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| ALDOI Commissioner Ridling Reinforces Message of Patience |
| 9/23/2008 |
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"The Alabama Department of Insurance wants to continue to assure Alabama
citizens with AIG policies that the companies writing their policies are
financially sound. The financial standings of the companies should not motivate
anyone to change their policy.”
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| Commissioner Ridling also warned the state’s
insurance sales producers to not use underhanded tactics to invoke fear as
means to lure a consumer to switch policies. |
| “We expect the highest level of integrity from
the men and women who market products to Alabama families. And we will enforce
it,” he said. |
| Commissioner Ridling reinforced the fact that
AIG’s financial problems are with the holding company, which is not an
insurance company. The underlying subsidiaries – the insurance companies – are
subject to state financial solvency laws. All are solvent and paying claims. |
| “The companies have continued to meet their
obligations,” Commissioner Ridling said. “If these companies were not, then
they would be placed into receivership. That hasn’t happened." |
| “We encourage any Alabama citizen with a question
regarding this issue – or any insurance related issue – to contact us. We’ll do
our best to provide answers to your questions.” |
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AIG Consumer FAQ
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| 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 regulators doing to make sure AIG insurance companies
can continue to pay claims? |
| The Alabama Department of Insurance and
regulators from the other states 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. |
| I own an AIG American General fixed annuity. Is that protected
by state insurance solvency standards in the same way that insurance policies
are? |
| Yes. Fixed annuities are considered a type of
life insurance, and as such are protected by the same solvency and guaranty
framework as traditional life insurance. If at some point in the future AIG
insurance companies or their assets and blocks of business are sold, fixed
annuity-holders should experience no changes to the way their policies are
administered -- other than the fact that their correspondence may come from a
different company. This is not unique to AIG; insurance companies are bought
and sold everyday. Your benefits as defined in the original annuity contract
remain the same in a sale. |
| How can I check on the financial status of a specific AIG
insurance subsidiary? |
| You can search for each individual AIG subsidiary
in the National Association of Insurance Commissioners'
Consumer Information Source
(CIS). Here you will find financial information specific to the company as well
as complaint data and licensing information. |
| Who do I call if I have questions about my AIG policy? |
| Contact the Alabama Department of Insurance at
334-269-3550. The Department has a staff of consumer specialists prepared to
answer your questions. |
