Edward Liddy, the new chief executive of American International Group Inc., today assured insurance commissioners that AIG’s insurance units are sound.
Liddy spoke at a closed briefing here at the fall meeting of the National Association of Insurance Commissioners, Kansas City Mo.
Liddy said in an interview after the briefing that the AIG insurance units are “absolutely safe and extremely well capitalized.”
An asset sale plan is in the works, and AIG will make the plan public “as soon as we can,” Liddy said.
Liddy declined to comment on whether the insurance or leasing units would be sold and whether there has been an uptick in surrender activity.
NAIC President Sandy Praeger, the Kansas insurance commissioner, said in an interview after the briefing that the briefing had given her the assurance that the AIG insurance units are safe.
Management will decide which units to sell, and the only changes policyholders will notice will be new company names on their contracts, Praeger said.
There was no indication given during the briefing that there has been an increase in the number of AIG insurance contract surrenders or cancellations, Praeger said.
Pennsylvania Insurance Commissioner Joel Ario said the balance sheets of AIG’s insurance units have not changed.
“It is a victory for state insurance regulation, because the strength of those operations had given federal officials the confidence that a solution should be developed for the company,” Ario said.
Today, the AIG insurance companies are some of AIG’s most valuable units, Ario said.
Ario said he already has gotten a number of inquiries about the possibility that AIG might sell insurance company units.
“If there is an orderly disposition, competition for those companies [insurance units] will be fierce,” Ario predicted.
Ario declined comment on whether AIG is facing an increasing number of policy cancellations and surrenders.
State lawmakers at the NAIC meeting received their own private briefing on the AIG situation.
Lawmakers wanted to know whether their constituents’ AIG contracts would be safe, and whether fears about the companies’ soundness would trigger a “run on the bank,” according to someone familiar with went on during the briefing.
The briefers assured the lawmakers that the AIG insurance companies are sound, the source said.