AIG says CEO Liddy to step down

By Lilla Zuill

NEW YORK (Reuters) - American International Group Inc (AIG.N) said on Thursday that Edward Liddy, its chief executive, plans to step down, signaling the end to a short and tumultuous tenure running the bailed-out insurer.

Liddy, named chairman and chief executive of AIG in September after the government rescued it with a massive injection of capital, had always planned for his stay at the company to be temporary.

The former Allstate executive's reign at AIG will be best remembered for the public scolding he received from lawmakers over bonuses paid to executives of the insurer's troubled financial product unit.

Liddy, who was being paid only $1 in annual salary, will not receive a severance package.

AIG, which now owes taxpayers more than $85 billion, could take several years to repay its obligations, Liddy said.

In total, taxpayers have put up to $180 billion at AIG's disposal, including billions of dollars more to buy toxic assets that led to the company's losses and $30 billion in a credit facility that is as yet untapped.

"AIG should have a leadership team committed to a similar time horizon and prepared to carry the plan to completion," Liddy said.

Liddy has recommended to the board they find a separate chairman for the insurer, splitting the two roles, AIG said in a statement.