CHARLOTTE, N.C. — American International Group Inc. will be allowed to use $20 billion of assets held by its subsidiaries to provide cash needed for the troubled insurer to stay in business, New York Gov. David Paterson said Monday.
The move comes as AIG reviews its operations and discusses alternatives with outside parties, reportedly including Warren Buffett's Berkshire Hathaway Inc., to shore up its business amid concern the world's largest insurer could need billions of dollars for its balance sheet.
Paterson asked New York state insurance regulators to essentially allow New York-based AIG to provide a bridge loan to itself. The governor has also asked the head of New York's insurance department to talk with federal regulators about providing an additional bridge loan to AIG.
The move will allow AIG to use those assets as collateral to borrow cash to fund its day-to-day operations, Paterson said.
Shares of AIG, once the world's most valuable insurer by market value, fell $7.38 to close at $4.76 Monday.