Life insurers have issued large private loans to AI-related companies; if those loans default, insurer failures could trigger state guaranty-fund assessments that ultimately burden other policyholders or state taxpayers.

A proposed fix is to change bankruptcy law so private-equity owners remain liable for the debts of the insurers they control, removing the ability to walk away from losses and forcing more cautious lending.

Such a reform would reduce the risk of an AI-related bailout through private accountability rather than new spending, but it faces political resistance from private-equity interests that fund campaigns.

The American Prospect had an excellent piece  describing how taxpayers could end up being on the hook for bailing out bad loans to the AI industry even with no new actions by Congress or state legislatures. The mechanism is that life insurance companies have issued hundreds of billions of dollars of private loans to AI-related companies. (We can only speculate on the amount........

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