I congratulate Mr. Tulupman for the professional way in which he deals with this matter. He is even prepared to engage the Online Citizen directly and use this channel to communicate to AIA’s policyholders.

I believe that AIA Singapore is financially sound, and that the policyholders do not have to worry about this matter. The protection to Singapore policyholders comes from a separate Singapore fund.

Now that AIG is taken over by the US Government, even the risk of failure becomes at the corporate level becomes quite small.

Thank you AIG. Thank you Peter for the reassurance. I too received an assurance letter from your counterpart in Hong Kong with regard to the MPF as well as on active policies. Good work.

1) Tan Kin Lian on September 29th, 2008 8.59 am

———————-

Mr Tan, while i regard you as a person with much experience, a believe is still just a believe is it not?

thank you Mr Tan for helping us to get the assurance in this insurance crisis. Mr Tan’s commitment to try and alleviate our problems is commendable when you consider that he is doing this without a salary

Hi Black is White (#3)

You are right. A belief is just a belief and can be wrong. You decide what is best for yourself. Good luck.

Has MAS move in to audit AIA Singapore to verify that everything is alright?

Statements of re-assurance doesn’t help without concrete evidence backing it up.

What about unit trusts which are guaranteed by AIG and/or subsidiaries wholly owned by AIG? I have invested some money in a DBS distributed fund called Reach Capital Fund. DBS informed me only a week ago that it was guaranteed by AIG and that if AIG becomes insolvent, the fund will also be insolvent.
Would appreciate Mr Peter Tulupman’s advice on this.

I always thought Singaporeans are too naive when dealing with foreign companies and this prove it once again. What do you expect someone from Media Relations to say? Mr. Peter Tulupman might not even have a job by Christmas.

There is an ancient saying – “There is no smoke without fire”.

1. If AIG is so financially strong, why did it need US Gov protection or the 2 yr US$85bn loan? You can give lots of reasons, but if it is sound, why didn’t the rating agencies buy that?

One of the biggest issues for AIG – and the source of its collapse into government ownership – is the US$440bn of insurance it has provided on complex debt products, a.k.a, CDSs on the CDOs. In addition to these CDS contracts, AIG is a counterparty to billions of dollars worth of other derivatives, such as interest rate swaps.

2. The letter is basically report partial truth: New York and Pennsylvania are where the housing problems are. Smart fellow. Let’s see the letters from ALL AIG subsidiaries business in US.

3. Even if AIG survives, it is so badly depleted of resources, how much commitment can it make on its future non-guaranteed payouts for its annuities, pension funds, endowments and whole life plans, various asset classes investments.

Last but not least, for Singapore’s AIG, their CEO, Mr. Mark O’Dell, has resigned to move on to Taiwan. Another smart man.

The full devastasting impact of AIG unwinding will only been seen 1 or 2 years down the road. For readers who “believed” that AIG is financially sound, can you state a timeframe? It is irresponsible to generalise a situation when the statement is meant for now, maybe this month. Are you going to put your name down for next year?

Hi Truth Seeker (#8)

AIA Singapore is financially strong because it has a separate fund for its policyholders.

I think that AIG will be all right at the corporate level, due to the Government funding. However, if they are not, they are likely to sell AIA to another investor. So, the policyholders of AIA should be quite well protected.

Mr Tan,

Thank you for your reply. You have a good point of course.

I am aware of AIA’s separate life fund but like many investors I am not certain to what extent their investments (through their investment arm for their ILPs) are exposed to Global AIG funds (which are in turn managed by AIG). Also AIG has changed a few CEOs within a year – so much for leadership.

In good times, AIG’s name was marketed to indicate how big and stable it is; in trying times, AIG’s subsidiaries tell a different story and how they are isolated and not related to AIG. That’s double standard and misleading. An insurer with only $24bn in assets .. even NTUC Income’s financial strength is stronger than AIA’s.

Like Asialife, CGU, John Hancock, Keppel Insurance, and other failed enterprises that come and go before, AIA may be sold. To what extent that AIA’s potential new buyer would want to keep AIA’s existing liabilities, I can’t say for sure.

There is a couple of Chinese saying:
a. Upper beam crooked, lower beam bent (I refer to AIG’s management and leadership)
b. Ten feet of ice, not due to one night’s snow. (I refer to AIG’s financial woes)

Forgive me literal translation but I am sure you know what I mean.

Therefore, unlike you, I am in the other camp where I am skeptical and unconvinced of MAS’s and AIG’s “assurances”, where there are no transparency, details or timeframe given.

Tan Kin Lian (#9):

The only thing that can verify if AIA Singapore is safe is that the insurance fund is insulated sufficiently from the Credit Crunch. Whether the insurance fund is in Singapore or not is immaterial to probability of the insurance fund’s collapse as this is only linked to the composition of the insurance fund’s portfolio.

Tan Kin Lian (#9):

I also want to add the fact the funds must be in Singapore is only useful in the event that AIA collapse, MAS can still facilitate the processing of claims or transfer the management rights of the insurance fund to another insurer so that policyholders still have a functional insurance policy. This, however, has nothing to do with preventing the collapse of the insurance fund.

MAS said that AIA’s capital adequacy is more than 220%. From Capital adequacy of banks are typically less than 13%. How does AIA maintain more than 100% capital?

The jungle takes care of its own – look the mega AIG R & R expenses after getting the Bailout – NEVER LOOK AT AIG/AIA again!

Its interesting how some people would make comments which are groundless. 14)HAHAHA the R & R expenses were clarified later that goes to someone who doesnt read news and go ard like aunties in the wet market…