Former AIG head Benmosche dies; led insurer after bailout

Fri Feb 27, 2015 5:15pm EST
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By Luciana Lopez and Jennifer Ablan

NEW YORK (Reuters) - Robert Benmosche, who took the helm of insurer American International Group (AIG.N: Quote) after a massive government bailout at the height of the financial crisis, died on Friday at 70 after a battle with lung cancer.

Benmosche is credited with steering AIG through the turbulent period following its near collapse and rescue by the U.S. government. During his tenure, which started in August 2009, AIG fully repaid the $182.3 billion government bailout it received in 2008 to stave off bankruptcy.

Benmosche, who stepped down in September 2014, weathered intense scrutiny and was sharp-tongued at times, referring to federal officials as "those crazies down in Washington."

Critics often likened the former CEO, who also tangled with then-New York State Attorney General Andrew Cuomo over bonuses paid to AIG staff after the bailout, to a bull in a china shop.

"I can be - I can break things," he said in an interview at his villa in Croatia in August 2009, when asked about his sometimes pugnacious manner shortly after taking the AIG job.

That was about 11 months after the insurer was brought to its knees because of a unit that sold credit-default swap contracts on risky securities, as well as other investments in subprime mortgage-backed securities.

Benmosche also often defended AIG employees from public criticism of the company and its role in the financial crisis, which helped trigger the worst recession in the United States in 70 years.

"A lot of (employees) feel hurt, embarrassed, a lot of people have lived in fear because of what I call lynch mobs with pitchforks," he said in the Reuters interview.   Continued...

Robert Benmosche (L), president and CEO of American International Group, speaks to a reporter as he arrives at the White House in Washington, October 2, 2013, for a meeting of the Financial Services Forum with U.S. President Barack Obama.   REUTERS/Jason Reed