The Next AIG Problem
The New York Times has a great piece on the huge liabilities facing AIG's many insurers. The problem appears to be that AIG's various companies have insured the liabilities of all of AIG's other various companies. American Home's Finances, for instance, has $26.3 billion in assets and $140.6 billion in potential liabilities. That may all turn out to be fine, if all of AIG's other properties prove solid. But if not, it could start a chain reaction across the company.
Part of the problem here is that insurance companies are still subject to state, rather than national, regulation. This is one of those obvious points of weakness in the regulatory system that's not getting addressed because it didn't directly contribute to the recent financial crisis. But it could contribute to the next, or to the worsening of this one, and in any case, it's well worth changing.
Posted by: vklip | July 31, 2009 12:41 PM | Report abuse
Posted by: JimPortlandOR | July 31, 2009 1:33 PM | Report abuse
Posted by: atlliberal | July 31, 2009 2:02 PM | Report abuse
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