2007 0611 – OTS – Office of Thrift Supervison Holding Company Report Of Examination of AIG – 52p
2007 0611 – OTS – Office of Thrift Supervison Holding Company Report Of Examination of AIG – 52p
- 2007 0611 – OTS – Office of Thrift Supervison Holding Company Report Of Examination of AIG — [BonkNote] — 52p
- (p12) – Based on revenues,
- domestic general insurance (30.7 percent) and
- foreign life insurance and retirement services (31.2 percent) are the largest operating segments of the company.
- The other segments of the conglomerate include:
- domestic life and retirement services (14.3 percent),
- foreign general (10.8percent),
- financial services (8.0 percent), and
- asset management (5.0 percent)
- (p14) – AIG insurance companies and AIGFP invest in Mortgage Backed Securities (MBS) and Collateralized Debt Obligations (CDOs), in which the underlying collateral includes pools of subprime mortgages.
- …
- AIG provided significant public disclosure of its subprime mortgage exposure with its second quarter 2007 earnings release.
- Management is comfortable with the size of the exposures and the quality of the respective investment portfolios and operations.
- (p24) – The Financial Services segment had negative earnings trends due to changes in accounting rules rather than core fundamentals.
- (p26) – Liquidity
- Dividends from the company’s insurance and financial services subsidiaries are the principal source of funding for its top tier operations.
- Dividends are a sound funding source because the subsidiaries have proven earnings and cash flow records.
- In addition, AIG issues commercial paper to fund short-term cash needs, medium term notes to fund its matched investment program (MIP), and long-term debt securities to capitalize subsidiaries and repurchase common stock.
- It has established back-up credit facilities with financial institutions to support its liquidity needs should it lose access to the commercial paper facility.
- AIG also has access to a $2 billion inter-company line of credit with its insurance subsidiaries.
- AIG uses funds mainly to service debt obligations, pay dividends to shareholders, allocate capital to subsidiaries, and repurchase outstanding common stock.
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