Zombie Company AIG in need of more brai....err billions

From NYT

After Rescue, New Weakness Seen at A.I.G.
In the months since A.I.G. received its $182 billion rescue from the Treasury and the Federal Reserve, state insurance regulators have said repeatedly that its core insurance operations were sound — that the financial disaster was caused primarily by a small unit that dealt in exotic derivatives.
But state regulatory filings offer a different picture. They show that A.I.G.’s individual insurance companies have been doing an unusual volume of business with each other for many years — investing in each other’s stocks; borrowing from each other’s investment portfolios; and guaranteeing each other’s insurance policies, even when they have lacked the means to make good. Insurance examiners working for the states have occasionally flagged these activities, to little effect.

Here's the kicker:

"An organization like this one relies on constant, ever-growing premium volume, so it can cover and pay for the deficits," said W. O. Myrick, a retired chief insurance examiner for Louisiana.
If A.I.G.'s incoming premiums shrink, he warned, "the whole thing's going to collapse in on itself.

I don't really have much else to add....