Can anybody answer a simple question for me: if AIG is forced to liquidate (don't think it will happen, but whatever), would people who have cash value life insurance policies with them be likely to lose their investments? What about term policies -- would you have your policy canceled? Anybody know?
What does that really mean, though? If AIG went bust, then Lehman's real estate would lose its insurance, which it probably needs because they (Lehman) won't be able to pay for their property...?
Not unless things are much, much worse than I thought. Insurance subsidiaries are funded separately from the holding company and other operating companies and the claims of policyholders are senior to any secured creditors.
They have been given permission to trade some holding company assets for more liquid assets at the insurance subsidiary level, but this is an issue of duration. E.g., you have annuities that pay out over the next 20 years and assets that mature in 10 years, so you place these assets as security for the annuities, and take the short term stuff up to the holding company so that you can sell it today.
I'm an investment banker but with limited experience in structuring (mostly M&A advisory, though one needs at least some superficial level of knowledge to execute a dozen or so LBOs over the past 5 years... but we had a leveraged finance team for that).
Not to shill, but AIG's commercial insurance operations are strong. We're profitable, our NWP to surplus ratio is 1:1, and we haven't loaned any money to the parent company. Also, we're much more heavily regulated than the holding company. Things won't be pretty if AIG proper drags our rating down, but the insurance operations (even with Ike) are part of the solution, not part of the problem
Well, there must have been a reason that there were panics every 6 to 20 years up to Glass-Steagall, and then no crashes until repeal, plus 6 to 20 years -- exactly, in fact, 14 years.
Hayek was wrong. There is no such thing as a free market; without political intervention, all you get are cartels and monopolies.
Why were investment banks and commercial banks allowed under the same roof? We learned how that worked in 1929.
Insanity is repeating an action and expecting a different result the next time around.
Can anybody answer a simple question for me: if AIG is forced to liquidate (don't think it will happen, but whatever), would people who have cash value life insurance policies with them be likely to lose their investments? What about term policies -- would you have your policy canceled? Anybody know?
What does that really mean, though? If AIG went bust, then Lehman's real estate would lose its insurance, which it probably needs because they (Lehman) won't be able to pay for their property...?
Not unless things are much, much worse than I thought. Insurance subsidiaries are funded separately from the holding company and other operating companies and the claims of policyholders are senior to any secured creditors.
They have been given permission to trade some holding company assets for more liquid assets at the insurance subsidiary level, but this is an issue of duration. E.g., you have annuities that pay out over the next 20 years and assets that mature in 10 years, so you place these assets as security for the annuities, and take the short term stuff up to the holding company so that you can sell it today.
I'm an investment banker but with limited experience in structuring (mostly M&A advisory, though one needs at least some superficial level of knowledge to execute a dozen or so LBOs over the past 5 years... but we had a leveraged finance team for that).
Not to shill, but AIG's commercial insurance operations are strong. We're profitable, our NWP to surplus ratio is 1:1, and we haven't loaned any money to the parent company. Also, we're much more heavily regulated than the holding company. Things won't be pretty if AIG proper drags our rating down, but the insurance operations (even with Ike) are part of the solution, not part of the problem
I am 91.I paid $50,000 for FNM_T bonds no selling for$5000.Do I have any protection?Should I sell?Should I sue?
THanks
Well, there must have been a reason that there were panics every 6 to 20 years up to Glass-Steagall, and then no crashes until repeal, plus 6 to 20 years -- exactly, in fact, 14 years.
Hayek was wrong. There is no such thing as a free market; without political intervention, all you get are cartels and monopolies.
Why were investment banks and commercial banks allowed under the same roof? We learned how that worked in 1929.
Insanity is repeating an action and expecting a different result the next time around.