Taiwan protects customers of local AIG units

Taiwan's financial regulator said it is closely monitoring and overseeing the Taiwan-based units of AIG after the troubled US insurer said it would sell non-core assets to improve its balance sheet.
The Financial Supervisory Commission said its aim is to protect the rights of investors and customers of AIG's Taiwan units, which include a securities brokerage, asset management firm and its Nan Shan Life Insurance Co, according to a statement issued late on Sunday.
The FSC said it has been making efforts to understand conditions at AIG's Taiwan units since the US company announced its intent last week to focus on its main insurance operations and put the rest of its businesses up for sale to repay up to $85 billion borrowed from the US government.
The regulator said that AIG has promised not to move Nan Shan assets out of Taiwan without necessary government permission, and that Nan Shan and AIG's other units will continue to conduct business in a usual and legal fashion. Nan Shan said in its own statement it will immediately contact the government regarding any losses and rights of its customers.
It repeated its previous assertion that all operations at Nan Shan are normal and customers of the insurer, Taiwan's third largest life insurance company, have not been affected by issues at the parent company. Nan Shan said it will continue to do business in a normal fashion in compliance with Taiwan law, and that its top consideration will be protecting the rights of the company's customers and investors.
Speculation has been rampant since AIG's financial woes began that it might look to sell Nan Shan, which has been profitable in past years, to raise cash to shore up its financial position at home, which has deteriorated in the current financial crisis. Private equity firms in particular are believed to be circling the company.
Nan Shan, which competes in Taiwan with industry leaders Cathay Financial and Shin Kong Financial, said in September its parent had no plans to sell it. Nan Shan has reported profits in each of the last three years. But it fell into the red in the first half of 2008 amid the broader global market downturn, posting a T$15.4 billion ($477 million) loss for the six months to May 31, 2008, according to a company report.