Reply #8: AIG says Gen Re transaction accounting was 'improper" [View All]

[UpInArms]

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38441.3138127431-833670752&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- American International Group (AIG) said Wednesday it has concluded that the documentation for its reinsurance transaction with General Re Corp. was improper and that this deal shoudn't have been recorded as insurance. The Dow component plans to adjust its financial statements to reflect this, reducing the reserve for losses and loss expenses by $250 million and increasing other liabilities by $245 million. The company said the adjustment will have "virtually no impact" on its financial condition as of Dec. 31. AIG also said it's reviewing prior estimates of deferred acquisition costs and that it may record an after-tax charge of $370 million if revisions are necessary. The company added that it could also reclassify certain items previously reported as net investment income. AIG also said its management has yet to complete its assessment of the effectiveness of the company's internal controls over financial reporting as of Dec. 31.

"no impact" - hahahahaha