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Originally Posted by aceventura3
AIG has many subsidiary companies. The insurance companies are regulated by state agencies. Insurance company regulation is pretty tightly controlled with clearly defined reserve requirements and each state has insurance guarantee programs to protect insureds from failed insurance companies. AIG is in virtually every line of insurance. The insurance companies are healthy, and have value. The "investment banking" portion of the company is the problem.
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It's far more than the 'investment banking" part. They offered corporate insurance against defaults and so on, and the only reason some banks and financial institutions have been able to stay afloat has been because of AIG's continue existence.