AIG Life: should I stay or should I go?
UK investors in AIG Life’s “Enhanced Fund” have had an interesting choice this week.
The troubled life insurer, facing a potential run on the fund’s deposits in the wake of the near collapse of its US parent, has decided to effectively close it off for three years.
Investors, including many high net-worth clients, are being asked to either withdraw their holdings or leave them with the fund until 2011. But those wanting to get out now will almost certainly face a loss.
“The prices we are likely to receive in current markets are poor,” the company told financial advisers. “This will mean that policyholders leaving the fund on December 15 are very likely to receive less than the current value of their enhanced fund holding.”
The closure is in line with the fund’s policy conditions.
The troubled life insurer, facing a potential run on the fund’s deposits in the wake of the near collapse of its US parent, has decided to effectively close it off for three years.
Investors, including many high net-worth clients, are being asked to either withdraw their holdings or leave them with the fund until 2011. But those wanting to get out now will almost certainly face a loss.
“The prices we are likely to receive in current markets are poor,” the company told financial advisers. “This will mean that policyholders leaving the fund on December 15 are very likely to receive less than the current value of their enhanced fund holding.”
The closure is in line with the fund’s policy conditions.