The Treasury Department said it expects the combined costs of the Troubled Asset Relief Program and other aid to American International Group will be "about $30 billion."

Estimates of losses on the government's total estimated $182 billion investment in AIG were released as part of an administration report indicating that the government's final cost of the TARP program overall will be a less-than-expected $50 billion.

According to the report, the Treasury invested $40 billion in AIG and the additional funds were provided by the Federal Reserve, some of it through purchases of securities, placed in the Federal Reserve Bank of New York's facilities that are now showing increases in value.

In the report, the Treasury anticipated it will exit from investments in AIG and the automotive industry "much faster than anyone predicted."

The report said AIG has announced a restructuring plan that will "accelerate the timeline for repaying the government and put taxpayers in a considerably stronger position to recoup our investment in the company."

That, said the statement from Timothy Massad, acting assistant secretary for financial stability, makes clear that "TARP worked."

"Two years later, our financial system is stable, more than $204 billion of TARP funds have been repaid, only a quarter of the original $700 billion authorization remains outstanding, the total estimated cost of TARP has been cut by more than three-fourths, taxpayers have received $30 billion in income, and the TARP bank programs are on track to make solid returns for taxpayers," he said.

Mr. Massad said costs of the program are expected to come from losses related to TARP investments in auto companies and initiatives to help responsible homeowners avoid foreclosure.

NU Online News Service, Oct. 5, 3:50 p.m. EDT

WASHINGTON–The Treasury Department said today that it expects the combined costs of the Troubled Asset Relief Program and other aid to American International Group will be "about $30 billion."

The estimates of losses on the government's total estimated $182 billion investment in AIG was released as part of an administration report indicating that the government's final cost of the TARP program overall will be a less-than-expected $50 billion.

The report said that Treasury invested $40 billion in AIG and that the additional funds were provided by the Federal Reserve, some of it through purchases of securities placed in Federal Reserve Bank of New York facilities that are now showing increases in value.

In the report, Treasury predicted that it will exit from investments in AIG and the automotive industry "much faster than anyone predicted."

That, said the statement from Timothy Massad, acting assistant secretary for financial stability, makes clear that "TARP worked."

Mr. Massad said costs of the program are expected to come from losses related to TARP investments in auto companies and initiatives to help responsible homeowners avoid foreclosure.

Also in the news, AIG asked a federal judge to deny class-action status to a lawsuit brought against it by a group of insurance companies alleging AIG underreported premiums on workers' compensation policies.

According to a filing in the U.S. District Court in Illinois, AIG is being sued by a group, led by Liberty Mutual, now seeking class-action status. AIG said the "barebones memorandum in support of their motion for class certification contains no meaningful discussion of why the specific allegations, facts and circumstances of this case warrant certification."

The group alleges AIG underreported workers' compensation premiums to residual insurer National Workers' Compensation Reinsurance Pool (NWCRP).

AIG has also filed suit against the group of insurers, alleging they did the same thing. Liberty Mutual, The Hartford Financial Services Group, Travelers Insurance Group, Chubb Group of Insurance Companies and Ace INA Holdings are named as defendants.

Each side claims the underreporting threw off the insurers' share to the pool, to which they all contribute.

In June U.S. District Court Judge Robert W. Gettleman of the Northern District of Illinois denied AIG's request to dismiss Liberty Mutual's claims on behalf of the group of insurers. Judge Gettleman also denied AIG's claim for unjust enrichment. However, the judge did rule that AIG could proceed with its lawsuit.

In AIG's latest filing, the insurer said the case is "far from the type of case for which the class action mechanism was designed," adding that the insurers are alleged to have taken part in the same conduct, "thereby making class certification particularly inappropriate."

Special Reports /

AIG Relief Tab Around $30B, Treasury Says

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