A writer at the Competitive Enterprise Institute says he would like to see more information about the finances of the insurance subsidiaries of American International Group Inc.

Eli Lehrer, a senior fellow at the CEI, Washington, discusses the finances of the insurance subsidiaries of AIG, New York, in a commentary on a statement issued by the National Association of Insurance Commissioners, Kansas City, Mo.

In the NAIC statement, state insurance regulators contend that the states had done a better job of protecting AIG’s insurance subsidiary assets than a federal regulator would have done.

Lehrer contends that it is not clear that the states did a better job than a federal regulator could have done.

Lehrer also raises questions about the NAIC’s assertion that AIG’s 71 state-regulated insurance entities were not the reason for the company’s current liquidity problems.

The NAIC says in its statement that the insurance subsidiaries “are all financially sound.”

“Unless NAIC has completed its own detailed audit of each of the 71 state-regulated insurance entities, nobody knows if they really are solvent or sound,” Lehrer writes in his commentary.

“It will take a complete review of the companies’ balance sheets to know if every AIG subsidiary actually remains solvent,” Lehrer writes.

The NAIC also has contended that state regulators kept AIG from using insurance subsidiary assets to cope with liquidity concerns in non-insurance AIG operations.

Lehrer writes that he believes the New York State Insurance Department indicated that it would have let AIG’s holding company “raid” insurance subsidiary assets to increase liquidity.

“The rules would have protected consumers, but at least one state, New York, seemed willing to bend [the rules] for AIG,” Lehrer writes.

New York department spokesman Andy Mais rejects that argument.

New York Gov. David Paterson, D, said earlier this month, while negotiations with AIG and federal officials were under way, that any transactions would have to preserve AIG’s ability to pay claims, Mais says.

New York regulators would have let the AIG holding company increase liquidity by providing assets of greater value to the insurance subsidiaries in exchange for more liquid assets, Mais says.

“Indeed, upon a sale, these assets were expected to add to the capital base of the U.S. property-casualty companies, particularly the New York company,” Mais says. “To call this an asset raid is fundamentally at odds with any reasonable, informed interpretation of the facts.”