What insurance products got AIG into trouble? (2024)

What insurance products got AIG into trouble?

Credit default swaps were supposed to protect investors against a default in mortgage-backed securities, and AIG minted profits selling billions of dollars of these toxic subprime-fueled credit default swaps to banks, both in Europe and the United States.

What did AIG get in trouble for?

AIG was accruing unpaid debts—collateral it owed its credit default swap partners, but did not have to hand over due to the agreements' collateral provisions. But when AIG's credit rating was lowered, those collateral provisions kicked in—and AIG suddenly owed its counterparties a great deal of money.

When did AIG go out of business?

As a result, AIG's credit rating was downgraded and it was required to post additional collateral with its trading counter-parties, leading to a liquidity crisis that began on September 16, 2008, and essentially bankrupted all of AIG.

What insurance companies are part of AIG?

What were the primary reasons for AIG's financial distress during the Great Recession?

At the time, AIG was also threatened by “billions of dollars of collateral calls under its securities lending program associated with its domestic life insurance subsidiaries.” As assets continued to decline during 2007 and 2008 there was a massive reduction in the values of reinvested collateral in various securities ...

What was the AIG scandal?

The AIG bonus payments controversy began in March 2009, when it was publicly disclosed that the American International Group (AIG) insurance corporation was going to pay approximately $218 million (~$301 million in 2023) in bonus payments to employees of its financial services division.

What was the downfall of AIG?

AIGFP's undoing was a massive volume of swaps involving subprime mortgage-backed securities for major banks worldwide. By 2011 AIG had unwound the most problematic derivatives, and was left with trades of lower complexity and risk. AIG said back then that it didn't make economic sense to unwind those immediately.

What is AIG now called?

AIG Life & Retirement is now Corebridge Financial.

Does the US government still own AIG?

In December 2012, Treasury sold its remaining 234,169,156 shares of AIG common stock in an underwritten public offering for aggregate proceeds of approximately $7.6 billion.

What company bought AIG?

Blackstone Acquires Assets in Huge AIG Housing Portfolio.

Is AIG a reputable company?

AIG Auto Insurance Review

We give AIG an overall rating of 3.8 out of 5.0 stars based on its reliability, availability, coverage, cost, services, and technology.

Does AIG insurance still exist?

AIG is a leading global insurance organization with member companies around the world that provide a wide range of insurance and other financial services.

Who is the largest shareholder of AIG?

American International Group is not owned by hedge funds. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 10% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.9% and 5.9%, of the shares outstanding, respectively.

What would happen if AIG failed?

If AIG failed, it would trigger a domino effect globally as the insurance giant had provided protections worth more than half a trillion dollars, including $300 billion to banks in the U.S. and in Europe.

What happens to my mortgage if the economy collapses?

What Happens To Your Mortgage Rates & Payments? If you have a fixed-rate mortgage, then your monthly payments will remain the same, which can be beneficial in a high-inflation environment. However, if you have an adjustable-rate mortgage, expect your payments to increase.

How is AIG doing financially?

For full year 2023, net income attributable to AIG common shareholders was $3.6 billion, or $4.98 per diluted common share, compared to $10.2 billion, or $12.94 per diluted common share, in the prior year.

Did anyone from AIG go to jail?

for Role in Fraudulent Manipulation Scheme. WASHINGTON – The former vice president of reinsurance of American International Group Inc.

What laws did AIG break?

(AIG) committed securities fraud. The settlement is part of a global resolution of federal and state actions under which AIG will pay in excess of $1.6 billion to resolve claims related to improper accounting, bid rigging and practices involving workers' compensation funds.

Who was the whistleblower for AIG scandal?

That's the message of Gordon Massie, a 30-year veteran of the financial industry, whose book “The Whistleblower's Dilemma,” tells the tale of corporate greed, deceit and fraud inside American International Group - AIG - the financial mega-corporation that imploded in 2008 and subsequently received an $80 million ...

Has AIG paid back the bailout money?

AIG finished repaying the full $182.3 billion bailout in December 2012, leaving taxpayers with a nearly $23 billion profit. Greenberg, 89, led AIG for nearly four decades before his 2005 ouster.

Is AIG still too big to fail?

WASHINGTON — A group of federal regulators voted Friday to no longer classify the American International Group as “too big to fail,” freeing the giant insurer from years of tough government oversight. The vote came nine years after the government rescued A.I.G.

Did AIG buy American General?

American International Group Inc. reached an agreement to acquire American General Corp., officially trumping an earlier bid by Britain's Prudential PLC and tilting the operations of AIG, a property-casualty powerhouse, more toward the life-insurance and retirement-savings business.

Why did AIG go under?

Bad bets on mortgages by the Financial Products unit knocked parent company AIG off its feet, leading to a cascading series of bank failures that nearly caused a global economic collapse.

Did MetLife buy AIG?

NEW YORK (Reuters) - MetLife Inc pursued AIG's foreign life insurance business for two years before finally clinching a $15.5 billion purchase that will give it beachheads in 47 nations from Peru to Bangladesh.

Is AIG and American General the same company?

As part of the American General Life family, AIG Direct is one of the largest direct to consumer marketers of term life insurance in the country. To keep things simple, we work directly with you.