A.I.G. To Get 30 Billion more in Bail Out Money from the Government
Posted Mar 03 2009 3:09pm
One question that comes to mind here, where are those “reserves” or “rainy day” funds insurance carriers by law are supposed to maintain? I looked around the internet and found some problems with AIG Reserves dating back to 2003 and there are many more articles to be found with a simple search. We have Health Care Insurers being investigated by some states for over inflating their reserves and others who felt they could do what they pleased and not sustain adequate funds? Looks like Wall Street and the Insurance business has a bit in common and appears to be getting a bit closer on similar issues as time goes on.
It appears that folks were pretty well doing what they wanted with little or no effort to maintain the “reserve” accounts required by law, so once more we appear to be getting junk bonds as consumers. BD
The federal government agreed Sunday night to provide an additional $30 billion in taxpayer money to the American International Group and loosen the terms of its huge loan to the insurer, which is preparing to report a $62 billion loss on Monday, the biggest quarterly loss in history, people involved in the discussions said.
The intervention would be the fourth time that the United States has had to step in to help A.I.G., the giant insurer, avert bankruptcy. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.