AIG Says CEO's Prognosis Is Positive

NEW YORK ( TheStreet) -- American International Group ( AIG) CEO Robert Benmsoche said Monday that he has gotten "an encouraging prognosis" regarding his previously announced cancer diagnosis and expects to be able to remain in his position at AIG until 2012.

AIG announced on October 25 that Benmosche had cancer and outlined a contingency plan two days later that would put Chairman Steve Miller into the CEO role on an interim basis if necessary. Since then, Benmosche has said repeatedly that he jogs every day and carries out his normal duties, despite intensive treatment for the disease.

On Monday, the company issued a statement indicating that Benmosche may be on his way to recovery.

"My doctors have given me an encouraging prognosis as I continue to undergo treatment for cancer," Benmosche said in the statement. "As we all know, nothing in life is certain, but given that I've responded very well to my treatment, my doctors believe I can continue to apply the same commitment and energy to AIG over the next twelve to 18 months. I feel good, and I am delighted to tell you that I remain absolutely committed to continue working with the wonderful team of people here at AIG on that timetable. We are all very focused on positioning AIG for future growth and enhanced profitability as we continue to make substantial progress on repaying all of our government obligations - and, we continue to believe, at a profit. Most likely, I'll return to my retirement sometime in 2012."

Benmosche came out of retirement in August 2009 to take over AIG and lead its restructuring effort. He planned to retire once the company finished repaying its $182 billion in bailout funds. The company made significant progress in 2010, announcing plans on Sept. 30 to repay the federal government in full - through divestiture proceeds and the issuance of a 92% equity stake to the U.S. Treasury Department.

Benmosche hasn't disclosed what type of cancer he has or the nature of his treatment. However, the board believes he will be able to carry out his duties. Miller said the board "is thrilled" to hear of the positive prognosis, though the contingency plan remains in place if a worst-case scenario should occur.

"We have a very strong management team," Miller in a statement. "The Board of course has established a succession planning process, and we remain focused on taking all the right steps to ensure management continuity. The Board is conducting an active CEO succession planning process, and we are committed to effecting an orderly leadership transition at the appropriate time."

AIG shares closed down 2.4% at $41.96.

-- Written by Lauren Tara LaCapra in New York.

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