AIG - Bankruptcy - Life Insurance Companies

2009 0318 - GOV (House) - Federal Aid to AIG Insurance, Regulators Panel -[PDF-380p

  • (p48) - Carolyn MALONEY (D-NY). - So if Financial Products was walled off and allowed to fail, the insurance portion would be safe and sound, and going forward, is that correct?
  • Joel ARIO. (NAIC, Insurance Commissioner - PA) - Yes, the assets would be there and would be protected.  
  • Dinallo
  • Michael Moriarity

2010 0127 - GOV (House) - The Federal Bailout AIG - [PDF-652p

<Bonk: Where is the Hearing that Michael McRaith said this?>

  • Cliff STEARNS (R-FL).
    • Now, recently Michael McRaith, who is director of the National Association of Insurance Commissioners, told the Senate Banking Committee, he said, you know, if AIG had gone in bankruptcy, we would have taken care of it.
    • It would have been an orderly disposition. This is what he said: ‘‘AIG’s insurance operations and their other companies would have simply—we would have simply bought up AIG’s insurance assets, allowing a seamless delivery of AIG’s insurance obligations.’’
    • So the question is, considering that the State Insurance Commissions would likely have seized AIG’s insurance subsidiaries, protected policyholders in an AIG bankruptcy, why was it necessary to bail out AIG with taxpayers’ money, based upon the testimony of the director of the National Association of Insurance Commissioners?
  • Mr. Hank PAULSON. I respectfully disagree with him, and I believe that it is——
  • Mr. STEARNS.
    • So you disagree with this guy, with all his knowledge, his years of experience?
  • Mr. PAULSON.
    • I will just say many people with years of experience had some regulatory responsibilities with regard to AIG, but this company was had a huge problem, and it is case No. 1 on what is wrong with our regulatory system.
    • There was no single regulator that had a line of sight on the total company.
    • So there were regulators that looked at different pieces of it, and if the company had gone down, it would have been a huge mess. (p152)

2021 - YPFS Lessons Learned Oral History Project: An Interview with Eric Dinallo - 19p

(p17-18) - Eric Dinallo: Geithner asked about, because they're seriously considering, giving serious thought about a debtor in possession—DIP—thing for AIG.

  • He's like, "What do you think?"
  • I'm like, "It's a horrible idea."
  • He said, "Why?

I said, "Because while it looks possible on paper, and I get the point.,,

  • If you file for bankruptcy at the holding company level, all these subsidiaries, they're going to start ...
  • Some states may even require by law … that the states will seize the operating companies, because the holding company filed for bankruptcy.
  • They're going to pull up the drawbridge, and go into castle mode.
  • Then you're going to have a run on insurance companies."

While I'm saying this, I swear to God, CNN is on. We took a break, and CNN was on.

  • They were lining up in Singapore for, I don't know why, but at AIG's insurance company in Singapore, they were lining up.
  • They were acting like a run-on-the-bank moment.
  • Probably to check on their insurance policy.