I am beginning to wonder about all insurance co's.

[SlowDownFast]

If AIG has their tentacles so intertwined in EVERYTHING A-Z - whose failure is only ONE more aspect of where/why the economy is collapsing - how safe are the "other" insurance co's?

I'm not with AIG, but I'm about to pull any and all monies completely out of life and homeowner insurance and only keep auto insurance (for the time being, at least). They're all ultimately really just a scam, anyway, IMO.

It's really looking like is no safe place and traditional "investments" which Americans have used for 50+ years are falling like dominoes - insurance included.

[Warpy]

1. Most insurance companies are at risk right now

because they're like any other institutional investor, asset columns choked with SIVs, CDOs, and other hedge fund generated derivatives.

Insurance companies don't need a set asset to debt ratio to stay open, though, but expect them to get even worse about paying legal claims as they scramble to shore up the asset columns they do have.

[Veritas_et_Aequitas]

2. Savings accounts, CDs and bonds are all pretty safe still.

Heh. I typed "bongs" there initially. Guess where my mind is today.

[dkf]

3. AIG's derivatives shop is the problem because of their credit default swaps.

TPM has a good piece on it...

Back To AIG

As reported earlier today, AIG -- which is already 80% owned by the US government -- is poised to go back to the government trough for more money.

(Remember, we've already committed roughly $150 billion to AIG.)

So I want to come back again to this question: who are the counter-parties? When we pour $10 or 30$ billion into AIG, it doesn't vanish into thin air. It goes to someone else. Earlier evidence suggested that Goldman Sachs had massive exposure to a potential AIG bankruptcy. And it's been alleged -- though not on any harder evidence than a certain elementary logic -- that AIG got saved in part because of people tied to Goldman who were running Bailout Inc. last fall.

Whatever the truth of that, I think it's time we know more clearly where the $100 or so billion we've 'loaned' AIG so far went. (There's been some data on this. But I don't believe it's been exhaustive or particularly detailed.) And where's the next dollop of money likely to go? Whoever these recipients are, they are by definition companies that are in the capitalism business who made a bad bet on AIG,

http://www.talkingpointsmemo.com/archives/2009/02/back_to_aig.php