Posted On: September 29, 2008, 1:43 pm CDT

Posted By: Pasadena Agent

I couldn't agree more with Sandy Praeger. If it weren't for the health of the insurance units of AIG, no bailout could ever have been crafted.

Just look at the annual statements of each of AIG's insurance units. Collectively, all 71 companies made $1 billion in pretax profit in the second quarter of 2008 alone, and that would not be possible without robust state regulation. You won't find much leverage on any of the insurance company balance sheets, and the quality of the investments an insurance company shows on the asset side of the ledger are carefully monitored. Auction Rate securities and CDO's would never have found their way on to a carrier's balance sheet. Furthermore, the way a carrier reports their results to the state regulators is different and far less forgiving than GAAP. Quite frankly, the shanaigans the Fed prsently allow simply are not and would never be tolerated by the state regulators.

Could you imagine what our business would look like if we let Paulson and Bernacke become insurance regulators? Thank god for the existing regulatory structure. This is one time that I do appreciate a "19th Century" regulatory model and not the 21st Century sack of manure that led us to this abyss.

What you see and hear is nothing more than election cycle political posturing. No one on Capitol Hill wants to be blamed for this crisis. Please keep in mind that all of the House and 1/3 of the Senate seats are all up for grabs.