A slew of ratings cuts on American International Group Inc. Monday included its mortgage insurance business, one of only two in the sector that had retained AA grades from all three major rating agencies.

The fate of a small subsidiary like United Guaranty Corp. in Greensboro, N.C., is vastly overshadowed by the systemic threat posed by the parent's potential collapse after being devastated by mortgage-related losses. AIG reportedly was hunting for $70 billion or more of funding, without which it might have to file for bankruptcy protection.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.