AIG Has Drawn $90.3 Billion of $123 Billion Government Loans

October 24, 2008

  • October 25, 2008 at 1:29 am
    chris says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Bailing out private industry is an interesting concept.
    I wonder how all the past company’s that have gone under feel about the goverment playing favorites? It’s typical of the goverment to do what ever they want with the peoples money, and why not? They will always get more.

  • October 26, 2008 at 4:58 am
    Anonymous says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Adding wind coverage to the current federal flood and wind insurance program could benefit some policyholders, so why don’t we add fire, theft or maybe even no-fault insurance so the government can cover all of the risks that the insurance companies are paid to cover but can’t seem to pay for. Jeez, let’s screw the consumer twice. And State Farm needs to be sued for their “Good Neighbor” commercials because we all know that that is “bull”. Wake up America!
    We are the govermment peolpe………………………………………………………………………………………………………………………………………………………………………….. I will like a bail out how about all of you ??? put your name down for a bail out. its working for the big boys.

  • October 26, 2008 at 5:04 am
    $50 billion a year in insuranc says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    They have chosen to look for ways to save on claims.
    The 60 million U.S. homeowners who pay more than $50 billion a year in insurance premiums are often disappointed when they discover insurers won’t pay the full cost of rebuilding their damaged or destroyed homes. Property insurers systematically deny and reduce their policyholders’ claims, according to court records in California, Florida, Illinois, Mississippi, New Hampshire and Tennessee. The insurance companies routinely refuse to pay market prices for homes and replacement contents, they use computer programs to cut payouts, they change policy coverage with no clear explanation, they ignore or alter engineering reports

  • October 26, 2008 at 5:14 am
    Anonymous says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    ANITA LEE
    calee@sunherald.com
    More insurance coverage
    Amended complaint against State Farm, vendors

    The owner of an engineering firm hoped to make up to $1.5 million over three months by adjusting Hurricane Katrina claims for State Farm, borrowing $150,000 and establishing a line of credit with State Farm Bank to set up shop on the Mississippi Coast in September 2005, according to records filed late Tuesday in federal court.

    Because of the arrangement, Forensic Analysis & Engineering Corp. was beholden to State Farm, which wanted to minimize its Hurricane Katrina losses for wind damage, the lawsuit says. Another vendor that adjusted Katrina claims, the independent adjusting firm E.A. Renfroe & Co. Inc., at times owed 80 percent of its income to State Farm, the court records say.

    A team of policyholders’

  • October 26, 2008 at 5:56 am
    Anonymous says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Company
    ‘Boxing gloves’ replace ‘good hands,’ lawyers charge

    July 9, 2008

    • Allstate Homeowners
    • Allstate Auto

    News
    • Lawyers Rate Allstate as Worst Insurance Company
    • Consumers Want Allstate Records Kept Public
    • Consumer Group Blasts AllState
    • Texas Orders Allstate to Pay Homeowners’ Claims
    • Mississippi, Insurers In Stand-Off Over Hurricane Damage
    • Florida Consumers Sue Allstate

    Allstate ranks as the worst insurer for consumers, according to a comprehensive investigation of thousands of legal documents and financial filings by the American Association for Justice, a trial lawyers’ group.

    The group said it based its rankings on what it found to be “a distinct pattern of insurance industry greed” among 10 companies that do everything possible to avoid paying claims, employ hardball tactics against policyholders, reward executives with extravagant salaries, and raise premiums to maximize profits.

    “While Allstate publicly touts its ‘good hands’ approach, it has instead privately instructed its agents to employ a ‘boxing gloves’ strategy against its policyholders,” said American Association for Justice CEO Jon Haber. “Allstate ducks, bobs and weaves to avoid paying claims to increase its profits.”

    AAJ says Allstate is pretty much in a class by itself when it comes avoiding claims.

    The group says the company contracted with consulting giant McKinsey & Co. in the mid-1990s to systematically force consumers to accept lowball claims or face its “boxing gloves,” an aggressive strategy designed to deny claims at any cost.

    AAJ says its charges against AllState are backed by thousands of court documents, materials uncovered from litigation and discovery, testimony, complaints filed with state insurance departments, SEC and FBI records, and news accounts.

    The rest of the rankings are as follows:

    2. Unum AAL takes this company to task for its actions in servicing its disability insurance products. AAJ says Unum’s behavior was epitomized when it denied the claim of a woman with multiple sclerosis for three years, stating her conditions were “self-reported,” contrary to doctors’ evaluations. In 2005, Unum agreed to a settlement with insurance commissioners from 48 states over their practices.

    3. AIG The world’s biggest insurer, AIG’s slogan was “we know money.” In 2006, the company paid $1.6 billion to settle a host of charges.

    4. State Farm State Farm fought hard to deny many claims along the Gulf Coast after Hurricane Katrina, AAJ says. The group says the company employed multiple engineering firms until they could deny the claims of one particular family in Mississippi. In April 2007, State Farm agreed to re-evaluate more than 3,000 Hurricane Katrina claims.

    5. Conseco Conseco sells long-term care policies, typically to the elderly. Amongst its egregious behavior, the insurer “made it so hard to make a claim that people either died or gave up,” according to a former Conseco subsidiary agent.

    6. WellPoint Health insurer WellPoint has a long history of putting profits ahead of policyholders, AAJ said. The group says California fined a WellPoint subsidiary in March 2007 after an investigation revealed that the insurer routinely canceled policies of pregnant women and chronically ill patients.

    7. Farmers Swiss-owned Farmers Insurance Group consistently ranks at or near the bottom of homeowner satisfaction surveys, according to AAJ.

