Is A.I.G. a house of cards?

A.I.G., a major player in the California workers' comp industry, has been under intense scrutiny after its' corporate parent was rescued by the U.S. taxpayer last fall. The immediate factor leading to the crisis at A.I.G. was the company's involvement in arcane insurance lines, known as credit default swaps.

Last fall, the public was generally reassured that the A.I.G subsidiaries were, for the most part, healthy.

A.I.G. controls a network of insurers operating in many different countries and states. These subsidiaries are not subject to overall regulation in any one jurisdiction. A.I.G. has had a penchant for complicated stock and reinsurance transactions between the various subsidiaries.

A.I.G. is said to have placed a large volume of business among interlocking, interdependent subsidiaries.

But some are concerned that the system in a house of cards and that A.I.G. subsidiaries are vulnerable.

In California, a San Diego law firm has sued on behalf of A.I.G. policyholders, seeking an injunction requiring A.I.G. to post sufficient money to cover their obligations into a special account supervised by the California State Treasurer.

Whether all of this is a smoldering problem that will erupt or whether these concerns are overblown isn't apparent at the moment. One would hope that California Insurance Commissioner Poizner will give A.I.G. another detailed look.

Here's today's piece from the New York Times by Mary Williams Walsh:
http://www.nytimes.com/2009/07/31/busin ... nted=print

Stay tuned.

Julius Young
www.boxerlaw.com

Harry and Louise are back. Mud's starting to fly in Washington and on your local TV channel.

It makes one wonder what some of the comp insurers are doing under the radar to avert healthcare reform consequences that may be of concern.

Her poll numbers may be worse than Sarah Palin's, but the House Speaker knows that insurers may be even less popular than she is. Here's what Nancy Pelosi thinks of the health insurers:
http://www.reuters.com/article/politics ... mp;sp=true

Stay tuned.

Julius Young
www.boxerlaw.com

In between blogs on the comp scene, I've been covering the national healthcare reform debate for months.

A recurring theme has been the perception that Obama has let the debate drift. Perhaps it comes from his natural instinct to be a conciliator, seeking to find common ground among opposing interest groups. The risk is that nothing gets accomplished or that a generational chance for real reform is lost.

We're at a fork on the road on this issue. Here's a good piece by Charles Babington that summarizes the tough choice that Obama must make now:
http://www.realclearpolitics.com/news/a ... ealth.html

Stay tuned.

Julius Young
www.boxerlaw.com

What's new at the California Unemployment Insurance Appeals Board?

Big delays, that's what. The volume of unemployment claims and the impact of UI judge and staff furloughs is creating a monstrous backlog there.

Check out Mark Lifsher's piece in today's L.A. Times:
http://www.latimes.com/business/la-fi-u ... ?track=rss

Many injured workers unable to return to their former jobs eventually apply for UI benefits.

Delays apparently now average two months, making California the third slowest in the nation.

Stay tuned.

Julius Young
www.boxerlaw.com

It there's to be national healthcare reform, it's likely to emerge from a roomful of six senators.

At a time when much of the healthcare debate coverage seems to be based on smoke and mirrors, the Robert Pear piece in the New York Times is a window on how a bill may emerge:
http://www.nytimes.com/2009/07/28/us/po ... nted=print

Stay tuned.

Julius Young
www.boxerlaw.com