AIG TARP Not Needed For Insurance Part
The true core AIG is still growing steadily in the Workers Comp arena. In the last post, I included a passage from a very recent publication by the US Treasury Department on the TARP program.

As I have posted very often, the core of AIG’s business was never going to fail. The financial products area was failing, but AIG the insurer was doing well. The point that the Feds missed was that a bailout was never needed for the insurance services part of the business. I have friends that work for AIG that I verified this with before posting anything on the bailout.

Splitting the company into the two halves may have exposed the underbelly of a financial services area (not just AIG) that was very risky at best. However, in my opinion AIG Insurance Services would have had a good balance sheet. The Feds may have decided to mix the funds to not create a panic if AIG’s financial services area had to be bailed out on a standalone basis.