New York Insurance Superintendent Eric Dinallo will lead a National Association of Insurance Commissioners task force created to expedite the approval of sales of American International Group Inc. assets.
Commissioners approved the creation of the task force Tuesday, according to David Neustadt, an insurance department spokesman.
Observers say regulators and AIG, New York, need to act promptly to get good prices for AIG’s assets.
At press time, the S&P 500 stock index was down more than 3%.
AIG’s stock price was down about 40% early this afternoon, with shares selling for $2.33, giving the company a “market cap,” or total value of all outstanding stock, of just $6.4 billion.
Last week, AIG shares were selling in the mid-20s.
One reason that AIG could not set up a private credit facility is that investment bankers gave some AIG insurance subsidiary assets “low evaluations” when they looked at AIG’s books, Dinallo said today during an appearance on CNBC.
A Chapter 11 bankruptcy reorganization filing would have normally been an appropriate way to deal with AIG’s liquidity problems at the parent-company level, but regulators were concerned about the possibility that a bankruptcy filing could have triggered a frantic sale of AIG products by consumers, as well as decisions by commercial customers to switch their accounts to other insurers, Dinallo said.