Canadian Underwriter

Congressmen Seek AIG Bailout Study


March 25, 2010   by Terri Goveia


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How will the AIG bailout ultimately affect other insurers? Two U.S. congressional leaders are asking the Government Accountability Office (GAO) to study the troubled company’s rescue and its implications for the rest of the U.S. market.

The request-from Rep. Paul Kanjorski and Rep. Spencer Bachus-raises concerns over the bailout’s ripple effect, and calls for a full investigation by the end of March, 2009. “There have been troubling reports that market distortions may be occurring in the commercial property casualty market as a result of the actions by the U.S. Treasury and the Federal Reserve Bank to provide loans and other financial support to shore up AIG’s capital position,” they write in the letter to Gene Dodaro, the GAO’s acting Comptroller General of the United States. Kanjorksi is chair of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. Bachus is a ranking member of the full House Financial Services Committee.

The two House members ask that the investigation put special focus on the rescue’s effect on market discipline and competition. They also want the GAO to assess how well AIG is meeting the government conditions of its loans. “We are particularly interested in your analysis of any setbacks experienced as well as any challenges projected in recouping federal taxpayer funds,” they write. Their letter hints at concerns over openness surrounding the situation, asking the GAO, “with respect to actions associated with AIG, please review the Office of Financial Stability’s strategy to keep Congress fully informed.”

At press time, the GAO had not responded to the request.

This story was originally published by Canadian Insurance Top Broker.


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