http://www.uniset.ca/lloydata/pravda_engfo...

"The central charge against AIG and its offshore subsidiaries like Coral Reinsurance is that they were used to offset bogus losses in the same manner that Enron did. And, of course, there are numerous Bush connections in this. AIG used its offshore subsidiary, Coral Reinsurance, to issue, or to resell bogus reinsurance policies to Swiss Re
That was the real connection. And it's what put Swiss Re into trouble. Swiss Re is the biggest reinsurer on the planet."

"Reinsurance is simply excess and surplus insurance called E&S excess and surplus. They purposely would underestimate the risk in writing AIG's original policies in order to be able to steal the bids from everybody else. They would purposely underbid. Then they would go to their offshore subsidiary Coral, which was a reinsurance company and get Coral to sell a reinsurance policy on a contract on insurance policy or contract or fidelity instrument or guaranty instrument, etc. They would get Coral to write a reinsurance policy and get Swiss Re to buy it. But it wasn't worth anything because they had underbid the original insurance contract. So the reinsurance contract effectively wasn't worth anything.

--snip--

"The Bush connection into all this is that they controlled a variety of insurance companies, National Heritage Life, for instance. The Bush family also controlled Cardinal Life and Kentucky Life. What they kept doing is underbidding,underbidding, underbidding, purposely giving out cheap quotes that the companies themselves didn't have the reserves to back. They would then purchase from Coral a reinsurance guaranty, a fidelity and guaranty instrument that was completely bogus. It wasn't worth anything because they had so severely underestimated the potential liabilities. The actuarial tables they used didn't make any sense. When National Heritage or Century or Cardinal sold insurance policy, they would make assumptions that, for instance, in 30 years the median life span was going to be 110. Using an actuarial table that was Bushonian fantasy, they would come up with an estimated value of a policy over time that wasn't worth anywhere near what they claimed.

--snip--