AIG to Sell Life Insurance Unit to MetLife

Posted in AIG , Life Insurance

January 22nd, 2010

Troubled insurer American International Group (AIG) is nearing an agreement to sell one of its international life insurance units to its rival MetLife, Inc. as soon as possible. The negotiations have been going on for several months, but it looks as though the two companies have settled on a deal that will result in $15 billion sell-off.

Details of AIG’s Sell Off

Since AIG had its major financial troubles and had to be bailed out by the government in 2008, the company has been looking for ways to get the company in order and pay back its bailout funds.

After more than a year, the conclusion is that it will, for now, sell American Life Insurance Co. (Alico), which is its international life and health insurance business that currently operates in more than 50 countries.

What This Means for Taxpayers

The good news from all of this is that U.S. taxpayers may finally get a chunk of their money back if the deal goes through. Finally having something to repay their bailout funds received by the government, this deal would be a huge gain for the company, the government and, of course, the taxpayers.

About $9 billion has already been earmarked for the Federal Reserve Bank of New York for bailout repayment. The rest of would go back to the company to reduce its own debt.