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Insurance executives gone wild!

AIG snagged billions while its execs hung out by the pool


 

Insurance executives gone wild!

Last week, the U.S. Treasury announced it would double the taxpayer-funded bailout for troubled American insurer AIG. It has now committed an incredible US$152 billion—likely the largest-ever government rescue of a private firm. But that same week, instead of laying low and soberly reflecting on how their company got into such a mess, senior AIG executives were spotted frolicking poolside at a posh Phoenix resort by a local TV news crew.

This isn’t the first time AIG executives have been caught fiddling while their company burns. In September, just days after the U.S. government rescued AIG with its initial $85-billion loan, the company sent its top brass on a $440,000 retreat to a tony California resort. And after another $37.8-billion, taxpayer-funded in-fusion, AIG paid for an $86,000 English hunt. The latest seminar reportedly cost $343,000. This time—presumably to avoid detection—staff at the Pointe Hilton Squaw Peak Resort were instructed to post no company signs. “We can’t even say the word [AIG],” one hotel employee said.

When the news broke, the company swiftly went on the defensive. “It is essential for AIG to conduct seminars of this kind to keep independent financial planners abreast of investment products and services,” wrote spokesperson Nicholas J. Ashooh in a press release, adding that the company has been reimbursed for over 90 per cent of the cost by event sponsors and attendees. Ashooh also notes that company employees were directed to cut back last month, and since then more than 160 events have been cancelled.

Still, Ramy Elitzur, professor of financial analysis at the University of Toronto, is critical of AIG’s “business as usual” approach. “The optics are horrible,” he says. “It will come back to haunt them.” Elitzur predicts that things will change with Barack Obama in the White House. “The new chief of staff, Rahm Emanuel, worked as an investment banker. This guy will take no prisoners,” he says. “When they come to the new administrators, they’re going to get a swift kick in the butt.”


 

Insurance executives gone wild!

  1. Buying insurance is rather like playing in a casino. The house will always win. The only difference is insurance companies have manipulated the markets to ensure that we have to play. Like the insurance adjuster once told me after I burned up a machine and they would only pay out half of the value they charged premiums on “We are not in the business of paying out claims” Bunch of thieves that make the Mafia look like rookies.

  2. Interstingly with all the improvements to car safety – restrictions on new drivers and increased fines for speeders and drunk drivers our insurance costs have not come down. Although I have no statistics just anecdodal and personal experience – insurance companies seem to be plugging up our court systems with trials to avoid paying out claims. In an insurance case now many of these cases are dragged out until the last possible moment so they can bleed the claimant to a point they can get a lower settlement than the court may award. If the claimant does go to court and wins the insurance companies appeal it. It can take up to 6 years to get a settlement and in the meantime the claimant has paid thousands in fees to counter the roadblocks set up by the insurance companies. Not fair – If Harper wants to help Canadaians this would be a good place to start – Train a 1,000 laid off Auto and Forestry workers as adjudicators and set them after the insurance companies. That’ll get claims settled.

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