The financial problems that threatened to sink the American International Group conglomerate, forcing the federal government to bail out the company with a bridge loan, were not the fault of insurance commissioners, as locally-regulated subsidiaries remain solvent and sound, state officials reiterated last week.
Their comments to that effect were delivered throughout the quarterly meeting here of the National Association of Insurance Commissioners, a week after the federal government stepped in with $85 billion of liquidity to keep the AIG holding company in business.
New York Insurance Superintendent Eric Dinallo–one of the regulators involved in negotiations that led to the Treasury Department loan deal with AIG–emphasized that the problem was with credit default swaps and the way federal regulators oversaw the holding company, not with how insurance regulators oversaw insurers.
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