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News Release

New Jersey Department of
Banking and Insurance


Commissioner Steven M. Goldman

For Immediate Release:
October 1, 2008

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064


DOBI Commissioner Goldman Says AIG’s New Jersey Subsidiary is Sound

TRENTON – New Jersey Department of Banking and Insurance Commissioner Steven M. Goldman today assured American International Group’s (AIG) policyholders here that the company’s local subsidiary is financially sound, with substantially more in assets than they need to pay all valid present and projected claims.
 
"AIG’s auto insurance subsidiary in New Jersey, American International Insurance of New Jersey is well capitalized and well able to meet its claims,” said Goldman. “I urge policyholders not to make any rash decisions if you have a policy issued by an AIG insurance company."

American International Insurance of New Jersey, AIG’s sole subsidiary in New Jersey, has about 76,000 auto insurance customers and billed about $80 million in premiums in 2007.
 
Goldman urged consumers to make the important distinction between the financially-troubled AIG parent company, which is not regulated by the states and therefore not held to the same investment, accounting and capital adequacy standards, and the state-regulated insurance subsidiaries, which are solvent and able to pay their obligations.  

Goldman further stated that calls for a national insurance regulator to replace state regulators in the wake of AIG’s federal bailout are unnecessary.

“The problems that have arisen are with the holding company, which is federally regulated and not an insurance company,” he said. “The state-regulated subsidiaries are solvent and doing quite well. State insurance regulators have been doing a better job in regulating the companies under their jurisdiction and should be allowed to continue to do their jobs.”
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AIG Frequently Asked Questions and Answers

Question:
Is AIG going bankrupt?

Answer: AIG is an international financial holding company with numerous businesses. Your insurance and annuity policies are written by AIG's insurance companies. Those companies are financially strong and their assets are protected by state regulators.
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Question: Are the insurance and annuity policies purchased from AIG safe or am I going to lose my money?
Answer: Your policies are safe. AIG's insurance companies are financially strong and fully able to honor all policyholders' claims. The NJ Department of Banking and Insurance will continue to closely monitor the situation to ensure policyholders are protected and that there will continue to be sufficient assets to pay claims.
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Question: Should I cash in my insurance and annuity policies and purchase insurance from another insurer?
Answer: As stated above, the AIG insurance companies are financially strong 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 NJ Department of Banking and Insurance toll-free hotline 1-800-446-7467 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 an 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, call the NJ Department of Banking and Insurance toll-free hotline — 1-800-446-7467.

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Question: Should I pay the insurance premium bill that I just received from AIG?
Answer: 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.

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Question: Would my insurance and annuity policies have been protected had AIG been declared insolvent and ordered to be liquidated by a court?
Answer: There are guaranty funds in place in all states which act as a safety net in the event an insurer becomes insolvent. You may obtain information about the state insurance guaranty funds by visiting the following link: www.state.nj.us/dobi/finesolv.htm

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Question: I heard the government may take over AIG. What are state regulators doing to make sure AIG insurance companies will continue to be able to pay claims?
Answer: The agreement between AIG and the Federal Reserve protects the assets of the insurance companies so they will be available to pay claims. Any significant transaction affecting an AIG insurance company will need approval from state regulators.

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Question: What can I do if I am having difficulty getting through to AIG on the telephone?
Answer: You may obtain information about filing a complaint with the NJ Department of Banking and Insurance by calling the toll-free hotline 1-800-446-7467.  


 
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New Jersey Department of Banking and Insurance