AIG Consumer Information
In light of the recent news regarding the Federal Reserve’s decision to loan insurance giant AIG $85 billion in return for as much as 80% ownership of the company has raised a lot of questions amongst consumers. Because of the enormous size of AIG (likely the reason for the bailout) many of you may have insurance policies with them and are left left scratching your head as to the status of your insurance. Below is information from the National Association of Insurance Commissioners (NAIC) that should help. If you have specific questions, call your local state insurance office by clicking the link below.
AIG Consumer FAQ
I have an insurance policy with AIG. How does this impact me?
AIG is an international financial holding company with businesses ranging from aircraft leasing through investment services through insurance. The policy you hold is written by an insurance company that is an operating subsidiary of AIG. Those insurance companies are financially sound. State insurance regulators and federal regulators, in cooperation with the new management of AIG, are taking steps to make sure that insurance customers of AIG subsidiaries are protected.
Will the AIG insurance companies be able to pay claims?
In short, yes. The AIG affiliated insurance companies are financially solvent and able to pay claims. The financial issues facing AIG are occurring because of investments in risky mortgage-backed securities by the parent company. The Federal Reserve is basically extending a line of credit to the parent company to help it work through these issues.
What are state regulators doing to make sure AIG insurance companies can continue to pay claims?
State insurance regulators are closely monitoring the financial condition of the AIG affiliated insurance companies and are reviewing any activity at the parent company that impacts insurance company assets. Any significant transaction impacting an AIG insurance company, including sale of the company, is subject to state regulator approval.
What happens if AIG affiliated insurance companies get into financial trouble?
State regulators have a variety of tools available if it appears that an insurer is not going to be able to fulfill its promises to policyholders. Your state regulator can take over management of an insurer through conservation or rehabilitation. Even if liquidation of an insurance company is necessary, policyholder claims will generally be paid either by the insurance company or by a guaranty fund, which all states have in place to provide coverage to policyholders.
Who do I call if I have questions about my AIG policy?
Contact your state insurance regulator by clicking on your state on the NAIC’s map of state insurance department Web sites.
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