Jakarta, Financeroll.com – The bonuses paid to employees of American International Group, Inc. (AIG:  News ) were "highly inappropriate," Federal Reserve Chairman Ben Bernanke said Tuesday. Testifying before the House Financial Services Committee, Bernanke outlined the reasoning behind the government's repeated interventions to prop up AIG despite severe mismanagement within the embattled insurance giant.

The Fed Chairman added that AIG must "scrupulously avoid any excessive and unwarranted compensation." "We have pressed AIG to ensure that all compensation decisions are covered by robust corporate governance, including internal review, review by the Compensation Committee of the Board of Directors, and consultations with outside experts," Bernanke said in prepared remarks.

He noted that AIG has limited bonuses and other compensation for 2008 and 2009 voluntarily, adding that New York Attorney General Andrew Cuomo has imposed restrictions on that compensation. Bernanke called the bonuses "highly inappropriate," adding that he asked that suit be filed to prevent the payments.
However, the suit was deemed untenable by the Fed's legal staff, Bernanke said, and could have had the "perverse effect of doubling or tripling the financial benefits to the AIG-FP employees" due to punitive damages. Despite the uproar over the bonuses, Bernanke defended the Fed's decision to bail out the insurance giant. The government's decision to step in and bail out AIG came in the face of "unacceptable risks" that its collapse would have cause to the global financial system, Bernanke told lawmakers.

"Conceivably, its failure could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income, and jobs," Bernanke said. The collapse would have triggered severe shockwaves around the world, Bernanke said, from state and local governments to policyholders, from global and investment banks whose exposure exceeded $50 billion to money market mutual funds which held around $20 billion in commercial paper.

Using the collapse of Lehman and the credit crunch it triggered as an example, Bernanke noted in prepared testimony that "once begun, a financial crisis can spread unpredictably." "It is unlikely that the failure of additional major firms could have been prevented in the wake of the failure of AIG," Bernanke noted.
As a result of its loans to AIG in order to keep the insurance giant afloat, Bernanke said that the Fed is now in an "uncomfortable situation of overseeing both the preservation of its value and its dismantling." This role is a new one for the Fed, which is usually charged with maintaining price stability. However, despite its additional responsibilities, Bernanke noted that his organization's goals have remained the same, "to protect our economy and preserve financial stability, and to position AIG to repay the Federal Reserve and return the Treasury's investment as quickly as possible."

From : www.financeroll.com

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Help Make Your Policy Match Your Stuff

Some Property is Categorized

Having a good claims experience can start with getting the right coverage. Your total property limit may give you the impression you have plenty of coverage, but you may find that your category limit on computers isn't nearly enough to replace all of the computers in your home.

For example, your policy might have limits in categories like these:

• Money, bullion, bank notes and coins.
• Property for use in a business while the property is away from your home. This doesn't include computers, drives or other storage media.
• Property for use in a business, including property held as samples, while the property is at your home. This doesn't include computers, drives or other storage media.
• Trading cards, subject to a maximum amount of $250 per card.
• Accounts, bills, deeds, evidences of debt, letters of credit, notes other than bank notes, passports, securities, tickets and stamps.
• Manuscripts, including documents stored on electronic media.
• Watercraft, including their attached or unattached trailers, furnishings, equipment, parts and motors.
• Theft of jewelry, watches, precious and semi-precious stones, gold other than goldware, silver other than silverware, platinum (other than platinumware), pewter (other than pewterware) and furs, including any item containing fur that represents its principal value; subject to a maximum amount of $1,000 per item.
• Any motorized land vehicle parts, equipment or accessories not attached.
• Theft of firearms.
• Theft of silverware, pewterware and goldware.
• Computers, drives or other storage media, whether or not the equipment is used in a business. Storage media will be covered up to the retail value of the media.
• Theft of rugs, including, but not limited to, any handwoven silk or wool rug, carpet, tapestry, wallhanging or other similar article whose value is determined by its color, design, quality of wool or silk, quality of weaving, condition or age; subject to a maximum amount of $2,500 per item.

Keep in mind these are just examples and may vary by policy. Talk to an Allstate agent about your specific policy.

You can adjust the personal property coverage of your policy at any time. Since you are spending time now to learn about property insurance, it's also a good time to take a good assessment of your personal property coverage needs (use our free Home Inventory Tool software).

Really Nice Stuff

When you walk around your home, look for things that you spent a lot of money on, or that have appreciated in value since you got them (family heirlooms, your diamond jewelry). You will need to make a decision about how to insure them so, if they ever need to be replaced, the standard limits will not pose a problem.

• If it is only one or two items in a category, such as a diamond necklace
• Ask your agent about a Scheduled Personal Property endorsement
• If it is a category with many items of higher than normal value, such as an extensive computer network
• Ask your agent about an Optional Coverage

Insuring High Value Items

A common item in a category covered by your policy, such as a watch, may be worth $25 or $5,000. Because this category of common items can vary so greatly in value, your policy may set a per item limit for these items. If one item exceeds those limits, ask your agent for a Scheduled Personal Property endorsement to properly protect it.

For example: There may be a $1,000 limit per piece of jewelry and a $2,500 limit for all jewelry as a group. If you own a couple of inexpensive watches, you're in great shape. If you own a watch that is appraised for $10,000, you have an option to cover that specific watch at a higher amount. A Scheduled Personal Property endorsement can be used for jewelry, individual furs, oriental rugs, fine artwork and a variety of other items.

Insuring Groups of Valuable Items

You can use an Optional Coverage to raise the group limit on a category covered by your policy, such as computers — or you can use them to insure an entire category of items that are not covered by your policy because they are less commonly owned.

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