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  • Posted By: buffboy
  • Date Posted: 06/22/2011
  • Category: Psychology
  • Words: 3453
  • Pages: 14
  • Views: 1393
  • Rank: 234

AIG Ethical Dilemma

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AIG Ethical Dilemma

American International Group, better known as AIG was founded in 1919 by Cornelius Vander Starr. In 1962, the reigns of AIG were turned over to Hank Greenberg, who in turn changed the insurance focus from personal to corporate insurance. In 1968 Starr then turned over the company to Greenberg and in 1969 went public. AIG is the leader of the world when it comes insurance foreign and abroad. AIG is involved in four different areas of insurance: financial services, general insurance, asset management, life insurance and retirement. In 2005, the company started to run into problems financially and this lead to unethical business decisions.

In 2005, the board of directors of AIG forced Greenberg to step down from CEO. He was forced to step down because the attorney general of New York alleged that AIG was practicing fraudulent business and was also in violation of several other laws. The allege charges were later dismissed by the government and picked up by the civil court.

From 2005 to 2008 the company only kept struggling. This is when the Federal government stepped in and decided that AIG was too large to let fail and now owns 80% of the company. After the government stepped in and provided the bailout, AIG then decided that they were going to uphold the bonuses that were supposed to be paid out to the top executives that caused the company the problems in the first place. When President Bush provided AIG with the bailout he did not put many stipulations on how the company was to spend the money. This caused a huge outrage in the public and with the Obama administration. The Obama administration is now in the process of adding stipulations on AIG and how they can spend the money.

From a look at AIG people ...

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