AIG Insurance Subsidiaries Are Secure,
NAIC Tells Congress
October 7, 2008
New York's insurance regulator told Congress Tuesday how state insurance regulators nationwide have acted to ensure the solvency of the American International Group (AIG) insurance subsidiaries and protect policyholders.
N.Y. State Insurance Superintendent Eric Dinallo appeared before the U.S. House Committee on Oversight and Government Reform at a hearing October 7 titled, “The Causes and Effects of the AIG Bailout."
“The insurance companies . . . are solvent and have the funds to pay any policyholder claims,” he said. “AIG’s problems came from its parent company and from its non-insurance operations, which are not regulated by New York or any other state.”
AIG owns 71 U.S.-based insurance companies and 176 other financial services companies, including non-U.S. insurers. Only AIG’s U.S. insurance subsidiaries are regulated by state insurance regulators. AIG’s holding company, by its own choice, is regulated by the U.S. Office of Thrift Supervision, which oversees savings and loan associations.
Dinallo's comments were seconded by Sandy Praeger, Kansas Insurance Commissioner and president of the National Association of Insurance Commissioners (NAIC).
“Insurance regulators from every state — and especially those in New York and Pennsylvania, who oversee many AIG insurance subsidiaries — have been involved in every step of resolving AIG’s holding company problems,” Praeger said.
“Some insurance lobbyists hope to politicize and mislead policymakers by suggesting AIG’s problems are a result of state insurance supervision, and could have been averted by federal oversight,” Praeger said.
“On the contrary, conservative state regulation ensured that while the federally regulated holding company was failing, the insurance businesses were appropriately capitalized and the interests of policyholders were placed ahead of shareholders.”
Praeger’s comments were submitted via a letter to committee chairman Henry Waxman (D-Calif.) and ranking member Tom Davis (R-Va.) and circulated to members of the House Oversight Committee and the House Financial Services Committee and others.
For more information on related topics, visit the following:
