AIG Cancels Additional 'Junket'

The conference, held for 50 top-producing life insurance agents and their guests was attended by 10 employees of the insurance subsidiary, none of which were corporate executives, according to Liddy's letter. Liddy accepted that although the event had been planned for many months, "our company is now facing very difficult challenges -- and that we owe our employees and the American public new standards and approaches."

Liddy assured Paulson that AIG management is reevaluating the costs of all of AIG operations and is focused on doing what is necessary to address the capital structure, repay the Federal Reserve and emerge as a healthy global insurer.

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