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Insurance Officials: Policies Are Safe

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Sep 17, 2008 6:34 am US/Mountain

Insurance Officials: Policies Are Safe

Reporting
Shaun Boyd
DENVER (CBS4) ― Colorado's commissioner of insurance moved to quickly assure policy holders Tuesday as the Federal Reserve put up $85 billion to bailout AIG. AIG has 41 insurance companies that are allowed to do business in Colorado.

"We are very comfortable saying to the public in Colorado that your policies are safe," said Marcy Morrison, the commissioner of insurance.

Morrison said the AIG problem is with its holding company, not the insurance subsidiaries. State regulations prevent the parent company from reaching into the assets of the subsidiaries.

The Rocky Mountain Insurance Information Association said the AIG bailout is still a wake-up call. The group urged consumers to check their company's financial stability with independent rating agencies.

"It's significant for insurance consumers to realize their companies ability to balance their profit margins and hold claim reserves so they can pay claims when you have a Hurricane Ike or Colorado wildfire or financial upheaval," said Carole Walker of the Rocky Mountain Insurance Information Association.

Every state has a safety net if a company fails. Insurers pay into a so-called guaranty fund that covers claims if a company becomes insolvent.

Additional Resources: 

Understanding Insurance Ratings

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