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Oxner Thomas + Permar Blog

Oxner Thomas + Permar Blog
Blog Category:

Workers' Compensation

    9/17/2008
    Todd Oxner
    Comments (0)

    US Government bails out AIG

    Many of you have probably heard that the United States government has bought an 80% stake in AIG.  It's not surprising the company got in trouble when it paid its CEO $14,700,000.00 in 2007. That's a nice payday to a guy who ran up three years of losses in a row. Then when AIG finally fired him this June he's getting a severance of up to $68,000,000.00. You can read the full details in The Ten Worst Insurance Companies in our library. AIG is number three on the list.

    I'm not here to comment on the good or bad of federal bailouts in general, but this may have an effect on everyone, even those who have claims with other carriers. First, we're hearing reports of injured workers' weekly checks bouncing and we've seen AIG bounce checks.  So if you've got an AIG claim be aware that this IS happening. Now, more than ever, you need to make sure that your weekly check is in the bank and that it has cleared before you write your own checks with that money. Unfortunately, the Industrial Commission will pretty much limit AIG's penalty to covering your bank charge for depositng a bad check. In our experience they haven't made AIG pay the penalties when some of your own checks bounce as a result of AIG sending you a check they knew or should have none was bad.

    Second, the business community has long been lobbying Washington to step in on workers' compensation. This is a primary goal when you hear politicians talking about "tort reform."  Obviously businesses and insurance companies would prefer to pay less money to the workers they injure and would love to have Washington politiicians help out on that. So with the US Government now owning 80% of an insurance company does that make it easier to justify changing the laws on workers comp? Especially when changing those laws would make insurance companies more profitable? We'll have to wait and see.

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