FRB – Federal Reserve Board – Snippets

  • 2003 0729 – FCIC – Letter – From FRBNY Frank P Sabato to Michelle Sims, Re report conducted by examiners for the Federal Reserve Bank of New York – 40p
    • Some annuity products. however, contain benefit guarantees for which reserving practices are not well established.
  • 5. A general account is a design feature that is generally available to purchasers of whole or universal life insurance whereby the general assets of the insurance company support the policyholder’s CSV [Cash Surrender Values].  (p134/5)

2005 05 – FRB – Commercial Bank Examination Manual – Purchase and Risk Management of Life Insurance, Effective date November 2005 Section 4042.1, Interagency Statement on the Purchase and Risk – Management of Life Insurance – 318p

  • 2. A separate account is a design feature that is generally available to purchasers of whole life or universal life whereby the policyholder’s cash surrender value is supported by assets segregated from the general assets of the carrier.
    • Under such an arrangement, the policyholder neither owns the underlying separate account nor controls investment decisions (e.g., timing of investments or credit selection) in the underlying separate account that is created by the insurance carrier on its behalf.
    • Nevertheless, the policyholder assumes all investment and price risk.  (p131/2)

2006 05 – Commercial Bank Examination Manual – Purchase and Risk Management of Life Insurance, Effective date November 2005 Section 4042.1, Interagency Statement on the Purchase and Risk – 318p Management of Life Insurance

  • 2009 – FCIC – emails – FRBY-TOWNS-R3-002225 – big.assets.huffingtonpost.com/Dahlgren.pdf – 15p
  • (p2-3) – (2009 0303) – Sarah Dahlgren – [Federal Reserve Board]
  • — why segregate the specific counterparties on these transactions from the range of others who have “benefitted” from the government assistance to AIG (which would include not just financial counterparties, but also a range of other debtors to AIG. as well as policy holders, etc … )
  • (p3) – (2009 0303) – Sarah Dahlgren – [Federal Reserve Board] — separately, if the public wants to know where the funds have been used, AIG gave details of the uses of the government funds in its 10K that was issued on Monday — it’s on page 45 of the 10K ….. (and the *$20 billion to insurance companies shouldn’t go unnoticed …… )
  • For the fiscal year ended December 31, 2008 – AIG 10k – 344p
  • (p45) – Borrowings outstanding and remaining available amount that can be borrowed under the Fed Facility were as follows:
  • Inception through December 31, 2008  // Inception through February 18, 2009 (c) (In millions)
  • Borrowings:
    • Loans to AIGFP for collateral postings, GIA and other debt maturities ……… $ 46,997 //  $ 47,547
    • *Capital contributions to insurance companies (a) ……….. 20,850 // 20,850
    • Repayment of obligations to securities lending program . …. 3,160 // 3,160
    • Repayment of intercompany loans ………………… 1,528 // 1,528
    • Contributions to AIGCFG subsidiaries ……………… 1,672 // 1,686
    • Debt repayments ……………………………. 2,109 // 2,319
    • Funding of equity interest in ML III……………….. 5,000 // 5,000
    • Repayment from the proceeds of the issuance of Series D  Preferred Stock and common stock warrant ………..(40,000)  // (40,000)
    • Other(a)(b) ……………………………….. (4,516) // (6,890)
  • (a) Includes securities lending activities.
  • (p25) – Donald KOHN (Vice Chairman, Board of Governors of the Federal Reserve System):  Our authority under the Federal Reserve Act is to make loans.
    • We thought it was a short-term liquidity situation- in mid-September, this is what we thought-and that if we could bridge this situation with liquidity, then the company could make the adjustments to keep itself a going concern.
    • It turned out that the problems were deeper…

2009 0305 – GOV (Senate) – American International Group: Examining What Went Wrong, Government Intervention, And Implications for Future Regulation, (CSPAN) Government Intervention and Regulation of AIG, Chris Dodd (D-CT)  —  [BonkNote]