The failed sale of AIG's wholly owned pan-Asian life insurance subsidiary AIA Group Ltd. to U.K.-based Prudential plc “has strained relationships at the top of the US insurer, increasing tensions between Robert Benmosche, the chief executive, and Harvey Golub, the chairman,” the Financial Times (FT) reports.

Sourcing “people close to the situation,” FT reports that the relationship between Benmosche and Golub, was not yet at breaking point. However, the board’s behavior in the run-up to this month’s collapse of the proposed sale angered Benmosche and soured his relations with the chairman.

The news outlet also reports that Benmosche argued for accepting a proposed $35.5 billion—a reduction of about $5 billion—sale to help the UK company win support from its shareholders. But the board, led by Golub, rejected the idea by an overwhelming margin, and this angered Benmosche.

Earlier this month, INN reported that The Federal Reserve and Treasury failed to exhaust all options before undertaking their taxpayer-funded rescue of AIG.

“In previous rescue efforts, the government had placed a high priority on avoiding direct taxpayer liability for the rescue of private businesses,” the report, issued by the Congressional Oversight Panel, states. “With AIG, the Federal Reserve and Treasury broke new ground by putting U.S. taxpayers on the line for the full cost and risk of rescuing a failing company.”

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