(Reuters) - Zurich Financial Services AG ZURN.VX has agreed to buy the U.S. auto insurance business of American International Group (AIG.N), with most investors welcoming the move despite fears the U.S. market might be tough.
Following is a timeline of events since AIG was first rescued by the United States last year.
September 16, 2008 - AIG avoids bankruptcy thanks to an $85 billion United States rescue that gives the government a 79.9 percent stake in the insurer.
September 18 - AIG names Edward Liddy, former Allstate chairman, as chairman and chief executive succeeding Robert Willumstad, who steps down after three months on the job.
October 3 - AIG announces broad plan to sell assets to repay its loan from the U.S. government.
October 10 - AIG says it has borrowed $70.3 billion as of October 8. AIG draws fire on news it had spent $200,000 on hotel rooms and $23,000 on spa services after it got the emergency loan.
October 15 - New York Attorney General Andrew Cuomo says he is investigating what he contends is “unwarranted and outrageous” spending by AIG. Cuomo said he was seeking a full accounting of bonuses, stock options and other perks. Cuomo wants AIG to recover or rescind these payments.
November 10 - AIG posts a record quarterly loss, hurt for the fourth consecutive quarter by writedowns on assets linked to subprime mortgages and capital losses. It says its third-quarter net loss is $24.47 billion. Over the four quarters the loss has totaled $42.5 billion.
November 25 - Liddy is to receive $1 in salary in 2008/9, and there will be no 2008 bonuses for the company’s seven most senior executives. Fifty more AIG executives will be locked out of pay raises in 2009, according to AIG.
December 2 - AIG and the government say they have reached an agreement to clear the insurer of its obligations on about $53.5 billion in toxic mortgage debt.
December 22 - German reinsurer Munich Re says it will buy AIG’s HSB Group for $742 million to expand its U.S. business.
January 26, 2009 - AIG says it is working with Bank of America Corp and Merrill Lynch to sell a fund management business that operates 15 funds with more than $12.4 billion in assets under management as of September 30.
March 2 - Treasury and Fed announce a third new aid plan for AIG, putting $30 billion more at its disposal, and easing terms and conditions to give the insurer a billion-dollar-a-year break on interest and dividend payments.
— AIG says the revised bailout preserves capital.
— AIG reports a $61.7 billion fourth-quarter loss, the largest quarterly loss in corporate history.
March 14 - According to documents obtained by Reuters, AIG’s financial products unit is obligated to pay $220 million in employee retention payments for 2008, $55 million of which were paid in December and $165 million to be paid by March 15.
— AIG Chairman Edward Liddy says in a letter to Treasury Secretary Timothy Geithner that the company will sharply cut remaining 2009 salaries for top executives of the unit.
March 15 - AIG discloses that several U.S. and European banks were beneficiaries of the taxpayer bailout of the insurer and said that more than $90 billion had been paid to various banks between the September bailout and the end of the year. The banks include Goldman Sachs, Societe Generale, Deutsche Bank, Barclays, Merrill Lynch and Bank of America.
March 18 - Obama assails AIG’s hefty executive bonuses as an “inappropriate use of taxpayer funds.”
March 19 - Liddy says he has asked employees receiving more than $100,000 in bonuses to repay at least half.
— The House of Representatives passes a bill to approve a 90 percent tax on bonuses paid to AIG after public outrage. AIG had paid $165 million in bonuses after the government aid.
March 20 - Goldman Sachs Group Inc insists it did nothing wrong when it accepted payments to close out trades before and after the insurer was rescued. Goldman was the largest single beneficiary, receiving $12.9 billion between mid-September and the end of December.
March 24 - Fifteen of the top 20 bonus recipients have agreed to give back their bonuses, according to Cuomo.
April 9 - AIG’s aircraft leasing unit is in talks over a $5 billion credit line from the Fed that could be used to facilitate its sale, the Financial Times reports.
April 17 - Zurich Financial Services AG announces it will pay $1.9 billion for AIG’s U.S. auto insurance business, which will make it the third-largest U.S. personal line insurer.
Writing by David Cutler, London Editorial Reference Unit; Editing by Erica Billingham