AIG's insurance companies are financially sound, with substantially more in assets than they need to pay all valid present and projected claims, the Massachusetts Commissioner of Insurance has reassured state policyholders. 

"Don't make any rash decisions if you have a policy issued by an AIG insurance company," Commissioner Nonnie S. Burnes said.  “Making sure insurance companies are solvent and able to pay every valid claim is my number one job, and the AIG insurance companies are strong and solvent."

The commissioner warns of outside companies advising the public to replace policies because of the troubles at AIG's parent company. Replacing or liquidating a life insurance policy or an annuity can have heavy hidden costs and tax consequences, she said.

Commissioner Burnes explained that the trouble with AIG is largely with AIG's non-insurance parent company, which is not regulated by the states and therefore not held to the same investment, accounting and capital adequacy standards as its state-regulated insurance subsidiaries. The insurance subsidiaries are solvent at this time and able to pay their obligations.