Aig Case
Actuarial Accounting: A Cautionary Report
Dan R. Young, Esq. Attorney at Law Law Offices of Dan R. Young Seattle, Washington danryoung@netzero.net
Presented the Spring Meeting of the CAS New Orleans, Louisiana May 6, 2009
The Story of the AIG Accounting Scandal
The Companies The Participants Regulatory Scrutiny Intensifies The Prosecution Case The Defense Case Relevant Laws and Regulations The Fate of the Participants
The Companies
AIG Overview (2007)
World’s largest insurance and financial services company 93,000 employees Business in 130 countries Led by Maurice (“Hank”) Greenburg Shareholder’s equity 2007: $95.8 billion Net Income 2007: $6.2 billion Premium written 2007: $59.8 billion
GenRe Overview
One of World’s largest reinsurers Established 1921 Headquartered in Connecticut Owned by Warren Buffet’s Berkshire Hathaway Led by Ronald Ferguson, FCAS, until he retired in 2002 Premium written 2007: $6.0 billion
The Participants
Hank Greenburg, CEO of AIG
Born 1925 Admitted to NY Bar in 1953 Joined AIG in 1962 Named CEO in 1968 Led AIG for 38 years Stepped down March 21, 2005
Ron Ferguson, CEO of Gen Re
Born 1942 Fellow of CAS Co-developer of B-F method Joined Gen Re in 1966 Named CEO in 1987 1998 Berkshire Hathaway acquired Gen Re Retired 2002
Others
Christopher Garand, FCAS Senior VP and Chief Underwriter of GenRe’s Finite Reinsurance in US from 1994 to 2005 Elizabeth Monrad, CPA CFO of Gen Re 2000 to 2003 Robert Graham, JD SVP and Assistant General Counsel at GenRe until 2005
Others
Christian Milton VP of AIG’s Reinsurance until 2005 Richard Napier SVP responsible for GenRe relationship with AIG John Houldsworth CEO of Cologne Re Dublin (CRD)
Eliot Spitzer, JD
Born 1959 Former Attorney General of NY Notable prosecutions: Mutual fund scandals (2003) Insurer bid rigging (2004) AIG accounting
Dan R. Young, Esq. Attorney at Law Law Offices of Dan R. Young Seattle, Washington danryoung@netzero.net
Presented the Spring Meeting of the CAS New Orleans, Louisiana May 6, 2009
The Story of the AIG Accounting Scandal
The Companies The Participants Regulatory Scrutiny Intensifies The Prosecution Case The Defense Case Relevant Laws and Regulations The Fate of the Participants
The Companies
AIG Overview (2007)
World’s largest insurance and financial services company 93,000 employees Business in 130 countries Led by Maurice (“Hank”) Greenburg Shareholder’s equity 2007: $95.8 billion Net Income 2007: $6.2 billion Premium written 2007: $59.8 billion
GenRe Overview
One of World’s largest reinsurers Established 1921 Headquartered in Connecticut Owned by Warren Buffet’s Berkshire Hathaway Led by Ronald Ferguson, FCAS, until he retired in 2002 Premium written 2007: $6.0 billion
The Participants
Hank Greenburg, CEO of AIG
Born 1925 Admitted to NY Bar in 1953 Joined AIG in 1962 Named CEO in 1968 Led AIG for 38 years Stepped down March 21, 2005
Ron Ferguson, CEO of Gen Re
Born 1942 Fellow of CAS Co-developer of B-F method Joined Gen Re in 1966 Named CEO in 1987 1998 Berkshire Hathaway acquired Gen Re Retired 2002
Others
Christopher Garand, FCAS Senior VP and Chief Underwriter of GenRe’s Finite Reinsurance in US from 1994 to 2005 Elizabeth Monrad, CPA CFO of Gen Re 2000 to 2003 Robert Graham, JD SVP and Assistant General Counsel at GenRe until 2005
Others
Christian Milton VP of AIG’s Reinsurance until 2005 Richard Napier SVP responsible for GenRe relationship with AIG John Houldsworth CEO of Cologne Re Dublin (CRD)
Eliot Spitzer, JD
Born 1959 Former Attorney General of NY Notable prosecutions: Mutual fund scandals (2003) Insurer bid rigging (2004) AIG accounting