Posted on 03 Feb 2009
The Government Accountability Office (GAO) has launched a probe to assess the impact of federal funding to American International Group (AIG) and whether the insurer has an unfair advantage in the pricing of commercial insurance products as result of the bailout.
Rep. Paul Kanjorski (D-PA), chairman of the Capital Markets Subcommittee, and Rep. Spencer Bachus, (R-AL), ranking member of the parent House Financial Services Committee initiated the probe.
In their letter, the lawmakers requested that the GAO "assess the impact of all aspects of the AIG financial rescue package on the U.S. insurance marketplace," and called on the agency to seek information from a "variety of industry sources" as well as from state insurance regulators and economists.
"We are particularly interested in your assessment of whether market distortions are occurring now or may occur in the future, especially in the commercial property casualty market, and whether any such distortions are having a negative impact on market discipline and fair competition," wrote the congressmen.
"Furthermore, to the extent sufficient information is available to the GAO, we would like you to determine whether or not the AIG rescue package has resulted in measurable progress toward achieving the federal government's stated goals and objectives," wrote the congressmen. "We are particularly interested in your analysis of any setbacks experienced as well as any challenges projected in recouping federal taxpayer funds."
The lawmakers want the GAO to complete its review by March 31.