Chicago’s Mayor Hits AIG Bailout; Other Midwest Officials More Positive
Midwestern reaction to a proposed bail out of insurance giant American International Group (AIG) has been varied.
In Chicago Mayor Richard Daley is not happy about the Federal Reserve Bank’s decision to provide an $85 million bailout of AIG. Daley says the money would be better spent on education.
Daley said he feels sorry for the people of the United States. He said the nation doesn’t have enough money for education, but it has enough money to fix every problem on Wall Street.
Officials say the failure of AIG would further disrupt markets and threaten the already fragile economy.
AIG said it will repay the money in full with proceeds from the sales of some of its assets.
On September 18 the former head of Northbrook, Ill.-based Allstate Insurance Company Edward Liddy took over the helm of AIG as its new CEO.
“My intention is not to liquidate the company,” said Liddy, speaking with employees. He also said AIG’s insurance operations were well-funded, and that the company’s “mess is solvable.”
Ohio, North and South Dakota
Insurance regulators in other Midwest states delivered a more positive message.
State regulators say Ohio consumers with AIG insurance have no reason to fear, despite concerns about the company. Ohio insurance regulator Mary Jo Hudson said AIG’s insurance units are solvent and able to pay claims. Hudson said on Sept. 17 that the agency is monitoring the situation closely.
In South Dakota the head of the insurance division says the government bailout of insurer AIG will have little impact in that state. Insurance Director Merle Scheiber says none of the 42 AIG insurance companies licensed in South Dakota face “imminent financial problems.”
North Dakota’s insurance commissioner said the AIG insurance companies that do business in that state are running normally. Adam Hamm says the AIG holding company has 20 property and casualty insurers licensed to do business in North Dakota, and 11 life and health insurance companies.
Hamm says the AIG companies collected $66.8 million in premiums last year. He says the AIG companies in North Dakota are in business and paying claims.
Information from: Chicago Tribune, www.chicagotribune.com; AP