This Report sets out the facts discovered by the Office of the New York State Attorney General (the “Office” or the “Attorney General”) in an investigation of breaches of fiduciary duties by Maurice R. Greenberg and the other executors of the estate of Mr. Cornelius Vander Starr (the “Estate”) who were also directors of The Starr Foundation (the “Foundation”). Mr. Starr was the founder of a group of insurance businesses that have become American International Group, Inc.

Executive Compensation Practices

* AIG is focused on repaying the govemnment and the taxpayers, selling assets, and preserving the value of AIG’s diverse businesses.
* In recognition of AlG’s obligation to taxpayers, the company has taken several voluntary steps to restrict executive compensation beyond the requirements of TARP. These restrictions are far more onerous than measures taken by any other company that has received federal assistance
* In all, 2008 total compensation for the top 47 AIG executives is 56% lower than their 2007 total compensation.

Systemic risk is the risk imposed by inter-linkages and interdependencies in a system or market, which could potentially bankrupt or bring down the entire system or market if one player is eliminated, or a cluster of failures occurs at once. Systemic financial risk occurs when contingency plans that are developed individually to address selected risks are collectively incompatible. It is the quintessential “knee bone is connected to the thigh bone…” where every element that once appeared independent is connected with every other element.