Ed Liddy

  • AIG
  • AllState
  • 2009 0402 - Letter - Congressman Gary C. Peters to Liddy - 2p
  • Government Hearings
    • [PDF - 380p   VIDEO-CSPAN
  • (p60) - As former CEO Liddy explained in an interview, "It's an interesting structure where you have an insurance company that works really well and on top of it is a holding company and the holding company's biggest asset is this huge hedge AIGFP. Andrew Sorkin, The Case for Saving A.I.G., by A.I.G., N.Y. Times, Mar. 2, 2009.[link] "It just doesn't make sense to me." Id
  • (p61) - AIGFP thus led AIG to "stray[] from its core competencies in the insurance business" and suffer a virtual collapse. Liddy Testimony at 3.

1:08-cv-05722 - American International Group, Inc. ERISA Litigation
II

  • 2012 - Document 137 - Consolidated Second Amended Complaint - 230p
  • Mr. CAMPBELL. Talk about the life insurance subsidiary for a second. I know that in your—I believe it was the company’s evaluation of systemic risk, that is where you believe there is a great deal of systemic risk, but there is a lot of counterparty liabilities to other life insurance companies. Is that true?
  • Mr. LIDDY. It is in both. (p94)

      • Edward Libby testified about operations and business practices at American International Group (AIG) before, during, and after federal intervention.
        • 2:15:28 - Carolyn Maloney:  bad regulatory decision?
        • - Liddy: yes
        • all life insurance companies would have been in trouble... asset prices....capital markets
    • House - COMMITTEE ON FINANCIAL SERVICES -SUBCOMMITTEE ON CAPITAL MARKETS, INSURANCE, AND GOVERNMENT SPONSORED ENTERPRISES
  • (p63) - Mr. BACHUS. Thank you. Mr. Liddy, mark-to-market, I think, is good in concept, but insurance and banking CEOs are telling me that it is not working well in a distressed market. I would like your comments on modifications others have proposed, and general modifications, and how it might help AIG to increase the likelihood of the taxpayers being fully reimbursed.
  • Mr. LIDDY. Yes, sir. I think mark-to-market is a good concept, run amok. On balance, knowing what something is worth every day is a good thing, but it presumes that there’s a market. It presumes that there’s a willing buyer and a willing seller.
  • When liquidity completely dries up, there’s not a willing buyer, so you have to keep marking the value of the assets down to an unwilling buyer level.

In insurance companies, we have a long liability. We will insure your life.

  • And we will match it with a long dated asset.
  • Those long dated assets, like commercial mortgage-backed securities and residential mortgage-backed securities, because they’re long-dated, they are not liquid right now, and they have been buffeted in value, unlike anything most of us have ever seen.

So as a result of that, AIG and many other insurance companies have had to write the value of those assets down, and it has caused great stress on the liquidity.  

2009 0318 - GOV (House) - American International Group's Impact on the Global Economy: Before, During, and After Federal Intervention