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September 26, 2008 at 11:55 AM
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.
