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Tuesday, November 30, 2010

AIG -The Inside Job




Advertised as 'The movie that took over $20 Trillion dollars to make", Inside Job, is now on the screens of theaters throughout the nation. The movie's premise is that the recent,  systemic,   financial collapse was founded upon AIG's  feared inability to payout on the claims for failed sophisticated financial instruments that AIG insured. The resulting consequences of the AIG bailout  became a vehicle to shelter and fund Wall Street at enormous taxpayer expense.

The lack of criminal accountability for AIG, and the insurance industry's inadequate disclosures, poor ratings and reserves, bad investments and resulting political cover, left the industry destitute and unable to meet its fiduciary obligations to its insureds. Despite all of the bad news, AIG continued to pay bonuses to its executives, scheduled junkets and act as a conduit for payments. The movie questions who is actually regulating the financial/insurance industry, and whether the industry has now become so fused with American politics that Wall Street is insulated no  matter which political party is at the helm.

Workers' Compensation insurance coverage is premised on the legislative intent to provide remedial coverage and summary benefits. When major players in the insurance industry jeopardize that coverage, then the result impacts the ability of the system to function and causes lingering inability to pay. Government regulators have the moral, if not the legal obligation, to protect the system.