Actually, it could be. We've never before suffered "credit exhaustion" nor the layer-upon-layer of derivatives backed more by hope than assets. I doubt anybody really knows the extent of the potential damage as this house of cards tumbles.
but who ranks first in bankruptcy. CDS conterparties or policyholders, I read in the mbia debacle that policyholders are second. now its possible that the dinallo will just break the law since its an election year and the political pressure is great
actually scrap that, as I understand insurance companies go into receivership and payout the money overtime. I dont know why aig would file for bankruptcy
Once in bankruptcy insurance claims can only be paid by Court Order. Limits AIG's ability to even settle claims. This is going to tie up our Court System for years. ERISA claims process... File Claim - 60 Days Notice - 60 Days appeal period - file suit in state or federal court. 60 days - Court will order non binding mediation - No Settlement Possible (90 days). Court will conduct hearing (90 Days) You may win and receive an award AIG Appeals (90 days) About 1 year later if your lucky you receive an award which you'll never be able to collect. As a result many claims are just dropped by the beneficiaries.