When: Today, Friday, Nov. 9, 2012

Where: CNBC's "Mad Money w/Jim Cramer"

Following is the unofficial transcript of a CNBC interview with AIG President & CEO Robert Benmosche tonight on "Mad Money w/Jim Cramer" (M-F, 6PM & 11PM ET). Following is a link to video of the interview:

All references must be sourced to CNBC.

JIM CRAMER, host: With that we celebrate our nation's troops in honor of Veterans Day. In order to take the celebration one step further, we've got a chance to talk to American International Group, aka AIG, largest insurance company on earth physically, AIG's fabulous CEO Robert Benmosche, who himself happens to be a veteran, having served as lieutenant in the Army Signal Corps during the Vietnam War. If you think where AIG was just about four years ago, when everybody thought the company was a goner, it had taken $182 billion of bailout money just to stay afloat, you realize that this is one of the greatest turnarounds of our era. Not only has our government turned a profit on its investment in AIG, Treasury now looking to sell the remaining 15.9 percent stake in the company, but this insurance company has righted itself in a major way.

Just last Friday AIG reported a big earnings beat. Yeah, stock got hit, falling 7 percent. That was in part because of some one time issues, and in part because of some worries about loses from Superstorm Sandy. Now Bob Benmosche has said that AIG's got Sandy covered and I believe him. You know why? Because right after September 11th when he was still the CEO of MetLife, he came on my old show, "Kudlow & Cramer," to say that MetLife will be paying out all claims immediately. He was the first to say it. And it inspired real confidence in our nation because many people thought the insurers couldn't afford or wouldn't pay. That's when I first met him and since then he has not steered me wrong. So let's talk to Bob Benmosche, the excellent president and CEO of American International Group to hear more about his company's prospects in the aftermath of Sandy and how it's doing.

Mr. Benmosche, great to see you.


CRAMER: In honor of a special Veterans Day. Have a seat. Thank you so--thank you, thank you.

Mr. BENMOSCHE: Thank you, thank you.

CRAMER: All right. let me start. The federal government, the Treasury Department, the Federal Reserve, none of this has thanked you, OK, for the incredible job that you've done in returning the money to the American people and bringing back AIG. But I say thank you very much from these American people.

Mr. BENMOSCHE: Thank you.

CRAMER: I think it's more meaningful. OK. Now...

Mr. BENMOSCHE: By the way--just--is this right? I've gotten personal private thank yous, but there were a lot of people in government that went on cameras and talked about the people of AIG and vilified them.

CRAMER: Right.

Mr. BENMOSCHE: We had people who had their children beat up in school because their parents worked for AIG. We had people in America afraid to go home because of the way they were characterized publicly on television. And so when I said they were quick to publicly--attack them publicly...

CRAMER: Right.

Mr. BENMOSCHE: ...they ought to thank them publicly. So private conversations with me doesn't help me. Thank the people of AIG for having the courage to do what they did.

CRAMER: All right. Well, I was critical of the initial--but you know what, I want to thank people, too, from AIG.

Mr. BENMOSCHE: Thank you, thank you.

CRAMER: Now, what has been the chief accomplishment since you've come?

Mr. BENMOSCHE: Well, for the company, it's mainly--first of all, getting confidence of our customers.


Mr. BENMOSCHE: And that came through confidence of our employees and getting our businesses back up and running very effectively. And so that allowed us to create the money to pay back America.

CRAMER: OK. I think that you're being too modest. I think this was one where everybody thought it would never happen.


CRAMER: And it's some managerial skills. And these managerial skills perhaps learned when you were in the Army.

Mr. BENMOSCHE: Well, first of all, Jim, I was--my family made me to go to military prep school in high school.


Mr. BENMOSCHE: We couldn't afford it at the time and so I said how are we going to afford it? And my mother says you can wash dishes and you can be a waiter and you can help clean. And so I wound up becoming a dishwasher and working my way through prep school. But that was my beginning in the military and then, of course, I went through ROTC and I went in the Army in 1966. And by the way, it was during the Vietnam War, but I was stationed in Korea.

