This article considers the role of American International Group (AIG) and the insurance sector in the 2007 …–2009 financial crisis and the implications for insurance regulation. Following an overview of the causes of the crisis, I explore the … assistance to AIG. I discuss the extent to which insurance in general poses systemic risk and whether a systemic risk regulator …

) and the Federal Insurance Office (FIO) of the Dodd-Frank Act’s provisions affecting insurance. The paper emphasizes the … fundamental differences between insurance and banking, including much lower potential for systemic risk and substantial market … discipline in insurance, and how those differences favor solvency regulation and guaranty systems that reflect the distinctive …