What the AIG bailout means to you

So what does this latest bail out mean for you?

And if you're not an AIG customer, should you be concerned?

KLTV 7's Courtney Lane set out to get answers for us, and explain why the government made this unprecedented move.

AIG's financial problems are reportedly only with its holding company, not all its subsidiaries.

That's good news for policy holders. But how did the nation's largest insurer tumble so low?

"The problems that we're seeing right now are not the result of the hurricane, they're not the result of 9-11. What they did was speculate in a lot of very risky securities...and when the subprime market began to collapse, those securities became worthless."

So now, taxpayers are picking up the $85 billion tab.

Financial analyst and lecturer at UT Tyler, Robert Allen, says east Texans won't see a direct impact.

"Because we didn't have the housing bubble here, we don't have the mortgage related things that went along with the housing bubble."

What it could affect, Allen says, are 401K plans, as AIG's stock plunges.

"At one point their stock was trading at over $70 a share and now they're hovering at $2.40, so anyone who happened to hold AIG stock in their 401K plan obviously has felt the impact of that," said Allen.

So what made the federal government step in and save AIG over others like Lehman Brothers?

CEO of Heartland Security Insurance Group, Billy Hibbs Jr., says AIG was tied to a large number of money market funds.

"These managers of these money market funds woke up to the possibility that all of these people that had their money in money market funds, which most of us would assume would be the safest of investments now may not be able to return people's dollar for dollar back to them and I think the federal government saw that. They were very concerned this could set off not only a national panic but a world-wide panic and to avert it they felt like they had to step in."

Not to mention that AIG has a trillion dollars in assets, and is a huge global player, operating in 131 countries.

"Insurance, securities, money market accounts, China. They're such an important component to what's going on in a global economy that the federal government couldn't just allow them to shut down operations," said Hibbs.

Hibbs adds that because AIG owns more than a dozen companies, you could have stock in them and not even know it. If you have questions or need more information, you're advised to see your insurance agent or broker.

Courtney Lane, reporting. clane@kltv.com