The New York Times has an interesting story, New Weakness Seen at A.I.G. . It seems AIG has been playing state regulators off of each other, to hide liabilities.

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.