What Happens if AIG Goes Bankrupt?
This is a fairly common question I receive as an attorney, particularly from my worker’s compensation clients. These injured workers’ employers’ insurance is through AIG and, consequently, they receive their weekly checks and, ultimately settlement money from AIG. So, what happens if AIG blows through the bailout money on expensive retreats and poor executive decisions. First of all, let me make it clear President Obama’s idea of transparency and accountability within the government itself and related to government assistance to private entities make it much more likely AIG is successful in the future. However, what happens if AIG fails? Honestly, insureds have relatively little to worry about. Similar to FDIC insurance for bank deposits, significant regulation and state guarantee funds protect insureds to a fairly large extent. It is simply not as well known to the average person. The FDIC is well known because the federal government has made it well known to protect against a banking