CRAMER: Right.

Mr. BENMOSCHE: So I was in Korea, I wasn't in Vietnam. And what I learned is that in the military, as a leader, you're responsible for people's lives. And so therefore, you have to take that very seriously. When it came to AIG or any other job I've had since the military, people look to me for leadership because it's about their lives, it's about their families, it's about their ability to make a living and to be able to take care of their families and provide for them. So that is--what I got from the military is you as the leader have now signed on ownership of the lives you're responsible for.

CRAMER: OK. You're also responsible for the lives of a lot of people who've been hurt of late in Hurricane Sandy. You told our own Maria Bartiromo on November 1st that it would not be a significant financial impact. Since then, some insurance companies have said, jeez, a little more financially impactful than we thought. Chubb suspended its buybacks. How's it--how's it look upon further review?

Mr. BENMOSCHE: Look, I think it's a big event. It's not one that's oversize for the size of AIG.


Mr. BENMOSCHE: We're focused entirely on the claims coming in, on the people who need our support and services, employers who are trying to get their buildings back up, getting the trains moving again. Look, we had some very big customers here in New York.

CRAMER: Right.

Mr. BENMOSCHE: We're working with them, so it's really about getting the claims paid and getting everybody up and running. It's not the kind of financial situation that we're struggling at AIG what's going to happen next.

CRAMER: So you have a book value of $61. This does not impact book value?

Mr. BENMOSCHE: I'm not going to get into any numbers, Jim.


Mr. BENMOSCHE: You'll have to wait until we announce it. There's no tips coming off this show today.

CRAMER: OK. But how about this? How about explaining the disparity, which I think is because the markets got it wrong...


CRAMER: ...between the $32 stock price and the $61 book value when we think that book value in your case is actually being brought out by sales of major divisions that realize profits?

Mr. BENMOSCHE: People are still wondering what the Treasury will do. They still have 15.9 percent of the company. They are going to be smart. They've been smart so far. I expect them to continue to be smart.

CRAMER: Mm-hmm.

Mr. BENMOSCHE: They're focusing on our current shareholders and making sure they don't become disorderly. But the markets right now are nervous, and so as a result, not only the election and Sandy, I think that's put a little damper. Also, people were hoping we'd continue to buy back shares. What we said was that we've done a lot of that, 13 billion of buybacks this year. We're now focusing on our coverage ratio, our credit ratings. Because keep in mind, every one of our customers want us to live up to our guarantees. And our guarantees require very strong credit ratings. So we're balancing between, you know, buyback...

CRAMER: Mm-hmm.

Mr. BENMOSCHE: ...and balancing between coverage ratio and credit ratings.

CRAMER: Now the government can sell its stake. Are you in communication with Tim Massad, the TARP official who has come on our show multiple times to talk about disposal of different TARP assets?

Mr. BENMOSCHE: I talked to Tim when--he wants to know how things are going.


Mr. BENMOSCHE: Tim is totally in charge of what the end of this tranche will be.


Mr. BENMOSCHE: And I think that if he has any need to talk to me, he will. But right now they're operating pretty independently.

CRAMER: Right. So they're not telling you, listen, we're about to sell it in two weeks?

Mr. BENMOSCHE: They don't have any need to tell us.

CRAMER: OK. Fair enough. Now, you've been very clear that you want to thank so many of the employees who've stuck with you and done great. I've got here a much-thumbed-through December 5th, 2007, full-day analyst meeting for AIG,

OK. In that, I think it's important to...

Mr. BENMOSCHE: I realize I was drinking wine in Croatia having a good time on this date.

