State regulators from across the country say that the problems at parent company American International Group are unlikely to trickle down to affect its insurance operations that come under their regulatory supervision. The commissioners also maintain that conservative, state-based regulation has been responsible for keeping any issues in check.

“The underwriting affiliates today remain as sound and solvent as they were weeks ago,” said Thomas Sullivan, Connecticut’s insurance commissioner. “The enterprises that we as state regulators have direct supervision over are performing as well today as they were weeks ago. So that¹s a good story for consumers.”

Mississippi Insurance Commissioner Mike Chaney agrees. “All (of AIG’s) insurance companies are very solid and on solid ground,” he said, adding that “AIG is important to Mississippi. They write over $400 million in our state, and that does not include surplus lines.”

Scott Kipper, head of Oregon’s insurance Department, said individual AIG companies “were never ever in peril – they’re seen as the gold bricks in the vault of AIG that will enable the company to prosper eventually as they sell of good pieces to pay off that federal loan.” Sharon Clark, Kentucky’s top insurance regulator, said that insurers in her state “are solvent, able to meet their claims, the book of business goes on.” The loan to AIG’s parent company “was a federal decision but the impact it would have had worldwide would have been very significant, so the federal intervention was understandable,” she said.

State Regulators Confident (Insurance Journal 10/3/08)

October 7, 2008