|OLYMPIA, Wash. – American International Group’s (AIG) financial troubles continue to fuel consumer frustration and fear here in Washington state and nationwide. Insurance Commissioner Mike Kreidler urges caution and a close examination of the facts. |
AIG is often erroneously described as the world’s largest insurance company. In fact, it is a global financial services conglomerate that does business in 130 countries. It owns 176 other companies in addition to 71 insurance companies. While the parent company (AIG) is regulated at the federal level, the insurance companies are regulated by the states where they’re based.
“Many consumers have contacted my office concerned about their AIG insurance policies,” said Kreidler. “I’ve assured them that AIG’s insurance companies have the money necessary to pay claims. Regardless of what happens to AIG, there’s a firewall in place to guard the assets of the insurance companies and protect policyholders.”Even though insurers’ financial conditions are primarily overseen by their home state, Kreidler still carefully watches the financial condition of all insurance companies doing business in Washington state to make sure they have the money to pay claims. If the financial condition of an insurance company takes a turn for the worse, there are several steps state insurance regulators take to prevent the collapse of the company. In the very unlikely event that an insurance company was ordered to liquidate, policyholders’ claims would be paid by one of Washington’s two guaranty associations. “The insurance companies owned by AIG remain strong, in part because state-based regulation continues to wall them off from the high-risk activities of their parent company,” added Kreidler. “Insurance commissioners across the country are continuing to keep a close eye on all of the insurance companies doing business in their states, especially during these uncertain economic times.”Policyholders with additional questions about their AIG-owned insurance companies should read our frequently asked questions and our fact sheet on financially troubled insurers.