If AIG fails

[DOGS THAT BARK]

Got to love the eternal pessimist--if you look just look you might find a silver lining in those clouds--

Yesterday, 07:43 AM
DOGS THAT BARK
Registered User
Join Date: Jul 1999
Location: Bowling Green Ky
Posts: 14,009

AIG Big drop in pre market today--might not fit into "investment" catagory but have made wagers with a lot less risk reward prospect.

On the prmise of Ins Co taking care of their own made wager before the bell at anything under $2 and got 1000 shares @ $1.75

Your order to buy 1000 of AIG has been executed at $1.7500. Reference Number XXXXXXXXX


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#8 Yesterday, 01:03 PM
DOGS THAT BARK
Registered User
Join Date: Jul 1999
Location: Bowling Green Ky
Posts: 14,009

decided to sell 400 shares and get 600 free.

Your order to sell 400 of AIG has been executed at $4.2300. Reference Number

 

[Franky Wright]

:142smilie

AIG,

Pay Up You STIFFS!

 

[IntenseOperator]

Fed OKs $85 billion loan to AIG

September 17, 2008

BY TERRY SAVAGE

The Fed said it wouldn't bail out another financial firm, but when the chips were down the prospect of a bankruptcy for AIG, one of the largest insurers in the world with 74 million clients in 130 countries, was too daunting for global financial markets.

After a day of intense negotiations in an effort to get the private sector to front a bid for the $1 trillion assets of the giant insurer, the Federal Reserve on Tuesday night finally authorized the Bank of New York to lend up to $85 billion to AIG. Officially, it's not a handout, because in return the government will own a 79.9 percent stake in the company.

The transaction is technically a loan for two years -- at a steep annual interest rate of 11.3 percent. The loan will be backed by the assets of the company, and will be repaid as those assets are sold. It's reminiscent of the government's 1979 bailout of Chrysler, in which taxpayers guaranteed $1.2 billion of loans that were eventually repaid.

The Fed's major concern was a convoluted web of swaps and financial transactions that would have unraveled had AIG declared bankruptcy.

But individual clients of the giant insurer are also relieved. They include homeowners in flooded Texas communities, wondering if their AIG policies would pay for damage, along with millions of teachers who own retirement annuities through AIG subsidiary VALIC and worried that their retirement plans would go down the drain in a bankruptcy.

Now, it's likely that these profitable insurance subsidiaries will be purchased by other, stronger insurance companies. In that case, all the policies would continue intact under the original contracts. And until the assets are sold, the loan will allow AIG to continue to manage its insurance business.

The deal also gives AIG time to unwind the complex mortgage and credit transactions, whose value will likely continue to fall under the pressure of selling. But other markets are expected to rebound, now that the fate of AIG is being resolved.

The government has now managed a rescue for both Fannie and Freddie, as well as Bear Stearns and AIG. Only Lehman employees and shareholders must be wondering why they didn't qualify, too. The Fed drew a line in the sand, and then the tide came in and washed it away -- along with billions of dollars in shareholder value. And when the tide goes back out, it is the American taxpayer who is likely to ultimately pay for this rescue.

 

[DOGS THAT BARK]

Just a heads up to all those that have insurance through AIG. You will find unscrupulous agents who will use this as excuse to replace life ins business they might have have written with AIG often to benefit themselves (getting new commission) by replacing coverage with another company. Would like to share letter I received from department of insurance in ky.

Notice To All Agents:

We wanted to share some information with you regarding the recent turmoil in the market, particularly concerning American International Group (AIG).

The Kentucky Department of Insurance has participated in numerous national conference calls with other regulators, including those in the lead states of New York and Pennsylvania. We have been assured that the insurance subsidiaries of AIG are solvent and able to pay claims. As a matter of fact, the insurance portion of AIG?s business will play a critical role in the solution to the financial problems of the company.

As the AIG story has unfolded, we have begun receiving reports of agents who are using this as an opportunity to contact AIG insureds with offers to replace coverage. We also have received calls from consumers who have been advised to take actions clearly not in their best interests.

We want to remind you of two statutes ? 304.12-060 - Defamation (go to http://www.lrc.state.ky.us/KRS/304-12/060.PDF) and 304.12-030 - Replacement life insurance ? ?Twisting? prohibited (go to http://www.lrc.state.ky.us/KRS/304-12/030.PDF). Please be aware that we take allegations of twisting or defamation very seriously and will not hesitate to take appropriate action against agents in violation of those two statutes.

Although we are responding to general questions, we are advising consumers to contact their agents, attorneys, tax planners or other financial consultants for more specific guidance. For your information we have included the AIG Consumer FAQ.

The Department continues to monitor the situation. Please check our Web site for updates as they become available at http://doi.ppr.ky.gov

Sharon P. Clark
Commissioner
Kentucky Department of Insurance

AIG Consumer FAQ

I have an insurance policy with AIG. How does this impact me?
AIG is an international financial holding company with businesses ranging from aircraft leasing to investment services to insurance. The policy you hold is written by an insurance company that is an operating subsidiary of AIG. Those insurance companies are financially sound. State insurance regulators and federal regulators, in cooperation with the new management of AIG, are taking steps to make sure that insurance customers of AIG subsidiaries are protected.

Will the AIG insurance companies be able to pay claims?
In short, yes. The AIG affiliated insurance companies are financially solvent and able to pay claims. The financial issues facing AIG are occurring because the parent company (which is not an insurance company) made investments in mortgage-backed securities and engaged in credit default transactions with troubled investment banks and financial firms. The Federal Reserve is basically extending a line of credit to the parent company to help it work through these issues.

What are state regulators doing to make sure AIG insurance companies can continue to pay claims?
State insurance regulators, including those in Kentucky, are closely monitoring the financial condition of the AIG affiliated insurance companies and are reviewing any activity at the parent company that impacts insurance company assets. Any significant transaction impacting an AIG insurance company, including sale of the company, is subject to state regulator approval.


What happens if AIG affiliated insurance companies get into financial trouble?
State regulators have a variety of tools available if it appears that an insurer is not going to be able to fulfill its promises to policyholders. Even if liquidation of an insurance company is necessary, policyholder claims will generally be paid either by the insurance company or by a guaranty fund, which all states have in place to provide coverage to policyholders. This protection applies to direct business written by authorized licensed insurers. For more information on the Kentucky Life and Health Insurance Guaranty Association, go to http://www.klhiga.org/faq.cfm

Who do I call if I have questions about my AIG insurance policy?
If you need to file a complaint or have a general question, you can call the Kentucky Department of Insurance at 1-800-595-6053 and ask for David Howe. However, before making any changes to existing coverage, we advise a consumer to contact his/her agent, attorney, accountant or other financial/tax consultant

 

[Lookn4help]

AIG mess

AIG mess

Because of the wide range of investments and gaurantees of investments worldwide the ripple (sp) effect around the world would be devastating.
The insurance coverage and gaurantee that they have exposure to is truly huge.
Bottom line is even with the "loan" to keep them solvent, our economy is on the brink of goig straight into the sh*&^tter which in turn has a domino effect on the world markets with the potential of a true depression not just a recession as politics would have us believe.