N.Y. Times says, that the real systemic risk in the case of a failure of AIG is:
In the United States, A.I.G. has more than 375 million policies with a face value of $19 trillion.
If policyholders lost faith in A.I.G. and rushed to cash in their policies all at once, the entire insurance industry could falter.
Even though A.I.G.’s insurance business is regulated by states, there probably would not be enough money to pay out to consumers from what’s known as a guarantee fund. Other regulated insurance companies, which have been weakened by credit losses, would be required to pay money into the fund to cover the shortfall, weakening them further and in some cases bankrupting them.
Duck and Cover
Just to be aware … even if we have sunshine (recovery), rain fall is guaranteed for SOME TIME (market not near the ultimate low)