The American International Group, which has joint ventures for life and general insurance businesses with the Tata Group in India, on Wednesday said its Asian businesses remained adequately capitalised and were fully capable of meeting their obligations to policyholders.
In a statement issued soon after the announcement of the Federal Reserve Board, which said the Federal Reserve Bank of New York would provide a two-year, $85-billion secured revolving credit facility to meet its liquidity needs, AIG said its Asian operations continued to function normally.
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The statement was aimed at calming policyholders' sentiments, some of whom were jittery due to developments in the United States.
"AIG continues to pursue alternatives to increase short-term liquidity in the parent company. Those plans do not include any effort to reduce the capital of any of its subsidiaries or to tap into Asian operations for liquidity," it said.
Apart from policyholders, regulators like the Insurance Regulatory and Development Authority had asked AIG and its Indian partner, the Tata Group, to submit reports about the functioning of the company, though they maintained that at the end of March 2008, the life and the general insurance ventures had satisfactory solvency margins, which are adequate to meet their liabilities.
Analysts had expressed concern that the recent crisis would impact the growth plans of the two insurance companies.
A television channel said Tata AIG Life and Tata AIG General had nearly Rs 1,500 crore in capital and quoted an unidentified AIG source as saying that Tata AIG policyholders and employees were safe and secure.
Solvency in life insurance was 305 per cent and in general insurance was 176 per cent, it said. The Irda guidelines require insurance business to maintain 150 per cent solvency margins.
Tata-AIG Life Insurance posted a 69 per cent rise in the first-year premium to Rs 260.63 crore during April-June, while Tata-AIG General's gross underwritten premium grew 23.58 per cent to Rs 368.46 crore.
In addition to the interests in the two insurance ventures, AIG also has a controlling stake in a consumer finance unit, Vivek Hire and Purchase, a private equity arm and an asset management company, AIG Global AMC. It also has a BPO in India and is present in the aircraft leasing segment.
