The most prolific headlinegenerator by far this year was American International Group, whichstruggled to regain its credibility and repay its debt to taxpayersafter a massive federal bailout while changing CEOs, fending offchallenges to its executive compensation, rebranding its propertyand casualty subsidiaries and burying the hatchet with its formerboss.

Back in early January, AIG's roller coaster year began withcriticism from Maurice Greenberg–its former chair, president andCEO—about the sale of Hartford Steam Boiler to Munich Re.

Mr. Greenberg–now CEO of C.V. Starr & Company, and still amajor stockholder in AIG—noted pointedly that under his reign, HSBhad been purchased for $1.2 billion in 2000, yet was sold for whathe termed a “distressed” price of $724 million.

(As part of its efforts to pay off its federal loans, AIG alsoagreed to sell auto insurer 21st Century Insurance Group to aZurich subsidiary—Farmers Group—for $1.9 billion.)

Meanwhile, Mr. Greenberg and AIG locked horns in court over thesummer, battling for control of billions in company stock held byStarr International Company—with the jury verdict going in favor ofMr. Greenberg's SICO. (For more on Mr. Greenberg's own eventfulyear, see tomorrow's blog posting.)

There was also turmoil in the executive suite, with Ed Liddy–theformer Allstate head who came out of retirement in September 2008to lead the company after its federal bailout–announced in May hewould step aside as AIG chair and CEO. While he only took $1 peryear for his posts, there was controversy after it was revealedthat his expenses totaled about $460,000.

In August, AIG recruited another retiree—Robert Benmosche, theformer head of MetLife—as its new CEO. (The company appointed aseparate non-executive chair–former American Express CEO HarveyGolub.)

But the assignment has not been a cakewalk for Mr. Benmosche,who has clashed with federal officials over compensation for histop executives. There were even published reports that he wasthreatening to resign—which prompted him to send a letter toemployees reassuring them about his commitment to the company.

Indeed, compensation for AIG employees was a recurringcontroversy this year, starting with public uproar in the firstquarter over revelations that big retention bonuses had been paid.Much of the brouhaha centered on $165 million given to employees ofAIG's Financial Products unit, which traded the credit defaultswaps on securities bundling subprime mortgages that nearly broughtdown the company.

New York Attorney General Andrew Cuomo helped negotiate a returnof some of the bonus money, which seemed to put out the firestormfor the moment.

On more positive notes, AIG posted a $455 million profit in thethird quarter–its second straight period in the black. Butmanagement said it expects “continued volatility” for earnings.Last month, AIG lowered its debt to Uncle Sam by $25 billion aftercompleting deals for two life insurance entities.

AIG also rebranded its p&c carriers under the nameChartis—the Greek word for map, meant to underscore the company'sglobal reach. There was talk about a possible public offering andthe appointment of a separate board to further distance the p&ccarriers from its parent's tarnished reputation following thefederal bailout, but such a move has yet to be initiated.

However, a threat to the new brand came late last month in theform of a report from Todd Bault, an analyst with Sanford C.Bernstein, which reportedly suggested that reserves may bedeficient by $11 billion—particularly affecting workers'compensation, general liability and professional liability. Thecompany had no comment about the report.

The news overshadowed an announcement issued late afternoon onThanksgiving eve that AIG and Maurice Greenberg had agreed to aprocedure to settle all their remaining disputes.

All that is certain is that for better or worse, AIG and itssubsidiaries are likely to remain prominent as headline-generatorsin 2010. Stay tuned!