Q: AIG - Was AIG an Insurance Company or something Else?

  • And we were told that it was the intention of the Federal Reserve, with the full support of the Administration, to make $80 billion available for the insurance company AIG. 

--  Barney Frank (D-MA)

2009 0210 - GOV  (House) - Extraordinary Efforts by the Federal Reserve Bank to Provide Liquidity in Current Financial Crisis - [PDF-123p, VIDEO-archive.org]

  • (p5) - Ed Royce (R-CA) - Certainly, noting the failure of AIG, once the Nation’s largest insurer, is relevant, given the focus of today’s hearing.
  • (p7) - Melissa Bean (D-IL) - The collapse of AIG, the world’s largest insurer, has proven to be one of the most costly and dangerous corporate disasters in our Nation’s financial history.
  • (p29) - Mike CAPUANO (D-MA) - But everybody here thinks that there is <NO> one company that somehow provides systemic risk. That’s what I heard. I don’t think I heard anybody say anything different.
    • Has anybody here heard of the company AIG? I know it hasn’t been in the news lately.
  • (p29) - Michael MCRAITH (IL, NAIC) - But, Congressman, to be clear, AIG is kind of colloquially referred to as the world’s largest insurance company. But it is 71—

Insurance and Systemic Risk) - [PDF-181p,

  • 2009 0305 - GOV (House) - Perspectives on Systemic Risk - [PDF-254p
    • 4:30 / p32 - Terri Vaughan (IA, NAIC CEO) -
      • The problem is that we did have this—I would say AIG was not an insurance company.
      • It was a large complex financial institution, large globally complex financial institution.
  • Q. AIG was the largest insurance company in the world; correct?
  •  A. That's correct.  (Geithner)  (p61)

2014 1008 -  Starr International Company, Inc. v. The United States - Case 1:11-cv-00779-TCW - Trial Volume 8 - Geithner - 254p

Dennis Ross (R-FL)

  • And would it not be just as likely, then, because of the precedent set there, that such packages, TARP packages would now be considered for nonfinancial institutions; insurance companies?
  • We saw that with AIG, but I guess my question is does this not set a precedent that goes well beyond assisting the too big to fail financial institutions and to any entity that may be deemed to be too big to fail, regardless of what their commercial purpose is? (p38)

Mr. BAROFSKY.  (SIGTARP - Special Inspector General for the Troubled Asset Relief Program)

  • The moral hazard generated by TARP wasn’t just limited to banks, it was, as you said, to insurance companies like AIG... (p38)

2011 0330 - GOV (House) - Has Dodd-Frank Ended Too Big To Fail? - [PDF-103p, VIDEO-Part 1 and Part 2

  • “In this case, we’re dealing with the largest insurance company in the world,” Mr. Bernanke said.
    • “Its failure would have sent shockwaves through the entire insurance industry” and likely beyond.

2009 0303 - NYT - Fed Chief Says Insurance Giant Acted Irresponsibly - [link]

  • 14AIG Financial Products (AIGFP) is an example of a firm that does not fit neatly into the microprudential regulatory framework.
  • Although it was an insurance company subsidiary, it was supervised by a domestic housing regulator, the Office of Thrift Supervision (OTS), without deep expertise in the credit derivatives that were AIGFP’s specialty. (p19)

2012 0105 - OFR - A Survey of Systemic Risk Analytics - 165p

  • However, after the financial crisis in 2008, the bankruptcy crisis at AIG, the world’s largest insurer, raised concerns about systemic risks in the insurance industry, realizing that insurance industry may also give rise to systemic risks.  (p8)

2020 02 - SOA - Systemic Risk in China’s Insurance Industry, Society of Actuaries - 55p