We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Aig

Mr_Crunch
Posts: 99 Forumite


AIG in the USA is supposedly another contender to follow Lehman Brothers, having got itself knee-deep in CDOs. Does anyone know what happens here in UK if AIG were to go bust? I have an AIG UK Contents insurance policy and the documentation says that it is jointly underwritten by AIG UK & Fortis. In the event of failure of an insurance vendor does the policy continue to be underwritten, or get sold on, or what...?
It's new territory...Any experts out there??
It's new territory...Any experts out there??

0
Comments
-
You will be protected by the Financial Services Compensation Scheme. I'm not sure if the changes to the scheme in the wake of Northern Rock affect the situation for insurers, but at an absolute minimum you will be covered at the following levels:
- Compulsory insurance claims and policies (i.e. the Road Traffic Act element of motor insurance) are covered in full
- Other insurance claims or policies are covered in full for the first £2,000 then 90% of the balance.
0 -
Thanks. Yes I know that insurers have gone bust in the past, & that policyholders may lose their insurance as a result. But this is more complex, because it is an American parent with the UK subsidiary AIG UK being FSA-registered, & the policy is jointly underwritten with Fortis. Bearing those specific things in mind, does anybody else have any thoughts? Thanks.0
-
Uninsured but entitled to recover 100% of the first £2000 of the unexpired premium and 90% of any balance under the Financial Services Compensation Scheme.
That's for non-compulsory classes. Compulsory classes such as motor repay 100% without limit.0 -
All that matters is that the firm is FSA authorised. AIG UK is authorised by the FSA so you will be eligible for the FSCS should AIG go bust.
http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=565390 -
Thanks Raskazz, just saw your post about the FSCS. Of course....had forgotten that that would apply.0
-
Simultaneous posting.
Where a policy is underwritten by more than one insurer, it's a safe bet that the underwriting agency will be able to find another insurer to take over AIG's percentage. There would be an extra premium to pay but you would get it back from the FSCS.0 -
Ha! And thanks to you too, Greco. Seems like it should resolve, if it happens. Hopefully not this week, which has already been too long...0
-
Ha! And thanks to you too, Greco. Seems like it should resolve, if it happens. Hopefully not this week, which has already been too long...
If they do go bust then as Greco says, it is very likely that another insurer would simply buy AIG's 'book' of insurance business. So you shouldn't lose any sleep over it!0 -
-
They wouldn't actually be buying the book as much as stepping into AIG's shoes. Effectively it's a roll over arrangement of the sort that the major insurers offered brokers when Independent went bust a few years ago.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.5K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245.1K Work, Benefits & Business
- 600.7K Mortgages, Homes & Bills
- 177.5K Life & Family
- 258.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards