A View from the Press Box

Has the financial meltdown on Wall Street–with AIG derivative trading one of the chief catalysts–guaranteed not only that Congress will move for direct oversight of insurance next year, but that any chance of the new federal charter system being “optional” is out the window?

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“60 Minutes” this past Sunday devoted its lead segment–”The Bet That Blew Up Wall Street”–to an indictment of how “casino capitalism” and a negligent Congress allowed unregulated trading in credit default swaps to trample our financial system in a stampede of blind greed, with AIG the poster child for all that went wrong.

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Am I the only one who thinks it might actually be a good idea for state regulators to consider forming their own insurance company rating organization to compete with A.M. Best, Fitch, Moody’s and Standard and Poor’s?

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What do you folks think about calls to renegotiate the terms of AIG’s bailout loan from Uncle Sam? AIG’s former head honcho, Hank Greenberg, warns that the current deal could spell doom for AIG, which wouldn’t serve anyone’s purposes. The Wall Street Journal seconded that motion in an editorial today, and I tend to agree.

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Ever since Uncle Sam tossed American International Group a life preserver after the company nearly drowned our economy in reckless credit default swaps, Congress and the consumer press have been hammering AIG for some pretty ungrateful behavior. One major newspaper went so far as to suggest that AIG really stands for “arrogance, insensitivity and gall.” Are the critics right? Unfortunately, I think so, for mistakenly thinking AIG could continue to conduct business as usual in this post-subprime world.

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No matter what Uncle Sam does, or how many taxpayer dollars are poured into the financial system, the economy seems determined to tank, taking the stock market (and our retirement funds) along with it. It’s clear there are no quick-fixes here, so insurers, agents and risk managers had better fasten their seat belts, because we are in for one incredibly bumpy ride.

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Last July, in a blog entry about the growing trend of “medical tourism”–in which more Americans are forced to seek cheaper health care outside the country–I asked: “Is this really what we’ve come to in the United States?” Now I’m hearing buzz that more folks are considering foreign long-term care facilities to cut costs. Again, I say, must our own citizens leave the greatest country on Earth to be properly cared for?

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I’m sad to report that one of National Underwriter’s former Washington editors, Mary Jane Fisher–dubbed the “Helen Thomas of the insurance press” by my colleague, NU Life Weekly Editor Steve Piontek–passed away recently at the age of 90. For those of you Inside The Beltway who dealt with Mary Jane as a source or subject of her stories, you’ll no doubt remember her as I do–as a classy, fair-minded, savvy professional. She was one of a kind–a keen reporter who never lost her passion for journalism, and never let herself be tainted by the cynicism that poisoned so many Capitol Hill beat reporters.

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The party is literally over at American International Group, as the beleaguered company scrapped plans to host a second lavish junket to reward top-performing agents in the wake of a tsunami of criticism for continuing to live the high life, throwing a $400,000-plus celebration for life producers after begging Uncle Sam for not one, but two massive loans topping $120 billion to keep the organization afloat.

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Hank Greenberg is known for having the constitution of an ox, thus it was both a surprise and a huge disappointment that he failed to show up on Capitol Hill this week to testify at a hearing on how AIG got into so much trouble that it needed an $85 billion government bailout to survive.

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