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American insurer AIG under Indian scrutiny
Published on Tue, Sep 16, 2008 at 17:34, Updated on Tue, Sep 16, 2008 at 18:16 in 
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Mumbai/ Hong Kong: India's insurance regulator is investigating whether American Insurance Group Inc's financial crisis will have any impact on its two Indian insurance joint ventures, a senior official said on Tuesday.
AIG is the minority partner with India's Tata Group in two ventures, holding 26 per cent each in Tata AIG Life Insurance Co Ltd and Tata AIG General Insurance Co Ltd.
"We are looking into the whole issue, assessing the impact, but as of now both the companies are complying with the solvency requirement," R Kannan, a board member of the Insurance Regulatory and Development Authority (IRDA) said.
The solvency margin is the extent to which an insurance company's assets exceed its liabilities. Indian regulations require a solvency margin of 150 per cent, and both of the joint ventures have margins well above that, he said.
Indian laws permit foreign firms to hold up to 26 per cent in insurance firms.
AIG was thrown a $20 billion funding lifeline by New York state officials on Monday but its longer-term survival depended on additional funding, which will be hard to get as the global financial sector meltdown spreads.
On Monday, investment bank Lehman Brothers filed for bankruptcy protection while its rival Merrill Lynch has agreed to be sold to Bank of America for $50 billion.
AIG downgraded
AIG, thrown a $20 billion lifeline by New York state officials, came under fresh pressure for survival on Tuesday as ratings agencies downgraded the insurer's debt and the global financial sector meltdown spread.
Asian markets, many of them closed for a holiday on Monday, tumbled as investors absorbed the weekend's dramatic events on Wall Street, where Lehman Brothers filed for bankruptcy protection and rival Merrill Lynch agreed to be sold to Bank of America for $50 billion.
Shares in AIG plunged nearly 61 per cent on Monday and the US Federal Reserve hired investment bank Morgan Stanley to review options for what was once the world's biggest insurer -- which has lost 92 per cent of its value this year -- a person familiar with the situation said on Monday.
British bank Barclays Plc, which over the weekend pulled out of rescue talks for Lehman, was reported by the Wall Street Journal to be in talks to buy large portions of Lehman.
"We do not comment on market rumours," said Angie Tang, a Barclays spokeswoman in Hong Kong.
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I feel it is safe to insure LIC of India than pvt companies like TATA AIG etc..
It\'s just
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Don\'t agree these Indian rulers will quote the debacle and swidndle people\'s funds.Pl don\'t insure at all .enjoy what you
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This AIG Insurance matter is a of grave concern to the Indian public who have put their monies into TATA
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