AIG
American International Group agreed to sell its prime real estate holding in Tokyo for approximately $1.2 billion in cash to Nippon Life Insurance Co. The property consists of one acre of land on which The AIG Otemachi Building in Tokyo is situated. The transaction is expected to close during the second quarter.
AIG noted that the property’s address is one of the most coveted in central Tokyo’s downtown business district and is in the highest rent district in Japan.
AIG also said it’s taking offers for Stowe Mountain Resort in Vermont. AIG spokesman Peter Tulupman said AIG has received unsolicited queries from qualified buyers. The resort includes Stowe Mountain Lodge, mountain operations and permits for future real estate development. In recent years, AIG has invested millions in the resort, building a new lodge at the base of Spruce Peak.
The Hartford
Contrary to rumors of an imminent sale, the Hartford Financial Services Group Inc., as reported by Reuters, said it plans to keep its U.S. property/casualty and life insurance businesses, after winning approval to tap $3.4 billion of federal bailout funds. Chief Executive Ramani Ayer announced the decision in a memo to employees, writing: “The best way to deliver long-term value to our shareholders is to return to our historical strengths as a U.S.-centric insurance company,” Ayer wrote.
The Hartford, like many insurers, has been struggling with the falling value of its investments. It lost $1.21 billion in the first quarter, its third straight quarterly loss, and lost $2.75 billion in all of 2008. Hartford has been scaling back operations in Asia and Europe, and last month said it would suspend selling new policies in Japan and the UK.
Ayer said Hartford now plans to emphasize P/C, group benefits and life, and also operate wealth management and retirement businesses.
Allstate
Allstate Corp., the largest publicly-traded U.S. home and auto insurer, said it will not take funds from the government’s Troubled Asset Relief Program, after winning eligibility to do so. Chief Executive Thomas Wilson said the Northbrook, Illinois-based company had more than enough capital and liquidity and could do without taxpayer funds.
State Farm Florida
Representatives of Florida insurance regulators and State Farm Florida believe they will be able to resolve their differences over how the insurer may exit the state’s insurance marketplace by June 15.
Lawyers for the adversaries asked for and were granted an abeyance of proceedings before the Division of Administrative Hearings, which settles disputes with state agencies, until June 15. The petition for the abeyance indicated that the parties have been in negotiations and believe they can reach an accord by that date, making the involvement of an administrative hearings judge unnecessary. Administrative Law Judge Suzanne F. Hood granted the stay.
The dispute stems from State Farm Florida’s announcement in January that it would begin a two-year withdrawal from the state by non-renewing its 1 million policies, beginning with its highest risk policies.
Insurance Commissioner Kevin McCarty and the Office of Insurance Regulation have balked at State Farm’s withdrawal plan, terming it “hazardous” to the state and to policyholders.
McCarty issued an order in February requiring the insurer to meet certain conditions as part of its withdrawal. He is seeking to ban State Farm from placing risks in the state-backed residual market Citizens Property Insurance and to force the insurer to amend its contracts with its exclusive agents to permit them to place business with other private insurers. He also wants the insurer to surrender its certificate of authority before the withdrawal is complete.
State Farm appealed the stipulations, arguing that McCarty and the OIR do not have the authority to set conditions on its withdrawal. State Farm also contends that allowing its agents to write policies for other carriers (except Citizens) would violate the exclusivity provision of their contracts with State Farm Florida. Losing its certificate of authority early would harm its ability to purchase reinsurance it would need during the course of the withdrawal, according to the insurer.
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