    8. UnitedHealth AAJ says physicians have complained that their reimbursements are so low and delayed by the company that patient health is being compromised.

    9. Torchmark AAJ claims Torchmark has preyed on low-income Southern residents and charged minority policyholders more than whites for burial policies.

    10. Liberty Mutual Like Allstate and State Farm, Liberty Mutual hired consulting giant McKinsey to adopt what AAJ calls “aggressive tactics.” The group says Liberty’s tactics were highlighted when a New York couple’s insurance was “nonrenewed” by Liberty, even though they lived 12 miles from the coast and never experienced weather-related flooding

  • October 27, 2008 at 8:19 am
    stckbyr says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Just for the record the American Association for Justice, is made up of plaintiff lawyers–not exactly an unbiased group on this topic.

    From the History of the AAJ according to its own web site

    On August 16, 1946, a group of nine plaintiffs’ attorneys involved in workers’ compensations litigation met in a hotel room at the Heathman Hotel in Portland, Oregon. Their goal was to put together a plan for a national organization to combat new threats facing trial lawyers across the country. It was at this meeting where it was enthusiastically agreed upon to create a new association by the name, the National Association of Claimants’ Compensation Attorneys (NACCA). Their devotion to securing strong representation for victims of industrial accidents soon attracted admiralty, railroad, and personal injury lawyers. It wasn’t long before the group included attorneys engaged in almost all facets of trial advocacy.

    Reflecting its growth and expanded commitments, NACCA changed its name 3 times before 1973, when it emerged as the Association of Trial Lawyers of America (ATLA). In 1977, ATLA’s headquarters moved from Boston to Washington, DC.

    In 2006, ATLA members voted to change the association’s name to the American Association for Justice (AAJ). Today, AAJ is a broad-based, international coalition of attorneys, law professors, paralegals, and law students.

  • October 27, 2008 at 8:28 am
    stckbyr says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Just my own opinion, but I don’t think you can sell off AIG assets fast enough, and at a high enough price to pay off the government’s loan (including the accrued interest) within two years.

    I think AIG will have to continue to post additional collateral and will blow through the total government approved amount. That collateral will be needed for years because AIG will never get the ratings improvements it needs to be able to recapture posted collateral to pay off the government.

    I believe this company and the government are stuck together for years before the advanced funds can be fully recovered, if ever, and the interest the government loan is at will ultimate bleed AIG to the point it cannot provide a decent return to its non-government shareholders.

  • October 27, 2008 at 1:20 am
    Doctor J says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Chris,

    I’d like to agree with you, but, AIG’s importance is on a global scale. It’s not a bailout, per se, it’s a loan. The fact is, AIG makes money on its insurance operations. It’s lost money on its investments and hence the problem. I can’t see us allowing a company with $1 Trillion in assets fail. It would only make the situation far worse.

    Imagine millions of policies having to be replaced overnight – or not being able to be replaced at any cost. That’s what would have happened otherwise. Major construction projects grinding to a halt. Lawsuits galore between project owners and their GCs and subs. Property being seized by lenders for lack of adequate coverage. The ripple effect would have been huge.

  • October 27, 2008 at 2:00 am
    Allan says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    AIG’s collapse would definitely put an end to this “soft market”. Smart carriers would price themselves where they can once again make money on underwriting, and not rely on the increasingly volatile investment income to offset their losses. Smart agents should then be able to explain increases in premium to their clients and make more commission dollars.

  • October 27, 2008 at 2:06 am
    joe says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Amen, Doctor J
    You’re the only guy out there who has a genuine grasp on WHY the government or private banking MUST save AIG
    End of story

  • October 27, 2008 at 3:45 am
    Reverend-CPCU,CLU,FLMI says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I only want a one million dollar bailout. I’ll be real quiet about it. I’ll lock up my rented house full of new furniture(no principle or interest until June 2009) take my new car (20% over blue book trade-in down and 0% for 72 months) and drive to Washington to get the check. What then? Put it in the bank? NO. Mutual funds? NO. Stock market? NO. A large part of it will be invested in taxes so I won’t have the full million to worry about. I suppose I will just take it in cash and hide it until the government or some other thief figures out a way to steal it.

  • October 27, 2008 at 4:22 am
    Baxtor says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Amen Reverend. Unlike these Harvard degree idiots, Joe and Doctor J who think the messiah works through CEO’s and large businesses including governments. Let the greedy fail. The Lord says the smart will be made to look foolish. Makes you wonder why these smart CEO’s are failing. I guess they’re not as smart as Joe and Doctor J think they are. The effect of AIG failing and other corporations would be far less burdensome then what us as tax payers will be paying for tens of years to come. The government is delaying the inevitable. 2009 will not be as rosie as Joe and Doctor J think it will be with their government taking control. Mark my words.

  • October 28, 2008 at 1:23 am
    Anonymous says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    State Farm Insurance’s chairman and CEO received an 82 percent raise after the company posted a record profit last year, a statement from the Bloomington-Ill.-based insurer said this week.

    Chairman and Chief Executive Officer Ed Rust Jr. got a $5.26 million raise. He earned $11.66 million in 2006 with a base salary of $1.77 million and results-based bonus of $9.89 million, the statement said. Rust made $6.4 million in 2005 and $5.5 million in 2004.

    The absence of a major catastrophe helped the insurer generate a record $5.32 billion profit last year, compared to $3.24 billion in 2005 when Hurricane Katrina hit the Mississippi Gulf Coast, release said



Add a Comment

Your email address will not be published. Required fields are marked *

*