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AIG: Where is the Taxpayers Money Going? (Part 1) - House Oversight Committee - 2009-05-13 - On Wednesday, May 13, 2009, The House Committee on Oversight and Government Reform held a hearing entitled "AIG: Where is the Taxpayers Money Going?" The hearing featured testimony from AIG CEO Edward Liddy. Video provided by the US House of Representatives.

Money Morning Staff Reports

Embattled U.S. insurer American International Group Inc (AIG) is looking to sell its Hartford Steam Boiler Inspection and Insurance Co. unit to Germany’s Munich Re Group AG, the world’s second-largest reinsurance company, a source familiar with the negotiations told Reuters yesterday (Sunday).

The unit could fetch between $700 million and $1 billion, Reuters said. The Washington Journal said the price being talked about is actually in the range of $1.2 billion to $1.5 billion. The negotiations are continuing and the timing of any deal is unknown.

AIG, which bought Hartford Steam Boiler, or HSB, for around $1.2 billion in 2000, is under pressure to sell assets around the world to pay off a huge government loan. The U.S. government saved AIG from bankruptcy in September with a rescue plan that has since ballooned to about $152 billion (the government had to boost the value of the bailout package back in November after the company deteriorated faster than had been expected). AIG has several years to repay the loans, but the company is trying to sell businesses as quickly as possible, both to free itself from the interest it is paying to the government and to avoid further deterioration in the value of its assets.

That is forcing AIG - which has 74 million customers and 116,000 employees in 130 countries - to shed or sell stakes in units globally. AIG said in October that HSB would be among the assets it would sell to repay the federal government. In fact, the Hartford Steam Boiler deal would actually be AIG’s first major divestiture as it seeks to repay as much as $60 billion in loans that it received as part of the September government rescue package, sources familiar with the situation told The Wall Street Journal.

However, as AIG moves to sell assets to repay the loan, it faces the twin challenges of its own weakness and the global credit crisis, which has made it difficult - if not impossible - for interested suitors to obtain financing for buyouts or other high-dollar projects.

Hartford Steam Boiler insures steam boilers around the world. It also offers inspection services and engineering consulting. It provides insurance for a range of risks, including insurance to cover the cost of lost business and the cost of needed repairs when equipment breaks down. The company was founded in 1866.
Founded in 1880 in Munich, Münchener Rückversicherungs-Gesellschaft AG, or Munich Re, provides reinsurance coverage to traditional insurance companies in 150 countries, for everything from oil rigs to satellites and hurricanes.

AIG shares closed Friday at $1.60 each. They’ve traded as high as $60.04 in the past 12 months.

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Have you ever tried obtaining car insurance for new drivers? If you have tried finding any, you would know that finding car insurance for a driver, below 25 years of age is one of the most difficult things to accomplish. The highest premiums on insurance apply to drivers between 16 and 24 years of age. This is something that many people find complicated to do, and struggle to get done. But, it is easy to obtain car insurance for a young driver and that too at cheap rates.

Young drivers are in a problem in the case of obtaining car insurance. License is a legal requirement and they cannot use cars until and unless they obtain it. Bu, they also face the problems of being at a tough financial position and having to pay quite a lot in terms of insurance amount or premium. Moreover, their financial position at that age tends to be very unstable.

This fact may seem very unfair, but let's look at the flipside as well. Young drivers are rather inexperienced. Most of them may be safe drivers; yet, considering the elder group who drive, they are not experts in driving. Being inexperienced, they are at a greater chance of meeting with accidents. So, the cost that the new drivers cause to the insurance companies is much larger than that caused by experienced drivers.

So, if you need car insurance before you turn 25, the premium that you may have to pay for the policy will be much higher than the amount you may have to pay after you turn 30. However, there are several ways available to you in case you want to find cheap insurance rates for young or new drivers. There are a few steps you can take to keep your premiums lower.

The type of car that you drive is a primary factor that affects your insurance premiums. At their age, all new drivers would be waiting to explore fast cars on their own. But flashy cars cause quite a big sum as insurance premium. So, the first step you take towards saving money through lower premiums is to get a basic model car, with a small engine. You need to convince yourself of the possibilities to upgrade the car to get a better model, once you gain a little road experience and you turn older, and are ready to pay the increased premiums.

The next way to gain a lower insurance is to enroll into the Pass Plus course. This course provides you many tips that you may not get to know from a normal driving instructor. Following these tips, you should be able to get a lower premium towards car insurance, because most insurance companies give special recognition to courses like Pass Plus.

Herschel Stuart

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