CRAMER: You has the edge on all of us, absolutely. I know you've got that great vineyard there. Fabulous New York Magazine piece about that. But Marty Sullivan, he said this is--remember, the stock's flying, still doing well. He says, "We are fortunate to have a capital base as well as a diverse portfolio of leading businesses with tremendous earnings power that will also absorb volatility and maintain the resources to grow and take advantage of opportunities that emerge from this uncertainty. I don't wake up in the morning worried I'm going to have to have to dilute the shareholders by issuing additional common equity or cutting our dividend." They did all of that. They cut the dividend, they issued common equity, and they still couldn't save it. Maybe we should, at some level, question the people who ran AIG before you.

Mr. BENMOSCHE: Well, I won't go into what happened before. I'll go to where we are today.


Mr. BENMOSCHE: Why I'm not concerned about being a SIFI, Systemically Important Financial Institution...

CRAMER: Right, right.

Mr. BENMOSCHE: ...which means that the Federal Reserve--and by the way, as a Savings & Loan...

CRAMER: Mm-hmm.

Mr. BENMOSCHE: ...holding company, we already have the Federal Reserve as our regulator.

CRAMER: Right.

Mr. BENMOSCHE: What's important is that we run stress tests. We're thinking about liquidity and demands for liquidity.


Mr. BENMOSCHE: We're not taking our rating for granted. And--but we will have outside regulators, and the Fed in particular is capable enough to assess have we thought through our liquidity needs. So the issue was not capital, the issue was cash.

CRAMER: Right.

Mr. BENMOSCHE: They didn't have cash.

CRAMER: Did they have collateral for...

Mr. BENMOSCHE: They actually had the collateral. But the question was, they had no window to go to because they weren't a bank until afterwards. Had the same been given to AIG that was given to other companies after AIG got the bailout, as you know...

CRAMER: Right.

Mr. BENMOSCHE: ...some of the investment houses were given access to the Fed window.

CRAMER: Mm-hmm.

Mr. BENMOSCHE: Other large institutional companies were given access to the Fed window.

CRAMER: Right.

Mr. BENMOSCHE: Had AIG had the same access, I believe that would've solved the liquidity crisis they had.

CRAMER: So why did that fail? It was just the question of the moment in time.

Mr. BENMOSCHE: It was cash. To meet collateral calls because in the end, the financial products that were put on the books, that were bought by the Fed, you saw the profits already...

CRAMER: Right.

Mr. BENMOSCHE: ...we believe almost all of that will accrete back to what it was supposed to be.

CRAMER: That's incredible.

Mr. BENMOSCHE: It was a question of the markets had tanked, the way the accounting was done, which was changed.

CRAMER: Right.

Mr. BENMOSCHE: OK. But the accounting was very aggressive at that point in time and so it required too much cash to be put up on things that ultimately would've worked.

CRAMER: OK. I want to leave on a note of optimism here. You've got a lot of young people from the military. You've been a great leader of several companies, you've done terrific things in your life. Any advice to them about how to go about their life and how to lead? Because I think you're a born leader.

Mr. BENMOSCHE: Well, thank you. First of all, if I may look at your audience here, I will tell you that first of all I appreciate all of you and your service of what you've done for our country. That a lot of people, you know, sit home and rely on all of us to do it for them. And for you to step up and do that, I think it's a great honor. So I just congratulate you and all thank you for what you do for our country. So that's number one.


Mr. BENMOSCHE: And so... that they'd understand how to serve and to serve the country that's so important to them. And that's about what is it that's important to you. And as a leader, you have to decide what is it you want to do and in some cases, you want to be an individual contributor so you really want to lead, but just yourself. In other cases, you want to take on that responsibility for other people's lives. And as you think about what's important to you, you've got to say to yourself, what do I love to do and if I would love to do that, then you've got to figure out a way to do it. And so start with yourself, what you love to do, how much responsibility you want to take up. And then enjoy the fact that you're taking on that responsibility. That starts from there and the rest of it gets pretty easy.

CRAMER: Well, terrific. OK. I want to thank you, to a great American, a proud veteran, Bob Benmosche. He's done a remarkable job. Thank you very much, president and CEO of AIG. Great. Thank you. Stay with Cramer.

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