AIG’S CHINA UNIT FACES POLICY CANCELLATIONS

Meanwhile American International Assurance (AIA) Shanghai, the China-based life insurance arm of AIG has received a number of applications from policy holders wanting cancellations. The cancellations are a result of customers’ nervousness over the parlous state of AIG following the government bailout and AIA’s units in Singapore and Hong Kong have already suffered large-scale cancellations of policies. AIA had released a statement on September 16th, following the announcement of AIG’s bailout, to assure policyholders that the group’s life insurance and Asian operations were adequately capitalised to meet its obligations to policyholders, however this has done little to persuade a number of customers not to withdraw their investments.