(Washington, DC) — In the face of continuing media and consumer confusion regarding American International Group Inc. (AIG) and the role of state insurance regulators, the DC Department of Insurance, Securities and Banking (DISB) and the National Association of Insurance Commissioners (NAIC), the organization of insurance regulators from the 50 states, the District of Columbia and the five US territories, urge caution and a closer examination of the facts.
“In uncertain times, making correctly informed financial decisions is more important than ever,” said DISB Commissioner Thomas E. Hampton. “This is especially true for AIG’s policyholders, where unsubstantiated information and misstatements in the media have led to unnecessary consumer frustration and fear.”
First and foremost, AIG is typically described as the world’s largest insurance company. In fact, it is a global financial services conglomerate that does business in 130 countries. AIG owns 176 other companies, in addition to 71 US state-regulated insurance subsidiaries.
“DISB, like other state insurance regulators, has been actively involved in the AIG situation to help ensure that consumers remain protected,” Hampton said. “Regardless of the failings at AIG’s holding-company level, its insurance subsidiaries have continued to fulfill their obligations to policyholders.”
This is why DISB is issuing an FAQ on its Web site to answer questions District consumers may have about AIG. Also, during April’s Financial Literacy Month, DISB staff will attend events around the city to discuss matters concerning financial services, in general, or AIG in particular.
Commissioner Hampton reiterated that “AIG’s insurance companies remain strong, in part because state regulation continues to wall them off from the high-risk activities engaged in by AIG financial products. The insurance industry—just like the rest of the global economy—is facing challenges, but this only reinforces the need to be wary of changing a part of the regulatory system proven effective.”
“DISB joins other state insurance regulators in recognizing that federal action is needed to address systemic risk within the nation’s financial marketplace,” Hampton added. “This shared objective calls for a collaborative approach that does not compromise one company within the enterprise for the benefit of another.”