AIG Press Release - September 16, 2008

Below is a copy of the text from an official statement issued by AIG today in response to the company’s current financial situation and the press coverage of that situation.

  

We know there have been an increasing number of negative media stories on the financial services front and the volatility of stock prices over the past several weeks.  As some background, American International Group, Inc.(AIG) is a leading global insurance and financial services organization with 74 million customers around the world.  As of June 30, 2008, assets were $10.5 trillion and shareholder’s equity was $78.09 billion.  In 2007, AIG had revenues of $110 billion.  In May 2008, AIG ranked 5th by assets in the Fortune 500 and 13th by revenues.  AIG continues to rank among the largest and strongest insurance and financial services companies in the world with ample resources to meets its obligations.  Having said this the company has undertaken a comprehensive review of all its businesses with an eye toward improving results, reducing AIG’s risk profile and protecting its capital base.  Chairman and CEO Robert Willumstad will report on AIG’s progress in late September.

The AIG American General life insurance companies, which are wholly owned subsidiaries of AIG, collectively rank among the largest life insurance providers in the country with top rankings in almost every category.In response to clients questions about their AIG American General policies we have responded, “Recent events do not change our continuing commitment to providing our clients with world-class coverage and the highest levels of service.  Insurance is a highly regulated industry.  All insurance companies doing business in the United States are regulated by state law, and required to maintain enough capital and surplus to satisfy their obligations to their policy holders.  The type and quantity of investments in which insurance companies may invest surplus capital is also limited by state law.  Although various companies owned by AIG - including the member insurers of AIG American General - are part of a larger insurance holding company system, each company is individually responsible for the liabilities associated with the business that it sells.  Each insurer is individually regulated by its state of domicile for compliance and financial solvency.  This includes ongoing financial reporting to the regulator and undergoing periodic financial examination. 

In addition, major transactions involving insurance companies are typically required to be approved by the responsible state regulator.  In accordance with the state requirements and the investment guidelines, AIG American General companies’ general accounts are primarily invested in high quality investment grade fixed income securities (bonds).  The investment objective of the general accounts is to optimize yield, adjusting for credit risk, liquidity and liability characteristics.  State insurance regulations are substantial, designed to preserve and enhance the solvency of the general accounts and to assure that the contractual obligations to insurance clients are fulfilled.  These regulations, along with the conservative investment requirements, help to safeguard client assets.  It is important to note that the guarantees related to individual AIG American General life policies are backed by the general accounts of the respective issuing companies.  These general accounts support only the obligations of AIG American General life insurance companies and are not obligated to support other.

We continue to have over a trillion in assets, 79 BILLION in shareholder equity and the state regulators and ratings agencies are closely monitoring our every move.  Thank you for all your support, especially during this time.”

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