Fitch Ratings views today’s 2004 10k filing by American International Group (AIG) as a modest positive development and a necessary step forward in addressing the various uncertainties that continue to surround the company. Fitch views the following near-term uncertainties as material and supportive of the current Rating Watch Negative status: the financial effect of civil litigation filed on May 26, 2005 by the New York Attorney General and New York Superintendent of Insurance, the magnitude of potential litigation costs from various lawsuits that have been filed, the resolution of ongoing investigations by numerous regulators and governmental authorities, results of the independent actuarial review of loss reserves, and remediation of material weaknesses cited in the auditor’s opinion. These include tangible evidence of how recent developments, including rating downgrades, have affected AIG’s franchise, competitive position and future financial performance, resolution of the relationship between AIG and Starr entities, the evolution of ceded reinsurance strategies and how that may impact future operating results, subsidiary capitalization strategies, and broader potential changes in management strategies…..
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