Taxpayers Will Get Hosed By The Collapse Of AIG's Insurance Business
AIG was once an ultra-reputable insurance company. But its fantastic losses have now more or less ruined the company and the brand. Already there are rumors that AIG's insurance customers are fleeing. And now CEI's insurance expert says AIG may be the next Enron.
From CEI (no link yet):
The collapse of state-regulated insurance subsidiaries could result in a significant tax hike for nearly all Americans, warns an insurance policy expert with the Competitive Enterprise Institute.
Eli Lehrer, who first warned about potential problems with AIG’s US-based insurance subsidiaries in September of 2008, warns that a second scandal appears to be brewing with regard to the insurance giant.
“AIG subsidiaries are likely in worse shape than appeared at first blush,” Lehrer explained. So far, AIG has sold only one of its 72 subsidiaries that sell insurance in the U.S.
Past collapses have not been a big deal because they have been small; but an AIG collapse would not be small. “In the past, when insurers have collapsed, it has meant that people in a few states have seen surcharges of a few dollars on their insurance policies—annoying, but not a big deal,” said Lehrer. “A bailout of AIG’s insurance businesses could mean enormous new taxes for just about everyone. Some people might see a very unwelcome surprise in their insurance bill.”
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The consequences for the collapse of any one of AIG’s sizeable insurance subsidiaries would result in significant taxes—called “assessments” —on homeowners, automobile, life insurance, and other policies. These assessments would be decided at the state level.http://www.businessinsider.com/taxpayers-will-get-hosed-by-the-collapse-of-aigs-insurance-business-2009-3