Easier said than done

As we reported recently, clients are understandably concerned that low insurance company market valuations will translate to claims-paying trouble. Not so, says Thomas Hampton, commissioner for the Department of Insurance, Securities and Banking. Take AIG, for instance.

"The insurance aspects of AIG are sound financially, and the products it's selling are sound," he tells Kiplinger.

Customers with insurance or annuities from Hartford and Genworth started to worry when those companies' share prices plummeted a few months ago, according to the story. Meanwhile, Penn Treaty's long-term-care insurance business has been taken over by state regulators, and Conseco's has been placed in a separate trust because of its financial problems.

Although many insurers have been downgraded by the ratings agencies, the magazine thinks they're still in good shape. But even when an insurer's ratings are cause for concern, finding a replacement policy may be too expensive -- or even impossible given the current market.

Best plan of action? Don't overreact. Yeah, when has that ever been a problem?

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