CHARTIS TIGHTENS DISCLOSURE PRACTICES

Chartis, the p/c division of US government-controlled insurer AIG, said last week that it has improved its disclosure practices surrounding guarantees that its subsidiaries provide each other. Chartis made the announcement in the wake of a report by Pennsylvania Insurance Department that there were "deficiencies" in the group's reporting. The Pennsylvania report, released last week, said that an examination of the group's National Union Fire Insurance and American Home Assurance units found that a total of $157bn of guarantees in their 2008 operations, while they reported only $138.3bn in guarantees in their statutory filings to the state. Pennsylvania suggested that the two Chartis companies notify regulators of any plans to issue further guarantees to sister companies, terminate existing guarantees, and improve their reporting. Chartis chief financial officer Robert Schimek said that the company concurred with the report's findings, noting that "the guarantors have the appropriate controls in place to ensure more accurate disclosures". Meanwhile, the Pennsylvania regulator responded to complaints from AIG's rivals Chubb, Liberty and others that AIG's pricing was too low, with the conclusion that AIG's pricing was not out of line with its competitors.