I must admit that like a number of probably better informed lawyers linked here, I cannot think of a statutory authority that allows the Federal Reserve Bank to "take over" (in effect, nationalize) AIG Insurance. The Fed clearly has that authority with failing banks, but insurance companies are not banks, much less members of the Federal Reserve system. I can think of no law that allows the Fed to buy an insurance company, with or without its consent.
Is there some act of Congress that allows this? ERISA, the series of federal acts most directly touching on a very limited sector of the insurance industry (health insurance, which isn't what AIG was all about) is not an oversight statute, nor does it grant any power to the Federal Reserve.
Mind you that, unlike some who believe that the Fed's bailout/seizure of AIG is (or more fairly, should be) constitutionally impermissible, I recognize that battle was lost decades ago, in the Supreme Court's decisions addressing the constitutionality of the New Deal. But there are limits even there. The only clear holding of Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952) (a muddled mess of concurring opinions) is that even the President (to say nothing of the Federal Reserve), cannot seize private property, even in wartime, absent specific authority from Congress or absent an enumerated power in the Article II of the Constitution.
So I'm left baffled. The only legal argument I can craft (apart from the realist argument of "because we're the Federal Reserve, we're the government, so fuck it, let's do it") is that this must be some emergency action. But we were in an emergency in 1952, fighting a war against North Korea and China, when Truman tried to seize the steel mills leading to the Youngstown decision. An economic emergency doesn't trump a war. So I'm left with war. And for this action to be legitimate, for Ben Bernanke to have power that Harry Truman lacked, it must be because the war on terror is a more serious war than the Korean War. If the Fed's takeover is legal, as much as I hate to say it, the constitutional principle that justifies this bailout is:
They ought to write an amendment.