Insurance Quotes & Advice

American International Group Inc. reported a $7.81 billion loss for the first quarter in a earnings report released after the market closed on Thursday.  While AIG’s core insurance business is doing reasonably well,  the mounting losses are stemming from it’s high risk exposure to the slumping housing market.

For the second quarter in a row, the company has had to write-down the value of it’s credit default swap contracts and mortgage backed securities portfolio.  The company reported another $15 billion in pre-tax write-downs after taking $11 billion in write-downs last quarter.

The company also announced plans to raise $12.5 billion in additional capital through the sale of stock and the issuance of fixed income bonds.  These efforts will be hampered somewhat due to the fact it’s stock value took a big hit Friday, as well as the fact that ratings agencies downgraded the company’s credit rating, which will make borrowing more expensive.

A number of analysts have revised AIG’s earnings estimates downwards for the rest of the year as they expect the company’s misfortunes to continue until the housing market can rebound.  Earlier this week the SEC also announced that financial institutions must become more transparent with their bookkeeping.

As the many woefully inaccurate earnings estimates have proven, it has been difficult for analysts and regulators alike to put a value and asses risk on the complex securities and financial products these companies deal in.

On Tuesday, a bill to renew the National Flood Insurance Program(NFIP), which is set to expire this September, passed a key hurdle in the Senate.  Lawmakers have stepped up their efforts to reauthorize the program which is run by the Federal Emergency Management Agency(FEMA).

The Senate bill would extend the program through 2013, while forgiving a $17 billion NFIP debt run up by the Federal Emergency Management Agency after 2005’s Hurricane Katrina.

Unlike a similar bill passed last year in the House of Representatives, the Senate bill would not add wind damage coverage to the program.

With the start of the hurricane season less than a month away, there are still a large number of residents without adequate flood coverage.  Researchers are predicting well above average hurricane activity for the Atlantic basin this year.

While FEMA has done it’s best in trying to get the word out, there is still a large lack of awareness for many Americans about flood insurance in general.  Unlike wind damage coverage which can be purchased from regular property insurers, there is for the most part no private market for flood insurance.

Earlier today, the U.S. House passed the Genetic Information Nondiscrimination Act of 2008(GINA) by a vote of 414-1.  The bill which was also approved by the Senate with a 95-0 vote last week is expected to be signed into law by President Bush when it crosses his desk.

GINA would prohibit employers and health insurers from discriminating against individuals based on information gained from genetic testing.  They would also be prohibited from seeking or disclosing any type of genetic information.

The proposed law could have a large impact on the health insurance industry in the future.  Health insurers would be unable to set premiums or deny claims to individuals that may have higher risks to certain diseases based on their genetic makeup.

While genetics is already a controversial subject, many doctors have claimed that research has been slowed due to the fear many patients have that this information could be used against them.  The passage of the bill along with the completion of human genome project could make genetic testing much more widespread, which could lead to medical breakthroughs in the future.