Write-Downs

  • 1994 - FRB - Announcements of asset-quality problems and contagion effects in the life insurance industry, by George W. Fenn and Rebel A. Cole, First version August 1992, final version October 1993, Federal Reserve Board - 29p
  • AIG Securities Lending / Life Insurance - 50-55 Billion
    • mp3 interview - Dixie / 
  • <Contagion / Writedowns> - (p139) - 677 One analysis of the contagion effects on other insurers of announcements by First Executive in January 1990 of a write-down in its bond portfolio, and by Travelers in October 1990 of losses on its CRE portfolio, concluded that “the primary significance of the write-down announcements to the market was their anticipated effect on policyholders’ behavior [at other insurers].”
    • George Fenn and Rebel Cole, “Announcements of Asset-Quality Problems and Contagion Effects in the Life Insurance Industry,” Journal of Financial Economics volume 35, issue 2 (1994).  

Documents 85-2 and 85-3 - 2015 0930 - MetLife v FSOC - 15-CV-45 - Documents 85-2 and 85-3 - 387p

AIG to Absorb US $5B losses on Securities Lending: Insurance units wrote down $13B tied to mortgages -  (Bloomberg News 28 June 2008)

“American International Group Inc plans to absorb losses for a dozen insurance units after their securities lending accounts suffered $13 billion of write downs tied to the subprime mortgage collapse during the past year.

  • The world’s largest insurer will absorb as much as US$5 billion of any losses on sales of investments, up from a previous commitment of US $500 million, said Christopher Swift, vice-president for life and retirement services.
  • AIG will also inject an undisclosed amount of capital into some of the subsidiaries, he said.

⊗ Moody’s Investors Services and AM Best Co. both cited the write downs in May when they downgraded New York based AIG’s credit ratings.

State regulators in Texas said they didn’t know AIG was investing cash collateral from the securities lending business in subprime-linked assets and were concerned the insurance units hadn’t put aside enough capital to cover potential losses.