I have received several calls from clients with personal injury claims against AIG fearing their claims are unprotected.
Yesterday, we got a call in one of our AIG cases. Someone from Resolute Systems called and said that AIG had given them the assignment of settling large cases. They are setting up settlement conference days in Philadelphia for some pending AIG cases. We were given November 5-6 as dates for these mediations.
I suspect AIG is looking to capitalize on the panic and induce below market settlements. I have no proof of this.
The financial problems at AIG are not with the 70 AIG insurance companies. In fact, these are independent marketable assets that would likely continue to be maintained should AIG declare bankruptcy. Practically, I think a bailout bill will get passed to solve the AIG problem. But either way, the chance of claims being affected by all of this is a relatively remote possibility.
I think people with claims are understandably concerned. No one in their right mind would agree to a structured settlement with AIG. But I think the risk of claims not being paid is relatively low, both because of the safeguards are in place in every state to secure claims, and because I think the AIG insurance companies will continue in some form no matter what the outcome of the bailout.
Maryland Insurance Commissioner Ralph Tyler was kind enough to be a guest speaker at my insurance law class at the University of Baltimore last year and said his most important job is making sure Maryland insurance companies are solvent. Last year, the most important part of Ralph Tyler’s job was not on anyone’s radar screen. Now, it is front and center.
These are scary economic times for many people. But insurance companies have been doing well. I understand the concerns of people who have pending AIG claims, but I think the doom and gloom talk about AIG claims will not be prophetic.