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AIG in financial crisis, will this effect my Workers’ Compensation benefits under the Defense Base Act? September 15, 2008

Posted by Aaron Walter in Uncategorized.
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On news of a potential downgrading of its debt rating, AIG’s stock fell 31% Friday and another 50% as of lunch time on Monday September 15. AIG has asked the U.S. Federal Reserve Bank to help raise $40 billion to avoid such a downgrading and is attempting to sell off its domestic automobile businesses and aircraft leasing business.

AIG insurers approximately 90% of Defense Base Act Workers’ Compensation claims. The questions we have been asked several times today are – will this effect my weekly benefits? Will AIG keep paying my doctors?

The answer is that there should not be any immediate disruption in these benefits.  It appears that AIG should have enough cash to continue to pay claims. In fact, the division handling these claims has made record profits  for AIG over the past few years.

Long term, this could produce some changes. I don’t mean even more denials of coverage, as that would only result in increased penalties, attorneys fees, and man hours, but rather a potential reduction in personnel. A reduction in adjusters would negatively affect those on Workers’ Comp benefits under the DBA in that you could have less adjusters spending less time reviewing claims. At this point this is all speculation, but this is certainly something to keep an eye on over the coming weeks and months.

UPDATE: It looks like the State of New York may be stepping in to help AIG as well. Apparently the State will authorize AIG to borrow from its own funds to cover AIG’s operating needs.

9/16 UPDATE: Here is a short CNN Money article on how this affects even non-customers – Five Questions, Why AIG Matters To You

9/17 UPDATE: AIG stock fell yet another 30% this morning (44% as of 11:18 AM EST)and buzz on Wall Street is that the Federal Government, in an unprecedented move, may essentially buy an 80% share in AIG in exchange for a whoping $85 billion loan.

The Fed’s loan doesn’t require asset salesor the company’s liquidation, though these are the most likely ways AIG will repay the Fed, central bank staff officials told reporters on condition of anonymity. Blackstone Group LP advised AIG on the transaction.

That should certainly float the company along, but it doesn’t sound like good news for current stockholders.

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Comments»

1. Jana - September 17, 2008

AIG holds the biggest goverment contract for Insurance in Iraq for KBR. Did anyone really think that the government would let them faulter? Shoot no! I almost went and bought stock at 1.25 banking on this! See, that would break their security issues with the many contractors that are under contract in Iraq. Did anyone see KBR out looking for new insurance during all of this crisis?
If AIG would of not gotten the bail-out from the FEDS, would our government been held accountable? Also how many court cases were moved over the last few days? I just don’t see how any of AIG’s attoneys would want to nego. any cases. I bet they blamed it on the Hurricane. What gets me the most is that the government knows after the Defense Base Act hearing in May, that AIG makes profits of 15% on the claims that are filed from contractors. Yet they deny them, many suffer now from pure medical neglect from AIG. During the hearing, I thought I heard Waxmans comment about AIG say this, “Denials and delays are the rule!” Hearing stated that AIG profits had reached 100 million just off the DBA alone. This all at tax payers expense! Money that was to be used for treating injured contractors. Now the government bails them out. What about bailing the people of America out from the harm that AIG has and is doing to us? Of the 300 million that tax payers have paid to help injured, only 73 million went to contractors, so please tell me where the rest went? Screw the people save the corporation.

Next time I buy a lotto ticket and loose, I’m asking the government to give me my money back!

Just my opinions!

2. AIG in financial crisis, will this effect my Workers’ Compensation benefits under the Defense Base Act? - Part 2 « The Defense Base Act Blog - September 17, 2008

[…] trackback We have been receiving numerous emails in response to our previous posting on the AIG crisis and its effect on Defense Base Act claims. While it appears that a potential government bailout will keep AIG’s daily operations and […]

3. thisisBS - September 22, 2008

I absolutely hate the bullshit that Congress is doing. Bailing out the airline pensions, then Fannie and Freddie, then Bear Stearns, finally AIG. I believe people should become violent, and simply terrorize the ones responsible. American patriots of old did this all the time. If this is not your cup of tea, do to a lack of cajones, then allow me to lend you some passive actions you can take.

Like David Letterman, here is my top ten list.

1. Convert your money to another currency. Owning U.S. money is like owning stock. If the U.S. is full of shit, then change toilet paper brands. The massive deflation of printing funny money to AIG is only going to weaken your dollar. A two dollar loaf of bread will become four or more. Change your money to buy bread in the future. Push to remove penalties and charges for changing U.S. dollars into other monies or standards like gold.

2. Write your congressman. Find their damn home number and call them at all hours of the night. Break apart the lobby system. Find out who is lobbying, and screwing up your life and never purchase from them again. Tell all of your friends to do the same.

3. Try to set up a system where the people’s vote usurps Congressional power like in state governments. We the people can amend amendments all the time at the state level. How many signatures does it take to undo the Congressional approval of AIG. How about removing the requirment that we have to buy insurances like those for our cars.

4. Remember this day, and engrain it in your mind. Never, ever invest in the stockmarket or America again. Allow the stock market to truly crash so that even the government cannot bail out the bullshit. Last time I checked people learn best through pain and suffering. Nationalize and government control things like energy, health care, and above all insurances. Use your head. You do not need to go overboard, and all we need is cheap basic standardized policies. For example, if people want million dollar transplants that will prolong a short period of life, then let them buy the expensive insurance. You will always be covered for being mangled in a car accident. Trust me, this would be cheap, and not even equal funding like socialized countries like Canada.

5. Act quickly because the world is poised to screw over us American’s, and they will soon be flooding us will all of our worthless dollars. Prepare for the Sith invasion.

6. Fix the Glass-Steagall act A.S.A.P. This repeal allowed banks to mix hedge funds with commercial or simply risk markets with solid investments. Banks never go under in any economy if their simply commercial. Of course they don’t make great profits either. The great depressions taught us this lesson and set the Glass-Steagall act up. The republicans, and the democrats for that matter overturned this wise approach in 1999.

7. The entire republican party has to be destroyed politically because they are the worst, and you need to watch the democrats and any new formation of parties until you can transition to a truly independent party. Simply choose someone off of the street. These people could not do as much damage as party politics.

8. Do not forget to break apart the monopolistic system. 50 seperate entities should be a good number. Microsoft is the only operating system for P.C. break the sucker up. Boeing and a few other national security and airline groups need to be broken up as well. Auto industries should be cracked to pieces. Banks should really be broken up and not be able to centralize over state boundaries like we had before. The Time Warner media giant that went untouched in its merger needs to fall. Smaller companies like Dentsply that control most tooth implantation are wrong. Do your part and ask where your money is going and support the smaller businesses until we get a congress that breaks up monopolies.

9. Make every aspect of what we pay for in the government open to the public. Finances, time, etc. need to be available at the click of a mouse, and there is always someone board enough to check their records.

10. If all else fails, leave the country. Many people on these blog sites will tout you to just get the hell out. Leave the ignorant behind, and take your skilled labor elsewhere. When they cart America off to the auction block, you can come back and buy all that you lost.


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