US Lawmakers Question AIG Plan, Future

Towns asked whether it made sense to sell off AIG's assets in a bear market where prices are depressed.

New York-based AIG on Monday announced plans to sell its Japanese headquarters to Nippon Life Insurance Co. for $1.2 billion in cash. The transaction is expected to close in the second quarter.

Liddy said AIG doesn't intend to sell its assets at "fire-sale prices." AIG plans to retain its U.S. property-casualty and foreign general insurance businesses, and a stake in its foreign life insurance operations.

It was the second grilling before Congress in less than two months for Liddy, who was brought out of retirement by the Bush administration for a $1 annual salary to lead the hobbled insurance giant after it nearly collapsed at the height of the financial crisis last fall. Liddy is the former chairman and CEO of Allstate Corp.

AIG became one in a string of corporate calamities and a touchstone for public outrage. The huge volume of credit default swaps — a form of insurance against bond defaults — sold by AIG, coupled with rising levels of defaulted mortgage and other debt, threatened the company's existence and prompted the government to step in.