New Delhi: The Tatas have assured the government that Tata-AIG, their joint venture with the troubled US insurer AIG, will meet all the payment obligations to its policyholders, Finance Minister P Chidambaram said.
“We have received a full report from the Tata-AIG management. IRDA has spoken to them and has got a report. I have spoken to IRDA Chairman. Their (Tata-AIG) solvency margins are adequate,” Chidambaram said after briefing reporters on the decisions taken by the Cabinet Committee on Economic Affairs.
The American Insurance Group (AIG), which has since been bailed out by the US Government, has two joint ventures in India. Both these joint ventures, in life and non-life insurance are with the Tatas who own 74% stake in each.
“As far as Tata-AIG is concerned, it is on a sound financial basis and the Tatas have assured that every payment obligation will be met,” Chidambaram said.
“Besides, AIG itself has been bailed out by the US government. AIG is not a failed financial institution,” he said, adding AIG should not be compared with the Lehman Brothers.
Asked whether there was a likelihood of revision in the solvency margins, the Finance Minister said these were “provided by the regulator not government.”
The existing regulator’s guidelines require the insurance firms to keep aside 150% of the uncovered liability as solvency margins.