AIG and DAN Dive Insurance?

[DandyDon]

American International Group seems to be in some trouble? From: Industry Efforts to Rescue A.I.G. Said to Falter - Mergers, Acquisitions, Venture Capital, Hedge Funds -- DealBook - New York Times "If a financing solution is not reached, A.I.G. may file for bankruptcy as soon as Wednesday"

This is the Group that underwrites DAN Dive Insurance, right? Before you phone DAN, I just did - and they assured me that I'll be covered okay, but I'm not business savy enough to understand. Someone want to explain to me how they can guarantee payments from a insurance written by AIG if it goes into bankruptcy...?

thanks

 

[fairybasslet]

As far as I know, AIG isn't filing for bankruptcy but the price of their stock has fallen. AIG is Travel Guard. I have that insurance for my trip to Indonesia. I hope I don't need it. I ask my financial planner about it and he said the insurance side of AIG is pretty solid. It's their investments that suck.

 

[Web Monkey]

American International Group seems to be in some trouble? From: Industry Efforts to Rescue A.I.G. Said to Falter - Mergers, Acquisitions, Venture Capital, Hedge Funds -- DealBook - New York Times "If a financing solution is not reached, A.I.G. may file for bankruptcy as soon as Wednesday"

This is the Group that underwrites DAN Dive Insurance, right? Before you phone DAN, I just did - and they assured me that I'll be covered okay, but I'm not business savy enough to understand. Someone want to explain to me how they can guarantee payments from a insurance written by AIG if it goes into bankruptcy...?
thanks

Good question. If AIG goes bankrupt, I'd suggest not getting bent.

Do we have any insurance lawyers hanging around who would like to chime in?

Terry

 

[fairybasslet]

I just found this story which may answer some questions

Five common AIG questions answered - Sep. 16, 2008

 

[diversteve]

Fed in AIG rescue - $85B loan - Sep. 16, 2008

 

[DandyDon]

Fed in AIG rescue - $85B loan - Sep. 16, 2008

Wow, looks like the Feds bought AIG for us...

NEW YORK (CNNMoney.com) -- In an unprecedented move, the Federal Reserve Board is lending as much as $85 billion to rescue crumbling insurer American International Group, officials announced Tuesday evening.

The Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) the funds. In return, the federal government will receive a 79.9% stake in the company.

Officials decided they had to act lest the nation's largest insurer file bankruptcy. Such a move would roil world markets since AIG (AIG, Fortune 500) has $1.1 trillion in assets and 74 million clients in 130 countries.

An eventual liquidation of the company is most likely, senior Fed officials said. But with the government loan, the company won't have to go through a tumultuous fire sale.

(continued at the link)

 

[drbill]

Although I'm glad that my DAN insurance should be fine, I'm tired of the bailouts and loans to corporations that invested in bad paper. Several years ago I questioned when this was all going to come to a head and as far back as when I got the mortgage on my house (10 years ago) I was well aware of the issues relating to subprime loans and teaser rates vs fixed interest.

Of course most of these companies bought the mortgage packages from other originators. The real fault rests with those who were willing to lend risky money because THEY didn't have to carry the paper. Let greed get its reward!

 

[deco_martini]

Apparently, the only guy in the finance and investment banking industry who understands diversification is the guy who worked on my portfolio. Oh wait, nevermind, that was me just using the basics from my Finance class from way back in college.

It amazes me how these giants like AIG let so many of their eggs go into the riskier home loan basket that it could take out their businesses.

 

[Orion12521]

While I'm not an insurance lawyer, I've worked in the insurance industry for insurance companies for over ten years and have experience writing policy language, setting rates and developing insurance products for offering to the public.

When an insurer becomes insolvent or is financially unable to meet its obligation to indemnify its policyholders, it will generally be taken into receivership by the respective state insurance regulatory body in the state it is domiciled. Each state establishes a gaurantee fund by collecting from each insurer that conducts business in the state. These funds are used to pay claims in the event that an insurer that is providing coverage in that state is unable to pay for the claims it owes.

That being said, I don't believe AIG will be going that route, especially with the announcement of the loan yesterday.

 

[DandyDon]

I'm aware of the state guarantee funds for insurance companies. We used to have a dreadful problems wiht jackleg companies in Texas. But we count on DAN Dive Insurance for more than just reimbursements, and I'm glad it's safe. Did not mean to open anything else up on this diving forum.