AIG Edict On Re Gets Mixed Reactions International Editor
London
American International Groups recent decision to ask for collateral from some of its reinsurers is bringing mixed, sometimes worried, reactions from the marketplace.
"Reinsurance is a long-term business, and we will not place reinsurance, particularly so-called long-tail business, with a reinsurer that doesnt have adequate financial ratings unless they post collateral that meets our standards," said Maurice Greenberg, chairman and chief executive of the New York-based AIG during a recent annual shareholder meeting.
He said this will apply to both domestic and foreign reinsurers, which means that alien companies, which have to post 100 percent of their gross liabilities in a U.S. fund, will have to put up another collateralization for AIG, sources said.
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