NEW YORK (Reuters) - Some of American International Group Inc’s biggest rivals have urged U.S. Federal Reserve Chairman Ben Bernanke to prevent the insurance giant from using the government rescue to win an advantage, particularly by cutting prices, The Wall Street Journal reported.
In an article posted on its website, the Journal said AIG’s competitors had complained directly to Bernanke at a Mar 4 meeting at the St. Regis Hotel in Washington.
Bernanke said he would look into the complaints, the Journal reported, citing unidentified people familiar with the situation.
Industry executives and competitors told Reuters in December that AIG has been lowering prices to win new business and boost market share after receiving bailout dollars, even as market fundamentals suggest that prices need to be raised.
AIG was rescued by the U.S. government in September after it nearly went bankrupt trying to meet obligations on bad mortgage bets.
So far, the government has committed $180 billion in bailout funds to the insurer.
Last month, Rep. Paul Kanjorski, chairman of the House subcommittee on capital markets and insurance, said he would dig into claims that AIG is driving down prices to win business.
Kanjorski and Spencer Bachus, the top Republican on the U.S. House Financial Services Committee, asked the Government Accountability Office to probe for answers.
The government watchdog said recently it has not seen any indications that AIG’s insurance pricing is inadequate or out-of-line with previous pricing, although there is a general consensus that the insurer may be pricing products more aggressively.
AIG has denied its rivals’ allegations.
Reporting by Anupreeta Das and Lilla Zuill; Editing by Dhara Ranasinghe