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AMERICAN INTERNATIONAL GROUP RESPONDS TO ORDER AND PRESS RELEASE ISSUED BY FLORIDA DEPARTMENT OF INSURANCE

 AMERICAN INTERNATIONAL GROUP RESPONDS TO ORDER AND PRESS RELEASE
 ISSUED BY FLORIDA DEPARTMENT OF INSURANCE
 NEW YORK, Sept. 9 /PRNewswire/ -- M.R. Greenberg, chairman of American International Group, Inc. (NYSE: AIG), has released the following statement in response to the order and press release issued yesterday by the Florida Department of Insurance regarding AIG:
 "The order and accompanying statement issued by the Florida Department of Insurance make a number of allegations against AIG that are not in accordance with the facts and are damaging to our company. We intend to request a prompt hearing on these matters as permitted by Florida law. In the course of such a hearing, we are confident the facts will clearly show that the order was based on a misunderstanding of AIG's intentions, that it attributes motives to AIG that are inaccurate, and that it paints a grossly distorted picture. At this time, we will not undertake a point-by-point rebuttal of the charges and allegations contained in the order. The proper place for this will be the hearing.
 "It bears repeating, however, that commercial and industrial insurance rates have been inadequate for some time. This is not a new phenomenon, and is not related to any specific disaster such as Hurricane Andrew. Every analyst who follows our industry is well aware of this situation.
 "It is unfortunate and unfair that an internal memorandum, taken completely out of context, should form the basis for such a legal order or otherwise be used to imply that AIG intends to take certain actions to take advantage of Hurricane Andrew. This is pure speculation. In fact, this memo is nothing more than one aspect of a broader internal discussion we have been having for some time about the need for increased rates in the commercial insurance sector. It has always been AIG's strategy to write only business where we can achieve an adequate return. This is especially critical in times like the present where the financial capacity of some insurers may have been weakened and where there is increased concern about solvency and balance sheet strength. If our industry does not remain financially strong, it will be unable to respond to future disasters and serve our policyholders' needs.
 "Insurance rates are not set in response to any single event, even a disaster as unprecedented as Hurricane Andrew. They are set by the marketplace. Any informed observer of our industry knows that. However, the size of the insured losses from Andrew will surely add pressures on many insurers.
 "We, along with the rest of the industry, have responded promptly to this disaster. Our claims adjusters are in the field, and in fact were there the day after Andrew struck, adjusting and paying claims as quickly as possible. We will continue this effort as long as necessary, and we are committed to fulfilling our obligations to every policyholder in the affected areas. We at AIG are as appalled and shocked at the devastation of Andrew's aftermath as are all Americans. The enormous extent of the suffering in Florida and Louisiana is hard to comprehend.
 "AIG will of course comply with the Florida Insurance Department's order. We believe the order contains many serious misinterpretations and unsubstantiated allegations, but we will rely on our hearing to set the record straight."
 -0- 9/9/92
 /CONTACT: John T. Wooster, vice president, communications of AIG, 212-770-3146/
 (AIG) CO: American International Group, Inc. ST: New York, Florida IN: INS SU:


KD -- NY084 -- 7688 09/09/92 16:53 EDT
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Publication:PR Newswire
Date:Sep 9, 1992
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