What if AIG is Your Insurer?

Businesses that have AIG as their business insurance carrier obviously have a number of questions regarding their business insurance. Will the policies pay off in case of a claim? What is happening to my premiums? Should I switch carriers?

AIG garnered some pretty bad press this week with the revelation that executives and employees had enjoyed a $440,000 spa retreat during the same week the company was bailed out by the New York Federal Reserve--a fact that President Bush found "despicable." In addition, AIG will borrow another $37.8 billion for its life division and has already spent $61 billion of the initial loan. But, "despicable" business decisions, and loans to life insurance units, in a company as large as AIG, do not invalidate policies or create insolvent insurers at the state level. AIG is a large holding company of upwards of 71 different insurers operating at the state level.

If AIG is your business insurer, the state level AIG entity writing the policy is most likely solvent, able to pay claims, and insulated to some extent from the financial services division at the holding company level. Insurance Journal recently interviewed top state insurance commissioners. The video of those interviews is posted on the Insurance Journal website and I would encourage any business owner with concerns to watch the video. Also, a business owner can contact their state department of insurance and ask specific questions.