The American taxpayers are about to get another return on their investment in the bailout of American International Group (AIG). Prudential Plc (PUK), the largest insurer in the UK, is going to buy AIG's Asian operations for $35.5 billion in cash and stock. Prudential will pick up more than 20 million new customers, and the federal government will squeeze out a bit of financial relief.

The deal, which is for AIG's AIA Group, consists of $25 billion in cash and $10.5 billion in stock and other securities. Prudential will raise $20 billion in a rights offering and $5 billion through a bond issue to cover the cash portion of its offer.

Insurance company upgrades outpaced downgrades by 50% last year. In a report by insurance rating agency A.M. Best, Upgrades, Downgrades Moved at a Similar Pace in 2009, 36 commercial property/casualty insurers were upgraded, compared to 24 that saw their ratings head in the opposite direction.

According to the report, "By demonstrating consistently strong operating results over several years and maintaining sound underwriting discipline, conservative reserving practices and leading business positions in certain segments of the commercial market, these insurers have been able to strengthen their risk-adjusted capitalization."

Stock futures on Wall Street were modestly higher ahead of a much-anticipated report on December employment, due at 8:30 a.m. Eastern time. The Dow Jones industrial average was higher by 6 points to 10,551, while the Nasdaq ticked up 2 points to 1,879.50 and the S&P 500 was up slightly to 1,137.60.

Friday's latest Employment Situation Report from the government is expected to provide further evidence that the nation's jobs picture continues to improve. A Labor Department report yesterday showed that although initial claims for jobless benefits inched 1,000 higher to 434,000 in the latest week, continuing claims plunged 179,000 to 4.8 million to their lowest level in a year. And on Wednesday the ADP National Employment Report showed private-sector employers cut the fewest number of jobs since March 2008. Expectations are the nation lost 25,000 non-farms jobs in December, while the unemployment rate inched up to 10.2%, according to Briefing.com.

American International Group (AIG) is holding onto its property/casualty division for a while. It originally planned to unload 20% of Chartis (formerly named AIU) via an initial public offering or through a private transaction involving institutional investors.

But CEO Robert Benmosche is concerned that he'd be giving up the operating unit at discount prices. Selling cheap to repay the government won't benefit anybody – not even taxpayers – so he's waiting until an appropriate price can be fetched.

Were we all too fast to blame AIG (AIG)?

The insurance giant's role in precipitating the worldwide financial crisis has been covered at length since it teetered on the edge of disaster in September 2008, thanks to a series of high-risk transactions executed through its financial products group. Well, Goldman Sachs (GS), which has recovered quickly from last year's woes and is already figuring out how to pay some hefty bonuses, may have played a larger role in these transactions than everyone realized.

The bailouts of late 2008 and 2009 have cost the American taxpayers $61 billion, according to the Treasury Department, but the banks aren't to blame this time. The auto manufacturer bailout, which includes Chrysler and General Motors (GRM), has cost the country more than $30 billion, with American International Group (AIG) consuming another $30 billion.

Meanwhile, Bank of America (BAC) has already made good with the government, and several banks -- such as Capital One (COF), JP Morgan Chase (JPM) and TCF Financial (TCB) -- only have to clean up situations regarding the warrants they've issued. And interestingly, the losses from the bailouts on AIG and auto manufacturers are being offset by profits from the bank bailouts, which could generate additional funds of up to $19.5 billion.

American International Group (AIG) is a step closer to paying back the U.S. government. The insurer has announced that it's planning to float American International Assurance on the Hong Kong stock exchange. A date hasn't been selected yet, but the decision isn't much of a surprise, given that AIG moved it into a special unit, a signal that some sort of liquidity event was on the way.

According to Robert Benmosche, the company's CEO, "The planned listing is in the best interests of policyholders, distribution partners, AIG shareholders and US taxpayers." He continues to say that AIA's roots are in Asia, which made a Hong Kong listing "a natural choice." The timing, according to AIA president and CEO Mark Wilson will depend on marketing conditions and regulatory approvals.

American International Group (AIG) trimmed its tab to the American people by $25 billion on Tuesday. The insurance company, plagued by fallout from the financial crisis for more than a year, moved two subsidiaries -- American International Assurance and American Life Insurance -- into special units that are used to separate a business from its parent company. A spinoff or sale is the next logical step.

For now, AIG is holding on to the companies and giving the U.S. government preferred equity in the two life insurers. When AIG decides to send the companies public or divest via a private transaction, the feds (and taxpayers) will be able to cash in. Before becoming too optimistic, keep in mind that a timetable hasn't been set.

The American International Group (NYSE: AIG) bonuses controversy took a turn for the bizarre today, when The Financial Times reported that the company had paid $168 million in bonuses and retention payments to 400 employees in the troubled financial products unite between December 2008 and March 2009.

And $7,700 of that amount went to a kitchen assistant.

Look: The point here is not to beat up on "the little guy" and in the grand scheme of AIG's malfeasance, $7,700 to a kitchen assistant isn't that big of a deal.

Robert Benmosche has been CEO of American International Group (NYSE: AIG) for less than a month, but he's already established a reputation as an arrogant jerk -- which is exactly not what AIG needs at this particular moment in history.

Benmosche drew some sharp criticism for his comment that New York Attorney General Andrew Cuomo "doesn't deserve to be in government" and his comment that he will deal with "all those crazies down in Washington."

Those are pretty ambitious comments given that he and every single AIG employee around the globe literally owe their jobs to an unprecedented episode of taxpayer largesse -- brought to you by, at the expense of much well-deserved populist resentment, those "crazies down in Washington."

Executive pay czar Kenneth Feinberg could approve the compensation package for income American International Group (NYSE: AIG) CEO Robert Benmosche as soon as next week.

According to The Wall Street Journal (subscription required), "Mr. Benmosche, a former CEO of insurer MetLife Inc., was pressing for a quick resolution in large part to energize AIG employees and show them that AIG employees could be well-compensated, according to people familiar with the matter."

American Internation Group's (NYSE: AIG) top earners enjoyed a luxurious retreat at the St. Regis Monarch Beach resort in Dana Point, Caifornia -- manicures, pedicures and luxury dining at a cost of $440,000, with the tab helpfully picked up by the United States taxpayers.

But apparently that wasn't enough to save the resort from the ailing economy, and the property went into foreclosure yesterday. The Wall Street Journal reports (subscription required) that "The resort has missed payments since April on a $70 million mezzanine loan from Citigroup. The resort's $230 million mortgage, held mostly by units of Prudential Financial Inc. and a hedge fund, isn't in default, according to people familiar with the matter."

Reports today indicate that American International Group, Inc. (NYSE: AIG) may need yet another bailout from the federal government. This time, The New York Post states that AIG will likely require additional government guarantees before it can successfully sell its International Lease Finance Corp. (ILFC) aircraft leasing business.

"Already, the government has agreed to guarantee $5 billion of debt, but those remaining in the auction now want either more government aid or support from airline manufacturers," reports the Post. The newspaper notes that ILFC carries a $30 billion debt load, portions of which will soon mature, along with $50 billion in assets. The unit, which has been up on the auction block since last September, has a book value of $7.5 billion.

AIG shares slipped more than 6% this morning to trade at $1.46, extending their 52-week swoon of 95.7%. After smacking into resistance from its 10-month moving average, the stock is now struggling to maintain a foothold atop its recently supportive 10-week trendline.

Even though the security is trading fairly low on the charts already, some traders are betting on continued losses from AIG. Despite a 16.4% drop in short interest during the most recent reporting period, shorted shares still account for a hefty 9.7% of the stock's available float. Plus, peak put open interest in the June series lies at the 2 strike, with 17,975 contracts in residence.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

A report today in The Wall Street Journal [subscription required] indicates that the restructuring of American International Group, Inc. (NYSE: AIG) could be a multi-year process.

The paper cites an internal email sent to AIG employees on April 23, which describes an initiative known as "Project Destiny." The dreamily named plan involves a 45-day review of the insurance issue's various units, which is then meant to generate a longer-term road map for the future.

While the internal memo explains Project Destiny as an "effort to redefine the future of most of the major businesses within AIG," Chief Restructuring Officer Paula Reynolds described the initiative in terms indicating that all AIG needs to regain its joie de vivre is a torrid island affair with a younger man. "Simply put, we are going to get our groove back," she enthused.

Maurice Greenberg, the former chairman of American International Group (NYSE: AIG), testified before the House Oversight and Government Reform Committee Thursday that the company should have been allowed to go into bankruptcy, and is unlikely to pay off taxpayers under the current plan.

"It is clear that the current approach has not worked and cannot work in today's environment. A.I.G., in my judgment, in the current plan, will not pay the taxpayers back," he told lawmakers.

He also said that an AIG bankruptcy would not have been as disastrous as many had feared. "There would have been a ripple, but it wouldn't have been catastrophic," Mr. Greenberg said. "I don't think it would have been disastrous."