AIG - Securities Lending - Insurance Companies

  • AIG was also taking risks with the assets of its life insurance subsidiaries through its securities-lending program.

2012 0725 - SIGTARP - AIG Remains in TARP as TARP’s Largest Investment - 22p

2008 0530 - Delaware - Report On Examination of AIG Life Insurance Company as of December 31, 2006 - 44p

  • As of September, 2007, the Company reported approximately $36.3 million in unrealized losses associated with sub-prime investments.
  • The investments were made in conjunction with the Company's securities lending activities.

2011 05 - Missouri - RE: Examination Report of AGC Life Insurance Company (As of: DECEMBER 31, 2009 ) - 25p

  • The current full scope financial examination covers the period from January l, 2007, through December 31, 2009, and was conducted by examiners from the state of Missouri representing the Midwestern Zone of the NAIC with no other zones participating. This examination also included material transactions or events occurring subsequent to December 3 l, 2009.

SUMMARY OF SIGNIFICANT FINDINGS

AGC Life Insurance Company operates as a holding company that directly owns six domestic life insurance subsidiaries and one foreign subsidiary.

  • The domestic subsidiaries lost $17.5 billion in 2008 as a result of their participation in a securities lending program sponsored by its upstream parent, American International Group, lnc. (''AIG").
  • AIG made capital contributions in 2008 to substantially offset these securities lending losses from funds primarily obtained from the U.S. government.
  • However the subsidiaries incurred significant damage to their reputations because of their association with AIG and this reputational damage resulted in a substantial loss of business that may be considered a threat to their future level of profitability.
  • As a result the subsidiaries could be dependent on additional capital contributions from AlG to maintain their capital positions.