MAS urges AIA policyholders not to terminate policies hastily

[High till Dry]

SINGAPORE : The Monetary Authority of Singapore (MAS) has urged AIA policyholders not to act hastily to terminate their insurance policies, as queues formed outside AIA's offices on Tuesday, with some clients seeking to end their policies.

AIA is a subsidiary of New York-based American International Group (AIG) - one of the world's largest insurers - which has been hit by the financial meltdown.

Some Singaporeans are concerned that AIG could be the next financial giant to fall after Lehman Brothers.

With regards to AIG, MAS said: "The value of these assets is not linked to AIA's or AIG's financial condition, but like all investments, their value may be affected by general market conditions."

The MAS assured the public that "AIA currently has sufficient assets in its insurance funds to meet its liabilities to policyholders".

It advised policyholders not to act hastily to terminate their insurance policies as they may suffer losses from the premature termination and lose insurance protection.

MAS explained that there are regulatory requirements, ensuring that all insurance companies maintain statutory insurance funds, including an investment-linked fund. This fund is segregated from its head office and other shareholders' funds.

Within these funds, insurance companies must maintain sufficient assets to meet all its liabilities to policyholders, which include participating policies and investment-linked policies.

MAS monitors the situation closely, and requires insurance companies in Singapore to manage their investment risks carefully.

There have been queues at AIA's offices in Singapore since Tuesday morning.

A few long-term AIA policyholders told Channel NewsAsia that they wanted to surrender their policies, despite incurring losses for premature termination.

Some waited for up to three hours to be attended by staff who were overwhelmed by requests since the office opened on Tuesday morning.

One policy holder said: "I just want to cash out the policy, and I have no intention of putting my money here anymore."

Another said: "I contemplated surrendering it a few years ago, so I guess it's about time."

A third noted: "AIG was mentioned in those reports, so we just wanted to make sure that whatever we have is going to be safe." - CNA/ms

 

[makapaaa]

if so, which "subsidiaries" does AIG get its USD20B from? And fancy paying the minister so much $ and they can tell u that they "dunno".

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Published September 16, 2008
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US FINANCIAL CRISIS
US storm won't hit AIA policyholders
It maintains separate insurance funds for policies
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By GENEVIEVE CUA
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(SINGAPORE) The troubles dogging the American International Group Inc (AIG), the US-based parent of life insurer AIA and non-life insurer American Home Assurance here, will not affect policy contracts, say the group's executives.
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News yesterday that AIG Inc is seeking US$40 billion from the Federal Reserve in short-term financing raised questions on the possible ripple effect on its Singapore units. The fresh capital is to stave off ratings downgrades, which could force AIG to post up to US$14.5 billion more in collateral, Reuters reported.
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The news agency added that a downgrade could also hurt the insurance business as some policies carry clauses that nullify a contract in the event of downgrades below a certain level. AIG has been hit by US$18 billion in losses from guarantees that it wrote on mortgage derivatives.
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In Singapore, BT understands that AIA, as with other insurers here, maintains separate insurance funds for policies. Any sub-prime losses that may be borne by AIG at the group level are understood to have no impact on Singapore policyholders.
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AHA president Kevin Goulding said that AHA here is one of AIG's premiere insurance operations in the region. 'Our capital adequacy ratio (CAR) stands at
176 per cent compared to the published CAR requirement per the (Monetary Authority of Singapore) of 120 per cent. In layman terms, this ratio demonstrates that we have sufficient capital in Singapore to pay our claims.'
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He added that it was premature to comment on potential downgrades. 'But at this juncture, we do not anticipate an impact on AHA's premiums. Our underwriting practices are at the heart of the AIG culture and remain unparalleled; they are one of the core competencies that differentiate us from our competitors.'
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MAS said that it is unable to comment on AIG Inc's position. 'As a Singapore registered insurer, (AIA Singapore) is required under the Insurance Act and regulations to maintain sufficient financial resources to meet all its liabilities to policyholders at all times.  AIA currently meets these regulatory requirements. MAS will continue to monitor the financial position of AIA,' it said.
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Last Friday, S&P placed its rating on AIG Inc and subsidiaries on 'CreditWatch with negative implications'. It said that it believes that AIG has 'sufficient capital and liquidity to meet its policyholder obligations and potential collateral requirements, which are significantly greater than the expected cash losses on mortgage-related assets'.
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But additional market value losses will place some strain on AIG's resources, said S&P. 'Given the movement in the share price, we now believe AIG's potential access to the capital market may be more restricted in the short term,' it said.
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[lifeafter41]

It's not their money, it's your money. Easier said then done.

 

[TeeKee]

It's not their money, it's your money. Easier said then done.

who says Singa Por Lians don't know how to manage their retirement funds?

 

[DerekLeung]

It's not their money, it's your money. Easier said then done.

Yeah man prudence is important in unsound times !

Keep your own money ! Cash out !

 

[suteerak1099]

its obvious that if they cash out, the company might eventually pull outta sg. ppl start losing jobs, n when that happens there's more trouble for the gahmen.

 

[zhihau]

its obvious that if they cash out, the company might eventually pull outta sg. ppl start losing jobs, n when that happens there's more trouble for the gahmen.

then more Singaporeans become jobless

 

[Cestbon]

If all people cash out, there is not enough cash in the bank. Actual money printed in the market is only 10% and 90% is just a figure/number or virtual money.

 

[suteerak1099]

then more Singaporeans become jobless

while the FTs continue to come in to flood our lands

 

[suteerak1099]

If all people cash out, there is not enough cash in the bank. Actual money printed in the market is only 10% and 90% is just a figure/number or virtual money.

no choice, then perhaps they start issuing "hellbank notes" - itd come in pretty handy anyway.

 

[Cestbon]

no choice, then perhaps they start issuing "hellbank notes" - itd come in pretty handy anyway.

Money will not run out.
Let say if you draw money from Bank A of course you going to put it in the bank right that Bank B but only people some will bring home. If Bank A run out of cash they will loan cash from Bank B to hand out the cash. As soon as cash run out from all the Banks the Hell GOD will come down to collect SOUL.
But this is very unlikely to happen because not many people choose to keep large cash in home.

 

[suteerak1099]

...... But this is very unlikely to happen because not many people choose to keep large cash in home.

correct me if i'm wrong, cos from the looks of things, when ppl start remitting overseas - be it for property/ biz, FTs remitting $ home... i reckon its a sign of our currency depreciating against some neighboring currencies.

 

[Cestbon]

correct me if i'm wrong, cos from the looks of things, when ppl start remitting overseas - be it for property/ biz, FTs remitting $ home... i reckon its a sign of our currency depreciating against some neighboring currencies.

Those PRC/Bangla/Malaysia remmit money home but the SG$ still remain in Singapore. They don't sent SG$, they only sent their RMB/RM/Ruppee home. Currency much depend on the economy and Goverment it sell. Goverment can control currency like selling more SG$ and buying eg, EURO/Yen/US$ will make SG$ lower compare to others market to make country as more competitive.
Or make SG$ buy buying back all the currency but this will need a lot of resources not many country can do that but I think Singapore can but not US is a bankrupt goverment because US have debt more than trillion of $$$.