The mess at AIG may be getting worse. According to Reuters, on Wednesday, the state of Florida ordered American International Group Inc.:
“to turn over information about the company’s previously disclosed accounting misrepresentations or possibly be suspended from doing business in the state. The Office of Insurance Regulation order also requires AIG and its 43 units operating in the state to name and remove any culpable parties responsible for misrepresentations made on the insurer’s financial statements.”
Among other lines, AIG is one of the largest writers of workers comp in the state, with an estimated $200 million in premiums (plus claims administrative responsibilities for large self-insured risks). AIG also administers managed care programs throughout the state through its HealthDirect subsidiary. It is unclear from the report if there would be any impact on either the TPA or managed care programs.
According to Reuters;
“The Florida order also requires AIG to file by July 1 “true and correct” financial statements for the years of 2000 through 2005 for all AIG entities licensed in Florida. The company has said it expects to file its 10-K annual report with securities regulators by the end of May. If AIG does not comply with Florida’s order, the state said it will suspend the insurer, among other potential actions.”
What does this mean for you?
This is serious. It indicates a lack of faith in the veracity of AIG’s financial statements, and possibly concern about its finances. No one is suggesting, even remotely, that AIG is in financial difficulty. However, given how fast Kemper sank, and the very few indicators before their demise, one would be well-served to watch this developing situation closely.
May
20
