Insurance giant American International Group Inc. is better positioned to pay back all of its $182 billion federal bailout, a key Treasury official testified Wednesday.
But AIG's ability to repay taxpayers depends on its future profitability and the insurance industry's strength, Treasury chief restructuring officer Jim Millstein said. He said AIG must complete the planned sales of two large insurance subsidiaries and regain the market's confidence.
"There's a lot of things that have to occur before we'll know" how much taxpayers will be repaid, Millstein told the Congressional Oversight Panel, which is monitoring the $700 billion financial bailout.
The panel has criticized officials who managed the bailout for failing to consider alternatives, such as filing for bankruptcy or demanding concessions from AIG's creditors.
AIG received the largest bailout of any company during the financial crisis that crested in September 2008. The company could not meet its financial obligations after selling guarantees on mortgage-related investments that later lost value.
The panel also heard from a regulator who failed to halt AIG's near-collapse and from officials who managed the rescue for the Federal Reserve Bank of New York.
AIG CEO Robert Benmosche testified that AIG is less reliant on government aid because it has been able to raise money from private investors in recent months.
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