Bankruptcy of insurance and reinsurance companies in the United States

Deeply rooted in American business, bankruptcy is an old practice that dates back to 1800. The United States have, therefore, seen numerous groups and jewels of their economy such as AIG, General Motors or Lehman Brothers collapse in the heat of financial scandals.

Several dozens of insurance companies, including big names in the business, have gone bankrupt in the United States in the course of the recent 30 years.

Bankruptcy of AIG case

AIG was seriously affected by the 2008 financial crisis. Under the pressure of the authorities that questioned some of the group’s practices, the group’s board of directors was pushed to part ways with its historic president Maurice Greenberg on duty for 35 years.

AIG was bailed out by American Federal Reserve (FED) which had to intervene on various occasions to inject the total amount of 205 billion USD. A drastic restructuring plan was then imposed on the group which was compelled to cede a large number of non-strategic assets including subsidiaries Alico in the United States and AIA in Asia.

Bankruptcy of Conseco

Conseco, an insurance company set up in 1979, was estimated at 61.4 billion USD upon its bankruptcy in 2002.

Due to bad investments, including the acquisition of numerous companies in the 1990s, in particular Green Tree Financial, the company was pushed to bankruptcy.

Bankruptcy of Executive Life Insurance Company

Executive Life Insurance Company is regarded to be the biggest bankruptcy of an insurance company in the United States [5] in the course of recent years.

Based in California, the life company had to file for bankruptcy in 1991 following disastrous investments in junk bonds.

List of major bankruptcies of insurance companies in USA

Source: National Organization of Life and Health Insurance Guaranty Association