successful to Investors and Customers
More customers means more overall profit in company Keep scandal out of the media
Deny accusations towards the company
Work with inside companies to reverse/cover up mistakes
Get confidential third party to advise/help with situation
Follow Accounting Standards -> currently fighting civil charges
Full transcript