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American International Group, the nation's largest insurer, can give itself a $20 billion loan to keep operating, thanks to measures taken Monday by its New York State regulator.
valhakar, gee you are a true doomer man.
Basically the bosses at AIG are raiding grandma's annuity to keep themselves afloat for a few more weeks. They should all be shot.
People borrow from themselves all the time... taking from retirement plans promising to pay back with interest in a given time frame to avoid tax penalties.
But what happens to the car insurance and the life insurance, and the other insurance, if AIG goes belly up? Who takes over? Do the policies get cancelled? Is there a refund on premiums? What does one do for insurance during the transfer interium?
WHAT IS THE POINT OF A BANK LOANING ITSELF MONEY?
What happens when --- did not address my question.
AIG is in multiple states and conforms their requirements to each state individually.
So does it have to declare bankruptsy in each state individually, and get resolved individually on a state-by-state basis?
When do I get notified that my car insurance is no longer valid and needs to be obtained from another company?
Cities loan themselves money all the time. They have independent departments with independent revenue streams and independent reserves. One cannot just take from one pocket to pay another. But a better rate for both the borrower and lender may be able to be obtained in-house than going to a separate financial institution.
This especially works well if the debt is expected to be for a short time period. Also if credit rating organizations are presently giving really low ratings thus making it difficult to apply for a good rate from other sources.
I work for AIG and all of the above is way off line. First, the report that we were going to lend ourselves money was inaccurate. AIG was going to ask it's insurance subsidiaries for 20 billion in cash in exchange for $20 billion in less liquid assets. Thankfully that did not need to happen due to the feds coming in. Second, AIG is not a bank, at the core we are majorily an insurance company with a small financial services section that got the company into trouble with the mortgage backed securities that are causing havoc across all areas of the market at this time. Third, the insurance parts of AIG, which make up 85% of AIG's gross earnings, are wholly owned subsidiaries of AIG and are not and will not be affected by the goings on of AIG going forward so anyone that has their car insurance through AIG Direct, formerly 21st Century, will continue to have a policy and will not all of a sudden be dropped and have to scramble for coverage. Insurance is regulated on a state by state basis and there is no way that policyholders are going to be left holding the bag.
There was just an announcement today that AIG will be going back to it's core businesses of Property Casualty and life insurance. So I think the worst is behind us and the fed loan will be paid off by summer of next year at the latest. The one thing that we as employees did not realize is that even after the fed loan is repaid, the feds will still own 79.9% of AIG. So that just shows you how dire the situation was if they agreed to that in order to get their hands on the capital. There is a lot more that is involved but the main thing is that if you are a policyholder you are safe and if you have a claim it will be paid.
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AIG to loan itself money!
DebtsNMesses
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Can I do that too? Please, please, can I loan myself money? I promise to pay myself interest.
Uh... what's wrong with this picture? Linky
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