Sunday, April 19, 2009
AIG is an insurance company
And as such, it follows the currently accepted business model for insurance companies, deny every possible claim, as long as possible, hoping the claimant will go away. Unfortunately for AIG, some claimants are going public instead of going away and others are looking to see what smells here.
Insurance giant AIG is already in trouble with the taxpayers from whom it has received billions in bailout money. Now an investigation by ABC News, the Los Angeles Times, and the non-profit Pro Publica has found that AIG has been ripping off its own insurance customers as well.When you have to offset a huge amount of high stakes gambling losses in the derivatives market, you get your money where you can. And they are neither the first nor the last insurance company to run this scam on their policy holders. They just happen to be the first on owned by the taxpayers.
According to ABC’s Brian Ross, “AIG covers about 90% of the people who get hurt working overseas for American defense contractors.” Pro Publica analyzed 30,000 of those cases and found that, although minor injuries were covered without question, AIG had challenged an astonishing 43% of the more serious claims.
ABC reported on several of the most outrageous cases, including that of a blind amputee for whom AIG has refused to buy a new artificial leg. John Woodson, who was formerly a truck driver with Halliburton spin-off KBR, complained bitterly, “You have to ask a second time, a third time, a fourth time, and you’re still not getting it.”
AIG has refused to divulge how much it is making on insuring private defense contractors at the expense of US taxpayers, but according to Pro Publica, it is the major player in a system which Congressional investigators found has earned nearly $600 million in profits out of $1.5 billion in premiums. A military audit described AIG’s premiums as “unreasonably high.”
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