The Hindu : Business : IRDA seeks status report from AIG, Tata Sons

Online edition of India's National Newspaper
Wednesday, Sep 17, 2008
ePaper | Mobile/PDA Version

Business

Business

IRDA seeks status report from AIG, Tata Sons

Special Correspondent

HYDERABAD: The Insurance Regulatory and Development Authority (IRDA) has asked Tata Sons and American International Group (AIG) to explain their position in the wake of reports suggesting possible insolvency of the AIG.

In a release here on Tuesday, the IRDA said that the recent developments in the New York financial markets had caused concern in the financial markets in India. Certain newspapers had reported that AIG, which is a leading insurance group of the U.S., had sought financial support from the Federal Reserve. They had voiced concerns about the impact the developments in AIG would have on the general and life insurance companies in India in which AIG had partnered Tata Sons.

The IRDA would like to clarify that the life insurance and general insurance companies, jointly promoted by Tata Sons and AIG, were companies registered under the Indian Companies Act and were bound by the provisions of the Insurance Act and other Regulations.

The accounts of these two companies as on March 31, 2008 indicated that both companies had satisfactory solvency margins which were adequate to meet their liabilities. However, having regard to the developments reported in the U.S., the IRDA had asked for the reports of the companies in the matter, the release said.

Reports suggested that the Insurance Regulatory and Development Authority might ask Tata Sons to disassociate itself from the AIG, if the latter failed to infuse sufficient funds into the two entities — life and general insurance companies. The Tata Sons holds 74 per cent of stake in each of the insurance companies.

Printer friendly page
Send this article to Friends by E-Mail

Business