As AIG's financial troubles seemed to subside Wednesday after the government's pledge of an $85 billion emergency loan to keep the insurer from collapsing, local insurance agents have spent much of the week taking calls from worried policyholders.
AIG is a major insurer in Tennessee and is one of the largest insurance companies in the world.
Some complained about delayed reassurances about the safety of AIG policies.
"Unfortunately, they weren't very prompt in getting anything out to customers,'' Lorrie Palmer, an agent with Holman & Holman in Springfield, said of AIG's efforts to reassure customers.
Palmer said she got about a dozen phone calls and e-mails from worried customers beginning Monday, when news broke that AIG might fail. The next day, she got a notice from AIG assuring customers of the safety of its insurance policies.
One customer complained that she was put on hold for 15 minutes Tuesday on AIG's automated telephone service before giving up.
"I was worried,'' said Bud Zander of Zander Insurance, a Nashville independent insurance agency that sells AIG life and property insurance. "Everyone was worried. You really couldn't get a straight answer from anybody."
Zander said he resorted to sending his customers faxes of news reports on Monday.
An AIG spokesman could not be reached Wednesday. AIG sells life insurance, including annuities, property and commercial lines in Tennessee. Plus, its American General Life and Accident Insurance Co. is based in Nashville, employs about 900 people and has assets of more than $9 billion.
On Wednesday, state Department of Commerce and Insurance Commissioner Leslie Newman issued a statement saying the state is confident that American General Life and Accident Insurance Co. "is fully capable of continuing to honor the claims and other obligations it has to its policyholders."
The announcement came after the state agency got somewhere between 75 and 100 phone calls from worried AIG customers and agents this week.
AIG and other insurance companies have separate insurance subsidiaries that are regulated by the states, which monitor capital levels to cover potential losses.
The financial troubles plaguing the AIG holding company, which has been stung by losses tied to the mortgage market, don't affect the insurance company's subsidiaries, state regulators said.
State gives reassurance"The Department of Insurance is going to make sure they can do everything to protect the interests of policy-holders," assistant commissioner Larry Knight said.
Plus, the state has two guaranty associations that cover losses if an insurance company is left with more liabilities than assets.
The Tennessee Life and Health Guaranty Association covers up to $100,000 of the value of fixed annuities, $100,000 for the cash value of life insurance and up to $300,000 in death benefits, according to Dan Elrod, an attorney at Miller & Martin and administrator of the association.
Variable annuities are not covered because those are investments that fluctuate with the value of the underlying securities.
The Tennessee Insurance Guaranty Association, which covers losses in commercial lines, property and workers' compensation, covers up to $100,000 in losses. Workers' compensation insurance has no cap, according to David Broemel, the executive secretary of the group.
"From an insurance side, there's no need to have significant worries," said Brad Butler of The Butler Co. in Nashville, president of the independent agents trade group Professional Insurance Agents of Tennessee.
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