From my lips to your ears...good riddance!
Next time you may want to listen to your (former) GAs about your company practices.
Click THIS link.
Accounting flaws at American International Group significantly understated the insurance giant's losses on complex financial instruments linked to mortgages and corporate debt, A.I.G. said on Monday, raising new questions about the deteriorating health of financial companies.
The disclosure stunned Wall Street and raised concern that other companies could report similar problems related to instruments known as credit default swaps. The news sent A.I.G. stock tumbling 12 percent, or $5.94, to $44.74, its lowest level in a year.
“We are going to see more and more problems come to light like this,” said Lynn E. Turner, a former chief accountant at the Securities and Exchange Commission. “This is an indication that these large financial institutions do not have the risk management systems in place to give us accurate data.”
In a securities filing, A.I.G. said it would take a $4.88 billion charge related to a decline in the value of credit default swaps. That is roughly five times the charge the company suggested it would take in early December.
A.I.G. said its longtime auditor, PricewaterhouseCoopers, had found “material weakness” with the company's financial reporting practices for valuing the swaps, which are derivatives that provide insurance against a decline in credit quality.
A.I.G. had previously developed proprietary systems using market data and financial models. But because swaps are thinly traded, they are often difficult to price accurately. A.I.G.'s initial models could not reliably estimate the benefits of owning the less risky parts of the instruments. As a result, what the company originally suggested would be a roughly $1 billion loss is now likely to swell to about $5 billion.
A.I.G. said in its filing that it is “still accumulating market data” to update its valuations but that it believes it has the necessary “controls and procedures to appropriately determine the fair value.”
Chris Winans, an A.I.G. spokesman, said the company still planned to file its 2007 financial statements at the end of this month.
The development is a major setback for A.I.G., the world's biggest insurance company, which has been struggling to win back Wall Street's trust after a string of scandals. Over the last three years, the company has been the target of multiple criminal and civil investigations. At one point, its books were in such disarray that its auditors refused to endorse them, and its longtime chief executive, Maurice R. Greenberg, was forced out.
Its profit has also been ravaged by three big hurricanes and a South Asian earthquake, and investors remain concerned about the company's exposure to the subprime mortgage crisis. Shares of A.I.G. have fallen about 30 percent since 2005.
The company received more bad news on Monday when Fitch Ratings warned that it might lower A.I.G.'s credit rating in light of the disclosure. On top of current market conditions, Fitch said that the troubles contribute to uncertainty regarding the value of A.I.G.'s portfolio.
Posted: Tue Sep 16, 2008 09:20 am Post Subject:
Old Line Life Insurance Company used be one of the best life insurance companies to do business with UNTIL AIG bought them.
I say good riddance to AIG.
May you be chopped up into small pieces and sold to actual insurance companies who know what they're doing.
Your advertizing and underwriting practices are pathetic.
A male age 40 could get $250,000 of coverage for less than $15 dollars per month, but when the policy comes back from the computer underwriting system the actual premium will be about $30 per month which is competitive with everybody else out there.
This is the same technique the car dealers use where they advertize that one car for thousands below market and THAT car is just never available for some reason.
Hey AIG, why don't you "advertize" what happens to the premium in the 11th year?
Where's InsInvestigator?
Posted: Fri Oct 17, 2008 12:23 am Post Subject:
I agree with you Gary...good riddance...An aig accounting fraud is enough to show us their worth..go find a spa somewhere.
Posted: Fri Oct 17, 2008 12:54 am Post Subject:
After I quit my job from a big4 firm I was pretty worried that I wouldn't find another one, that's until a friend recommended me this website : big4.com/home.html .Here I found myself a job and I feel I could do a favor to everyone who is now in my former situation.
Posted: Fri Oct 17, 2008 10:54 am Post Subject:
I wonder which one of the Big 4 was cooking AIG's books?
From Wiki:
The Big 4, sometimes written as the Big Four, are the four largest international accountancy and professional services firms, which handle the vast majority of audits for publicly traded companies as well as many private companies. The Big Four firms are shown below:
PricewaterhouseCoopers
Deloitte Touche Tohmatsu
Ernst & Young
KPMG
Posted: Sun Nov 02, 2008 04:11 am Post Subject:
Hey Gary,
Sorry I missed this post. I've been working on a number of aig accounting fraud cases in Florida, Nevada, Texas, and California. These cases have more to do with agent misrepresentation and not bad company policy in "advertizing."
Don't worry, they're being watched very closely.
Posted: Sun Nov 23, 2008 08:14 am Post Subject: AIG:you saved urself?did you?
:lol: it is quiet pretty to pat one's back.where all big 4 are saying we haven't seen anything,heard anything.this is totally ridiculous where they are playing with investor's & policyholder's interest.
Posted: Mon Nov 24, 2008 05:48 am Post Subject:
Mr.Garry, do you think that any current aig accounting fraud will have impact on other insurance company's credibility?
Posted: Thu Nov 27, 2008 03:47 pm Post Subject: aig accounting fraud
Mr.Garry,Do you think that current turmoil situation of AIG will have impact on other insurance company's credibility?
Not really, but now we have to take the time to explain that AIG isn't just one singular company an introduce an explaination of Credit Default Swaps.
AIG was going for the gusto with its Credit Default Swap business.
All is well until you have to payout the claims on all the defaulted credit.
Credit Default Swap:
A swap designed to transfer the credit exposure of fixed income products between parties.
The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. By doing this, the risk of default is transferred from the holder of the fixed income security to the seller of the swap.
Private Mortgage Insurance is a Credit Default Swap.
Your lender makes you pay their premium on their policy they buy from AIG to transfer the risk of you defaulting on your mortgage from themselves to AIG.
This is normally an extremely profitable business.
Posted: Tue Feb 03, 2009 08:26 pm Post Subject:
"What are the words you do not yet have? What do you need to say?...for it is not differences which immobilize us, but silence. And there are so many silences to be broken." -Audre Lorde
A lot of this is communication issues. Silence has a long history of destruction. Not enough talking and listening to people. One-sided agendas. AIG wasn't open to the public's needs and wants in a way that would deem it a success. If AIG had cared to listen to what was going on they good have done a lot of good. Shoulda Coulda Woulda. Now that they've failed though, I say good riddance to aig accounting fraud plots. May we all learn to pay more attention.
Posted: Wed Feb 11, 2009 11:26 am Post Subject:
If AIG had cared to listen to what was going on they good have done a lot of good.
it is true that it would have made the difference but i am sure that this practice can be duplicated in every aspect or with any other business.All those businesses are here to stay if they make a habit to ask :arrow: listen, :arrow: adopt, :arrow:change,:arrow: ask, :arrow: listen. then surely each & every business will flourish. :wink:
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