AIG to prepare detailed closure plan
View(s):The troubled American International Group (AIG) has to provide a detailed closure plan to tackle issues that would crop up after halting its operations, according to Insurance Board of Sri Lanka (IBSL) Chairperson Indrani Sugathadasa.
Ms. Sugathadsa told the Business Times that AIG’s Regional Director gave an assurance in a telephone conversation to submit this plan tomorrow or before the end of next week.
The Regional Director has informed that the salaries and due compensation of employees are being paid by the company till the halting of their operations in the island, she said. AIG also suspended selling policies with immediate effect. But it will maintain its office at the BOC Merchant Tower in Colombo 3 at least for 18 months to allow the lapsing of insurance policies of customers, she added.
The office will function for at least 18 months and employees were paid salaries and therefore settlement of insurance policies of customers does not arise, she added.
She disclosed that the Regional Director has informed that their company’s withdrawal from the country was a part of global policy of withdrawing from markets unviable for their strategic growth.
She noted that she informed him that the company should submit a written notice and a detailed action plan before halting their Sri Lanka operations and thereafter the board would take the necessary action.
Ms. Sugathadasa told Business Times that the AIG should submit an action plan including details of what they intend to do on insurance policies issued to local customers since the commencement of their operations in the country, settlements of claims, payment of compensation and other dues to employees, etc.
The 30 per cent compulsory reinsurance with National Insurance Trust Fund (NITF) was a major concern of the company as the local entity, along with other local insurance companies, fear the NITF doesn’t have enough funds to settle claims.