To What Degree Were AIG?s Operating Insurance Subsidiaries Sound? (6)

Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control

Posted on 29 April 2009 by David Merkel

Realized Capital Losses, Excluding Securities Lending at the Life Companies

Subsidiary	Sum of 2007YE Surplus	Other Realized Capital Losses / Surplus
First SunAmerica LIC	501	-81%
The Variable Annuity LIC	2,838	-61%
AIG Annuity IC	3,729	-49%
Am Int LIC of NY	553	-41%
AIG LIC	440	-39%
American General L&A IC	471	-28%
SunAmerica LIC	4,716	-17%
American General LIC	5,704	-16%
American Life IC	6,718	-11%
Merit LIC	705	-4%
Pacific Union Assurance Co	67	-1%

If the securities lending losses weren’t enough, the life companies ran asset portfolios where many risks did not pan out.

Much of that came from corporate bonds (including junk bonds), CMBS, and non-conforming RMBS.? The domestic life companies pruned areas of their portfolios in order to prevent greater losses later.

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