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 (here 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.
