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Subject:  Re: Lifetime Annuity Date:  10/4/2013  1:47 AM
Author:  CCinOC Number:  73403 of 88823

AIG sold hundreds of billions of dollars on insurance on collateralized debt obligations which in fact turned out to be virtually worthless. These losses far exceeded any reserves AIG possessed

Well, not exactly. The collateralized debt obligations exceeded the reserves of THAT DIVISION of AIG, but not the reserves of the entire company. Obviously, the reserves backing the life insurance policies in force could not be accessed to rescue THAT DIVISION of AIG.
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