SINGAPORE - Singapore's central bank said Tuesday the local unit of embattled insurance giant American International Group Inc. has sufficient assets to meet its liabilities as nervous policyholders lined up outside the company's offices.
AIA Singapore, a subsidiary of AIG, is required by Singapore law to maintain enough funds to cover its polices, and these funds must be separate from its parent company, the bank said. "AIA must maintain sufficient assets to meet all it liabilities to policyholders," the central bank, known as the Monetary Authority of Singapore, said in a statement. "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."
AIG, the world's largest insurer, has been hit by a wave of downgrades by credit-rating agencies worried that the deteriorating housing market is further undermining the company's battered finances.
All three major agencies _ Standard & Poor's, Moody's Investors Services and Fitch Ratings _ cut AIG's ratings at least two notches Monday. While the new ratings are all still considered investment grade, the downgrades add to the pressure on AIG as it seeks billions of dollars to strengthen its balance sheet.
About 100 policyholders on Tuesday waited outside AIA offices in Singapore to check the status of their policies.
The bank called on policyholders to stick by the company, and said it was "monitoring the situation closely."
"Policyholders should not act hastily to terminate their insurance policies with AIA as they may suffer losses from premature termination," the bank said.
AIG Singapore, founded in 1931, has more than 2 million policies in force.
