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AIG is suspected of mortgage swindle

9 June 2008
Written by: admin Posted under General Insurance

US adjusting bodies have started investigation against world’s largest insurance company, American International Group (AIG). It is suspected of overestimate of cost of the insurance products, connected with hypothec credits.
Securities and stock exchanges commission of the USA (SEC) conducts investigation concerning AIG. SEC suspects the company of overestimate of cost of contracts, in particular, hypothec credits.
According to The Wall Street Journal (WSJ), the insurance company actively sold default swaps to clients - contracts according to which it has undertaken to pay to the buyer the certain sum in case of approach of default under structural promissory notes (CDO), provided hypothec actives.
In the end of April, AIG has sharply increased maintenance on default swaps for the companies - up to $9,7 billion in comparison with $5,3 billion in the beginning of March.
SEC wishes to understand, how the company estimated cost of such insurance contracts and the reason of so sharp growth of cost of CDO insurance, connected with hypothec actives.


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