As a follow-up to the mess at American International Group, its insurance companies reserves have not been placed as collateral for either internal or external loans.
Shortly prior to the federal bailout, New York State approved AIG using its insurance companies’ reserves as $20 billion collateral. See our prior post here. This was an emergency measure before the federal government stepped-up with a loan of $85 billion.
Now that the U.S. has agreed to the bailout, New York has withdrawn its permission. Therefore, the AIG insurance companies remain on solid footing with their reserves undisturbed.
See our related post on AIG structured settlement annuities here.
Mark E. Seitelman, 9/22/08, www.seitelman.com.