CHARLOTTE, N.C. — Beleaguered insurer American International Group is apparently asking for its fourth loan from the federal government just days before it is expected to report a fourth-quarter loss.
The move could put more of a burden on U.S. taxpayers, as the government has already committed more than $150 billion to AIG.
The New York-based insurer wants to alter its $150 billion government bailout while it continues to look for buyers for some of its operations, according to published reports.
Under a proposed plan, the government’s primary loan to AIG totaling $60 billion would be repaid with a combination of debt, equity, cash and stakes in operating businesses, according to a story in The Wall Street Journal. The Journal, citing anonymous sources familiar with the discussions, said the sides have been working to revamp the loan since December.
The story came a day after CNBC reported that AIG will soon post a $60 billion loss.
“Nobody knows what the final deal will look like at this point, assuming there is one,” said Bob Hartwig, president of the Insurance Information Institute, a New York-based industry group. “What it sounds like is the Treasury and the Federal Reserve are struggling to craft a solution that will prevent additional problems from emanating from AIG and one that minimizes the impact on taxpayers.”
AIG spokeswoman Christina Pretto declined to provide specifics about potential losses or changes to the company’s government loans, but she did acknowledge the insurer is reviewing alternatives with the government ahead of releasing its fourth-quarter results.
The Federal Reserve Bank of New York, which is handling the government loan, declined to comment.
AIG has been in the process of selling assets to raise more cash to help cover the government loans. Its latest sales might include a deal for its life insurance unit, called American Life Insurance Co. AIG is entertaining bids from MetLife and Axa for American Life, which operates in more than 50 countries, according to a Bloomberg report.
