XL Capital chief executive officer Mike McGavick said he's "jealous" of American International Group's continuing support from the US Government.

The notion that some financial institutions were "too big to fail" notion was flawed, Mr. McGavick told delegates at the World Insurance Forum, and would have unintended consequences for the market.

Mr. McGavick said the US Government intervention in AIG "might have been the right reaction at that particular period of time".

"But now I am frustrated to know that we have a government-owned competitor — the problem is very, very real," he added.

"I'm very jealous of them being able to call the Treasury to refuel their reserves — it sets in motion a whole bunch of consequences that the consumer will pay for when the market corrects."

McGavick, who once ran for the US Senate as a Republican candidate, added that he was amazed that AIG had been allowed to choose which assets to sell to repay the government.

"The fact they can choose which assets to sell to repay Uncle Sam, and they don't have to sell any, seems very bizarre to me," he said.

"It should be of grave concern to the American taxpayer."

Mr. McGavick was speaking in a panel discussion on the wider issue of government assuming risk.

"Too big to fail has pernicious unintended consequences, and we should be driving away from it," the XL CEO added.

When AIG was initially bailed out by the US Government in 2008, XL was going through the toughest year in its history. Both companies had suffered from different forms of exposure to the US housing slump.

AIG's problems were on a massively greater scale and the US commitment to the New York-based insurance giant topped out at around $182 billion.

XL, which recovered strongly last year, had to raise around $2.9 billion through the capital markets and received no US aid.