#6: The Big Payback From AIG

And, in filings with the U.S. Securities and Exchange Commission, AIG looks to get back into the capital markets.

Not to mention, throughout the year, AIG was thrown about in conversation against federal regulation–the industry claimed the company was the exception, not the rule, in whether insurance is systemically risky.

More recently, AIG, the Federal Reserve Bank of New York and the U.S. Treasury Department officially signed a deal to repay the government for sustaining the massive financial services company.

In a Dec. 8, 2010 filing with the U.S. Securities and Exchange Commission, AIG said it and its loaners have entered a "definite agreement" meant to recapitalize the once near-bankrupt insurance giant.

According to the New York-based company, the sale of its American Life Insurance Company (ALICO) subsidiary to MetLife Inc. for $16.2 billion, and another $20.5 billion it raised from an initial public offering of its unit, AIA Group Ltd. in Hong Kong, will repay $20 billion in principal and interest owed to the Federal Reserve Bank of New York.

In order to repay the $26 billion in interest the FRBNY has in two special purpose vehicles (SPVs), AIG will ultimately issue common stock to the U.S. Treasury Department–raising the Treasury's ownership of AIG to about 92 percent from 80 percent–by using $22 billion available to it under the Troubled Asset Relief Program (TARP) to buy an equal amount of interests in the SPVs and giving them to the Treasury to convert to common stock to be sold to the public.

As of mid-November, Mr. Benmosche was saying the FRBNY could be repaid by the end of this year.

The Treasury now says it expects a profit from its loans and investments in AIG.

At the same time the Treasury offers its common stock in AIG to the public, AIG may also offer stock. Each looked to be getting their respective houses in order when AIG promoted Brian T. Schreiber to executive vice president, treasury and capital markets, and the Treasury hired Greenhill & Co. to provide services related to the investments in AIG.

The company continued its efforts to sell assets in 2010 to cut into its debt to taxpayers. The sale of American General Finance was to close late this year. The sale of AIG Star Life Insurance Company and AIG Edison Life Insurance Company to Prudential Financial Inc. should close early in 2011. Additionally, AIG said it plans to complete a sale of Nan Shan Life Insurance Company within a year.

On the litigation front, AIG settled two important cases, including another involving its former CEO, Maurice "Hank" Greenberg. Mr. Greenberg and the company's former chief financial officer will get $60 million from AIG's insurers as part of a proposed settlement to resolve shareholder derivative claims.

AIG also agreed to pay $725 million to Ohio and Florida public pension plan funds in a securities class-action settlement to resolve bid-rigging allegations.

AIG got word in July that it is free to proceed with a lawsuit alleging other insurers–Liberty Mutual, Travelers, The Hartford, Chubb and ACE–conspired to underreport workers' compensation premiums, which the company said skewed the market. AIG is also being sued by the group.

A month prior, the SEC said it was ending its investigation of Joseph Cassano, former head of Financial Products, the AIG unit that dealt in credit default swaps, which was at the center of the company's near collapse. No charges were filed by the SEC of Department of Justice.