If the NYS Insurance Dept was doing the job of regulating in the first place maybe all of this could have been avoided. It wouldn’t be the first time there was a slip in the system. Look at the complaints that have gone without any recourse taken.Who does the Insurance Dept have to answer to? Not even the OAG?
And what job was the NY insurance department supposed to be doing?
The part of AIG that got it in trouble was the “Financial Products” division — technically an investment bank, and not subject to the NY DOI’s purview. The insurance arms of AIG were doing fine, but the shadow cast by FP is taking the whole company down. This structure wouldn’t have been allowed before Gramm-Leach-Bliley was passed.
Moreover, even if the NY DOI had jurisdiction over AIG FP, The credit default swaps that sank it were specifically excluded from regulation by the Commodity Futures Modernization act in 1999. The federal government had already hamstrung any regulatory powers to prevent the CDS crash well before it occurred.
If I recall correctly, the Ins. Dept WAS doing their job . . . As everyone should know by now, it was the AIG FINANCIAL entitie(s) that failed. The INSURANCE entity was stable and secure!
If the NYS Insurance Dept was doing the job of regulating in the first place maybe all of this could have been avoided. It wouldn’t be the first time there was a slip in the system. Look at the complaints that have gone without any recourse taken.Who does the Insurance Dept have to answer to? Not even the OAG?
And what job was the NY insurance department supposed to be doing?
The part of AIG that got it in trouble was the “Financial Products” division — technically an investment bank, and not subject to the NY DOI’s purview. The insurance arms of AIG were doing fine, but the shadow cast by FP is taking the whole company down. This structure wouldn’t have been allowed before Gramm-Leach-Bliley was passed.
Moreover, even if the NY DOI had jurisdiction over AIG FP, The credit default swaps that sank it were specifically excluded from regulation by the Commodity Futures Modernization act in 1999. The federal government had already hamstrung any regulatory powers to prevent the CDS crash well before it occurred.
If I recall correctly, the Ins. Dept WAS doing their job . . . As everyone should know by now, it was the AIG FINANCIAL entitie(s) that failed. The INSURANCE entity was stable and secure!