Last weekend AIG released information about the amounts and recipients of roughly $100 billion of its government loans from September to December 2008.  The utterly unreported surprise is that the staid, boring, heavily regulated insurance businesses managed to run up losses on securities lending requiring $44 billion of government support.  By way of contrast, the credit derivatives widely blamed for bringing down the world's financial system were consuming $27 billion of support; municipal investment agreements (essentially, deposits) made by municipalities with AIG Financial Products took another $12 billion, and maturing debt took $13 billion.  Perhaps a table will help:

Government support of AIG - Where Did The Money Go

Insurance  Divisions
Securities lending:                      		$44.0 billion

AIG Financial Products

Credit Derivatives - collateral           		$22.4
Credit Derivatrives - cash hedges          		5.0

Municipal Investment Agreements           		12.1
Maturing Debt                              		12.5

Total:                                    			$96.0

The recipients of payments for the securities lending is a Who's Who of global finance and reeks of systemic risk; here are the top names:

Barclays      				$7.0 billion   
Deutsche Bank   				6.4
BNP Paribas    				4.9
Goldman Sachs   				4.8
Bank of America 				4.5
HSBC       				3.3
Citigroup     				2.3(more)

Why so little attention paid to the losses in the regulated side of the business? 

My guess is that we are seeing an unholy alliance of insurance regulators 
who would rather point the finger at unregulated credit derivatives, people 
who always favor more regulation as the answer to everything, and public 
officials who don't want people to wonder whether other staid, boring 
insurance companies that don't do credit derivatives might still have huge 
problems in their core portfolios.

We don't need more regulation. We need more competent people to enforce the regulations we already have.