During Uncertain Times, Making Informed Financial Choices are More Important Than Ever
Before acting hastily, consumers need to know the facts. This page information designed specifically to address the concerns of AIG consumers.

AIG just posted a $24.5 billion loss and the government is bailing them out again. What does that mean for insurance consumers with AIG policies? AIG is an international financial holding company with businesses ranging from aircraft leasing through investment services through insurance. The policy you hold is written by an insurance company that is an operating subsidiary of AIG. Those insurance companies are financially solvent. Insurers are subject to conservative financial standards required by state regulators, and these standards are intended to allow insurers to weather times of financial distress. State insurance regulators and federal regulators, in cooperation with the new management of AIG, are taking steps to make sure that insurance customers of AIG subsidiaries remain protected.

In short, yes. The AIG affiliated insurance companies are financially solvent and able to pay claims. The financial issues facing the AIG Holding Company are occurring because of investments in risky mortgage-backed securities initiated by AIG financial products companies. Continued loss reports are due to those same investments and the newly announced government funding is primarily directed at continued losses from those same investments.

State insurance regulators are closely monitoring the financial condition of the AIG affiliated insurance companies and are reviewing any activity at the parent company that impacts insurance company assets. Any significant transaction impacting an AIG insurance company, including sale of the company, is subject to state regulator approval. If AIG can line up a buyer for its insurance assets, state regulators are ready to approve any appropriate transaction on a coordinated basis.

Due to general economic conditions, almost everyone is losing money, including AIG and other insurance companies. When the government stepped in to assist AIG, the assumption was that the AIG Holding Company could sell its valuable insurance operating subsidiaries to raise funds to pay back the loan. Unfortunately, the credit market was and continues to be basically frozen, and no sales have taken place.

State regulators have a variety of tools available if it appears that an insurer is not going to be able to fulfill its promises to policyholders. A state regulator can take over management of an insurer through conservation or rehabilitation. Even if liquidation of an insurance company is necessary, policyholder claims will generally be paid either by the insurance company or by a guaranty fund, which all states have in place to provide coverage to policyholders. This protection applies to direct business written by authorized licensed insurers. For information on Michigan's guaranty funds, visit: Michigan Property and Casualty Guaranty Association: http://www.mpcga.comand Michigan Life & Health Insurance Guaranty Association: http://www.milifega.org/links.cfm.

Your policies are safe. AIG's insurance companies are solvent and able to honor policyholders' claims. The Michigan Office of Financial and Insurance Regulation (OFIR) will continue to closely monitor the situation to ensure policyholders are protected and that there will continue to be sufficient assets to pay claims.

Yes. Fixed annuities are considered a type of life insurance, and as such are protected by the same solvency and guaranty framework as traditional life insurance. If at some point in the future AIG insurance companies or their assets and blocks of business are sold, fixed annuity-holders should experience no changes to the way their policies are administered -- other than the fact that their correspondence may come from a different company. This is not unique to AIG; insurance companies are bought and sold everyday. Your benefits as defined in the original annuity contract remain the same in a sale.

As stated above, the AIG insurance companies are solvent so your policies are not in jeopardy. Whether you should cash in your insurance policy or switch insurance to another insurer is, as always, a personal decision. Please be aware that some policies may contain surrender charges and/or cancellation penalties. Contact the Michigan Office of Financial and Insurance Regulation (OFIR) toll-free at 877-999-6442 to find out all the information your agent or broker should give you before you make a decision. Talk to your financial adviser before making any decisions. If you have any insurance policy with an AIG company and someone tells you to replace it because of the troubles at AIG's parent company or supposed trouble at the insurance company, please contact OFIR.

Yes, in order for your coverage with AIG to continue, you will need to pay the insurance premiums. Failure to pay your premiums can result in the termination of your insurance policies by the insurance company.

Contact the Michigan Office of Financial and Insurance Regulation (OFIR) toll-free at 877-999-6442.

What can I do if I am having difficulty getting through to AIG on the telephone? You may obtain information about filing a complaint by contacting the Michigan Office of Financial and Insurance Regulation (OFIR) toll-free at 877-999-6442 or by visiting: http://www.michigan.gov/dleg/0,1607,7-154-10555_12902_12907---,00.html.