The brouhaha over American International Group’s lavish junket for top-performing agents, coming so soon after its federal bailout, raises more than narrow questions of propriety, instead going to the heart of the debate over agent compensation and conflicts of interest.

The party is literally over at AIG, as the beleaguered company scrapped plans to host a second bonus resort conference to reward agents in the wake of a tsunami of criticism. AIG was hammered for throwing life producers a $400,000-plus celebration after begging Uncle Sam for an $85 billion bailout loan–returning for another $37.8 billion to keep the organization afloat.

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