Chidambaram allays fears over Tata-AIG

18 September 2008

Mumbai: Tata AIG General Insurance Company Limited and tat AG Life Insurance, the troubled American International Group's insurance joint ventures with the Tata Group, has enough financial capacity to meet its obligations to policyholders, though the American group's financial woes would have a bearing on its Indian operations, finance minister P Chidambaram said.

The Tata Group has assured insurance regulator IRDA that all Tata-AIG payment obligations will be met, Chidambaram said.

He said the Tatas own 74 per cent each of the joint ventures and the group has assured the Insurance Regulatory and Development Authority (IRDA), that the joint ventures are not facing any solvency problem.

''The insurance regulator's chairman has spoken to the Tatas and has been assured that all payment obligations of Tata-AIG will be made,'' Chidambaram said.

He also said the Tata-AIG joint ventures in India should not be compared with that of Lehman Brothers.

Policy holders need not worry as the financial condition of AIG's insurance subsidiaries in India is stable, and they can meet all the liabilities arising out of the claims from the policy holders, the company is reported to have told the insurance regulator.