U.S. Treasury Secretary Timothy Geithner told a congressional oversight group June 22 that the federal bailout of American International Group in 2008 could cost the U.S. taxpayers money.

Philadelphia-based Lincoln National Corp. plans to buy back $950 million worth of preferred stock to pay back the U.S. Treasury for money it received from the government last year.

American International Group said it plans to adhere to the original terms of a deal where it would sell its American International Assurance Co. (AIA) unit to Prudential plc for $35.5 billion and not renegotiate a price.

The president and CEO of American International Group told a congressional panel that not only would the insurer repay the more than $132 billion it was loaned by taxpayers, but would pay more than it received.

The executives at the top of American International Group’s Financial Products unit – largely seen as responsible for the insurer’s near-collapse – will escape any federal charges, according to media reports.

As it works to stabilize its operations and repay billions in federal bailout funding, American International Group reported $1.5 billion in net income through its core insurance business for the first quarter of 2010.

Having survived a scandal of its own, American International Group may be dropping one of its long-term partners under intense scrutiny by federal authorities.

For his work in aiding troubled American International Group regain its reputation as one of the world’s leading insurance companies while also overseeing repayment of billions in federal aid, Robert Benmosche earned $2.7 million as head of the company in 2009.

A pair of recent deals has American International Group’s chief executive officer confident that the insurer can repay the government for bailout funds by 2013.

American International Group was victorious in defending a shareholder lawsuit, claiming that current and former executives ignored “red flags” of the company’s near collapse, after a federal judge dismissed the case.