A brave new era of insurance regulation will likely be launched sometime this month, when the government’s share of American International Group (AIG) is expected to fall below 50 percent and the Federal Reserve Board uses that opportunity to launch fresh oversight of the AIG holding company.
If so, it would be a significant event. Insurance has been regulated primarily at the state level since the founding of the Republic.
In an investor’s note, Nadel said the Treasury's Aug. 4 IPO of AIG stock reduced the government’s stake in AIG to 53 percent, and that a 30-day “lockup” period ends Sept.4.
He sees AIG using the proceeds from the sale of its remaining 19 percent stake in American International Assurance (its Asian life insurance business, valued at up to $7.5 billion) as an incentive for the Treasury to launch another IPO before the end of September, “when presumably AIG would enter its third quarter quiet period.”