AIG Still Far From Recovery

American International Group Inc. (AIG - Snapshot Report) Chief Executive Edward Liddy failed to appease US policymakers on Wednesday by claiming that the bailed-out insurer had made "substantial" progress in its restructuring efforts in spite of his sustained concerns about the commercial real-estate markets.

"We are hearing, 'Trust us,' but we are not willing to let $180 billion go just on trust," said Rep. Edolphus Towns, Democrat of Maryland and chairman of the House Oversight Committee. Towns said he was disappointed with AIG’s lack of compliance regarding details of its restructuring plan, Project Destiny, and chided the company for not being forthright with answers on when it would finally refund billions of taxpayer dollars.

AIG CEO Liddy said if the current market conditions persist, the American taxpayer would be fully repaid within three to five years. However, that repayment could take longer if the economy deteriorates.

The New York insurer, which had to seek government aid after huge losses from credit-default swaps related to mortgage-backed securities, reported its sixth straight quarterly loss last week. Liddy is also on the line of fire for large bonuses paid to AIG executives last year.

"We will do everything we can to not require additional federal funding," Liddy told the Congress today. But till the company resuscitates, lawmakers would definitely continue to inquire into every step it takes towards reaching that goal.

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