AIG is a pretty wacky company.

AIG has just been "saved" by the U.S. taxpayers, who now hold an 80% stake in the company while AIG attempts to reorganize and sell off some of its component businesses (AIG may or may not sell off some of its insurance subsidiaries who write California comp coverage).

AIG has been a major player in California workers comp, and a major contributor to Governor Schwarzenegger. So I'm giving them a bit of focus during the economic meltdown . Recently I covered news about their swanky conference held right after the bailout.

But the strange news about AIG just keeps coming.

The company is under pressure to recover millions in payouts to executives.

In the last few days we learned that on September 16, 2008-the DAY AFTER the rescue of AIG-AIG lobbyist Brett J. Ashton was meeting with state regulators in Indiana in an effort to relax recently enacted oversight rules governing mortgage originators, known as the SAFE Act (the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. Lax oversight over mortgage originators was one of the big factors in how the current U.S. housing and economic debacle began, of course.

Again....the DAY AFTER the AIG bailout, they are at it, seeking to ease regulatory oversight.

Yes, AIG is not alone. Other financial firms already appear to be engaged in an effort to undermine oversight rules. But stats show that AIG is the biggest spender on lobbying activities

All of this was revealed in an October 16 Wall Street Journal investigatory piece by Elizabeth Williamson.

Several weeks later, Brett J. Ashton was briefing colleagues in the mortgage finance industry at the Beverly Hilton conference of the American Financial Services Association.

The Wall Street Journal noted that Ashton referred questions about his activities to an AIG spokesman, who defended AIG's right to maintain lobbying activities ("government affairs"). They do have that right. They exercised it to the tune of $3 million on federal government lobbying in the 2nd quarter of 2008 alone.

But since AIG is now essentially a ward of the U.S. taxpayer, fighting oversight of mortgage originators is a PR debacle. If the Journal's story is correct, it's time for a pink slip for Brett J. Ashton.

But just when you think it can't get worse, it does.

London's tabloid paper, News of the World, recently went undercover to
an AIG sponsored partridge hunt at an English country manor, spending thousands of dollars on lodging, rare wines and private jets. Get a load of this:
http://www.newsoftheworld.co.uk/news/article43510.ece

That's AIG. You, the taxpayer, now own it. And they continue to be a big player in California workers' comp.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column under "Most Recent Entries")

Some things just seem destined to shuffle.

Madonna looks for a marriage that will stick.

The San Francisco Forty Niners look for a quarterback who can provide some offense and reclaim the glory days of Montana and Young.

The Federal Reserve and the Treasury look for the policy that will restore confidence in the banking system. Otherwise, millions will be eating dog and cat food in their old age.

And California's Division of Workers Compensation continues to revise and revise and revise its QME guidelines.

Here's a link to the newest version and the statement of reasons:
http://www.dir.ca.gov/dwc/DWCPropRegs/q ... ations.htm

The 15 day comment period ends on October 30.

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column under "Most Recent Entries")

A couple weeks ago I did a post on Gov. Schwarzenegger's veto of most of the workers' comp bills that made it to his desk.

Exactly what insurance-related bills did he sign?

In the workers' comp arena, the only bills of significance that he signed had to do with governance of SCIF, the State Compensation Insurance Fund. SCIF was involved in major controversy over the last few years as various mismanagement problems surfaced at the large quasi-public insurer which continues to have the largest share in the California comp market.

If you'd like a list of other insurance related bills (note:many deal with other types of insurance), here's a list compiled by D. Ashley Furness of the North Bay Business Journal:
http://www.pressdemocrat.com/apps/pbcs. ... e=Governor

In a coming post I'll detail some of the other important insurance bills that died at the hand of Arnold's pen.

Soon I'll also be recapping the 10 Top Events in California Workers' Comp during the 3rd quarter of 2008.

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column under "Most Recent Entries")

As we sit on the economic precipice, It appears that for lack of better alternatives we're headed toward a different model of capitalism.

Today's Washington Post piece by Anthony Faiola poses the question: the end of American capitalism?
http://www.washingtonpost.com/wp-dyn/co ... 25_pf.html

What will the model be when the current crisis recedes? The government may have large equity stakes in banks and perhaps some insurers. Sweden did this with some success during its crisis about a decade ago.

In a recent piece, Newsweek columnist Jacob Weisberg notes the myriad forms of modified capitalism.

Corporatism, where large industries function as adjuncts to the government. Mussolini's facist Italy was organized along those lines. Russia, where many enterprises are being run by oligarchs with ties to the former Soviet state-security apparatus, may be evolving towards a corporatist model.

Social democracies or mixed economies are often seen in Europe. They feature strong labor unions, comprehensive safety net benefits for workers, more regulation, higher taxes, and a government that intervenes more in the economy. Even so, European economies are melting down at the moment. And with an aging population, those European economies feature special challenges.

Weisberg reminds us about the Charles de Gaulle policy of dirigisme, where the government allocates resources to chosen technologies (in the case of France, to nuclear power, aerospace manufacturing, rail systems etc).

In Mercantilism, the government may actually own enterprises, some of which compete with private firms. China has been moving towards such a system, layered over control of the media and political system. Mercantilism usually features use of tariffs and trade barriers to discourage imports and encourage exports.

Weisberg coins the phrase "life-jacket capitalism" for what may be evolving here. The assumptions about free markets and the evils of regulation and taxes are beginning to collapse.

Are we headed toward the "Third Way"?
http://en.wikipedia.org/wiki/Third_Way_(centrism)

Measures that would have been political suicide for politicians to suggest in a campaign are being implemented on the fly by free marketeers in the Bush administration.

Stay tuned. I'll continue covering bread and butter California workers comp issues, but during the current crisis hope you'll enjoy some commentary on the current situation.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button under "Most Recent Entries")

If you've never visited the Ritz-Carlton at Half Moon Bay on the San Mateo coast, you've missed a beautiful spot. Perched on a serene bluff over the Pacific, the resort reeks of privilege, pampering, and calm.

Got to give them credit where it's due. Those AIG executives have good taste in resorts. The Ritz was to be their next shindig. Despite the bailout and despite word that the Federal Reserve is loaning billions more to AIG, the Ritz-Carlton event was still on.

Insurance brokers were set to join them at the fest.

But after all the negative press about their expensive soiree at Monarch Bay, they've decided to cancel.

Those pesky taxpayers. They are such spoilers.

Here's the piece on sfgate.com confirming the cancellation:
http://www.sfgate.com/cgi-bin/blogs/sfg ... y_id=31334

Stay tuned. Someday I'll get back to more bread and butter daily California workers' comp issues, but the unfolding developments in our economy regarding insurers are so significant (and game changing) that I'll be focusing on that until events calm down.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button under "Most Recent Entries")